/raid1/www/Hosts/bankrupt/TCRLA_Public/020524.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
Friday, May 24, 2002, Vol. 3, Issue 102
Headlines
A R G E N T I N A
AEROLINEAS ARGENTINAS: Forecasts Profits Within Next Year
BANCO SUDAMERIS: Parent Shuns Planned Capital Injection Rumors
BISEL/SUQUIA/BERSA: Parent Maintains Growth Outlook For 2002
CABLEVISION: Parent Details Grim Outlook for Latin America
PATAGON: Offers Workers Voluntary Severance Package
POLYMER GROUP: Argentine JV Plant Hurt By Peso Devaluation
POLYMER GROUP: To Present Restructuring Plan End-May
POLYMER GROUP: Company Profile
SOCIETE GENERALE SA: Future Hinges On Government Plans
TELECOM ARGENTINA: Chairman Predicts 3-5 Years To Recovery
B E R M U D A
GLOBAL CROSSING: Court Extends Deadline For Negotiations
GLOBAL CROSSING: Seeks To Sell Unused Telecom Capacity
B R A Z I L
EMBRAER: Quashes Rumors On Bombardier Negotiations
M E X I C O
AEROMEXICO/AVIACION: Sale Process To Start Next Month
GRUPO DINA: Hidalgo State To Pay MXN157 Mln To 559 Workers
HYLSAMEX: Debt-Restructuring Efforts Boost Stock Price
U R U G U A Y
ANCAP: Moody's Reviewing For Possible Downgrade; S&P Lowered
V E N E Z U E L A
SIVENSA: To Sign New Debt Agreement May 31
- - - - - - - - - -
=================
A R G E N T I N A
=================
AEROLINEAS ARGENTINAS: Forecasts Profits Within Next Year
---------------------------------------------------------
Aerolineas Argentinas expects to turn a profit within eight to 10
months and to reach breakeven or post only a small loss over the
whole of 2002, AFX reports, citing chairman Antonio Mata.
Mata revealed that Aerolineas's four-month loss narrowed to US$39
million from US$87 million in the year-earlier period. The
airline reduced operating costs by 75 percent to offset falling
revenue from a four-year economic slump.
"We are a boat in the storm of the national crisis," Mata said.
"A very strict management, however, will allow us to probably end
this year with minor losses or achieve profit in eight to 10
months."
The Argentine peso fell 66 percent in the first four months of
the year, cutting revenue in euros for the airline and reducing
foreign travel. Revenue from ticket sales slumped about 60
percent in the period, Mata said.
Aerolineas was bought by Air Comet, led by Spanish travel company
Viajes Marsans, last October from the Spanish government holding
company Sepi for US$615 million in debt.
Disagreements with unions forced SEPI to sell the airline, which
will remain under protection from creditors until September. The
airline has about US$1 billion in debt, Mata said.
The airline shed costs mainly in service fees, the chairman said.
The Company didn't fire people, avoiding a conflict with unions,
which had opposed several rescue plans proposed under SEPI. The
number of workers at the company rose 4.5 percent to 7,000 since
Air Comet took over.
The fifty-year-old airline has resumed most of its international
flights, halted amid labor disputes and rising costs in May last
year.
The Company is negotiating agreements with rivals from
neighboring countries, such as Lan Chile SA and Viacao Aerea Rio-
Grandense SA, or Varig, to jointly contract services like fuel
and insurance at lower costs.
Meanwhile, Air Comet plans to carry out a US$50-million capital
increase by September unless it finds an outside investor willing
to inject money into the carrier, Mata said. The owners want to
sell Aerolineas shares in the stock market "once Aerolineas
finances are shored up."
CONTACT: AEROLINEAS ARGENTINAS
Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA
Phone: (54-11) 4310-3000
Fax: (54-11) 4310-3585
E-mail: volar@aerolineas.com.ar
Home Page: www.aerolineas.com.ar
Contact:
Patricio Zabalia Lagos, President
AIR COMET
Bahˇa de Pollensa, 21-23
Edificio Airplus
28042 Madrid
Phone: 913 993 674
Fax: 913 291 146
E-mail: airplusops@jet.es
Contact:
Antonio Mata, presidente de Air Comet
BANCO SUDAMERIS: Parent Shuns Planned Capital Injection Rumors
--------------------------------------------------------------
IntesaBCI, Italy's largest bank by asset size, said it is ruling
out a capital injection for its ailing Argentine unit Banque
Sudameris, quashing reports that it may be planning to inject
US$100 million into its Argentine unit.
"IntesaBCI notes that there are no new developments with regard
to the bank's presence in Argentina and, in particular, there are
no plans to inject funds into Banco Sudameris Argentina," the
bank said in a statement.
The bank said it wanted to see the Argentine central bank's
restructuring plan for the banking system before making any
decision on Sudameris.
"IntesaBCI continues to monitor in close cooperation with the
Argentine central bank the developments of the Argentinean
liquidity crises which also affects its subsidiary in the
country," the parent said.
"Any decision on the nature of the support to the Argentinean
subsidiary is in any case subordinated to the definition by the
local authorities of a restructuring plan of the Argentine
banking and financial system," the group stated.
IntesaBCI controls Banco Sudameris Argentina through Paris-based
Banque Sudameris SA.
CONTACT: BANCO SUDAMERIS ARGENTINA
Tte. Gral. Juan Domingo Per›n, 500
C1038AAJ Buenos Aires
Casilla De Correo 1849
Phone: +54 11 43295200 / 43295300 / 43314061
Fax: +54 11 43342398
Home Page: Www.Sudameris.Com.Ar
E-Mail: Marketing@Sudameris.Com.Ar
INTESABCI SPA
c/o Banco Sudameris Argentina S.A.
San Martin 195 - Piso 1o
1038 Buenos Aires
Phone: +54 11 43295388
Fax: +54 11 43433402
E-mail: amdileo@sudameris.com.ar
BISEL/SUQUIA/BERSA: Parent Maintains Growth Outlook For 2002
------------------------------------------------------------
Credit Agricole SA, which recently closed its three subsidiaries
in Argentina - Banco Bisel, Banco del Suquia and Banco de Entre
Rios - warned it may have to make fresh financial provisions this
year to cover losses in the country, says Dow Jones.
However, the listed vehicle of Groupe Credit Agricole, France's
biggest mutual bank, said any such move would not have "a
significant impact" on its 2002 earnings, in an effort to allay
investors fears.
"At this moment, we cannot exclude that some costs linked to the
closures will be recorded in the accounts," said Managing
Director Jean Laurent. "But, if they are, we can say that there
will not be a significant financial impact for 2002."
Despite difficulties in Argentina, Laurent said Credit Agricole
SA will stick to its forecast of net profit growth this year of
between 5 percent and 10 percent. The executive revealed that
Credit Agricole is currently in talks to find buyers for three
Argentine subsidiaries.
The bank's senior officials had said that the French bank had
decided it could no longer afford to pump money into its
Argentine banks.
"Virtually nothing is working in Argentina at the moment," said
one. "We can't continue to pour money into a bottomless pit."
Marc-Antoine Autheman, head of the bank's Credit Agricole
Indosuez investment banking arm, promised "an orderly
withdrawal." The French bank had tried to buy time in the hope of
a new agreement between Buenos Aires and the International
Monetary Fund, he said.
Credit Agricole's biggest investment is a 70 percent stake in
Banco Bisel, Argentina's eighth biggest bank, with 350 branches.
Last year, Credit Agricole booked a one-off provision against its
Argentine operations totaling EUR325 million, fully covering its
investment in the country and clearing the way for a withdrawal.
"This is something easier for a medium-sized operation like
Credit Agricole's than for one that's more important. This wasn't
that strategic for Credit Agricole," said Romain Burnand, banking
analyst at J.P. Morgan in London.
CONTACT: CREDIT AGRICOLE S.A.
91-93 Pasteur Boulevard
75710 - Paris Cedex 15 - France
Phone: +33 01 43 23 52 02
Fax: +33 01 30 44 68 88
Home Page: http://ww.actionnaires.creditagricolesa.fr/
Contact:
Marc Bue, Chairman
Jean Laurent, Chief Executive Officer
Patrice Vincent, Head of the service Synthesis &
Financial Info.
E-mail: patrice.vincent@credit-agricultural-sa.fr
BANCO DE ENTRE RIOS S.A. (BERSA)
Monte Caseros 128
Parana
3100 Entre Rios
Argentina
Phone: 0343-4201200
Fax: 0343-4213869
Contact: Alberto Roque Ferrero, Vice-President
BANCO BISEL S.A.
Mitre 602 Rosario
2000 Santa Fe
Argentina
Phone: 0341-4200300
Home Page: http://www.bancobisel.com.ar/
Contact:
Guillermo Harteneck, President
Jean Luc Perron, Vice President
Bernard Brousse, Vice President
BANCO SUQUIA S.A
25 de Mayo 160 Cordoba
5000 Cordoba
Argentina
Phone: 0351-422-2048
Fax: 0351-420-0279
E-mail: relacioninversores@bancosuquia.com.ar
Home Page: http://www.bancosuquia.com.ar/
Contact:
Bernard Pierre Jean Brousse, Vice-President
Nestor Jose Belgrano, Director
CABLEVISION: Parent Details Grim Outlook for Latin America
-------------------------------------------------------------
On May 14, 2002, Liberty filed its Form 10-Q with the Securities
and Exchange Commission for the three months ended March 31,
2002. The Company issued an additional release to supplement the
information provided to investors in Liberty's Form 10-Q as filed
with the SEC. Within that report, Liberty made the following
disclosures and comments regarding its Latin American holdings:
LIBERTY MEDIA INTERNATIONAL, INC. (non-public assets only)
Liberty owns 100% of LMI, which owns and operates programming
services and communications networks outside the continental
United States. Its primary operations are conducted through
equity affiliates located in Japan, Latin America, the United
Kingdom and Continental Europe. The table below reflects LMI's
attributed pro forma operating results of its non-public assets,
presented as though LMI's percentage ownership in each of its
underlying assets was held constant for all of the periods
presented at the ownership level in effect as of March 31, 2002.
The table also reflects the affiliate's results using the
historical average foreign currency exchange rate in effect for
each quarter. As a result, the affiliates U.S. Dollar results
reported below vary due to exchange rate fluctuations as well as
underlying operational changes. These results do not reflect
pending transactions or transactions consummated after March 31,
2002.
Liberty Media International
Non-Public Assets
Pro Forma Summary Attributed Financial Information
Q1 02 Q1 01
amounts in millions
Revenue:
Japan $93 73
Latin America 80 149
Europe and Other 20 22
Total Revenue 193 244
Operating Expense:
Japan 88 78
Latin America 67 112
Europe and Other 19 20
Total Operating Expense 174 210
Operating Cash Flow (Deficit):
Japan 5 (5)
Latin America 13 37
Europe and Other 1 2
Total Operating Cash Flow $19 34
Outstanding Attributed Debt:
Japan 571 497
Latin America 469 537
Europe and Other 90 96
Total Outstanding Attributed
Debt $1,130 1,130
Japan: 36% of Jupiter Telecommunications Co. Ltd. ("J-COM"); and
50% of Jupiter Programming Co. Ltd. ("JPC")
-- Revenue for the Japanese operations increased 27% due to a 36%
increase in LMI's attributed share of J-COM's revenue combined
with a 9% increase in LMI's attributed share of JPC's revenue.
The improvement in J-COM's revenue is due to increased cable
distribution and substantial growth in telephony and internet
revenue. At March 31,
2002, total gross cable subscribers were 1,425,000, an increase
of 35% over the prior year; total telephony subscribers were
201,000, an increase of over 128%; and internet services
subscribers increased over 207,000 to 428,000. Total revenue
generating units ("RGUs") were 2.1 million, an increase of 50%,
and average revenue per subscriber was over $47. The increase at
JPC was primarily due to 17% growth in JPC's shopping channel
revenue combined with moderate revenue gains at the other
channels due to subscriber growth.
-- Attributed operating cash flow for Japan improved by $10
million to operating cash flow of $5 million compared to a $5
million deficit in the prior year. The improvements were driven
by the revenue increases combined with improving margins.
-- The increases in attributed revenue and cash flow, excluding
the negative impact of the depreciation of the Japanese Yen, were
42% and 210%, respectively.
Latin America: 50% of Cablevision S.A.; 100% of Pramer S.C.A.;
100% of Liberty Cablevision of Puerto Rico, Inc. ("Puerto Rico");
54% of Torneos y Competencias S.A. ("TyC"); and other Latin
American distribution assets.
-- Latin America attributed revenue decreased 46% and cash flow
decreased 65% primarily due to the impact of the devaluation of
the Argentine Peso and the economic instability in Argentina.
The revenue decrease was due to a 58%, 44% and 56% decrease at
Cablevision, Pramer and TyC, respectively, partially offset by a
15% increase at Puerto Rico. The decline at Cablevision was a
result of subscriber churn and the effect of exchange rate
change. Excluding the effect of exchange rates, Cablevision's
underlying decrease in the Argentine Peso denominated revenue was
9%. The revenue decreases at both TyC and Pramer were primarily
due to exchange rate changes rather than operational issues.
Pramer and TyC have not been as heavily affected by the currency
crisis as both businesses have some U.S. Dollar revenue streams.
Excluding the effect of exchange rates, TyC's Argentine Peso
revenues decreased 3% and Pramer's increased 22%.
-- Latin America attributed operating cash flow decreased 65%
primarily due to decreased revenue, exchange rate changes and
increased programming costs and bad debt expense. The decrease
included a 70% decrease at Cablevision, a 47% decrease at TyC and
a 48% decrease at Pramer. Excluding the effect of exchange
rates, Cablevision's cash flow decreased 34% while TyC and
Pramer's increased 16% and 13%, respectively.
-- It is expected that the deteriorating political and economic
situation in Argentina will continue to have a substantial
negative impact on Liberty's operating companies in Argentina,
principally Cablevision. These Argentine operating companies
comprise the majority of Liberty's Latin American operations.
Currency devaluation, government-imposed restrictions on foreign
payments and the prolonged recession are making it difficult to
collect receivables, pay vendors, service debt and make medium to
long term strategic planning decisions. Liberty is working
closely with its Argentine management teams to monitor the local
developments and to manage the businesses through this crisis.
PATAGON: Offers Workers Voluntary Severance Package
---------------------------------------------------
Patagon Argentina, a unit of regional online bank and financial
services provider Patagon Americas (wwww.patagon.com), is
offering employees a voluntary severance package, reports
Business News Americas, citing a company source. TCR-LA earlier
reported that Patagon is exiting Argentina on May 31 after its
parent refused to infuse more funding.
Patagon's problems in Argentina stem from the country's
protracted economic crisis and the currency devaluation
implemented by the government in January, which have reduced
stock-trading volume to virtually zero.
Patagon Argentina executives have been accused in a court of law
of withdrawing money from the company in anticipation of its
expected closure.
A local judge froze Patagon Argentina's funds two weeks ago as
part of a labor dispute currently under way in a Buenos Aires
court. The court order affects funds totaling US$470,000, and
Patagon Argentina's 2,000 clients are unable to conduct financial
transactions.
According to the source, Patagon CEO and founder Wenceslao
Casares is in Argentina negotiating the possible sale of
Patagon's Latin American operations with three or four interested
parties.
CONTACT: PATAGON (Argentina)
Peru 375, 6 Piso
Buenos Aires, Argentina
Belen Galleppi
Tel: 00-54-11-4343-7200
Home Page:
http://www.patagon.com.ar/Default.asp?rnd=0.211651
Contact: Javier Bolzico, Market manager
POLYMER GROUP: Argentine JV Plant Hurt By Peso Devaluation
----------------------------------------------------------
Polymer Group Inc., (PGI) which makes the fabric used in Handi
Wipes and other products, ended the first quarter with a US$29.6-
million loss, 59 percent steeper than the US$18.6 million loss a
year ago, according to report by Knight-Ridder Business News.
The quarterly earnings report showed a 5-percent dip in the
Company's revenues, to US$191.2 million from US$201.3 million a
year ago. The Company's sales volume grew, adding US$4.5 million
to revenues. But the production increase was more than offset by
factors that drained the value of products.
PGI took a US$7.9 million hit to the bottom line as weak foreign
currencies drove down prices of overseas goods. Notably, the
devaluation of the Argentine peso affected Polymer Group's joint
venture plant in Argentina. The manufacturer also reported a
US$6.7 million drop in sales as the profit margin on its mix of
products shrank.
The drop was most pronounced in the industrial and specialty
sector where sales fell 6 percent and net losses increased 7
percent to US$3.6 million. By contrast, the consumer fabrics
sector had a 4 percent decline in sales and a 25 percent surge in
income to US$5.5 million. The Company had an overall loss in part
because of special charges, including plant realignment and
restructuring costs.
Polymer Group took a special US$200,000 charge before taxes
during the quarter, primarily due to personnel costs related to
its restructuring program. The Company also rang up US$2.2
million of expenses in the quarter from professional services.
Excluding its current debt, PGI has US$191.1 million in cash or
assets that can be sold quickly. That compared with US$204.7
million three months earlier.
The quarterly financial results disclosure came less than two
weeks after the North Charleston, S.C.-based fabrics maker filed
for Chapter 11 bankruptcy-law protection from its creditors. The
filing is aimed at shedding more than US$550 million of debt
through a reorganization of company finances. U.S. Bankruptcy
Judge John E. Waites is presiding over the case in Columbia.
POLYMER GROUP: To Present Restructuring Plan End-May
----------------------------------------------------
Polymer Group Inc. (PGI), which has struggled financially from a
flood of setbacks, including soaring raw materials costs, the
U.S. manufacturing recession and the financial slide following
the Sept. 11 terrorist attacks, said it intends to present a
restructuring plan by late May, says a report by Knight-Ridder
Business News.
Last week, the Company briefly outlined the plan, which has very
little difference from its March proposal, to turn the bulk of
its shares over to its largest bondholder.
In the current proposal, bondholder CSFB Global Opportunities
Partners would wind up with anywhere from 78.4 percent to 97
percent of Polymer Group shares. The venture fund of Credit
Suisse First Boston, which controls two-thirds of the bonds,
would have received 87.5 percent in the earlier plan.
CSFB Global will control the bulk of the shares because it is
posting US$50 million in cash, putting up US$25 million as a line
of credit and erasing US$394.4 million of its debt holdings.
The financing package is expected to cut Polymer Group's debt by
US$560 million, including reducing the principal the Company owes
its bank lenders by US$50 million.
The wide gap in what the partnership could receive is due to
choices offered to the remaining bondholders, who have US$200
million in notes, and depends on the Company's ability to meet
certain financial plateaus in the next few years.
Bondholders other than CSFB Global have the option to accept new
bonds at 12 cents to 15 cents on the dollar paying up to 11
percent interest -- or stock proportionate to their note
holdings. The bond deal is well below the 30 cents to 37 cents
they would have received originally. But under the March plan,
they didn't have a choice to receive stock.
Company spokesman Dennis Norman said that the minority
bondholders can earn more shares by putting up equity of their
own.
Meanwhile, existing shareholders will receive 3 percent of stock
in the restructured company. They are also entitled to up to
another 9.5 percent in warrants -- which are similar to stock
options. The warrants are "exercisable at specified value targets
of the Company," according to court documents.
POLYMER GROUP: Company Profile
------------------------------
NAME: Polymer Group Inc.
4838 Jenkins Avenue
North Charleston, South Carolina
PHONE: (843) 566-7293
FAX: 843-747-4092
E-MAIL: johnstonr@pginw.com
WEBSITE: http://www.polymergroupinc.com/index.htm
CORPORATE GOVERNANCE:
Jerry Zucker, Chairman, President and CEO
James G. Boyd, EVP, Treasurer and Chief Financial Officer
James L. Schaeffer, EVP and President and COO
Nonwovens Division
S. Grant Reeves, Vice President and Chief Operating Officer
Oriented Polymers Division
Thomas E. Phillips, Senior Vice President
Nonwovens Division
Richard L. Ferencz, Group Vice President
Advanced Technology and Engineering
Peter C. Bourgeois, Group Vice President and General
Manager-Fabrene/DIFCO
Joann E. Salek, Group Vice President
Susan C. Wimmers, Group Vice President
Brice Sweatt, Vice President, Finance
Jay Tiedemann, Vice President, Human Resources
TYPE OF BUSINESS: Polymer Group, Inc. (PGI) is a global,
technology-driven developer, manufacturer, and marketer of
engineered materials and products. With 25 manufacturing
facilities in 11 countries on four continents, the Company is a
leading supplier to global consumer and industrial product
manufacturers. PGI is the exclusive manufacturer of Miratecr
fabrics, produced using the Company's advanced proprietary APEXr
laser technologies. The Company believes that APEXr has the
potential to replace traditionally woven and knit textiles in a
wide range of applications. With more than 4,000 employees, PGI
provides a vast array of engineered materials and products that
are used by consumers around the world.
SIC: Manufacturing - Textile Manufacturing
EMPLOYEES: 4, 040 (as of 2001)
FINANCIAL ADVISOR: Dresdner Kleinwort Wasserstein
20 Fenchurch Street
London
EC3P 3DB
United Kingdom
Tel (+44) 20 7623 8000
Fax (+44) 20 7623 4069
Dresdner Kleinwort Wasserstein
Av Leandro N Alem 855
Piso 23
(1001) Buenos Aires
Tel (+54) 11 4590 7979
Fax (+54) 11 4590 7978
ACCOUNTANT: Ernst & Yound LLP
Greenville 75 Beattie Place
Suite 800
Greenville, SC 29601
Phone: (864) 242-5740
TRANSFER AGENT: First Union Corporation
Corporate Trust Client Services
1525 West W.T. Harris Blvd. - 3C3
Charlotte, NC 28288-1153 USA
Phone (800) 829-8432
TRUSTEE - PGI SENIOR NOTES:
Harris Trust and Savings Bank
22101 Treasury Center
Chicago, IL 60694-3100
To see Financial Statement:
http://bankrupt.com/misc/POLYMERGROUP.htm
SOCIETE GENERALE SA: Future Hinges On Government Plans
------------------------------------------------------
Societe Generale SA is still expecting a government initiative to
solve the current crisis in the Argentine banking sector before
drawing out plans for its Argentine operation, Dow Jones reports.
The bank expressed its intention to continue operating in the
region, but financial conditions in the country made bank
officials watchful for the government's counter measures for the
crisis.
Last year, Societe Generale placed EUR346 million to cover its
exposure in Argentina. It said the amount was three times the
net asset value of its investment, which is enough to cover
expenses should the bank withdraw.
Societe Generale has reduced its exposure by around 20 percent
since the end of last year.
Speculation on Societe Generale's withdrawal was earlier reported
together with that of Banco Sudameris, a unit of Canadian
IntesaBci SpA.
Societe Generale has a retail banking business of some 60
branches in and around Buenos Aires and a corporate banking
division, which has a total exposure of around EUR800 million.
Societe Generale Argentina is a subsidiary of Societe Generale
International Group, a European banking group.
CONTACT: SOCIETE GENERALE
29, Boulevard Haussmann
75009 Paris, France
Phone: +33-1-42-14-20-00
Fax: +33-1-42-14-54-51
E-mail: investor.relations@socgen.com
Home Page: http://www.socgen.com
Contacts:
Pierre-Guillaume de Pompignan, Investor Relations
Carole Noel, Investor Relations Assistant
E-mail: investor.relations@socgen.com
SOCIETE GENERALE ARGENTINA
Nuestra sucursal de Ramos
Mejˇa se ha trasladado a:
Av. de Mayo 251 -
C. P. B1704BUC
Phone: 4658-8051 / 3190 / 5819
Home Page: http://www.ar.socgen.com/portal/ui/home.xml
E-mail: webmaster@bsg.com.ar
Contacts:
Foreign Trade
Oscar Colombo
E-mail: oscar.colombo@bsg.com.ar
Asset Management
Corporate Investors: Agustˇn Galvalisi
E-mail: ricardo.galvalisi@bsg.com.ar
Private Investors: Oscar Donato
E-mail: oscar.donato@bsg.com.ar
TELECOM ARGENTINA: Chairman Predicts 3-5 Years To Recovery
----------------------------------------------------------
Telecom Argentina STET-France Telecom SA chairman Juan Carlos
Masjoan thinks an economic turnaround in Argentina is further off
than some might expect.
"Between three and five years will pass before we can think about
a resumption of growth," said the head of the France Telecom and
Telecom Italia SpA joint venture.
According to Mr. Masjoan, growth prospects are non-existant until
the financial system returns to normality, which means ending the
banking restrictions currently in operation.
In any case, it could be many years before foreign investors feel
comfortable with returning to the country, he added, declining to
specify a timeframe.
Telecom Argentina is seen by telecommunications industry analysts
as the first major firm at risk of a creditor takeover since the
devaluation of the peso weakened its ability to pay its debts.
Most the Company's income is in Argentine pesos, which have
tumbled 70 percent in value against the dollar since January.
According to the analysts, the firm has a very narrow chance of
making good on its US$3.4-billion dollar-denominated debt.
"They can't pay their debt," said Ben Laidler, Argentine equity
strategist at UBS Warburg. "What we may see here is the Company
surviving but ending up owned by its debtholders, since its
majority shareholders are unlikely to keep putting money into a
bottomless pit."
The Company's net worth is now a fraction of its US$2.37 billion
year-end-2001, pre-peso-devaluation figure.
CONTACT: 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
=============
B E R M U D A
=============
GLOBAL CROSSING: Court Extends Deadline For Negotiations
--------------------------------------------------------
Global Crossing and its creditors now have until Friday to reach
an agreement with the two companies that have offered to buy the
ailing fiber optic network operator.
Judge Robert E. Gerber, of the Bankruptcy Court of the Southern
District of New York, delayed the deadline from Wednesday to
Friday at the parties' request, after they failed to agree on
buyout terms Tuesday.
Sources close to the situation said Wednesday that Global
Crossing and its creditors were still debating the value of the
company's assets with the bidders, Hutchison Whampoa Ltd. and
Singapore Technologies Telemedia.
Banks and creditors, who are owed billions of dollars by the
Bermuda-based telecom company, are pushing the two Asian firms to
increase the price of their combined bid, which they proposed as
part of Global Crossing's filing for bankruptcy protection in
January.
Under their proposal, Hutchison Whampoa and Singapore
Technologies would pay US$750 million for a 79 percent stake in a
restructured Global Crossing. Creditors would get the remaining
slice as well as US$300 million.
So far, Hutchison Whampoa and Singapore Technologies are the only
bidders who have formally made an offer for the firm, which filed
for Chapter 11 bankruptcy protection on January 28, 2002 listing
US$12.4 billion in debt.
Hutchison Whampoa and Singapore Technologies have exclusive
rights to negotiate until the new deadline.
Other bidders have until June 20 to submit an offer, with an
auction scheduled for July 8, if necessary. Both those dates may
be extended by Judge Gerber.
CONTACT: GLOBAL CROSSING
Press Contact
Cynthia Artin
+1 973-410-8820
Email: Cynthia.Artin@globalcrossing.com
Becky Yeamans
+ 1 973-410-5857
Email: Rebecca.Yeamans@globalcrossing.com
Analysts/Investors Contact
Ken Simril+ 1 310-385-3838
Email: investors@globalcrossing.com
GLOBAL CROSSING: Seeks To Sell Unused Telecom Capacity
------------------------------------------------------
Global Crossing Ltd. is searching for telecommunications capacity
buyers. The Company paid more than US$500 million for the as-yet
unused capacity, Wall Street Journal reveals.
The Journal discloses that Global Crossing, in a confidential
memo prepared in February, detailed various routes and original
purchase prices for US$521 million in capacity the Company
purchased from other telecom carriers, but remains "un-
integrated" in its 27-country network. Portions of the memo were
read to The Wall Street Journal.
Global Crossing has come under scrutiny from the Securities and
Exchange Commission and Justice Department for its use of so-
called swap transactions in which it recognized revenue on trades
of equal amounts of telecom capacity with other carriers.
Former finance official Roy Olofson has alleged in a lawsuit
against Global Crossing executives that the Company entered into
many swap deals that had no clear business purpose.
Officials close to Global Crossing have countered Mr. Olofson's
allegations, saying Global's budget for hooking up such capacity
was severely crimped during 2001, dropping to US$3.2 billion from
US$4.3 billion in the second half of the year.
===========
B R A Z I L
===========
EMBRAER: Quashes Rumors On Bombardier Negotiations
--------------------------------------------------
In an official statement, Embraer attemts to set the record
strait on recent reports. "There have been recent press reports
indicating that Embraer and Bombardier would be engaged in
negotiations aimed at establishing a commercial agreement for the
supply of aircraft to US Airways.
Embraer unequivocally denies any such negotiations.
On going discussions do involve representatives of the Brazilian
and Canadian governments with the purpose of achieving a
consensus in regard to the levels of support for aircraft export,
according to guidelines established by the World Trade
Organization."
Contacts: Press office
Phone: +55 12 3927 1311
Fax: + 55 12 3927 2411
Press officer: Wagner Gonzalez
Email: wagner.gonzalez@embraer.com.br
===========
M E X I C O
===========
AEROMEXICO/AVIACION: Sale Process To Start Next Month
------------------------------------------------------
The sale process of Mexico's flagship airlines AeroMexico and
Mexicana de Aviacion will kick off as soon as the government
hires a financial agent next month.
In a press release, the federal deposit insurance agency IPAB
said that the financial agent is expected to be hired in early
June, after a sale advisory contract with Merrill Lynch & Co.
expired in December.
Merrill Lynch, Societe Generale, Goldman Sachs Group Inc. and
Citigroup Inc.'s Salomon Smith Barney have expressed initial
interest in submitting sale proposals, IPAB officials revealed.
The airlines are currently held together under state-owned Cintra
SA. Cintra was created in 1996 to control the airlines after they
defaulted on loans and creditors exchanged the bad debt for an
equity stake. IPAB, created in 1995 in the wake of the banking
crisis, bought the bad debt from the creditors and became
Cintra's majority shareholder.
IPAB had sought to sell Cintra as a single company to maximize
returns, but the plan was scrubbed by antitrust regulators
seeking to break up the local monopoly.
To see Cintra's financial statements:
http://bankrupt.com/misc/Cintra.pdf
CONTACT: CINTRA
Jaime Corredor Esnaola, Chairman
Juan Dez-Canedo Ruiz, CEO
Rodrigo Ocejo Rojo, CFO
Xola 535, Piso 16, Col. del Valle
03100 M,xico, D.F., Mexico
Phone: +52-5-448-8050
Fax: +52-5-448-8055
OR
C.P. Francisco Cuevas Feliu, Investor Relations
Xola 535, Piso 16
Col. del Valle
03100 M,xico, D.F.
Tel. (52) 5 448 80 50
Fax (52) 5 448 80 55
infocintra@cintra.com.mx
AEROMEXICO
Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or
mweitzman@aeromexico.com
MEXICANA DE AVIACION
Jenny Jenks, Marketing Director, International
Division of Mexicana Airlines, +1-210-491-9764, or
ennyjenks@mexicana.com
GRUPO DINA: Hidalgo State To Pay MXN157 Mln To 559 Workers
----------------------------------------------------------
The state of Hidalgo will pay 559 workers from the Dina Camiones
(trucks) and Dina Composites companies in Ciudad Sahagun the
MXN157 million (US$16.5 million) they were owed, reports C&A
Automotive. The amount will come from a credit line the state
Congress authorized the state government to take in fiscal year
2002.
The secretary of Economic Development, Alberto Melendez Apodaca
said that state authorities had also reached an agreement with
National Casting, located in the same industrial complex, to hand
over company stock as payment to union workers and providers.
Grupo Dina, a manufacturer of subway cars, passenger and cargo
trucks and Renault automobiles, closed its plant in Ciudad
Sahagun, Hidalgo last year after more than three decades in
operation.
The Company had been facing a series of troubles -- first the
1995 crisis, then the cancellation of the West Star Trucks
contract, and the impossibility of paying the US$6.5 million in
current interest on a US$163-million bond due in 2004.
Failure to meet financial obligations led to a strike in the
Company's plant in Ciudad Sahagun, which ended in its sale.
Dina is now bankrupt and has no options for renegotiating its
liabilities due to the international crisis in the automotive
industry.
Nevertheless, Dina executives say all of these events would have
been "bearable" if it were not for the worldwide economic
slowdown and the crisis in Argentina, which have dashed any hopes
for recovery.
CONTACT: CONSORCIO G GRUPO DINA SA DE C.V.
Tlacoquemecatl de Valle
No 41 Tlacoquemecatl
Mexico
Tel. +52 5 420 3900
+52 5 420 3987
Home Page: http://www.dina.com.mx/
HYLSAMEX: Debt-Restructuring Efforts Boost Stock Price
-------------------------------------------------------
Mexican steelmaker Hylsamex is slowly seeing a revitalization of
its equity. According to a report by Dow Jones, the U.S. decision
in March to impose tariffs on steel products from several
countries is a boon for Mexican steel makers, which are exempt
because of the country's membership in the North American Free
Trade Agreement (NAFTA) and stand to benefit from a recovery in
steel prices.
Shares in Hylsamex, which trade on the Mexican Stock Exchange,
have gained 139 percent this year to MXN11.93 ($1=MXN9.50), with
74 percent of those gains posted this month.
This is largely due to the Company's efforts to restructure a
large part of its US$1.3 billion debt load, suggests Dow Jones.
In mid-April, the Company got the majority consent needed to
restructure its 2007 Eurobonds, avoiding a formal default on the
US$300 million debt. The Company had missed a US$13.8-million
coupon payment on the bonds March 15.
The steel maker extended the maturity on the bonds by three
years, and also worked out a deal to restructure US$627 million
in bank debt.
"The restructuring is very comfortable, with more long-term
maturities so that Hylsamex can await the recovery of the
sector," said Angelo Garcia, an analyst with the Vector Brokerage
in Mexico City.
Market participants hope that better days for Hylsamex will
translate into better quarterly results this year. Hylsamex
posted a net loss of MXN288.3 million in the first quarter of
2002 and a loss of MXN2.17 billion for all of 2001.
CONTACT: HYLSAMEX
Investor Relations
Margarita Gutierrez
E-Mail: mgutierrez@hylsamex.com.mx
Ricardo Sada
E-Mail: rsada@hylsamex.com.mx
Phone: (52) 81 8865 1224
(52) 81 8865 1201
Munich 101,
San Nicolas de los Garza N.L., 66452
Mexico
=============
U R U G U A Y
=============
ANCAP: Moody's Reviewing For Possible Downgrade; S&P Lowered
------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade the
Ba2 foreign currency issuer rating of Administracion Nacional de
Combustibles, Alcohol y Portland (ANCAP).
The action follows Moody's earlier announcement that it had
placed the Ba2 long-term foreign currency ceiling for Uruguay on
review for downgrade.
Recently, international credit rating agency Standard and Poor's
(S&P) also cut ANCAP's local currency rating to 'BB-' from 'BBB-
', and its foreign currency rating to 'BB-' from 'BB+.' The
ratings have a negative outlook.
S&P, which took the action after it downgraded Uruguay's
sovereign rating, said that ANCAP's ratings are constrained
because it only has one refining asset, and limited upstream
presence.
The Company is currently engaged in a US$160 million upgrade to
its La Teja refinery and, in order to finance the project, ANCAP
entered into a US$115-million credit facility, of which US$50
million has already been drawn.
The drop from investment grade status on ANCAP and Uruguay's
sovereign rating allows creditors to ask for the acceleration of
the facility. ANCAP is currently negotiating with its lenders for
a waiver.
S&P said it expects ANCAP to reach an agreement with its lenders
in the near future, and for the Uruguayan government to continue
supporting the Company. However, ANCAP's growing fiscal deficit
and Uruguay's contracting economy could hurt the Company's
future.
ANCAP is Uruguay's state-owned oil, alcohol and cement company.
It is headquartered in Montevideo, Uruguay.
CONTACT: Administracion Nacional de Combustibles, Alcohol y
Portland (ANCAP)
Central Administration PaysandŁ
s/n esq. Avenida del Libertador
Montevideo, 11100 Uruguay
P.O. Box 1090
Phones: +598(2) 902 0608
902 3892
902 4192
Fax +598(2) 902 1136 902 1642
Telex ANCAP UY 23168
E-mail: info@ancap.com.uy
Home Page: www.ancap.com.uy
Contact:
Benito E. Pi¤eiro, Chief Executive Officer
Phone +598(2) 900 2945
+598(2) 902 0608 Ext. 2253
Fax +598(2) 908 9188
Washington Iribarnegaray, Assistant Manager
Phone: +598(2) 901 5049
+598(2) 902 0608 Ext 2330
Fax : +598(2) 902 11 36
=================
V E N E Z U E L A
=================
SIVENSA: To Sign New Debt Agreement May 31
------------------------------------------
Siderurgica Venezolana Sivensa, Venezuela's largest publicly
traded steel company, is set to sign a US$250-million debt-
restructuring agreement with creditors on May 31.
The deal, Business News Americas reports, could lead a syndicate
of 17 national and international banks and financial institutions
to take up to an 80-percent stake in the cash-strapped firm.
Sivensa has been battling with losses for the past four
consecutive years and shrinking markets, which was exacerbated by
its loss-making investments in fellow steelmaker Sidor. As a
result, the Company's market value has plunged from US$1.2
billion to just US$20 million, with debts exceeding US$600
million. Part of this was covered in a previous refinancing
package, but Sivensa failed to see through the entire debt
repayment program. The remainder will be dealt with in the
refinancing deal to be signed on May 31.
Also covered in the new agreement are Sivensa's subsidiaries -
Vicson, Sidetur and IBH, as well as its share in the Amazonia
consortium (which controls 70 percent of Sidor).
CONTACT: INTERNATIONAL BRIQUETTES HOLDING
Henrique Machado Zuloaga, Chairman
Oscar Augusto Machado, CEO
Gustavo Machado, CFO
Contacts:
Av. Venezuela, Edificio Torre America, Piso 11.,
Urbanizacion Bello Monte.
Caracas, Venezuela
Phone: +58-(0)2-707-6145
Fax: +58-(0)2-707-6335
Iron and steel of Turbio, S.A.. - Sidetur
Home Page: www.sidetur.com.ve
Contacts:
Mr. Left Nicholas, General Manager
Phone: (58212) 407,03,00 and 51
E-mail: nicolas.izquierdo@sidetur.com.ve
Mr. Carlos Fonseca , Finance & Administration Manager
Phone:(58212) 407,04,11 and 12
E-mail: carlos.e.fonseca@sidetur.com.ve
SIDERURGICA VENEZOLANA "SIVENSA", SA
Torre America, Piso 12
Av. Venezuela
Bello Monte
Caracas, Venezuela
Phone: (0212) 707.6200 /6145
Fax. (0212) 762.9938 - 707.6335
Home Page: www.sivensa.com.ve
Contacts:
Armando Rondon, Corporate Planning Manager
Phone: (58) (212) 707.62.80 / 707.61.27
E-mail: armando.rondon@sivensa.com
Fax: (58) (212) 707.63.52
Peggy Medina
Transfer Agent. Planivensa
Phone: (58) (212) 707.64.66 / 707.64.68
E-mail: peggy.medina@sivensa.com
Fax: (58) (212) 707.64.56
Investor Relations. Nueva York
Geoffrey Bell and Co.
780 Third Avenue, New York, N.Y.
Phone: (212) 888.37.00
E-mail: d.vandecker@worldnet.att.net
Fax: (212) 888.37.07
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter Latin American is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ,
and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
Psamathe P. Alfeche and Ma. Cristina Canson, Editors.
Copyright 2002. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
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Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is $575 per half-year,
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