/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020605.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, June 5, 2002, Vol. 3, Issue 110 Headlines B E R M U D A ANDERSEN: Delaying Settlement Will Increase Payments Due FLAG TELECOM: Milberg Weiss Extends Class Period in Suit GLOBAL CROSSING: Reclaiming Creditors' Confidence GLOBAL CROSSING: Second SEC Probe Targets Execs' Stock Sales TYCO INTERNATIONAL: Kozlowski Steps Down; John Fort Steps In TYCO INTERNATIONAL: Shtock Pressure Continues After CEO Quits TYCO INTERNATIONAL: CIT Group Ratings Remain on CreditWatch B R A Z I L ADELPHIA SA: Unaffected By Parent's Pending Bankruptcy Filing BCI: America Movil Buys Interest in Telecom Americas PREVI FUND: Government Intervenes; Executives Ousted C O L O M B I A EDT: Future Disposition Remains Obscured By Indecision M E X I C O BANCA QUADRUM: IPAB Covers 98% Of Payment Requests CORPORACION DURANGO: Moody's Downs Sr. Notes; Outlook Negative CORPORACION DURANGO: Company Profile GRUPO BITAL: Regulators Demand Prompt Decisions From SCH GRUPO MEXICO: Shares Dip On SPCC Reduced Earnings Forecast GRUPO TMM: Signs Contract For Container Movements In Manzanillo - - - - - - - - - - ============= B E R M U D A ============= ANDERSEN: Delaying Settlement Will Increase Payments Due -------------------------------------------------------- Arthur Andersen LLP had until Tuesday to pay off a US$217-million settlement with investors in the failed Baptist Foundation of Arizona -- the largest non-profit bankruptcy in history, says AP. The settlement, agreed to in May, resolves civil cases against Andersen relating to the firm's audit work for the collapsed Baptist foundation and pending cases brought by state regulators and the Arizona attorney general's office. In that same month, Andersen made an initial payment of US$11.3 million and had until Tuesday to pay the rest and avoid interest charges. In the event that Andersen fails to make it to the deadline, Maricopa County Superior Court Judge Edward Burke is scheduled to issue a judgment against Andersen on Wednesday to enforce the settlement and set a payment schedule. The revised schedule involves six payments with increasing interest rates, culminating in a final installment on October 25. Should the firm fail to make a payment, Andersen would lose its Arizona accounting license and be responsible for paying off the settlement, said Tim Nelson, an assistant attorney general. Andersen backed out of an earlier $217 million settlement, saying its insurance company, the Hamilton, Bermuda-based Professional Services Insurance Co., couldn't afford to pay it. The firm then agreed to the new deal one week into a trial where the foundation's trust sought US$150 million in compensatory damages and more in punitive damages. FLAG TELECOM: Milberg Weiss Extends Class Period in Suit -------------------------------------------------------- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on behalf of purchasers of the shares of FLAG Telecom Holdings, Ltd. between February 16, 2000 and February 13, 2002, inclusive. A copy of the complaint filed in this action is available from the United States District Court, Southern District of New York, located at 500 Pearl Street, New York, NY. The Complaint alleges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 by issuing a materially false and misleading Registration Statement and Prospectus (collectively, "Prospectus") in connection with the Company's initial public offering, and violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between February 16, 2000 and February 13, 2002, thereby artificially inflating the price of FLAG shares. Specifically, the complaint alleges that the Prospectus was materially false and misleading because, among other things, it contained statements which led investors to believe that there was a huge demand for the Company's Atlantic cable system, when, in fact, the Company had been marketing its Atlantic cable system with minimal success. Additionally, throughout the Class Period, as alleged in the complaint, FLAG was experiencing diminishing revenue growth. The complaint alleges that in order to create the impression that FLAG was continuing to experience growth, the Company engaged in a series of reciprocal transactions with certain competitors for the purchase and sale of dark fiber optic cable -- the so-called dark fiber swap. The complaint alleges that as a result of these transactions, FLAG artificially inflated its operating results and materially misrepresented its financial results at all relevant times. Purchasers of FLAG shares between February 16, 2000 and February 13, 2002 you may, had until June 3, 2002, to request that the Court appoint them as lead plaintiff. Contact: Milberg Weiss Bershad Hynes & Lerach LLP Steven G. Schulman or Samuel H. Rudman One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 Phone number: (800) 320-5081 Email: flagcase@milbergNY.com Website: http://www.milberg.com ABOUT FLAG TELECOM: On April 12 and April 23, 2002, FLAG Telecom Holdings Limited and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Also, FLAG Telecom Holdings Limited and the other companies continue to operate their businesses as Debtors In Possession under Chapter 11 protection. FLAG Telecom Holdings Limited and certain of its Bermuda- registered subsidiaries - FLAG Limited, FLAG Atlantic Limited and FLAG Asia Limited - filed parallel proceedings in Bermuda to seek the appointment of provisional liquidators to obtain a moratorium to preserve the companies from creditor actions. Provisional liquidators were appointed and part of their role is to oversee and liaise with the directors of the companies in effecting a reorganization under Chapter 11. CONTACT: FLAG Telecom John Draheim, VP Corporate Services Phone: +44 20 7317 E-mail: jdraheim@flagtelecom.com David Morales, VP Corporate Finance & Investor Relations Phone: +44 20 7317 0837 E-mail: dmorales@flagtelecom.com Brunswick Group Mike Buckley Phone: 212/333-3810 E-mail: mbuckley@brunswickgroup.com GLOBAL CROSSING: Reclaiming Creditors' Confidence ------------------------------------------------- A move by Global Crossing's creditor committee last week to put an end to investment talks with Hutchison Whampoa and Singapore Technologies Telemedia is a sign that the Company's lenders are slowly showing confidence in the bankrupt firm's operational abilities, suggests Telephony. Upon its bankruptcy filing in late January, Global Crossing disclosed a letter of intent under which Whampoa and STT would invest a combined US$750-million in the carrier in exchange for controlling interest. That deal was never finalized, however. Global Crossing CEO John Legere claimed that the Company's operational turnaround coincided with his appointment in October 2001. According to Legere, Global Crossing has cut its cash burn rate to US$6 million per month in April, giving it US$913 million in the bank at the end of the month. "There's virtually no cash burn," Legere said. "Throughout this period of action, we've maintained customer retention 10 percent to 15 percent higher than we expected." Operating expenses are expected to be down 42 percent year over year to US$900 million for 2002. In addition, the carrier's 2002 capital expenditure budget is anticipated to be less than US$200 million, compared with US$3.2 billion in 2001. Those developments, along with the 60 parties that Global Crossing said are interested in buying its network, make the $750 million offer inadequate, the creditors committee said. Now an auction of the carrier's assets is scheduled for July 8. The creditors may be expecting too much from the auction, though. "They've already demonstrated their judgments on a lot of these matters," said Frank Barbetta, senior analyst for global carriers with Probe Research. "I would be skeptical of whether they know what they're doing." GLOBAL CROSSING: Second SEC Probe Targets Execs' Stock Sales ------------------------------------------------------------ The Securities and Exchange Commission, which is currently investigating Global Crossing's accounting practices, kicked off another probe concerning the bankrupt Bermuda-based firm's stock sales. According to a Wall Street Journal report, the SEC has authorized investigators to probe the stock sales and purchases of officers of Global Crossing. The matter was raised after Global Crossing's insurance carrier, Federal Insurance Co., noted it in a May 28 bankruptcy-court filing. The Journal reveals that Global Crossing executives sold more than US$1.3 billion of stock between 1999 and the end of last November. The chief beneficiary of the executive sales was Global Crossing founder and current Chairman Gary Winnick, who sold about US$735 million in stock in three separate transactions in 1999, 2000 and 2001. The first two sales, in June 1999 and April 2000, were related to a secondary offering and a tender offer in connection with a planned merger, respectively. 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 Kevin Burgoyne Latin America + 1 305-808-5947 Kevin.Burgoyne@globalcrossing.com Mish Desmidt Europe +44 (0) 7771-668438 Mish.Desmidt@globalcrossing.com Analysts/Investors: Ken Simril + 1 310-385-3838 investors@globalcrossing.com TYCO INTERNATIONAL: Kozlowski Steps Down; John Fort Steps In ------------------------------------------------------------ In an official company statement, Tyco International Ltd. announced that L. Dennis Kozlowski resigned as Chairman and Chief Executive Officer for personal reasons. Mr. Kozlowski also stepped down from the Board of Directors. At the request of Tyco's Board, John F. Fort has agreed to assume primary executive responsibilities during an interim period while a search for a permanent replacement is completed. All operating units and corporate staff will report through Mr. Fort. Mr. Fort has been associated with Tyco for over 28 years. He held the post of Chairman and CEO for 10 years, from 1982 until 1992. Since 1992, he has been an active member of the Board and he is currently the lead director. This position acts as the primary liaison between management and the outside directors. The Board reaffirmed its commitment to the complete monetization of CIT, Tyco's financial services subsidiary, and to a significant reduction in the amount of debt. "We plan to complete the IPO of CIT by the end of June," commented Mr. Fort. "Also, I fully support the evolution of the Company's long-term operating strategy to focus more on organic growth. We will continue with our plans to make Return on Capital a key part of our compensation system along with earnings growth and cash flow." Mr. Fort continued, "During his tenure, Dennis Kozlowski grew Tyco to a $36 billion manufacturer and service provider operating in over 100 countries. We wish him well and thank him for his contributions. Looking forward, Tyco's strong fundamental businesses and talented workforce position the Company to continue to prosper in the years ahead." CONTACT: R. Jackson Blackstock Investor Relations Phone: +1-212-424-1344 or J. Brad McGee or Peter Ferris Media Relations Phone: +1-212-424-1300 TYCO INTERNATIONAL: Shtock Pressure Continues After CEO Quits ------------------------------------------------------------- Analysts expect shares of Tyco International Ltd to remain under pressure following the abrupt departure of chief executive Dennis Kozlowski. The latest news in a series of negative reports that have battered Tyco shares since early this year. Kozlowski's resignation comes amid criticism of the company's shifting strategy and a report of a criminal probe into suspected personal tax evasion. Meanwhile the Company continues to prepare for the initial public offering of its CIT finance arm, a deal that expected to raise at least US$5 billion. The CIT monetization is viewed as crucial for Tyco as it struggles to reduce debt and bolster liquidity. "This doesn't add to the stability or visibility which would make investors want to buy shares in the offering," said Prudential Securities analyst Nicholas Heymann. Salomon Smith Barney analyst Jeffrey Sprague cut his rating on Tyco by two notches to 'neutral' from 'buy' and said the news has broader implications for the troubled company. TYCO INTERNATIONAL: CIT Group Ratings Remain on CreditWatch ----------------------------------------------------------- Standard & Poor's said Tuesday that its ratings on Tyco International Ltd. and its industrial subsidiaries as well as those of commercial finance subsidiary The CIT Group Inc., remain on CreditWatch with developing implications following the company's announcement that Dennis Kozlowski has resigned as chairman and CEO and stepped down from the board of directors. John Fort, a former Tyco chairman and CEO and current board member, will assume primary executive responsibilities on an interim basis. Kozlowski's resignation is reportedly for personal reasons, and no other senior management changes are expected. Developing implications means that ratings could be raised, lowered, or affirmed. The ratings on Tyco could be raised to triple-'B'-plus if: The planned IPO of CIT is successful or CIT is sold to a third party for cash; Tyco uses proceeds to reduce debt; The company expands availability under its bank lines; Tyco appoints a new CEO who is committed to a business and financial profile consistent with a higher rating; and Industry and competitive conditions do not worsen. The board has reiterated its commitment to the complete monetization of CIT and significant debt reduction, and Mr. Fort has said that he supports a focus on organic growth. These would all be positive factors for credit quality. If Tyco does not sell CIT, it would have to seek alternative financing arrangements to meet financial obligations in calendar 2003, heightening refinancing risk. The inability to access capital markets could result in a ratings downgrade. If CIT separates completely from Tyco and maintains financial strength, profitability, and asset quality at current levels, or is acquired by a financially stronger company, the ratings of CIT are likely to be raised. However, CIT's ratings could be lowered if Tyco's ratings are lowered or if CIT is sold to a third party with a lower credit rating. Hamilton, Bermuda-based Tyco is a diversified company with total debt of about $27 billion. New York, N.Y.-based CIT is major provider of commercial financial services with total debt of about $34 billion. To see financial statements: http://bankrupt.com/misc/Tyco.txt CONTACT: TYCO INTERNATIONAL INC. Media Relations: J. Brad McGee or Peter Ferris +1-212-424-1300 Investor Relations: R. Jackson Blackstock +1-212-424-1344 Home Page: http://www.tyco.com CTI Group (Holdings), Incorporated 333 North Alabama Street Suite 240 Indianapolis, IN. 46204-1767 Tel:317-262-4666 Fax:317-262-4605 Home Page: http://www.ctigroup.com/index.asp Contact: Brad Houlberg, Chief Executive Officer Email: dsauceda@ctigroup.com =========== B R A Z I L =========== ADELPHIA SA: Unaffected By Parent's Pending Bankruptcy Filing ------------------------------------------------------------- The US company Adelphia Communications Corporation's (Adelphia) imminent bankruptcy filing will not affect its subsidiary in Brazil, according to a Gazeta Mercantil report. Adelphia, which is close to filing for Chapter 11 bankruptcy protection in the United States due to massive debts, owns Adelphia S.A. in Brazil. The unit operates cable TV services through ViacaboTV. According to Adelphia, the subsidiary will not be affected by its expected bankruptcy filing because the unit does not depend on the parent. Adelphia has 30,000 subscribers in 15 cities and invested around US$40 million to structure a chain allowing it to serve 400,000 residences in Brazil. The Company faces pressure from lenders to file delinquent financial reports including its annual 10-K statement, overdue since April 1, as it attempts to account for off-the-books debt now estimated at more than US$3 billion. The stock was due to be delisted in Nasdaq on Monday because of failure to file the reports. The delisting would entitle convertible bondholders to exercise a put option, turning them back in and demanding cash from Adelphia. "I think this raises the likelihood that they will be forced to seek bankruptcy protection," said Joe Galzerano, a high-yield telecommunications analyst for CIBC World Markets. CONTACT: ADELPHIA COMMUNICATIONS CORPORATION 1 N. Main St. Coudersport, PA 16915-1141 Phone: 814-274-9830 Fax: 814-274-8631 Toll Free: 800-892-7300 Home Page: http://www.adelphia.net Contact: Karen Chrosniak, Director of Investor Relations Phone: 1-877-496-6704 E-mail: adlaeir@adelphia.com ADELPHIA BRASIL Tel: 55-11-818-0926 Fax: 55-11-818-0924 VIACABOTV Rua Carlos Appel 53 - Centro Brusque - SC - 88350150 Phone: (47) 351 1982 E-mail: brusque@viacabotv.com.br Home Page: http://www.viacabotv.com.br/ BCI: America Movil Buys Interest in Telecom Americas ---------------------------------------------------- In an official company press release, BCI announced the following highlights of its latest transaction: -- America Movil to pay approximately US$366 million for BCI's interest in Telecom Americas -- BCI to be released from US$250M of Telecom Americas related guarantees -- BCI to seek approval for Plan of Arrangement to commence winding up of the Company Bell Canada International Inc. ("BCI") today announced that it has reached a definitive agreement for the sale of 42% of the common shares (39% giving effect to the conversion of preferred shares held by a financial investor) of Telecom Americas Ltd. ("Telecom Americas") to America Movil S.A. de C.V., of Mexico ("America Movil"). The terms of the transaction include: -- Payment by America Movil of US$146 million in cash and a US$220 million interest-free note due on March 1, 2003 -- Release of BCI from US$250 million of guarantees relating to Telecom Americas (i.e Tess Notes and ATL indemnity) -- Closing is expected by August 9, 2002 -- Prior to closing, America Movil will provide a minimum of US$200 million of new funding to Telecom Americas at which time America Movil will obtain effective control of Telecom Americas Acting as Advisor to BCI, Salomon Smith Barney has provided a fairness opinion on the consideration being received in connection with the sale of BCI's interest in Telecom Americas. BCI has obtained the required approval from lenders under its C$230 million bank credit facility to conclude this transaction. Effective immediately, the credit facility is reduced to C$200 million and its maturity date advanced from March 2003 to August 9, 2002, at which time the facility will be repaid in full and canceled. BCI will seek approvals for a court supervised Plan of Arrangement pursuant to which BCI will conclude the sale of its interest in Telecom Americas; proceed with the disposition of its remaining assets in an orderly fashion; and seek expeditious resolution of outstanding claims in order to accelerate final distributions to BCI stakeholders. According to the company, using the Plan of Arrangement provisions of the Canada Business Corporations Act is an efficient way for a solvent company, such as BCI, to proceed in the circumstances. During July 2002, BCI will hold meetings of its common shareholders and holders of its 11% notes due September 2004 to obtain the required approvals for the Plan of Arrangement. BCI has been informed that BCE intends to vote its shares in favour of the Plan of Arrangement. BCI, through Telecom Americas, holds interest in 4 Brazilian B Band cellular companies serving more than 4.5 million subscribers in territories of Brazil with a population of approximately 60 million. BCI is a subsidiary of BCE Inc., Canada's largest communications company. BCI is listed on the Toronto Stock Exchange under the symbol BI and on the NASDAQ National Market under the symbol BCICF. The company's Web site is at www.bci.ca. CONTACT: BELL CANADA INTERNATIONAL INC. Marie-Lise Gauthier, 514/392-2318 marie-lise.gauthier@bci.ca AMERICA MOVIL, S.A. de C.V. Lago Alberto 366, Colonia Anahuac 11320 Mexico, D.F., Mexico Phone: +52-55-5703-3390 Fax: +52-55-5545-5550 Home Page: http://www.americamovil.com Contacts: Carlos Slim Helu, Chairman Daniel Hajj Aboumrad, CEO Carlos J. Garcia Moreno Elizondo, CFO SALOMON SMITH BARNEY 388 Greenwich Street 35th Floor New York, NY 10013 Home Page: http://www.salomonsmithbarney.com Phone: (212) 816-6000 Fax: (212) 816-7020 Contact: Richard G. Spiro, Global Head of Insurance Group Phone: (212) 816-2170 Fax:(212) 816-5990 E-mail: richard.spiro@ssmb.com Williams Johns, Managing Director Phone: (212) 816-8782 Fax: (212) 816-7020 E-mail: william.johns@ssmb.com PREVI FUND: Government Intervenes; Executives Ousted ---------------------------------------------------- Brazil's Social Security Ministry, headed by Jose Roberto Savoia, has placed Latin America's largest pension fund, Caixa de Previdencia dos Funcionarios do Banco do Brasil (PREVI), under administration. The Brasilia-based fund is caught up in a power struggle involving its parent bank, Banco do Brazil SA, the government and unions. PREVI faces a hole in its current account of about BRL2 billion (US$790.2 million). As a part of the intervention, executives were thrown out and had their accounts frozen. PREVI President Luiz Tarquinho Sardinha Ferro was removed from office and Carlos Eduardo Esteves Lima, a former subsecretary of the Social Security Ministry, was installed in his place. The 98-year-old fund runs the pensions of some 123,000 Banco do Brazil workers and had about BRL38 billion in assets while boasting a surplus of BRL11.9 billion in 1997. The government's court-sanctioned intervention calls on the fund to adhere to new laws demanding changes to PREVI's boards. Fund directors were unwilling to change PREVI's structure -- a move that would effectively lead to equal representation between the unions and the government on the fiscal and decision-making boards and give the president an overriding vote in a deadlock. CONTACT: PREVI-CAIXA DE PREVIDENCIA DOS FUNCIONARIOS DO BANCO DO BRASIL Praia de Botafogo 501 - 3� E 4� and Rio de Janeiro 22250-040 RJ Phone: (21) 3870-1030 E-mail: presi@previ.com.br Home Page: http://www.previ.com.br/ BANCO DO BRASIL SBS Edificio Sede III, 24th Fl. 70089-900 Bras�lia, D.F., Brazil Phone: +55-61-310-3406 Fax: +55-61-310-2563 Home Page: http://www.bb.com.br Contact: Marco Geovanne Tobias da Silva, IR Manager Phone: 61-310-5920 =============== C O L O M B I A =============== EDT: Future Disposition Remains Obscured By Indecision ------------------------------------------------------ The future of the intervened Colombian telco Empresa Distrital de Telecomunicaciones de Barranquilla (EDT) still hangs in the balance. Colombia's public services regulator is considering liquidation, a move expected to require COP579 billion (US$249 million). However, liquidation seems very unlikely at this point, as the government has already said it won't contribute any more money to the process. Another option being considered is an acquisition of EDT by another company. "There could be a merger with other firms, with Metrotel, EPM, ETB, Alcatel, Telecom or other international firms, but we must closely examine the situation and what options we have," Baranquilla mayor Humberto Caiafa Rivas said. Colombia's regulator needs COP152 billion to cover EDT's pension liabilities, COP197 billion to compensate EDT employees for being laid off and another COP230 billion to pay the Company's debts. The regulator intervened EDT in May 2000 with a view to making the Company viable and returning it to the Baranquilla city government this month. EDT has some 130,000 local telephony subscribers. =========== M E X I C O =========== BANCA QUADRUM: IPAB Covers 98% Of Payment Requests -------------------------------------------------- Mexico's bank savings protection institute IPAB said it covered about 98 percent, or 798 payment requests, of the defunct Banca Quadrum's total deposits, relates Dow Jones. IPAB paid a total MXN4.6 billion (US$1=MXN9.64) for the requests. Requests weren't presented for 151 accounts, but of those only 13 were for more than MXN1,000, said IPAB. Only 10 requests were turned down, for unspecified reasons. Banca Quadrum, a small, niche-oriented financial services concern with an estimated 0.3-percent market share, was seized by regulators last year after shareholders declined to inject more capital into the bank. To see Banca Quadrum's latest financial statements: http://bankrupt.com/misc/Bancaquadrum.doc CONTACTS: BANCA QUADRUM Ernesto Rodriguez, Investor Relations Tel. +011-52-55-5284-5693 Email: erodrigu@quadrum.com.mx KPMG - Ciudad de Mexico Bosque de Duraznos Nom. 55 Bosques de las Lomas 11700 Mexico, D.F. Tel.: +(55) 5246 83 00 Fax.: +(55) 5596 80 60 Contacts: Guillermo Garcia-Naranjo, General Director Phone: +(55) 52 46 8320 CORPORACION DURANGO: Moody's Downs Sr. Notes; Outlook Negative -------------------------------------------------------------- Corporacion Durango, S.A. de C.V. (Durango) had the ratings of its senior notes lowered by Moody's Investors Service. Ratings affected: - Senior Unsecured Issuer rating lowered to B3 from B2 - US$301.7 million senior notes, due 2006, lowered to B3 from B2 - US$10.4 million senior notes, due 2008, lowered to B3 from B2 - US$121.7 million senior notes due August 2003, lowered to B3 from B2 The outlook has been changed to negative from stable. The downgrades reflect their effective subordination to approximately US$166 million of secured debt and their structural subordination to about US$20.4 million of subsidiary debt, Moody's explained. With the completion of the merger between Corporacion Durango, S.A. de C.V. and Grupo Industrial Durango S.A. de C.V. the pledge agreement securing the US$301.7 million of senior notes due 2006 has been cancelled resulting in all rated debt obligations being unsecured and at the holding company level, Corporacion Durango, S.A. de C.V. Moreover, the Company can incur substantial additional indebtedness, subject to certain limitations as provided for under its indenture. The change in the rating outlook to negative from stable reflects current difficult conditions in the paper industry, the Company's weak operating performance and debt protection measures which are lower than what Moody's has previously expected, and its constrained liquidity position resulting from uncommitted short- term bank lines. The ratings and negative outlook also anticipate that the Company will complete the refinancing of its remaining 12 5/8% senior notes due 2003 in the near term, thus extending its maturity profile. The ratings continue to reflect a high degree of leverage, weak interest coverage protection, exposure to fluctuating raw material costs and limited control of product pricing, particularly in containerboard and corrugated packaging, and newsprint. Durango also faces increased competition from substantial competitors with greater access to financial resources in both Mexico and the United States. In addition, with substantially all debt being U.S. dollar denominated, the Company is subject to foreign exchange risks, including the potential devaluation of the Mexican peso, currency conversion restrictions and conversion to Peso obligations in the event of a judgment or bankruptcy in Mexico. However, foreign exchange risks are mitigated to a certain degree due to a substantial portion of the Company's revenues (approximately 43% in 2001) being U.S. dollar based thus providing a natural foreign currency hedge. Durango ended March 31, 2002, with approximately US$38 million in cash and equivalents and about US$100 million in uncommitted bank lines. "Although Moody's recognizes the long-term relationships the Company has established with its banks, we believe that since the banks are not legally bound to fund these obligations that during difficult times the availability of these funds would be questionable," the ratings service said. New York Robert N. McCreary Senior Vice President Corporate Finance Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 New York William V. Fahy Associate Analyst Corporate Finance Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 CORPORACION DURANGO: Company Profile ------------------------------------ NAME: Corporacion Durango, S.A. de C.V. Potasio 150 Ciudad Industrial Durango, Mexico PHONE: (212) 815-4372 FAX: (212) 571-3050 WEBSITE: http://www.corpdgo.com/ EXECUTIVE MANAGEMENT TEAM: Calderon, Prudencio, Managing Director Del Palacio Elizondo, Angel, Director De Velasco, Mayela R., Chief Financial Officer o Diaz, Arturo, Financial Manager Peyro, Gustavo, Audit and Systems Manager TYPE OF BUSINESS: Corporacion Durango, S.A. de C.V. is the result of a merger between Durango and its majority owned subsidiary Grupo Industrial Durango, S.A. de C.V. (GID), which received shareholder approval for the merger on October 8, 2001. After the merger the surviving entity was GID, which was subsequently renamed Corporacion Durango, S.A. de C.V. effective February 12, 2002. Corporacion Durango is a public company that is 92.8% owned by members of the Rincon Family. It is a holding company with numerous subsidiaries SIC: Paper and Paper Products EMPLOYEES: 7769 (last reported count) DEBT: US$813.9 million (as of March 31, 2002) CONTACTS: CORPORACION DURANGO, S.A. DE C.V. Mayela R. Velasco +52 (1) 829 1008 mrinconv@corpdgo.com.mx Arturo Diaz Medina +52 (1) 829 1015 adiaz@corpdgo.com.mx THOMSON FINANCIAL CORPORATE GROUP Alex Cancio (212) 701 1973 alex.cancio@tfn.com Richard Huber (212) 701-1830 richard.huber@tfn.com To see latest financial statements: http://bankrupt.com/misc/Durango.pdf GRUPO BITAL: Regulators Demand Prompt Decisions From SCH -------------------------------------------------------- The Mexican banking regulators are pushing for a timely decision from Santander Central Hispano (SCH) regarding its intentions with Grupo Financiero Bital. According to Patricio Bustamante, supervising vice-president at the Banking and Securities National Commission (CNVB), the CNVB has an interest in knowing what SCH's plans are because Bital entered into an agreement in December to take over Banco Atlantico. "We do not mind whether it is ING or Santander (that takes majority control), which is basically a decision between individuals," he said, adding that what matters from the CNVB's standpoint is that Bital's finances be sound and its shareholder structure solid. Fortifying Bital's financial condition is expected to be accomplished by its upcoming recapitalization involving either SCH or ING Group NV, Bustamante said. In May, ING was supposed to inject US$200 million into Bital to gain control of 17.5 percent of the bank, but the transaction has never taken place. In the past two months, the director of Santander Mexico, Marcos Martinez, has been quoted by local media as saying that SCH is interested in raising its stake in Bital by as much as possible. The CNBV is also awaiting formal notification of the sale by Banco Comercial Portugues of its stake in Bital to SCH. CONTACT: GRUPO FINANCIERO BITAL Paseo De La Reforma No. 243, Cuauhtemoc, 06500, Mexico ,D.F. Phone: 57.21.52.86 Fax: 57.21.57.83 Home Page: www.bital.com.mx Contact: Investor Relations Act. Ricardo Garza Galindo Salazar Phone: 57.21.26.40 Fax:57.21.26.26 E-mail: ricaggs@bital.com.mx SANTANDER CENTRAL HISPANO S.A. (BSCH) Plaza de Canalejas,1 28014 Madrid, Spain Phone: +34-91-558-10-31 Fax: +34-91-552-66-70 Email: investor@grupo.bsch.es Home Page: http://www.bsch.es Contacts: Ana P. Botn, Chairman, Banesto Emilio Botn-Sanz, Chairman Francisco G. Rold n, Financial Division General Manager Investor Relations: Phone: + 34.91.558.13.69 + 34.91.558.10.05 Fax: + 34.91. 558.14.53 + 34.91.522.66.70 GRUPO MEXICO: Shares Dip On SPCC Reduced Earnings Forecast ---------------------------------------------------------- Shares of Grupo Mexico SA, the world's third-largest copper producer, recently fell 44 centavos, or 2.6 percent, to MXN16.82. The drop in the stock follows an announcement made by its unit, Southern Peru Copper Corp., on Friday that it will cut its earnings forecast on US$11 million for this year as the average price of copper fell below the company's estimates. Southern Peru Copper shares fell US$1.08, or 7 percent, to US$14.27 on similar news. Grupo Mexico took control of SPCC, Peru's largest copper producer, in 1999 through their purchase of U.S.-based Asarco Inc. Late last year, Asarco Inc. violated its agreement on a US$450- million loan. Creditors have been negotiating ever since with Grupo Mexico over how they will get paid. If negotiations fail within the coming months, creditors may exercise their right to demand immediate payments. CONTACTS: GRUPO MEXICO S.A. DE C.V Avenida Baja California 200, Colonia Roma Sur 06760 Mexico, D.F. Mexico Phone: +52-55-5264-7775 Fax: +52-55-5264-7769 http://www.gmexico.com Contacts: German Larrea Mota-Velasco, Chairman & CEO Xavier Garcia de Quevedo Topete, President & COO ASARCO, INC. 2575 E. Camelback Rd., Ste. 500 Phoenix, AZ 85016 Phone: 602-977-6500 Fax: 602-977-6701 Home Page: http://www.asarco.com Contacts: German Larea Mota-Velasco, Chairman & CEO Genaro Larrea Mota-Velasco, President Daniel Tellechea Salido, VP & CFO GRUPO TMM: Signs Contract For Container Movements In Manzanillo --------------------------------------------------------------- Grupo TMM , the largest Latin American multi-modal transportation and logistics company, and owner of the controlling interest in Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (Grupo TFM), announced in a company press release that its TMM Ports and Terminals division has signed a new contract with Mediterranean Shipping Company of Geneva, Switzerland, the third largest container shipping company in the world, for container movements in Manzanillo. TMM Ports and Terminals is owned 51% by Grupo TMM and 49% by Stevedoring Services of America. As previously announced, the division recently received approval from the Secretary of Communication and Transportation in Mexico for the expansion of the waterfront and yard in Manzanillo, providing entry into Mexico and the United States. The new services announced will use the port of Manzanillo as an eastern Pacific hub for vessels originating in Asia that will stop at Manzanillo and move through the canal to the United States; for vessels from the United States east coast that will move through the canal and stop in Manzanillo before moving westbound to Asia; and for Latin American trade ships that will use Manzanillo as the transshipment port. Based upon the contract signed this week for increased services and on the positive outlook of other customers, Manzanillo is projecting significantly improved volume growth for the near term, from its current 300,000 TEU's annualized increasing to 500,000 TEU's over the next 18 months. Javier Segovia, Grupo TMM's president, said, "The expansion at Manzanillo is part of a focused program that TMM Ports and Terminals instituted two years ago to grow its terminal business. We are seeing the results of our initiatives to focus on selected, core transportation offerings and have been pleased with the results this division has contributed." Jon Hemingway, Stevedoring Services of America's CEO and president commented, "We are pleased to see Mediterranean Shipping, an important customer and also our partner in the Port of Long Beach at Pier S, give all of us at TMM Ports and Terminals the opportunity to provide global service to its Mexican customers." Headquartered in Mexico City, Grupo TMM is the premier Mexican multimodal transportation company and logistics provider. Through its branch offices and network of subsidiary companies, Grupo TMM provides a dynamic combination of ocean and land transportation services within Mexico. Grupo TMM also has the controlling interest in Transportacion Ferroviaria Mexicana (TFM), which operates Mexico's Northeast railway and carries over 40 percent of the country's rail cargo. Grupo TMM's web site is at http://www.grupotmm.com.mx,TFM's web site at http://www.gtfm.com.mx.Both sites offer Spanish/English language options. CONTACT: GRUPO TMM COMPANY Jacinto Marina, 011-525-629-8790 jacinto.marina@tmm.com.mx or Brad Skinner, 011-525-629-8725 (Investor Relations) brad.skinner@tmm.com.mx or Luis Calvillo, 011-525-629-8758 (Media Relations) luis.calvillo@tmm.com.mx or AT DRESNER CORPORATE SERVICES (general investors, analysts and media) Kristine Walczak, 312/726-3600 kwalczak@dresnerco.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Ma. Cristina Canson, Editors. Copyright 2002. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior 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 * * *