/raid1/www/Hosts/bankrupt/TCRLA_Public/020628.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, June 28, 2002, Vol. 3, Issue 127
Headlines
A R G E N T I N A
CAMPOFRIO ALIMENTACION: LatAm Subsidiaries Buyer Proves Elusive
B E R M U D A
MUTUAL RISK: The Emerson Firm Announces Class Action Lawsuit
MUTUAL RISK: Schiffrin & Barroway, LLP Announces Class Action
TYCO INTERNATIONAL: Kozlowski Pleads Not Guilty To New Charges
TYCO INTERNATIONAL: Previously Undisclosed Exec. Loans Surfacing
B R A Z I L
EMBRATEL: Investor Fears Send Shares Plunging
EMBRATEL: JP Morgan Confident It Can Meet Debt Payments
WORLDCOM: Disclosure Drags Down Brazil's Bonds
M E X I C O
DESC: SSB Rates `Neutral, High Risk'; Healthy Upside Target
SANLUIS CORPORACION: Debt Negotiations Nearing Finality
VITRO: SSB Initiates Coverage; Leverage Remains Concern
U R U G U A Y
BANCO EUROPEO: German Parent Considers Uruguayan Pullout
BEAL URUGUAY: Current Conditions Prompt Withdrawal from Uruguay
- - - - - - - - - -
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A R G E N T I N A
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CAMPOFRIO ALIMENTACION: LatAm Subsidiaries Buyer Proves Elusive
---------------------------------------------------------------
Spanish food company Campofrio Alimentacion SA is yet to find any
takers for its subsidiaries in Argentina and Dominican Republic.
Campofrio has been seeking buyers for its 40% stake in Argentine
company Campo Austral and 49% stake in the Dominican Republic
meat company Agrocarne SA in light of the economic crisis in
Latin America.
Meanwhile, Luis Serrano, former joint chairman, is expected to
step down this week in line with agreements signed two years ago.
However, he will remain as vice chairman representing the
interests of the Diaz family, the second shareholder of the
Company with 15.8% of the equity.
Serrano was formerly chairman of the Navidul meat company, which
Campofrio absorbed in the year 2000. His resignation will leave
Campofrio with Pedro Ballve as its sole chairman.
Campofrio is still recovering after outbreaks of animal diseases
in Europe in 2001 led to high prices that it couldn't pass on to
consumers. The Company reported net profit of EUR25.7 million in
2001, with provisions of EUR40 million for Argentina and any
losses arising from disposals in the Americas.
CONTACT: CAMPOFRIO ALIMENTACION, S.A.
Avda Europea 24, La Moraleja
E-28108 Madrid, Spain
Phone: +34-91 484 2700
Fax: +34-91 661 5345
Home Page: http://www.campofrio.es
Contacts:
Pedro Ballve Lantero, Co-Chairman
Luis Serrano Martin, Co-Chairman
Juan J. Guibelalde Inurritegu, CEO and VP
CAMPO AUSTRAL
Calle 12 Lote 2 fracc.1
Pque.Ind.de Pilar (1629) Pilar
Prov. de Buenos Aires
Tel. (54-2322) 49-6202
Home Page:
http://www.frioraf.com.ar/castellanos/obrasimportantes/contenido1
0.htm
=============
B E R M U D A
=============
MUTUAL RISK: The Emerson Firm Announces Class Action Lawsuit
------------------------------------------------------------
The Emerson Firm, a securities class action trial law firm,
announced Wednesday that a class action has been filed in the
United States District Court for the Southern District of
California on behalf of purchasers of Mutual Risk Management Ltd.
("Mutual Risk" or the "Company") (Pink Sheets:MLRME) previously
(NYSE:MM) publicly traded securities during the period between
February 16, 2000 and April 2, 2002, inclusive (the "Class
Period"). A copy of the complaint filed in this action is
available from the Court, or can be obtained from the Firm.
The complaint charges Mutual Risk and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
The complaint alleges that during the Class Period, Mutual Risk
and its most senior officers and directors disseminated
materially false financial statements for each of Mutual Risk's
interim quarters during that period and for the years ended
December 31, 2000 and 2001, which materially overstated the
Company's cumulative revenues and its net income. Defendants also
made a series of other materially false and misleading statements
about Mutual Risk and its financial condition and performance. As
a result of the materially false and misleading statements and
omissions described herein, Mutual Risk stock was inflated to an
all-time high of $23.75 per share.
Mutual Risk also represented in each of its quarterly and annual
filings with the SEC that the financial statements included
therein had "been prepared in conformity with generally accepted
accounting principles" and "reflected all adjustments necessary
for a fair presentation of results for such periods." In reality,
each of Mutual Risk's financial statements violated GAAP by
understating reserves for potential claims. The financial results
included in Mutual Risk's SEC filings during the Class Period
were thereby rendered materially false and misleading.
Then, on April 2, 2002, the Company admitted that even its
disastrous Q4 2001 results (announced February 19, 2002) were not
accurate, putting the Company's shares into another "free fall,"
trading at just pennies per share following the April 2, 2002
admission.
Purchasers of Mutual Risk publicly traded securities between
February 16, 2000 and April 2, 2002, inclusive, who wish to serve
as lead plaintiff, must move the Court no later than August 6,
2002. Members of this class, may join this class action by
contacting Tanya Autry in the Shareholder Relations Department at
The Emerson Firm. Any member of the purported class may move the
Court to serve as lead plaintiff through The Emerson Firm or
other counsel of their choice.
The Emerson Firm has substantial experience representing
investors in securities fraud class action lawsuits such as this.
The firm has offices in Houston, Texas and Little Rock, Arkansas,
but represents investors throughout the nation. Questions about
recovering for losses, or to consider serving as one of the lead
plaintiffs in this lawsuit, should be directed to the Firm.
The Emerson Firm
Investor Relations Department:
Tanya R. Autry
P.O. Box 25336
Little Rock, AR 72221-5336
Toll Free: 1-800-663-9817
E-mail: tanya.autry@worldnet.att.net
MUTUAL RISK: Schiffrin & Barroway, LLP Announces Class Action
-------------------------------------------------------------
The following statement was issued today by the law firm of
Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in
the United States District Court for the Southern District of
California on behalf of all purchasers of the common stock of
Mutual Risk Management Ltd. ("Mutual Risk") from February 16,
2000 through April 2, 2002, inclusive (the "Class Period").
To discuss this action or questions concerning this notice or
your rights or interests with respect to these matters, contact
Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L.
Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or
via e-mail at info@sbclasslaw.com.
The complaint charges Mutual Risk Management Ltd. and certain of
its officers and directors with issuing false and misleading
statements concerning its business and financial condition.
Specifically, the complaint alleges that during the Class Period,
Mutual Risk and its most senior officers and directors
disseminated materially false financial statements for each of
Mutual Risk's interim quarters during that period and for the
years ended December 31, 2000 and 2001, which materially
overstated the Company's cumulative revenues and its net income.
As a result of the materially false and misleading statements and
omissions described herein, Mutual Risk stock was inflated to an
all-time high of $23.75 per share.
Mutual Risk also represented in each of its quarterly and annual
filings with the SEC that the financial statements included
therein had "been prepared in conformity with generally accepted
accounting principles" and "reflected all adjustments necessary
for a fair presentation of results for such periods." In reality,
each of Mutual Risk's financial statements violated GAAP by
understating reserves for potential claims. The financial results
included in Mutual Risk's SEC filings during the Class Period
were thereby rendered materially false and misleading.
Then, on April 2, 2002, the Company admitted that even its
disastrous Q4 2001 results (announced February 19, 2002) were not
accurate, putting the Company's shares into another "free fall,"
trading at just pennies per share following the April 2, 2002
admission.
Plaintiff seeks to recover damages on behalf of class members and
is represented by the law firm of Schiffrin & Barroway, LLP,
which prosecutes class actions on behalf of investors and
shareholders. For more information on Schiffrin & Barroway, or to
sign-up to participate in this action online, please visit
http://www.sbclasslaw.com/cgi/signup.cgi.
Members of the class described above may, not later than August
6, 2002, move the Court to serve as lead plaintiff of the class,
if they so choose. Serving as lead plaintiff, however, demands
meeting certain legal requirements.
CONTACT: Schiffrin & Barroway, LLP
Marc A. Topaz, Esq.
Stuart L. Berman, Esq.
Three Bala Plaza East
Suite 400, Bala Cynwyd,PA 19004
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at info@sbclasslaw.com
TYCO INTERNATIONAL: Kozlowski Pleads Not Guilty To New Charges
--------------------------------------------------------------
Dennis Kozlowski, the former CEO of Tyco International Ltd.
charged earlier this month with evading sales taxes on pricey
art, pleaded innocent Wednesday to a new indictment charging him
with tampering with evidence, the AP reports.
"I plead not guilty," Kozlowski said as he was arraigned in
Manhattan's State Supreme Court. Justice Michael Obus allowed him
to remain free on US$3 million bond and set his next court
appearance for Aug. 14.
The recent indictment accuses Kozlowski for removing a bill of
lading from a document file at his office in Boca Raton, Fla.,
after the file was requested by the Manhattan district attorney's
office.
That bill of lading, dated Jan. 2, 2002, falsely showed that five
paintings by Monet, Renoir and others, for which Kozlowski paid
some US$13 million, were shipped from New York to New Hampshire,
prosecutors say.
An earlier indictment, filed against Kozlowski on June 4, alleged
that he actually shipped five empty crates to New Hampshire to
avoid paying more than US$1 million in New York sales taxes.
That indictment also alleges that Kozlowski worked with art
gallery executives and employees in New York and London from Aug.
11, 2001, through June 3, 2002, to carry out his tax evasion
schemes.
Stephen E. Kaufman, the business tycoon's lawyer, said outside
court that he would ask Obus on Aug. 14 to dismiss the charges.
"Mr. Kozlowski has pleaded not guilty, and we believe the charges
are unsubstantiated," he said.
Kozlowski quit as Tyco's chairman and chief executive officer the
day before the June 4 indictment was filed charging him with
falsifying business records, conspiracy, tampering with evidence,
and state sales tax evasion.
TYCO INTERNATIONAL: Previously Undisclosed Exec. Loans Surfacing
----------------------------------------------------------------
Tyco International failed to disclose to investors a transaction
involving granting a US$4.35-million loan to the head of its Fire
and Security Division in Boca Raton. Knight-Ridder Business News
suggests that failure to disclose such transactions is an
violation of securities laws.
Fire and Security President Jerry Boggess was given a mortgage on
his barrier-island home at 671 S. Ocean Blvd. in Boca Raton in
December 1997. Over the life of a 30-year, US$4.35-million loan
at 6% interest -- below market rates at the time -- total
interest paid would amount to more than US$5 million.
According to Tyco spokesman Gary Holmes, the Company wasn't
required to disclose the loan, which was made as part of a
program to help about 40 employees move to Boca Raton from Tyco's
operational headquarters in Exeter, N.H., Holmes said.
"The mortgage was not disclosed because it was an all-employee
program and not just open to top executives. Secretaries were
able to get mortgages," Holmes said.
Disclosure of transactions between a public company and its
officers and directors is regulated by the Securities and
Exchange Commission. An agency spokeswoman said a loan by a
company to a top officer generally should be outlined in
corporate filings, but she wouldn't comment specifically on the
Boggess' loan.
Michael Pucillo, an attorney who often represents shareholders
against corporations, said the Boggess loan should have been
disclosed.
"If he's an executive officer and is indebted by more than
US$60,000, then there's a disclosure obligation. Generally,
related-party transactions between the company and its top
officers should be disclosed. They're important," Pucillo said.
Another attorney, Paul Geller, who is representing shareholders
against Tyco, agreed.
"It's something that shareholders had a right to know under SEC
guidelines," Geller said. "There's no exemption that I'm aware of
that would shield them from the disclosure requirement."
===========
B R A Z I L
===========
EMBRATEL: Investor Fears Send Shares Plunging
---------------------------------------------
Apprehensions that Embratel may also have fraud in its financial
results after its controlling shareholder WorldCom admitted it
hid US$3.9 billion in expenses prompted investors to dump the
stock.
According to Bloomberg, Embratel preferred shares fell 26% to
BRL2.13, the lowest level since being spun off from
Telecomunicacoes Brasileiras SA in September 1998. Common shares
fell 17% to BRL3.10, while American depositary receipts fell 27%
to 75 cents. Shares of Embratel have fallen 78% this year and are
the worst-performing stocks at the Bovespa index.
"Investors may imagine Embratel will face more difficulties to
access credit lines abroad and may also have problems in its
reports," said Jorge Simino Jr., who helps manage BRL20 billion
(us$7.1 billion) in assets at Unibanco Asset Management in Sao
Paulo. Unibanco Asset sold all its Embratel shares by the end of
the first quarter on concern the stocks would fall further,
Simino said.
WorldCom's alleged fraud and its effect on Embratel's shares may
hasten the sale of control of the Brazilian unit, investors said.
"Shares are likely to fall further and it may be easier to sell
the Company," said Fabio Motta, who manages about BRL160 million
in stocks at Sul America Investimentos in Sao Paulo, including
some Embratel shares. He doesn't plan to sell Embratel shares.
"It's been a long time that WorldCom hasn't had a good image
among investors so a change in Embratel's control could have a
positive impact," Motta said.
Shares of Embratel have fallen this year on concern its profits
and margins may be squeezed as a result of increased competition,
investors said. Embratel's revenue declined 2.5% to BRL1.8
billion in the first quarter.
EMBRATEL: JP Morgan Confident It Can Meet Debt Payments
-------------------------------------------------------
JP Morgan believes that Brazilian telecommunications company
Embratel Participacoes SA will not be affected by its parent
WorldCom's woes. According to a Dow Jones Newswires report, JP
Morgan is the lead arranger of a US$270-million loan to Embratel
and expects to receive an interest payment from the Company this
Thursday.
Normally, companies wire their funds to accounts before it
reaches bank lenders such as JP Morgan. JPM said that Embratel
sent the money for making its interest payment on the US$270-
million loan Friday, well in advance of its Tuesday deadline.
The money "is already there in the account," JP Morgan said.
The process of making an interest payment can often take a few
days, so it isn't uncommon for investors to receive their
payments a day or two after the Company's due date. JP Morgan
expects to receive the interest payment from Embratel Thursday.
When asked if there is anything in the way of cross-default
provisions or payment acceleration clauses that would hit
Embratel if WorldCom were to file for bankruptcy protection,
Embratel Chief Financial Officer Jose Maria Zubiria said: "No,
nothing."
Zubiria said the companies are financially separate and that "we
(Embratel) have been able to keep ourselves very healthy."
He added that despite the tough market conditions, the Company
will continue to work to improve its results and operations.
Regarding this week's debt payment, JP Morgan said: "This US$270-
million loan is totally apart from WorldCom and isn't affected.
That would imply that other (debt) wouldn't be affected either."
Embratel has about BRL1.1 billion ($1=BRL2.89) in debt coming due
over the next 12 months and has about BRL2.6 billion in long-term
debt.
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
WORLDCOM: Disclosure Drags Down Brazil's Bonds
----------------------------------------------
Brazil's bonds ended lower Wednesday after revelations that
WorldCom improperly booked US$3.8 billion in expenses as capital
expenditures in order to boost profits over the past five
quarters.
The country's 8% bond maturing in 2014 fell 3.42 cents on the
dollar to 57.69 to yield 20.7%, up from 19.2% Tuesday. The bond's
price plunged almost 23% this month.
"What happened with WorldCom will have a global impact and that
includes bonds of all kinds," said Jana Benesova, who manages
about US$750 million in fixed-income securities at Credit Suisse
Asset Management in London. "Investors will be flying away from
risk."
"This WorldCom stuff is concerning investors around the world,"
said Nicholas Field, who manages US$300 million in emerging
market bonds with West LB Asset Management in London.
"Specifically, in Brazil's case, what's fueling the huge drop is
a lack of liquidity now in the market," he said.
===========
M E X I C O
===========
DESC: SSB Rates `Neutral, High Risk'; Healthy Upside Target
-----------------------------------------------------------
Pablo Burbridge, a Salomon Smith Barney analyst, initiated
coverage of Mexican conglomerate Desc SA, reports Dow Jones.
In his research note, Burbridge gave Desc a "neutral, high risk"
rating. According to the analyst, the conglomerate offers 24%
upside to his target price of MXN6.50 pesos ($1=MXN9.8850) per
share.
"Desc is the best vehicle with which to play the improving Mexico
auto parts sector, although we believe most of the good news is
already discounted in the price," Burbridge said in his research
note.
He added that management's commitment to cutting the Company's
debt burden is an important investment positive. However,
decreasing demand for manual transmissions and Daimler Chrysler
closing its plant in Mexico City are seen as sources of concern.
Desc, S.A. de C.V. is one of Mexico's largest industrial groups
with sales of approximately US$ 2.2 billion during 2001, out of
which exports to over 50 countries amounted to US$ 980 million.
Through its subsidiaries, the Company is a leading operator in
the Autoparts, Chemical, Food and Real Estate Sectors.
CONTACTS: DESC, S.A. DE C.V.
In Mexico:
Arturo D'Acosta
Alejandro de la Barreda
Tel: (525)5-5261-8037
Email: abarredag@mail.desc.com.mx
In New York:
Blanca Hirani
Melanie Carpenter
Tel: 212-406-3693
Email: bhirani@i-advize.com
SANLUIS CORPORACION: Debt Negotiations Nearing Finality
-------------------------------------------------------
Sanluis Corporacion, S.A. de C.V., and its creditors, which have
been locked up in talks for a year now, will decide within a
month what direction to take in order to restructure US$290
million in liabilities. By the end of July, bondholders and
stockholders will opt for a radical accord, a legal process, or
bankruptcy proceedings.
Of the US$290 million Sanluis owes, US$77 million is in
commercial paper; US$5 million to US$8 million in two banking
institutions (one of which is the Bank of Venezuela); and US$105
million euro bonds.
The company recently sold its LuisMin subsidiary for US$90
million -- US$20 million of which will go to payment of
liabilities, US$55 million to install a brake production line,
US$10 million to acquire a factory in the United States, and US$5
million to pay off steel providers.
Sanluis Corporacion is a Mexican industrial company that
manufactures autoparts and mines gold and silver.
CONTACT: SANLUIS Corporacion
Hector Amador
Email: hamador@sanluiscorp.com.mx
ADVISOR: N M ROTHSCHILD & SONS LIMITED
New Court, St. Swithin's Lane
London EC4P 4DU, United Kingdom
Phone: +44-20-7280-5000
Fax: +44-20-7929-1643
E-mail: infouk@rothschildco.uk
Home Page: http://www.nmrothschild.com
Contacts:
Sir Evelyn de Rothschild, Chairman
Andrew Didham, Exec. Dir. Finance Director Holdings
N M ROTHSCHILD & SONS (MEXICO) SA DE CV
Campos Eliseos 345-8o Piso
CP 11550 Mexico, DF Mexico
Phone: 52 5 327 1450
Fax: 52 5 327 1485
Home Page: www.rothschild.com.mx
VITRO: SSB Initiates Coverage; Leverage Remains Concern
-------------------------------------------------------
Pablo Burbridge, an analyst at Salomon Smith Barney, initiated
coverage of Mexican glassmaker Vitro, says Dow Jones. In his
research note, Burbridge gave Vitro an "outperform, speculative"
rating, saying that the stock is "potentially evolving into a
great value play, albeit with significant risks."
Although Vitro is becoming a pure play on glass and has
geographic diversification, Vitro's debt leverage and the limited
growth potential of its glass containers unit remains a source of
concern.
Vitro shares are trading at a 26% discount to the bank's 12-month
target price of MXN14.50 ($1=MXN9.8850) per share.
"The market has not recognized the value that Vitro has as a
strong free cash flow generator," Burbridge said in his research
note.
To see Vitro's latest financial statements:
http://bankrupt.com/misc/Vitro.txt
CONTACT:
(Media):
Albert Chico Smith
Vitro, S. A. de C.V.
011 (52) 81 8863-1335
achico@vitro.com
(Financial Community):
Rodrigo Collada
Vitro, S. A. de C.V.
+52 (81) 8863-1240
rcollada@vitro.com
(U.S. Contacts):
Luca Biondolillo/Susan Borinelli
Breakstone & Ruth Int.
(646) 536-7012 / 7018
Lbiondolillo@breakstoneruth.com
sborinelli@breakstoneruth.com
=============
U R U G U A Y
=============
BANCO EUROPEO: German Parent Considers Uruguayan Pullout
--------------------------------------------------------
The closure of Banco Europeo Para America Latina in Uruguay is
imminent. The bank's parent, leading German bank Westdeutsche
Landesbank Girozentrale, is now considering a swift exit from the
country due to its economic woes.
Just a week ago, the German bank said it would shut its Banco
Europeo Para America Latina unit in Argentina. Argentine banks'
earnings have been battered by the government's US$141 billion
debt default in December and a weakening local currency. Canada's
Bank of Nova Scotia and France's Credit Agricole SA are also
pulling out of Argentina.
The International Monetary Fund Tuesday gave Uruguay a beefed-up
loan package to help it battle a financial crisis.
CONTACT: WESTLB
Head office
West German Landesbank Girozentrale
Duke route 15
40217 Duesseldorf
Tel.: (0211) 826-01
Fax: (0211) 826-6119
Cathedral Head office
West German Landesbank Girozentrale
Friedrichstrasse 1
48145 cathedrals
Tel.: (02 51) 412-01
Fax: (02 51) 412 2921
BEAL URUGUAY: Current Conditions Prompt Withdrawal from Uruguay
---------------------------------------------------------------
An executive from the European Bank of Latin America (BEAL)
announced that the bank is pulling out of Uruguay within 3- 4
months, Xinhua reports.
"Uruguay does not offer adequate operating conditions for the
development of an international bank following European
standards, " Santiago Marchese, the BEAL's general director was
quoted as saying.
The application of BEAL's withdrawal from Uruguay reportedly "
has not yet been sent formally" to the Central Bank of Uruguay (
BCU). It will take three to four months to fulfill its internal
formal proceedings.
In April 2000, the BEAL, with its headquarters based in the
Belgian capital of Brussels, became a large foreign bank in
Uruguay and had registered reserves amounting to US$15.3 million
by December of the year. In 2001, it made a post-tax profit
amounting to US$2.3 million.
***********
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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