/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020719.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, July 19, 2002, Vol. 3, Issue 142 Headlines A R G E N T I N A ACINDAR: `D' Rating On $100M Bonds Reflects Increased Losses ALPARGATAS: Fitch Drops $22.7M In Corporate Bonds to Default BANCO BANSUD: Lowered to 'raCCC' On Deteriorating Outlook BANCO BANSUD: Simple Issue Corporate Bonds Now Rated "raD" BANCO FRANCES: US$1 Billion Bond Issues Now Rated "Junk" CAPEX SA: Local S&P Affiliate Lowers US$105 M Bonds to "raD" CAPEX SA: Two Corporate Bonds Get "raCC", "raD" Ratings from S&P EDEMSA: Interest Payment Delay Prompts "D" Rating From Fitch HSBC ARGENTINA: Cash Injection Doesn't Prevent Ratings Cut JUAN MINETTI: Cement Maker Gets "raD" Rating on US$12 MM Bond MULTICANAL SA: Drops to "raD" Levels; Two Bond Issues Affected SCOTIABANK QUILMES: Argentine Judge Indicts Former Head TELEFONICA DE ARGENTINA: Forced to Absorb Transaction Tax VRH: Defaults on Bank Debt; Ahold Revises FY02 EPS Growth Target B R A Z I L BANCO ALFA: Fitch Assigns `B' to Local Currency Ratings CEMIG: Market Difficulties Prompt Moody's Review For Downgrade COPEL: Moody's Puts Rating Under Review For Possible Downgrade CSN: Reaches Agreement On Proposed Merger With Corus CSN: Shares Jump Following Proposed Merger Announcement CSN: Fitch Changes Status to Watch Evolving After Merger Deal MRS LOGISTICA: Fitch Affirms, Amends Watch on Merger News VICUNHA SIDERURGIA: Fitch Rates `Watch Evolving' on Proposal M E X I C O BANCA QUADRUM: Liquidation Requires MXN1 B From Treasury BANCRECER: IPAB Rejects Banorte's Request For Refund GRUPO BITAL: CNBV Grants HSBC Approval To Conduct Due Diligence GRUPO BITAL: HSBC To Unveil Recapitalization Plans Soon GRUPO DINA: Authorizes Public Buyback Offer for 45% Of Capital GRUPO MASECA: Low Corn Prices Negatively Affecting Results HYLSAMEX: Debt Restructuring Should Close This Week P E R U BACKUS: Conasev Launches Probe Into Alleged Accounting Misdeeds - - - - - - - - - - - ================= A R G E N T I N A ================= ACINDAR: `D' Rating On $100M Bonds Reflects Increased Losses ------------------------------------------------------------ Fitch Argentina Calificadora de Riesgo S.A. has assigned a "D" rating to Acindar Industria Argentina de Aceros' (ACINDAR) US$100 million corporate bonds. The bonds mature February 16, 2004. The rating was based on the Company's March 31, 2002 financial reports which posted a net loss of ARS384 million (currently about US$107 million), compared to a loss of ARS41.6 million in same-period last year, and a negative net worth of ARS252 million. The Company defaulted on a bond repayment in February this year. ACINDAR is Argentina's biggest producer of steel rods. The company is controlled by the Acevedo family and Brazil's long products steel maker Belgo-Mineira. Its total debts amounted to US$550 million at the end of last year. To see Acindar's financial statement: http://bankrupt.com/misc/Acindar.htm CONTACTS: ACINDAR S.A. Jose I. Giraudo, Investor Relations Manager Phone: (54 11) 4719 8674 Andrea Dala Investor Relations Officer Phone: (54 11) 4719 8672 URL: http://www.acindar.com/index.htm ALPARGATAS: Fitch Drops $22.7M In Corporate Bonds to Default ------------------------------------------------------------ Fitch Argentina Calificadora de Riesgo S.A. assigned a "D" rating to Alpargatas S.A.I. y C's US$22,662,889 corporate bond last week. The bonds mature February 30, 2004. The rating was based on the Argentine company's March 31 financial results. Alpargatas called in the receivers in early Jan. 2002 due to the ongoing economic depression in Argentina. The footwear and textile firm has debts totaling US$279 million, 83% of which is bank debt. The Bank of New York is the largest creditor with ARS87.96 million, followed by Banco Nacion with ARS68.23 million and Bankers Trust Company with claims for ARS25.11 million. Alpargatas values its assets at ARS295 million and the guarantees given to Bancafe de Panama, Creditanstalt, Eagle and Hamilton at ARS3.8 million. CONTACTS: SAO PAULO ALPARGATAS S.A. Rua Urussui, 300 - Itaim Bibi 04542-903 - Sao Paulo - SP Home Page: http://www.alpargatas.com.br/ingles/index_ie.htm Contact: Fernando Tigre de Barros Rodrigues, Director of Business Adminstration and Finance CREDITORS: THE BANK OF NEW YORK COMPANY, INC. 1 Wall St. New York, NY 10286 Phone: 212-495-1784 Fax: 212-635-1799 Home Page: http://www.bankofny.com Contacts: Public and Investor Relations One Wall Street - 31st Floor New York, NY 10286 Tel: (212) 635-1569 Fax: (212) 635-1799 E-mail: rgrieves@bankofny.com BANCO DE LA NACION ARGENTINA Bartolome Mitre, 326 1036 Buenos Aires, Argentina Phone: +54-11-4347-6000 Fax: +54-11-4347-8078 Home Page: http://www.bna.com.ar/ Contacts: Enrique Olivera, President Adolfo Martin Prudencio Canitrot, Deputy VP BANKERS TRUST COMPANY OF NEW YORK 280 Park Avenue New York, New York 10017 Phone: (+1-212) 237-2000 Fax: (+1-212) 469-7014 CREDITANSTALT: Creditanstalt Schottengasse 6 P.O. Box 72 A-1010 Vienna Republic Of Austria Phone: (43)531310 Fax: (43)531317566 Home Page: http://www.creditanstalt.co.at/home_eng/ BANCAFE PANAMA S.A. (COLOMBIA) Calle Manuel M. Icaza & Calle 52 No. 18 Panama City, Panama Phone: 264-6066 Fax: 263-6115 HAMILTON BANCORP INC. 3750 NW 87th Ave. Miami, FL 33178 Phone: 305-717-5500 Fax: 305-717-5631 Contacts: Eduardo A. Masferrer, Chairman and CEO Lucious T. Harris, Executive Vice President and CFO EAGLEBANK 7815 Woodmont Avenue Bethesda, Maryland 20814 Phone: (301) 986-1800 Fax: (301) 986-8529 Home Page: http://www.eaglebankmd.com/ Contact: Ronald D. Paul, Chairman BANCO BANSUD: Lowered to 'raCCC' On Deteriorating Outlook --------------------------------------------------------- Standard & Poor's International Ratings, Ltd. Sucursal Argentina assigned Banco Bansud S.A. an "raCCC" rating early this week. The rating includes the company's US$600 million corporate bond issue. The rating agency did not specify the maturity date of the bonds, but indicated that the ratings were based on the reported financial footing of the company as of December 31, 2001. Mexico's Banamex bank, a unit of U.S.-based Citigroup Inc., used to control Banco Bansud but sold its majority stake in January due to overlapping problems with Citigroup's operations in Argentina. Banco Macro assumed the stake for US$65 million and now controls the bank's 72 branches, 1,500 employees and assets of over ARS1 billion. This is not the first time that a rating agency doubted the bank's viability. In January, Moody's Investors Service predicted that the company could become insolvent due to Argentina's lack of a coherent monetary and banking policy framework coupled with paralysis in the local financial markets. Sucursal Argentina is the local affiliate of Standard & Poor's. BANCO BANSUD: Simple Issue Corporate Bonds Now Rated "raD" ---------------------------------------------------------- Banco Bansud suffered a second black eye on Monday after Standard & Poor's International Ratings, Ltd. Sucursal Argentina also downgraded the bank's US$60 million simple issue, the same day that the bigger US$600 million program type bond got a "raCCC" rating. The local affiliate of Standard & Poor's gave the smaller "obligaciones negociables subordinadas" an "raD" grade, citing the unimpressive financial performance of the bank at December 31, 2001. Last year, the bank reported third quarter consolidated assets of 1.522 billion pesos, with deposits of 1.042 billion pesos. Nine- month net losses reached 69.7 million pesos. BANCO FRANCES: US$1 Billion Bond Issues Now Rated "Junk" -------------------------------------------------------- The two US$1 billion program type corporate bond issues of ailing BBVA Banco Frances S.A. are now rated "raCCC" and "raCC" by Standard & Poor's International Ratings, Ltd. Sucursal Argentina. A disclosure by the rating agency to the National Securities Commission of Argentina did not specify its reason for the downgrade, but noted that the new credit grades were based on financial figures at December 31, 2001. The local affiliate of Standard & Poor's described the bonds as "Programa de Obligaciones Negociables." On Monday, Troubled Company Reporter-Latin America quoted an executive of Banco Bilbao Vizcaya Argentaria SA (BBVA) saying that the Spanish parent will pull out of Argentina if the economic situation in the country goes unchanged. "A good banking practice and the commitment to shareholders calls for a bank to leave any project in which the expectations of profits in the medium and long term are not satisfactory," said BBVA President Francisco Gonzalez. In mid-June, the Spanish parent said it would help Banco Frances by increasing the ailing unit's capital through the conversion of US$209.3 million in debt for equity. A source, at that time, said that about US$130 million of Banco Frances' subordinated negotiable bonds held by BBVA would be swapped for shares in the Argentine bank as would US$79.3 million of a US$150 million loan BBVA previously made to the unit. In return, BBVA will increase its stake in Banco Frances to around 75% from 67%. Banco Frances recorded a loss of EUR4 million in the first quarter of the year, compared to a profit of EUR53 million in the previous year. CAPEX SA: Local S&P Affiliate Lowers US$105 M Bonds to "raD" ------------------------------------------------------------ The National Securities Commission of Argentina posted on Monday a rating action by Standard & Poor's International Ratings, Ltd. Sucursal Argentina, assigning a "raD" grade on Capex S.A.'s US$105 million simple issue corporate bond. The Commission said the rating agency did not provide an explanation for the downgrade. This bond is set to mature on December 23, 2004 and is described by the agency as an "Obligaciones Negociables Simples." The new rating reflects figures posted by the company as of January 31 this year. In March, credit rating agency Standard and Poor's (S&P) lowered Capex's foreign currency rating to 'D' from 'SD' (Selective Default), and its local currency rating to 'D' from 'CC', because Capex failed to make a US$2.5 million principal debt payment. In April, Fitch Ratings also downgraded Capex's foreign and local currency ratings to 'DD' from 'C' following the Company's default on interest payments due under its floating rate note (FRN) and trade facilities. The default was prompted by the absence of the required approval from the central bank (Banco Central de la Republica de Argentina, BCRA) to transfer the corresponding interest payments. Capex's financial flexibility has been adversely affected by the devaluation, implementation of transfer and convertibility controls, pesofication and effects stemming from the government's default. The Company still faces uncertainties around the electricity sector's proposed new pricing system that would allow companies to recover higher operating costs from the devaluation. Capex, which generates electricity in the Comahue region in southwest Argentina, with six gas-fired units and one steam unit, is 55%-owned and controlled by Capsa S.A. (CAPSA) with the remainder of the common stock being listed of the Buenos Aires and Luxembourg Stock Exchanges. Capsa is 55% owned by the Gotz family and 45%-owned by El Paso Energy (EPG), a U.S.-based energy company that has operations in interstate natural gas transmission, gas gathering and processing, energy marketing, and international energy infrastructure development. EPG and Capex are strategic partners that expect to invest in oil and gas and power projects in Latin America. CAPEX SA: Two Corporate Bonds Get "raCC", "raD" Ratings from S&P ---------------------------------------------------------------- Two simple issue corporate bonds of power firm Capex S.A. received "junk" ratings from Standard & Poor's International Ratings, Ltd. Sucursal Argentina on Monday. The US$150 million "Obligaciones Negociables Simples," which matures on January 1, 2005, got an "raCC" rating, while the smaller US$40 million bond of the same type got a further nodge to "raD." The second tranche matures on June 11, 2004. Both ratings were based on January 31, 2002 financial figures, an advisory posted on the National Securities Commission Web site said. In April, Fitch Ratings downgraded the foreign and local currency ratings of Capex S.A. to 'DD' from 'C'. The rating actions followed Capex's default on interest payments due under the company's floating rate note (FRN) and trade facilities. The default was prompted by the absence of the required approval from the central bank (Banco Central de la Republica de Argentina, BCRA) to transfer the corresponding interest payments. EDEMSA: Interest Payment Delay Prompts "D" Rating From Fitch ------------------------------------------------------------ Fitch Argentina Calificadora de Riesgo S.A. has assigned a "D" rating to the corporate bonds of Empresa Distribuidora de Electricidad de Mendoza S.A. (EDEMSA) worth US$28,328,611. The rating, which was issued last week, reflects the Company's financial position as of March 31, 2002. Argentine distributor Edemsa has delayed payments of the series II debentures capital (US$9.8 million) that expired Friday and the series III interest (US$2.2 million). Edemsa is controlled by the French EDF through direct and indirect holdings. The Argentine province of Mendoza also holds a stake in the utility. The company has US$120 million in debt. CONTACT: EDEMSA San Martin 322 5500 Mendoza Phone: (54) 261 4 497 300 HSBC ARGENTINA: Cash Injection Doesn't Prevent Ratings Cut ---------------------------------------------------------- The injection of some US$200 million by parent HSBC Holdings Plc last month appears to have failed to sway Standard & Poor's International Ratings, Ltd. Sucursal Argentina, which rated "junk" two corporate bonds issued by HSBC Bank Argentina S.A. The US$500 million program type bond received a "raCCC" rating, while the other US$500 million notes got a "raCC" grade. The two ratings were based on figures posted by the bank as of December 31, 2001, said the National Securities Commission of Argentina. In a report last month, Troubled Company Reporter-Latin America said HSBC Bank Argentina SA had to pay US$158 million worth of bonds maturing in the third week of June. The British parent has already spent US$446 million this year to shore up finances of the local unit after it ran out of cash resulting from a run on deposits, debt default and devaluation. JUAN MINETTI: Cement Maker Gets "raD" Rating on US$12 MM Bond ------------------------------------------------------------- The US$12 million simple corporate bond issue of Industrial group Juan Minetti received a "raD" grade in the latest rating action of Standard & Poor's International Ratings, Ltd. Sucursal Argentina. The bond will mature on December 1, 2005 and is described by the rating agency as "Obligaciones Negociables, no convertibles y subordinadas, emisi�n aprobada por Asamblea Gral. Ordinaria y Extraordinaria de fecha 10.11.95." According to the National Securities Commission of Argentina, the agency based its latest ratings on the financial figures posted by the company as of March 31 this year. MULTICANAL SA: Drops to "raD" Levels; Two Bond Issues Affected -------------------------------------------------------------- Both the simple and program type corporate bond issues of Multicanal S.A. slipped to "raD" levels on Monday, an advisory posted on the National Securities Commission Web site said. The US$125 million simple issue described by Standard & Poor's International Ratings, Ltd. Sucursal Argentina as "Obligaciones Negociables simples, con vencimiento a 10 a�os, autorizada poa AGOyE de fecha 7.10.96" will mature on February 1, 2007. The rating agency did not indicate when the larger US$1.05 billion program issue will mature. Both ratings were based on figures as of March 31 this year, the advisory noted. Troubled Company Reporter-Latin America learned last month that the Cable-TV network operator, which has already defaulted on interest payments twice this year, has hired J.P. Morgan Securities Inc. to draft a debt-restructuring plan. The cable group, a unit of Grupo Clarin SA, defaulted on interest payments in February and April, garnering a "default" rating from Standard & Poor's. The group's debts are estimated to total some US$560 million. Argentina's four-year recession, an 18-month advertising and corporate spending slump, including the peso devaluation in early January, are being blamed for the company's financial difficulties. The peso devaluation was especially debilitating because the company has substantial dollar-denominated debts. SCOTIABANK QUILMES: Argentine Judge Indicts Former Head ------------------------------------------------------- Alan MacDonald, the former head of the Argentine unit of Canada- based Bank of Nova Scotia, from October 2000 to June 2002, is facing charges in Argentina court for refusing court orders to release pensioners' frozen funds, reports Reuters, citing court and bank officials. Judge Mariano Berges charged MacDonald, who headed Scotiabank Quilmes bank from October 2000 to June 2002, with "legal disobedience." The charges, which included Eduardo Oteiza, chief of the unit's legal department, carry jail terms of up to one year. In addition, the judge imposed a lien on ARS120,000 worth (US$33,058) of both executives' property. Scotiabank Quilmes was the first foreign-owned bank to be halted amid Argentina's four-year recession. The ensuing financial turmouil has pushed the entire banking system to the brink of bankruptcy after last year's bank run drained 20% of all deposits. Scotiabank owes depositors, the Central bank, and private creditors ARS3.7 billion. The obligation to the Central Bank consists of ARS200 million in repurchase agreements and ARS170 million in rediscount loans. The bank's headquarters in Canada, after taking a CAD707-million write-down that erased most of its profits in the first quarter of this fiscal year, has refused to inject fresh capital into the unit until clear, consistent banking rules are announced. Officials have said they hope to sell the Argentine unit. LATIN AMERICAN CONTACTS: SCOTIABANK QUILMES Alan Macdonald Chief Executive Officer Phone: (54-11) 4338-8000 Fax: (54-11) 4338-8033 Mail: 6th Floor Gral. J.D. Peron 564 (C1038AAL) Buenos Aires Roy D. Scott Vice-President and Managing Director, Latin America Phone: (54-11) 4394-8726 Fax: (54-11) 4328-1901 Mail: P.O. Box 3955 C1000WBN Correo Central Buenos Aires, Argentina E-mail: scotiarep@sinectis.com.ar TELEFONICA DE ARGENTINA: Forced to Absorb Transaction Tax ---------------------------------------------------------- The National Communications Commission issued a ruling barring Telefonica de Argentina from passing on transaction tax to its clients. In its decision, the Commission said that Telefonica cannot pass onto its customers the 1.2% tax levied on financial transactions. The commission's ruling came after an association of consumers sued Telefonica, accusing the Company of infringing a government law that suspended a clause allowing companies operating public services to adjust tariffs according to the US PPI, while freezing their tariffs after converting them into pesos. As a result, Telefonica, which started including the cost of the tax in its bills in June, must refund the additional sums it has already collected. Telefonica de Argentina, which has decided to freeze investments, has been hard hit by the devaluation of the Argentine peso, plummeting sales and high debts. The Company reported first- quarter losses of ARS2.48 billion compared with a profit of US$44 million a year ago. CONTACTS: TELEFONICA DE ARGENTINA Tucuman 1, 18th Floor, 1049 Buenos Aires, Argentina Phone: (212) 688-6840 Home Page: http://www.telefonica.com.ar Contacts: Carlos Fernandez-Prida Mendez Nunez, Chairman Paul Burton Savoldelli, Vice Chairman Fernando Raul Borio, Secretary VRH: Defaults on Bank Debt; Ahold Revises FY02 EPS Growth Target ---------------------------------------------------------------- Ahold, the international food retailer and foodservice operator, announced that it anticipates earnings per share growth for full- year 2002 at 5 - 8%, excluding currency impact, goodwill amortization/impairment charges and a Euro 350-450 million charge related to the Velox Retail Holdings ("VRH") default. Organic operating earnings growth is confirmed at approximately 15%, excluding currency impact. Ahold, being contingently liable with respect to certain indebtedness owed by VRH, received notice on July 16, 2002 that VRH has defaulted on certain bank debts secured by its shares in Disco Ahold International Holdings ("DAIH"), Ahold's Latin American joint venture. Ahold will be required to take over loans and purchase substantially all of VRH's shares in DAIH for a total consideration of approximately USD$490 million. The company stated in its earnings outlook on May 7 and reiterated in the announcement of first-quarter 2002 results on June 6, the target of 15% earnings per share (EPS) growth, excluding currency impact and goodwill amortization/impairment charges, was ambitious. Ahold has said on several occasions that reaching this EPS growth target this year could be impacted by a continuing deterioration of the situation in Argentina, by developments in Spain and by the level of gains from the sale of real estate. Mid-way through 2002, a better assessment can be made of the size of the impact of these specific factors on full- year EPS, as it is becoming apparent that second-quarter EPS growth for the company as a whole is expected to be flat. The company also projects somewhat higher 2002 interest expenses than originally forecast. The estimated impact of these factors on full-year 2002 can now be quantified as follows: 1. Deteriorating situation in Argentina In 2002, the economic situation in Argentina has continued to deteriorate as illustrated by the ongoing devaluation of the Argentine Peso. Ahold has continuously stated its potential exposure in Argentina should VRH default under its bank indebtedness. - Towards the end of the second quarter of 2002, which ended on July 14, it became more apparent that VRH would default on bank debts secured by its shares in DAIH. On July 16, 2002 Ahold received notice that VRH had defaulted on several of its credit agreements. These defaults constitute a default under VRH's other credit agreements secured by VRH's shares in DAIH. - Ahold will be required to take over loans and purchase substantially all of the remaining shares held by VRH in DAIH for a total consideration of approximately USD 490 million. Such payments are expected to be made in the third quarter. About 60% of this investment will be financed from available funds. The rest will be financed by utilizing credit facilities specifically arranged for this purpose. It is expected that net interest expenses will increase by approximately Euro 10 - 12 million in 2002. Ahold intends to terminate its shareholders' agreement with VRH. - The takeover of loans and purchase of VRH's shares in DAIH will generate a substantial charge in the second quarter 2002 under Dutch and U.S. GAAP estimated at Euro 350-450 million, as the amount paid will exceed the fair value of the DAIH shares. Furthermore, as anticipated, the situation in Argentina continues to be uncertain and the economic slow- down is expected to impact Ahold's net earnings for full-year 2002 by Euro 38 - 47 million, largely because of the higher interest expenses resulting from USD denominated debt, based on current exchange rates. 2. Prolonged integration of Spanish activities The integration of Ahold Spain and Superdiplo on the Spanish mainland, as earlier communicated, is a complicated endeavor that is taking longer than anticipated to execute. As announced in May, operating earnings in Spain for full-year 2002 are expected to total approximately Euro 70 million, some Euro 30 million short of Ahold's original target. 3. Real estate gains at lower end of the range. The level of gains from the sale of real estate in 2002 is now projected at between Euro 55 - 65 million, which is Euro 30 - 40 million lower than anticipated. Potential impact on net earnings, excluding currency, goodwill amortization/impairment charges and the charge related to the VRH default: Euro 136-164 million These factors, combined with the estimated impact of higher interest rates in Latin America (Euro 8 - 10 million) in 2002 and an estimated interest expense higher than originally projected (additional net interest expenses of Euro 20 - 25 million) for the entire company in 2002, indicate that Ahold's full year net earnings, excluding currency impact and goodwill amortization/impairment charges, could be approximately Euro 136-164 million lower than the original plan for 2002. This also excludes the Euro 350-450 million charge related to the VRH default. The estimate is based on the following breakdown: Euro 10 - 12 million: DAIH (interest expenses resulting from purchase of VRH's shares in DAIH) Euro 38 - 47 million : Argentina (impact of decreased net earnings; mainly interest expense) Euro 30 million: Spain (underperformance vs. original plan) Euro 30 - 40 million: Real estate gains (at lower end of projected range) Euro 8 - 10 million: Interest rates (in local Latin American markets) Euro 20 - 25 million: Interest expenses Ahold President & CEO Cees van der Hoeven commented: "In light of the unfolding developments, we feel it is necessary to revise our outlook for full-year 2002 earnings per share growth to the mid single-digits,' said Ahold President & CEO Cees van der Hoeven. 'In this statement, we have provided a detailed discussion and quantification of the issues, which are mainly unrelated to operations. The Corporate Executive Board has made every effort to be as transparent as possible in outlining the specific circumstances that can potentially impact our results. Preliminary results for the second-quarter of 2002, which ended on Sunday, July 14, indicate that, compared to last year, no EPS growth should be expected, largely because of non-operating factors. However, we are encouraged by the underlying strength of our core business and are fortunate that most Ahold companies are performing according to or better than expectation." "Performance continues to be particularly solid at U.S. Foodservice, Stop & Shop, Albert Heijn, Giant-Landover and ICA- Sweden. Operating earnings at these five companies are according to plan and all are expected to sustain their performance throughout the year. Significant organic growth and margin expansion are being driven by Ahold's customer focus, operational strength and economies of scale, and we are pleased with the way our operations are embracing EVA principles," the Ahold president concluded. Organic operating earnings growth, excluding currency impact, confirmed at approximately 15% The Ahold Corporate Executive Board expects operating earnings, excluding currency impact to increase organically by approximately 15% in 2002. The implied strong margin expansion is derived from significant additional economies of scale, synergies and operational enhancements. Including the acquisitions of Alliant and Bruno's, but excluding currency impact, operating earnings are expected to increase by approximately 20%. Earnings are expected to grow faster in the second half of 2002 than in the first half of the year, mainly reflecting completion of the integration of Alliant into U.S. Foodservice. Other developments: 1. U.S. Foodservice U.S. Foodservice sales for the full year 2002, originally projected at around USD 18.5-19 billion, are now expected to be USD 18.0-18.5 billion. Sales in the second quarter are anticipated to be flat as a consequence of shedding some unprofitable business. The integration of Alliant continues according to schedule. Operating earnings of U.S. Foodservice for the full year are expected to be in line with earlier projections. 2. Positive cash flow Ahold expects to generate cash flow for full-year 2002 in excess of its capital expenditure plan. After payment of the cash required for the default of VRH and the distribution of dividends, Ahold expects to reach the same net interest bearing debt level as at the end of 2001. 3. Pension fund Due to rapidly falling stock markets worldwide, we have reviewed our pension funds to determine any potential funding requirements that might materialize in 2002. Currently, we are at an acceptable funding level and our Dutch pension fund is over-provided. However, should stock markets continue their dramatic decline, this could trigger a funding requirement in 2002 in our Dutch pension fund. The company also cautioned that: -- Earnings per share growth: excludes currency impact, goodwill amortization/impairment charges and the charge related to the VRH default. Organic sales growth excluding currency impact definition: "Sales year n" divided by "Sales year (n-1)* Ahold base + sales year (n-1)* acquired companies**" * adjusted for the currency impact. ** to the extent that the sales of the acquired company represent less than 5% of the sales of the acquiring entity, or that the acquisition is an entry into a new business channel or market area. Currency impact is defined as the impact of using actual exchange rates to translate the financial figures of our subsidiaries into Euros. The financial figures of the previous year are restated using the actual exchange rates in order to eliminate this currency impact. CONTACT: Ahold NV, Zaandam Public Relations +31.75.659.5720 Annemiek Louwers +31.6.53.98.16.06 (Mobile) =========== B R A Z I L =========== BANCO ALFA: Fitch Assigns `B' to Local Currency Ratings ------------------------------------------------------- Fitch Ratings, the international rating agency, has assigned a Short-term Local currency rating of 'B' and a Long-term Local currency rating of 'B+' to Brazil's Banco Alfa de Investimento. These ratings are at Brazil's sovereign ceiling and, in line with the Outlook assigned to the sovereign's Long-term ratings, the Outlook for the bank's Long-term rating is Negative, reflecting continued pressure on Brazil's economic fundamentals. All other ratings assigned to Banco Alfa de Investimento (Alfa) are affirmed: Individual 'C', Support '4T', Short-term foreign currency 'B', Long-term foreign currency 'B+' (Negative Outlook), Short-term national rating 'F1 (bra)', Long-term national rating 'A+ (bra)' (Stable Outlook). Alfa is a medium-sized wholesale bank, controlled by Dr. Aloysio Faria, a wealthy Brazilian entrepreneur, and focusing on corporate lending, investment banking, car loans and fund management. All business lines are gradually being expanded, under the guidance of an experienced management team. Fitch Ratings's Support and Individual Ratings for Banks Fitch's Individual ratings assess how a bank would be viewed if it were entirely independent and could not rely on external support. Its Support ratings deal with the question of whether a bank would receive support from its owners or from the state if it were to get into difficulty. These ratings are not debt ratings but rather, respectively, an assessment of the intrinsic strength of a bank and of any level of outside support that may, or may not, be available to it. A Support rating qualified by the suffix "T" indicates significant existing or potential transfer risk of economic and/or political origin that might prevent support for foreign currency creditors. CONTACT: FITCH RATINGS Jose Romero, +55 (0) 11 287 3177, Sao Paulo Rafael Guedes, +55 (0) 11 287 3177, Sao Paulo Peter Shaw, 1-212-908-0553, New York James Jockle, 1-212-908-0547, New York, Media Relations BANCO ALFA DE INVESTIMENTOS S.A Alameda Santos, 466, 5 andar SP Sao Paulo 01418-000 Phone: +55 11 3175 5773 Home Page: www.bancoalfa.com.br CEMIG: Market Difficulties Prompt Moody's Review For Downgrade -------------------------------------------------------------- Moody's Investors Service placed the ratings of Companhia Energetica de Minas Gerais (Cemig) under review for possible downgrade. Approximately, BRL588 million of debt securities are affected. Moody's review centers on concerns over Cemig's ability to execute its strategic program in light of the difficult financial markets in Brazil. In its review, Moody's said will assess the possible effects of on-going severe limitations in credit availability for borrowers in Brazil, and will also consider the credit quality and financial position of the owners, the largest of which is the state government. Cemig was due to file its 2001 annual report on Form 20-F with the U.S. Securities and Exchange Commission July 15, 2002. However, due to the uncertainties associated with the final outcome of the ongoing negotiations with the Minas Gerais State Government and the Brazilian Federal Government, and the related effects, if any, on Cemig's financial position and results of operations, Cemig decided to postpone the filing until these negotiations have been concluded. Cemig announced Tuesday that it has entered into negotiations with the Minas Gerais State Government, which is its controlling shareholder, and the Brazilian Federal Government regarding the payment terms of an account receivable from the Minas Gerais State Government that had a total outstanding balance as of December 31, 2001 of BRL1.2 billion (US$519 million). Cemig expects that the negotiations will involve the transfer of the payment obligation from the Minas Gerais State Government to the Brazilian Federal Government and the issuance of bonds to Cemig by the Brazilian Federal Government. Cemig has 5,633MW in generating capacity, most of which is hydroelectric, and distributes natural gas. It has "limited" telecom investments, according to Moody's. CONTACT: CEMIG Luiz Fernando Rolla, Investor Relations Phone: +55-31-3299-3930 Fax: +55-31-3299-3933 E-mail: lrolla@cemig.com.br Or Vicky Osorio of The Anne McBride Co., Phone: +1-212-983-1702 Fax: +1-212-983-1736, E-mail: vicky@annemcbride.com COPEL: Moody's Puts Rating Under Review For Possible Downgrade -------------------------------------------------------------- Moody's Investors Service placed the rating of Companhia Paranaense de Energia (COPEL) under review for possible downgrade. Approximately, BRL500 million of debt securities are affected. The review was prompted by concerns over COPEL's ability to execute its strategic program in light of the difficult financial markets in Brazil. In its review, Moody's said it will assess the possible effects of on-going severe limitations in credit availability for borrowers in Brazil, and will also consider the credit quality and financial position of the state government as the controlling shareholder of COPEL. Copel owns 4,548MW in generating capacity and has planned several additional generation investments through its wholly owned subsidiary, Copel Participacoes. The Company also holds smaller telecom and gas distribution investments. To see financial statements: http://bankrupt.com/misc/Copel.pdf CSN: Reaches Agreement On Proposed Merger With Corus ---------------------------------------------------- The Boards of CSN and Corus, the Anglo-Dutch steel producer, have reached agreement in principle on the terms of a proposed merger of the two companies. Under the terms of the proposed merger, existing CSN shareholders will hold 37.6 per cent of the enlarged group while existing Corus shareholders will hold 62.4 per cent. The transaction will be structured such that existing CSN shareholders will receive shares in a new Brazilian listed holding company ("CSN HoldCo") which will, in turn, hold 37.6% of the share capital of the enlarged Corus. The proposed merger is an important step in CSN's strategy of internationalization and of expansion of its low cost steel production, while maximizing the potential of CSN's assets. The proposed merger will bring together one of the world's lowest cost steel producers with one of Europe's market leaders in carbon steel, creating value through inherent synergies. The enlarged group will: -- be a leading global steel producer with operations in Europe, Brazil and North America; -- be substantially vertically integrated with access to low cost iron ore through the expansion of the Casa de Pedra mine in Brazil and enhanced logistics for CSN's railways and ports infrastructure; and -- have an extensive portfolio of flat and long carbon steel products serving a wide range of end-user sectors, with improved access to market opportunities in Brazil for niche products, including tinplate. Commenting on the proposed merger, Mr. Benjamin Steinbruch, Chairman and Chief Executive of CSN, said, "The joining of our forces is very important for Brazil and CSN. As announced in the past, it has been CSN's strategy to increase steel production and expand internationally, and this step ensures that CSN will become a truly international company with increased exports and with potential investments in Brazil. The transaction should benefit investors, customers and employees." Commenting on the proposed merger, Mr. Tony Pedder, Chief Executive of Corus, said, "This combination is a further major step in focusing Corus as a leading international steel company with improved quality of earnings and significant growth potential. It will underpin our key objective of creating shareholder value". - Transaction Structure - The proposed merger will be implemented in two steps, both of which require approval from the respective shareholders: CSN shareholders will exchange their existing shares in CSN for shares in CSN HoldCo. Thereafter Corus will receive CSN shares from CSN HoldCo in exchange for new Corus shares representing 37.6 per cent of Corus' enlarged share capital. Corus will remain listed in London, New York and Amsterdam. CSN HoldCo will be listed in Brazil (on BOVESPA) and in New York. Vicunha Siderurgia S.A. ('Vicunha'), the current owner of 46.5 per cent. of CSN's share capital and the future owner of the equivalent proportion of CSN HoldCo's share capital, has indicated to Corus that it intends, through CSN HoldCo, to be a long-term investor in the enlarged group. Vicunha is a Brazilian company owned by the Steinbruch and Rabinovich families. The Chairman and CEO of CSN is Mr Benjamin Steinbruch. - Synergies - Based upon a preliminary assessment, the proposed merger will generate annual pre-tax synergy and cost benefits estimated at US$250 million by the end of the third full year of trading following completion. The synergy benefits arising from the sourcing of low-cost iron ore from an expanded Casa de Pedra mine are expected to be substantial. Commercial and market synergy benefits will be in addition to those savings already identified. - Board and Management - The companies intended that Sir Brian Moffat will continue as Chairman of Corus until his retirement in or before April 2004 and that Mr. Benjamin Steinbruch, Chairman and CEO of CSN, will succeed him. Mr. Benjamin Steinbruch will be appointed to the Board of Corus upon completion of the proposed merger and will, as Chairman designate, hold the title of Vice Chairman from completion, playing a significant role in the life of the company. In addition, two other non-executive directors nominated by CSN HoldCo will be appointed to the Corus board. Two executive members will join Corus' Executive Committee, one of whom will also be appointed to the Corus Board. The Board of the enlarged Corus will comprise 15 members at completion of the proposed merger reducing to 12 by the end of 2004 as a result of the retirement of existing Corus directors, including Sir Brian Moffat. - Proposed Dividend Policy for the Enlarged Group - Following the completion of the proposed merger it is envisaged that the enlarged group will adopt a policy of distributing 40 per cent of its earnings to its shareholders over the course of the steel business cycle. The significant synergy benefits expected to arise from the merger should allow Corus to adhere to this dividend policy whilst maintaining a robust balance sheet. Further distributions of capital may be made if the Board determines that these will lead to a more efficient and appropriate capital structure, provided doing so would be consistent with Corus' aim of maintaining a gearing ratio of an average of 35 per cent (net debt to tangible net assets) over the course of the steel business cycle (peaking at 50 per cent) and a sound investment grade rating. - Conditions to the Transaction - The current proposals are subject to a number of conditions, including the negotiation and execution of definitive binding transaction documentation, the financing of the enlarged group and the completion of appropriate due diligence. The terms of the proposed merger are such that CSN HoldCo will receive more than 30 per cent of the shares in Corus. As a result, the transaction will require the approval of the Takeover Panel and the implementation of a City Code "whitewash" procedure. The process of satisfying these conditions is expected to be completed by the end of 2002, at which point CSN and Corus anticipate being in a position to put a definitive proposal to their respective shareholders. Completion of the proposed transaction will, in turn, be subject to the satisfaction of a number of further conditions including, inter-alia, shareholder approval and the receipt of appropriate regulatory clearances. Completion is expected to occur during early 2003. The Boards of CSN and Corus believe that the fundamentals of the proposed merger are robust, despite recent market volatility. CSN and Corus will continue to monitor the situation as discussions progress. Inquiries CSN Investor Relations +55-21-2586-1442/1347 JP Morgan +1-212-270-7381 - Additional Information - In connection with the proposed merger, CSN HoldCo and CSN will file a prospectus with the U.S. Securities & Exchange Commission (the "SEC"). Investors, holders of CSN American depositary shares and holders of CSN shares who are located in the United States are urged to carefully read the prospectus regarding the proposed transaction when it becomes available, because it will contain important information. Investors and security holders may obtain a free copy of the prospectus (when it is available) and other documents containing information about CSN HoldCo and CSN, without charge, at the SEC's public reference room at 450 Fifth Street, NW, Washington, DC 20549 and on CSN's website at www.csn.com.br. Call the SEC at +1-800-SEC-0330 for further information on the public reference room. Copies of the prospectus and the SEC filings that will be incorporated by reference in the prospectus may also be obtained for free by directing a request to either: CSN's Investor Relations Department, Rua Lauro Muller, 116, 36th Floor, Botafogo, Rio de Janeiro, CEP 22299-900, Brazil, telephone: +55-21-2586 1442, fax: +55-21-2586-1330, or Morgan Guaranty Trust Company of New York, Roy Marmelo, telephone: +1-212-648-7043, fax: +1-212-648-5576. J.P.Morgan Securities Inc is acting exclusively for CSN and no one else in connection with the proposed merger of CSN and Corus and will not be responsible to anyone other than CSN for providing the protections afforded to their clients nor for providing advice in relation to the proposed merger. - No Profit Forecasts - Nothing in this announcement shall be construed as a profit forecast or be interpreted to mean that the future earnings per share of the Enlarged Group will necessarily be greater than the historic published earnings per share of the Corus Group. Summary of Certain Provisions of Non-binding Heads of Agreement CSN and Corus have entered into non-binding Heads of Agreement. The Heads of Agreement set out the key terms of the proposed merger and the process envisaged for preparing and executing definitive documentation and achieving completion. - CSNHoldCo's Voting Rights - For as long as CSN HoldCo holds more than 29.9 per cent. of the issued share capital of Corus, CSN HoldCo's voting rights will be restricted to 29.9 per cent other than in certain circumstances. The circumstances in which CSN HoldCo will have unrestricted voting rights include: -- where any shareholder resolution is proposed in relation to a takeover offer for Corus; -- during any period where Corus, in breach of definitive documentation to be entered into in connection with the proposed merger, fails to appoint to its Board a proposed non-executive director nominated by CSN HoldCo in accordance with its rights described below; -- during any period after April 2004, in which the number of members of the Corus Board exceeds 12 unless the appointment of directors in excess of such number has been unanimously approved by the Corus Board; and -- where any shareholder resolution is proposed in relation to a Class 1 transaction. - Standstill - CSN HoldCo will consult with Corus and will comply with orderly marketing arrangements in relation to any disposals of shares and will not, without the consent of Corus, sell more than three per cent of the issued shares of Corus in any one year, or six per cent if such sales are required in order to meet the financing needs of CSN HoldCo or Vicunha. These restrictions will cease to apply on the fifth anniversary of completion of the proposed merger. - Nomination Rights - For so long as it retains a shareholding of not less than 24.9 per cent of Corus, CSN HoldCo will have the right to nominate three non-executive directors for appointment to the Board of Corus. This number will be reduced as follows in the event of a reduction in CSN HoldCo's shareholding to below 24.9 per cent. If CSN HoldCo's shareholding is reduced to: -- less than 24.9 per cent but not less than 19.9 per cent, it will have the right to nominate two non-executive directors; -- less than 19.9 per cent but not less than 13.7 per cent, it will have the right to nominate one non-executive director; -- less than 13.7 per cent, it will have no rights in relation to the nomination of non-executive directors. For this purpose, CSN HoldCo's shareholding will be calculated without taking into account reductions and dilutions arising from the issue of shares by Corus on a non-pre-emptive basis, e.g. following the exercise of employee share options or conversion rights. In addition, CSN HoldCo will have no rights in relation to the nomination of non-executive directors if its shareholding in Corus falls below 10 per cent on an absolute basis, i.e. taking into account reductions and dilutions of any description. - Conduct before Signing - The Heads of Agreement contains non-binding provisions: -- requiring CSN and Corus to carry on their respective businesses in the ordinary course; and -- restricting CSN and Corus from making any material disposals, acquisitions or distributions to shareholders without the consent of the other; in either case, prior to the execution of definitive transaction documentation. These provisions do not apply to Corus' proposed sale of its aluminium business or CSN's acquisition of Cia. Metalic Nordeste. To see latest financial statements: http://bankrupt.com/misc/CSN.pdf CONTACT: CIA SIDERURGICA NACIONAL (CSN) Rua Lauro Muller 116-36 Andar, PO Box 2736 Rio De Janeiro, Brazil, 22299-900 Phone: +011-55-21-2586-1442 +011-55-21-2586-1347 Home Page: http://www.csn.com.br/english/index.htm Contact: Antonio Mary Ulrich, Exec. Officer - Investor Relations CSN: Shares Jump Following Proposed Merger Announcement ------------------------------------------------------- News that Companhia Siderurgica Nacional (CSN) plans to merge with Anglo-Dutch rival Corus Group PLC evoked a positive response from the stock market. CSN shares, according to Dow Jones Newswires, soared almost 26% in Wednesday's early trading to BRL59.00 (US$1=BRL2.897) after the deal was announced, before closing 15.2% higher at BRL54.03. Analysts, however, remain skeptical about the potential benefits of the deal. "At first glance the deal is great for CSN because it reduces its costs of capital and it improves distribution of its products in international markets," said Rony Stefano, a steel sector analyst at BBV Securities. Stefano cautioned, however, that more details were still needed on how minority shareholders will be treated, among other issues. In a report, UBS Warburg said the transaction announcement should support CSN's shares in the near term, but it also had a lot of questions. "We are cautious in the near term, as deal risk, synergies and control structure details are the key outstanding issues," it said. "We believe CSN shareholders may be giving up competitive low- cost production in exchange for potentially lower debt risk and access to international markets," UBS added. Analysts also said that CSN shareholders, apart from investing in a better company, which will be able to better deal with its US$2.2 billion debt load, will get a stake in a group that plans to distribute 40% of its earnings to shareholders. The merger, which is seen producing the fourth- or fifth-largest steel company in the world, is expected to be concluded in the first quarter of 2003. CSN: Fitch Changes Status to Watch Evolving After Merger Deal ------------------------------------------------------------- Fitch Ratings has changed the status of the senior secured local currency rating of Companhia Siderurgica Nacional (CSN) from 'BBB-' Rating Watch Negative to 'BBB-' Rating Watch Evolving. Fitch has also changed the status of CSN's foreign currency rating of 'B+', Rating Outlook Negative to Rating Watch Evolving. Fitch has also placed CSN's 'AA-(bra)' national scale rating on Rating Watch Evolving. These rating actions follow the recent announcement by CSN of a proposed plan to merge with the Anglo-Dutch steel producer Corus Group Plc (Corus). Once the effects of the proposed merger on capital structure and operations of these entities are clearly determined, Fitch will make the appropriate revisions to CSN's ratings. CSN's credit ratings reflect CSN's position as one of the industry's lowest-cost steel producers due to the company's ownership of the Casa de Pedra mine, one of the world's largest, high-quality iron ore bodies located in Brazil. In addition, CSN benefits from its modern production facilities, vertical integration and access to low-cost labor. CSN's fully integrated steel operations, located in the state of Rio de Janeiro in Brazil, produce steel slabs and hot- and cold-rolled coils and sheets for the automobile, construction and appliance industries, among others. CSN also holds leading market shares in the galvanized and tin-mill product segments. The company owns iron ore, limestone and dolomite mines and has participated in consortia that operate railroad systems, power generation plants and port terminals. With annual production capacity of 5.4 million tons of crude steel, CSN ranks as one the largest steel producers in Latin America. CONTACT: FITCH RATINGS Anita Saha CFA, 312/368-3179 (Chicago) Joe Bormann CFA, 312/368-3349 (Chicago) Matt Burkhard, 212/908-0540 (Media Relations, New York) MRS LOGISTICA: Fitch Affirms, Amends Watch on Merger News --------------------------------------------------------- Fitch Ratings has changed the status of 'BB' Rating Outlook Negative senior unsecured local currency rating for MRS Logistica (MRS) to Rating Watch Evolving. Fitch has affirmed the 'B+' Rating Outlook Negative senior unsecured foreign currency rating for MRS. The foreign currency rating of MRS applies to the Series A and Series B Notes due 2005 issued by MRS in 1997. MRS's senior unsecured foreign currency rating is constrained by Brazil's 'B+', Rating Outlook Negative foreign currency credit rating. These rating actions follow the recent announcement by Companhia Siderurgica Nacional (CSN) of a proposed plan to merge with the Anglo-Dutch steel producer Corus Group Plc (Corus). Once the effects of the proposed merger on capital structure and operations of these entities are clearly determined, Fitch will make the appropriate revisions to the ratings of MRS. To see MRS Logistica's financial statements: http://bankrupt.com/misc/MRS_Logistica.pdf CONTACT: FITCH RATINGS Anita Saha CFA, 312/368-3179 (Chicago) Joe Bormann CFA, 312/368-3349 (Chicago) Matt Burkhard, 212/908-0540 (Media Relations, New York) MRS Logistica S.A. Praia de Botafogo, 228/1201-E Rio de Janeiro - RJ, 22359-900 Brazil Phone: 55-21-2559-4600 Fax: 55-21-2552-2635 E-mail: daf@mrs.com.br Home Page: http://www.mrs.com.br Contacts: Julio Cesar Pinto, Chief Financial Officer Phone: (21) 2559 4600 (32) 3239 3600 (11) 3648 8401 Fax: (21) 2552 2635 (32) 3239 3609 (11) 3645 2743 E-mail: jfn@mrs.com.br Eduardo Cassinelli, Treasurer Phone: (21) 2559 4630 (32) 3239 3660 Fax: (21) 2559 4631 (32) 3239 3518 E-mail: edu@mrs.com.br VICUNHA SIDERURGIA: Fitch Rates `Watch Evolving' on Proposal ------------------------------------------------------------ Fitch Ratings has placed the 'A(bra)' national scale rating for Vicunha Siderurgia S.A. (Vicunha) on Rating Watch Evolving. These ratings action follows the recent announcement by Companhia Siderurgica Nacional (CSN) of a proposed plan to merge with the Anglo-Dutch steel producer Corus Group Plc (Corus). Vicunha holds a 46% stake in CSN but has no operating assets. Thus, Vicunha's credit quality is closely linked to that of CSN given that Vicunha's debenture obligations are expected to be serviced from the cash dividends received from CSN. Once the effects of the proposed merger on capital structure and operations of these entities are clearly determined, Fitch will make the appropriate revisions to the ratings of Vicunha. CONTACT: FITCH RATINGS Anita Saha CFA, 312/368-3179 (Chicago) Joe Bormann CFA, 312/368-3349 (Chicago) Matt Burkhard, 212/908-0540 (Media Relations, New York) =========== M E X I C O =========== BANCA QUADRUM: Liquidation Requires MXN1 B From Treasury -------------------------------------------------------- The latest financial statement of the Bank Savings Protection Institute (IPAB) shows that the bankruptcy and liquidation of Banca Quadrum is going to cost the Mexican treasury a total of more than MXN1 billion, way above MXN800 million (US$88.1 million) as was initially indicated. According to the final data, Quadrum lacks MXN1.02 billion (US$106.0 million) in cash, which will have to be covered with budget funds and part of the quotas contributed by the banks. The figure is included in the accounts as "uncollectible accounts," which is the difference between the liabilities already covered by IPAB and the value of the bank's assets. To date, IPAB has had to shell out almost MXN4.5 billion (US$467.6 million) to protect the clients of the bank. According to the auditors' note, which was included as an appendix to IPAB's financial statement, the institute has paid out MXN4.497 billion (US$467.2 million), and IPAB registers MXN3.477 billion (US$361.2 million) as "accounts receivable" leaving a total of MXN1.020 billion (US$106.0 million) to be paid. 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 BANCRECER: IPAB Rejects Banorte's Request For Refund ---------------------------------------------------- Mexico's Bank Savings Protection Institute (IPAB) shunned Grupo Financiero Banorte's request for a refund of the MXN200 million it paid for Bancrecer. Banorte, which took possession of Bancrecer late last year in a transaction valued at MXN1.650 billion, had asked IPAB to return the said amount after it discovered hidden liabilities and non- existent assets in the bank. It may resort to arbitration if it feels it would be right to return the cash. The non-existent assets may include loans without documentation, while the hidden liabilities are most likely unpaid taxes, pending payments for services or debts to employees. Just a few days ago, Banorte received authorization from the Treasury Secretariat to consider Bancrecer as being absorbed, and as such would be able to set the MXN4.5-billion (US$467.6 million) credit portfolio of Bancrecer against tax. CONTACTS: IPAB Adrian Hong 5209-5636 eahong@ipab.org.mx Juan Pablo Trevizo 5209-5631 jptrevizo@ipab.org.mx Natalia Ize 5209-5636 nize@ipab.org.mx Erika Avil,s 5209-5500 eaviles@ipab.org.mx Email: investor-relations@ipab.org.mx GRUPO BITAL: CNBV Grants HSBC Approval To Conduct Due Diligence --------------------------------------------------------------- HSBC Holdings plc (HSBC) has been granted approval by the National Banking and Securities Commission (CNBV) in Mexico to conduct a process of due diligence with a view to considering whether to make an offer to acquire a controlling interest in Grupo Financiero Bital (GF Bital). HSBC Holdings is one of the world's largest banking and financial services organizations, with assets of US$696 billion at 31 December 2001 and some 7,000 offices in 81 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. Grupo Financiero Bital GF Bital is one of Mexico's largest financial services groups with more than 1,380 branches and almost six million customers, the largest personal customer base in Mexico. 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 HSBC HOLDINGS PLC 10 Lower Thames St. London EC3R 6AE, United Kingdom Phone: +44-020-7260-0500 Fax: +44-020-7260-0501 Home Page: http://www.hsbc.com Contacts: Sir John R. H. Bond, Group Chairman/Executive Director Sir Brian Moffat, Deputy Chairman/Senior Non-Executive Director Keith R. Whitson, Group Chief Executive GRUPO BITAL: HSBC To Unveil Recapitalization Plans Soon ------------------------------------------------------- A source from HSBC Holdings PLC confirmed that the bank has been in talks with Grupo Financiero Bital for two weeks now regarding a possible equity injection in the Banco Santander Central Hispano (BSCH) affiliate. HSBC, Europe's biggest bank by market value, will unveil this week its plans regarding the matter. "The information is correct, but there is a confidentiality agreement with Bital and we cannot break it; we will be issuing something before Friday," the HSBC source said. Bital, which has a market value of MXN6.7 billion (US$690 million) needs an equity injection of between US$550 million and US$600 million, according to estimates by Mexico's Bank and Securities National Commission. A recent report released by Spanish daily El Pais suggested the BSCH, which controls 30% of Bital, plans to launch a bid this week to raise its stake in the Mexican bank. The Spanish bank, however, refused to confirm the report. In the report, El Pais said that BSCH would have to compete with HSBC for a controlling stake in Bital. Bital would cost US$1.1 billion for an acquirer that buys all of it, according to an estimate from Spanish brokerage Ibersecurities AVB. Bital, which is controlled by the Berrondo and Esteve families, needs additional capital to remain competitive with foreign-owned rivals Grupo Financiero BBVA Bancomer SA and Citigroup Inc.'s Banamex unit. "This is a matter of survival for Bital," said Patricio Zambrano, who owns Bital shares as part of the US$150 million he helps manage at Finest Finanzas Estrategicas in Monterrey, Mexico. Bital, which is being advised by Credit Suisse First Boston in its effort to raise capital, has been in negotiations to sell a US$200 million stake to ING Groep NV, the Dutch bank. Bital said that it is still "advancing in the steps related to the letter of intent with ING." Bital has MXN127 billion of assets and MXN119.7 billion of deposits. It has 1,400 branches and six million clients nationwide. 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. Botin, Chairman, Banesto Emilio Botin-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 ING GROEP N.V. Strawinskylaan 2631 1077 ZZ Amsterdam, The Netherlands Phone: +31-20-541-54-11 Fax: +31-20-541-54-44 Home Page: http://www.ing.com Contacts: Ewald Kist, Chairman Cees Maas, Chief Financial Officer HSBC HOLDINGS PLC 10 Lower Thames St. London EC3R 6AE, United Kingdom Phone: +44-020-7260-0500 Fax: +44-020-7260-0501 Home Page: http://www.hsbc.com Contacts: Sir John R. H. Bond, Group Chairman/Executive Director Sir Brian Moffat, Deputy Chairman/Senior Non-Executive Director Keith R. Whitson, Group Chief Executive GRUPO DINA: Authorizes Public Buyback Offer for 45% Of Capital -------------------------------------------------------------- Financially strapped Mexican truck and bus maker Consorcio G Grupo Dina authorized last week a public purchase offer for 45% of the Company's corporate capital, held by the investing public, says an article released by BMV Corporate Actions. The move to buy back the stock brings the Company a step closer toward de- listing the shares, which were suspended last year following a debt default. The price per share, according to Legal Director Mauricio Mendoza, was MXN0.2187 (US$0.0227) and the offer would stand for 10 working days. The buyback applies only to stocks issued in Mexico. Holders of ADRs in the United States could go to JP Morgan to exchange the receipts for Mexican shares and thus participate in the buy-back. This week Dina began the process of canceling its deposit contract with JP Morgan for ADRs in the United States. ADR holders have 30 days to exchange the documents. Mendoza said that the idea is to benefit minority shareholders who will have the opportunity to sell their stocks at the value authorized by the National Banking and Securities Commission, despite the Company's reported losses. 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/ GRUPO MASECA: Low Corn Prices Negatively Affecting Results ---------------------------------------------------------- Despite an improvement in its debt profile after making an early payment of US$50 million, Grupo Industrial Maseca SA (Gruma SA) will continue to have its results affected by low corn prices, says Standard & Poor's. The high price of tortillas has made traditional tortilla-makers more competitive and that has limited the capacity of Gruma, the largest producer of tortillas in the U.S., to increase production and sales. S&P also said that the Company's main growth would come from its operations in the US, where it has increased its sales and profit margins and continues finding growth opportunities as a result of the high demand for Mexican foods. On Tuesday, Gruma said that sales were expected to be similar to those in the second quarter of 2001 and operating profits are thought to increase by around 20% compared to the first quarter. Gruma's investments for this year were estimated at US$70 million, money that that will be used for maintenance and to increase production levels. The Company recently made an early payment of US$50 million. The debt paid was part of the US$100-million liability coming due in February 2003, which is also part of a syndicated credit for US$400 million the group obtained in February. The debt expires in February 2004. All of the funds obtained through that credit line were used to refinance short- and medium-term liabilities, which allowed the Company to improve its debt profile. Gruma is the world's largest corn flour and tortilla producer with sales in excess of US$1.9 billion. Founded in 1949, Gruma has its headquarters in Monterrey, Mexico, and operations in Mexico, the United States, Central America, Venezuela and Europe. CONTACTS: Rogelio Sanchez Email: rogelio_sanchez@gruma.com Tel. (52)81 8399-33-11 Lilia G>mez Email: lilia_gomez@gruma.com Tel. (52)81 8399-33-24 Cecilia Rodrguez Email: cecilia_rodriguez@gruma.com Tel. (52)81 8399-33-49 CORPORATE HEADQUARTERS Gruma S.A. de C.V. y Subsidiarias Calzada del Valle 407 Ote. San Pedro, Garza Garca, N.L. M,xico CP 66220 (52)81 8399-33-00 HYLSAMEX: Debt Restructuring Should Close This Week --------------------------------------------------- Expectations are that Mexican steelmaker Hylsamex SA will finish its restructuring of around US$1.2 billion in debt as early as Friday. Dow Jones Newswires suggests that the ongoing negotiations with creditors, if completed, will bring Hylsamex's debt down to a more manageable amount of US$745 million. "We are hoping to close (the deal) very soon," a representative at Hylsamex said, adding that unexpected events could always cause the restructuring to take longer. More than half the holders of Hylsamex's main subsidiary Hylsa's US$300 million of 9.125% Eurobonds coming due in 2007 have already agreed to an exchange for 10.5% debt coming due in 2010. The exchange offer, which expires this Friday, would give Hylsa more time to meet its payments and is the final leg of the months-long restructuring process. According to David Sohnen, an analyst at Morgan Stanley, Hylsamex's restructuring turned out better than many had first expected. Investors are going to get paid a little later, but they won't be taking major losses on the money they put down when they first bought Hylsa's debt. Hylsamex's parent Alfa SA is using its 82% stake in the troubled unit to guarantee US$542 million of restructured bank debt taken on by Hylsamex. Alfa will also fork over around US$150 million to capitalize and buy back intercompany debt, in addition to providing Hylsa with a new US$25 million credit line. Sohnen sees the deal as a positive development for Hylsamex. "Their operations are doing fine and if the steel market rebounds more, they'll have decent credit statistics," Sohnen said. 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 ======= P E R U ======= BACKUS: Conasev Launches Probe Into Alleged Accounting Misdeeds --------------------------------------------------------------- UCP Backus & Johnston SA, Peru's top brewer, is now under investigation by the country's stock regulatory agency, Conasev, for allegedly committing accounting irregularities. The review was prompted by charges brought by Venezuela's Empresas Polar SA that Backus, in which it owns 22%, misstated supplier invoices. "We don't have official information about the magnitude of the supposed accounting irregularities," Carlos Eyzaguirre, the head of Conasev, said. He said regulators were "analyzing" the charges and gave no deadline for a decision to be taken. The investigation was begun after Polar asked regulators to study the US$420-million purchase of an 18% stake in Backus by Colombia's Bavaria SA. Polar reportedly objected to the transaction. Peru's Backus has a monopoly on the Peruvian beer market since the acquisition of its rival Cia. Cervecera del Sur SA two years ago. Bavaria paid about double the market price for its shares. News of Consasev's investigation brought Backus' shares down by 4.7%, to PEN36.01 ($10.2) in Wednesday's mid-afternoon trading. Polar, parent of Venezuela's Cerveceria Polar, is closely held. *********** 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 * * *