/raid1/www/Hosts/bankrupt/TCRLA_Public/020723.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, July 23, 2002, Vol. 3, Issue 144
Headlines
A R G E N T I N A
ALTO PALERMO: S&P Assigns "CC" Rating To Corporate Bonds
ARGENTINE BANKS: Rescue Plan Close To Reaching Official Targets
BGN: S&P Rates "D" Corporate Bonds Worth $200M
CTG: Negotiation With Creditors To Restructure $54 M In Debt
PEREZ COMPANC: Local Consultancy Expects Successful Bond Refi
SCOTIABANK QUILMES: Central Bank Extends Suspension For 1 Month
B E R M U D A
TYCO INTERNATIONAL: Cauley Geller Announces Class Action Lawsuit
TYCO INTERNATIONAL: To Ask Shareholders For Board Seat Increase
B R A Z I L
BCP TELECOMUNICACOES: Controllers Fail To Strike Debt Deal
BELL CANADA: Toronto Bankruptcy Court OK's Telecom Americas Sale
EMBRATEL: To Report Higher Losses This Week
WORLDCOM: Bankruptcy Filing Excludes LatAm Subsidiaries
C H I L E
ENERSIS: Ends June 30 With $10.5 B In Consolidated Bank Debts
MANQUEHUE NET: Shareholders' Conflict Further Delays Sale
D O M I N I C A N R E P U B L I C
SMITH-ENRON: Geneva Court To Decide On Fate Of Contract
E C U A D O R
BANCO DEL PICHINCHA: Fitch Lowers Transfer Risk Support Rating
M E X I C O
BANCA MIFEL: Sale Agreement Seems Out of Reach
SUGAR REFINERIES: Government Auction Expected In Early 2003
P E R U
BACKUS: Reports Positive Results Amid Regulatory Probe
V E N E Z U E L A
SIDOR: Nears Debt-Restructuring Deal with Government
- - - - - - - - - -
=================
A R G E N T I N A
=================
ALTO PALERMO: S&P Assigns "CC" Rating To Corporate Bonds
--------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
assigned a rating of "CC" to Alto Palermo S.A.'s (APSA) US$
23,809,523 worth of simple issue corporate bonds. The bonds are
scheduled to mature April 7, 2005. The rating reflects the
Company's financial standing as of March 31, 2002.
APSA has more than 80% of total debt with third parties maturing
in 2005. The remaining share of debt is characterized by very
short maturities.
APSA is a real estate company that owns, leases, operates,
develops, and acquires shopping centers in Argentina. It has also
developed a credit card operation, Tarshop, which started in late
1998.
To see APSA's financial statement:
http://bankrupt.com/misc/apsa.pdf
CONTACT: ALTO PALERMO S.A.
476 Hipolito Yrigoyen
Buenos Aires, Argentina
Phone: +54 11 4344 4600
Home Page: http://www.altopalermo.com.ar
Contact:
Eduardo Sergio Elsztain Sr., Chairman
Aaron Gabriel Juejati Sr., Vice-Chairman
Marcos Marcelo Mindlin Sr., Vice-Chairman
ARGENTINE BANKS: Rescue Plan Close To Reaching Official Targets
---------------------------------------------------------------
Argentina's program aimed at rescuing frail banks is nearing
official targets after depositors agreed to swap about ARS7
billion (US$1.94 billion) or 23% of frozen bank accounts for
government bonds.
According to a Reuters report, President Eduardo Duhalde's
government, under pressure from the markets and private banks to
make the swap compulsory to ensure the plan's success, is hoping
that the figure would reach about 30% of some ARS53 billion
($14.7 billion) in funds.
"(The swap) is going to be an average of between 23 and 24
percent," Economy Ministry Roberto Lavagna said. The month-long
swap offer ended on Tuesday.
Banks currently lack the cash to meet demand after a devastating
four-year recession. The mounting problem led the previous
government in December to freeze what then amounted to some US$40
billion of savings, or half of all accounts, in an effort to stop
a damaging run on banks.
Lavagna criticized some banks for discouraging deposit holders to
take up the voluntary swap. He said those banks wanted a
compulsory swap, meaning the state would foot a bigger bill for
the bank rescue plan.
"They (the banks) have tried to make sure that it is the state
that pays," the minister said.
BGN: S&P Rates "D" Corporate Bonds Worth $200M
----------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
has assigned a "D" rating to the program corporate bond worth
US$200 million of Banco General de Negocios. The rating is based
on the financial position of the Company as of September 30 2001.
Banco General de Negocios S.A. (BGN) is a wholesale private
Argentine bank. Early in July, the bank had asked a 120-day
suspension of its operations to restructure its business due to
crisis in Argentina.
To see the summary of BGN's financial statement:
http://bankrupt.com/misc/BGN.htm
CONTACT: BANCO GENERAL DE NEGOCIOS
Esmeralda 120 - (C1035ABD)
Capital Federal
Argentina
Phone: (54-11) 4394-3003
Home Page: http://www.bancobgn.com
CTG: Negotiation With Creditors To Restructure $54 M In Debt
------------------------------------------------------------
As part of an effort to begin a debt restructuring, Argentine
generator Central Termica Guemes (CTG) called creditors to a
meeting in New York Thursday, reports Business News Americas.
Talks are being held at the offices of the Company's US law firm
Morgan, Lewis & Bockius and center on debt totaling US$54 million
coming due in 2010. The Company said it wants to make payments
viable under the "new economic scenario."
In February 2001, CTG signed a five-year supply contract worth
some US$100 million with distributor Edesa. CTG has also been
looking to export power to Brazil.
To see latest financial statements:
http://bankrupt.com/misc/CTG.doc
CONTACT: Central Termica Guemes S.A.
Avenida Leandro N Alam 822
Piso 12
Ciudad Autonoma de Buenos Aires C1001AAQ
ARGENTINA
Tel. +54 4311-6064/6065/6066
PEREZ COMPANC: Local Consultancy Expects Successful Bond Refi
-------------------------------------------------------------
Consultancy Argentine Research is upbeat on the debt
restructuring of Perez Companc SA's unit Pecom Energia.
Last week, Perez Companc announced an official time extension to
swap several of Perez Companc Energia bonds to July 31. Under new
terms, the exchange is no longer subject to reaching minimum
take-up levels nor agreeing the refinancing of loan facilities
with lending banks.
With an average tender rate, as of July 17, of 91.5%, Argentine
Research expects that the bond swap is very satisfactory. By
delaying the closing date and thanks to the modification of some
of the terms of the exchange, the final acceptance level could be
even higher, the consultancy added.
Argentine Research noted that holders of bonds maturing next year
-- where the take-up rate is the lowest -- are the primary target
of the changes introduced by Perez Companc.
The Company decided to make an offer to pay US$150 in cash and
issue US$850 million in new bonds for the holders of 2002 bonds
with a face value of US$1,000, who agree to subscribe to the bond
swap.
In June, Pecom was prompted to restructure some US$2 billion of
debt to avoid defaulting amid losses, which resulted from
Argentina's persistent economic crisis and the evaluation of its
currency.
Pecom is swapping short and medium-term bonds worth US$997.5
million for bonds with maturities that are three years longer but
carrying the same coupon. Pecom's bank debt currently totals some
US$950 million.
Pecom Energia S.A. is the largest independently owned energy
company in the Latin American region. Its business activities
include oil and gas production and transportation, refining and
petrochemicals, power generation, transmission and distribution
as well as forestry activities. Headquartered in Buenos Aires,
the Company has operations throughout Argentina, Brazil,
Venezuela, Bolivia, Peru and Ecuador.
To see financial statements:
http://bankrupt.com/misc/Perez_Companc.pdf
CONTACT: PECOM ENERGIA S.A. DE PEREZ COMPANC S.A.
Maipo 1 - Piso 22 - C1084ABA
Buenos Aires, Argentina
Phone: (54-11) 4344-6000
Fax: (54-11) 4344-6315
URL: http://www.pecom.com.ar
ARGENTINE RESEARCH
Av. Corrientes 753, Piso 22§ (1043)
Buenos Aires, Argentina
Tel: (5411) 4393-3547
Fax: (5411) 4393-3547
Email: infor@argentineresearch.com.ar
SCOTIABANK QUILMES: Central Bank Extends Suspension For 1 Month
---------------------------------------------------------------
Scotiabank Quilmes, which is battling with liquidity woes
resulting from a massive deposit exodus that threatened to topple
Argentina's fragile banking system, remains shut for another 30
days. The news was confirmed by a banking official, who asked not
to be named.
This is the third time that the Argentine Central bank extended
the suspension of Scotiabank since its operations were first
halted in April amid Argentina's four-year recession. The ensuing
financial turmoil 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 Canada-based parent, Bank of Nova Scotia, after taking
a CAD707-million charge 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
=============
B E R M U D A
=============
TYCO INTERNATIONAL: Cauley Geller Announces Class Action Lawsuit
----------------------------------------------------------------
The Law Firm of Cauley Geller Bowman & Coates, LLP announced
Friday that a class action has been filed in the United States
District Court for the Southern District of Florida on behalf of
purchasers of Tyco International, Ltd. (NYSE: TYC) ("Tyco" or the
"Company") publicly traded securities during the period between
May 1, 2002 and June 12, 2002, inclusive (the "Class Period").
The complaint alleges that Tyco and certain of its officers and
directors violated the federal securities laws. Specifically, the
complaint alleges that during the Class Period defendants failed
to disclose Tyco's practice of engaging in related-party
transactions with Tyco's own officers and directors, including
(a) interest-free loans Tyco made to employees, including
Defendant Kozlowski, for personal use; (b) Tyco's purchase of a
Florida home from its director, Defendant Ashcroft; (c) Tyco's
retaining a law firm that employs its director, Defendant Berman,
while Berman's compensation at the law firm was based on the
amount of work the law firm did for Tyco; and (d) the Company's
use of funds to pay for executives' personal items, including a
home in Utah for Defendant Belnick. Additionally, during the
Class Period defendants failed to disclose the ongoing criminal
investigation of defendant Kozlowski.
As a result of Defendants' failure to disclose Tyco's related-
party transactions, Tyco's securities traded at artificially
inflated levels during the Class Period.
Purchasers of Tyco publicly traded securities between May 1, 2002
and June 12, 2002, inclusive, who wish to serve as lead plaintiff
must move the Court no later than September 13, 2002. Members of
this class can join this class action online at
http://www.classlawyer.com/sign_up.html.Any member of the
purported class may move the Court to serve as lead plaintiff
through Cauley Geller Bowman & Coates, LLP or other counsel of
their choice, or may choose to do nothing and remain an absent
class member.
CONTACT:
CAULEY GELLER BOWMAN & COATES, LLP
Investor Relations Department:
Jackie Addison, Sue Null or Ellie Baker
P.O. Box 25438
Little Rock, AR 72221-5438
Toll Free: 1-888-551-9944
E-mail: info@classlawyer.com
TYCO INTERNATIONAL: To Ask Shareholders For Board Seat Increase
---------------------------------------------------------------
Tyco International Ltd. (NYSE: TYC, LSE: TYI, BSX: TYC),
announced Friday that the Company has notified the New York Stock
Exchange that it plans to hold a Special Shareholder Meeting on
September 5, 2002. The Company will ask shareholders to vote to
increase the maximum size of its Board of Directors from 11 to 15
directors and to allow the Board to fill the new directorships.
The Board anticipates that one of these positions will be filled
by the new Chief Executive Officer when that person is
identified, and the remaining positions will be filled by
independent directors. A preliminary proxy statement detailing
the proposal to be considered is expected to be filed with the
Securities and Exchange Commission ("SEC") by Tuesday, July 23,
2002.
Tyco strongly urges investors to read the proxy statement because
it contains important information. Investors will be able to
obtain the proxy statement free of charge at the SEC's website
www.sec.gov, or by contacting Tyco at the numbers below. The
directors and executive officers of Tyco may be deemed to be
participants in the solicitation of proxies. The direct or
indirect interests of such participants, by security holdings or
otherwise, will be included in the proxy statement to be filed
with the SEC.
ABOUT TYCO INTERNATIONAL LTD.
Tyco International Ltd. is a diversified manufacturing and
service company. Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services; and the world's largest
manufacturer of specialty valves. Tyco also holds strong
leadership positions in disposable medical products, plastics and
adhesives. Tyco operates in more than 100 countries and had
fiscal 2001 revenues in excess of $36 billion.
CONTACT: Tyco International Ltd.
Gary Holmes of Tyco
Tels. +1-212-424-1314 or +1-212-424-1307
===========
B R A Z I L
===========
BCP TELECOMUNICACOES: Controllers Fail To Strike Debt Deal
----------------------------------------------------------
BellSouth Corp and Grupo Safra haven't reached a restructuring
agreement on the debt of cash-strapped Brazilian mobile operator
BCP Telecomunicacoes S.A., AFX reports, citing Grupo Safra.
BCP, which currently has liabilities of US$1.6 billion, defaulted
in March on US$375 million in debts stemming from license fees
and the costs associated with building its network.
Grupo Safra, which owns 44.5% of BCP, through its Verbier unit
might team up with BCP's other creditors and assume management
until a buyer for the operator is found.
BellSouth Corp also owns 44.5% of BCP.
ONTACT: BCP TELECOMMUNICACOES, S.A.
Rua Florida, 1970
Sao Paulo, SP, Brasil
CEP 04565-001
Tel. 55-11-5509-6555
Fax 55-11-5509-6257
Home Page: http://www.bcp.com.br
BELLSOUTH CORPORATION
1155 Peachtree St. NE
Atlanta, GA 30309-3610
Phone: 404-249-2000
Fax: 404-249-5599
Home Page: http://www.bellsouth.com
Contacts:
Investor Relations
Phone (US): 800.241.3419
Fax: 404.249.2060
E-mail: investor@bellsouth.com
CREDITORS: FLEETBOSTON FINANCIAL CORPORATION
100 Federal St.
Boston, MA 02110
Phone: 617-434-2200
Fax: 617-434-6943
Home Page: http://www.fleetboston.com
Contact:
Investor Relations
Phone: 617-434-2200
Terrence Murray, Chairman
Charles K. (Chad) Gifford, President/CEO/Director
Eugene M. McQuade, Vice Chairman and CFO
CITIBANK
Avenida Paulista, 1111
13th floor - room 5
Sao Paulo 01311- 920
Brazil
Home Page: http://www.citibank.com.br
Contact:
Fernando Tafner
Phone: 55-11-5576-2004
E-mail: fernando.tafner@citicorp.com
ABN AMRO HOLDING N.V.
Foppingadreef 22
1102 BS Amsterdam, The Netherlands
Phone: +31-20-628-9393
Fax: +31-20-629-9111
Home Page: http://www.abnamro.com
Contact:
Investor Relations(HQ1191)
Gustav Mahlerlaan 10
PO Box 283
1000 EA Amsterdam
The Netherlands
Tel. +31 (0) 20 628 78 35
Phone: +31 (0) 20 628 78 37
E-mail: investorrelations@nl.abnamro.com
BELL CANADA: Toronto Bankruptcy Court OK's Telecom Americas Sale
----------------------------------------------------------------
A bankruptcy court in Toronto approved Bell Canada
International's (BCI) restructuring plan that calls for the sale
of its Brazilian telecom assets prior to liquidation, reports the
Financial Post.
BCI, a subsidiary of BCE Inc., Canada's largest communications
company, is expected to close this week the sale of its 42% stake
in Brazil's Telecom Americas Ltd. to America Movil S.A. de C.V.
of Mexico for US$366 million.
Part of the proceeds will be used to pay back a US$174-million
credit facility to a bank syndicate. Any remaining proceeds will
be split among shareholders, holders of the US$160-million in
senior unsecured notes coming due September 2004, and possible
litigants.
BCI faces two lawsuits, including a class action claiming damages
of US$285 million on the part of former debenture holders.
"Unlike a typical liquidation where you would just sell all of
the assets, this is complicated and may take some time," Derrick
Tay, a BCI lawyer, told Mr. Justice James Farley of the Ontario
Superior Court.
BCI will also continue trying to unload a pair of Latin American
telecom holdings, which have been on the auction block since last
year.
Ernst & Young Inc., the court appointed monitor, has been
assigned the task of hammering out a plan for divvying up the
debt-laden company's assets -- a proposal that will be presented
to the court by mid-August.
No decision has been made as to how company assets will be
divided, but BCI's asset sale is the best scenario stakeholders
could have hoped for, Mr. Tay said.
"We're not trying to determine anyone's rights until the monitor
has looked at this," he told the court. "That would be premature.
[But] this deal is the best deal we can find. It maximizes
shareholder recovery."
BCI, through Telecom Americas, holds interest in 4 Brazilian B
Band cellular companies serving more than 4.5 million subscribers
in territories of Brazil with a population of approximately 60
million.
CONTACT: BELL CANADA INTERNATIONAL INC.
Marie-Lise Gauthier, 514/392-2318
Email: marie-lise.gauthier@bci.ca
Web site: www.bci.ca
ERNST & YOUNG
787 7th Ave.
New York, NY 10019
Phone: 212-773-3000
Fax: 212-773-6350
Home Page: http://www.eyi.com
Contacts:
James Turley, Global Chairman
William L. Kimsey, CEO
EMBRATEL: To Report Higher Losses This Week
-------------------------------------------
Analysts expect Embratel, a unit of the scandal-ridden U.S. phone
carrier WorldCom Inc., to post bigger net losses this week when
it reports second-quarter results due to spiraling debt costs
triggered by a sharp currency depreciation, says Reuters.
According to an average of five analysts' forecasts, Embratel
will register a net loss of BRL246 million (US$86 million), its
sixth consecutive quarterly loss. The estimates ranged from a
BRL134-million loss to a BRL417-million loss.
The estimated loss is more than six times the BRL39-million loss
it reported for the same period a year ago. The Company reported
a BRL36-million loss in the first quarter of 2002.
"Net financial expenses ... are going to be more than double what
we saw in the second quarter of last year and also higher than
what was posted in the first quarter of this year," said
Alexandre Garcia, an analyst at Rio de Janeiro's Espirito Santo
Securities.
Embratel has seen its costs inflated due to the sharp decline in
the Brazilian currency against a backdrop of simmering political
worries about October's presidential election.
Almost all of Embratel's gross debt is pegged to the dollar and
only 46% is hedged against currency fluctuations, Andrew
Campbell, a telecommunications analyst at CS First Boston in Sao
Paulo, said in a report.
Campbell estimates net debt will increase 11% to BRL3.92 billion
in the second quarter, from BRL3.55 billion in the first quarter
of 2002. The rise, in turn, will boost the Company's financial
expenses.
On the operating front, earnings before interest, taxes,
depreciation and amortization (EBITDA), should dip 12 percent
from a year ago, but rise 6% from the prior quarter to BRL352
million.
Embratel was one of the worst-performing stocks on the Sao Paulo
Stock Exchange last year and is among contenders for this year,
having lost about 85% of its worth since the start of the year in
the wake of the WorldCom scandal.
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: Bankruptcy Filing Excludes LatAm Subsidiaries
-------------------------------------------------------
WorldCom, Inc. (Nasdaq: WCOME, MCITE) announced Sunday that
WorldCom and substantially all of its active U.S. subsidiaries
filed voluntary petitions for reorganization under Chapter 11 of
the U.S. Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of New York. Chapter 11 allows a
company to continue operating in the ordinary course of business
and to maximize recovery for the company's stakeholders. The
filings will enable the company to continue to conduct business
as usual while it develops a reorganization plan.
WorldCom's non-U.S. subsidiaries are not included in the filing
and will also continue to operate normally.
WorldCom also announced that it has obtained an agreement to
arrange up to $2 billion in Debtor-in-Possession (DIP) financing.
The company already has secured a commitment of $750 million of
this amount from Citibank, N.A., JP Morgan Chase Bank and General
Electric Capital Corporation. This facility is being arranged by
Salomon Smith Barney Inc., JP Morgan and General Electric Capital
Markets Group, Inc. The facility will be used to supplement the
company's cash flow during the Chapter 11 proceedings and is
subject to approval by the Bankruptcy Court.
Once approved, the arrangement will provide an immediate source
of funds to WorldCom, allowing the company to operate its
business normally while it focuses on its new strategic plan,
restructures its finances, reduces its debt burden and
strengthens its balance sheet. This additional liquidity will
enable the company to satisfy customary obligations associated
with the daily operations of its business, including the timely
payment for new services, employee wages and other obligations.
"Chapter 11 enables us to create the greatest possible value for
our creditors, preserve jobs for our employees, continue to
deliver top-quality service to our customers and maintain our
role in America's national security," said John Sidgmore,
president and chief executive officer of WorldCom. "We will use
this time under reorganization to regain our financial health and
focus, while operating with the highest integrity. We will emerge
from Chapter 11 as quickly as possible and with our competitive
spirit intact."
WorldCom currently employs more than 60,000 people in 65
countries and serves over 20 million residential and business
customers. It also operates the world's largest Internet network.
"Our total focus will be to take this company forward in the best
way possible and with the highest ethics so that WorldCom can
continue to be an important part of our economy. To that we are
totally committed," said Sidgmore.
To this end, WorldCom announced the election of two new members
to its Board of Directors; Nicholas deB. Katzenbach and Dennis R.
Beresford. Mr. Katzenbach currently is a private attorney and
previously served as Attorney General of the United States (1965-
66), Under Secretary of State for the United States (1966-69),
and as Senior Vice President and General Counsel of IBM
Corporation (1969-86). Mr. Beresford currently is Professor of
Accounting at the Terry College of Business, University of
Georgia and previously served as Chairman of the Financial
Accounting Standards Board (1987-97). Mr. Katzenbach and Mr.
Beresford have not previously been involved in the company's
affairs.
Following their election as Directors, Mr. Katzenbach and Mr.
Beresford were appointed to a Special Investigative Committee of
the Board to conduct an independent review of the Company's
accounting practices and preparation of financial statements.
This Special Committee will take on the oversight role with
respect to the previously-announced investigation led by William
R. McLucas into these matters.
"The additional board members of this caliber demonstrate our
seriousness in attracting independent board members and
establishing a quality governance structure for our corporation.
Their willingness to serve is also an indication of the
importance of our company's future," said Sidgmore.
About WorldCom, Inc.
WorldCom, Inc. (Nasdaq: WCOME, MCITE) is a pre-eminent global
communications provider for the digital generation, operating in
more than 65 countries. With one of the most expansive, wholly-
owned IP networks in the world, WorldCom provides innovative data
and Internet services for businesses to communicate in today's
market.
WorldCom's major divisions include:
-- MCI, the country's second-largest long-distance telephone
provider with 20 million customers and revenues of $13.8 billion
in 2001.
-- The company's Internet backbone providers, UUNET and MFS
Communications, which handle about a third of U.S. Internet
traffic and were acquired in 1996.
-- Its local communications business, which offers service in
nine states. WorldCom also owns small local telecom service
provider Brooks Fiber, which provides services mainly to business
and government.
-- Its wireless reselling business, which, despite $1 billion in
2001 revenue and 2 million customers, WorldCom had previously
announced that it would sell. CIBC World Markets estimated the
unit could fetch $400 to $500 million.
-- A 94 percent voting stake in Digex Inc., a Web hosting firm
that had sales last year of $214 million.
-- Paging company SkyTel Communications, which earned $441
million in revenue in 2001.
-- Embratel, a Brazilian telecom in which WorldCom holds a
controlling stake.
-- Avantel, a Mexican long-distance company.
CONTACT: WORLDCOM
500 Clinton Center Drive
Clinton, MS 39056
1-877-624-9266
Phone: (601) 460-5600
Fax: (601) 460-8350
E-mail: http://www.worldcom.com/
Contact:
John Sidgmore, President and CEO
LATIN AMERICAN SUBSIDIARIES:
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
AVANTEL SERVICIOS LOCALES, S.A. (AVANTEL LOCAL)
Reforma No. 265, 6o piso, Col.
Cuauhtemoc, 06500, M,xico, D.F.
Tel: 5242-1004
Fax: 5242-1060
Home Page: www.avantel.com.mx/
=========
C H I L E
=========
ENERSIS: Ends June 30 With $10.5 B In Consolidated Bank Debts
-------------------------------------------------------------
Chilean power sector holding company Enersis ended June 30 with a
total of US$10.8 billion in consolidated bank liabilities,
reports Business News Americas. In a statement to Chile's
securities regulator, the Company revealed that the debts of over
1% of the total consolidated bank liabilities are as follows:
- Enersis: international bonds US$1.926 billion, bank loans
US$1.308 billion, and inter-company loans US$1.395 billion.
- Endesa Chile International (a 100% subsidiary of Endesa):
international bonds US$546 million, bank loans US$654
million.
- Pehuenche (a generation subsidiary of Endesa): international
bonds US$170 million.
- Endesa: national bonds US$143 million.
- Autopista del Sol (a Chilean highway concession owned by
Enersis): national bonds US$132 million.
- Central Costanera (an Argentine generator owned 51.6% by
Endesa): debt to suppliers US$179 million.
According to Enersis, none of the Company's liabilities,
including bond issues, are in the process of renegotiation. Most
of the creditors have required Enersis and its various direct and
indirect subsidiaries to meet certain debt ratios, minimum equity
levels and interest charge coverage, Enersis said, adding that
such requirements are standard.
CONTACT: ENERSIS S.A.
Santo Domingo 789
Santiago, Chile
Phone: (562) 688-6840
www.enersis.cl
Contacts:
Alfredo Llorente, Chairman
Enrique Garcia, CEO
Rafael Miranda, Vice Chairman
Mauricio Balbontin, CFO
Domingo Valdes, Gen. Counsel
ENDESA CHILE
Santa Rosa 76
Santiago, Chile
Tel. +56-2-530-9000
Fax. +56-2-535-4720
Contacts:
Pablo Yrarrazaval Valdes, Chairman
Hector Lopez Vilaseco, CEO
Mario Valcarce Duran, Finance & Administration Mgr./CFO
MANQUEHUE NET: Shareholders' Conflict Further Delays Sale
---------------------------------------------------------
Chilean local exchange carrier Manquehue Net, currently in search
of a strategic partner, delayed the deadline for companies to
make offers until mid-August, Chilean daily El Diario reports,
citing a source close to the operation.
According to Pyramid Research senior analyst Carlos Rodriguez,
the delay is likely to drag on indefinitely because shareholders
are demanding too much money for the financially-challenged
company.
In mid-June, when news that Manquehue's shareholders had
initiated a formal process to sell all or part of the Company to
a new partner first got out, Fitch Ratings Chile analyst Ivonne
Ibanez said that the Company would be an attractive buy. Ms.
Ibanez based her assessment in the notion that the company owns
100,000 telephone lines distributed through 22 boroughs of
Santiago, along with a small broadband client base. However, she
also made the point that any new partner will have to reckon with
Manquehue's US$84.9-million debt load, US$63.6 million of which
is long-term debt. Manquehue needs to restructure its debt to
extend its maturities if it wants to attract partners, she said.
Rodriguez agreed with Ibanez that the Company itself is
attractive, but said the big question is the price.
"If [Manquehue] didn't have so much debt it would be
interesting," he said. El Diario reported that Manquehue's
shareholders are looking to sell the Company for around US$100
million plus its liabilities.
Rodriguez said this is not likely to happen anytime soon because
the price is way too high and there are too many investors with
conflicting interests involved in the Company to allow that price
to come down.
Manquehue's shareholders are the UK's National Grid (NYSE: NGG)
(30%), Chilean gas distributor Metrogas (25.6%), the local Rabat
family (21.2%), bankrupt US network operator Williams
Communications (NYSE: WCG) (16.5%) and investment fund Xycom.
The shareholders all have different priorities and objectives
with regard to Manquehue, which makes reaching an agreement on
how exactly to clean up the Company's balance sheet extremely
difficult, Rodriguez said.
"It would be a matter of how much they would be willing to
sacrifice, and some owners, such as the Rabats, do not want to
leave with a loss on their hands," he said.
ABN Amro is the coordinator for the sale of the Company's assets.
CONTACT: MANQUEHUE NET S.A.
Av. Condor 796, Enterprise City,
Huechuraba Santiago Chile
Phone: 00 562 243 8800
Fax: 00 562 248 7292
EMAIL: info@manquehue.netl
Home Page: http://www.manquehue.net/
http://www.manquehue.cl
Contact:
Mr. Miller Williams, President
Sr.Jos, Luis Rabat Vilaplana, Vice President
ABN AMRO HOLDING N.V
Foppingadreef 22
1102 BS Amsterdam, The Netherlands
Phone: +31-20-628-9393
Fax: +31-20-629-9111
Home Page: http://www.abnamro.com
Contact:
Investor Relations(HQ1191)
Gustav Mahlerlaan 10
PO Box 283
1000 EA Amsterdam
The Netherlands
Phone: +31 (0) 20 628 78 35
+31 (0) 20 628 78 37
E-mail: investorrelations@nl.abnamro.com
===================================
D O M I N I C A N R E P U B L I C
===================================
SMITH-ENRON: Geneva Court To Decide On Fate Of Contract
-------------------------------------------------------
It's now up to the international arbitration court in Geneva to
decide how to resolve the conflict between the Dominican
government and Smith-Enron regarding a power plant contract,
reports DR1 Daily News.
The contract, which was signed by the Dominican state in 1994
during the government of the late President Balaguer, expires in
2015. Smith-Enron is asking for US$34 million payment to rescind
the contract but the Dominican government's last offer was for a
US$20 million settlement.
According to Minister of Finance Jose Lois Malkum, the contract
was extremely onerous for the country. The conditions were overly
generous for the Company. He said that the generator never
supplied the power contracted.
As signed, the government is required to make payments of US$7
million per month, even if the plant is out of service.
The U.S. government and Enron Corp. each own a stake in the cash-
strapped Dominican Republic power plant, as revealed by the U.S.
Maritime Administration in early June.
=============
E C U A D O R
=============
BANCO DEL PICHINCHA: Fitch Lowers Transfer Risk Support Rating
--------------------------------------------------------------
Fitch Ratings has changed the support rating for Ecuador's Banco
del Pichincha (Pichincha) to a '5T' from a '4T'. Support ratings
represent Fitch's assessment of whether a bank would receive
support, should it be necessary.
Fitch continues to view Pichincha as the country's leading
commercial bank, with domestic deposit market share of 24% at
end-2001.
Nevertheless, Fitch believes that given the lack of lender of
last resort under dollarization, support is possible, but cannot
be relied upon, which is consistent with its view of banks in
other dollarized economies, including Panama and El Salvador. The
'T', signifying transfer risk, has been maintained due to the
country's short experience with dollarization.
Ecuador adopted the USD as legal tender in January 2000,
following a severe economic crisis, marked by sovereign default,
devaluation and hyperinflation.
Early this month, rumors surfaced that Pichincha is having
liquidity problems, creating concern among depositors, leading
them to withdraw their funds from the bank.
However, Central Bank Governor Mauricio Yepez denied these
rumors, affirming Pichincha as one of the most solid financial
institutions in Ecuador.
CONTACT: BANCO DEL PICHINCHA C.A.
Av. Amazonas, Edif. Bco. del Pichincha; Quito
Phone: (2) 980-980, 981-081
Fax: (2) 981-280, 981-281
Home Page: www.pichincha.com
===========
M E X I C O
===========
BANCA MIFEL: Sale Agreement Seems Out of Reach
----------------------------------------------
Negotiations between Banca Mifel and shareholders headed by
Antonio del Valle Ruiz over the latter's purchase of the Mexican
bank still continues. However, del Valle, who is looking to
acquire an 80% stake in Mifel, admitted that the outlook is very
complicated as the parties concerned have significant differences
in terms of the price and the percentage of shares to be
exchanged.
Although del Valle refused to discuss detailed figures, the del
Valle family is thought at first to have offered around MXN600
million (US$61.71 million) for 80% of Banca Mifel. The bank's
book value currently stands at approximately MXN484 million
(US$49.8 million).
Talks between Mifel and the del Valle family were expected to
have ended last June after the results of the audits were
released.
SUGAR REFINERIES: Government Auction Expected In Early 2003
-----------------------------------------------------------
The Mexican government revealed Friday that it managed to improve
the output and efficiency of the 27 sugar refineries it
expropriated last September to protect the industry and end
government bailouts of the troubled sector.
The refineries are scheduled to go on sale early next year, but
not before an audit of the refineries has been conducted, said
Roberto Newell, the newly placed director of the Expropriated
Sugar Sector Companies Fund (FEESA). If the audit is completed by
year's end, the refineries could be sold as soon as March 2003,
Newell said.
"We have to demonstrate that the refineries are a good business,
that they can be privatized. We will be very careful so that only
those who know the sector and can make guarantees that they will
improve them ... will take part in the purchase," Newell said.
=======
P E R U
=======
BACKUS: Reports Positive Results Amid Regulatory Probe
------------------------------------------------------
UCP Backus & Johnston SA, Peru's top brewer reported positive
income for the second quarter of the year. Conasev, the
country's stock regulatory agency, is currently investigating the
company for allegedly committing accounting irregularities,.
According to a report by Dow Jones, Backus posted net income of
PEN57.06 million during the quarter against PEN16.73 million in
the same period in the previous year. Revenues rose to PEN245.18
million in the second quarter compared with PEN197.40 million in
the second quarter a year earlier. The company said second
quarter common shares per share profits were PEN0.365, compared
with PEN0.116 in the same period a year earlier.
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. On Monday, Bavaria SA paid about US$420 million for a 21.96%
voting stake in Backus. That works out to 18.23% of its corporate
capital.
=================
V E N E Z U E L A
=================
SIDOR: Nears Debt-Restructuring Deal with Government
----------------------------------------------------
Siderurgica del Orinoco CA (Sidor), a Venezuelan integrated steel
mill that covers from pellet making to long and flat products
manufacturing, is close to restructuring its debt with the
government.
According to a report released by state-run Venpres news agency,
Venezuelan President Hugo Chavez is due to sign an agreement July
30, paving the way for the steel maker to restructure or
capitalize about US$700 million in government loans.
Venpres says that the amount is about equal to what Sidor owes
the state-run investment bank Banco de Desarrollo Economico y
Social de Venezuela (Bandes). The report, however, didn't specify
how much of the amount would be reworked.
Sidor's ability to pay its obligations has been hampered by low
international steel prices and a slumping economy.
The Company is 70%-owned by a consortium called Amazonia, which
is made up of Mexico's Hylsamex SA, Argentina's Siderar SA,
Venezuela's Sivensa, and Brazil's Usiminas SA. The remainder is
state-owned.
CONTACT: SIDERURGICA DEL ORINOCO, C.A. (SIDOR)
Edificio General, Piso 9
Avda. La Estancia
Chuao, Caracas 1060
Venezuela
Tel: (582) 902 3800/3917/3955
Fax: (582) 993 2930
Home Page: www.sidor.com.ve/
***********
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 * * *