/raid1/www/Hosts/bankrupt/TCRLA_Public/020802.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, August 2, 2002, Vol. 3, Issue 152
Headlines
A R G E N T I N A
AMERICA ONLINE: Struggles To Avert Nasdaq Delisting
B E R M U D A
FOSTER WHEELER: Announces Regulation FD Disclosure
FOSTER WHEELER: Posts $109M 2Q02 Net Loss, 1H02 Results Suffer
GLOBAL CROSSING: Extends Asset Auction Date
TYCO INTERNATIONAL: TyCom Venture Dragging Down Earnings
B R A Z I L
CSN: Chairman Hopeful of BNDES Approval on Merger with Corus
LIGHT: Gets New CEO After Restructuring, Recapitalization
NET SERVICOS: Eliminates Base Price In Planned Share Sale
D O M I N I C A N R E P U B L I C
TRICOM: 2Q02 Results Show Improvement, Debt Maturities Extended
M E X I C O
GRUPO BITAL: ING Agrees To Acquire 19.2% Stake
GRUPO BITAL: Fortifying Capital Structure
GRUPO MEXICO: U.S. Subsidiary Refuses To Pay For El Paso Cleanup
P A N A M A
BLADEX: Doubles Loss Allowances in 2Q02, Net Income Suffers
BLADEX: Moody's Confirms Debt & Deposit Ratings; Cuts BFSR
U R U G U A Y
ABN AMRO: Moody's Cuts Long-Term Foreign Currency Ratings
BANCO A.C.A.C.: Moody's Lowers Ratings To Caa1
BANCO COMERCIAL: Ratings Downgraded by Moody's
BANCO COMERCIAL: Fitch Downgrades Ratings To `CCC'
BANCO DE MONTEVIDEO: Moody's Cuts On Deposit Moratorium Risk
BANCO SANTANDER: Moody's Lowers Ratings To Caa1
BANCO SANTANDER: Long-Term Foreign Currency Rating Cut to `B-'
BANCO SUDAMERIS: Fitch Cuts Following Sovereign Rating Action
BANCO SURINVEST: Moody's Reduces Foreign Currency Deposit Ratings
BANKBOSTON: Moody's Cuts Ratings, Places on Negative Outlook
BNL: Heightened Risk of A Deposit Moratorium Prompts Ratings Cut
HSBC URUGUAY: Fitch Lowers Long-Term Foreign Currency Ratings
LLOYDS TSB: Foreign Currency Deposit Ratings Cut To Caa1
URUGUAYAN BANKS: Economy Minister Orders Closure Until Friday
V E N E Z U E L A
AES VENEZUELA: Currency Devaluation Leads to 1H02 Loss
- - - - - - - - - -
=================
A R G E N T I N A
=================
AMERICA ONLINE: Struggles To Avert Nasdaq Delisting
---------------------------------------------------
America Online Latin America Inc. (AOLA) is set to increase
market capitalization in the coming weeks to keep up with Nasdaq
SmallCap market requirements, Dow Jones reports, citing the
Company's chief executive. The Company has until August 28 to
meet the Nasdaq's US$35 million requirement.
Earlier this year, the Internet company slid down from the Nasdaq
National Market to the SmallCap market.
The delisting warning for AOL came after the Company reported its
second-quarter results Wednesday that reflected user base falling
7.3% to 1.3 million as marketing spending in the latest quarter
was halved to $24 million from $48 million a year earlier. The
Company's user base includes paying and free-trial members.
Analysts are worried that the spending cuts may turn shareholders
off. According to Dow Jones, the first signs that shareholders
wanted the Company to cut on spending was when the Company
announced it would focus on retaining upper-income customers
rather than adding new users. The strategy was announced after
the Company raised cash in March.
Company chief executive Charles Herington refused to reveal its
moves for the next weeks. He also did not reveal hopes for funds
coming from shareholders. As noted, during its last bid for new
funds, the only backing the company managed to receive was the
US$160 million in convertible notes issued by its AOL parent.
Adding to the fears about the Company's position was the news of
the resignation of the chief executive of Banco Itau, the bank,
which is a key founder of some AOLA customer acquisition costs in
Brazil starting year 2000.
AOL's subscription revenue in the latest quarter was US$16.2
million, compared with US$15.7 million in the first quarter and
US$11.3 million a year ago. The second-quarter net loss was
US$44.6 million, less than US$74.5 million a year ago. Average
revenue per user was US$12.39, higher than US$11.12 in the first
quarter, but down from US$12.76 a year ago.
The Company's results were negatively impacted by large currency
fluctuations in Argentina and Brazil, according Herington. The
Company also provides services in Mexico.
News of the possible delisting has sent AOL's share 10% lower
Wednesday, trading at $0.37 each in early afternoon.
Despite gloomy outlooks, Herington is still confident about
shareholders support. He also banks on the Company's strong
performance to weather the market mood, expecting user base to
start growing again in late 2002.
The Company's shareholders include AOL, Venezuela's Cisneros
Group of Cos. and Brazil's Banco Itau SA (ITU).
CONTACT: AMERICA ONLINE
22000 AOL Way
Dulles, VA 20166-9323
Phone: 703-265-1000
Fax: 703-918-1400
Home Page: http://www.corp.aol.com
BANCO ITAU
Rua Boa Vista, 176
01014-919 Sao Paulo, Brazil
Phone: +55-11-237-3000
Fax: +55-11-5582-1133
Home Page: http://www.itau.com.br
Contacts:
Olavo Egydio Setubal, Chairman of the Board
Roberto Egydio Setubal, President and CEO
Geraldo Soares, Investor Relations Superintendent
Pra‡a Alfredo Egydio de Souza Aranha, 100
Torre Concei‡ao - 11§ andar
04344-902 - Sao Paulo - SP
Phone: +5511 5019-1549
Fax: +5511 5019-1133
CISNEROS GROUP OF COMPANIES
36 E. 61st Street
New York, NY 10021
USA
E-mail: info@cisneros.
Home Page: http://www.cisneros.com
Phone: +58-2-781-8286
Fax: +58-2-781-5957
=============
B E R M U D A
=============
FOSTER WHEELER: Announces Regulation FD Disclosure
--------------------------------------------------
Foster Wheeler Ltd. (NYSE:FWC) announced that in response to a
question raised during the Company's earnings conference call
Wednesday, it was disclosed that under the terms of its proposed
new senior secured credit facility, which the Company expects to
consummate in August 2002, the Company will be required to
continue to defer the dividend on its FW Preferred Capital Trust
I- 9% Preferred Securities.
Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering, construction,
manufacturing, project development and management, research,
plant operation and environmental services. The corporation is
based in Hamilton, Bermuda, and its operational headquarters are
in Clinton, N.J. For more information about Foster Wheeler, visit
their Web site at: www.fwc.com.
CONTACT: Foster Wheeler Ltd.
Shareholder Contact:
John Doyle
Phone: 908/730-4270
Other Inquiries: 908/730-4000
FOSTER WHEELER: Posts $109M 2Q02 Net Loss, 1H02 Results Suffer
--------------------------------------------------------------
Foster Wheeler Ltd. (NYSE:FWC) on Wednesday, reported revenues
for the second quarter 2002 of $958.9 million and net income of
$7.6 million, or $0.19 per share diluted, excluding after-tax
special charges of $81.8 million, after recognizing gains on its
foreign exchange contracts of $13.5 million and an increase in
the allowance for domestic tax assets of $48.3 million.
The special charges of $81.8 million include write-downs of $39.2
million on assets in the process of being sold, $30.7 million
related to revisions of estimates of amounts to be realized on
claims disposition, and $11.9 million of costs in connection with
the company's refinancing efforts, performance intervention
activities, and employee severance. The net loss for the quarter
including all these items was $109 million, or $2.66 per share
diluted.
These results compare with second quarter 2001 revenues of $840
million, and net earnings of $5.8 million, or $0.14 per share
diluted, excluding a $5.0 million loss on the sale of a hydrogen
plant. Including this charge, the net earnings for the second
quarter 2001 were $0.8 million, or $0.02 per share.
New orders booked during the second quarter 2002 were $648.4
million versus $1.2 billion in the second quarter of last year,
and backlog was $5.7 billion, compared to $6.3 billion at the
close of the second quarter of 2001.
"We continued to take a series of difficult but necessary actions
to improve the company's future ability to earn," said Raymond J.
Milchovich, chairman, president and chief executive officer of
Foster Wheeler. "We are sharply focused on the productive
generation of cash from operations, monetization of selected
assets, and positioning the company to be more competitive in the
markets we serve."
At the close of the second quarter 2002, the company's cash and
cash equivalents were $384.6 million compared to $423.2 million
at the end of the first quarter of 2002. This change was
primarily due to the run-off of the company's previous $50
million receivables sale arrangement which ended during the
quarter. On June 28, 2002, the company's indebtedness was $1.1
billion, unchanged from the level at the end of the first
quarter.
For the six months ended June 28, 2002, revenues were $1,765
million, a 15 percent increase from $1,538 million in the first
half of last year, attributable primarily to increased activity
in the company's European subsidiaries. Net earnings for the
period were $7.9 million, or $0.19 per share diluted, excluding
after-tax special charges of $119.8 million, after recognizing
gains on foreign exchange contracts of $13.5 million and an
increase in the allowance for domestic tax assets of $60.0
million. The special charges of $119.8 million include write-
downs of $51.5 million related to assets in the process of being
sold, $30.7 million related to revisions of estimates of amounts
to be realized on claims disposition, $16.1 million for goodwill
impairment, and $21.5 million related to payments in connection
with the company's refinancing efforts, performance intervention
activities, and employee severance. The net loss for the six-
month period including these charges was $158.4 million, or $3.87
per share diluted.
These results compare to first-half 2001 net earnings of $13.9
million, or $0.34 per share diluted, excluding a $5.0 million
loss on the sale of a hydrogen plant. Including this charge, net
earnings for the first six months of 2001 were $8.9 million, or
$0.22 per share diluted.
As previously disclosed, the company's implementation of
Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets," in connection with one waste-to-
energy facility in the U.S. resulted in a $24.8 million charge
for the impairment of goodwill.
Arrangement for New Credit Facilities Nearing Completion
Foster Wheeler's management is in the process of finalizing
arrangements for a new long-term credit facility, a replacement
of its lease financing, and a new $40 million receivables sale
arrangement. On June 5, 2002, Foster Wheeler signed a term sheet
with its bank group for a $289.9 million secured bank credit
facility. The new facility will mature in 2005 and includes a
term loan, a revolving credit facility and a letter of credit
facility. The company expects the documentation for these
facilities to be completed in August 2002. The previously
announced waiver and forebearance have been extended through
August 30, 2002.
Engineering and Construction Group Results
Second quarter revenues were $560.2 million compared to $535.7
during the same period of 2001. New bookings for the quarter were
$512.6 million compared to $635.1 million in the second quarter
of 2001. This reduced level of bookings was primarily the result
of delays in anticipated project investments by clients. The
Group's ending backlog was $4.4 billion, essentially the same as
the first quarter of 2002. For the first half of the year, E&C
bookings were down to $896 million from $1.2 billion for the
first six months of 2001. Revenues for the six months were $981.3
million compared to $1,009.3 million in the same period of the
last year.
Energy Group Results
Revenues rose to $411.9 million from $313.4 million in the same
quarter of 2001. New bookings during the second quarter were
$138.0 million compared to $525.8 million in the second quarter
of 2001, reflecting in part the downturn in the U.S. power
market. Backlog at the end of the quarter was $1.4 billion
compared to $1.7 billion in the first quarter of 2002. For the
six-month period, bookings were $552.0 million compared to $904.7
million in 2001. Revenues for the half-year grew 45 percent to
$799.3 million from $552.0 million in the same period last year.
To see Foster Wheeler's Financial Results:
http://bankrupt.com/misc/FOSTERWHEELER.htm
CONTACT: Foster Wheeler Ltd.
Sherry Peske
Phone: 908/730-4444
Shareholder Contact: John Doyle
Phone: 908/730-4270
Other Inquiries: 908/730-4000
GLOBAL CROSSING: Extends Asset Auction Date
-------------------------------------------
Global Crossing announced Wednesday that, in accordance with the
bidding procedures order originally approved by the United States
Bankruptcy Court for the Southern District of New York, it has
moved the date of the auction to determine the successful bidder
from July 31, 2002 to August 2, 2002. The auction will take place
at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue,
New York, New York 10153 at 10:00 a.m. EDT. The auction hearing
is still scheduled for August 7, 2002.
"We are extending the auction in order to give the parties more
time to finalize and compare the competing investment proposals,"
said John Legere, chief executive officer of Global Crossing.
ABOUT GLOBAL CROSSING
Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the globe.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services. Global Crossing operates throughout the Americas and
Europe, and provides services in Asia through its subsidiary,
Asia Global Crossing.
On January 28, 2002, Global Crossing and certain of its
affiliates (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated proceedings
in the Supreme Court of Bermuda. On the same date, the Bermuda
Court granted an order appointing joint provisional liquidators
with the power to oversee the continuation and reorganization of
the Bermuda-incorporated companies' businesses under the control
of their boards of directors and under the supervision of the
U.S. Bankruptcy Court and the Supreme Court of Bermuda. On April
23, 2002, Global Crossing commenced a Chapter 11 case in the
United States Bankruptcy Court for the Southern District of New
York for its affiliate, GT UK, Ltd. Global Crossing does not
expect that any plan of reorganization, if and when approved by
the Bankruptcy Court, would include a capital structure in which
existing common or preferred equity would retain any value.
CONTACT:
GLOBAL CROSSING (Press Contacts)
Becky Yeamans
+ 1 973-410-5857
Rebecca.Yeamans@globalcrossing.com
Tisha Kresler
+ 1 973-410-8666
Tisha.Kresler@globalcrossing.com
Analysts/Investors Contact
Ken Simril
+ 1 310-385-3838
investors@globalcrossing.com
TYCO INTERNATIONAL: TyCom Venture Dragging Down Earnings
---------------------------------------------------------
Tyco International is not seeing a sufficient return on its
investment on the development of its undersea fiber-optic cable
network known as TyCom, Reuters suggests. The Company's financial
statements show, over the past eight quarters, it has spent about
US$3.5 billion on TyCom.
However, in the current quarter, Tyco expects the telecom unit to
generate only US$49 million in revenue, down from US$173.2
million in the year-ago period.
The decline is remarkable, says Reuters, given that TyCom's
quarterly revenue exceeded US$600 million during peaks in 2000
and 2001.
Mark Swartz, Tyco's chief financial officer, said on Tuesday that
TyCom will continue to hurt the conglomerate's performance in the
fiscal fourth quarter that ends September 30.
"Our TyCom loss is expected to increase by approximately US$60
million" as compared to the third quarter, Swartz said.
TyCom's deteriorating performance and Tyco's higher borrowing
costs are expected to offset improvements in operating earnings
in the majority of Tyco's businesses in the fiscal fourth
quarter, Swartz said.
"It is expected that this business will continue to generate
operating losses for the near term, as this market is not
expected to show signs of recovery for the foreseeable future,"
Tyco said in its earnings release on Tuesday.
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 and plastics
and adhesives. Tyco operates in more than 100 countries and had
fiscal 2001 revenues from continuing operations of approximately
US$34 billion.
To see financial statements:
http://bankrupt.com/misc/Tyco_International.htm
CONTACT: TYCO INTERNATIONAL LTD.
Media: Gary Holmes
Tel: +1-212-424-1314 or +1-212-424-1307
Investor Relations: Kathy Manning
Tel: +1-603-778-9700
===========
B R A Z I L
===========
CSN: Chairman Hopeful of BNDES Approval on Merger with Corus
------------------------------------------------------------
Benjamin Steinbruch, chairman and chief executive of Companhia
Siderurgica Nacional (CSN), believes that the Company's plan to
merge with Corus Group PLC will have the approval of state-owned
national development bank BNDES.
Earlier reports indicated that BNDES is unsure whether to allow
the Vincunha group swap its shares in CSN for Corus shares. BNDES
and other creditors lent US$600 million to Vincunha group, which
used its 46.5% stake in CSN as collateral. BNDES and the other
lenders want to make sure they do not lose out in the exchange,
said a BNDES source.
But Steinbruch insists that the Corus/CSN deal will be beneficial
to BNDES as the new shares will be more liquid. He also
reiterated that the deal with Corus is a merger, and by no means
a sell-off.
A report released by daily Folha de Sao Paulo Sunday said that
CSN minority shareholders were considering asking from CSN a
payment representing 80% of the value of the transaction with
Corus.
A group of CSN minority shareholders argues that CSN is not
merging with Corus but selling majority control of the Company.
To see CSN's 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
LIGHT: Gets New CEO After Restructuring, Recapitalization
---------------------------------------------------------
Michael Gaillard will relinquish his post as CEO of electricity
distributor Light Servicos De Eletricidade S.A., reports Gazeta
Mercantil. Jean Pierre Bel will be replacing Gaillard, who's
scheduled to give up his post after completing the restructuring
of Light and the Company's US$1-billion capitalization aimed at
helping the Company restore financial balance.
After leaving the position, Gaillard will remain in Brazil as the
chair of Light's Board of Directors and representative of the
French EDF, controller of Light, in the country.
Light predicts investments of BRL320 million this year, while
EDF, further US$900 million in the construction of two thermal
electric power plants in Rio de Janeiro: Norte Fluminense (US$550
million) and Paracambi (US$350 million).
CONTACT: LIGHT SERVICOS DE ELETRICIDADE S.A.
Avenida Marechal Floriano, 168
20080-002 Rio de Janeiro, Brazil
Phone: +55-21-2211-2794
Fax: +55-21-2211-2993
Home Page: http://www.lightrio.com.br
Contact:
Bo Gosta Kallstrand, Chairman
Michel Gaillard, President and CEO
Joel Nicolas, Executive Director, Operation
Paulo Roberto Ribeiro Pinto, Executive Director,
Investor Relations and CFO
ELECTRICITE DE FRANCE (EDF)
Rue Louis-Murat
75384 Paris Cedex 08,
France
Phone: +33-1-40-42-54-30
Fax: +33-1-40-42-79-40
Home Page: http://www.edf.fr
Contacts:
Francois Roussely, Chairman and CEO
Yannick d'Escatha, COO, Industry Branch
Jacques Chauvin, Chief Financial Officer
ELECTRICITE DE FRANCE (INTERNATIONAL)
30, Rue Jacques Ibert
75017 Paris
Phone: 33 (0) 1 40 42 22 22
Fax : 33 (0) 1 40 42 31 83
Home Page : http://www.edf.fr
Contact :
M. Fang Deyi
Phone: 33 (0) 1 40 42 18 68
Fax : 33 (0) 1 40 42 18 89
E-mail : deyi.fang@edf.fr
NET SERVICOS: Eliminates Base Price In Planned Share Sale
----------------------------------------------------------
Net Servicos de Comunicacao SA, Brazil's largest cable television
operator, decided to scratch a minimum price of BRL1.21 per share
for a share sale planned for August to raise about BRL1 billion
(US$287 million), says Bloomberg.
The decision came after the Company, which is controlled by Latin
America's biggest media company Organizacoes Globo, saw the stock
plunge 39% since the floor price was announced last week.
Instead, Net Servicos, in a statement to the Sao Paulo Stock
Exchange, said that it would set the price based on an average of
preferred shares in Brazil. The Company also said that it may
have to increase the sale from 800 million shares planned as the
price per share falls.
"The suppression of the minimum price suggests there probably was
little demand for the shares at that high a level," said Fabio
Zagatti, an analyst at HSBC Investment Bank in Sao Paulo.
"They're relaxing some of the requirements for the share sale to
make it more attractive to investors."
Net Servicos, which has never posted a profit, last week
increased the number of shares it plans to sell from the 575
million shares it set July 18. The Company's shares, the worst
performer in the benchmark Bovespa index, closed down 11
centavos, or 12%, to 78 centavos on the Sao Paulo stock exchange.
The shares are down 90% so far this year.
To see financial statements:
http://bankrupt.com/misc/globo_cabo.pdf
CONTACT: NET SERVICOS DE COMUNICACAO S.A.
CNPJ/MF n 00.108.786/0001-65
NIRE n 35.300.177.240
Companhia Aberta
Rua Verbo Divino n 1.356 - 1 a, Sao Paulo-SP
Contact:
Leonardo P. Gomes Pereira
Investor Relations and Chief Financial Officer
URL: http://globocabo.globo.com/
===================================
D O M I N I C A N R E P U B L I C
===================================
TRICOM: 2Q02 Results Show Improvement, Debt Maturities Extended
---------------------------------------------------------------
Tricom (NYSE: TDR) announced on Wednesday financial results for
its second quarter and first six months that reflect continuing
progress in the company's key growth drivers and capital
structure improvement.
Tricom achieved the following financial and operational
highlights during the second quarter and first six months of the
year:
-- Consolidated revenues grew 13.1 percent to $66.7 million for
the second quarter, a 4.2 percent sequential increase. For the
first six months, consolidated revenues increased 12.3 percent to
$130.8 million.
-- Consolidated EBITDA totaled $20.1 million for the second
quarter and $40.2 million for the first six months.
-- Adjusted EBITDA, excluding $1.7 million of negative EBITDA for
the second quarter and $3.0 million for the first six months,
related to Tricom's start-up operations in Panama, totaled $21.8
million for the second quarter and $43.3 million for the first
six months.
-- Consolidated EBITDA margin was 30.1 percent for the second
quarter and 30.7 percent for the first six months. Adjusted
EBITDA margin was 32.7 percent for the second quarter and 33.1
percent for the first six months.
-- Net loss of $14.2 million, or 33 cents per share for the
second quarter and $24.8 million or 57 cents per share for the
first six months.
-- Lines in service grew 16.9 percent to approximately 189,000.
-- Mobile subscribers increased 31.6 percent to 398,000.
-- Cable subscribers totaled 71,000 at June 30, 2002, a 4.4
percent sequential increase.
-- Capital expenditures declined by 33.5 percent to $21.4 million
for the second quarter and by 39.7 percent to $39.7 million for
the first six months.
-- Restructured $32 million of short-term borrowings during the
second quarter and a total of $110 million for the first six
months.
-- Names Ramon Tarrago -- Vice president of International
Business Division -- as Chief Financial Officer; Promotes Carlos
Vargas -- former CFO -- to Executive Vice president of cable
operations.
-- Announces new consumer and business segment organizational
structure to correspond current business and growth prospects.
"Despite a challenging economic environment and competitive
landscape we remain strongly positioned and continue to achieve
sustained progress in our key growth drivers," said Arturo
Pellerano, Chairman and Chief Executive Officer. "We continue to
target quality and profitable customers to achieve a stronger
cash flow performance and profitable growth. We are focused on
improving our operational and cash flow margins, optimizing our
capital expenditures and strengthening our balance sheet. We have
set a clear path towards reaching positive free cash flow. For
the remainder of the year you should expect us to stay intensely
focused on expense control, rigorous financial discipline in
operational decisions, spending capital in the right places, and
continued commitment to our growth drivers."
The revenue growth in the second quarter stemmed primarily from
revenues from cable television services, and increases in
revenues from international long distance, local service, mobile,
and data and Internet services. Revenue growth was offset, in
large part, by lower installation and activation revenues
primarily as a result of a change in revenue recognition
regarding the average service life of installation and activation
revenues, combined with lower average installation fees.
Cable television revenues totaled $5.7 million in the second
quarter, representing a 9.2 percent increase from revenues in the
2002 first quarter, the third quarter following the acquisition
of cable operations. Cable revenues for the first six months of
the year totaled $11.0 million. The sequential increase was
primarily derived from higher basic and premium programming
services revenues and advertising sales.
Second quarter international revenues grew 10.7 percent to $22.1
million for the quarter, and increased 9.5 percent to $43.3
million in the first six months. On a sequential basis,
international revenues increased 3.7 percent. The growth was
attributable to increasing traffic derived from the company's
U.S. wholesale long distance operations. Toll revenues increased
6.3 percent to $7.4 million during the second quarter, and 17.0
percent sequentially, primarily due to higher access charges
revenues.
Local service revenues increased 12.3 percent to $17.5 million in
the second quarter, and 12.7 percent to $34.2 million during the
first six months. On a sequential basis, local service revenues
increased 4.2 percent. The revenue growth was primarily the
result of the continuing growth in the number of lines in
service.
Second quarter cellular and PCS revenues grew 3.5 percent to $9.5
million and 5.2 percent to $19.0 million during the first six
months. The increase was primarily the result of a higher average
subscriber base, coupled with higher post-paid program service
revenues, partially offset by a year-over-year decrease in
average revenue per user (ARPU). The decline in ARPU was
attributed to lower average minutes of usage and a broader base
of prepaid subscribers.
Data and Internet revenues grew 32.2 percent to $2.7 million
during the second quarter, representing an 11.6 percent
sequential increase. For the first six months, data and Internet
revenues increased 30.9 percent to $5.1 million, primarily due to
the continuing growth in the number of data and Internet
subscribers. The company ended the quarter with approximately
11,000 data and Internet customers, an increase of 36.9 percent
over the same period last year.
Consolidated operating costs and expenses totaled $66.1 million
in the second quarter and $128.7 million for the first six
months. These results reflect higher selling, general and
administrative expenses, in large part related to non-recurring
marketing and promotional campaigns designed to bolster the
company's image and market position, as well as increased network
and non-network depreciation expenses, resulting from the
company's capital investment expansion programs. Higher transport
and access charges, combined with cable programming costs related
to the integration of cable television operations, contributed to
the overall year-over-year increase in operating costs. Operating
costs from Tricom Latin America operations in Panama totaled $2.8
million in the second quarter and $4.4 million for the first six
months of the year.
Interest expense totaled $16.0 million in the second quarter and
$29.7 million in the first six months. The year-over-year
increase is attributable to a higher aggregate amount of
interest-bearing debt coupled with lower interest capitalization,
as a result of a lower capital spending program during the past
twelve months. Total debt, including capital leases and
commercial paper, amounted to $525.6 million at June 30, 2002,
comprised of $413.3 million in long-term borrowings, and $112.2
million in short-term loans with related companies, local and
international banks. During the first half, the Company improved
its capital structure by extending the maturity of a portion of
its domestic short-term debt. The company extended the maturity
of approximately $32 million of its short-term debt during the
second quarter. At June 30, 2002 Tricom had refinanced more than
$110 million of short-term debt to long-term debt.
Capital expenditures totaled $21.4 million for the second quarter
compared to $32.2 million over the same period last year, and
totaled $39.7 million for the first six months of the year
compared to $65.8 million in the same period last year.
About TRICOM
TRICOM, S.A. is a regional integrated telecommunications provider
in the U.S., Caribbean and Central America. In the Dominican
Republic we offer local, long distance, cable television
entertainment, mobile telephony, as well as broadband data
transmission services. Through TRICOM USA, we own switching
facilities in New York, Miami and Puerto Rico, providing us with
end-to-end connectivity, and are one of the few Latin American
long distance carriers that have a United States licensed
subsidiary. Through TCN Dominicana, we are the largest cable
television operator in the Dominican Republic based on our number
of subscribers and homes passed. TRICOM is deploying the first
integrated digital wireless communication network based on
iDEN(R) technology across Central America. For more information
about TRICOM, please visit http://www.tricom.net
To see Tricom's financial results:
http://bankrupt.com/misc/TRICOM.htm
CONTACT: Miguel Guerrero, Investor Relations
Phone: +1-809-476-4044
+1-809-476-4012
E-mail: investor.relations@tricom.net
Home Page: http://www.tricom.net
===========
M E X I C O
===========
GRUPO BITAL: ING Agrees To Acquire 19.2% Stake
----------------------------------------------
ING announced Wednesday it has entered into an agreement with
Grupo Financiero Bital for a 19.2% stake in Banco Bital, one of
the leading retail banks in Mexico. This announcement follows a
memorandum of understanding signed in March this year.
The US$200 million investment will enable ING to further enhance
its bancassurance strategy in Mexico. Closing of the transaction
is, amongst others, subject to regulatory approvals. The
transaction is expected to be completed in the fourth quarter of
this year.
In 1998, ING entered into a bancassurance joint venture with
Bital to enable ING to distribute its insurance products through
Bital's branches. ING's 49% ownership in that joint venture is
unaltered by today's announcement.
The co-operation between ING and Bital dates back to 1997, when
both companies established Afore Bital, one of the largest
pension funds in Mexico. In October 2000, ING acquired Bital's
interests in Afore Bital.
CONTACT: ING GROUP
Ward Snijders
Phone: + 31 20 541 6522
ING Americas
Dianne Bernez,
Phone: +1-770-618-3910
Home Page: http://www.ing-usa.com
GRUPO BITAL: Fortifying Capital Structure
-------------------------------------------
The chief executive of Grupo Financiero Bital SA made an
assurance that the bank is strengthening its capital structure
and not preparing a stake sale, Dow Jones reports.
According to Jaime Ruiz Sacristan, the Company's position is
highlighted by the bank's agreement with ING Groep NV (ING) for a
US$200 million capital injection expected to arrive in September.
The deal would give ING a 19.2% stake in its flagship banking
unit for US$200 million.
"The agreement shows that ING intends to continue selling
insurance products with us," Ruiz Sacristan said in an interview.
Mexico is one of ING's top five foreign operations, which
includes a 49% stake in a bancassurance venture with Bital,
offering insurance products via Bital's network of 1,379 bank
branches. The newly closed deal will increase ING's investment in
Mexico to $2.5 billion since it entered the country in the 1990s.
It will also strengthen the Dutch giant's bancassurance venture.
Part of the capitalization agreement included a commitment from
controlling shareholders to refrain selling their stakes.
Bital plans to raise an additional capital of US$530 million to
comply with stricter capitalization regulations. The Company
plans to offer up to US$250 million in "capitalization notes" to
boost capitalization ratios in September. Bital's advisor, Credit
Suisse First Boston, will act as lead agent for the placement.
The Company also expects another US$280 million coming from
dividends from its units and from profits generated this year
through its banking operations.
Bital, led by the Berrondo and Esteve families, is one of two
local banks that remain under control of Mexican shareholders.
Spain's Santander Central Hispano SA holds 30% of Bital's voting
rights.
Capitalization plans for Bital had earlier exposed it to possible
bidder, thinking the Company is slated for takeover. Among the
interested parties linked to the bid were SCH and HSBC Holdings
PLC. After boosting its minority stake to 30%, however, SCH
withdrew allegedly because of the high price expected by
controlling shareholders.
HSBC conducted a due diligence, preparing to launch a GBP638
million offer, but it too left.
"There have been lots of rumors, but we haven't received a
concrete offer," Ruiz Sacristan said, reiterating that the
company is currently focused on its capitalization process.
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
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
GRUPO MEXICO: U.S. Subsidiary Refuses To Pay For El Paso Cleanup
----------------------------------------------------------------
Asarco Inc., the U.S. subsidiary of the embattled multinational
mining and refining conglomerate Grupo Mexico S.A. de C.V.,
denied responsibility for the El Paso lead contamination and
refused to pay for an cleanup ordered by the Environmental
Protection Agency (EPA), reports AP.
As a result, the federal government will pay to remove
contaminated soil in 45 residential yards.
"We gave Asarco an opportunity to step up and proceed with the
cleanup with EPA oversight, and they declined," EPA spokesman
David Bary told the El Paso Times. "Now, the EPA will proceed
with cleanup activities as we already have outlined in west-
central El Paso."
The EPA believes that lead and arsenic found in the El Paso yards
comes from a 115-year-old smelter owned by Asarco. The company
has challenged the EPA's soil-testing procedure, saying there's
no evidence of an immediate public health threat and no evidence
that the smelter, which stopped processing lead in 1985, is the
primary contamination source.
Company officials say it's too soon to conclude that soil must be
removed from the local yards.
Asarco's refusal to pay could result in fines and an order for it
to pay triple the amount the EPA spends on the cleanup, which
will begin in September, officials said.
Asarco and Grupo Mexico are both facing liquidity problems.
Asarco's 54.2% share of Southern Peru Copper Co. is pledged
against Asarco's current debt. The company owes US$450 million to
a consortium of international banks and is trying to renegotiate.
The money is due in November.
Grupo Mexico, on the other hand, which is also carrying a debt
load of US$2.8 billion, partly the result of its acquisition of
Asarco, recently announced it is in talks with a group of
creditors led by Bank of America Corp. to renegotiate US$574
million of debt.
CONTACTS: GRUPO MEXICO S.A. DE C.V
Avenida Baja California 200,
Colonia Roma Sur
06760 Mexico, D.F.
Mexico
Phone: +52-55-5264-7775
Fax: +52-55-5264-7769
http://www.gmexico.com
Contacts:
German Larrea Mota-Velasco, Chairman & CEO
Xavier Garcia de Quevedo Topete, President & COO
SOUTHERN PERU COPPER CORPORATION
Ave. Caminos del Inca 171
Urb. Chacarilla del Estanque
Santiago de Surco
Lima 33, Peru
Tel: +51 1 372 1414
Fax: +51 1 372 0238
Home Page: http://www.southernperu.com
Contacts:
German Larrea Mota-Velasco, Chairman & CEO
Oscar Gonzalez Rocha, President & Director General
Daniel Tellechea Salido, VP - Finance
ASARCO, INC.
2575 E. Camelback Rd., Ste. 500
Phoenix, AZ 85016
Phone: 602-977-6500
Fax: 602-977-6701
Home Page: http://www.asarco.com
Contacts:
German Larea Mota-Velasco, Chairman & CEO
Genaro Larrea Mota-Velasco, President
Daniel Tellechea Salido, VP & CFO
===========
P A N A M A
===========
BLADEX: Doubles Loss Allowances in 2Q02, Net Income Suffers
-----------------------------------------------------------
Banco Latinoamericano de Exportaciones, S.A. (NYSE: BLX)
("BLADEX" or the "Bank"), a specialized multinational bank
established to finance trade in the Latin American and Caribbean
region, reported Wednesday results for the second quarter ended
June 30, 2002. The Bank reported a $259.9 million increase in the
allowance for potential credit losses and a $42.0 million charge
representing an impairment loss on securities, making the total
of the allowance for potential credit losses $474.6 million and
the total charges for impairment loss on securities for 2001 and
2002, $82.4 million. These figures compare with $214.7 million in
allowances for potential credit losses at March 31, 2002, and
with $194.7 million at December 31, 2001, and a charge of $40.4
million for impairment loss on securities for the quarter ended
December 31, 2001.
Net loss for the second quarter of 2002 was $300.1 million, or
$17.32 per share, compared with net income of $33.2 million, or
$1.78 per share, reported in the second quarter of 2001.
The net loss for the first six months of 2002 was $299.7 million,
compared with net income of $60.3 million reported in the same
period of 2001. Losses per common share after preferred dividends
were $17.31 for the first six months of 2002, compared with
earnings per common share after preferred dividend of $3.20 in
the first six months of 2001.
Jose Castaneda, Chief Executive Officer of Bladex, said, "The
significant decline in our net income for the second quarter was
caused by the $259.9 million addition made to the Bank's
allowance for possible credit losses on its Argentine loans and
contingencies portfolio, which was $846 million at June 30, and
an additional $42.0 million mark-to-market write down on our $115
million securities portfolio in the country. Excluding $30.7
million in credits we expect to collect within the next few
months, our reserve and charges for impairment losses for 2001
and 2002 against this portfolio is now slightly over 50%, which
we believe is adequate given the conditions prevailing in the
country. However, we believe it is important for our shareholders
and investors to know that even with this significant increase in
the reserve position, Bladex's total capital ratio at June 30,
2002, was 11.9%, its Tier 1 capital ratio was 10.6%, and the book
value per Class E common share was $16.88."
The Board of Directors took this action within the context of a
carefully developed plan to address four specific challenges
facing the Bank:
* Mitigate the risk in its credit portfolio, particularly in
Argentina, and take a cautionary stance relative to the Bank's
exposure in other countries
* Maintain a strong and stable liquidity position
* Return Bladex to profitability, and
* Adjust the Bank's medium term strategy to the new trends
in its markets and the economic challenges facing the region
The Board's decision to take such additional provisions at this
time reflects the continuing uncertainty in Argentina, as well as
the extent and depth of economic turmoil in this market, which is
affecting all borrowers in the country. In establishing the
additional provision, Bladex employed a rigorous borrower-by-
borrower credit analysis process, one of the Bank's core
competencies, which has enabled it to experience only $77 million
of loan charge-offs on $117 billion of disbursements since the
Bank began operations 23 years ago.
While most of the Bank's loans and investments in Argentina have
been placed on a non-accrual status following US GAAP
requirements, Bladex collected fully 91% of the $28.9 million
interest due on these loans and investments during the first half
of the year, leaving only $2.7 million in unpaid past due
interest as of June 30. In addition, the Bank collected $40
million in Argentine principal exposure during the second
quarter, bringing year-to-date Argentine principal reductions to
$198 million. This extraordinary performance in view of the
circumstances in Argentina was due in large measure to the
combination of an effective collection program and the preferred
creditor status that Bladex enjoys in the country, where it is on
similar footing with other multilateral entities. Restructuring
of existing loans involving principal balances of $61 million has
been accomplished without reduction of principal, and with
unchanged or improved interest terms for the Bank.
In Brazil, the Bank recognizes the increasing risk levels and is
acting accordingly. Bladex's Brazilian portfolio is highly
flexible: of the $1.7 billion outstanding at June 30, 58% is
trade related, and 83% represents exposure to the lower-risk
banking sector. The highly liquid nature of this portfolio has
allowed the Bank to reduce its exposure by $795 million since
January 1, 2002 ($323 million in the second quarter), with $880
million or 53% of the remaining exposure scheduled to mature by
year-end and $1,349 million or 81%, within the next 18 months. As
of Wednesday, the Bank has no past due amounts of interest or
principal in the country and has not restructured any of its
loans.
Excluding the Argentine portfolio, Bladex's impaired loans are
minimal ($1.0 million) and past due loans amounted to $97
thousand.
Bladex says it is being managed with an extremely conservative
liquidity policy. In the last year the cash position has been
increased in both absolute and relative terms and was $570.5
million, 80% of deposits, at June 30, 2002. The liquidity
position is kept in the form of inter-bank deposits with top tier
international banks in Europe and North America and is placed at
maturities ranging from overnight to one month.
As the balance sheet has been reduced, Bladex has been able to
change the mix of its funding base so as to improve the maturity
profile of its liabilities. Historically, funding has been
divided roughly into three equal parts: deposits, short-term
funding and medium-term funding. At June 30, deposits were $710
million, down $861 million from the end of last year. The
reduction resulted principally from the credit rating downgrade
during this period and the challenging operating environment.
Although the deposit reduction resulted in higher funding costs,
it changed the liability mix of the Bank so that average
maturities have been lengthened and volatility reduced. The
increased cost of funds has been fully offset by higher lending
margins as net interest spreads increased from 1.33% at the end
of 2001 to 1.46% at June 30, 2002.
Since the beginning of the year, Bladex has reduced its balance
sheet by $2.0 billion, or 34%. This reduction took place with
three goals in mind: 1) Insuring an adequate level of
capitalization following the Argentine provision charges, 2)
reducing exposure to countries where risk levels were increasing,
and 3) adapting the balance sheet to reduced funding levels.
During 2002, expenses have been reduced by 10%, which has
included a 26% reduction in headcount. Importantly, these
reductions have been focused on marketing activities in sectors
that the Bank no longer plans to emphasize. Core functions such
as risk management, compliance, and transaction processing have
been unaffected or strengthened.
In the second quarter, in addition to the Argentine provision
charges, the Bank took a number of additional provisions and
restructuring charges. As a result, based on currently available
information, it expects no additional provisions will be
necessary for the balance of the year.
"As a result of these actions and our current assessment of
market conditions," Mr. Castaneda said, "we expect Bladex to
return to profitability in the third quarter ending September 30,
2002 at a level that should translate into quarterly net income
of around $10 million."
A strategy to support Bladex's growth in the near term has been
developed based on a review of the Bank's business model within
the context of its franchise, corporate mission, competitive
advantages, and trends in the market. The Bank has concluded that
its special role as a provider of trade finance will remain
critically needed in the Region. As a result, it intends to base
its future growth on an expanded set of trade finance products
channeled principally through its client banks.
The provision charges taken in the second quarter have resulted
in diminished capital ratios. In order to bring these back to
historical levels to support Bladex's growth plans and strengthen
its ability to withstand market volatility, the Bank intends to
raise additional equity capital in a minimum amount of $100
million. To this end, it has retained an advisory services team
of BNP Paribas and Deutsche Bank to assist in executing a plan to
secure the initial participation of a small core group of Class A
shareholders and multilateral agencies. The group's initial
response to Bladex's plan has been encouraging, although there is
no assurance the Bank will be successful in this effort.
SUMMARY ANALYSIS OF OPERATING RESULTS
The following table sets forth the condensed profit and loss
statements for the second quarter of 2001, as well as for the
first and second quarters of 2002:
(In $ millions, except percentages)
IIQ01 IQ02 IIQ02
Operating net interest income 16.9 17.4 14.7
Effect of interest rate gap 4.7 3.9 1.9
Interest income on available
capital funds 9.8 3.8 3.9
Net interest income (1) 31.5 25.1 20.5
Net commission and other income 6.3 2.8 2.0
Derivatives and hedging
activities (2) 4.9 -0.3 -4.3
Net revenues 42.7 27.5 18.2
Operating expenses -5.8 -5.2 -5.0
Net income before one time
restructuring charges, provisions
for credit losses and impairment
losses on securities 36.9 22.3 13.2
Restructuring charges (3) -- -0.1 -2.3
Adjustments and reversal of
unpaid interest accrued on
non-accruing loans (4) -- -1.8 -9.1
Provision for possible credit
losses and impairment loss
on securities -3.8 -20.0 -302.0
Net income 33.2 0.5 -300.1
(1) Excludes $9.1 million reversal of interest accrued on
Argentine loans placed on zero accrual in IIQ02, and $0.2 million
in IQ02, as well as an accounting adjustment of $1.5 million in
IQ02, which are shown separately.
(2) Represents the impact of mark-to-market of credit put
options.
(3) Includes $1.5 million in severance costs related to the
structured finance unit in New York, and $0.8 million at head
office in IIQ02.
(4) Includes reversal of interest accrued on Argentine loans
placed on zero accrual of $9.1 million in IIQ02, and $0.2 million
in IQ02, as well as an accounting adjustment of $1.5 million in
IQ02
The following table sets forth the condensed profit and loss
statements for the first six months of 2002 and 2001:
(In $ millions, except percentages)
6M01 6M02
Operating net interest income 32.2 32.0
Effect of interest rate gap 8.1 5.8
Interest income on available capital funds 21.8 7.7
Net interest income (1) 62.1 45.6
Net commission and other income 10.5 4.7
Derivatives and hedging activities (2) 5.6 -4.6
Net revenues 78.2 45.7
Operating expenses -11.5 -10.2
Net income before restructuring charges,
provisions for credit losses, and
impairment losses on securities 66.7 35.5
Restructuring charges (3) -- -2.4
Adjustments and reversal of unpaid interest
accrued on non-accruing loans (4) -- -10.8
Provision for possible credit losses and
impairment loss on securities -7.5 -322.0
Cumulative effect of accounting change 1.1 --
Net income 60.3 -299.7
(1) Excludes $9.3 million reversal of interest accrued on
Argentine loans placed on zero accrual in the first six months of
2002, as well as an accounting adjustment of $1.5 million in
IQ02, which are shown separately.
(2) Represents the impact of mark-to-market of credit put
options.
(3) Includes $1.5 million in severance costs related to the
closing of the structured finance unit in New York, and $0.9
million at head office in the first half of 2002.
(4) Includes reversal of interest accrued on Argentine loans
placed on zero accrual of $9.3, as well as an accounting
adjustment of $1.5 million in the first six months of 2002.
BLADEX, with $3.9 billion in assets, is a specialized
multinational bank established to finance trade in the Latin
American and Caribbean region. Its shareholders include central
banks from 23 countries in the region and 151 commercial banks
(from the region, as well as international banks) and private
investors. Its mission is to channel funds for the development of
Latin America and the Caribbean, and to provide integrated
solutions for the promotion of the region's exports. BLADEX is
listed on the New York Stock Exchange. Further investor
information can be found at http://www.blx.com.
BLADEX, Head Office
Calle 50 y Aquilino de la Guardia
Panama City, Panama
Attention: Carlos Yap, VP - Finance & Performance Management
Tel. No. +1-507-210-8581
E-mail: cyap@blx.com
-or-
The Galvin Partnership, 67 Mason Street, Greenwich , CT 06830
Attention: William W. Galvin
Tel. No. +1-203-618-9800
E-mail: wwg@galvinpartners.com
BLADEX: Moody's Confirms Debt & Deposit Ratings; Cuts BFSR
----------------------------------------------------------
Moody's Investors Service confirmed the Baa3 senior long-term
ratings of Banco Latinoamericano de Exportaciones, S.A. (BLADEX),
as well as the bank's short-term ratings at Prime-3. The outlook
on the ratings remains negative.
Simulataneously, Moody's downgraded BLADEX' bank financial
strength rating (BFSR) to E+ from D.
Moody's took the rating actions on optimism that BLADEX will
receive increased capital support from its core shareholder group
as part of a financial restructuring plan to bolster the balance
sheet and support future growth. BLADEX' financial restructuring
plan includes the raising of additional equity capital of at
least US$100 million by the end of 2002. The capital increase is
expected to take the form of a private placement with a small
core group of Class A shareholders and multilateral agencies.
Furthermore, Moody's expects BLADEX to be able to raise the
additional capital, because of the importance of the bank's role
and mission in the Latin American and Caribbean regions.
The negative outlook for the ratings reflects the uncertainty as
to the timing and amount of the capital support, and points to
the continued pressure on the bank's profitability and balance
sheet stemming from its large exposure to Argentina and from the
increased risk perception of the region's markets.
Moody's noted that the downgrade of the BFSR reflects the bank's
reduced capitalization and reserve coverage and its weaker
earnings capacity due to the winding down of a large portion of
its loan portfolio in order to build liquidity and to meet its
obligations.
The BFSR is Moody's opinion of a bank's intrinsic
creditworthiness and measures the likelihood that a bank may
require assistance from third parties.
The agency indicated at the same time that BLADEX is actively
addressing the higher risks associated with its exposure to
Argentina. The bank took loan loss provisions against most of
that portfolio, amounting to approximately 50% reserve coverage
for the total portfolio, despite having received over 90% of all
interest due from Argentine borrowers.
BLADEX, which is based in Panama City, Panama has US$3.9 billion
in assets and US$292 million equity as of June 30, 2002. For the
second quarter ended June 30, 2002, BLADEX reported a US$300.1-
million net loss reflecting a US$302 million charge for loan loss
provisions and for impairment losses on securities primarily
related to the bank's Argentine exposure. As a result of the
reclassification of loans and establishment of specific reserves
for Argentina, the related loans were classified as non-accrual.
=============
U R U G U A Y
=============
ABN AMRO: Moody's Cuts Long-Term Foreign Currency Ratings
---------------------------------------------------------
Moody's Investors Service lowered the long-term foreign currency
deposit ratings of ABN AMRO Bank N.V., Montevideo Branch, to Caa1
from B3 and placed the ratings on negative outlook.
The ratings firm noted the downgrade reflected the increasing
risk of a deposit moratorium, particularly in light of the bank
holiday declared on July 30th, in order to stem deposit outflows
from the banking system. The rating action also reflected the
increasing inability of the Uruguayan government to support
accelerating deposit withdrawals without incremental support from
the multilateral lending agencies.
ABN AMRO BANK was established in Uruguay in 1952, as a full
service branch. Its constant growth and innovative attitude have
made it one of the major participants in the domestic market.
With 500 employees, working in 23 branches, ABN AMRO Bank has
become the foreign bank with strongest presence in Uruguay.
CONTACT: ABN AMRO Bank N.V.
Main Branch
Calle Julio Herrera y Obes 1365
Montevideo
Uruguay
Postal Address
Casilla de Correo 888
Montevideo
Uruguay
Phone: +598-2 9031073
Fax +598-2 9009798
Home Page: http://www.abnamro.com.uy
BANCO A.C.A.C.: Moody's Lowers Ratings To Caa1
----------------------------------------------
Moody's Investors Service downgraded to Caa1 from B3 the long-
term foreign currency deposit ratings of Banco A.C.A.C. S.A. and
put the ratings on negative outlook.
Moody's noted the ratings downgrade reflected the increasing risk
of a deposit moratorium, particularly in light of the bank
holiday declared on July 30th, in order to stem deposit outflows
from the banking system. The rating action also reflected the
increasing inability of the Uruguayan government to support
accelerating deposit withdrawals without incremental support from
the multilateral lending agencies.
BANCO COMERCIAL: Ratings Downgraded by Moody's
----------------------------------------------
Moody's Investors Service downgraded the ratings of Banco
Comercial S.A. (Comercial)
To / From
The ratings affected are:
-- Long-term foreign currency deposits Caa1 B3
-- Long-term foreign currency
senior unsecured debt Caa1 B1
-- Long-term foreign currency
subordinated debt Caa1 B2
All the ratings were placed on negative outlook.
Moody's noted the ratings downgrade reflected the increasing risk
of a deposit moratorium, particularly in light of the bank
holiday declared on July 30th, in order to stem deposit outflows
from the banking system. The rating action also reflected the
increasing inability of the Uruguayan government to support
accelerating deposit withdrawals without incremental support from
the multilateral lending agencies.
The agency also said that the lack of differentiation between the
long-term bank deposit and debt ratings of Banco Comercial
indicates its view that these classes of obligations are of equal
risk.
Banco Comercial is Uruguay's largest private sector bank and the
third largest overall with US$2.3 billion in assets as of
September 30, 2001.
CONTACT: BANCO COMERCIAL
Cerrito No. 400,
11100 Montevideo
Phone: 960-394/97
Fax: 963-569
Home Page: www.bancocomercial.com.uy/
BANCO COMERCIAL: Fitch Downgrades Ratings To `CCC'
--------------------------------------------------
Fitch Ratings has downgraded the long-term foreign currency
rating of Banco Comercial del Uruguay to 'CCC' from 'B+'. The
lower rating on the bank reflects its need for support from the
Uruguayan government, and the growing possibility that its
creditors may face some restructuring of the bank's obligations.
The rating remains on Rating Watch Negative.
The rating action follows a downgrade of Uruguay's sovereign
ratings Tuesday, reflecting the continued and pronounced drop in
banking system deposits and the associated fall in gross official
reserves. The sovereign action also reflects the deterioration of
public debt dynamics as a result of the devaluation and ongoing
recession, all of which have contributed to a marked worsening in
the operating environment.
With the creation of the FFSB (Fondo de Fortalecimiento del
Sistema Bancario), to be funded at $2.5 billion, the government
has established the mechanism to provide liquidity and solvency
support to its troubled domestic banks. The announcement of the
FSB helped moderate what had been growing outflows of resident
deposits. Full funding at the proposed level, however, will not
likely be reached in the immediate future, as it depends on
further disbursements from multilateral institutions and domestic
bond issues, the timing and completion of which continue
uncertain.
Even when fully funded, however, the resources proposed for the
FFSB will prove sufficient to restructure the local banking
system only if the government is able to stem the current pace of
deposit outflows, an outcome that at this point remains unsure.
An indication of local uncertainties was the suspension yesterday
of already intervened Banco de Montevideo and Caja Obrera, which
led to the declaration of a bank holiday, as the government
appeared unwilling to continue to provide the support necessary
for the bank to meet the demands of its depositors. Should
deposit outflows across the banking system continue unabated, the
government may be forced to consider less orthodox approaches
such as capital and/or deposit controls, events which could lead
bank ratings lower. The extension of the banking holiday through
the weekend may indicate that the government will put in place
exchange and/or deposit controls.
Fitch expects that deposit controls, if enacted, would likely
protect small depositors while mandating longer tenors for the
return of larger obligations. There are some indications that the
government may consider different levels of support for banks
with significant private ownership. With the largest domestically
held banks already under intervention or suspension, such private
institutions are largely controlled by foreign shareholders.
CONTACT: Fitch Ratings
Peter Shaw
Phone: 212/908-0553,
Ricardo Chaves
Phone: 212/908-0606
Linda Hammel
Phone: 212/908-0303, New York,
Lorna Martin or Ana Gavuzzo
Phone: +5411 4327 2444,
BANCO DE MONTEVIDEO: Moody's Cuts On Deposit Moratorium Risk
------------------------------------------------------------
Moody's Investors Service lowered the long-term foreign currency
deposit ratings of Banco de Montevideo S.A. (Montevideo) to Caa1
from B3. The ratings were placed on negative outlook.
Moreover, Moody's also lowered Banco de Montevideo's long-term
foreign currency senior debt ratings to Caa1 from B1. The rating
outlook on the debt ratings is also negative.
Moody's noted that the cut on the ratings reflected the
increasing risk of a deposit moratorium, particularly in light of
the bank holiday declared on July 30th, in order to stem deposit
outflows from the banking system.
The Uruguayan government's inability to support accelerating
deposit withdrawals without incremental support from the
multilateral lending agencies also prompted the downgrade.
According to Moody's, the lack of differentiation between the
long term bank deposit and debt ratings of Banco de Montevideo
indicates its view that these classes of obligations are of equal
risk.
Banco de Montevideo had UYU11 billion (US$398 million) of assets
as of December and UYU8.7 billion of deposits. Before deposit
withdrawals started in December, the bank was already strapped
for cash after purchasing Caja Obrera from the government in
November last year.
CONTACT: BANCO MONTEVIDEO
Misiones
1399 - Montevideo
Fax: 9162880
E-mail: info@bm.com.uy
Home Page: http://www.bancomontevideo.com.uy
Contact: Sr. Marcelo Pestarino, President
BANCO SANTANDER: Moody's Lowers Ratings To Caa1
-----------------------------------------------
Moody's Investors Service downgraded to Caa1 from B3 the long-
term foreign currency deposit ratings Banco Santander, S.A.
(Uruguay) and placed the ratings on negative outlook.
Moody's noted that the ratings downgrade reflected the increasing
risk of a deposit moratorium, particularly in light of the bank
holiday declared on July 30th, in order to stem deposit outflows
from the banking system. The rating action also reflected the
increasing inability of the Uruguayan government to support
accelerating deposit withdrawals without incremental support from
the multilateral lending agencies.
Banco Santander entered the Uruguayan financial sector in 1980.
In 1982, it acquired "Bancos del Litoral Asociados". In 1995,
based on its favorable business position, it embarked on a period
of marked growth, leading it to become one of the benchmark
institutions of the Uruguayan banking system and creating the
foundations of what is today the Santander Group in Uruguay.
Banco Santander is among the six companies of the Santander
Group.
CONTACT: BANCO SANTANDER
Cerrito,449, Montevideo
Tel. (598-2) 917 0970
Fax (598-2)916 1110
Home Page: http://www.santander.com.uy/index2.asp
International Desk (S.A.C.I.)
Alejandro Santos Lorenzo
Tel. (598-2) 917-0970, 915-9155
Fax (598-2) 916-3685 anexo: 250
E-mail: asantos@santander.com.uy
BANCO SANTANDER: Long-Term Foreign Currency Rating Cut to `B-'
--------------------------------------------------------------
Fitch Ratings has lowered the long-term foreign currency rating
of Banco Santander Uruguay to 'B-' from 'B+'. The rating below
the sovereign ceiling reflects growing possibilities that
restrictions on deposits may be put in place across the banking
system, which could affect all financial institutions in the
market. The rating remains on Rating Watch Negative.
This rating action follows a downgrade of Uruguay's sovereign
ratings Tuesday, reflecting the continued and pronounced drop in
banking system deposits and the associated fall in gross official
reserves. The sovereign action also reflects the deterioration of
public debt dynamics as a result of the devaluation and ongoing
recession, all of which have contributed to a marked worsening in
the operating environment.
With the creation of the FFSB (Fondo de Fortalecimiento del
Sistema Bancario), to be funded at $2.5 billion, the government
has established the mechanism to provide liquidity and solvency
support to its troubled domestic banks. The announcement of the
FSB helped moderate what had been growing outflows of resident
deposits. Full funding at the proposed level, however, will not
likely be reached in the immediate future, as it depends on
further disbursements from multilateral institutions and domestic
bond issues, the timing and completion of which continue
uncertain.
Even when fully funded, however, the resources proposed for the
FFSB will prove sufficient to restructure the local banking
system only if the government is able to stem the current pace of
deposit outflows, an outcome that at this point remains unsure.
An indication of local uncertainties was the suspension yesterday
of already intervened Banco de Montevideo and Caja Obrera, which
led to the declaration of a bank holiday, as the government
appeared unwilling to continue to provide the support necessary
for the bank to meet the demands of its depositors. Should
deposit outflows across the banking system continue unabated, the
government may be forced to consider less orthodox approaches
such as capital and/or deposit controls, events which could lead
bank ratings lower. The extension of the banking holiday through
the weekend may indicate that the government will put in place
exchange and/or deposit controls.
Fitch expects that deposit controls, if enacted, would likely
protect small depositors while mandating longer tenors for the
return of larger obligations. There are some indications that the
government may consider different levels of support for banks
with significant private ownership. With the largest domestically
held banks already under intervention or suspension, such private
institutions are largely controlled by foreign shareholders.
CONTACT: Fitch Ratings
Peter Shaw
Phone: 212/908-0553,
Ricardo Chaves
Phone: 212/908-0606
Linda Hammel
Phone: 212/908-0303, New York,
Lorna Martin or Ana Gavuzzo
Phone: +5411 4327 2444,
BANCO SUDAMERIS: Fitch Cuts Following Sovereign Rating Action
-------------------------------------------------------------
Fitch Ratings has downgraded the long-term foreign currency
rating of Banco Sudameris' Uruguayan branch to 'B-' from 'B+'.
The rating below the sovereign ceiling reflects growing
possibilities that restrictions on deposits may be put in place
across the banking system, which could affect all financial
institutions in the market. The rating remains on Rating Watch
Negative.
This rating action follows a downgrade of Uruguay's sovereign
ratings Tuesday, reflecting the continued and pronounced drop in
banking system deposits and the associated fall in gross official
reserves. The sovereign action also reflects the deterioration of
public debt dynamics as a result of the devaluation and ongoing
recession, all of which have contributed to a marked worsening in
the operating environment.
With the creation of the FFSB (Fondo de Fortalecimiento del
Sistema Bancario), to be funded at US$2.5 billion, the government
has established the mechanism to provide liquidity and solvency
support to its troubled domestic banks. The announcement of the
FSB helped moderate what had been growing outflows of resident
deposits. Full funding at the proposed level, however, will not
likely be reached in the immediate future, as it depends on
further disbursements from multilateral institutions and domestic
bond issues, the timing and completion of which continue
uncertain.
Even when fully funded, however, the resources proposed for the
FFSB will prove sufficient to restructure the local banking
system only if the government is able to stem the current pace of
deposit outflows, an outcome that at this point remains unsure.
An indication of local uncertainties was the suspension yesterday
of already intervened Banco de Montevideo and Caja Obrera, which
led to the declaration of a bank holiday, as the government
appeared unwilling to continue to provide the support necessary
for the bank to meet the demands of its depositors. Should
deposit outflows across the banking system continue unabated, the
government may be forced to consider less orthodox approaches
such as capital and/or deposit controls, events which could lead
bank ratings lower. The extension of the banking holiday through
the weekend may indicate that the government will put in place
exchange and/or deposit controls.
Fitch expects that deposit controls, if enacted, would likely
protect small depositors while mandating longer tenors for the
return of larger obligations. There are some indications that the
government may consider different levels of support for banks
with significant private ownership. With the largest domestically
held banks already under intervention or suspension, such private
institutions are largely controlled by foreign shareholders.
CONTACT: Fitch Ratings
Peter Shaw
Phone: 212/908-0553,
Ricardo Chaves
Phone: 212/908-0606
Linda Hammel
Phone: 212/908-0303, New York,
Lorna Martin or Ana Gavuzzo
Phone: +5411 4327 2444,
BANCO SURINVEST: Moody's Reduces Foreign Currency Deposit Ratings
-----------------------------------------------------------------
Moody's Investors Service downgraded to Caa1 from B3 the long-
term foreign currency deposit ratings of Banco Surinvest S.A. The
ratings were placed on negative outlook.
Moody's noted the ratings downgrade reflected the increasing risk
of a deposit moratorium, particularly in light of the bank
holiday declared on July 30th, in order to stem deposit outflows
from the banking system. The rating action also reflected the
increasing inability of the Uruguayan government to support
accelerating deposit withdrawals without incremental support from
the multilateral lending agencies.
BANKBOSTON: Moody's Cuts Ratings, Places on Negative Outlook
------------------------------------------------------------
BankBoston, N.A. (Uruguay) had its long-term foreign currency
deposit ratings downgraded to Caa1 from B3 by Moody's Investors
Service. The ratings were placed on negative outlook.
The rating action reflected the increasing risk of a deposit
moratorium, particularly in light of the bank holiday declared on
July 30th, in order to stem deposit outflows from the banking
system, according to Moody's. The move also reflected the
increasing inability of the Uruguayan government to support
accelerating deposit withdrawals without incremental support from
the multilateral lending agencies, Moody's added.
Established in 1976, BankBoston Uruguay provides a broad range of
financial services to multinationals and large national
corporations, middle market companies, and small businesses. The
bank also maintains a leading market position in retail and
private banking, mortgage lending, and trade services. It is the
2nd largest private sector bank in the country. It has US$890
million in assets, 15 offices, and 400 employees. It owns OCA,
the largest private label credit card issuer and consumer finance
company in the country, with 22 offices and more than 500
employees.
CONTACT: BANKBOSTON N.A.
Zabala 1464
Casilla de Correo 90
Montevideo, (11000)
Uruguay
Phone: 598-(2)-916-0127
Fax: 598-(2)-916-2209
SWIFT: FNBB UY MM
Cable: BOSTONBANK
Telex: BOSTON UY 22433
Home Page: http://www.bankboston.com.uy/
BNL: Heightened Risk of A Deposit Moratorium Prompts Ratings Cut
----------------------------------------------------------------
Moody's Investors Service downgraded to Caa1 from B3 the long-
term foreign currency deposit ratings of Banca Nazionale del
Lavoro S.A. (Uruguay) and put the ratings on negative outlook.
Moody's noted the ratings downgrade reflected the increasing risk
of a deposit moratorium, particularly in light of the bank
holiday declared on July 30th, in order to stem deposit outflows
from the banking system. The rating action also reflected the
increasing inability of the Uruguayan government to support
accelerating deposit withdrawals without incremental support from
the multilateral lending agencies.
Banca Nazionale del Lavoro SA ("BNLSA") is owned by Italy-based
Banca Nazionale del Lavoro. At year end-2001, preliminary
accounts showed that BNLSA had equity of US$305 million
(representing c.8% of the group's equity), and total assets of
US$3.3 billion.
CONTACT: BANCA NAZIONALE DEL LAVORO CASA FINANCIARIA S.A.
25 de Mayo 575
Casilla de Correo 1454
11000 Montevideo
Phone: 0059 82 962030
Fax: 0059 82 962195
E-mail: bnl@adinet.com.uy
Home Page: http://www.bnl.com.uy/new/
HSBC URUGUAY: Fitch Lowers Long-Term Foreign Currency Ratings
-------------------------------------------------------------
Fitch Ratings cut the long-term foreign currency rating of HSBC
Bank (Uruguay) to 'B-' from 'B+'. The rating below the sovereign
ceiling reflects growing possibilities that restrictions on
deposits may be put in place across the banking system, which
could affect all financial institutions in the market. The rating
remains on Rating Watch Negative.
The rating action follows a downgrade of Uruguay's sovereign
ratings Tuesday, reflecting the continued and pronounced drop in
banking system deposits and the associated fall in gross official
reserves. The sovereign action also reflects the deterioration of
public debt dynamics as a result of the devaluation and ongoing
recession, all of which have contributed to a marked worsening in
the operating environment.
With the creation of the FFSB (Fondo de Fortalecimiento del
Sistema Bancario), to be funded at $2.5 billion, the government
has established the mechanism to provide liquidity and solvency
support to its troubled domestic banks. The announcement of the
FSB helped moderate what had been growing outflows of resident
deposits. Full funding at the proposed level, however, will not
likely be reached in the immediate future, as it depends on
further disbursements from multilateral institutions and domestic
bond issues, the timing and completion of which continue
uncertain.
Even when fully funded, however, the resources proposed for the
FFSB will prove sufficient to restructure the local banking
system only if the government is able to stem the current pace of
deposit outflows, an outcome that at this point remains unsure.
An indication of local uncertainties was the suspension yesterday
of already intervened Banco de Montevideo and Caja Obrera, which
led to the declaration of a bank holiday, as the government
appeared unwilling to continue to provide the support necessary
for the bank to meet the demands of its depositors. Should
deposit outflows across the banking system continue unabated, the
government may be forced to consider less orthodox approaches
such as capital and/or deposit controls, events which could lead
bank ratings lower. The extension of the banking holiday through
the weekend may indicate that the government will put in place
exchange and/or deposit controls.
Fitch expects that deposit controls, if enacted, would likely
protect small depositors while mandating longer tenors for the
return of larger obligations. There are some indications that the
government may consider different levels of support for banks
with significant private ownership. With the largest domestically
held banks already under intervention or suspension, such private
institutions are largely controlled by foreign shareholders.
CONTACT: Fitch Ratings
Peter Shaw
Phone: 212/908-0553,
Ricardo Chaves
Phone: 212/908-0606
Linda Hammel
Phone: 212/908-0303, New York,
Lorna Martin or Ana Gavuzzo
Phone: +5411 4327 2444,
LLOYDS TSB: Foreign Currency Deposit Ratings Cut To Caa1
--------------------------------------------------------
The long-term foreign currency deposit ratings of Lloyds TSB bank
plc (Uruguay) have been lowered to Caa1 from B3 by Moody's
Investors Service. The agency also placed the ratings on negative
outlook.
The downgrade, according to Moody's, reflected the increasing
risk of a deposit moratorium, particularly in light of the bank
holiday declared on July 30th, in order to stem deposit outflows
from the banking system. The rating action also reflected the
increasing inability of the Uruguayan government to support
accelerating deposit withdrawals without incremental support from
the multilateral lending agencies, Moody's added.
CONTACT: LLOYDS TSB BANK PLC
Casa Central: Zabala 1500 - Montevideo
Phone: 916.13.70 - 916.09.76
Fax: 916.12.62
Telex: 26.632 - 23.761 - LOYDBK UY
Home Page: http://www.lloydstsb.com.uy
E-mail: lloydsm@adinet.com.uy
Contact: Christopher David Golby, General Manager
URUGUAYAN BANKS: Economy Minister Orders Closure Until Friday
-------------------------------------------------------------
Uruguayan banks, which were first shuttered Tuesday, will
continue to stay that way until Friday, as the country tries to
plug the drain of deposits from its banking system. Economy
Minister Alejandro Atchugarry announced the extension in a news
conference Wednesday. The Minister assured he would tap the
Congress for new laws that will support the country's financial
system.
The country has been affected by financial troubles in
neighboring Argentina, whose four-year recession culminated to a
debt default and currency devaluation. Uruguay is also ambling
through a fourth year of recession.
Government officials are currently in negotiations with
International Monetary Fund executives in Washington. According
to reports, some US$1.5 billion is likely to be provided for
Uruguay after the talks.
Reserves in Uruguayan banks had fallen from around US$13 billion
last year to US$9 billion at present. Massive withdrawals from
jittery depositors on Monday alone amounted to US$52 million. The
Central Bank's dollar reserves had also fallen from US$3 billion
to US$725 million. The dropped in deposits, which was down to 40
percent this year alone, had crippled banks badly.
According to a statement issued by the Office of the President,
the bank holiday was declared after Banco Montevideo and Caja
Obrera were shut down for not meeting regulations.
The country's Economy Minister later revealed that the suspension
of the two banks stems from the incapacity of the banks to issue
further loans, Associated Press reports.
Uruguay's peso, which was valued at 17 to the dollar a month ago,
is now trading at about 28 to the dollar.
=================
V E N E Z U E L A
=================
AES VENEZUELA: Currency Devaluation Leads to 1H02 Loss
------------------------------------------------------
Grupo EDC, a Venezuelan unit of U.S.-based AES Corp., registered
a loss in the first-half of the year due to currency devaluation,
which inflated its dollar denominated debt.
According to a report by Bloomberg, the holding company for the
country's largest publicly traded power company, lost VEB241.5
billion (US$179.3 million) in the first-half of 2002 compared
with net income of VEB56 billion a year earlier.
The 43% drop in the bolivar after Venezuela allowed the currency
to float in February increased the cost of Grupo EDC's mostly
dollar denominated debt.
The negative result during the first-half period was also brought
about by the AES unit's loss on the sale of its stake in Nacional
Telefonos de Venezuela. EDC lost VEB39 billion on the sale of a
6.8% stake in Telefonos de Venezuela after the unit failed to
launch a takeover.
Grupo EDC is comprised of CA Electricidad de Caracas and
Corporacion EDC, the other holding company for other AES
investments in Venezuela. AES Corp took over CA Electricidad de
Caracas in June 2000 for US$1.6 billion.
CA Electricidad de Caracas lost VEB63.7 billion, or VEB1,020 per
American depositary receipt in the second quarter. Its shares
rose VEB1, or 0.7%, to VEB151 on the Caracas Stock Exchange. AES
shares fell 16 cents, or 7.6%, to US$1.96 on the New York Stock
Exchange.
CONTACT: AES VENEZUELA
Avenida Rio de Janeiro
Qta. Tres Pinos
Chuao, VE-1061 Caracas, Venezuela
Phone: +58 14 929 2552
Fax: +58 2 9937296
E-mail: venezuela@aes.org
Contact: Elmar Leal, Chairman
Juan Font, Vice Chairman
***********
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
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