/raid1/www/Hosts/bankrupt/TCRLA_Public/020826.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
Monday, August 26, 2002, Vol. 3, Issue 168
Headlines
A R G E N T I N A
ACINDAR: Agrees To Sell Interest In Comercial Acindar
ARGENTINE BANKS: Government Details Plans to Lift Restrictions
METROGAS: Turmoil, Currency Troubles Crush 1H02, 2Q02 Numbers
B E R M U D A
GLOBAL CROSSING: New Probe Seeks Ties to Grubman
TELEBERMUDA INTERNATIONAL: Head Expects Sale to Close Soon
TYCO INTERNATIONAL: Investors Seek Ouster Of Some Directors
B R A Z I L
CEMAR: Seeks Creditor Protection; Aneel Assumes Management Role
CEMAR: Company Profile
ELETRONET: Seeks Debt Maturity Extension
JERONIMO MARTINS: CBD Gets Regulatory Approval for Se Purchase
E C U A D O R
TRANSELECTRIC: CONAM To Reveal Bidders' Names Soon
M E X I C O
BITAL: HSBC To Inject Equity If Needed
BITAL: S&P Affirms HSBC, Affiliate's Ratings; Outlook Stable
CFE: Needs Outside Help To Follow Through On Investments
FAR-BEN: Signs Agreement Of Understanding With Farmacias Ahumada
GRUPO BANORTE: Denies Sale Rumors
GRUPO MEXICO: S&P Cuts Ratings on Structured Transactions
GRUPO TMM: Issuing New Bonds To Repay Debt
PEGASO: Still Holds Remaining Shares After Moviles Acquisition
T R I N I D A D & T O B A G O
BWIA: Pilots' Association Defends Drastic Move
BWIA: Reduces Fleet, Drops Routes to Avoid Going Under
U R U G U A Y
URUGUAYAN BANKS: Face Closure If Investors Refuse New Funding
- - - - - - - - - -
=================
A R G E N T I N A
=================
ACINDAR: Agrees To Sell Interest In Comercial Acindar
-----------------------------------------------------
Acindar Industria Argentina Aceros S.A. ("Acindar") agreed to
sell its interest in its wholly-owned subsidiary, Comercial
Acindar Chile Ltda., to Corporacion Aceros del Pacifico and
Gerdau AZA S.A. for U.S.$4.8 million. The transaction will close
within forty-five days of July 30, 2002, according to a company
news release.
Comercial Acindar Chile Ltda. specializes in producing steel
products for the civil construction market in Chile. Acindar will
continue supplying the Chilean market trough direct exports from
Argentina.
Acindar is Argentina's biggest producer of steel rods. The
company is controlled by the Acevedo family and Brazil's long
products steel maker Belgo-Mineira. Its total debts amounted to
US$550 million at the end of last year.
To see Acindar's financial statement:
http://bankrupt.com/misc/Acindar.htm
CONTACTS: ACINDAR S.A.
Jose I. Giraudo, Investor Relations Manager
Phone: (54 11) 4719 8674
Andrea Dala
Investor Relations Officer
Phone: (54 11) 4719 8672
URL: http://www.acindar.com/index.htm
ARGENTINE BANKS: Government Details Plans to Lift Restrictions
--------------------------------------------------------------
Argentina's central bank outlined a program for removing the
country's current bank restrictions, despite disagreement with
the Economy Ministry.
``Perhaps they'll [Economy Ministry] come around to our point of
view in a month or so,'' says central bank board member Guillermo
Lesniewier in a Bloomberg report.
The central bank's proposal had been to ease restrictions on
checking and savings accounts and allow limited access to term
deposits.
Economy Minister Roberto Lavagna has thus far opposed the move.
Mr. Lavagna is concerned that access to accounts would trigger
inflation and further weaken the peso, as depositors are likely
to convert their cash for dollars.
Lavagna earlier also denied reports from Clarin that a new
proposal to the IMF includes the lifting of bank restrictions on
checking and saving accounts by September 30.
Argentina, which has limited account withdrawals since December,
is negotiating with the to extend maturities on US$3 billion
of debt it owes the IMF this year.
The country's debt default and currency devaluation has led to
international banks losing at least US$11 billion. Some banks
have closed operations entirely in Argentina. The peso has lost
about 72% since its devaluation in January.
Meanwhile, lawmakers are pushing to require international banks
to back their local deposits with dollar-denominated assets.
METROGAS: Turmoil, Currency Troubles Crush 1H02, 2Q02 Numbers
-------------------------------------------------------------
MetroGAS (NYSE: MGS) announced Wednesday its financial results,
stated in Argentine GAAP, for the six-month period ended June 30,
2002.
Highlights for the six-month period include:
- On January 6, 2002, following a political crisis that had led
to the resignation of two presidents, the government passed Law
25,561 (the Public Emergency and Exchange Regime Reform Law - The
Emergency Law -), which brought profound changes in the economic
structure that had existed until then, and which modified the
Convertibility Law that had been in effect since March 1991. The
Emergency Law deals with many different matters, such as
financial obligations, public utilities, contracts, etc. In
addition to the Emergency Law, the Government announced new
economic measures, which were implemented through Executive
Orders that introduced substantial modifications to specific
measures that had been adopted through the Emergency Law.
- All licensed public service providers entered into a
renegotiation process with the Government that will result in new
terms for such licenses and concessions. The most immediate
effect on MetroGAS is that all tariff adjustments have been
suspended and tariffs remain frozen in Pesos.
- The provisions of the Emergency Law modify the Regulatory
Framework applicable to the transportation and distribution of
natural gas. These measures have led to such legal uncertainty
that makes impossible for the Company to invest in and carry on
its business as usual.
- In view of the substantial and significant adverse changes that
have taken place in Argentina, on March 25, 2002, MetroGAS
announced that it was suspending principal and interest payments
on all of its financial indebtedness. MetroGAS further stated
that it has retained J.P. Morgan Securities Inc. and legal
advisors under Argentine and New York Law in order to assist the
Company with the development of a restructuring plan.
- Nevertheless, on August 12, 2002 MetroGAS made an
extraordinary, one-time payment on its accrued interest until
April 30, 2002 on its financial debt. The payment was funded with
the proceeds of the early termination of a cross-currency swap
that resulted in an increase measured in U.S. dollars of
MetroGAS' debt denominated in Euros. MetroGAS believes that these
payments resulted in its financial creditors being treated
equitably with respect to the total amount paid.
- Since January 1, 2002, MetroGAS has discontinued the accrual of
revenues based on US PPI tariff adjustments (currently in dispute
with the Government) according to the above-mentioned
developments in the country. In addition, the Company recorded an
extraordinary loss due to the write-off of the accumulated
accrual for US PPI tariff adjustments as of December 2001.
- Due to Executive Order Number 1269/02 enacted by the
government, the National Securities Exchange, through Resolution
Number 415 dated July 25, 2002, approved the restatement for
inflation accounting methodology, applicable since January 1,
2002. Accordingly, the results have been restated as follows
- Results accumulating monetary transactions, such as net
sales, operating costs, and administrative and selling
expenses, have been restated in constant Argentine pesos,
applying to the original value the conversion factor to the
month when the transaction took place.
- Results related to non-monetary assets valued at restated
costs, such as amortization and depreciation, have been
computed based on the restated amounts of such assets.
- Financial results have been valued net of general inflation
on the related assets and liabilities. The effect of
inflation on the remaining monetary assets and liabilities
has been disclosed as "Results of exposure to inflation."
- Consequently, figures corresponding to the first half and
second quarter of 2001 have been restated to constant Argentine
pesos as of June 30, 2002 for comparative purposes. This
restatement does not change in any way the prior period figures,
except to update the reported amounts to constant Argentine pesos
as of that date. The inflation rate for the period amounted to
95%, in accordance to the internal wholesale price index
("IPIM"). It is worth mentioning that the restatement for
inflation does not imply a generation or use of funds.
- The six-month period ended June 30, 2002 was characterized by
changes in the mix of sales to power plants, by increasing
volumes delivered under transportation and distribution services
and decreasing volumes of gas sales. Additionally, the demand for
electric power decreased compared to the same period of the year
2001. As a consequence, the overall volumes of gas delivered to
power plants also decreased.
- Net sales (gross revenues less turnover tax) decreased 42.5% to
$350.1 million during the first half of the year 2002, compared
to $608.9 million for the same period of 2001. This result was
primarily due to a decrease in net sales to residential,
industrial, commercial and governmental customers and power
plants amounting to $150.1 million, $51.8 million and $34.8
million, respectively. Moreover, net sales of compressed natural
gas and processed natural gas also decreased, amounting to $19.2
million and $2.9 million, respectively.
- While volumes delivered to residential, industrial, commercial
and governmental customers, power plants and compressed natural
gas customers decreased in the first half of the year 2002, the
higher decrease in net sales to these categories of customers was
mainly due to the restatement for inflation of 2001 figures that
exceeded significantly the increase in tariffs for the first half
of 2002.
- Operating expenses decreased 38.5% to $273.6 million in the
first half of the year 2002, from $444.9 million in the same
period of 2001. This variation was mainly due to a decrease in
gas and transportation costs as a result of a reduction of
volumes of gas purchased, and the restatement for inflation of
2001 figures that exceeded the real increase in costs.
- Total SG&A expenses decreased by 3.1% to $73.9 million in the
first half of 2002, from $76.3 million in the same period of
2001. This decrease was mainly due to the restatement for
inflation of 2001 figures, partially offset by the increase in
allowance for doubtful accounts, based on the Company's estimates
of collections and on the increase in certain provisions.
- As a result of this, gross profit decreased by 53.3%, while
operating income decreased by 97.0% to $2.6 million in the first
half of 2002, from $87.8 million in the same period of 2001.
- Net financing and holding results totaled a loss of $828.4
million during the first half of 2002, compared to a loss of
$24.3 million in the same period of 2001. This increase was
mainly derived from an increase in losses from financial and
holding results generated by liabilities amounting to $626.4
million, principally resulting from the exchange losses generated
by the peso devaluation on the foreign-currency denominated
financial debt not pesified, partially offset by the results for
exposure to inflation generated by liabilities. Likewise,
financial and holding results generated by assets totaled a loss
of $172.4 million during the first half of 2002, compared to a
gain of $5.3 million in the same period of 2001, mainly due to
the results of exposure to inflation generated by assets.
- Other income amounted to $0.3 million during the first half of
2002, compared to a loss of $0.3 million during the same period
of 2001.
- As of fiscal year 2002, income tax is recorded under the
deferred income tax methodology. During the first half of 2002,
the Company accrued an income of $182.6 million for income tax,
compared to a loss of $22.9 million for the same period of the
previous year. This variation is due to the income tax
carryfowards for the period, and the deferred income tax assets
generated by the exchange losses, deductible for income tax
purposes according to the Emergency Law, partially offset by a
valuation allowance against these deferred assets.
- Net loss amounted to $642.8 million during the first half of
2002, compared to an income of $40.2 million during the same
period of 2001, mainly as a consequence of the peso devaluation.
- Loss per American Depositary Share (ADS) for the six-month
period ended June 30, 2002 was $11.29 compared to earnings per
ADS of $0.71 for the same period of last year. One ADS is
equivalent to ten common shares (Exchange rate as of June 30,
2002, US$1.00 = $3.80).
Highlights for the second quarter include:
- The second quarter of 2002 was characterized by a decrease in
net sales of 51.3% when compared to the second quarter of last
year, due basically to the reduction in volumes delivered as a
result of the Argentine economic crisis suffered during 2002, and
the restatement for inflation of 2001 figures that exceeded
significantly the increase in tariffs for the second quarter of
2002.
- Operating costs and SG&A expenses decreased 49.4% and 10.8% in
the second quarter of 2002, compared to the same period of 2001.
The main factors that explain the reduction in costs and expenses
are: the restatement for inflation of 2001 figures that exceeded
the real increase in costs and expenses, the increase in
allowance for doubtful accounts based on the Company's estimates
of collections, and the increase in certain provisions.
- Net financing and holding results for the second quarter of
2002 totaled an income of $117.6 million, compared to a loss of
$11.6 million in the same period of 2001. The income for the
second quarter of 2002 is mainly due to the results for exposure
to inflation generated by liabilities that were only partially
offset by the increase in exchange losses generated by the peso
devaluation on the foreign-currency denominated financial debt
not pesified as a result of the fact that the devaluation rate
was lower than the inflation rate for this quarter.
- During the second quarter of 2002, the Company accrued an
income tax loss of $209.8 million, compared to $24.7 million for
the same period of the previous year. This increase is mainly due
to the valuation allowance against deferred income tax assets.
- Net loss for the second quarter of 2002 was $73.7 million.
Comparatively, net income for the same period of 2001 was $44.8
million.
- Loss per ADS for the second quarter of 2002 amounted to $1.29,
while for the second quarter of 2001 the earnings per ADS were
$0.79.
To see financial statements:
http://bankrupt.com/misc/MetroGAS.htm
CONTACT: METROGAS
Alberto Alfredo Alvarez, President
William Harvey Adamson, First VP
Gen. Director Enrique Barruti, HR Director
Fernando Aceiro New Bus. Director
Luis Domenech Admin. and Fin. Director
Their Address:
G. Araoz de Lamadrid 1360
1267 Buenos Aires, Argentina
Phone: (800) 422-2066
Fax: (201) 262-2541
Email: info@metrogas.com.ar
URL: http://www.metrogas.com.ar
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B E R M U D A
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GLOBAL CROSSING: New Probe Seeks Ties to Grubman
------------------------------------------------
Bankrupt telecom firm Global Crossing is now a subject of a
congressional investigation for its links to Jack Grubman, the
former telecommunications analyst for Salomon Smith Barney.
According to an AP report, Global Crossing has been asked by The
House Financial Services Committee to provide information about
its relationship with Grubman, who left his post last week amid
growing controversy over his alleged conflicts of interest in
touting the shares of Global Crossing, WorldCom Inc. and other
failed companies.
Concurrently, the committee is also questioning the sale of
Global Crossing to two Asian companies. The committee asked the
Company to provide records relating to its sale to Hutchison
Whampoa of Hong Kong and Singapore Technologies, which was
approved August 9 by the judge overseeing Global Crossing's
bankruptcy case.
Once worth tens of billions of dollars, Global Crossing is being
sold for US$250 million to the same investors who only months ago
agreed to pay three times as much for the world's most extensive
fiber-optic network.
Rep. Michael Oxley, R-Ohio, the panel's chairman, noted that the
sale price also was for "a small fraction of the US$22.4 billion
in assets declared in the bankruptcy petition."
Global Crossing has until September 4 to respond.
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
Kevin Burgoyne
Latin America
+ 1 305-808-5925
Kevin.Burgoyne@globalcrossing.com
Mish Desmidt
Tel: +44 (0) 118 908 6788
Mobile: +44 (0) 7771 66 84 38
mish.desmidt@globalcrossing.com
Analysts/Investors Contact
Ken Simril
+ 1 310-385-3838
investors@globalcrossing.com
TELEBERMUDA INTERNATIONAL: Head Expects Sale to Close Soon
----------------------------------------------------------
James Fitzgerald, the president of TeleBermuda International
Ltd., said that the sale of the long distance provider is "almost
there" and "close to being finalized," reports the Royal Gazette.
In terms of a timeline for the sale Mr. Fitzgerald said he was
certain the deal would be closed within the space of the next
month or two.
TBI is now a subsidiary of 360networks after the Vancouver-based
telecommunications giant bought TBI's former parent, GlobeNet,
for US$1 billion in March 2000.
The company's future has been clouded with uncertainty ever since
360networks collapsed due to mounting debt and filed for
protection from its creditors in Canada and the United States in
June 2001. As part of its bankruptcy filing, 360networks reported
US$1.2 billion in secured debt and US$1.45 billion of unsecured
bond debt.
In a bid to get out of the red, 360networks revealed plans to
abandon its hopes of running a global system, instead trying to
survive as a North American-only operation and selling off its
global units.
The end result was that Bermuda-based TBI, as an offshore asset
of 360networks, was put up for sale.
CONTACT: TELEBERMUDA INTERNATIONAL LIMITED
Bermuda Commercial Bank Building
2nd Floor 43 Victoria Street
Hamilton HM12, Bermuda
Tel: 441-296-9000
Fax: 441-296-9010
E-mail: 292.save@telebermuda.com
TYCO INTERNATIONAL: Investors Seek Ouster Of Some Directors
-----------------------------------------------------------
A group of Tyco International Ltd. shareholders led by Ralph
Whitworth threatened to stage a proxy fight for several
directorships if the Company refuses to replace every board
member who served under former Tyco chief executive officer L.
Dennis Kozlowski, reports the Wall Street Journal.
If necessary, "we will put up a slate of directors to replace the
directors that are still there" when Tyco convenes its annual
meeting in March, Whitworth, a principal of Relational Investors
LLC, was quoted as saying in the Journal.
Relational, which owns more than seven million Tyco shares,
typically acquires stakes in troubled companies and often seeks
board representation.
Whitworth was reported as saying he and representatives of four
other institutional stockholders, owners of about 16% of Tyco's
roughly two billion shares outstanding, lobbied Edward D. Breen
to replace the old regime's board members during a New York
meeting on his first day as Tyco CEO.
Whitworth said he subsequently alerted Breen about the possible
proxy fight and suggested several potential board candidates.
CONTACT: TYCO INTERNATIONAL LTD. (Corporate Offices)
The Zurich Centre, Second Floor
90 Pitts Bay Road
Pembroke HM 08, Bermuda
441-292-8674
URL: http://www.tyco.com/main/index.jsp
===========
B R A Z I L
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CEMAR: Seeks Creditor Protection; Aneel Assumes Management Role
---------------------------------------------------------------
Brazilian power distributor Cia. Energetica do Maranhao (Cemar),
a unit of U.S.-based PPL Corp., which sought protection from
creditors Wednesday, now has new management, says Bloomberg.
Aneel, the country's electricity regulator, decided to take on
the management of Cemar after rejecting the proposed sale of the
Company to U.S.-based investment company Franklin Park for US$1.
The regulator said it will manage Cemar for at least six months
to help the utility cut costs and refinance its debt.
"The measure seeks to prevent the Company's financial problems
from affecting energy supply to consumers in Maranhao," Aneel
said.
Cemar has been hurt by declining power demand and losses
triggered by nine months of power rationing that ended in March.
The drop in revenue left the Company to drain its coffers
resulting it to miss payment on its BRL560 million (US$180
million) debt and forced PPL to write off all its US$317 million
investment in the unit.
On Wednesday, A Brazilian judge rejected PPL's plan to declare
Cemar bankrupt, saying that would cause the Company to lose its
power concession and would leave the Company without a source of
revenue to pay creditors.
Aneel named Sinval Zaidan Gama, an electrical engineer, to manage
the utility over the next six months. PPL, which supplies energy
to 1.3 million customers in Pennsylvania, said yesterday it plans
to "exit" Cemar by year-end.
CEMAR: Company Profile
----------------------
NAME: Companhia Energ‚tica Do Maranhao
Av. Colares Moreira, 477
65075-441 - Sao Luiz- MA
PHONE: (98) 217-2119
FAX: (98) 235-3024
WEBSITE: http://www.cemar.com.br/
TYPE OF BUSINESS: CEMAR provides electricity delivery service to
1.04 million customers in the northeastern Brazilian state of
Maranhao.
NUMBER OF EMPLOYEES: 1,500
LIABILITIES: Cemar has liabilities totaling BRL40 million due to
default. It has BRL43.5 million total debt to
Eletronorte and Eletrobras.
BOND PRICING: BRL150 million bond rated `brCC' by S&P (Mar 2002)
CREDIT RATING: `brSD' (Selective Default) rated by S&P (Mar 2002)
TRIGGER EVENT: Companhia Energetica do Maranhao (CEMAR) on
August 21, 2002 filed a concordata preventiva, the Brazilian
equivalent of a U.S. Chapter 11 bankruptcy, with a state court in
Brazil due to the recent denial of emergency rate relief and the
inability to obtain support from creditors for a proposed sale.
CREDITORS: Centrais Eletricas Brasileiras S.A. - ELETROBRAS
Avenida Presidente Vargas 409, 13 Andar
20071-003 Rio de Janeiro Brazil
Phone: (21) 2514-5151
Fax: +55-21-2242-2697
Home Page: http://www.eletrobras.gov.br
Contacts:
Cladio da Silva avila, President
Jose Alexandre Nogueira de Resende, Director of
Financial and Market Relations
Investor Relations Division
Phone: (0XX21) 2514-6207 / 2514-6333
Av. Presidente Vargas, 409 - 9 andar
20071-003 - Rio de Janeiro - RJ
Email: arlindo@eletrobras.gov.br
CENTRAIS ELETRICAS DO NORTH DO BRAZIL - ELETRONORTE
Av. Presidente Vargas, 489 -13 andar.
20071-003- Rio do Janeiro RJ
Phone: + (55+61) 429 5139
Fax: +(55+61) 328 1373
E-mail: elnweb@eln.gov.br
Home Page: http://www.eln.gov.br/
Contact:
Mr. Arlindo Soares Castanheira, Investor Relations
Phone: 55 21 2514.6331
55 21 2514.6333
Fax: 55 21 2242.2694
E-mail: arlindo@eletrobras.gov.br
FLEETBOSTON FINANCIAL CORP.
100 Federal Street
Boston, MA 02110
Phone: (617) 434-2200
Fax: (617) 434-6943
URL: http://www.fleet.com/home.asp
MAJOR SHAREHOLDERS:
PPL GLOBAL (90%)
11350 Random Hills Road
Suite 400
Fairfax, VA 22030
Phone: 703-293-2600
Fax: 703-293-2659
William F. HechtChairman, President/CEO
John R. Biggar, Executive Vice President/CFO
ELETRONET: Seeks Debt Maturity Extension
----------------------------------------
Brazilian telecommunications company Eletronet is renegotiating
with its suppliers, primarily Lucent and Furukawa, to extend
payment deadlines on BRL320 million in debts, reports O Globo.
Eletronet owes Furukawa BRL150 million in promissory notes,
BRL106.4 million of which due in April. The debt with Lucent
amounts to BRL170 million. The suppliers want Eletrobras to back
the Company since it has a 49% stake in it.
Eletronet finished the second-quarter 2002 with a net income of
BRL5.6 million and operating loss of BRL11.7 million. US-based
AES, which owns 51% stake in the Company, is looking to sell its
interest and use the proceeds to pay part of a US$1.1-billion
loan owed to the Brazilian development bank BNDES (Banco Nacional
de Desenvolvimento Economico e Social).
Eletronet's original project was to build a 22,000 km fiber
network in Brazil, using investments of US$480 million. But the
company's plan was revised and the investment reduced to US$300
million. AES Bandeirantes became a major partner in the business,
making four capital increases between 1999 and 2002, totaling
BRL290 million.
JERONIMO MARTINS: CBD Gets Regulatory Approval for Se Purchase
--------------------------------------------------------------
After three weeks of fighting off a possible suspension on its
purchase of Jeronimo Martins SGPS' Brazilian unit Se, Companhia
Brasileira de Distribuicao SA (CBD) finally obtained approval
from the Brazilian antitrust watchdog, known as CADE, to proceed
with the transaction.
The approval, however, according to a Dow Jones report, has
certain restrictions attached. The conditions stipulate that CBD
won't engage in multiple store closures, as previously feared by
unions, except for three in the city of Sao Paulo and one in the
state interior.
CBD, which will have to maintain the Se banner on the stores it
bought. It will also have to maintain job levels according to an
average index indicated by the Brazilian Supermarket Association,
ABRAS, that monitors gross revenues per employee at the nation's
10 largest supermarkets in 2001.
"These are normal measures in processes of this nature and they
will not significantly affect the actions already planned for the
stores acquired from the Se chain," the Sao Paulo-based retailer
said in a statement.
CADE's approval blocks an attempt by Basil's Finance Ministry to
temporarily suspend the July 1 sale on grounds it would increase
CBD's domination of food retailing in seven cities in Sao Paulo
state. The government sought to halt the transfer until the
antitrust authorities have a chance to issue a final decision.
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E C U A D O R
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TRANSELECTRIC: CONAM To Reveal Bidders' Names Soon
--------------------------------------------------
Details about companies vying for a contract to operate state
transmission company Transelectric will be revealed soon,
Business News Americas reports, citing Alfredo Mena, coordinator
of Ecuador's state privatization agency CONAM.
Among those expressing interest in taking part in the bidding are
Canadian power company Hydro Quebec, Spain's REE and Italian
energy company Enel, Mena said, adding that other companies will
also be invited to take part.
"The Solidarity Fund [which owns Transelectric] put forward that
an offer would be made to an international operator with
experience in the transmission area," Mena said, explaining that
the process seeks an external manager, and is neither
privatization nor concession.
The Ecuadorian government is looking for a new operator that will
increase the Company's revenues and reduce its liabilities.
Transelectric has a negative cash flow due primarily to
distributors not making payments.
The new owner will be tasked with completing a US$300-million
recapialization plan at Transelectric. In additions, the new
owner will have to assume the Company's planned investment of
US$57 million in 2002. Some US$29 million of the amount is set to
cover the cost of transmission fees and other operations.
However, the operator will not have to put up the resources for
the investments.
Furthermore, the new contractor will also push through with the
interconnection project with Colombia, which is set to operate in
December, according to state privatization committee CONAM.
CONTACT: TRANSELECTRIC
A. Quito - Ecuador
Phone: 593-2-2555570/2556461
Fax: 593-2-2529695
E-mail: lruales@transelectric.com.ec
===========
M E X I C O
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BITAL: HSBC To Inject Equity If Needed
--------------------------------------
HSBC Holdings PLC is ready to provide Grupo Financiero Bital SA
de CV's banking unit, Banco Bital, the necessary additional
equity funding. The announcement by Alexander Flockhart,
executive vice-president of HSBC's retail operations in the US,
came in a news conference held Wednesday.
Exactly how much money would be put up hasn't been defined yet,
Flockhart said, but according to estimates by Bital's managers,
the bank needs US$450 million in fresh funding. Flockhard also
said that HSBC will meet all requirements set by the National
Bank and Securities Commission.
GF Bital managing director Jaime Ruiz Sacristan said the US$1.14
billion HSBC plans to disburse to take full control of GF Bital
covers exclusively the cost of acquiring GF Bital's shares, and
by no means the cost of the bank's recapitalization.
Citing GF Bital president Luis Berrondo, El Economista reported
that, although HSBC is offering twice the book value of the
group, GF Bital's shareholders would recover only about half the
losses incurred as result of the 1995 financial crisis.
El Economista said the government is bound to accept the sale of
its 4% stake in GF Bital, as is Banco Santander Central Hispano
SA. The newspaper also quoted Berrondo as saying that almost 100%
of the shares will be tendered to HSBC.
According to a source close to the operation, SCH will sell its
26.6% stake in GF Bital to HSBC, realizing a capital gain of
about EUR170 million.
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 HOLDING PLC
10 Lower Thames St.
London, EC3R 6Ae
Phone: 44-20-7260-0500
Home Page: http://www.hsbc.com
Contact:
Keith R.Whitson, CEO
BITAL: S&P Affirms HSBC, Affiliate's Ratings; Outlook Stable
------------------------------------------------------------
Standard & Poor's Ratings Services said Thursday it affirmed all
its ratings on HSBC Holdings PLC (HSBC) and related entities,
including its long-term single-'A'-plus and its short-term 'A-1'
counterparty credit ratings on HSBC. The outlook is stable.
The affirmation follows yesterday's announcement of an agreed bid
for Mexican banking group Bital S.A. (BBpi/--/--). With the
consent of Bital's board of directors and shareholders
representing 52% of Bital's ownership, HSBC intends to launch a
cash tender offer in the fourth quarter of 2002, which will value
the acquisition at $1.1 billion. Subject also to regulatory
approval, completion is expected in the fourth quarter of 2002.
It was announced on July 17, 2002, that HSBC had been granted
permission to conduct due diligence on Bital--one of the five
largest banks in Mexico--with a view to making a bid.
Strategically, the acquisition would accord with HSBC's
commitment to the Americas in general, and Latin America in
particular (despite the recent adverse experience in Argentina).
The share of group assets accounted for by Latin America would
roughly double to 3%.
"Although HSBC is likely to commit further resources to Bital
after the acquisition, the overall financial impact on the HSBC
group is expected to be minimal. Once the acquisition is
completed, Bital will account for less than 2% of HSBC's total
assets," said Standard & Poor's credit analyst Peter Dutton.
The ratings on HSBC reflect the group's increasing
diversification, strong capitalization, high liquidity, and
robust earnings capacity. Profitability rebounded strongly after
the Asian crisis of 1998, and continues to be robust. Operating
profit for the first half of 2002 was down only 1% year on year,
despite tougher financial and economic conditions. The regulatory
Tier 1 ratio was a high 9.7%.
"HSBC is likely to remain highly liquid and well capitalized,
with solid earnings. This places the group in a strong position,
given the more uncertain and volatile international financial
environment," said Mr. Dutton. The still-significant (35%)
reliance on earnings from Hong Kong Special Administrative Region
(Hong Kong; local currency AA-/Stable/A-1+, foreign currency
A+/Stable/A-1) means that the territory continues to be a factor
in the ratings on HSBC, although much less so than for HSBC's
non-Asian subsidiaries.
Credit Analyst: Peter Dutton, London (44) 20-7847-7208; Moira
Taylor, London (44) 20-7847-7221
CFE: Needs Outside Help To Follow Through On Investments
--------------------------------------------------------
Mexico's energy secretary, Ernesto Martens admitted the Federal
Electricity Commission (CFE) will seek outside help to carry out
its investment program until 2011.
Martens mentioned the need for industry-wide upgrades in order
for the company to meet the 560 million pesos (US$57.6 billion)
it needs in the coming decade. The state-owned company needs
around US$5 billion per year, says Senator Juan Jose Rodriguez
Prats.
A previous TCRLA report cited Prats saying the company's
repayments of the debt contracted under the Deferred Investment
Projects in Spending Registers (Pidiregas) will increase from
MXN7 billion (US$719 million) to MXN15 billion (US$1.54 billion).
CFE opted for debt and financed investments after its physical
budget investment dwindled. Majority of the company's income is
now being used to pay the debts, says company director Alfredo
Elias Ayub.
The firm's debts reached 48 billion pesos (US$4.9 billion) at the
end of 2001.
Meanwhile, CFE is planning to construct 61 electricity generation
projects to provide a capacity of 28,862 megawatts from 2002 to
2011.
The state power company also plans to complete by the end of this
year a program that is aimed to increase power transmission and
distribution capacity in the country's northeast by 33%.
FAR-BEN: Signs Agreement Of Understanding With Farmacias Ahumada
----------------------------------------------------------------
In an official statement, Farmacias Ahumada S.A. (Santiago Stock
Exchange: FASA) announced the signing of an Agreement of
Understanding with Far-Ben S.A. de C.V. (Mexican Stock Exchange:
BEVIDES), owners of the Farmacias Benavides chain, to acquire
control of the Company. The operation involves a contribution of
joint capital from FASA with the Benavides family and the
restructuring of the company's current debt. The deal will be
concluded within the next few weeks in Monterrey, Mexico, after
due diligence and approval has been given to the restructuring
plan proposed for the company's liabilities.
The increase in capital under consideration in Far-Ben would be
approximately $62 million (Ps$630 million), which will be
structured by means of an emission of some 315 million shares at
a value of Ps$2.0 per share -- Ps$450 million would be subscribed
by FASA, Ps$60 million by the Benavides Family and Ps$120 million
would be subscribed through a debt conversion and minority
shareholder subscription. This would allow FASA to assume control
of the company with a percentage of no less than 51%. The
transaction will also help Benavides reduce its financial burden
and contribute the necessary resources for the development of a
program for improving profitability and growth in the Mexican
market over the years to come.
The Agreement of Understanding grants FASA an exclusive option to
review Benavides' operations for 60 days, negotiate the final
agreements, and obtain the results of the liability
restructuring, thereby determining the resulting income from the
property.
In 2001, Farmacias Benavides had sales in excess of $500 million
dollars, claiming 4.5% of the national market. The firm operates
640 pharmacies in 129 cities and 20 states throughout the
country, with a total of 160,000 square meters of sales space.
The firm employs 8,000 people and serves 125 million customers
each year.
Mexico has a population of more than 100 million and is the
largest economy in Latin America with 2001 GDP of $575 billion
dollars, diminishing inflation controlled at between 5%-6% per
year and an exchange rate that has been stable over the last 24
months, during which time it has appreciated against the U.S.
dollar.
Farmacias Ahumada is the largest pharmacy chain in South America
with 405 pharmacies as of August 2002, distributed as follows:
Chile 212; Brazil 11; and Peru 83. With annual sales in excess of
$480 million dollars, it is the undisputed leader in the markets
in which it operates. The firm has been traded on the Santiago
Stock Exchange since 1997. Majority shareholders for the firm are
the Codner family, Falabella, Latin Healthcare Fun from the
United States, AIG (American International Group), and executives
from the firm.
In the words of Jose Codner, President and Founder of FASA, "This
acquisition means entering the largest market in Latin America --
and one of the ten largest on a global scale -- representing for
FASA consolidated annual sales in excess of $1 billion dollars.
This operation strengthens our confidence in the company's
strategy by creating important advantages not only in terms of
scale but also in terms of transfer of knowledge and technology."
Representatives for the Benavides Family indicate that this
agreement means incorporating into the chain's properties a very
important partner, which comes from the sector as well as the
Latin American continent, which brings with it solid experience
and technical support that have already proven highly successful
when applied in the three countries where FASA has existing
operations -- Brazil, Chile and Peru -- which will undoubtedly
help strengthen its position.
CONTACT: FARMACIAS AHUMADA, IN CHILE,
Alejandro Rosemblatt, Corporate Finance Manager
Phone: 011-56-2-661-9620
E-mail: arosemblatt@fasa.ci
FARMACIAS BENAVIDES, IN MEXICO
Enrique Villareal, Finance Director
Phone: 011- 52-81-8399930
E-mail: evillareal@benavides.com.mx/
GRUPO BANORTE: Denies Sale Rumors
---------------------------------
Grupo Financiero Banorte SA's (E.GFN) top executive, in a news
conference, denied rumors of the bank's possible sale, Dow Jones
reports. Being the last major Mexican bank controlled by local
shareholders, Mexico's fourth largest bank has been target of
much speculation about a possible takeover.
Mexico's fourth largest bank is actually in the process of
merging its newly purchased bank BanCrecer, says Ruiz Montemayor.
Under the plan, the branch and brand integration will be
completed in October, while the technical platform will be done
by mid-2003.
Speculations of the sell-off sent Banorte's shares up 4.9% to
22.79 pesos ($1=MXN9.8050) Wednesday. The sudden enthusiasm came
after HSBC Holdings Plc. waved a US$1.14 billion cash offer for
Grupo Financiero Bital SA (E.BNL).
With the growing presence of international players in Mexico
analysts predict that US banks such as Wells Fargo & Co. and Bank
of America Corp. may also consider appearing in the scene.
CONTACT: GRUPO FINANCIERO BANORTE, S.A. DE C.V.
Zaragoza 920 Sur
64000 Monterrey, Mexico
Phone: +52-81-8831-9720
Fax: +52-81-8831-9727
Home Page: http://www.banorte.com
GRUPO MEXICO: S&P Cuts Ratings on Structured Transactions
---------------------------------------------------------
Standard & Poor's Ratings Services lowered Thursday its ratings
on Grupo Mexico Export Master Trust No. 1's secured export notes
series B-1, C, and D to double-'C' from triple-'C'-plus.
In addition, the triple-'A' rating on the company's series E
notes, insured by MBIA Insurance Corp. (MBIA; triple-'A'
financial enhancement rating), is affirmed. At the same time, the
ratings on Grupo Minero Mexico S.A. de C.V.'s (GMM) guaranteed
senior notes, series A and B, are lowered to double-'C' from
triple-'C'-plus.
The downgrades of the uninsured series of the Grupo Mexico Export
Master Trust No. 1 and GMM senior notes stem directly from the
downgrade of GMM's corporate credit rating to 'SD' (selective
default) from triple-'C'-plus (see related press release). As is
the case with most future flow transactions, Standard & Poor's
views the corporate credit rating of GMM (the originator of the
securitized assets) as the best proxy for the likelihood that
this entity will continue servicing the secured export notes in a
timely manner. The affirmed triple-'A' rating on the series E
notes of the Grupo Mexico Export Master Trust No. 1 secured
export notes program is based on the full financial guarantee
provided by MBIA.
The Grupo Mexico Export Master Trust No. 1 notes entered into
early amortization in September 2001. Upon the occurrence of the
accelerated amortization event, all collections from export sales
committed to the payment of the secured export notes were trapped
in the collection account. Initially, the noteholders waived the
early amortization event until Jan. 9, 2002. After that date,
proceeds from export sales were trapped in the collection
account. On Feb. 15, 2002, the noteholders again waived the early
amortization event. Currently, collections are being trapped in
the collection account and, with the consent of the noteholders,
periodically released back to the company as needed.
GMM is a subsidiary of Grupo Mexico S.A. de C.V. (Grupo Mexico),
the world's third-largest copper producer, as well as a producer
of other base metals, such as zinc, silver, lead, and gold. Grupo
Mexico is also the majority owner of GMM, ASARCO Inc., and
Southern Peru Copper Co. The downgrade of the corporate credit
rating of GMM was based on the company's recent public
announcement that it did not make a principal payment of
approximately $26 million on two syndicated loans. Grupo Mexico's
deteriorating liquidity position led to GMM's decision to halt
principal payments on the loans, and also compelled Grupo
Mexico's subsidiaries to begin restructuring negotiations with
its creditors.
For more information regarding this press release, please contact
Nancy Gigante Chu, Structured Finance New York; and Maria Tapia,
Structured Finance Mexico City.
For more information regarding the corporate credit rating of
Grupo Mexico and its subsidiaries, please contact Federico Mora,
Corporates Mexico City.
CONTACT: STANDARD & POOR'S, NEW YORK
Nancy Gigante Chu
Phone: 212/438-2429
Maria Tapia, Mexico City
Phone: (52) 55-5279-2015
Federico Mora, Mexico City
Phone: (52) 55-5279-2036
GRUPO TMM: Issuing New Bonds To Repay Debt
-------------------------------------------
Mexico's Grupo TMM SA plans to issue about US$500 million in
bonds maturing between five to 10 years to pay off existing debt,
Bloomberg reports. The country's largest transportation company
opted to issue bonds after it failed to generate cash from its
railroad unit.
Debt covenants have prevented the unit from paying cash dividends
that would allow access to the company's profits. The railroad
unit has debt obligations totaling US$830 million.
The company's other option is to swap $200 million of 9 1/2
percent bonds due in May next year with its $200 million of 10
1/4 percent bonds maturing in 2006.
Headquartered in Mexico City, Grupo TMM is Latin America's
largest multimodal transportation company. Through its branch
offices and network of subsidiary companies, Grupo TMM provides a
dynamic combination of ocean and land transportation services.
Grupo TMM also has a significant interest in Transportacion
Ferroviaria Mexicana (TFM), which operates Mexico's Northeast
railway and carries over 40 percent of the country's rail cargo.
Visit Grupo TMM's web site at www.grupotmm.com.mx and TFM's web
site at www.gtfm.com.mx. Both sites offer Spanish/English
language options.
To see financial statements:
http://bankrupt.com/misc/Grupo_TMM.htm
CONTACT: Grupo TMM
Javier Segovia or Jacinto Marina
Tel. 011-525-55-629-8866
or
TFM
Mario Mohar, 011-525-55-447-5811
Investor Relations:
Brad Skinner, 011-525-629-8725
PEGASO: Still Holds Remaining Shares After Moviles Acquisition
--------------------------------------------------------------
Pegaso is still continuing with its holding business after
Telefonica Moviles SA acquired 65% of its mobile phone company,
Pegaso PCS. Speaking of a possible additional acquisition by the
Spanish firm, Pegaso chairman Alejandro Burillo Azcarraga says he
is open to further negotiations.
In an El Universal report, Burillo was quoted saying, "I do not
want to quit soon because it is a company that has to mature."
Telefonica has until 2007 to exercise the option of purchasing
the remaining shares of Pegaso PCS.
The US$884 worth acquisition paves the way for a merger between
Moviles' Mexican business and Pegaso. The company resulting from
the merger is expected to become the country's second-largest
mobile phone operator with as many as 2.7 million clients as
indicated by Pegaso chairman, Alejandro Burillo, in a previous
TCR-LA report.
Telefonica Moviles, the wireless unit of Telefonica, is the
largest telephone company in Spain and Latin America. Telefonica
owns more than 90% of Moviles.
CONTACT: PEGASO PCS, SA OF CV
Stroll of the Tamarinds 400A,
Floor 4, Forests of Hills
Mexico, DF 05120
Phone: (55) 5806,8700
Fax: (55) 5806.9080
E-mail: atencionclientes@pegasopcs.com.mx
Home Page: http://www.pegasopcs.com.mx/
Contact:
Roberta Lopez Negrete
Manager of Strategic Communication
Phone: 261 66 38 Fax: 261 66 98
Email: rlopez@pegasopcs.com.mx
Eduardo Jimenez Urias
Phone: 261 66 34
Fax: 261 66 91
E-mail: ejimenez@pegasopcs.com.mx
TELEFONICA MOVILES, S.A.
Goya 24
28001 Madrid, Spain
Phone: +34-91-423-4004
Fax: +34-91-423-4010
E-mail: webmaster@telefonicamoviles.com
Home Page: http://www.telefonicamoviles.com
Contact:
Maria Garcia-Legaz, Head of Investor Relations
Arantxa San Rom n Wong
Raimundo de los Reyes
Paseo de Recoletos, n 7-9 2Y Planta
28004 Madrid
Phone: +34 914 23 40 27
Fax: +34 914 23 44 12
E-mail: relaciones.inversores@telefonicamoviles
=================================
T R I N I D A D & T O B A G O
=================================
BWIA: Pilots' Association Defends Drastic Move
----------------------------------------------
The T&T Airline Pilots Association recently responded to mounting
criticism, saying that they have not set out to place BWIA under
financial pressure, according to a Trinidad Guardian report.
In fact, the pilots said, they were driven by a genuine desire to
help the airline survive, noting that focus in salary
negotiations is on non-cash/non-cost benefits and protection for
pilots who lose income through illness.
However, TALPA said that pilots have become "frustrated by
management decisions that are rendering them helpless to assist
the Company, as they have done in the past."
TALPA noted its members, like all other employees of BWIA, were
also shareholders in the Company and have everything to lose if
the airline gets into more serious difficulties.
"They are understandably concerned over the long-term effects of
the management's preoccupation with plugging leaks for a dubious
short-term result," the statement said.
CONTACTS: BWIA West Indies Airways
Phone: + 868 627 2942
E-mail: mailto:mail@bwee.com
Home Page: http://www.bwee.com/
Contacts:
Conrad Aleong, President and CEO (Trinidad)
Beatrix Carrington, VP Marketing and Sales (Barbados)
Paul Schutz, Chief Financial Officer (Trinidad)
BWIA: Reduces Fleet, Drops Routes to Avoid Going Under
------------------------------------------------------
As part of a restructuring plan to ensure it can pay its
creditors, Trinidad national airline BWIA said Thursday it will
sell some of its fleet and cut routes in the Caribbean.
The AP reports that BWIA is looking to unload 6 of its 13
airplanes by March, and according to BWIA Vice President Brenda
Billy, the Company will enter into a strategic partnership with
the smaller regional carrier LIAT to make up for dropped
Caribbean flights. The latter, however, still needs the approval
of the airline's board of directors.
"Unless we change, we'll become dinosaurs," Billy told reporters.
BWIA has lost US$10 million so far this year, he said.
BWIA currently flies to 22 destinations, but it was unclear how
many would be dropped with the planned changes. It's also unclear
when the board would vote on the changes.
The Trinidad carrier, which was privatized in 1995 and is a third
owned by the government, has annual revenue of US$260 million. It
had about 2,500 employees in March.
=============
U R U G U A Y
=============
URUGUAYAN BANKS: Face Closure If Investors Refuse New Funding
-------------------------------------------------------------
Uruguay vowed to shut down insolvent private banks, including two
of its three largest, Banco de Montevideo SA and Banco Comercial
SA, if they aren't recapitalized by investors, relates Bloomberg.
The pledge is part of an agreement reached with the Washington
lenders early this month.
In a document sent to the International Monetary Fund, Uruguay
stated that its economy, which has been undercut by neighboring
Argentina's default, will tumble by 11% this year and 4.5% in
2003. Uruguay also said its inflation rate could surge by as much
as 50% next year compared to a slight drop in inflation it had
predicted in June.
"Uruguay is facing the worst economic crisis in its history," the
World Bank said in an internal report on its US$252-million loan
for the nation, part of a US$3.8-billion support package cobbled
together by the IMF early this month.
The program supported by the IMF and World Bank "should help
Uruguay overcome" the crisis, the bank said. "However, there is
still a substantial risk that is beyond the government's
control."
Uruguay must stick to the measures agreed with the Washington
lenders to preserve their credit lines and stave off default.
In addition to the insolvent bank closures, Uruguay also said it
would overhaul the mortgage lender Banco Hipotercario del
Uruguay. Uruguay has promised the World Bank that it will
jumpstart efforts to open its US$20-billion economy to private
investments in electricity, telephone service and water.
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 COMERCIAL
Cerrito No. 400,
11100 Montevideo
Phone: 960-394/97
Fax: 963-569
Home Page: www.bancocomercial.com.uy
***********
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
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contact Christopher Beard at 240/629-3300.
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