/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020827.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, August 27, 2002, Vol. 3, Issue 169 Headlines A R G E N T I N A EASA: Informs Bourse of Plan To Renegotiate $92.2M Debt SOLDATI GROUP: Takes Action To Restructure Ailing Business TELECOM ARGENTINA: Registers Net Loss In 1H02 TGN: Reports $28M Net Loss In 1H02 B E R M U D A FOSTER WHEELER: Director, Senior Vice President Steps Down B R A Z I L ANDERSEN: KPMG Consulting Closes Brazil, Peru Transactions ELETROPAULO / KLABIN: Petitioning Wallstreet for Credit Lines CEMIG: Governor To Approve Power Plant Construction CSN: BNDES Hires Outside Legal Counsel To Evaluate Corus Deal CSN: Salomon Smith Maintains "Outperform" Recommendation ELETROPAULO METROPOLITANA: S&P Cuts Corporate Credit Ratings TEKA: Strikes Agreement With Creditors TELESP CELULAR: Increasing Capital Through Private Placement VARIG: Beset With Uruguayan Unit's Woes M E X I C O BITAL: ING Ditches Plan To Inject Capital After HSBC Proposal BITAL: Spanish Bank, Investor To Sell 3% Stake To HSBC CFE: Moody's Upgrades Ratings of Five Power Projects GRUPO MIFEL: Talks With Mexican Banker Flop SANLUIS: BMV Halts Trading of Shares Over Price Volatility P A R A G U A Y BANCO ALEMAN: Central Bank Delays Liquidation P E R U EMPRESAS LUCCHETTI: Faces Imminent Closure SIMSA: Refinancing Plan Gains Approval From Creditors T R I N I D A D & T O B A G O BWIA: On the Brink of Collapse - - - - - - - - - - ================= A R G E N T I N A ================= EASA: Informs Bourse of Plan To Renegotiate $92.2M Debt ------------------------------------------------------- Argentine energy holding Electricidad Argentina S.A. (EASA) issued an official statement to the Buenos Aires stock market disclosing its plan to renegotiate US$92.2 million of debt. In a Business News Americas report, EASA spokesperson Yves Desrousseaux revealed that the Company's debt is mostly US-dollar denominated. "Due to the devaluation of the Argentine peso, which has negatively affected many energy sector companies, Edenor has been unable to meet some of its interest payments this year", Desrousseaux explained. Easa owns a majority stake in electricity distributor Edenor, which has over 2.2 million customers in the northern part of Buenos Aires. "We can't do anything until the government makes a decision about raising tariffs", Desrousseaux said, adding that "Edenor has met recently with its creditors and we are currently in negotiations". Edenor has been seeking to raise power tariffs to stave off an impending bankruptcy. Edenor managing director Henri Ducre has admitted Edenor could go bankrupt unless it is allowed to hike power tariffs to offset the effects of inflation and the depreciation of the peso. In ten years of concession, Edenor made US$450 million in profits on US$1.165 billion in investments. Its debt now totals US$515 million. Edenor expects the government to announce rate increases soon, enabling the distributor to restructure its debt to new cash flow. However, the context is highly unstable and negotiations with the government could drag on, Desrousseaux added. To see EASA's latest financial info: http://bankrupt.com/misc/Electricidad_Argentina.htm CONTACT: EDENOR S.A. Azopardo Building Azopardo 1025 (1107) Capital Federal Phone: (54-11) 4346-5000 Fax: (54-11) 4346-5300 E-mai: to ofitel@edenor.com.ar Home Page: http://www.edenor.com.ar Contact: Riuttort Marc, Treasurer Fax: (54 1) 348-2149 SOLDATI GROUP: Takes Action To Restructure Ailing Business ----------------------------------------------------------- The Soldati group is moving to solve debt problem through asset sales, Estrategia reports. The debt, which as of the end of 2001 reached US$1.05 billion, mainly comes from two businesses of oil and entertainment conglomerate Sociedad Comercial del Plata (SCP), tourism train Tren de la Costa and entertainment park Parque de las Costa. The businesses together represented a US$400-million investment. The assets sold were shares in private companies and oil business, as well as a construction company and an agro-chemical distribution company. The Group lost all its shares in companies that were privatized in the nineties. SCP filed for protection in September of 2000 following a lawsuit filed by Reef Exploration Inc., as well as a debt service default on a US$25-million bond issue April 1999. The conglomerate is principally a holding company. It produces petroleum gas, liquefied gas and crude oil; explores and produces hydrocarbons; constructs and operates gas pipelines; and produces and transports natural gas. The Group also provides passenger transportation; operates parks; provides lottery services; constructs, operates and provides equipment for casinos. In addition, the Group provides cargo transportation; develops and operates wireless data transmission system, Internet network connection and value added services; sells lots and miscellaneous land; and invests in securities. CONTACT: SOCIEDAD COMERCIAL DEL PLATA 1056 Reconquista Buenos Aires Capital Federal Argentina Phone: +54 11 4311 6854 Contact: Santiago Soldati, Chairman Matias M Brea, Vice Chairman TELECOM ARGENTINA: Registers Net Loss In 1H02 --------------------------------------------- Telecom Argentina Stet-France Telecom SA (TEO) posted a net loss in the first half of the year as well as earnings drop due to recession and currency devaluation, Dow Jones reports citing the company's official statement. Telecom disclosed a net loss of ARS4.1 billion (US$1.139 billion) in the first six months of the year versus a net income of ARS80 million for the same period last year. The company also posted earnings per share loss of ARS4.16 during the first half of 2002 versus earnings of ARS0.08 for the same period in 2001. Earnings per ADR for the first six months of 2001 were ARS11.46. The company has been affected by the ongoing crisis in Argentina as a result of the country's default on US$141 public debt and currency devaluation. The peso has lost around 70% since January. Revenues of the second-largest telephone company in Argentina have also been affected by the "pesofication" of rates, which converted dollar-denominated contracts to peso-denominated ones in 1-to-1 ratio. Meanwhile, Telecom suspended payment of management tax to France Telecom and Telecom Italia, which together forms Nortel Inversora SA and owns 54.7 percent of Telecom. The tax is 1.25 percent of Telecom's turnover. It is paid in addition to payment for services, and amounts to about ARS100 million (US$27.8 million) a year. Last year, the amount totaled ARS105 million (indexed to the dollar) (US$29 million). The payment of the tax has been temporarily suspended until the end of this year. CONTACT: TELECOM ARGENTINA STET - FRANCE TELECOM SA (TELECOM) Alicia Moreau de Justo 50, 10th Floor Capital Federal (1107) Repoblica Argentina Phone: +54 11 4968 4000 Home Page: http://www.telecom.com.ar Contacts: Alberto J. Ricciardi, Chief Financial Officer Elvira Lazzati, Finance Director Pedro Insussarry, Investor Relations Manager Phone: (5411) 4968-3626/3627 Fax: (5411) 4313-5842/3109 Email: inversores@intersrv.telecom.com TGN: Reports $28M Net Loss In 1H02 ---------------------------------- Argentine natural gas transport company TGN submitted financial results for the first-half of 2002 to the Buenos Aires stock exchange. Business News Americas reports the company's numbers show a net loss of ARS103 million (US$28.5 million). That compares to a net profit of US$28.3 million in the equivalent period last year. TGN did not report any extraordinary charges or earnings during the first-half of this year, but stated it ended with ARS1.15 billion in equity. TGN, which holds a 35-year license to operate northern Argentina's gas transport system, has been severely hit by the measures taken by the government, particularly the pesofication of tariffs, the free-floating of the peso and debt that is financed in dollars. The Company defaulted on various interest payments during the first half of the year but said it would treat all creditors equally, allowing for 27% of interest payments to be met over the next two years. The current measures are temporary until rate increases for TGN and other utilities are approved. However, expectations are such changes won't be likely until after the May 2003 presidential elections. TGN faces some US$50 million interest payments in the next four quarters, and according to company estimates, quarterly EBITDA will be some US$15 million compared to the US$46 million posted in 2001. CONTACT: TRANSPORTADORA DE GAS DEL NORTE (TGN) Don Bosco 3672, (C120ABF) Buenos Aires, Argentina. Phone: (+54 11) 4959-2000 Fax: (+54 11) 4959-2242 Home Page: www.tgn.com.ar/ ============= B E R M U D A ============= FOSTER WHEELER: Director, Senior Vice President Steps Down ---------------------------------------------------------- Foster Wheeler Ltd. (NYSE:FWC) announced Friday that James E. Schessler, member of the board of directors and senior vice president, human resources and administration, has left the company to pursue other interests. In keeping with its initiative to reduce corporate overhead expenses, the company does not intend to appoint a new corporate officer to oversee its human resources and administrative activities. The company is developing a reorganization plan for the management of these functions. Schessler joined the company's headquarters in 1977 as director of personnel, becoming vice president of personnel and industrial relations in 1988, and vice president of human resources and administration in 1994. He was appointed senior vice president and elected a member of the company's board of directors in May 2001. Earlier in his career he was plant personnel manager at Foster Wheeler's manufacturing facility in Dansville, N.Y., and personnel manager at its Houston engineering center. 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 our World Wide Web site at www.fwc.com. CONTACT: Foster Wheeler Ltd. Phone: 908/730-4000 =========== B R A Z I L =========== ANDERSEN: KPMG Consulting Closes Brazil, Peru Transactions ---------------------------------------------------------- KPMG Consulting, Inc., (Nasdaq: KCIN), one of the world's largest business consulting and systems integration firms, on Friday announced that is has closed transactions to hire partners and staff from the Andersen Business Consulting unit in Brazil, and to acquire the Andersen Business Consulting unit in Peru. The terms of the transactions were not disclosed. The transactions have added approximately 70 people, including two former Andersen partners, to KPMG Consulting's operations in both countries. The transactions also enhance KPMG Consulting's strength in shared services, change management, and SAP enterprise software skills in Peru, as well as increased capabilities in finance-related solutions, program management, and experience in the banking and telecommunications business segments in Brazil. "These transactions enhance our ability to offer industry- tailored systems integration solutions," said Robin Palmer, executive vice president, Latin America Region, KPMG Consulting. "We have extended our depth of coverage in our key industries and we have acquired some exceptional talent. Friday's announcement also reinforces our commitment to the Latin American market -- particularly in Brazil, which represents one of our most important strategic markets -- and positions us as one of the leaders in providing business consulting and systems integration services in the region." Mr. Palmer added that KPMG Consulting recently unveiled its new state-of- the-art consulting office in Sao Paolo, underscoring the company's momentum in the Brazilian market. About KPMG Consulting, Inc. KPMG Consulting, Inc. (Nasdaq: KCIN), based in McLean, Virginia, is one of the world's largest business consulting and systems integration firms with approximately US $2.4 billion in annual revenues for the fiscal year ended June 30, 2002. We currently employ approximately 15,000 employees around the world providing business and technology strategy, systems design and architecture, applications implementation, network and systems integration and managed services. We help our clients capitalize on information technology to achieve their business objectives through real-time access to important information and improved business systems integration. Working with market leading hardware and software companies, we serve more than 2,100 clients, including Global 2000 companies, small and medium-sized businesses, government agencies and other organizations. Our business and technology solutions are tailored to meet the specific needs of the industries we serve and are delivered through global industry-focused lines of business, including communications and content companies, consumer and industrial markets, financial services industries, high technology companies and federal, state and local governments. For more information about KPMG Consulting, Inc., visit the web site at http://www.kpmgconsulting.com. KPMG Consulting, Inc. is an independent consulting company, no longer affiliated with KPMG LLP, the tax and audit firm. CONTACT: KPMG CONSULTING, INC. Ken Neal Phone: +1-212-954-2462 E-mail: kneal@kpmg.com For Investors: Deborah Mandeville Phone: +1-617-988-1628 E-mail: dmandeville@kpmg.com ELETROPAULO / KLABIN: Petitioning Wallstreet for Credit Lines ------------------------------------------------------------- Brazil's top economic officials are scheduled to go to New York this week in order to lobby for continued credit lines to the country, says Dow Jones. The move comes amid a struggle by local companies to fulfill their payment obligations, as foreign investors continue shaking their heads at the idea of renewing even relatively stable short- term credit. Investors are skeptical about extending credit any longer due to the country's debt burden and October presidential elections, despite news unveiled earlier this month of a US$30 billion International Monetary Fund loan. "The lack of (credit) lines is a problem for companies," said Luciana Massaad, an analyst at ING Barings in Brazil. The companies most affected happen to have payment deadlines coming up in the next couple months; around $10 billion in international debt held by companies comes due between July and December. The healthiest companies, such as Gerdau, are now forced to tap into their cash reserves to repay these debts. Gerdau used cash to repay US$140 million in commercial paper that came due Wednesday. Gerdau, one of Brazil's stronger companies, says it has many ways to meet another US$210 million payment deadline this fall. However, raising new debt would be an "expensive" option, according to a source from the company. Meanwhile, financially embattled companies, such as Eletropaulo Metroplitana and Klabin SA, are having a hard time dealing with the lack of credits. Eletropaulo, Metropolitana, a unit of US-based giant company AES Corp., barely managed to repay US$120 million of commercial paper that came due on Wednesday. Investors had refused to renew the debt, but Brazil's National Development Bank, or BNDES, finally came to the rescue on Wednesday with BRL402 million, or about US$130 million, in aid as part of an agreement to compensate utilities for losses related to a power rationing program last year. Eletropaulo, which is Brazil's largest electricity distributor, has around US$700 million of other debt coming due later this year. Packaging and paper company Klabin, on the other hand, has relatively less cash on reserve than most exporters, only around US$38 million. Klabin must meet payments on nearly US$540 million of debt in the next twelve months, most of which is trade finance-related. Klabin has tried raising new money in recent months by selling local bonds or doing a structured trade deal, but so far with no success. "We are waiting for trade finance lines to come back," a source from Klabin said. To see Klabin's latest financial statements: http://bankrupt.com/misc/Klabin.pdf CONTACT: INDUSTRIAS KLABIN Ronald Seckelmann, Financial and IR Director Luiz Marciano Candalaft, IR Manager Tel: (55 11) 3225-4045 Email: marciano@klabin.com.br CEMIG: Governor To Approve Power Plant Construction --------------------------------------------------- Companhia Energetica de Minas Gerais (Cemig) and waterworks company Copasa expected state governor Itamar Franco to sign early this week an authorization to begin construction of two power plants totaling 36MW, Business News Americas reports, citing a Cemig statement. Cemig and Copasa established a joint venture in July this year to build the US$5-million, 13MW Barreiro cogeneration thermoelectric plant. The joint venture, named Central Termeletrica de Cogeracao (CTC), is 51% owned by Copasa and 49% by Cemig. Previously, Cemig announced it has signed a 20-year contract to build the plant at the facilities of steel tube manufacturer Vallourec & Mannesmann Tubes (V&M do Brasil), located in the Barreiro district of state capital Belo Horizonte. Cemig and Copasa will provide investments, while Cemig will operate and maintain the plant. V&M will supply gas from its steel plant, which is currently flared. Construction began in April 2002 and is scheduled for completion by July 2003. The plant will supply electricity to 108,000 people. Just recently, Cemig failed in its plans to auction 600MW of power after investors shunned the process due to a very high price. According to a Business News Americas, Cemig reportedly charged a minimum of 75/MWh for two-year contracts and 78/MWh for four-year contracts. The only silver lining was that the electronic auction platform provided by Banco do Brasil worked fine, Cemig said, and will be used for further auctions later this year. CONTACT: COMPANHIA ENERGETICA DE MINAS GERAIS Luiz Fernando Rolla, Investor Relations Phone: + 011-5531-299-3930 Fax: + 011-5531-299-3933 E-mail: CONTACT: CEMIG Avenida Barbacena, 1200 Sto Agostinho 30123-970 Belo Horizonte - MG Brazil Phone +55 31 299 4900 Home Page http://www.cemig.com.br Contacts: Djalma Bastos De Morais, Chairman Geraldo De Oliveira Faria, Vice Chairman Cristiano Correa De Barros, Finance Director CSN: BNDES Hires Outside Legal Counsel To Evaluate Corus Deal ------------------------------------------------------------- The intricacy of the proposed merger of Rio de Janeiro-based flat steel CSN and Anglo-Dutch group Corus prompted Brazil's state- owned development bank BNDES to seek evaluation of the deal announced last month. BNDES will hold a tender process to select an outside law firm to do the evaluation. The planned merger between CSN and Corus needs the approval of BNDES, as it is a creditor of CSN and of its controller, the Vicunha group. BNDES became a creditor of Vicunha group after the latter put up CSN shares as collateral to obtain a BRL1.5-billion real loan from the bank in March 2001. The loan was used to unwind a shareholder cross-ownership between the steel maker and Rio-based mining giant CVRD. The group still owes BNDES US$600 million. The chief executives of the two steel companies, Benjamin Steinbruch (CSN) and Tony Pedder (Corus), in a meeting with bank officials, promised to supply BNDES with all the details of the merger within two months. "It was an introductory meeting. We did not enter into details about the operation," Pedder said. Some market observers and legal specialists still believe the "merger" is actually an acquisition of CSN by Corus, but Pedder denied the transaction was a "disguised takeover." Steinbruch said BNDES should approve the merger by the end of the first-half of 2003. If both creditor banks and minority shareholders approve the operation, CSN will end up being the largest shareholder in Corus with 37.6% of the new company. To see financial statements: http://bankrupt.com/misc/CSN.pdf CONTACT: Jose Marcos Treiger CSN - Investor Relations General Manager Tel. +55 21 2586 1442 Email: jmtreiger@csn.com.br URL: www.csn.com.br Isabel Viera Thomson Financial Tel. +1 (212) 701-1823 Email: isabel.vieira@tfn.com URL: www.thomsonfinancial.com BNDES Main Office Av. Republica do Chile, 100 Rio de Janeiro - RJ Phone: (021) 2277-7447/6978 Home Page: http://www.bndes.gov.br/english/welcome.htm Contacts: Enterprise Information Center Main Office Av. Repoblica do Chile, 100 - 13 andar - Sala 1301 Tel.: (21)2277-8888 Fax: (21) 2220-2615 Email: contact@bndes.gov.br CSN: Salomon Smith Maintains "Outperform" Recommendation -------------------------------------------------------- Salomon Smith Barney continues with its "outperform" recommendation for Rio de Janeiro-based integrated steelmaker CSN, relates Business News Americas. CSN, according to Salomon Smith analyst Jennifer Carrou, is a high-risk company. The outperform rating means she predicts a total rate of return on capital of 10-25% over the next 12 to 18 months. Just recently, Fitch Ratings placed CSN's `B+' foreign currency rating on Rating Watch Negative following the placement of Brazil's sovereign foreign and local currency ratings on Rating Watch Negative on August 1, 2002. Fitch placed the rating on Rating Watch Negative on concern about the increased country risk and unfavorable market conditions for the Company as it faces tighter liquidity and greater refinancing risk under the current volatile environment. CONTACT: SALOMON SMITH BARNEY HOLDINGS INC. 388 Greenwich St. New York, NY 10013 Phone: 212-816-6000 Fax: 212-793-9086 Home Page: http://www.smithbarney.com Contact: Michael A. Carpenter, Chairman and CEO Michael J. Day, EVP and Controller ELETROPAULO METROPOLITANA: S&P Cuts Corporate Credit Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services said Friday that it lowered its global scale foreign currency and local currency corporate credit ratings on Brazilian utility Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. to double-'C' from triple-'C'. The ratings on the Brazil National scale were also lowered to 'brCC' from 'brCCC'. The downgrade is based on Standard & Poor's perception that Eletropaulo has already used available sources of liquidity and will face increasing challenges to amortize the remaining debt coming due in 2002. The ratings remain on CreditWatch with negative implications. Eletropaulo has total debt of $1.6 billion, including the debt held at holding companies. "Eletropaulo reached an agreement yesterday with BNDES securing the borrowing of some $125 million (Brazilian Real 400 million) that was due to compensate Eletropaulo from losses that originated with the recent rationing program," Standard & Poor's credit analyst Milena Zaniboni said. "These resources have assured the payment of the $120 million promissory notes that was due on August 21. However, even though Eletropaulo is likely to reach an agreement with creditors to extend the maturity of the syndicated loan of $225 million due on Aug.26, financial flexibility is even tighter under worsen market conditions, resulting in the high likelihood of nonpayment of the remaining maturities of 2002." Standard & Poor's said the CreditWatch listing will be resolved if Eletropaulo presents conditions to repay amortizations that are coming due, and succeeds in its negotiations with creditors. Through this, Standard & Poor's would be able to analyze the company's cash flow and coverage ratios, and consider the resulting amortization schedule. CONTACT: ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes Gonzalves Jr., VP Finance/Investor Relations TEKA: Strikes Agreement With Creditors -------------------------------------- Teka Tecelagem Juehnrich, a Brazilian textile products manufacturer, reached an agreement with the investors of its third debenture issuance (in 1996) worth BRL25 million, O Estado de Sao Paulo reports without revealing the terms of the agreement. The Company did not pay the installments of the debt due in January and June. TEKA - Tecelagem Juehnrich S.A. is the largest manufacturer of bed, table and bathroom textile products in Latin America. The Group's principal activities are: marketing and sale of table, bath and bed linens, such as bedspreads, bed sets, dishcloths, tablecloths, towels, bathrobes and other related products. The Group has five factories located in Blumenau, Indaial, Sumare, Artur Nogueira and Passos with a production capacity around 28 thousand tons per year. The Company exports its products to 40 countries including EU and the United States. Exportation represents 32% of 2001 Group's revenues. CONTACT: TEKA - Tecelagem Kuehnrich S.A. Rua Paulo Kuehnrich, 68 Itoupava Norte 89052-900 Blumenau - SC Brazil Phone: +55 47 321-5000 Home Page: http://www.teka.com.br Contact: Rolf Kuehnrich, Chairman Frederico Kuehnrich Neto, Vice Chairman Dieter G. Wachholz, Finance Director TELESP CELULAR: Increasing Capital Through Private Placement ------------------------------------------------------------ Telesp Celular Participacoes S.A ("TCP"), (NYSE:TCP) (BOVESPA: TSPP3 (Common), TSPP4 (Preferred)), announced Friday updates to its recent share offerings. Based on information provided by Banco ABN Amro Real S.A., the registrar for the Company's shares, the company disclosed: (i) the number of new TCP preferred shares (PN), common shares (ON) and American depositary shares (ADSs) subscribed for in the Brazilian and U.S. markets during the first reoffering round of unsubscribed shares, which closed on Aug. 21, 2002, (ii) the total number of shares subscribed in the Brazilian and U.S. markets through Aug. 21, 2002, and (iii) the number of remaining unsubscribed shares that are available for subscription in the second reoffering round by TCP shareholders who participated in the first reoffering round and indicated an interest in subscribing for additional shares. --------------------------------------------------------------- First Reoffering Round - Shares Subscribed - Brazilian Market --------------------------------------------------------------- Common Shares (%)(1) Preferred Shares (%)(2) --------------------------------------------------------------- Portugal 34,934,366,194 14.02 101,328,668,689 21.83 Telecom --------------------------------------------------------------- Other 49,605,446 0.02 31,677,255,697 6.82 Shareholders --------------------------------------------------------------- Total 34,983,971,640 14.04 133,005,924,386 28.65 --------------------------------------------------------------- First Reoffering Round - Shares Subscribed - Brazilian Market --------------------------------------------------------------- TOTAL (%)(3) --------------------------------------------------------------- Portugal 136,263,034,883 19.10 Telecom --------------------------------------------------------------- Other 31,726,861,143 4.45 Shareholders --------------------------------------------------------------- Total 167,989,896,026 23.55 --------------------------------------------------------------- First Reoffering Round - ADSs Subscribed - U.S. Market --------------------------------------------------------------- ADSs (%)(2) TOTAL (%)(3) --------------------------------------------------------------- Portugal 10,835,602 5.84 10,835,602 3.80 Telecom --------------------------------------------------------------- Other 5,483 0.003 5,483 0.002 Shareholders --------------------------------------------------------------- Total 10,841,085 5.84 10,841,085 3.80 --------------------------------------------------------------- First Reoffering Round - Total Shares Subscribed --------------------------------------------------------------- Common Shares (%)(1) Preferred Shares (%)(2) TOTAL (%)(3) (including preferred shares underlying ADSs) --------------------------------------------------------------- 34,983,971,640 160,108,636,886 195,092,608,526 14.04 34.49 27.35 --------------------------------------------------------------- Summary of Rights Offering Results Total Shares Subscribed (Initial Subscription Period and First Reoffering Round) --------------------------------------------------------------- Common Shares (%)(1) Preferred Shares (%)(2) (including preferred shares underlying ADSs) ------------------------------------------------------------ Portugal 246,948,700,588 99.08 210,573,625,393 45.37 Telecom ------------------------------------------------------------ Other 2,020,961,696 0.81 100,996,966,756 21.76 Shareholders ------------------------------------------------------------ Total 248,969,662,284 99.89 311,570,592,149 67.12 ------------------------------------------------------------ Summary of Rights Offering Results Total Shares Subscribed (Initial Subscription Period and First Reoffering Round) ------------------------------------------------------------ TOTAL (%)(3) ----------------------------------- Portugal 457,522,325,981 64.13 Telecom ----------------------------------- Other 103,017,928,452 14.44 Shareholders ----------------------------------- Total 560,540,254,433 78.57 ----------------------------------- Unsubscribed Shares Available for Subscription from Aug. 26, 2002 through Aug. 28, 2002 ---------------------------------------------------------------- Common Shares (%)(1) Preferred Shares (%)(2) TOTAL (%)(3) (including preferred shares underlying ADSs) ---------------------------------------------------------------- 275,205,975 0.11 152,601,119,652 32.88 21.43 152,876,325,627 ---------------------------------------------------------------- (1) Percentage of common shares offered (2) Percentage of preferred shares offered (3) Percentage of total shares offered TCP shareholders who subscribed for shares during the first reoffering round and indicated an interest in purchasing additional shares in the second reoffering round will have the right to subscribe for 0.00786663040526 of a common share and 1.14732573271796 preferred shares for each common and preferred share subscribed, respectively, in the first reoffering round. The period for subscription of remaining unsubscribed shares in the second reoffering round, by preferred and common shareholders who indicated an interest in purchasing additional shares in the second reoffering round, ends on Aug. 28, 2002. After that date, if there are any unsubscribed shares remaining, a public auction will be held at the Sao Paulo Stock Exchange (BOVESPA), where such unsubscribed shares will be offered to the public. TCP is a Brazilian holding company that owns 100% of Telesp Celular S.A., the leading mobile operator in the state of Sao Paulo in Brazil, and an 83% indirect economic interest in Global Telecom S.A., a B-band mobile operator in the Brazilian states of Santa Catarina and Parana. CONTACT: TELESP CELULAR PARTICIPACOES S.A, Sao Paulo Investor Relations: Edson Alves Menini Phone: (55 11) 3059-7531 E-mail: emenini@telespcelular.com.br VARIG: Beset With Uruguayan Unit's Woes --------------------------------------- Besides dealing with financial problems of its own, Varig is also grappling with the financial troubles of the Uruguayan airline Pluna, Gazeta Mercantil reveals. Varig owns 49% of Pluna. The Uruguayan government, which also owns 49% in Pluna, is looking to sell its participation with Varig as the prospect bidder. Varig's creditors, however, are not willing to include Pluna in the Brazilian company's capitalization program. Pluna reported a BRL33.3-million loss in 2001. Varig, with US$900 million in debt, on the other hand, needs a capitalization of US$300 million. CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.) Rua 18 de Novembro No. 800, Sao Joao 90240-040 Porto Alegre, Rio Grande do Sul, Brazil Phone: (51) 358-7039/7040 (51) 358-7010/7042 Fax: +55-51-358-7001 Home Page: www.varig.com.br/english/ Contacts: Dorival Ramos Schultz, EVP Finance and CFO E-mail: dorival.schultz@varig.com.br Investor Relations: Av. Almirante Silvio de Noronha, n 365-Bloco "B" - s/458 / Centro Rio de Janeiro, Brazil =========== M E X I C O =========== BITAL: ING Ditches Plan To Inject Capital After HSBC Proposal ------------------------------------------------------------- Netherlands-based ING Group NV is not gowing forward with its plans to take a 19.2% stake in Banco Bital for US$200 million, according to ING spokesman Ward Snijders. In an AFX report, Snijders said that the move came after HSBC Holdings PLC proposed to bid for 100% of Grupo Financiero Bital SA de CV, Banco Bital's parent company, for US$1.14 billion. The proposal was accepted by Bital's board and was then recommended to shareholders. ING entered into an agreement with Grupo Financiero Bital for a 19.2% stake in Banco Bital following an announcement of a memorandum of understanding signed in March this year. According to Snijders, the stake acquisition was planned as a capital injection for Banco Bital. With the proposed takeover by HSBC, the capital is no longer needed. ING will continue its insurance joint venture with Grupo Bital, in which the Dutch company holds 49%, Snijders said. In 1998, ING entered into a bancassurance joint venture with Bital to enable ING to distribute its insurance products through Bital's branches. The Dutch company has already held preliminary talks with HSBC on the matter, Snijders added. ING Group is one of the world's largest financial services groups offering banking, insurance and asset management to over 50 million private, corporate and institutional clients in 65 countries. HSBC Group is one of the largest financial groups in the world with some 7,000 offices in 81 countries and territories CONTACT: ING GROEP N.V. Strawinskylaan 2631 1077 ZZ Amsterdam, The Netherlands Phone: +31-20-541-54-11 Fax: +31-20-541-54-44 Home Page: http://www.ing.com Contacts: Ewald Kist, Chairman Cees Maas, Chief Financial Officer 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: Spanish Bank, Investor To Sell 3% Stake To HSBC ------------------------------------------------------ Caixa Galicia and investor Olegario Vazquez Rana, who jointly own 3% of Mexico's Grupo Financiero Bital SA, revealed plans to sell their participation in the Mexican group to HSBC Holdings Plc. Citing Inaki Torres, a spokesman for the Spanish bank, Bloomberg reports that the stake, which is being held by an investment company, will be tendered to HSBC after the UK-based bank gets Mexican regulatory approval to take over Bital, Mexico's fifth- largest bank. According to Torres' estimates, Caixa Galicia, which isn't traded in the stock market, and Vazquez Rana will each make a capital gain of US$3.4 million. CFE: Moody's Upgrades Ratings of Five Power Projects ---------------------------------------------------- Moody's Investors Service upgraded the foreign currency debt ratings of the following Mexican power projects related to Comisi�n Federal de Electricidad (CFE), to Baa2 from Baa3: - El Habal Funding Trust US$60.0 million 10.352% senior secured notes due 2011 - Fideicomiso Petalcalco US$308.9 million 10.16% senior secured notes due 2009 - Fideicomiso Petalcalco-Topolobampo US$250.0 million 8.125% senior unsecured notes due 2003 - Monterrey Power, S.A. de C.V. US$235.54 million 9.625% senior secured notes due 2009 - Proyectos de Energia, S.A. de C.V. US$100 million 9.75% senior secured notes due 2013 The outlook on the ratings is stable. Each of the ratings represents lease obligations of CFE to the particular project, and the noteholders' claims rank pari-passu with CFE's senior unsecured indebtedness. The rating action concludes a review for possible upgrade that was initiated on July 31, 2002. Moody's upgraded the ratings believing that the prospects for possible privatization of CFE have receded, that CFE will continue to receive strong support from the government of Mexico (Local Currency Rating of Baa1; Foreign Currency Rating of Baa2), and that the need for government subsidies will decline over time as rate increases are implemented. While efforts to bring additional private capital into Mexico for new power projects will move ahead, Moody's believes that CFE's strong interlocking relationship with the Mexican government will remain intact, providing support to CFE and its related projects during a lengthy market transition period. Moody's views the recent energy bill proposed by President Fox as being consistent with this view. The bill if adopted, would encourage much needed private investment, while the overall electric sector would largely remain controlled by the Mexican government. CONTACT: COMISION FEDERAL DE ELECTRICIDAD Rio Rodano 14, Col. Cuauhtemoc 06598 Mexico, D.F., Mexico Phone: +52-55-5229-4400 Fax: +52-55-5310-4614 http://www.cfe.gob.mx Contacts: Alfredo Elias Ayub, General Director Arturo Hernandez Alvarez, Director of Operations Francisco J. Santoyo Vargas, Director of Finance GRUPO MIFEL: Talks With Mexican Banker Flop -------------------------------------------- Talks between Mexican financial group Mifel and Mexican banker Antonio del Valle over a stake sale failed to reach a successful conclusion. According to Business News Americas, Del Valle and the Mifel executives terminated the negotiations due to differences of opinion over the group's future strategy. Del Valle and a group of investors were expected to have injected some MXN700 million (US$70.9 million) into the group in exchange for 80% of its shares. Sources say, however, that several other groups of investors are now eyeing a stake in the Company after it showed attractive profitability this year. Mifel is a small niche-oriented financial group that focuses on mortgage lending and corporate clients. SANLUIS: BMV Halts Trading of Shares Over Price Volatility ---------------------------------------------------------- The Bolsa Mexicana de Valores (BMV) suspended trading on the shares of Mexican autoparts manufacturer SanLuis Corporacion, reports Business News Americas. The suspension came following "extraordinary price fluctuations," the BMV said, noting the difference between the share's bid price of MXN3.00 and ask price of MXN4.98 (US$0.31 and US$0.52). The bourse said that the suspension will continue until officials of the company issue a statement and explain the reasons for the fluctuations. In response, a SanLuis spokesperson said that the share price discrepancy could be explained by the Company's delay in releasing its 2Q02 results, which were due out on August 2. In addition, ongoing negotiations with creditor banks to restructure US$234 million of the Company's debts were cited as contributing factors. SanLuis announced Wednesday (Aug.21) that an agreement in principle had been reached with a steering committee representing the banks. SanLuis also has US$291 million in debt in the form of commercial paper, due 2008. SanLuis Corporacion quotes at the Mexican Stock Exchange under the board code MSE: SANLUIS. Its Auto-Part Division, SANLUIS Rassini, manufactures suspension and brake components and systems, and it is a leading company in suspensions in North America and mercosur. Over 85% of SanLuis Corporacion's consolidated sales are made abroad and denominate in dollars. CONTACT: SANLUIS CORPORACION, S.A. DE C.V. Hector Amador, Investor Relations Phone: +5255-5-229-58-38 Fax: +5255-5-202-66-04 E-mail: hamador@sanluiscorp.com.mx Home Page: http://www.sanluiscorp.com =============== P A R A G U A Y =============== BANCO ALEMAN: Central Bank Delays Liquidation --------------------------------------------- The Paraguayan central bank postponed its decision on the liquidation of intervened bank Banco Aleman to allow deposits to be transferred to other banks, Business News Americas reports. Aleman, a subsidiary of Uruguay's Velox group, was intervened on June 24 at its own request due to losses during a 20-day run on deposits following local media rumors that the bank was experiencing financial difficulties. The July 7 TCR-LA issue cited Business News Americas reporting losses reaching more than US$100 million. The recent BNAmericas report said total deposits in the bank fell to US$26 million from US$100 million since the government's intervention in June. The bank's board of directors voted to liquidate the bank after the Securities Regulatory Agency authorized the Grupo Velox, which has owned the Banco Aleman since 1989, to wind up its affairs and sell off its remaining assets to pay creditors. CONTACT: BANCO ALEMAN PARAGUAYO S.A. Estrella Esquina 14 de Mayo Asuncion, PARAGUAY Tel: (59521) 418 3000 Fax: (59521) 447 645 Home Page: http://www.bancoaleman.com.py/ Contact: Juan Peirano, Presidente Ricardo Castillo Fracchia, Vice President ======= P E R U ======= EMPRESAS LUCCHETTI: Faces Imminent Closure ------------------------------------------ Empresas Lucchetti SA, which is owned by Chile's Luksic family, only has a few days left to operate its pasta factory in Lima, Peru, Bloomberg suggests. The news comes after Lima Mayor Alberto Andrade said his city will evict the factory and would only accept a company request to delay the closing past Friday's deadline for a few days. "We already granted them a year's time to move," Andrade said. The Lima city council, which originally refused to allow construction of the US$40-million plant in 1997 due to environmental concerns, ordered the plant to be closed within 12 months. The order came after a court charged that Lucchetti executives manipulated a lawsuit allowing construction of the plant with the help of former spy chief Vladimiro Montesinos. Quinenco SA, the Luksic family holding company, said in a filing to the U.S. Securities and Exchange Commission in July that suspension of the operations of the plant would have a negative impact on its finances, and would result to the suspension of its obligations. Lucchetti had earlier sold assets in Argentina and renegotiated the Company's debts last year to reduce financing costs. The Company hasn't posted a profit since 1997. As of December, it has debts worth CLP56.4 billion (US$85 million), which is equivalent to 120% of its net worth. The Lucchetti plant in Peru reportedly involved about US$135 million in total investments. CONTACT: EMPRESAS LUCCHETTI S.A. 2600 Av Vicuna Mackenna Comuna de Macul Santiago Chile Phone: +56 238 2711 +56 238 6592 Home Page: http://www.lucchetti.cl/ SIMSA: Refinancing Plan Gains Approval From Creditors ----------------------------------------------------- Creditors of Peruvian lead-zinc miner San Ignacio de Morococha (Simsa) unanimously endorsed a refinancing plan for the Company, Business News Americas reports. As agreed by creditors, a steering committee composed of heavy machine distributor Sandvik del Peru and Citileasing will implement the plan. Simsa, which has a recognized debt of US$18 million, went into a form of bankruptcy protection late last year. Its biggest single shareholder, Phoenix-based Phelps Dodge (NYSE:PD) had initiated the move for shareholders to declare the company bankrupt. A July 10 TCR-LA issue reported Simsa's plans of establishing partnership with Swiss natural resources company Glencore to help the company restructure its debts. Simsa mines at San Vicente in the Chanchamayo area of Junin department in central Peru. The medium-sized Peruvian company posted a first-half 2002 net loss of 4.17 soles (US$1.16 million). CONTACT: COMPANIA MINERA SAN IGNACIO DE MOROCOCHA S.A.- SIMSA Calle Uno 795 - Urb. Corpac San Isidro - Lima 27 Phone: 224-3432 Fax: 224-1321 E-Mail: simsa@simsa.com.pe ================================= T R I N I D A D & T O B A G O ================================= BWIA: On the Brink of Collapse ------------------------------ As part of an effort to stem its hemorrhaging accounts, BWIA West Indies Airlines said it is considering a US$1-million a month cost reduction plan, the Trinidad Guardian reports. President and CEO Conrad Aleong assured that there will be no salary cuts unless voluntarily agreed with workers or negotiated with unions. However, the high-powered BWIA team created exclusively to restructure the cash-strapped airline revealed its dim conclusion last week. According to the team, even with reduced flying, job cuts, concessions and selling off aircraft, the airline will still need millions of dollars to turn itself around. Industry insiders admit the troubled carrier is on the brink and is in a desperate-maybe even terminal-financial position from which it may not recover. Although airline officials were not prepared to disclose the airline's exact financial position, its 2001 financial report points to debt of more than US$120 million. Of greater concern to BWIA's accountants is the ever-increasing portion of expenses being gobbled up by debt service payments. Last year, the airline paid US$36 million to lease its aircraft and engines alone. Sources have it that the airline's other debt- service payments are in excess of US$10 million, which makes the annual expense on leases and interest payments the second costliest aspect of operating expenditure after employee expenses. According to sources, the surest signal of the morbidity of BWIA's balance sheet was the airline's addiction to high interest rate, short-term loans. The Company has received short-term loans from RBTT, Citibank, Clico Investment Bank and the International Lease Finance Corporation (ILFC). Fees amounting to more than TT$30 million are owed to the Airports Authority of Trinidad and Tobago none of which has been repaid. More critically, sources close to the current restructuring discussions revealed that at least one of the airline's lessors threatened to seize at least one of BWIA's Boeing 737 planes if the ailing airline can't come up with cash up to November. The Company entered into a loan agreement in October 2000 to reschedule its obligations with the US-based ILFC for US$3,096,059. The loan is unsecured and was to be repaid over 12 months commencing January 2001 with interest calculated at 11%. But sources close to the deal said that BWIA has been unable to make any of its monthly payments to ILFC. 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) *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Ma. Cristina Canson, Editors. Copyright 2002. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *