/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020927.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, September 27, 2002, Vol. 3, Issue 192 Headlines A R G E N T I N A ARGENTINE BANKS: Receive $8.1B in State Bonds as Compensation CAPEX SA: Cutting Costs To Keep Business Afloat EDEERSA: Parent Exits Argentina Entirely IMAGEN SATELITAL: Claxson Increases Terms, Amends Exchange Offer B A H A M A S ENRON: To Sell Conflict-Ridden Pipeline Project B E R M U D A TYCO INTERNATIONAL: Nellcor Files Lawsuit Against Sensidyne TYCO INTERNATIONAL: Slashes Quarter Earnings Estimates B R A Z I L AES SUL: Court Overturns Ruling Concerning Power Sales BANCO BRADESCO: Seeks Authorization For Public Stock Offering CELESC: Gets $137.2M From BNDES CEMIG: Minority Shareholders Lodge Complaint Against State ORGANIZACOES GLOBO: Delays IPO, Key Executive Resigns C H I L E MADECO: First Phase of Capitalization Misses Target C O L O M B I A EDT: ETB Considers Acquisition, Awaits Official's Decision PAZ DEL RIO: Workers Prefer Co-Op to Private Ownership J A M A I C A AIR JAMAICA: Overcomes Turbulent Times, Growth Continues M E X I C O ALESTRA: S&P Issues Warning On Credit Rating INTERNATIONAL THUNDERBIRD: Update on Work-Out with Creditors P A N A M A AES PANAMA: Readies Startup Of New Unit U R U G U A Y BANCO DE CREDITO: St George To Acquire 60% - - - - - - - - - - ================= A R G E N T I N A ================= ARGENTINE BANKS: Receive $8.1B in State Bonds as Compensation ------------------------------------------------------------- The government's bailout of Argentine Banks includes bonds totaling US$8.1 billion as compensation for losses from the currency devaluation last January. Bloomberg reports that the Argentine government promised the compensation after it forced conversion of U.S. dollar deposits and loans into pesos at different exchange rates. Standard and Poor's commented that the move was designed to curry favor with depositors and debtors at the banks' expense, causing the financial system's insolvency. Some US$7.3 billion of 2012 bonds and ARS3.1 billion (US$840 million) of 2007 bonds were allocated to the country's banks, including units of Citigroup Inc and Fleetboston Financial Corporation. The bonds were from the same series the government offered depositors in a July exchange. The dollar-denominated bonds pay the London interbank offered rate (LIBOR), currently about 1.8%, while the bonds in pesos pay 2% interest annually. Argentina is currently in default of US$95 billion worth of debt. The country defaulted sometime after it restricted bank withdrawals and lost access to International Monetary Fund loans. Negotiations to restructure the debts are to be initiated by the Argentine government. CAPEX SA: Cutting Costs To Keep Business Afloat ----------------------------------------------- Argentine energy company Capex SA announced it will drill seven wells in the Agua del Cajon field in the Comahue region at a cost of some US$5 million - US$7 million as part of its plans to focus investments in liquid resources rather than gas this year. The total wells equates to about half of the company's typical exploration efforts. "We normally drill ten to fifteen wells a year, but this year we all have to tighten our belts," said a company spokesperson. Capex is looking to cut costs and minimize investments in order to survive in the next few months, the spokesperson said, adding that the Company still has a positive cash-flow due to income from its dollar-denominated oil and LPG exports, and will continue servicing its debts. "We are adjusting to the new reality of Argentina's economy. Energy prices are still pesified and it looks like the government will delay a serious rates increase until after the March elections," the spokesperson said. "We can manage in the short-term, but we need tariffs to be adjusted in the medium-term because no company can survive long under these conditions," the spokesperson explained. For the period April 30 to July 30 2002, Capex registered losses of ARS130 million (US$35.2 million), against profits of ARS15 million in the same period last year. Total sales fell 15.4% to ARS53 million in the quarter compared to the same period last year, mainly due to the pesification of energy prices, part compensated by higher oil exports. Total liabilities increased to ARS1.09 billion due to the devaluation of the peso with respect to the dollar, negatively affecting Capex' US-dollar denominated debts - some US$280 million with Deutsche bank, Boston bank and others. "We are still in discussions with our creditors to renegotiate our debts, but nothing definite has been confirmed," the spokesperson revealed. Capex generates electricity in the Comahue region in southwest Argentina, with six gas-fired units and one steam unit. CONTACTS: Enrique Gotz, Chairman Alejandro Gotz, Vice Chairman 948/950 Av Cordoba Dept 5 Buenos Aires, Argentina Phone +54 110 4322 4884 URL: http://www.capex.com.ar EDEERSA: Parent Exits Argentina Entirely ---------------------------------------- Public Service Enterprise Group Inc., the owner of New Jersey's largest utility, is pulling out of Argentina after posting a US$264-million second-quarter loss mostly from writing off electricity businesses in the country. Citing Public Service's finance vice president Miriam Gilligan, Bloomberg reports that the company is trying to sell its 90% stake in Argentine power distributor Empresa Distribuidora de Electricidad de Entre Rios (Edeersa). Gilligan didn't say to whom the company may sell the interest nor did it disclose how much money it expects to get. "We are exiting the country," Gilligan said. Public Service is currently suing AES Corp. for backing out of an agreement to buy stakes in three Argentine electric-distribution companies and two power plants for US$420 million. IMAGEN SATELITAL: Claxson Increases Terms, Amends Exchange Offer ---------------------------------------------------------------- Claxson Interactive Group Inc. ("Claxson") announced the extension and the amendment of its pending exchange offer and consent solicitation (the "Exchange Offer") for all U.S.$80 million outstanding principal amount of the 11% Senior Notes due 2005 (144A Global CUSIP No. 44545HHA0 and Reg S Global ISIN No. USP52800AA04) (the "Old Notes") of its subsidiary, Imagen Satelital S.A. ("Imagen"). Claxson has raised the interest rate on the proposed new notes 50 basis points to 8.75%, increased the consent payment to U.S.$18.75 per U.S.$1,000 principal amount of Old Notes, increased the extraordinary cash payments on the new notes and has now provided for the amortization of principal beginning in 2006. The Supplement to the Offering Memorandum dated September 24, 2002, relating to the Exchange Offer, contains a full description of the amendments to the terms in connection with this extension. Any holder who has previously tendered their Old Notes will automatically be eligible to receive all of the new and improved terms of the Exchange Offer. The expiration date for the Exchange Offer has been extended from 5:00 p.m. New York City time on September 24, 2002 to 5:00 p.m. New York City time on October 8, 2002. As of 5:00 p.m. New York City time on September 24, 2002, Claxson received tenders from holders of approximately U.S.$12.8 million in aggregate principal amount of the Old Notes. Informational documents relating to the Exchange Offer will only be distributed to eligible investors who complete and return an eligibility letter that has already been sent to investors. If you would like to receive this eligibility letter, please contact Tom Long at D.F. King & Co., the Information Agent for the Exchange Offer, at +(1) 212-493-6920, or Eduardo Rodriguez Sapey at Banco Rio de la Plata, the Trustee and Rep. Exchange Agent in Buenos Aires, Argentina at +(54) 11-4341-1013. The new notes will not be registered under the U.S. Securities Act of 1933, as amended, and will only be offered in the United States to qualified institutional buyers and accredited investors in private transactions and to persons outside the Unites States in off-shore transactions. The new notes may be listed on the Buenos Aires Stock Exchange. The company's press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the new notes in any state of the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Claxson (Nasdaq: XSON) is a multimedia company providing branded entertainment content targeted to Spanish and Portuguese speakers around the world. Claxson has a portfolio of popular entertainment brands that are distributed over multiple platforms through Claxson's assets in pay television, broadcast television, radio and the Internet. Claxson was formed in a merger transaction, which combined media assets contributed by El Sitio, Inc., and other media assets contributed by funds affiliated with Hicks, Muse, Tate & Furst Inc. and members of the Cisneros Group of Companies. Headquartered in Buenos Aires, Argentina, and Miami Beach, Florida, Claxson has a presence in all key Ibero-American countries, including without limitation, Argentina, Chile, Brazil, Spain, Portugal and the United States. CONTACT: CLAXSON INTERACTIVE GROUP INC. Press - Alfredo Richard, SVP, Communications +1-305-894-3588 Investors - Ezequiel Paz, AVP, Corporate Finance +1-305-894-3574 Web site: http://www.claxson.com ============= B A H A M A S ============= ENRON: To Sell Conflict-Ridden Pipeline Project ----------------------------------------------- Bankrupt Enron Corp. is moving forward to sell its Bahamas-to- Broward County natural gas pipeline project, reports the South Florida Sun-Sentinel. Filings with the Federal Energy Regulatory Commission revealed the buyer as Tractebel North America Inc., a subsidiary of the large French company Suez. However, the sale requires the approval of the commission and of a federal bankruptcy judge in New York. Since no approval motions have been drawn up yet, Tractebel's vice president for communications Paula Rockstroh, said that it is not yet time to discuss the deal. As such, the purchase price is still unknown. Ms. Rockstroh also said that the sale would facilitate her company to enter the market with great prospects of growth. The Enron project would enable Suez to set up a system to deliver natural gas to Florida's power plants. Liquefied natural gas brought to a plant in Freeport, Grand Bahamas will be converted into gaseous form and will be sent through undersea pipeline to Port Everglades. There, it will continue through an underground link with the state's pipeline system in Central Broward County. "We're very interested because we think it's a terrific fit for the Florida market," she said. "We're hoping to serve some of the growth forecast for the next five years." Paris-based Suez, operates water works, gas lines, power plants and waste-management systems all over the world. The company, whose stocks are traded on the New York Stock Exchange, reported revenues of US$42.4 billion last year. Enron had invested heavily in engineering studies, permit applications and other preliminary work for the pipeline. Work on the pipeline was put on hold in December as Enron was driven to bankruptcy. The project had drawn sharp scrutiny from state and county environmental regulators over its potential effect on the sensitive coral reefs off Broward County. Rockstroh said that the company always considered the local concerns on its projects. "We're very sensitive to the environmental issues," she said. "We have been sensitive to environmental groups, and we're very committed to doing this right." Two other companies, El Paso Corp. and AES Corp., have also proposed pipelines from the Bahamas to Broward or Palm Beach counties. ============= B E R M U D A ============= TYCO INTERNATIONAL: Nellcor Files Lawsuit Against Sensidyne ----------------------------------------------------------- Nellcor, part of Tyco Healthcare, announced Wednesday it filed a patent infringement lawsuit against Sensidyne, Inc. in Federal District Court in Oakland, California. The lawsuit, filed September 24, seeks damages and injunctive relief for infringement by Sensidyne of two Nellcor Oximeter patents, U.S. Patent 4,621,643 and 4,700,708, due to Sensidyne's manufacture and sale of its SensAid Pulse Oximeter sensors. "We are disappointed that Sensidyne has chosen to infringe our patents which they should know have been determined valid and enforceable in previous U.S. litigation," said Forrest Whittaker, President, Respiratory Division, Tyco Healthcare. "Though we desire to avoid litigation whenever possible, we cannot stand idly by while companies like Sensidyne use our patented technology." On July 4, 2002, Nellcor sued Sensidyne's German distributor, B+P Beatmungsprodukte GmbH, for infringing Nellcor's corresponding German patent. Nellcor has also previously successfully litigated the German patent. About Nellcor Nellcor is dedicated to developing innovative, clinically relevant medical products with an emphasis on noninvasive patient safety monitoring and respiratory care. A part of Tyco Healthcare, Nellcor is the world's foremost supplier of pulse oximetry, fetal pulse oximetry and airway management products. The company also offers a wide range of products for measuring and regulating patient body temperature. Known for the highest standards of quality and reliability, Nellcor products contribute to patient care in every type of healthcare setting. Nellcor serves its customers with an exceptional level of product performance and support, technical service and clinical education resources. For more information on Nellcor, visit www.nellcor.com. About Tyco Healthcare Tyco Healthcare is one of the major business units of Tyco International. Tyco Healthcare is a leading manufacturer, distributor and servicer of medical devices worldwide. Its broad portfolio includes disposable medical supplies, monitoring equipment, medical instruments and bulk analgesic pharmaceuticals, sold under such names as Auto Suture, Graphic Controls, Kendall, Mallinckrodt, Nellcor, Puritan Bennett, Sherwood, United States Surgical, Valleylab and others. About Tyco International Ltd. Tyco International Ltd. is a diversified manufacturing and service company. Tyco is the world's largest manufacturer and servicer of electrical and electronic components; the world's largest designer, manufacturer, installer and servicer of undersea telecommunications systems; the world's largest manufacturer, installer and provider of fire protection systems and electronic security services; and the world's largest manufacturer of specialty valves. Tyco also holds strong leadership positions in disposable medical products, financing and leasing capital, plastics and adhesives. Tyco operates in more than 100 countries and had fiscal 2001 sales in excess of $36 billion. CONTACTS: Kristin Garvin NELLCOR (925) 463-4353 kristin.garvin@tycohealthcare.com Peter Ferris TYCO INTERNATIONAL (212) 424-1366 pferris@tyco.com TYCO INTERNATIONAL: Slashes Quarter Earnings Estimates ------------------------------------------------------ Facing state and federal investigations, Tyco International Ltd. lowered its earnings estimates on Wednesday. A report by the Associated Press shows that Tyco's expected earnings for the quarter ending this month are down to US$0.30 to US$0.33 per share from the estimated US$0.45 to US$0.47 given last quarter. Tyco's new CEO Edward Breen disclosed the figures in his first conference call with the Company's investors. He said that the Company's earnings forecast was lowered due to taxes that were higher than expected and slow operations, especially in electronics. He added that the Company expects revenue of about US$9.1 billion in the fourth quarter. Analysts surveyed by Thomson First Call had been expecting revenue of about $9.25 billion, while earnings are estimated at close to US$0.40 cents per share. On the New York Stock exchange, Tyco shares closed up US$1.41, or 10.4% at US$15 Wednesday. Steven Altman, an analyst with Commerzbank in New York said,"Overall, most people are fairly impressed in the short time that Breen has been there in what he has been able to accomplish on the corporate governance front." In an independent interview, Breen said that the last three years of the Company's accounting is about 40% complete. A total of 50 accountants and 8 attorneys in 45 different locations around the world are currently undertaking a review of the Company's revenues, profits and cash flow. The process is expected to be finished by fall. Breen said that they had not found anything that requires additional disclosure yet, expressing his belief that they have taken the right steps with regards to the issue. =========== B R A Z I L =========== AES SUL: Court Overturns Ruling Concerning Power Sales ------------------------------------------------------ A Brazilian federal court on Wednesday invalidated a prior ruling allowing AES Sul Distribuidora Gaucha de Energia to account for credits from the sale of electricity on the wholesale power market last year without the need to republish its 2001 financial statement, according to an article in Dow Jones Newswires. AES Sul, which is 96.7%-owned by U.S.-based AES Corp., on August 30 had won the right in court to account for BRL 373 million (US$1=BRL3.78) in credits from sales on Brazil's wholesale power exchange, known as MAE. However, the decision had to be invalidated, said a court spokeswoman because the case was also sent to another court and was already under the responsibility of another judge. Roberto Zanardo, a spokesman for AES Sul, said the Company appealed the decision protectively, but considered it just a "judicial glitch." The credits for electricity sold on the MAE, Brazil's ailing power exchange launched in late 2000, weren't made available to companies last year because of regulatory hurdles and price disputes. BANCO BRADESCO: Seeks Authorization For Public Stock Offering ------------------------------------------------------------- Cidade de Deus, Osasco, SP, September 25, 2002 Dear Sirs, Banco Bradesco S.A., with principal place of business located in Cidade de Deus, Vila Yara, Oasaco, SP, parent company of Banco BEA S.A., Federal Corporate Taxpayer Number (CNPJ) 04.562.120/0001-33, with principal place of business located at Rua Silva Ramos, 368, Centro, Manaus, AM, hereby announces to stockholders and the market that it will submit to the records of the Brazilian Securities and Exchange Commission-CVM a request to authorize a public offering stock issued by the referenced Company on the market to the investing public for a term of thirty (thirty) days, beginning on the publication date of the "Public Offer Act for the Purchase of Common and Preferred Stocks Issued by Banco BEA S.A.", complementary to: - The Call for Sale of its shareholding interest (Item 5.3, letters "c" and "h"); - CVM Instruction Number 361, March 5, 2002, related to the cancellation of its Registration as a Publicly Held Company. Further information concerning his matter, including price and appraisal report, will be available through the CVM website (www.cvm.gov.br). Sincerely yours, Banco Bradesco S.A. Luiz Carlos Trabuco Cappi Executive Vise President and Investment Relations Director www.bradesco.com.br CELESC: Gets $137.2M From BNDES ------------------------------- Santa Catarina state distributor, Celesc, will now be able to make good on its short-term obligations after Brazil's National Development Bank (BNDES) paid out a BRL507-million (US$137.2 million) loan to the utility. Bloomberg reports that the payment is part of a debt restructuring process undertaken between the Santa Catarina state government, the federal government, and Celesc. The state government, which owes Celesc a total of BRL720 million, could not make good on its payments. By taking over the debt, the federal government, through BNDES, will settle payments with Celesc. The state government will now pay the debt to the federal government. Celesc has BRL663.8 million in short term debts, of which BRL325.5 million are with suppliers, Celesc advisor Carlos Henrique Ramos da Fonseca said. Its long-term loans are BRL148.3 million in financing and BRL28.5 million in debentures. According to Celesc president Jose Fernando Faraco, the Company is profitable. However, its performance has been affected by the lack of cash to meet short-term commitments, he said. CONTACTS: CELESC Rodovia SC 404 - Km 3 Itacorubi 88034-900 Florianopolis - SC Brazil Phone +55 48 231 6011 Home Page http://www.celesc.com.br Contacts: Francisco De Asis Kuster, Chairman Enio Andrade Branco, Finance Director CEMIG: Minority Shareholders Lodge Complaint Against State ---------------------------------------------------------- Seeking to recover debts owed by the state government, Minority shareholders of Brazil's Minas Gerais state integrated power company Cemig are now taking legal action. Reportedly shareholders have filed a complaint with the country's securities commission (CVM), claiming that the state government is abusing its power as controlling shareholder of Cemig by not paying its debts. The complaint is believed to have been filed by Cemig board members representing minority shareholders. US-based power companies Mirant and AES, together with Brazil's Opportunity Fund, own 33% of Cemig shares. Cemig has 5,633MW in generating capacity, most of which is hydroelectric, and distributes natural gas. CONTACT: COMPANHIA ENERGETICA DE MINAS GERAIS Luiz Fernando Rolla, Investor Relations Phone: + 011-5531-299-3930 Fax: + 011-5531-299-3933 E-mail: lrolla@cemig.com.br; or ORGANIZACOES GLOBO: Delays IPO, Key Executive Resigns ----------------------------------------------------- Brazil's largest media group, Organizacoes Globo, decided to put off plans for an initial public offering intended to raise cash to pay on its US$2.63-billion debt, reports Bloomberg. The Company, controlled by Brazil's Marinho family, attributed the delay to "a new market reality" to which the Company must adapt to before any changes in its shareholders' structure. The decision came three months after announcing the plans, underscoring the difficulty Brazilian companies have raising funds and attracting investments in the current capital markets. The media group must now count on US$200 million that the Marinhos are raising from the sale of local television affiliates to reduce its debt. In a related report, Organizacoes Globo also announced that the president of its financial holding company has left his post. Henri Philippe Reichstul stepped down as president of Globo Comunicacoes e Participacoes SA, the financial holding unit. TV Globo Ltda., the Company's broadcasting arm, will take over the management of the financial unit, known as Globopar, as part of plan to cut costs. The change in leadership "will improve the group's efficiency and will bring a notable reduction in costs, as similar jobs are eliminated," Globo said in an e-mailed statement. Globopar's credit rating was downgraded twice this year by Standard and Poor's and Moody's Investors Service on concern a decline in advertising revenue and a 38% slump in the currency make it more difficult for the company to service its debt. Globopar and Organizacoes Globo have US$562 million in debt maturing this year and US$315.8 million due in 2003. To see financial statements: http://bankrupt.com/misc/globo_cabo.pdf CONTACT: NET SERVICOS DE COMUNICACAO S.A. CNPJ/MF n 00.108.786/0001-65 NIRE n 35.300.177.240 Companhia Aberta Rua Verbo Divino n 1.356 - 1 a, Sao Paulo-SP Contact: Leonardo P. Gomes Pereira Investor Relations and Chief Financial Officer URL: http://globocabo.globo.com/ GLOBO COMUNICACOES E PARTICIPACOES - GLOBOPAR Rua Afranio de Melo Franco 135/4 andar- Leblon Rio de Janeiro - RJ CEP: 22430-060 Phone: (21) 240.2000 Fax: (21) 259.6586 Home Page: www.globopar.com.br Contacts: Mr. Roberto Marinho, President - Board of Directors Mauro Molchansky, Executive Director Marcos Carneiro, Director - Corporate Relations ========= C H I L E ========= MADECO: First Phase of Capitalization Misses Target --------------------------------------------------- Copper cable manufacturer Madeco SA failed to raise enough money during the phase one of a capital increase to meet short-term bank debts. The initial round of Madeco's capital increase totaled CLP37.01 billion (US$1=CLP744.80), the Company told Santiago's securities regulator SVS on Wednesday. At about US$49.69 million, the capital increase falls well short of the US$60 million the Company needs to pay to meet short-term bank debts. Under a special mechanism set up by Madeco with Banco de Chile, those taking part in the first phase, which ended on September 23, will get their money back if the debt-ridden company fails to raise a minimum of CLP47 billion (US$63.2 million) or sign contracts with creditor banks to reschedule debts. Madeco's majority shareholder, the Luksic group's Quinenco holdings and its subsidiaries, which already hold a 56.5% interest in the Company, were virtually the only subscribers in the first phase, taking down CLP35.4 billion of the deal. The capital increase remains open until October 8 but shareholders must now subscribe directly to the issue and will not receive the benefits provided under the scenario with Banco de Chile. The shares can be paid for either in cash or by swapping debt. Under the capital increase, which opened September 9, Madeco issued 1.8 billion shares at CLP35 each. The aim had been to raise US$90 million but given the weaker Chilean peso in recent weeks, even if the issue were fully subscribed it would only be worth some US$85 million. If successful, the Company plans to use US$60 million of the capital increase to pay off 50% of its short-term debt of US$120 million while the other half would be paid off over seven years with three years' grace. Any remaining funds would be used as working capital. Madeco has been undergoing financial restructuring after problems in Argentina and Brazil hit company earnings, making payment on its US$325 million in debt difficult. The Company hired investment bank Salomon Smith Barney late last year to help it with the restructuring. The debt consists of roughly US$100 million in long-term bonds, US$120 million in bank loans and US$100 million related to Madeco's subsidiaries. Beyond cables, Madeco makes finished and semi-finished non- ferrous products based on copper, aluminum, related alloys and optical fiber as well as flexible packaging products for use in the mass consumer market for food, snacks and cosmetics products. To see latest financial statements: http://bankrupt.com/misc/Madeco.doc CONTACT: MADECO S.A. Ureta Cox, 930 San Miguel, Santiago, Chile Phone: 56-2 5201461 Fax: 56-2 5516413 E-mail: mfl@madeco.cl Home Page: http://www.madeco.cl Contacts: Oscar Ruiz-Tagle Humeres, Chairman Albert Cussen Mackenna, Chief Executive Officer Investor Relations Phone: 56-2 5201380 Fax: 56-2 5201545 E-mail: ir@madeco.cl RESTRUCTURING ADVISER: 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 =============== C O L O M B I A =============== EDT: ETB Considers Acquisition, Awaits Official's Decision ---------------------------------------------------------- ETB, a regional telco based in Bogota, Colombia is currently studying plans to acquire its insolvent counterpart in Baranquilla, EDT. Citing ETB President Paulo Orozco, Business News Americas reports that the acquisition would be conditioned on cleaning up EDT's balance sheet. Orozco said, "The mayor [of Baranquilla] must determine whether the money needed to make that transformation will be taken out of the budget for health, education and public works, or if it will be done with external capital. In whichever scenario, we are ready to help, but there must be a decision to not prolong the Company's agony." EDT's downfall was caused by the Company's failure to cover the sizable pension and labor obligations it faces. Local politicians also used the Company in giving political favors, according to Pyramid Research senior Analyst Carlos Rodriguez. Colombia's public services regulator aided the ailing company in May 2000. For the first quarter since the intervention, company reported profits of COP4.27 billion (US$1.59 million). The net loss for the same quarter was down to COP35.4 billion from COP70 billion for the same quarter of the previous year. According to the regulator, liquidating EDT takes approximately COP416 billion. Telco's workers need severance pay amounting to COP70 million, the pension fund requires COP196 billion and other debts add up to COP194 million. EDT has assets of COP485 billion and liabilities of COP255 billion ETB is a privately structured company, allowing it to raise cash on the public market but the municipality of Bogota owns 98 percent of it. Currently, ETB is trying to raise COP300 billion through a public share offering. Rodriguez expressed his opinion that ETB acquiring EDT is very possible, if the liability problems can be worked out. He added that ETB, which has about 200 million lines in service, will likely close attention to smaller telcos, such as ETELL operating near Bogota. Rodriguez also said that ETB's plans are often hampered by local politics. Bogota's mayor, who had poor relationship with the city council, appoints the management. The city council makes the final decisions involving ETB. PAZ DEL RIO: Workers Prefer Co-Op to Private Ownership ------------------------------------------------------ Workers of the embattled Colombian maker Acerias Paz del Rio would rather form a workers' co-operative to manage the Boyaca- based steel mill than see the Company handed over to a private operator as had been suggested by President Alvaro Uribe, reports Business News Americas. "They are now negotiating to see if all parties involved, the government and the Company, can reach an agreement," Juan Manuel Lesmes, director of sector association Andi-Fedemetal, said. President Uribe has expressed willingness to take out a credit for the Company and have the Colombian government act as guarantor. But according to him, he would only do this if Paz del Rio fulfills two conditions: first, the Company's management has to be free of political interference; and secondly, it must be handed over to a third party operator. Given the decision by Paz del Rio workers to reject a private operator, a long-term credit for US$42 million that the Company has been negotiating with the Japanese government could run aground. The reason is that the Japanese would tie the credit to the intervention in the Company of Colombia's central government. Meanwhile, Paz del Rio, which filed for bankruptcy protection in 1995, is now longer selling under credit. The measure was adopted to help recover US$5.3 million in the short term. However, Acerias has debts with creditors totaling US$47 million, while it owes employees and former employees some US$85 million. After years of being in the red, the Company managed to eek out a profit of COL483 million (US$212,000) in the first quarter of 2002. The results were attributed to improvements in efficiency and an increase in the price of metals, as well as the devaluation of the Colombian peso currency in the final months of 2001. CONTACT: ACERIAS PAZ DEL RIO S.A. Carrera 8 # 13-31, Pisos 7 al 11 Bogota, D.C. Phone: (091) 282-8111 Fax: (091) 282-6268 282-3480 E-mail: apdr@multi.net.co ============= J A M A I C A ============= AIR JAMAICA: Overcomes Turbulent Times, Growth Continues -------------------------------------------------------- Caribbean carrier Air Jamaica has grown to become the fourth largest international carrier serving the United States, according to the company's vice president of marketing and sale, Allen Chastanet. He added that the airline would be the 12th largest airline in the U.S. - if it were American. On a popular radio show in Antigua, Chastanet claimed that despite heavy losses after the WTC bombing, the carrier continued to develop. Air Jamaica sustained losses of approximately US$70 million as a result of last year's September 11 terrorist attacks against the United States. He also assured the radio's listeners that the carrier would keep its dedication to customer service, and is planning to grow in order to reduce losses. The airline plans to increase its capacity at existing U.S. gateways. This would enable the airline to take advantage of fixed costs without using new resources for sales, marketing and maintenance. In February, Air Jamaica will have two daily flights each for Chicago and Los Angeles, while new destination Curacao can expect four to five flights per week by end of November. Service to American and CARICOM nation of Belize will be inaugurated on Nov. 21. Air Jamaica's chairman, Gordon "Butch" Stewart said that the airline may well need Government assistance but that it had not yet sought that route choosing instead to fight on. He said that the question of whether Air Jamaica should go public and thereby raise adequate funds to address its plight though mooted was not feasible at this point in time. "We need to ensure that our balance sheet is healthy and that we are able to pay a dividend before we can even consider that possibility and we are some way from that." =========== M E X I C O =========== ALESTRA: S&P Issues Warning On Credit Rating -------------------------------------------- Standard & Poor's on Wednesday threatened to cut Mexican long- distance carrier Alestra SA's corporate credit and senior notes ratings to `D' should the Company complete its repurchase and exchange note offer, reports Dow Jones. The current rating is CC with a negative outlook. Earlier, Alestra revealed it filed a registration statement with the U.S. Securities and Exchange Commission proposing to repurchase part of US$570 million in bonds at a discount. In the filing, the Company, whose equity sponsors include AT&T Mexico and a joint venture between Grupo Alfa and Bancomer, proposed to buy back its US$270 million of 12 1/8 bonds maturing in May 2006 and US$300 million of 12 5/8 bonds due in May 2009, exchanging them for new debt. S&P, in a press release, said that the exchange offer "will represent a deep discount to the liquidation preference of the existing bonds, tantamount to a default on the senior notes, which represent the bulk of Alestra's debt." Alestra's total debt currently amounts to US$619 million. It has a cash position of US$26 million. The Company has said that that it doesn't have the cash in hand to make a US$35 million debt payment in November. The price and interest to be paid for the notes have not been set yet. The notes due 2006 are expected to be exchanged into senior Step-Up notes due 2008; while the notes due 2009 would be exchanged into senior Step-Up notes due 2011. Alestra seeks to include a cash alternative that will allow it to repurchase a portion of the outstanding notes. The Company's corporate credit rating will be reassessed and the final determination will depend on the amount of debt purchased and the tenor of its existing debt, S&P added. The agency said it expects that the Company will continue to suffer from weak market conditions and a heavy debt burden. To see Financial Statement: http://bankrupt.com/misc/ALESTRA.pdf CONTACT: ALESTRA S.A. DE R.L. DE C.V Av. Paseo de las Palmas No. 405 Col. Lomas de Chapultepec 11000 Mexico, D.F. Phone: 5201-5020 5201-5019 Fax: 5201-5031 5201-5027 Web site: http://www.alestra.com.mx/cgi- Executives: Rolando Zubiran, Chief Executive Officer Eduardo Lazos, V.P. Engineering & Ops Investor Relations: Alberto Guajardo Phone: (52-818) 625-2219 E-mail: aguajard@alestra.com.mx FINANCIAL ADVISOR: MORGAN STANLEY Worldwide Headquarters 1585 Broadway New York, NY 10036 Phone: (212) 761-4000 Fax: (212) 761-0086 Home Page: http://www.morganstanley.com/ Contact: Investor Relations Phone: (212) 762-8131 In Mexico: MORGAN STANLEY & CO. INCORPORATED Oficina de Representaci>n en M,xico Andres Bello 10 8o Piso Colonia Polanco 11560 M,xico, D.F. Phone: 011-525-282-6700 Fax: 011-525-282-9200 INTERNATIONAL THUNDERBIRD: Update on Work-Out with Creditors ------------------------------------------------------------ International Thunderbird Gaming Corporation (TSX:INB) previously reported that its "going concern" challenges may be overcome in part if the Company's major creditors were willing to enter into "work-out" agreements with the company. An official press release was issued to update the current dealings. The Company is no longer in default with respect to the Prime Receivables and MRG loans. Prime has agreed to a payment plan on the $730,000 balance whereby the Company will begin payments of $10,000 per month for 73 months. No interest will be charged on the $730,000 current balance unless the Company collects on one or more of its receivables, including the lawsuit filed by the Company against the Spotlight 29 tribe. The Company has entered into a Memorandum of Understanding with MRG whereby all amounts owed to MRG (approximately $3,000,000) will be re-paid over a period of 48 months at 14% interest. $235,000 of the loan can be converted into 2,350,000 shares of Thunderbird at US$0.10 per share. This conversion feature will increase the fully diluted number of shares outstanding to 25,865,868 from 23,515,868 currently. MRG is currently holding 2,330,000 convertible warrants at a conversion price of .65USD for 2,000,000 shares and .35USD for 330,000 shares. These warrants will be terminated and replaced with the new warrants. In no event shall such conversion rights result in MRG owning greater than 10% of the outstanding common shares. This conversion feature is subject to approval by the Toronto Stock Exchange. The new MRG loan will be secured by the Company's 50% interest in the Panama operation and will be contingent on approval by the Panama Gaming Board. The MRG "work- out" is also contingent on the Company raising $1,400,000 for use in the Company's Venezuelan operation. The $1,400,000 will be used in conjunction with other funds to pay-off the "Del Sur Bank" loan in Venezuela. The Company's affiliate, Fiesta Casino Guayana (FCG) is being charged 50% to 60% interest rates and the new funding will substantially improve FCG's cash flow which in turn will improve the Company's cash flow. The "work-out" will also improve the Company's working capital deficiency by 33%. Other news: The Company is pursuing the renewal of its concession in Guatemala and hopes to have an arbitration decision by September 30, 2002. The Company filed its NAFTA claim against the Mexico government on August 23, 2002 and expects to be engaged in a long and tedious arbitration process. The Company continues to pursue collection on other receivables. The Company is preparing to open a fifth Casino in the Republic of Panama. In addition, the completion of the El Panama Casino expansion is ahead of schedule. On Oct 15, 2002 Fiesta Chitre will open in the Province of Los Santos, Republic of Panama located in the Barcelo Los Guayacanes Hotel. Fiesta Chitre will be home to 66 state of the art Slot machines and 5 tables representing 35 positions. This casino will cater to the local markets of Chitre, Aguadulce and Las Tablas, Panama. On Nov 15, 2002 the second expansion of Fiesta Casino El Panama in Panama City will open. This addition of 6,000 square feet will house approximately 120 new slots, 4 new table games and a luxurious VIP gaming area. In addition, the upgrade of the entire facility is expected to fortify Fiesta's dominant market share position. The Company's CFO, Dave Michelson has submitted his resignation effective October 1, 2002. The Company wishes Mr. Michelson success in his future endeavors as he pursues other interests and thanks him for his dedicated service to the Company over the past five years. The Company's board of directors has elected Booker T. Copeland III to fill the position of CFO. Mr. Copeland has functioned with distinction as the Company's controller for the past four years. Based on this performance and his 18 years of diverse accounting and financial management experience, the Company is confident that Mr. Copeland's financial leadership will offer significant contributions to the Company's future development. The Company will not add additional executive staff in the San Diego office and will continue to move management offshore. There are currently seven employees in the San Diego corporate office, including the Company's President, Legal Counsel, Chief Financial Officer and Administrative Staff. The Company has laid off its Development Director and will pursue development with its existing staff. International Thunderbird Gaming Corporation is an owner and manager of international gaming facilities. Additional information about the Company is available on its World Wide Web site at www.thunderbirdgaming.com. On behalf of the Board of Directors, Jack R. Mitchell, President and CEO Cautionary Notice: This release contains certain forward-looking statements within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential revenue and future plans and objectives of the Company are forward-looking statements that involve risk and uncertainties. There can be no assurances that such statements will prove to be accurate and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's forward-looking statements include competitive pressures, unfavorable changes in regulatory structures, and general risks associated with business, all of which are disclosed under the heading "Risk Factors" and elsewhere in the Company's documents filed from time-to-time with the TSX and other regulatory authorities. CONTACT: INTERNATIONAL THUNDERBIRD GAMING CORPORATION Albert Atallah, 858/451-3637 Email: info@thunderbirdgaming.com Website: www.thunderbirdgaming.com =========== P A N A M A =========== AES PANAMA: Readies Startup Of New Unit --------------------------------------- AES Panama, a unit of US power company AES, is now preparing for the startup of its 87MW turbine at its Bayano hydro plant. AES Panama president and general manager David Sundstrom, in a Business News Americas report, revealed that the official startup date will be October 3, but the new unit should be operational by September 28. Tests are in progress, said Sundstrom. The new unit will line up alongside two 75MW turbines that have been in service since the plant was built in 1976. After the installation of the unit three, AES will begin work on an upgrade program at units one and two, increasing capacity to 87MW each, Sundstrom said. The US' General Electric and France's Alstom signed a US$40 million contact for the Bayano contract with AES Panama in March 2001. The work is now about two-thirds complete in terms of both the investment funds deployed and physical work carried out, Sundstrom said. The project completion date is end-2003. AES is a leading global power company comprised of contract generation, competitive supply, large utilities and growth distribution businesses. The company's generating assets include interests in 177 facilities totaling over 59 gigawatts of capacity, in 33 countries. AES's electricity distribution network sells over 108,000 gigawatt hours per year to over 16 million end-use customers. For more general information visit our web site at www.aes.com or contact investor relations at investing@aes.com. CONTACT: AES Kenneth R. Woodcock, 703/522 1315 ============= U R U G U A Y ============= BANCO DE CREDITO: St George To Acquire 60% ------------------------------------------ A recently-concluded meeting between Uruguay's economy minister, Alejandro Atchugarry, and St George Ltd resulted in an agreement that allowed the latter to acquire 60% of the suspended bank Banco de Credito. According to St George representative Elizeo Christiano Netto, St George will own 60% of the shares in the new Banco de Credito while depositors and the government will be minority shareholders. Christiano also said Banco de Credito would announce the date of its re-opening in three or four days. Banco de Credito will now begin talks with Uruguay's banking employees' union AEBU to modify labor contracts at the bank, Christiano said. Banco de Credito was intervened and suspended together with several other banks in Uruguay in July and August due to liquidity and capital problems. *********** 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. 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