/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/021007.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, October 7, 2002, Vol. 3, Issue 198 Headlines A R G E N T I N A AEROLINEAS ARGENTINAS: Obtains Additional $210M SEPI Payment PEREZ COMPANC: Brazil's PT Questions Stake Price PEREZ COMPANC: Pecom Issues US$598.3M In Debentures TELECOM ARGENTINA: Presenting New Info On Debt Restructuring Soon B E R M U D A ANECO: Creditors Get Payout B R A Z I L ACESITA: Fitch Assigns BBB To Corporate, Debenture Debts AES CORP: Launches Exchange Offer for Notes Maturing `02 & `03 AES CORP.: Fitch Lowers Notes' Rating To 'B', Watch Negative BRAZILIAN CORPORATIONS: Fitch Says Election Will Affect Ratings TELESP CELULAR: Shares Rise 7.2% VARIG: Pilots Meet To Vote On Strike C H I L E ENAMI: Seeks New Sulfide Minerals Suppliers PLANETVIAJE: Parent Shutters Site C O L O M B I A BBVA BANCO GANADERO: Fitch Downgrades Ratings D O M I N I C A N R E P U B L I C EDENORTE/EDESUR: Likely To Confront Courtroom Battle N I C A R A G U A INTERBANK/BANCAFE/BAMER/BANIC: Government Announces Asset Sale T R I N I D A D & T O B A G O BWIA: CEO Bares Restructuring Plan BWIA: Possible Bankruptcy Creates Concern On Industry BWIA: New Rival Poses `No Threat' ================= A R G E N T I N A ================= AEROLINEAS ARGENTINAS: Obtains Additional $210M SEPI Payment ------------------------------------------------------------ Spanish state holding company SEPI paid its formerly owned Argentine airline Aerolineas Argentinas SA an additional US$210 million in order to meet the terms of the sale agreement, according to Cinco Dias newspaper. SEPI sold Aerolineas Argentinas to Air Comet for the assumption of US$615 million in debt. The Spanish government holding company kept the other half of the airline's US$1.2 billion debt. The US$210-million payment was a "transfer balance" payment based on debts that surfaced after the sale agreement was signed and on the write- offs of losses, the newspaper reports, adding, Sepi had already given the airline $548 million. Air Comet said the agreement requires Sepi to pay another US$213 million. Sepi said it has met its commitments, but recognizes it might be legally forced to pay more. CONTACT: AEROLINEAS ARGENTINAS Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA Phone: (54-11) 4310-3000 Fax: (54-11) 4310-3585 E-mail: volar@aerolineas.com.ar Home Page: www.aerolineas.com.ar Contact: Patricio Zabalia Lagos, President AIR COMET Baha de Pollensa, 21-23 Edificio Airplus 28042 Madrid Phone: 913 993 674 Fax: 913 291 146 E-mail: airplusops@jet.es Contact: Antonio Mata, presidente de Air Comet PEREZ COMPANC: Brazil's PT Questions Stake Price ------------------------------------------------ Brazil's Workers Party (PT) is concerned about the amount that federal energy company Petrobras is paying for the control of Argentina's Perez Companc. In a Business News Americas report, PT energy advisor Luiz Pinguelli revealed that if the party wins the presidential election, it will review the price. "We support the international expansion of Petrobras. But the value [being paid for Perez Companc] is very high, and we'll have to analyze it," Pinguelli said. "Petrobras is paying US$1 billion for Perez Companc, which has interests all across Latin America, but its crude oil production is less than that of one of Petrobras' platforms," Pinguelli added. The PT's presidential candidate, Luiz Inacio Lula da Silva, currently leads in polls ahead of Sunday's first round vote. If Lula does not secure more than half the valid votes he will move into a second round run off against the second-placed candidate, probably the government's man, Jose Serra. Petrobras has agreed to purchase a controlling 58.6% stake in Perez Companc for about US$1.1 billion. The Argentine company has debts of about US$2 billion, and controls energy company Pecom Energia. Brazil's government owns a controlling share in Petrobras. The PT may arrive too late to halt the deal; Petrobras and Perez Companc expect to close the deal within days, and Pinguelli would not clarify exactly what the party proposes if the deal is done by the time Lula would take over on January 1. CONTACT: PECOM ENERGIA S.A. DE PEREZ COMPANC S.A. Maipo 1 - Piso 22 - C1084ABA Buenos Aires, Argentina Phone: (54-11) 4344-6000 Fax: (54-11) 4344-6315 URL: http://www.pecom.com.ar PEREZ COMPANC: Pecom Issues US$598.3M In Debentures --------------------------------------------------- Argentine energy company Pecom Energia, a unit of Perez Companc, was due to issue Friday US$598.3 million in debentures, part of the US$2.5 billion in debentures it had sought regulatory approval for the week before. The issuance will include a J class series of US$75.7 million, US$286.4 million of K class, US$55.6 million of L class, and US$180.6 million of M class bonds. The J class commercial paper's interest rate was set at 5.52%, the K and L class at 5.77%, and the M class debt was set at 6.52% interest. Pecom's debt renegotiation, which included a US$845.2-million debt swap in August, is crucial to finalizing the deal between Perez Companc and Brazil's federal energy giant Petrobras, which agreed in July to buy 58.6% of the group for US$1.1 billion. TELECOM ARGENTINA: Presenting New Info On Debt Restructuring Soon ----------------------------------------------------------------- Telecom Argentina Stet-France Telecom SA is expected to present new information about its US$3.2-billion debt restructuring plan to the public this week or maybe in the "next few" days, Dow Jones Newswires reports, citing a spokeswoman at one of the Company's foreign parents, Telecom Italia SpA. Telecom Argentina first announced its restructuring plan last spring but only kicked off talks with creditors in mid-September. Last week, the Company held a meeting with local and foreign bank creditors. People involved in that meeting declined to comment on the events due to confidentiality agreements. Morgan Stanley has sat for many months on its mandate to handle the restructuring deal but recently began doing serious work on it, according to a source familiar with the matter. Telecom Argentina hasn't announced anything that would imply any time constraints the Company has for making decisions about the debt restructuring right now. Still, market talk has it that Mexican telecommunications giant Telefonos de Mexico SA, or Telmex, offered to buy Telecom Argentina only on condition that the Company first restructure its debt. The Mexican operator, however, said several months ago that no acquisition of Telecom Argentina is in the works. Also, just recently, Jose Luis Manzano, who served as a minister under former Argentine President Carlos Menem, offered US$300 million to buy a stake in Telecom Argentina. Buenos Aires-based investors would also participate in the deal. To see financial statements and accompanying notes: http://bankrupt.com/misc/Telecom_Argentina.doc 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 ============= B E R M U D A ============= ANECO: Creditors Get Payout --------------------------- Creditors of Aneco Reinsurance will finally recover part of their funds more than a decade after the Bermuda-based company was put into liquidation, reports the Royal Gazette. Aneco has about 200 creditors and total liabilities of US$100 million. According to the Company's liquidators, PriceWaterhouseCoopers, creditors are to get a 70% pay out, in accordance with the June creditors' arrangement. Earlier, Aneco was awarded more than US$51 million, after the House of the Lords decided that Johnson & Higgins should pay Aneco Re all loses suffered from failed reinsurance contract. Aneco shareholders received the welcome news after years of legal battles, including between the Company's former controlling director Mark Hardy and liquidators. In a press statement, liquidators said, "Whilst the timescale has been protracted and frustrating, the 70 percent pay out should be regarded as significant and great credit must be given to the creditors committee for their patience, perseverance and support." But Hardy contests the finding that the Company is insolvent. He added that this could result in "a very long war". Hardy plans to continue the legal battle against the liquidators. CONTACTS: PriceWaterhouseCoopers LLD 1301 Avenue of the Americas New York NY 10019 Tel. No. 6464714000 Fax: 646-394-1301 Contact: Andrew Ratcliffe - Global Chairman Samuel A. DiPiazza - Global CEO Geoffrey E. Johnson - Global CFO =========== B R A Z I L =========== ACESITA: Fitch Assigns BBB To Corporate, Debenture Debts -------------------------------------------------------- Fitch assigned a BBB rating to the Brazilian stainless steel maker Acesita's corporate and debenture debt with a negative ratings watch. According to Fitch, Acesita's main credit risks include its high level of indebtedness especially in foreign currency, risks in short-term refinancing and exposure to the cyclical nature of the world's inox steel market. In the last quarter of this year, Acesita will have to pay down BRL175 million (currently US$49mn) in local debentures that mature this December. Acesita's ratings are positively affected by its dominant position in the Brazilian market and significant barriers for competition, Fitch said. Having the largest steel maker in the world as its parent company - Luxembourg-based Arcelor - also improves Acesita's debt ratings. Besides providing operational and technical support, Arcelor assists its Brazilian subsidiary by lending it its marketing network outside of the Mercosur region. Fitch believes there is a lot of market potential in Brazil where per capita consumption of stainless steel stood at 1kg in 2001 compared to 7-9kg in developed market economies. Acesita is also expected to increase exports to 40-50% of its stainless steel production. Last year, the company exported 264,000t of inox steel, or 37% of its total sales. Acesita's net losses ballooned 114% to BRL239 million (US$80 million) for the first half of this year compared to the same period last year. Its heavy debts stem from a round of investments totaling US$780 million starting in 1992 and ending in the first half of 2002. The Company expects its results to improve in the second half of the year. CONTACT: ACESITA Avenida Joao Pinheiro, 580 30130-180 Belo Horizonte, Minas Gerais, Brazil Phone: +55-31-3235-4200 Fax: +55-31-3235-4294 URL: http://www.acesita.com.br Contacts: Luiz A. de Lima Fernandes, President Bernardo C. Marie Del Litto, Industrial Director Guilherme Amado, Financial Superintendent AES CORP: Launches Exchange Offer for Notes Maturing `02 & `03 -------------------------------------------------------------- The AES Corporation (NYSE: AES), a major provider of electricity in the U.S., U.K. and Latin America, based in Arlington, Va., announced Thursday that it had commenced an offer to exchange a combination of cash and new senior secured securities for up to $500 million of senior notes due in 2002 and 2003. The offer affects $300,000,000 aggregate principal amount outstanding of its 8.75% Senior Notes due 2002 ("2002 Notes") and $200,000,000 aggregate principal amount outstanding of its 7.375% Remarketable and Redeemable Securities due 2013, which are puttable in 2003 ("ROARs"). Pursuant to the exchange offer, AES is offering the following: (1) for each $1,000 principal amount of its 2002 Notes, $500 in cash and $500 principal amount of a new issue of its 10% senior secured notes due 2005 and (2) for each $1,000 principal amount of its ROARs, $1,000 principal amount of its new 10% senior secured notes due 2005. In addition, holders that tender prior to October 25, 2002 and do not withdraw such securities will, if the exchange offer is consummated, be entitled to an early tender bonus payment in the amount of $15 for each $1,000 principal amount of 2002 Notes tendered and $5 for each $1,000 principal amount of ROARS tendered. Consummation of the exchange offer is subject to a number of significant conditions, including, without limitation, that (1) valid and unwithdrawn tenders are received representing at least 75% in aggregate outstanding principal amount of the 2002 Notes and the ROARs on a combined basis, (2) AES' concurrent entry into the new senior secured credit facility (described below), (3) the valid amendment of certain documentation executed in connection with the issuance of the ROARS in order to permit the consummation of the exchange offer and (4) the absence of certain adverse legal and market developments. The exchange offer will terminate at 5:00 p.m. on November 8, 2002 unless extended (the "Expiration Date"). Tenders of the 2002 Notes and the ROARs may be withdrawn at any time prior to the later of October 25, 2002 and the time AES announces that it has received valid and unwithdrawn tenders representing at least 75% in aggregate principal amount of the 2002 Notes and the ROARs on a combined basis but in no event later than the Expiration Date. The new senior secured notes will be secured equally and ratably with all debt outstanding under the new senior secured credit facilities, by first-priority liens, subject to certain exceptions and permitted liens, on (i) all of the capital stock of domestic subsidiaries owned directly by AES and 65% of the capital stock of certain foreign subsidiaries owned directly by AES and (ii) certain intercompany receivables, intercompany notes and intercompany tax sharing agreements owed to AES by its subsidiaries. In addition, the new senior secured notes will be subject to a mandatory offer to repurchase with a portion of the net cash proceeds received from certain asset sales by AES. The offering of the new senior secured notes in the exchange offer is being made only to "qualified institutional buyers" and "persons other than a U.S. person" located outside the United States, as such terms are defined in accordance with Rule 144A and Regulation S of the Securities Act of 1933, as amended. The new senior secured notes will not be registered under the Securities Act of 1933, or any state securities laws. Therefore, the new senior secured notes may not be offered or sold in the United States absent an exemption from the registration requirements of the Securities Act of 1933 and any applicable state securities laws. This announcement is neither an offer to sell nor a solicitation of an offer to buy the new notes. Concurrently, AES is also launching a new multi-tranche $1.6 billion senior secured credit facility, which will be secured equally and ratably with the new senior secured notes. The proposed bank facility will replace the following existing facilities: the $850 million revolver due March 2003, the $425 million term loan due August 2003, the $262.5 million term loan to AES subsidiary AES EDC Funding II L.L.C. due July 2003, and the (pound) 52.3 million letter of credit facility. Consummation of the new senior secured facility is subject to a number of conditions, including the completion of the aforementioned exchange offer for the bonds and participation of all of its existing lenders. CONTACT: AES Corp. Kenneth R. Woodcock, 703/522-1315 AES CORP.: Fitch Lowers Notes' Rating To 'B', Watch Negative ------------------------------------------------------------ Fitch Ratings has lowered the ratings of The AES Corp.'s senior unsecured notes to 'B' from 'BB-' in response to Thursday's announced launch of a $1.6 billion multi-tranche three-year senior secured credit facility (senior credit facility) and offer to exchange up to $500 million of senior notes with a combination of cash and secured notes. Fitch also lowered the ratings of AES's senior subordinated notes to 'B-' from 'B' and convertible junior debentures and trust preferred convertible preferred securities to 'CCC+' from 'B-' while leaving the ratings of its senior subordinated and junior subordinated notes unchanged at 'B-'. AES's ratings remain on Rating Watch Negative. Due to Fitch's policy regarding the linkage of ratings of subsidiaries with those of a lower-rated parent, Fitch has also lowered the ratings of AES's subsidiary IPALCO Enterprises and but left unchanged the ratings of Indianapolis Power and Light (IP&L), as shown in the table below. These ratings are also placed on Rating Watch Negative, reflecting the companies' ongoing exposure to AES. The ratings of CILCORP and Central Illinois Light Company (CILCO) remain unchanged and on Rating Watch Evolving pending completion of their committed sale to Ameren Corporation, subject to certain regulatory approvals. Fitch views the proposed transactions as a positive step for AES Corp. with the prospect to eliminate grave refinancing risks that currently overshadow the corporate credit. If the bank refinancing and exchange offer are successful, AES will have minimal debt maturities until the fourth quarter of 2005. Assuming that AES is successful in closing the senior credit facility and the exchange offer, Fitch expects to rate the senior secured bank facility and the senior notes 'BB-', remove the Negative Rating Watch. The Rating Outlook would then be Stable on the senior notes and bank facility. On the other hand, if these transactions fail, the newly assigned 'B' senior unsecured rating may be further reduced to reflect the company's imminent liquidity crisis and refinancing risk. Proceeds from the senior bank facility will be used to replace the following existing facilities: $850 million revolver due March 2003, $425 million term loan due August 2003, $262.5 million term loan to AES subsidiary AES EDC Funding II L.L.C. with a current effective maturity date of July 2003, and the EUR$52.3 million letter of credit facility. AES is making two exchange offers - firstly to exchange its $300 million 8.75% senior notes due December 2002 with an offer combining 50% cash redemption at par and 50% secured notes due 2005 and secondly an offer to exchange its $200 million 7.375% remarkable and redeemable securities due 2013 with its first remarketing date in June 2003 with $200 million of secured notes due 2005. Both the senior secured bank facility and the secured notes will be secured equally and ratably by all of the capital stock of each of the first tier domestic subsidiaries, which act as intermediate holding companies for AES' operating companies, and 65% of the capital stock of each material first tier foreign subsidiaries. While the revolver maintains exclusive upstream guarantees from certain subsidiaries of AES, the new senior secured notes and the new senior secured bank facility will be subject to mandatory prepayment from asset sales. AES's ratings reflect Fitch's notching policy and the relatively thin residual equity coverage expected to be afforded to the existing debt classes after paying off the senior secured noteholders and senior credit facility lenders. In the next two years, relieved from the burden of heavy debt maturities, the company plans to pay down the restructured debt using excess parent operating cash flow and proceeds from more asset sales. Barring any further unforeseen deterioration in AES' businesses worldwide, the company's credit metrics are expected to stabilize and see potential for improvement in late 2003/early 2004. (For details on AES's credit profile and recent press releases, please visit the Fitch Ratings web site at 'www.fitchratings.com'). The revised ratings of IPALCO are: IPALCO --Senior unsecured debt lowered to 'BB' from 'BB+'; --Rating remains on Rating Watch Negative. Ratings of the following subsidiaries remain unchanged : IP&L --First mortgage bonds and secured pollution control revenue bonds 'BBB-'; --Senior unsecured debt 'BB+'; --Preferred stock 'BB+'; --Ratings remain on Rating Watch Negative. CILCORP --Senior unsecured debt 'BBB-'; --Rating remains on Rating Watch Evolving pending consummation of sale of CILCORP to Ameren. CILCO --First mortgage bonds and secured pollution control revenue bonds 'BBB'; --Senior unsecured debt 'BBB-'; --Preferred stock 'BBB-'; --Commercial paper 'F2'; --Ratings remain on Rating Watch Evolving. The AES Corp., founded in 1981, is among the world's largest power developers. It generates and distributes electricity and is also a retail marketer of heat and electricity. AES owns or has an interest in 182 plants, with more than 63,000 megawatts, in 31 countries and also distributes electricity in 11 countries through 21 distribution companies. Contact: Mona Yee, CFA 1-212-908-0557 or Ellen Lapson, CFA 1-212- 908-0504, New York. Media Relations: James Jockle 1-212-908-0547, New York. BRAZILIAN CORPORATIONS: Fitch Says Election Will Affect Ratings --------------------------------------------------------------- Capital markets have reacted negatively to the possibility of Luiz Inacio da Silva winning the Brazilian presidential election and should the results of the election fail to return investor confidence to Brazil in the near term, Fitch Ratings will likely take negative rating action on several corporates according to a new report. Fitch has analyzed all debt obligations of companies involved in the debt capital markets to determine which corporates are likely to face liquidity issues after the election, should the credit environment remain tight. Over the next 12 months the companies have $9 billion of debt coming due with (26%) trade finance, (13%) euro/yankees, (13%) BNDES and (9%) import finance. 'From a credit perspective, Fitch Ratings has always positively factored into its ratings of exporters the availability of working capital finance via international trade finance lines,' said Joseph Bormann, Senior Director, Fitch Ratings. 'Should the international banks discontinue trade finance for an extending period of time after the upcoming election, it is likely that Fitch will downgrade some corporate ratings.' The report analyzes which corporates have prepared for a crisis in Brazil and ranks them according to the preparation. An important factor is how much cash these companies hold outside of Brazil. Petrobas, Aracruz, AmBev and Alcoa Aluminio are noted as having the highest liquidity while Acesita, BSE and Eletropaulo are among the companies with the lowest liquidity. Contact: Joseph Bormann, CFA, 1-312-368-3349, Chicago. Media Relations: James Jockle 1-212-908-0547, New York. TELESP CELULAR: Shares Rise 7.2% -------------------------------- Telesp Celular Participacoes SA saw its preferred shares rise 20 centavos, or 7.2%, to BRL2.98, relates Bloomberg. "I think current share price of Telesp Celular doesn't justify its fundamentals," said John Carioba, a director of Banco Indusval SA in Sao Paulo. "The Company reduced dramatically its debt with the rights offer concluded last month." Brazil's largest wireless telephone company raised about BRL2.4 billion in a share sale and said it plans to use the proceeds to reduce debt. Prior to the share sale, Telesp Celular had around BRL2.8 billion in debt, around 15% of which was unhedged. Telesp Celular saw its losses balloon to BRL394 million (US$124 million) in the second-quarter of 2002, nearly tripling the BRL133-million loss in the same quarter last year. Net losses grew larger due to the volatile real mixed with a high volume of foreign currency debts. Telesp Celular 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: Pilots Meet To Vote On Strike ------------------------------------ Pilots of Brazil's Viacao Aerea Rio-Grandense SA (Varig), Latin America's biggest airline, were scheduled to meet Friday to vote on a strike to protest firings, according to a Bloomberg report. Varig has 1,400 pilots, 92% or 1,300 of which are members of the Varig pilots' association. According to the association's legal adviser, Alexandre Moraes, the pilots approved the meeting after Varig suspended talks over the firing of 60 pilots and a decision to put another 60 pilots on unpaid leave. Under Brazilian law, pilots can halt flights only 72 hours later after a strike is approved and after they have formally notified management of their decision allowed the Company to respond. A strike at Varig would cripple flights by Brazil's biggest carrier and add to losses at the airline, which hasn't posted a profit since 1997. Varig is under pressure from creditors to cut costs and raise cash to reduce about US$900 million in debt. "Depending on how many pilots adhere to the strike and the extent of the stoppage, it will be very bad for the Company," said Carlos Albano, an airline industry analyst at Uniao de Bancos Brasileiros SA in Sao Paulo. Varig is owned by its employees through Fundacao Ruben Berta, which controls 87% of the airline's voting shares. Rubem Berta contracted KPMG to assist in the restructuring of the cash- strapped airline. Critics believe that the nonprofit Rubem Berta foundation has hampered management at the airline. A pilots' union proposal to restructure the Company would reduce the stake of the foundation to 10% and remove company executives from the foundation's board. 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 KPMG Brazil Belo Horizonte Rua Paraba, 1122 13th Floor 30130-918 Belo Horizonte MG Telephone 55 (31) 3261 5444 Telefax 55 (31) 3261 5151 or Brasilia SBS Quadra 2 BL A N 1 Edificio Casa de Sao Paulo SL 502 70078-900 Braslia - DF Telephone 55 (61) 223 2024 Telefax 55 (61) 224 0473 ========= C H I L E ========= ENAMI: Seeks New Sulfide Minerals Suppliers ------------------------------------------- Chilean state minerals company Enami is now on the lookout for new suppliers of sulfide minerals to its Matta plant after Chilean mid-sized copper miner Punta del Cobre (Pucobre) suspended its deliveries beginning October 2. In January 2001, Pucobre and Enami signed a contract in which the former agreed to supply Enami's Matta concentrator with 1.65Mt of mineral over four years. Under the contract, Pucobre said it is entitled to halt deliveries of the material if the price of copper remains below US$0.70/lb for three months, as is the case at present. If the price rises above US$0.70/lb for three months it can restart the deliveries. The January contract followed arbitration that put an end to a two-year long dispute between the two companies. Meanwhile, according to an earlier edition of the TCR-LA, the government of Chile is actively negotiating with the creditor banks of Enami to offer them guarantees on the US$490-million debt of the state owned mining company, most of which is coming due and payable within the next months. The board of Enami has renewed its pledge for private investors to join some of the projects it has in the portfolio to be developed in 2003. CONTACT: ENAMI (Empresa Nacional de Mineria) MacIver 459, Santiago, Chile Phone: 637 52 78 637 50 00 Fax: 637 54 52 Email: webmaster@enami.cl Home Page: www.enami.cl/ Contact: Jorge Rodriguez Grossi, President PLANETVIAJE: Parent Shutters Site --------------------------------- Chilean Internet holding company Ilatin Holdings ILH (www.ilatinholdings.com) pulled the plug on Planetaviaje (www.planetaviaje.com) two years after launching the regional travel portal in October 2000, reports Business News Americas. The move was attributed to poor Internet penetration in Latin America and a lack of trust in online purchasing, which hampered its ability to meet sales and profit expectations. The site's closure is in stark contrast to ILH executive VP Patricio Millas' comment in August that a group of ILH board members and shareholders expected to acquire 50% of Planetaviaje that same month. The demise of Planetaviaje is even more surprising since the company's Chile country manager Carlos Bambach said in August 2001 the site would be profitable by end-2001. =============== C O L O M B I A =============== BBVA BANCO GANADERO: Fitch Downgrades Ratings --------------------------------------------- Fitch Ratings has downgraded its Support rating for Colombia's BBVA Banco Ganadero to '4T' from '3T' and downgraded its Long- term Local Currency rating to 'BB+' from 'BBB-'. At the same time, the bank's Long and Short-term Foreign Currency ratings of 'BB' and 'B', as well as its Individual rating of 'D' have been affirmed. The change in the Support rating to '4T', signifying that in our view, support from the bank's shareholder, Spain's Banco Bilbao Vizcaraya Argentaria (BBVA), is likely but not certain, reflects the tightening of Fitch's methodology based on recent experience with bank support, particularly in emerging markets. (For additional information, see Fitch Ratings' Bank Support Ratings Definitions Revised -- July 19, 2002). While we continue to factor the bank's strong ownership, which provides managerial expertise, higher uncertainty in the bank's operating environment, which may force shareholders to reassess the value of further investment in the bank, prompted the change in its Support rating. In turn, the bank's Long-term Local Currency rating was downgraded to reflect the bank's continued weak financial performance in the context of the challenging operating environment and the evolution of our view on shareholder support. The outlook on the Long-term Foreign Currency rating remains negative, in line with that of the sovereign's ratings, while the outlook on the Long-term Local Currency rating is stable. Ganadero is Colombia's fourth largest bank with 246 branches and a 6.8% deposit market share at end-June 2002. Originally established by the government in 1956 to finance the agricultural and livestock sectors, it now provides a wide range of commercial banking and financial services. Ganadero was fully privatized in 1992, and in 1996 Spain's BBVA, acquired a 34.7% stake and assumed management control. Since then, BBVA has progressively increased its stake to 95.2%, where it stood at end-2001. The remaining shares are widely held. CONTACT: Fitch Ratings, New York Ricardo Chaves, 212/908-0606 Linda Hammel, 212/908-0303 Peter Shaw, 212/908-0553 Media Relations: James Jockle, 212/908-0547 =================================== D O M I N I C A N R E P U B L I C =================================== EDENORTE/EDESUR: Likely To Confront Courtroom Battle ---------------------------------------------------- Union Fenosa companies Edenorte and Edesur could find themselves locked in a court battle with power generator Itabo. Kevin Manning, Itabo's general manager, warned that the power generation company is considering commencing legal proceedings against Edenorte and Edesur due to a US$12-million debt that the companies owe to Itabo. Manning also revealed that that Union Fenosa distributors owe the other major generation company, Generadora Haina, more than US$24 million. ================= N I C A R A G U A ================= INTERBANK/BANCAFE/BAMER/BANIC: Government Announces Asset Sale -------------------------------------------------------------- The bidding rules for a contract to manage the auction of four intervened Nicaraguan banks, El Banco Intercontinental (Interbank), Banco del Cafe (Bancafe), Banco Mercantil (Bamer) y el Banco Nicaraguense de Industria y Comercio (Banic), are now available. Business News Americas reports that the bidding rules, which cost US$70, will be on sale until October 11. Interested foreign firms must have a registered local representative in Nicaragua and must submit their bid in Spanish in a closed envelope before November 6 at 15:30 (local time). The bidders that qualify to bid must also deposit a US$70,000 guarantee at the central bank before they can participate in the process. The central bank will open the envelopes on November 6 and declare a winner. The central bank reserves the right to extend the November 6 date for receiving the bids. The winner of the contest will have a period of five months to sell off the banks' loan portfolios, loans in judicial process and other assets, such as offices, cars and equipment. The five- month period can be extended by one month on mutual agreement between the firm and the central bank. Firms interested in buying the bidding rules should contact the central bank's administrative manager Eduard Zeledon, phone (+ 505 265 0747), fax (+ 505 265 1816), e-mail (ezg@cm.bcn.gob.ni). The four banks were intervened in 2000 and 2001 for breaking local regulations. The banks' assets carry a book value of US$360 million. ================================= T R I N I D A D & T O B A G O ================================= BWIA: CEO Bares Restructuring Plan ---------------------------------- BWIA Chief Executive Officer Conrad Aleong outlined Tuesday the airline's restructuring plan, aim at saving US$12 million in 12 months. He also said that if the plan does not work, the airline could go bankrupt within a month, according to the Caribbean Investor Tuesday. Aided by a slide presentation, Aleong detailed four areas for cost cutting: 24% - US$28.8 million will be saved in catering costs. Aleong reiterated that the airline has no intention to cease its meal services to passengers. 4% - US$4.8 million in Airport Fees. 20% - US$36 million in computer reservations charges. 21% - US$25.2 million in general across the board cuts. In house teams are organized to formulate cost efficient methods of operation. 31% - US$37.2 million in employee costs. Aleong stated that they need the cooperation of their employees in order to continue operations. An agreement with the airline's 2300 employees must be done by Oct 31. The plan also involves rationalizing the fleet and routes. The airline's Airbus A340s and Boeing 737s will be reduced from 5 to 2. The Dash 8 will be taken out of service; jets and Liat will then serve its routes. At least forty pilots will have to stay aground. There are plans of retaining and retraining some of them. While Aleong admitted that the airline's troubles are not caused by significant debt, he said that the airline's ability to continue operations depends heavily on the employees consent to the proposals before end of October. The Associated Press reported Wednesday that BWIA might halt flights to any of its 22 destinations as it reduces expenses. The carrier, based in Trinidad, and 33 percent government-owned, earns annual revenues of US$260 million. CONTACTS: BWIA West Indies Airways Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, Chief Financial Officer (Trinidad) BWIA: Possible Bankruptcy Creates Concern On Industry ----------------------------------------------------- Conrad Aleong, BWIA's president and chief executive officer said Thursday that airline must strike a deal with its workers to reduce costs; otherwise, the Company would be bankrupt within a month. Aleong said that the airline must cut US$1 million monthly, and that the concession with the employees has to be done by October 31. Barbados' tourism industry was shocked. Oliver Jordan, President of the Barbados Tourism Authority said BWIA is a direct concern for his country, as the airline has the most frequent flights into the island, making the country's tourism industry heavily dependent on BWIA. BWIA has eight flights from major tourist markets and the Caribbean to Barbados daily. If scaled down, the country's tourism industry would suffer deeply. However, BWIA's vice president of marketing and sales, Beatrix Carrington, said that the company had financial problems, but wouldn't collapse by the end of October. BWIA: New Rival Poses `No Threat' --------------------------------- Caribbean Star Airlines flight CSA#780 made its first inaugural trip from Trinidad to Tobago on Thursday. It carried 27 representatives from the media, tourism and trade industries. According to a report by The Trinidad Express, CSA Chief Executive Officer Paul Moreira explained that the airline does not aim to compete, or make things difficult for BWIA. "We don't see Tobago Express as a competitor. We see them as a partner. We believe that Caricom carriers should do their best for Caricom people," said Moreira. He added that his company will not merge with any other airline to avoid the possibility of price setting. CSA flies between Trinidad and Tobago, initially with two flights daily, then with four by December. The airline will also acquire two more planes within the next four months. *********** 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 * * *