/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/021018.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, October 18, 2002, Vol. 3, Issue 207 Headlines A R G E N T I N A ARGENTINE BONDS: S&P Cuts IMF-Backed Bonds To `CCC-' FLEETBOSTON FINANCIAL: Argentine Woes Drag Down 3Q Net Income LAPA: Emerging From Receivership Under With New Owners PEREZ COMPANC: Pecom Transfers Interest In Conuar S.A. PEREZ COMPANC: Petrobras Sale Announcement Expected Today REPSOL YPF: Talking With Authorities About Export Revenue Limits * World Bank To Grant Argentina $140M Emergency Fund B R A Z I L CSN: Seeks Payment Extension On $140M Short-term Bonds CSN: Pays Off Part of $115M Loan, Balance To Be Refinanced USIMINAS: Predicts Increased Exports This Year C H I L E CAP: 2002 Financing Program Virtually Completed ENAMI: Planned Bond Issuance Spurs Concerns MADECO: Failed Capitalization Prompts Feller Rate Cut C O L O M B I A GILAT SATELLITE: Expects More LatAm Actively After Restructuring J A M A I C A AIR JAMAICA: Joins Forces with DCA M E X I C O CINTRA: Aeromexico, Mexicana Sales To Come Early 2003 FAR-BEN: Reaches Acquisition Deal With FASA GRUPO MINSA: IFC Likely To Terminate Lawsuit Before Year-end P E R U BANCO REPUBLICA: Review on Liquidation Report Awaits Approval T R I N I D A D & T O B A G O BWIA: Despite Efforts, Airline May Lose Over $80M in 2002 BWIA: Employees Object to Countdown Notices V E N E Z U E L A SIDOR: Fails To Make Debt Restructuring Deadline - - - - - - - - - - ================= A R G E N T I N A ================= ARGENTINE BONDS: S&P Cuts IMF-Backed Bonds To `CCC-' ---------------------------------------------------- Standard & Poor's downgraded two US$250 million Argentine bonds that are guaranteed by the World Bank and due in 2003 and 2004, reports Bloomberg. S&P downgraded the bonds to `CCC-' from `CCC+.' The downgrade is the first time S&P has dropped the rating of a bond guaranteed by the lending institution, said S&P credit analyst Larry Hays. The cut on the bond ratings came a day after the World Bank gave Argentina three years to begin reimbursing it for US$250 million it paid on a similar bond that came due Tuesday. Argentina defaulted on that bond, compelling the bank to pay creditors. Now that the World Bank has extended Argentina's repayment, holders of the 2003 and 2004 bonds "ought to be less confident about timely payment than they were a week ago," said Hays. The downgrade reflects the diminished incentives to repay the World Bank for its guarantee payments early enough to ensure that the guarantee rolls to the next payment, Standard & Poor's suggested in a statement. FLEETBOSTON FINANCIAL: Argentine Woes Drag Down 3Q Net Income ------------------------------------------------------------- FleetBoston Financial (NYSE: FBF) reported Wednesday third quarter net income from continuing operations of $597 million, or $.57 per share, compared with $771 million, or $.70 per share, in the third quarter of last year. The decrease from last year was mainly due to declines from businesses undergoing significant market pressure: Argentina, Principal Investing and Brazil. For the first nine months of 2002, net income from continuing operations was $1.2 billion, or $1.16 per share, compared with $1.4 billion, or $1.30 per share for the first nine months of 2001. Including results from discontinued operations (primarily Robertson Stephens), net income in the current quarter was $579 million, or $.55 per share, compared with $766 million, or $.70 per share, in the third quarter of last year. Chad Gifford, President and Chief Executive Officer of Fleet, said, "We are pleased to report that our third quarter results were in line with expectations, despite these difficult economic times. The execution of our strategic refocus on our customer related businesses has gone well. In our consumer business, core deposits remain robust and are up approximately 10% from a year ago. We had a record number of new checking accounts opened this quarter and continue to make steady improvements in customer service. In wholesale banking, despite weak loan demand our results improved due, in part, to the cross-selling of products such as cash management and foreign exchange. I am greatly encouraged by the progress we have made to date in transforming the business mix of this company to concentrate on our customer focused businesses. We also made some key organizational announcements, which included naming Eugene M. McQuade President and Chief Operating Officer and H. Jay Sarles Chief Administrative Officer. I greatly look forward to working with them in their new roles as we continue to re-shape the company." Gene McQuade remarked, "The actions we took in the second quarter to strengthen our balance sheet have held up well. On the credit quality front, our nonperforming assets were down on a consecutive quarter basis for the first time in two years and our chargeoffs were approximately $500 million less than the second quarter. We continue to actively lower our risk profile by steadily reducing exposures to large corporations both domestically and in Latin America. Like others, we are dealing with a weak economy and capital markets, which certainly challenges our market-driven businesses. While difficult, it has not distracted us from our path. As we manage through this period of transition, we are greatly aided by our balance sheet strength. Our combined capital ratios and reserve levels are among the highest of any major bank in the country." Highlighting the financial performance was a quarter over quarter earnings improvement in Consumer Financial Services of $13 million, or 6%, driven by consumer loan growth and higher core deposits and in Wholesale Banking of $12 million, or 4%, due to lower credit costs and higher revenues from cash management and foreign exchange. Also included in the current quarter's results were a net loss from the Principal Investing business of $68 million ($.06 per share) reflecting continued weakness in the technology and telecommunications segments of this portfolio and a loss from Argentina of $42 million ($.04 per share) reflecting the impact of government measures on the financial system and the economic deterioration in the country. Partially offsetting these losses were securities gains of $34 million after-tax, or $.03 per share. Credit Quality/Balance Sheet Nonperforming assets were $3.8 billion at September 30, 2002, down approximately $130 million from June 30, 2002. Loan loss reserves stood at 3.2% of total loans. Total assets at September 30, 2002 were $187 billion, compared with $202 billion at September 30, 2001. The decrease from a year ago is primarily due to our previously announced risk reduction strategies and a decline in Latin American assets as a result of currency devaluations. Stockholders' equity amounted to $17 billion at September 30, 2002, with a common equity to assets ratio of 8.9%. On Tuesday, the Corporation announced that its Board of Directors approved its regular quarterly common stock dividend of $.35 per share, payable on January 1, 2003 to shareholders of record on December 3, 2002. To see financial statements: http://bankrupt.com/misc/FleetBoston_Financial.htm CONTACT: FLEETBOSTON FINANCIAL James E. Mahoney, 617/434-9552 (Media) John A. Kahwaty, 617/434-3650 (Investors) LAPA: Emerging From Receivership Under With New Owners ------------------------------------------------------- Lineas Aereas Privadas Argentinas SA (LAPA) will spread its wings once again after its new owner, the Aeroandina group, rescued it from receivership. According to an article released by the Airwise News, LAPA plans to start regional services to Sao Paulo, Brazil, the Chilean cities of Santiago and Puerto Montt and to Santa Cruz de la Sierra, Bolivia, by the end of this year. Citing a La Nacion newspaper, Airwise News revealed that the carrier also intends to revive domestic flights to southern Argentina. LAPA filed for protection from creditors in May 2001 due to increasing costs of fuel, excessive taxes and the recession plaguing the region. The filing listed debts of US$130 million to local bank units of Citibank (C), BBVA Banco Frances (BBV), Banco BanSud and Banco Rio. The airline also owed around US$52 million to energy company Repsol YPF SA; Royal Dutch Shell; Exxon Mobile Corp; Aeropuertos 2000, the concession that runs most of Argentina's airports; and the Argentine airforce for airspace fees. PEREZ COMPANC: Pecom Transfers Interest In Conuar S.A. ------------------------------------------------------ Perez Companc S.A. (Buenos Aires: PC NYSE: PC) announces that its controlled company Pecom Energ｛ S.A. (Buenos Aires: PECO) has transferred to Sudacia S.A. its 66.67% equity interest in Combustibles Nucleares Argentinos S.A. (CONUAR S.A.). The transaction price amounts to US$8 million, accounting for revenues of approximately ARS5 million for Pecom Energ｛ S.A., determined on the basis of inflation-adjusted information. Sudacia S.A. is wholly owned by the Perez Companc Family. Pecom Energ｛ S.A., controlled by Perez Companc S.A., is a leading company in an important Argentine and Latin American industry sector, including oil and gas production and transportation, refining and petrochemicals, power generation, transmission and distribution. 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: Petrobras Sale Announcement Expected Today --------------------------------------------------------- Brazil's state energy company Petrobras and Argentina's Perez Companc were scheduled to hold a joint press conference Thursday to announce the US$1.13-billion sale of Perez Companc to Petrobras, reports Business News Americas. The announcement comes after Pecom Energia, a subsidiary of Perez Companc, transferred its 66.7% equity interest in nuclear fuel company Conuar to the Sudacia holding. Sudacia is owned by the Perez Companc family, and is separate from the Perez Companc operating company, in which Petrobras is seeking to purchase a 58.6% controlling stake. The transfer was the last remaining obstacle that Perez Companc had to go through in order to complete the sale to Petrobras. Pecom had to sell the stake in Conuar for the Petrobras deal to close, as Argentina's constitution states that foreign companies cannot own assets related to the nuclear power industry. Pecom's 45% stake in Conuar subsidiary Fabrica de Aleaciones Especiales (FAE), which produces stainless steel welded and seamless pipes for use in nuclear power plants, is also included in the sale. REPSOL YPF: Talking With Authorities About Export Revenue Limits ---------------------------------------------------------------- Spanish-Argentine oil group REPSOL-YPF and its rivals are negotiating export revenue limits with Argentine governmental authorities. Former President Carlos Menem's decided in 1989 to exempt drillers from a requirement that exporters deposit their export income with the central bank. And now, a judge is recommending that the present administration of President Eduardo Duhalde revise that decision. Oil companies can send 70% of their export revenue outside the country, and the government is studying reducing that to 50%. Repsol lost ARS796 million (Us$217 million) in the first half of this year due to the devaluation of the Argentine peso. However, the Company's financial situation is improving, with profits of ARS1.04 billion in the second quarter, after losses of ARS1.84 billion in the previous quarter. CONTACT: REPSOL YPF Alfonso Cortina De Alcocer, Chairman & CEO Ramon Blanco Balin, Vice Chairman Carmelo De Las Morenas Lopez, CFO Their Address: Paseo de la Castellana 278 28046 Madrid, Spain Phone +34 91 348 81 00 Home Page: http://www.repsol.com or Av. Roque S enz Pe a, 777. C.P 1364. Buenos Aires Argentina * World Bank To Grant Argentina $140M Emergency Fund ---------------------------------------------------- The World Bank will provide Argentina US$140 million out of a previously approved but undisbursed loan funds, according to Dow Jones Newswires. The amount is intended to help the government buy medicines, vaccines and iron-fortified milk for children to alleviate to country's social ills. This is the second time that the bank reallocates funds intended for other purposes to aid the crisis-stricken country. "Increased poverty in Argentina has had a severe negative impact on health and education, with growing evidence of a deterioration in the quality of services," said Axel van Trotsenburg, a World Bank official overseeing Argentine issues. Argentina lost its credit line to the International Monetary Fund last year and is currently in negotiations with the multilateral lender for a new aid package. This year, the country defaulted on most of its foreign debt, the most recent of which was paid by the World Bank as it was under the bank's guarantee. Despite the crises the country is in, U.S. Treasury undersecretary for international affairs John Taylor said Argentina is showing signs of improvement. =========== B R A Z I L =========== CSN: Seeks Payment Extension On $140M Short-term Bonds ------------------------------------------------------ Cia. Siderurgica Nacional, a Brazilian flat steel maker, is working toward a 44-day extension for the payment of US$140 million in short-term bonds expiring on October 30 on the United States market, reports business daily Valor Economico. The Rio de Janeiro-based steel company says that it has the cash but wants to avoid liquidity shortfalls. Uniao de Bancos Brasileiros SA and Bank of America Securities arranged the loan for CSN. Other banks including Banco Bradesco SA, HSBC Holdings Plc's HSBC Bank Brasil and Banco Espirito Santo SA took part in the loan. CSN agreed to be acquired by the U.K.-based Corus Group Plc in July for US$4.2 billion of stock and assumed debt. Concern about Brazil's economy and a possible government debt default prompted speculation that the U.K. steelmaker may cancel the purchase. Corus has denied it has any plan to back out of the agreement. 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 CSN: Pays Off Part of $115M Loan, Balance To Be Refinanced ---------------------------------------------------------- CSN indicates it will pay 57% of a US$115-million loan on the day it matures, Oct. 16, and refinance the rest, allowing the company to retain extra cash, reports Bloomberg. According to Otavio Lazcano, the Brazilian steelmaker's chief financial officer, four of the banks that provided the loan -- Bank of America Corp., HSBC Holdings Plc, Banco Santander Central Hispano SA and J.P. Morgan Chase & Co. -- offered to refinance US$50 million of the loan. To obtain the new US$50-million loan, CSN agreed to use export earnings to pay interest and principal, Lazcano said. CSN isn't required to pay the export earnings into a trust or other company to guarantee the loans, he added. "We find ourselves in a situation that is better than expected," Lazcano said, adding, "We have to use less of our cash to repay debt." CSN has about US$700 million in cash to pay debt and the refinancing will allow the Company to retain more capital than expected to finance operations, Lazcano said. "Among Brazilian borrowers, CSN is one of Brazil's most liquid companies and has a very large cash position in dollars," said Joe Borman, a director the debt rating company Fitch Inc. "If they had to, they could easily pay their debts." However, some analysts believe that Brazilian steel makers' debt situation has suffered from the strong depreciation of the local currency, the real, versus the dollar. The local currency has lost over 60% of its value since January. CSN, which sells 80% of its production on the local market, has around 85% of its debt tied to the dollar, said analysts. The CSN loan that came due October 16 was arranged under commercial paper program contracted by a CSN offshore subsidiary, CSN Overseas. USIMINAS: Predicts Increased Exports This Year ---------------------------------------------- Usiminas, the second largest flat steel producer in Brazil, is on track to finish this year with 907,000m tons of exports, an 8.9% increase from that of the previous year. The Brazilian company is now betting on exports to compensate the drop on the domestic demand and to reduce the US dollar valuation impact on its debts, which currently total BRL3.93 billion, 62% of which is tied to the US dollar. Cosipa, a steel company controlled by Usiminas, is also facing debts of up to BRL4.65 billion, 77% of which is tied to the US dollar. Cosipa, which is operating at its full capacity this year, will register a 335% increase on the exports volume, due to repair of its blast furnace. The subsidiary will export 1.48 million m tons over this year. Usiminas expects to register a 2.2% drop on sales in the domestic market over this year, while Cosipa should register a 5.3% decrease, according to predictions. Usiminas has seen its debt service costs increase due to Brazil's onerous liabilities, as well as the plunging value of the country's currency. Meanwhile, ongoing fears mount about the global economy and the outcome of Brazilian presidential elections later this month. The local currency, the Real, has declined against the dollar by about 40% so far this year. Market players can only guess what will happen to the currency in the coming months, but more depreciation remains a possibility. CONTACT: USIMINAS Rua Prof. Jos, Vieira de Mendon凔 3011 Engenheiro Nogueira 31310-260 Belo Horizonte Minas Gerais, Brazil Phone: +55-31-3499-8000 Fax: +55-31-3499-8899 http://www.usiminas.com.br ========= C H I L E ========= CAP: 2002 Financing Program Virtually Completed ----------------------------------------------- In the early days of October, a refinancing agreement was signed at Banco BCI between CAP, BCI and other banks which, together with bilateral transactions with other Chilean and foreign institutions, enabled CAP to practically complete its refinancing program for 2002. Jaime Charles, CAP's finance manager expressed his satisfaction with these transactions, explaining that the amount involved was around US$100 million under agreements with repayment terms up to more than 2 years. "Our objective was to obtain the best matching of the maturities of our borrowings and our cash flow generation, and this was achieved; we are therefore very pleased. Our own generation of cash has enabled our financial debt to be reduced by approximately US$80 million by September 30," Charles said. Asked about future forecasts, he said that the company's financial performance should be more favorable in the second half of the year following an increase in steel prices and the strength of the US dollar. CAP is operating at full capacity with its production of large volumes of value-added products dispatched to both the domestic and export markets, thus confirming CAP's good technological position and its ability to meet demand. CAP, which operates the Huachipato steel mill in central-southern Chile's Region VIII, also operates the Los Colorados, EL Algarrobo and El Romeral iron ore mines in the north of the country, as well as the Huasco pellet plant. It also has railroad interests and a manganese ferroalloys subsidiary (Manganesos Atacama), among other assets. CONTACT: CAP, Main Office Huerfanos 669 - 8 floor Casilla 167-D, Santiago, Chile Telephone: (56-2) 520-2000 Fax: (56-2) 633-7082 URL: http://www.cap.cl Contact: Ana Luisa Larrain USA OFFICE 10 Rockefeller Plaza 14th Floor New York, N.Y. 10020 USA Telephone: (212) 581-5990 Fax: (212) 581-6979 Contact: Ana Luisa Larrain ENAMI: Planned Bond Issuance Spurs Concerns ------------------------------------------- Chile's state minerals company Enami plans to issue US$250 million in bonds with the state, under a bill currently in congress, acting as guarantor, reports Santiago business paper Estrategia. However, apprehension exists as to how the full US$250 million would be raised given that under the proposed legislation, only US$160 million of Enami's debts would enjoy an explicit state guarantee. Proceeds of the bond issuance will be used to pay off the long-term portion of Enami's debts, totaling nearly US$500 million. In an attempt to explain the situation, Enami's chief executive Jaime Perez de Arce said that the country's finance ministry had assured him the issue would be guaranteed and "I have to trust that is the case." Late last year, in an effort to help resolve its debt problems, Enami attempted to issue some US$140 million in bonds. However, the issue flopped because the bonds did not receive an explicit state guarantee and as a result were rated AA by ratings agencies as opposed to AAA. Enami's debts built up in the 1990s with a US$164-million "advanced profits" payment to the state, supplied with loans from Lyonnaise and Dresdner banks. The Company had been due to present a plan on refinancing these debts by the end of September. 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 MADECO: Failed Capitalization Prompts Feller Rate Cut ----------------------------------------------------- Chilean credit ratings agency, Feller Rate, lowered the ratings on bonds issued by Madeco following Tuesday's failed US$90- million planned equity issue. Feller Rate, a local associate of Standard & Poor's, downgraded Madeco's bonds from A- to BB, as well as its share recommendation to second class, while describing the Company's outlook as "in development." Madeco launched a capital increase program on September 9, under which the Company issued 1.8 billion shares worth CLP35 each to raise a total of CLP63 billion (US$84.4mn at today's exchange rate). To encourage shareholders to take up the offer, Madeco set up a mechanism whereby if it failed to raise a minimum of CLP67 billion, the issue would be called off and those who subscribed via an arrangement with the Banco de Chile would not have to pay up. When the offer closed on October 15, only 19.5 million shares worth CLP682 million had been directly subscribed and paid for. A further 1.06 billion shares were subscribed to under the special mechanism but as the total amount did not meet the CLP67 billion threshold, they were not incorporated into the end result. Despite the unsuccessful effort, "Madeco continues its financial restructuring process and negotiations with its creditors, and the Company's board of directors will conduct an extraordinary meeting on Oct. 17, 2002, in order to further explore possibilities to reach an agreeable solution with the parties involved," Madeco said in a statement. Madeco has been undergoing financial restructuring after problems in Argentina and Brazil as well as weak demand from telecommunications companies hit earnings, making payment on its debt difficult. The company hired investment bank Salomon Smith Barney late last year to help it restructure its US$325 million in debts. 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. Chile's Luksic family holds 56.5% of Madeco through Quinenco and its subsidiaries. In addition to cables, Madeco makes finished and semi-finished nonferrous 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 =============== GILAT SATELLITE: Expects More LatAm Actively After Restructuring ---------------------------------------------------------------- Gilat Satellite Networks Ltd. (NASDAQ: GILTF), a satellite networking technology company, announced Wednesday in an official news release that it, its largest banking creditor, and bondholders holding a majority of the US $350 million (face value), 4.25 percent Convertible Subordinated Notes due 2005, have agreed to commence negotiations to restructure the Company's debt to the Bank and the Bondholders. These negotiations will be based on certain agreed guidelines that will include concessions from its creditors and lenders. The guidelines anticipate a partial conversion of a major portion of the face value of the Bonds into common equity and options, and a partial exchange of the remaining face amount into new long-term convertible bonds with a grace period for interest payments. The guidelines also anticipate that a certain portion of the principal of the Company's debt to the Bank will be deferred by a few years and that the remaining debt will be converted into equity and new convertible bonds. The Company intends to negotiate better payment terms with its other major lenders and to obtain concessions from its major suppliers. The Company, the banks and Bondholders holding a majority of the bonds have agreed to cooperate in crafting a detailed restructuring plan by setting up a fast track timetable (30 days) and to submit the proposed plan to the Bondholders and banks for their approval as soon as feasibly possible. "We expect that the Company's debt level will be significantly reduced by approximately US$300 million by converting a substantial amount of debt to equity or options to acquire equity in the Company", said Yoel Gat, Chairman and CEO of Gilat Satellite Networks. "Post restructuring financing costs are expected to be relatively minimal (less than US$5 million cash per year) for the first few years", he added. Based upon the progress reached with major lenders and bondholders holding majority of the bonds, and in order to accelerate the completion of the process, the Company today filed an application with the Israeli District Court in Tel Aviv to commence the approval for the restructuring plan and a stay of action by the bondholders. The stay will be effective in Israel and the Company will seek a similar stay in the US. The stay in Israel will be in effect for a period of 30 days subject to the Company's compliance with certain matters requested by the Court. The stay is intended to allow the proper completion of a detailed restructuring plan and its further submission to bondholders and banks. The approved stay will enjoin the Company's bondholders from exercising any rights that could hamper the plan. The Company's petition filed with the Court is supported by it largest banking creditor, the Company's other Israeli banks, and bondholders holding a majority of the bonds. The Company, its banks and bondholders holding majority of the bonds are working consistently and steadfastly to complete the restructuring plan. While this process is taking shape, the Company's ongoing operations do continue as usual and are unaffected by the restructuring process. "This final phase of the restructuring process is nearing completion and we are encouraged by the progress made thus far", said Yoel Gat, Chairman and CEO of Gilat. "After the restructuring process is complete, Gilat will have significantly less debt and improved liquidity, ensuring long-term viability and positioning the Company for growth", he added. Gilat investor relations director Tim Perrott said that Wednesday's news positions Gilat for a post-restructuring scenario where the company would be able to operate more actively in Latin America and other parts of the world where it has operations. The anticipated restructuring agreement "will give us significantly less debt and improved liquidity, which will allow us to grow and do more things," he said. "Restructuring our debt clears up any uncertainty and lets Gilat accelerate deals a lot quicker, because there's no longer any need for spending extra energies reassuring customers," he said. Doubts about the company's financial health supposedly cost it a rural telecoms contract in Colombia earlier this year. Gilat is appealing its case to Colombia's communications ministry. About Gilat Satellite Networks Ltd. Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc. and Gilat Latin America, is a leading provider of telecommunications solutions based on Very Small Aperture Terminal (VSAT) satellite network technology - with nearly 400,000 VSATs shipped worldwide. Gilat markets the Skystar Advantage, DialAw@y IP, FaraWay, Skystar 360E and SkyBlaster* 360 VSAT products in more than 70 countries around the world. The Company provides satellite-based, end-to-end enterprise networking and rural telephony solutions to customers across six continents, and markets interactive broadband data services. The Company is a joint venture partner in SATLYNX, a provider of two- way satellite broadband services in Europe, with SES GLOBAL and, following the execution of a definitive agreement and regulatory approval, Alcatel Space and SkyBridge, subsidiaries of Alcatel. Skystar Advantage(R), Skystar 360(TM), DialAw@y IP(TM) and FaraWay(TM) are trademarks or registered trademarks of Gilat Satellite Networks Ltd. or its subsidiaries. Visit Gilat at www.gilat.com. (*SkyBlaster is marketed in the United States by StarBand Communications Inc. under its own brand name.) Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. The words "estimate", "project", "intend", "expect", "believe" and similar expressions are intended to identify forward-looking statements. These forward- looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of Gilat to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, inability to maintain market acceptance to Gilat's products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for Gilat's products, loss of market share and pressure on prices resulting from competition, introduction of competing products by other companies, inability to manage growth and expansion, loss of key OEM partners, inability to attract and retain qualified personnel, inability to protect the Company's proprietary technology and risks associated with Gilat's international operations and its location in Israel. For additional information regarding these and other risks and uncertainties associated with Gilat's business, reference is made to Gilat's reports filed from time to time with the Securities and Exchange Commission. CONTACT: GILAT Tim Perrott, VP, Investor Relations (USA) Tel: +703-848-1515 EMAIL: tim.perrott@spacenet.com ============= J A M A I C A ============= AIR JAMAICA: Joins Forces with DCA ---------------------------------- Air Jamaica had agreed to collaborate with the ground handling department of DC Holding, headquarters of Dutch Caribbean Airlines (DCA) reports Curacao Amigoe Monday. The cooperation agreement would take effect on November 1. DCA's president-director Mario Evertsz said that both parties are in agreement with the collaboration, though some issues need to be negotiated. 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. 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. CONTACT: Air Jamaica 4 St. Lucia Avenue Kingston 5, Jamaica Tel No. 876/922-3460 Fax /929-5643 Email: webinfo@airjamaica.com Contact: Gordon Stewart - Chairman Allen Chastanet - Vice President for Marketing and Sales =========== M E X I C O =========== CINTRA: Aeromexico, Mexicana Sales To Come Early 2003 ----------------------------------------------------- The sale of government-controlled holding company Cintra will be carried out early next year, according to a report in the Comtex Custom Wires. The transaction will come at a time when a call to tender Aeromexico and Mexicana, Mexico's two largest airlines, will be made, said industry sources. The other Cintra assets up for sale are Aerocaribe, Aerolitoral, Aerocozumel. So far, the companies that have shown interest in bidding for Cintra's assets are Grupo Angeles, Continental Airlines and Delta AirLines. The Bank Savings Protection Institute (IPAB) is managing the sale process, which has not yet been carried out because it was more convenient to wait until economic conditions had improved. The air transport market is still facing low demand due to September 11 terrorist attacks in the United States, as well as the poor economic conditions which have also helped reduce passenger traffic. CONTACT: CINTRA Xola 535, Piso 16, Col. del Valle 03100 M,xico, D.F., Mexico Phone: +52-5-448-8050 Fax: +52-5-448-8055 Contacts: Jaime Corredor Esnaola, Chairman Juan Dez-Canedo Ruiz, CEO Rodrigo Ocejo Rojo, CFO OR C.P. Francisco Cuevas Feliu, Investor Relations Xola 535, Piso 16 Col. del Valle 03100 M,xico, D.F. Tel. (52) 5 448 80 50 Fax (52) 5 448 80 55 infocintra@cintra.com.mx AEROMEXICO Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or mweitzman@aeromexico.com MEXICANA DE AVIACION Adolfo Crespo, V.P. of Public Affairs Division of Mexicana Airlines, +1-210-491-9764 FAR-BEN: Reaches Acquisition Deal With FASA ------------------------------------------- FASA Investment SA, a unit of Chile's Farmacias Ahumada SA (FASA), agreed to acquire 65% of Farmacias Benavides SA (Far- Ben), Mexico's leading drugstore chain, reveals Dow Jones. Signing of the related contracts between Far-Ben's controlling shareholders from the Benavides family and FASA will immediately follow. Under the agreement, according to a filing with the Mexican Stock Exchange, FASA will inject about US$45 million of new capital into Far-Ben, while the Benavides family will contribute with about US$6 million. The transaction, subject to regulatory clearance, will also include a tender offer for minority shareholders. Far-Ben, according to an earlier edition of the TCR-LA, is being accused of treachery from minority investors. TCR-LA reported that some 16 minority investors claimed they have been betrayed by Far-Ben and their financial representative, BBVA Bancomer. According to these investors, they haven't received payments and that Benavides is offering smaller amounts and even the retention of their investments. The group owns less than 10% of the debt bonds of Far Ben. Far-Ben had to pay obligations of some MXN700 million (US$70.5 million) on June 13, said Genaro Hernandez Santaolaya, lawyer for the 16 investors. However, according to Mr. Santaolaya, the payment was not made and instead, Far-Ben offered 75% of the money offered for the expiration of bonds from 1997 or a seven- year extension for recovering their capital. The investors were not pleased and, despite offers of other risk-free long-term investments, they merely want their money, said Hernandez Santaolaya. With a 4.5% market share, Far-Ben operates 640 pharmacies in 129 cities throughout Mexico. Farmacias Ahumada is the largest pharmacy chain in South America, with 405 pharmacies in Chile, Brazil and Peru. CONTACT: FARMACIAS AHUMADA S.A. (Chile) Alejandro Rosemblatt, Corporate Finance Manager 011-56-2-661-9620 arosemblatt@fasa.ci Web site: http://www.fasa.cl FARMACIAS BENAVIDES, IN MEXICO Enrique Villareal, Finance Director Phone: 011- 52-81-8399930 E-mail: evillareal@benavides.com.mx/ GRUPO MINSA: IFC Likely To Terminate Lawsuit Before Year-end ------------------------------------------------------------ The International Financial Corp. is expected to drop its lawsuit soon against Mexican corn flour and tortilla maker Grupo Minsa following Minsa's recent signing of a non-binding term-sheet to restructure its debt with the IFC, reports Dow Jones. The IFC, the private sector financing arm of the World Bank, sued Minsa in August for failing to pay a US$50 million loan it granted to the Company in 1996 to help pay off short-term debt and modernize its facilities. Minsa, in a press release, said that once a debt- restructuring agreement is finalized, the IFC will drop its lawsuit. Minsa expects to complete the restructuring by Dec. 15. Minsa's second-quarter loss ballooned to MXN87.1 million from MXN39.4 million in the year-ago quarter, due in part to a weaker peso. The difficulty made debt servicing costs more expensive, according to the Company's earnings report. Minsa had debt of MXN948 million (US$95 million) at the end of June, three quarters of which matures in less than a year. CONTACT: GRUPO MINSA Prolongacion Toltecas 4, Los Reyes Ixtacala 54090 Tlalnepantla, M�xico, Mexico Phone: +52-55-5722-1900 Fax: +52-55-5722-1905 URL: http://www.minsa.com Contact: Ernesto Moya Pedrola, Chairman Jose Cacho Ribeiro, General Manager Guillermo Turincio Pimentel, CFO Human Resources Director ======= P E R U ======= BANCO REPUBLICA: Review on Liquidation Report Awaits Approval ------------------------------------------------------------- Peru's full house is now awaiting a decision by the congressional consumer defense commission whether to let it review a report on the liquidation of defunct bank Banco Republica, reports Business News Americas. The commission, according to its chairman Yohny Lescano, has until October 21 to decide on the matter. The report, which was prepared by Lescano's predecessor Carlos Armas, names those responsible for the collapse of Republica. Lescano did not participate in the drafting and review of the report. If the full house decides to return the report to the commission, it would take another one or two months before a new draft will be outlined. Republica was intervened by the country's banking and securities regulator on November 24, 1998, due to irregularities that left the bank with a deficit of US$758 million. Another factor that prompted the intervention was the refusal of the board to carry out a US$20-million capital increase. Republica was also guilty of granting excessive loans to related companies. ================================= T R I N I D A D & T O B A G O ================================= BWIA: Despite Efforts, Airline May Lose Over $80M in 2002 --------------------------------------------------------- Lawrence Duprey, chairman of troubled airline BWIA said that the carrier's full year loss would climb to US$80.7 million despite efforts to reduce operations costs. The Trinidad Express reports that BWIA's has losses of about US$54.34 million for the first half of this year. The newspaper quoted Duprey explaining that while operating expenses for the first half-year of 2002 were in fact reduced by $6.87 million, following cost reduction initiatives, the September 11 attacks plummeted operating revenues by $53.96 million. The management has now undertaken rigid cost-cutting measures aiming to save at least US$1 million per months for the following months. The airline's president and chief executive officer Conrad Aleong had outlined the plans to the employees who expressed their intention to cooperate. The restructuring and reorganization plan includes rationalizing the fleet and drafting new rules. Aleong expressed his confidence that BWIA would survive the slump in the airline industry, saying that the airline had been through worst and has the capacity to stay alive. However, if the plan fails, BWIA would be at the mercy of its creditors, according to Duprey. "Come November 1, BWIA will still be flying and with the expected contributions of our employees, there should be no reason why we would not be doing so for many, many years to come," he said in a letter that was also sent to shareholders last week. BWIA is the largest airline in the eastern, western and southern Caribbean, based on both revenue and ASMs. The company's headquarters are located in the twin Island State of Trinidad and Tobago and from its headquarters, Piarco International Airport, it has a network of twenty (20) destinations: New York, Miami, Washington, London, Toronto, Trinidad, Tobago, Barbados, Georgetown - Guyana, Caracas, Venezuela, Antigua, Grenada, St. Lucia, St. Maarten, St. Kitts, Jamaica, St. Vincent, Denver, Chicago, and Boston. 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: Employees Object to Countdown Notices ------------------------------------------- In line with its restructuring and reorganization plan to save the Company, BWIA has posted notices counting down the days of the month, reports the Trinidad Guardian. BWIA needs the unions' nod to their proposed concessions by October 31. The ariline's corporate communications director Clint Williams said that the notices were posted to remind the employees that they are working against a deadline. However, the unions say that employees feel that the notices create a hostile working environment for them. Aviation Union President Christopher Abraham explains that everyone is uneasy of the outcome, and that the employees are requesting the management to remove them due to the additional uneasiness it gives to the atmosphere. "It is management's duty to remind employees of the end of the month deadline to save US$1 million. We need to move quickly and they need to see how many days we have left. We have no time to dance around realities," countered Williams. Abraham said that some flight attendants, and mechanics have left the airline in search for better employment. A number of them are now with the Caribbean Star. Abraham added that the employees are getting better wages and work conditions at the Caribbean Star. ================= V E N E Z U E L A ================= SIDOR: Fails To Make Debt Restructuring Deadline ------------------------------------------------ Siderurgica del Orinoco, Venezuela's biggest steelmaker, failed to restructure US$1.4 billion in debt with banks by the Sept. 30 deadline, reports El Universal, citing Sidor president, Francisco Rangel. He didn't state any reason for the failure but said that the Company, which has been battered by the sharp slide in steel prices and the shrinking domestic economy, is now in advanced talks with its creditor banks. Sidor, which defaulted on a US$31.3-million interest payment on its bank loans last December, signed a preliminary agreement with its bank creditors on July 30, which provided 60 days to work out terms of the restructuring. Under terms of the preliminary agreement, up to half of the Company's debt will be written off. Sidor is 70%-owned by Argentina's Siderar, Mexico's Hylsamex, Tubos de Acero de Mexico SA, Brazil's Usinas Siderurgica de Minas Gerais and Venezuela's Siderurgica Venezolana Sivensa SA. The remaining 30% is owned by the Venezuelan government. CONTACT: SIDERURGICA DEL ORINOCO, C.A. (SIDOR) Edificio General, Piso 9 Avda. La Estancia Chuao, Caracas 1060 Venezuela Tel: (582) 902 3800/3917/3955 Fax: (582) 993 2930 Home Page: www.sidor.com.ve/ *********** 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 * * *