/raid1/www/Hosts/bankrupt/TCRLA_Public/021206.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, December 6, 2002, Vol. 3, Issue 242
Headlines
A R G E N T I N A
AT&T LATIN AMERICA: Turnaround Specialist Named New CFO
IMPSA: Ex-President To Testify on Alleged IMPSA Payoff Attempt
B E R M U D A
ANNUITY & LIFE: Cauley Geller Announces Class Action Lawsuit
ANNUITY & LIFE: Scott + Scott, LLC Files Class Action Lawsuit
ANNUITY & LIFE: Hoffman & Edelson Announces Class Action Suit
ESG RE: Fitch Drops Ratings To 'B'; Still On Watch Negative
FOSTER WHEELER: Continued Losses Prompt Dansville Closure
GLOBAL CROSSING: Anatel Grants New License for Expansion
TYCO INTERNATIONAL: CalSTRS Seeks Tyco's Return To U.S.
B R A Z I L
AES Corp.: Extends the Exchange Offer Expiration Date
AES CORP.: Names Darman Vice Chairman, Lead Independent Director
BANCO FIAT: Banco Itau's Purchase Will Not Affect S&P Ratings
BANCO FIAT: Sale To Itau Will Reduce Parent's Gross Debt
CEMIG: EBITDA Forecast Revised Downward; Subsidies Cited
CSN: Hires Consultant To Value Asset
ESCELSA: S&P Affirms 'B+' Ratings; Outlook Negative
NETSAT SERVICOS: S&P Lowers Rating to 'CCC+', Outlook Negative
TELEMAR: Shareholders' Meeting Agenda Full of Changes
TELEMAR: Extraordinary General Meeting Minutes Released
* Brazilian State Ceases Payment of Obligations
C H I L E
TELEX-CHILE: Adopting Chilesat Trademark
C O L O M B I A
BANCAFE: Regulator Urges Sale
M E X I C O
AOL LATIN AMERICA: AOL Mexico, AmEx Reach Agreement
GRUMA SA: S&P Revises Outlook to Positive
GRUPO MEXICO: Restructures Unit's Debt With Creditors
UNEFON: Files Arbitration Case Against Canada's Nortel
- - - - - - - - - -
=================
A R G E N T I N A
=================
AT&T LATIN AMERICA: Turnaround Specialist Named New CFO
-------------------------------------------------------
AT&T Latin America (Nasdaq: ATTL), a facilities-based provider of
integrated business communications services in five Latin
American countries, on Wednesday named Lawrence E. Young as chief
financial officer. Mr. Young is with AlixPartners, a firm
specializing in corporate turnaround and restructuring work. AT&T
Latin America recently announced that it plans to restructure its
business and last week hired AlixPartners as its financial
adviser.
"Larry Young is the ideal CFO for us because of his vast
experience in working with companies in financial distress," said
AT&T Latin America chairman, president and CEO Patricio E.
Northland. "I am confident he will help us over the next several
months to regain firm financial footing."
Northland said Mr. Young will work with current CFO Nelson Murphy
until the end of the month to ensure a smooth transition, at
which time Murphy will leave the company to pursue other
opportunities.
Mr. Young has extensive experience with turnaround situations,
having recently served as CFO and chief restructuring officer
(CRO) for Sunterra Corp., a timeshare developer. He also served
as CFO for several other public and private companies in similar
turnaround situations.
Before joining AlixPartners, he was a principal with Carpediem
Capital and was a senior manager at Deloitte & Touche Consulting,
where he specialized in the turnarounds of financially troubled
companies.
Mr. Young holds an MBA from the Wharton School of Business and an
undergraduate degree from DePauw University. He is a certified
reorganization accountant.
CONTACT: AT&T Latin America
Media: Jim McGann
+1-202-689-6337
Investors: Catherine Castro
+1-202-689-6336
URL: http://www.attla.com
IMPSA: Ex-President To Testify on Alleged IMPSA Payoff Attempt
--------------------------------------------------------------
The Philippine Senate asked its jailed former President, Joseph
Estrada, to testify on an alleged US$14 million payoff offer for
a contract between the government and Argentinean firm Industrias
Metalurgicas Pescarmona Sociedad Anonima (IMPSA), according to a
report from local news firm ABS-CBN News.
Earlier, Mr. Estrada claimed that Manila Rep. Mark Jimenez had
offered to pay him US$14 million to approve a contract with IMPSA
to rehabilitate the Caliraya-Botocan-Kalayaan hydroelectric
complex in Laguna.
The chairman of the senate's committee in government corporations
and public enterprises, Senator John Osme¤a, sought Estrada's
appearance before the senate on the morning of December 19.
Mr. Osme¤a added that he would give the anti-graft court notice
of Estrada's scheduled meeting with the senate.
Mr. Estrada would need the approval of the Sandiganbayan in order
to leave detention. He is facing plunder charges, and is held in
custody at the Veteran's Memorial Medical Center in Quezon City.
CONTACT: (Latin America)
Hern n Gui¤az£
Carril Rodr¡guez Pe¤a 2451 (M5503AHY)
Godoy Cruz, Mendoza, Argentina.
Tel: (+54-261) 4131374
Fax.(+54-261) 4131429 - 4131423
Email: guinazu@IMPSA.com.ar
(Asia and South East Asia)
Juan Carlos Fern ndez
6-4 Level 6th Tower Block,
Menara Milenium
Jalan Damanlela,
Pusat Bandar Damansara
Damansara Heights
50490 Kuala Lumpur, Malaysia
Tel: (+60-3) 252 3744
Fax: (+60-3) 252 3743
Email: fernandez@IMPSA-sea.com
=============
B E R M U D A
=============
ANNUITY & LIFE: Cauley Geller Announces Class Action Lawsuit
------------------------------------------------------------
The Law Firm of Cauley Geller Bowman & Coates, LLP announced
Wednesday that a class action has been filed in the United States
District Court for the District of Connecticut on behalf of
purchasers of Annuity and Life Re (Holdings), Ltd. (NYSE: ANR)
("Annuity and Life" or the "Company") publicly traded securities
during the period between February 12, 2001 and November 19,
2002, inclusive (the "Class Period").
The complaint alleges that defendants violated the federal
securities laws by issuing a series of materially false and
misleading statements and/or concealing material adverse facts
throughout the Class Period, thereby artificially inflating the
price of the Company's securities. Throughout the Class Period,
the Company reported strong revenue growth and stable projected
earnings. The complaint alleges, however, that defendants failed
to disclose and/or misrepresented the following adverse facts,
among others: (i) that the Company had failed to properly account
for embedded derivatives contained in its annuity reinsurance
contracts in 2001; (ii) that, since at least 2001, the Company
had understated a portion of its liabilities and expenses; (iii)
that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of the
Company; and (iv) that as a result, the value of the Company's
balance sheet and financial results were materially overstated at
all relevant times.
On November 19, 2002, the last day of the Class Period, the
Company announced that it would be restating its financial
results for 2000, 2001 and the first and second quarters of 2002
due to the Company having improperly accounted for embedded
derivatives contained in its annuity reinsurance contracts during
those years. The Company's stock plummeted 44% upon this
revelation.
Purchasers of Annuity and Life publicly traded securities between
February 12, 2001 and November 19, 2002, inclusive that wish to
serve as lead plaintiff must move the Court no later than
February 3, 2003. Members of this class can join this class
action online at
http://cauleygeller.com/template8.asp?pcode=6&pp=1.Any member of
the purported class may move the Court to serve as lead plaintiff
through Cauley Geller or other counsel of their choice, or may
choose to do nothing and remain an absent class member.
Cauley Geller is a national law firm that represents investors
and consumers in class action and corporate governance
litigation. It is one of the country's premiere firms in the area
of securities fraud, with in-house finance and forensic
accounting specialists and extensive trial experience. Since its
founding, Cauley Geller has recovered in excess of two billion
dollars on behalf of aggrieved shareholders. The firm maintains
offices in Boca Raton, Little Rock, and San Diego.
CONTACT: CAULEY GELLER BOWMAN & COATES, LLP
Client Relations Department:
Jackie Addison, Heather Gann or Sue Null
P.O. Box 25438
Little Rock, AR 72221-5438
Toll Free: 1-888-551-9944
E-mail: info@cauleygeller.com
ANNUITY & LIFE: Scott + Scott, LLC Files Class Action Lawsuit
-------------------------------------------------------------
Scott + Scott, LLC announces that a class action has been
commenced Wednesday in the United States District Court, District
of Connecticut on behalf of purchasers of the securities of
Annuity and Life Re (Holdings), Ltd. ("Annuity and Life" or the
"Company") (NYSE: ANR) during the period from February 12, 2001
through November 19, 2002, inclusive (the "Class Period"),
against defendants Annuity and Life, Frederick S. Hammer,
Lawrence S. Doyle and John F. Burke.
If you wish to serve as lead plaintiff, you must move the Court
no later than Monday, February 3, 2002. A lead plaintiff is a
representative party that acts on behalf of other class members
in directing the litigation. Any member of the purported class
may move the Court to serve as lead plaintiff through Scott +
Scott, LLC or through counsel of their choice, or may choose to
do nothing and remain an absent class member. In order to be
appointed lead plaintiff, you must meet certain legal
requirements.
The Complaint alleges that defendants violated the federal
securities laws by issuing a series of materially false and
misleading statements and/or concealing material adverse facts
throughout the Class Period, thereby artificially inflating the
price of the Company's securities. Throughout the Class Period,
the Company reported strong revenue growth and stable projected
earnings. The Complaint alleges, however, that defendants failed
to disclose and/or misrepresented the following adverse facts,
among others: (i) that the Company had failed to properly account
for embedded derivatives contained in its annuity reinsurance
contracts in 2001; (ii) that, since at least 2001, the Company
had understated a portion of its liabilities and expenses; (iii)
that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of the
Company; and (iv) that as a result, the value of the Company's
balance sheet and financial results were materially overstated at
all relevant times.
On November 19, 2002, the last day of the Class Period, the
Company announced that it would be restating its financial
results for 2000, 2001 and the first and second quarters of 2002
due to the Company having improperly accounted for embedded
derivatives contained in its annuity reinsurance contracts during
those years. The Company's stock plummeted 44% upon this
revelation.
CONTACT: SCOTT + SCOTT, LLC
108 Norwich Avenue
Colchester, Connecticut 06415
1-800-404-7770
David R. Scott, Esq.
drscott@scott-scott.com
Neil Rothstein, Esq.,
nrothstein@scott-scott.com
ANNUITY & LIFE: Hoffman & Edelson Announces Class Action Suit
-------------------------------------------------------------
Hoffman & Edelson, LLC announced Wednesday that it has filed a
class action in the United States District Court, District of
Connecticut on behalf of purchasers of the securities of Annuity
and Life Re (Holdings), Ltd. ("Annuity and Life" or the
"Company") (NYSE:ANR) during the period from February 12, 2001
through November 19, 2002, inclusive (the "Class Period"),
against defendants Annuity and Life, Frederick S. Hammer,
Lawrence S. Doyle and John F. Burke.
The Complaint alleges that defendants violated the federal
securities laws by issuing a series of materially false and
misleading statements and/or concealing material adverse facts
throughout the Class Period thereby artificially inflating the
price of the Company's securities.
Specifically, the Complaint alleges that defendants failed to
disclose and/or misrepresented the following adverse facts, among
others: (i) that the Company had failed to properly account for
embedded derivatives contained in its annuity reinsurance
contracts in 2001; (ii) that, since at least 2001, the Company
had understated a portion of its liabilities and expenses; (iii)
that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of the
Company; and (iv) that as a result, the value of the Company's
balance sheet and financial results were materially overstated at
all relevant times.
On November 19, 2002, the last day of the Class Period, the
Company announced that it was going to restate its financial
results for 2000, 20001 and the first and second quarters of 2002
due to the Company having improperly accounted for embedded
derivatives contained in its annuity reinsurance contracts during
those years. The Company's stock plummeted 44% upon this
revelation.
If you purchased the securities of Annuity and Life during the
Class Period, you may, no later than Monday, February 3, 2002,
request that the Court appoint you as lead plaintiff. A lead
plaintiff is a representative party that acts on behalf of other
class members in directing the litigation. In order to be
appointed lead plaintiff, you must meet certain legal
requirements.
Your ability to share in any recovery is not, however, affected
by the decision whether or not to serve as lead plaintiff. You
may retain Hoffman & Edelson, LLC, or other counsel of your
choice, to serve as your counsel in this action.
CONTACT: Jerold B. Hoffman
Marc H. Edelson
HOFFMAN & EDELSON, LLC
45 W. Court Street
Doylestown, PA 18901
TOLL FREE: 877-537-6532
FAX: 215-230-8735
E-MAIL: jhoffman@hofedlaw.com
ESG RE: Fitch Drops Ratings To 'B'; Still On Watch Negative
-----------------------------------------------------------
Fitch Ratings, the international rating agency, has downgraded
the Insurer Financial Strength Ratings of ESG Reinsurance Bermuda
Limited, ESG Reinsurance Ireland Limited and European Specialty
Ruckversicherung AG, the principal reinsurance subsidiaries of
ESG Re Limited, Bermuda, to 'B' from 'BB-' (BB minus). The
ratings remain on Rating Watch Negative.
The ratings action follows ESG Re's filing of an 8-K report to
the US Securities and Exchange Commission on 2 December 2002. The
filing advised that Deloitte & Touche (D&T) had resigned as the
company's auditor with effect from 22 November 2002. No reason
was given by D&T for the resignation, but ESG Re has obtained a
schedule from D&T of accounting disagreements relating to the
quarter ending 30 September 2002.
These disagreements have been defined as follows:- (1) a proposed
provision for impairment in the value of ESG Re's investment in
4Sigma Limited in the amount of USD2.4 million; (2) a proposed
write-off of ESG Re's deferred tax asset in the amount of
USD1.3m; (3) an unspecified increase in ESG Re's legal reserves;
(4) a proposed provision in the amount of USD0.2m for funds
withheld in connection with a specific agreement; (5) a proposed
write-off of USD1.5m of a receivable due to ESG Re under a
specific agreement; (6) a proposed addition to the income
statement of USD0.125m, reflecting an excess of inter-company
broker receivables over inter-company broker payables; and (7)
disclosure of significant uncertainties relating to the Company's
financial position. In addition, D&T proposed a restatement of
ESG Re's financial statements for the quarter ended 30 September
2001, the fiscal year ended 31 December 2001, and the quarters
ended 31 March 2002 and 30 June 2002 to reflect appropriate
accounting for the co-reinsurance contract ESG Re had with ACE
Limited.
On 25 November 2002, ESG Re received a communication from Nasdaq
that the company's securities would be delisted from 3 December
2002 due to the company's failure to file its 10Q Report for the
period ending 30 September 2002 in a timely fashion. ESG Re
subsequently requested a hearing with Nasdaq which is expected to
take place within 45 days of the hearing request. Nasdaq has
agreed to defer the delisting until a decision has been reached
following the hearing.
Fitch's rating action reflects the negative impact that the
resignation of ESG Re's auditors and the highlighted accounting
disagreements are likely to have on the company's business
relationships over the short-term. Uncertainties surrounding ESG
Re's financial condition will inevitably impact on premium
volumes, particularly at this critical time in the year when a
large portion of inwards and outwards reinsurance contracts are
renegotiated. Fitch also believes that ESG Re's financial
flexibility, which has already been identified by the agency as
limited, will decline as a result of the recent announcement and
will be constrained further if Nasdaq decides to enforce the
proposed delisting of ESG Re's shares.
Fitch will maintain close contact with ESG Re's senior management
team over the coming weeks to review developments including the
appointment of a new auditor, the finalisation of the audited
report for the quarter to September 2002 and the forthcoming
hearing with Nasdaq relating to the company's listing. ESG Re
will remain on Rating Watch Negative while these issues remain
outstanding.
CONTACT: Chris Waterman (London)
Tel: +44 (0)20 7417 6328
Email: chris.waterman@fitchratings.com
David Wharrier (London)
Tel: +44 (0)20 7417 6327
Email: david.wharrier@fitchratings.com
FOSTER WHEELER: Continued Losses Prompt Dansville Closure
---------------------------------------------------------
Foster Wheeler Ltd. (NYSE:FWC) announced Wednesday that its
subsidiary Foster Wheeler Energy Corporation would close the
Dansville, New York, manufacturing facility. The closure is
necessary because of continued financial losses at the plant, the
inability to reduce future operating cost, and the decline in
business conditions in the energy sector.
The Company will begin curtailing operations immediately with an
anticipated closure date of February 2003.
As previously reported, this closure will result in a charge of
approximately $6 million. In accordance with the provisions of
SFAS 146, "Accounting for Costs Associated with Exit or Disposal
Activities," approximately $4.7 million of this amount will be
recorded during the fourth quarter 2002, and the remainder will
be recorded during the first half of 2003.
The company is notifying the workforce, union and government
agencies in accordance with "The Worker Adjustment and Retraining
Notification Act". In addition, management will work with the New
York State Department of Labor and related agencies to provide
employees with outplacement services.
Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering, construction,
manufacturing, project development and management, research,
plant operation and environmental services. The corporation is
domiciled in Bermuda, and its operational headquarters are in
Clinton, N.J. For more information about Foster Wheeler, visit
our Web site at www.fwc.com.
CONTACT: FOSTER WHEELER LTD.
Media Contact:
Sherry Peske, 908/730-4444
or
Investor Relations:
John A. Doyle, Jr. 908/730-4270
or
Other Inquiries:
908-730-4000
GLOBAL CROSSING: Anatel Grants New License for Expansion
-----------------------------------------------------------------
Global Crossing has been granted a license from Anatel (National
Telecommunications Agency of Brazil) to offer Multimedia
Communications Services (SCM). This license replaces the previous
Specialized Limited Service license and permits Global Crossing
to offer voice, videoconferencing and other multimedia services.
Signed by Anatel's president, Luiz Guilherme Schymura de
Oliveira, the authorization was published in the Union's Official
Daily on Tuesday, November 19, 2002.
The new license enables Global Crossing to offer transmission
capacity, as well as to send and receive multimedia content to
subscribers throughout Brazil and internationally.
"As a media and entertainment company and a Global Crossing
customer, we believe that this license will open a door to new
business opportunities, as the offering of multimedia services
certainly represents a significant upgrade in the company's
product portfolio," said A¡lton Rogato, telecom manager for SKY,
the leading digital pay-TV satellite service provider in the
Brazilian market.
"Global Crossing is committed to providing the most advanced
communications services to the world's top 200 cities over our
wholly owned and operated global IP fiber optic network,"
commented Jos‚ Antonio R¡os, international president and chief
administrative officer of Global Crossing. "We are delighted that
with this license we are able to expand our offering in Brazil,
one of the most dynamic telecommunications markets in the world."
Global Crossing currently provides services to more than 40
companies in the Brazilian market.
ABOUT GLOBAL CROSSING
On January 28, 2002, Global Crossing Ltd. and certain of its
subsidiaries (excluding Asia Global Crossing and its
subsidiaries) commenced Chapter 11 cases in the United States
Bankruptcy Court for the Southern District of New York
(Bankruptcy Court) and coordinated proceedings in the Supreme
Court of Bermuda (Bermuda Court). On the same date, the Bermuda
Court granted an order appointing joint provisional liquidators
with the power to oversee the continuation and reorganization of
the Bermuda-incorporated companies' businesses under the control
of their boards of directors and under the supervision of the
Bankruptcy Court and the Bermuda Court. Additional Global
Crossing subsidiaries commenced Chapter 11 cases on April 23,
August 4 and August 30, 2002, with the Bermuda incorporated
subsidiaries filing coordinated insolvency proceedings in the
Bermuda Court. The administration of all the cases filed
subsequent to Global Crossing's initial filing on January 28,
2002 has been consolidated with that of the cases commenced on
January 28, 2002. Global Crossing's Plan of Reorganization, which
it filed with the Bankruptcy Court on September 16, 2002, does
not include a capital structure in which existing common or
preferred equity would retain any value.
On November 18, 2002, Asia Global Crossing Ltd. and its
subsidiary, Asia Global Crossing Development Company, commenced
Chapter 11 cases in the United States Bankruptcy Court for the
Southern District of New York and coordinated proceedings in the
Supreme Court of Bermuda. Asia Global Crossing Ltd. is a
majority-owned subsidiary of Global Crossing. However, Asia
Global Crossing's bankruptcy proceedings are being administered
separately and are not being consolidated with Global Crossing's
proceedings. Asia Global Crossing has announced that no recovery
is expected for Asia Global Crossing shareholders.
CONTACT: GLOBAL CROSSING
Press Contacts
Fernanda Marques
+55 21-3820- 4712
fernanda.marques@globalcrossing.com
Fabiana Jacomini
Smart Comunica‡ao Inteligente
+55 11-3062-5439
fabiana@smartci.com.br
Analysts/Investors Contact
Ken Simril
+1 310-385-3838
investors@globalcrossing.com
TYCO INTERNATIONAL: CalSTRS Seeks Tyco's Return To U.S.
-------------------------------------------------------
A resolution by the California State Teachers' Retirement System
(CalSTRS) asking Tyco International Ltd. to relocate in the
United States had been approved. Bloomberg reports that the
resolution is aimed at stemming corporate expatriation, in which
companies move off-shore in name only to avoid taxes and weaken
shareholder rights, citing State Treasurer Phil Angelides.
CalSTRS owns 869,749 Tyco shares, according to the report.
Earlier, the California Public Employees' Retirement System, the
largest U.S. public pension fund, had passed a resolution with
the same purpose.
The public had been keeping a close watch on offshore businesses
after news of corporate scandals in WorldCom. Inc, and Tyco broke
out.
Tyco's former chief Dennis Kozlowski and ex-finance chief Mark
Belnick were charged of enterprise corruption and grand larceny
after they allegedly embezzled millions of dollars from company
funds. Both had entered pleas of innocence and are out on bail.
U.S. Treasury Assistant Secretary Pamela Olson told a
congressional panel two months ago that about 20 companies had
moved their addresses to tax havens while maintaining operations
in the United States.
In August, Angelides had banned his office and the US$45 billion
Pooled Money Investment Account, a state and local government
cash pool held in short-term investments, from any transactions
with companies that had escaped to tax havens.
CONTACT: TYCO INTERNATIONAL LTD.
Corporate Office
The Zurich Centre, Second Floor
90 Pitts Bay Road
Pembroke HM 08, Bermuda
Phone: 441-292-8674
Home Page: http://www.tyco.com
===========
B R A Z I L
===========
AES Corp.: Extends the Exchange Offer Expiration Date
-----------------------------------------------------
The AES Corporation (NYSE: AES) announced Wednesday that it had
extended the expiration date of the exchange offer relating to
its outstanding $300,000,000 8.75% Senior Notes due 2002 ("2002
Notes") and $200,000,000 7.375% Remarketable or Redeemable
Securities due 2013, which are puttable in 2003 ("ROARs"), from
5:00p.m., New York City time, on December 3, 2002 to 5:00p.m.,
New York City time, on December 6, 2002.
The AES Corporation has been informed by the exchange agent that,
as of 5:00 p.m., New York City time, on December 3, 2002,
approximately $230,074,000 in aggregate principal amount of its
2002 Notes and $172,859,000 in aggregate principal amount of its
ROARs had been tendered in the exchange offer. These amounts
represent approximately 77% and 86% of the outstanding 2002 Notes
and ROARs, respectively. Consummation of the exchange offer is
subject to a number of significant conditions including the
condition that 80% in aggregate principal amount of the 2002
Notes and 80% in aggregate principal amount of the ROARs are
validly tendered.
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, and
two individuals affiliated with AES who are accredited investors.
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.
CONTACT: The AES Corporation
Kenneth R. Woodcock, 703-522-1315
AES CORP.: Names Darman Vice Chairman, Lead Independent Director
----------------------------------------------------------------
The Board of Directors of The AES Corporation (NYSE: AES)
announced Wednesday that Richard Darman has been elected to the
newly established position of Vice Chairman and Lead Independent
Director. Mr. Darman's responsibilities as Lead Independent
Director will be consistent with those in the draft New York
Stock Exchange listing standards. He will continue to serve as a
member of the Financial Audit Committee.
Mr. Darman, 59, is a Partner of The Carlyle Group, one of the
world's largest private equity firms. He joined Carlyle in
February 1993, after serving as Director of the Office of
Management and Budget from 1989 to 1993, during the first Bush
administration. Earlier, he was a Managing Director of Shearson
Lehman Brothers. Mr. Darman's government service spanned five
Presidencies and included senior policy positions in the White
House and six cabinet departments. He graduated with honors from
Harvard College in 1964 and from Harvard Graduate School of
Business in 1967. Mr. Darman joined the AES Board of Directors on
July 25, 2002.
"I am delighted that Dick Darman is willing to assume even
greater Board responsibilities and that he has agreed to serve as
Vice-Chairman," said Roger Sant, Chairman of the Board of AES.
Paul Hanrahan, President and Chief Executive Officer, added, "I
am extremely pleased that Dick Darman will be assuming these new
responsibilities. His leadership will greatly assist us as we
move forward."
Mr. Darman said, "AES has taken a number of actions in recent
months to create a strong platform for recovery. I am looking
forward to the challenges that come with my new role and will
continue to focus on the turnaround of the Company."
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 176
facilities totaling over 60 gigawatts of capacity, in 33
countries. AES's electricity distribution network sells 108,000
gigawatt hours per year to over 16 million end-use customers.
CONTACT: AES Corporation
Kenneth R. Woodcock, 703/522-1315
BANCO FIAT: Banco Itau's Purchase Will Not Affect S&P Ratings
--------------------------------------------------------------
The acquisition of 99.99% of Banco Fiat S.A. by Banco Ita£ S.A.
(local currency counterparty credit ratings 'BB/Negative/B';
foreign currency counterparty credit ratings 'B+/Negative/B')
will not affect Standard & Poor's ratings of Banco Ita£. The
acquisition of Banco Fiat, still conditional on approval by the
Central Bank of Brazil, will reinforce Banco Ita£'s position in
vehicle finance and leasing operations by adding to the bank a
portfolio of approximately Brazilian reais (BrR) 2.3 billion of
operations. Under the acquisition agreement, Banco Ita£ is
entitled to several benefits, including the exclusivity in new
vehicle financing and leasing related to promotions organized by
Fiat in Brazil for 10 years.
Following the acquisition, Banco Ita£ will keep its position as
the second-largest private bank in Brazil, with total assets of
around BrR123 billion, and a car financing and leasing portfolio
of approximately BrR5.2 billion. Profitability should be
maintained at good levels and the bank may benefit from the
higher spreads provided in the consumer finance business, thus
leveraging on its revenue capacities. Banco Fiat will be acquired
for approximately BrR897 million, thus implying goodwill of
BrR462 million. The goodwill generated from recent acquisitions,
namely that of Banco BBA and Banco Fiat, has affected negatively
the bank's capital quality. Standard & Poor's will continue
monitoring closely Banco Ita£'s acquisition strategy, as it may
add further downward pressure to the bank's capital and ratings.
ANALYSTS: Tamara Berenholc, Sao Paulo (55) 11-5501-8950
Daniel Araujo, Sao Paulo (55) 11-5501-8939
BANCO FIAT: Sale To Itau Will Reduce Parent's Gross Debt
--------------------------------------------------------
The sale of Fiat SpA's financial arm in Brazil would reduce
Fiat's gross debt by EUR800 million (US$800 million). About
EUR100 million (US$100 million) would also be cut from Fiat's net
debt, reports Bloomberg News. Fiat is shedding its car making
businesses and other assets in an effort to achieve profits after
losing in four straight quarters.
Banco Fiat, which would be sold to Brazil's fourth largest bank,
Banco Itau for BRL897 million (US$224.5 million), would have to
pay Itau's carmaking unit EUR165 million in dividends before the
sale can be completed.
In Italy, Fiat's car sales had steadily gone down this year,
dropping by 22% last month. Its market share had plunged to a
record-low of 28.2%.
According to the report, the Company's shares fell 28 cents, or
2.9%, to 9.35 euros at 10:18 a.m. in Milan on Wednesday, giving
the Company a market value of 5 billion euros. The shares have
fallen 47% this year.
CONTACT: BANCO ITAU SA
Rua Boa Vista, 176
01014-919 Sao Paulo, Brazil
Phone: +55-11-237-3000
Fax: +55-11-5582-1133
Home Page: http://www.itau.com.br
Contacts:
Olavo Egydio Setubal, Chairman of the Board
Roberto Egydio Setubal, President and CEO
Geraldo Soares, Investor Relations Superintendent
Pra‡a Alfredo Egydio de Souza Aranha, 100
Torre Concei‡ao - 11§ andar
04344-902 - Sao Paulo - SP
Phone: +5511 5019-1549
Fax: +5511 5019-1133
CONTACT: Fiat SpA
Head Office
Corso Marconi 20
10125 Turin
Italy
Tel +39 011 68 61 111
Fax +39 011 68 62 444
Web http://www.fiatgroup.com
Contacts:
Paolo Fresco, Chairman
Paolo Cantarella, Chief Executive
CEMIG: EBITDA Forecast Revised Downward; Subsidies Cited
--------------------------------------------------------
Shares of Cia. Energetica de Minas Gerais (Cemig) fell 31
centavos, or 1.3%, to BRL23.19. According to Bloomberg, Brazil's
largest combined power distributor and generator cut its forecast
for earnings before interest, taxes, depreciation and
amortization, or EBITDA, for this year to BRL1.2 billion from the
previous projection of BRL1.45 billion.
In a statement sent to the exchange, the Company also said power
consumption is likely to grow 0.7% this year, from a previous
estimate of 2.3% growth.
One of the reasons for the change in the EBITDA forecast is the
new criteria expanding the subsidy to more low-income consumers,
which means a loss of about BRL5 million per month in Cemig's
revenue, Cemig said.
CONTACT: Cia Energetica de Minas Gerais (Cemig)
Registered Office
Edificio Julio Soares
Avenida Barbacena, 1200
Sto Agostinho
30123-970 Belo Horizonte - MG
Brazil
Tel +55 31 3349-2111
Fax +55 31 3299-4691
URL: http://www.cemig.com.br
Contact:
Djalma Bastos de Morais, Chairman
CSN: Hires Consultant To Value Asset
------------------------------------
Cia. Siderurgica Nacional SA (CSN), Brazil's second-largest
steelmaker, retained consultant Planconsult Planejamento e
Consultoria Ltda. to value its 238MW co-generation power plant at
its Volta Redonda mill in Rio de Janeiro as it prepares it for a
planned sale.
The Company's latest balance sheet revealed a book value of
US$120 million, but the consultant's report will determine the
final value of the asset. The report will be presented to CSN
shareholders to vote on the operation at a December 19 meeting.
The planned sale is part of CSN's strategy to focus on the core
business of steel production. CSN intends to transfer the plant
and its outstanding debt of US$250 million to a new company
called NewCo. Oliveira Trust Participacoes will acquire NewCo's
capital and in exchange issue convertible debentures to CSN.
"Since September 2001, we have been telling the market of our
intention to divest our stakes in the electric power sector and
focus our activities on steelmaking. The operation approved is
the first step toward selling off these investments without
putting at risk the supply of electric power to the Volta Redonda
mill," CSN's chairman and CEO Benjamin Steinbruch said.
CSN will sign a long-term contract with NewCo for the supply of
electricity to the mill, which needs 385MW.
Luciana Machada, a steel analyst at brokerage Fator Atherino,
expects the market to look favorably upon the move, as it will
cut CSN's liabilities.
"We just have to wait and see what will be the price they will
have to pay for the energy supplied, since CSN did not have to
spend on the input before. But I don't think there will be any
price gouging," she said.
CSN retains a 24.8% stake in hydroelectric dams Ita and
Igarapava, which provide its mills with 167MW and 21.7MW,
respectively.
CSN has lost money in the last four quarters and has been hurt by
the recent collapse of a US$3.5-billion takeover by Europe's
Corus Group Plc.
ESCELSA: S&P Affirms 'B+' Ratings; Outlook Negative
---------------------------------------------------
Standard & Poor's Ratings Services said Wednesday it affirmed the
'B+' foreign and local currency corporate credit ratings on
Brazilian energy utility Esp¡rito Santo Centrais El‚tricas S.A.
(Escelsa).
The 'B+' rating on Escelsa's $430 million senior notes program is
also affirmed. The outlook on ratings is still negative.
Escelsa's total debt amounts to $530 million.
The ratings were affirmed after Standard & Poor's analyzed the
tender offer to acquire all of Escelsa's outstanding senior
notes. According to Standard & Poor's criteria, such offer could
be classified as a distressed exchange offer leading to an 'SD'
(selective default) rating, if Standard & Poor's understands such
offer to be coercive by virtue of the investor's contemplation
that refusal to accept the offer may lead to an even worse
alternative (for more criteria information, please refer to
research articles "Distressed Exchange Offers: Tantamount to
Default" and "Rating Policies and Procedures: Distress and
Default").
The offer could lead to an 'SD' rating even if placed by
Electricidade de Portugal S.A. (EDP; A+/Negative/--) and not
Escelsa directly, since EDP is the controlling shareholder and is
acting to benefit the group. "However, Standard & Poor's does not
see this specific case as a distress exchange offer because
Escelsa is not under financial distress and is capable of meeting
debt requirements (approximately $43 million semi-annually
interest payments until maturity of senior notes in 2007),"
stated Standard & Poor's credit analyst Marcelo Costa.
Standard & Poor's expects Escelsa to reach free operating cash
flow of $16.4 million in 2003, after paying interests and capital
expenditures, and amortizing debt. Capital expenditures
requirements for 2003 are minimal and the company is expected to
maintain cash holdings of approximately $70 million.
The negative outlook highlights Standard & Poor's increasing
uncertainties about the regulatory environment and potential
negative effect on the company's level of cash generation. If
some important issues, such as the tariff revision rules and
procedures and the commercialization environment are not properly
regulated and put in place to improve the energy sector
performance, it could further impair the ratings on Escelsa.
ANALYSTS: Marcelo Costa, Sao Paulo (55) 11-5501-8955
Milena Zaniboni, Sao Paulo (55) 11-5501-8945
NETSAT SERVICOS: S&P Lowers Rating to 'CCC+', Outlook Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services said Wednesday it lowered the
corporate credit rating on Brazil-based pay-TV provider NetSat
Servi‡os Ltda. to 'CCC+' from 'B-'. The outlook is now negative.
"The rating action reflects increasing concerns about
shareholders' capacity and willingness to continue to support
NetSat's persisting negative cash flow. The company faces a
difficult and potentially unstable economic environment for 2003
and the financial distress of its controlling shareholder,
Globopar S.A., who is in default with several bank and capital
market debts," stated Standard & Poor's credit analyst Milena
Zaniboni.
Globopar and News Corp. Ltd., the two major equity shareholders,
have signed an agreement in which News Corp. will be responsible
for most of the capital contributions required by NetSat until
December 2003, eventually diluting Globopar's controlling
ownership.
Standard & Poor's expects News Corp. to continue supporting the
subsidiary's operations for the next year, but there are
increasing concerns on whether it will fund the repayment of the
senior secured notes due in August 2004. Standard & Poor's views
News Corp.'s ongoing financial support as uncertain, as Latin
America may not be a crucial market for News Corp. The
shareholder's willingness to continue supporting the money-losing
Brazilian subsidiary will very much depend on the macroeconomic
environment and the company's turnaround prospects.
NetSat's operating losses have been decreasing systematically,
but more sustainable profitability would depend on NetSat's
capacity to increase its subscriber base. Growth prospects,
though, are impaired by the negative forecast for Brazil in 2003,
and limited access to funding.
NetSat's capacity to grow and eventually become cash flow
positive is also dependent on shareholders' willingness to
continue funding the acquisition cost of subscribers (SAC).
Attracting subscribers is particularly expensive for direct-to-
home (DTH) due to the significant subsidy given in the set-top
box - 100% of which is expensed as incurred. The company has been
able to reduce SAC and has managed to post marginally positive
EBITDA (2%) in the first quarter of 2002. However, higher
advertising and programming expenses related to the Soccer World
Cup negatively affected results in second quarter 2002, but a
return to marginally positive EBITDA is expected for 2003.
The delay in achieving the maturity of NetSat's business plan and
in turning free cash flow positive can be attributed to lower-
than-expected penetration and the volatility of the currency,
which erodes the company's cash flow. Some 40% of operating costs
are linked to the variation of the dollar while revenues are in
local currency.
The company has many competitive advantages compared with other
major pay-TV providers, such as a fully digital platform and
capacity to offer fee-based interactive products and services,
and exclusive DTH programming. These represent significant growth
opportunities, which will only materialize if shareholders remain
committed to the business.
ANALYSTS: Milena Zaniboni, Sao Paulo (55) 11-5501-8945
Jean-Pierre Cote Gil, Sao Paulo (55) 11-5501-8946
TELEMAR: Shareholders' Meeting Agenda Full of Changes
-----------------------------------------------------
The Extraordinary Shareholders' Meeting scheduled for December
16, 2002, shall deliberate and vote on (i) changes in article
nine of the Company's Bylaws with respect to the rights of
preferred shares and (ii) a correction of article 11 of the
Company's Bylaws, to adjust a cross reference to an article which
has been renumbered on the last revision.
The change on article nine of the Company's Bylaws is necessary
to adequate it to the terms of Law 10,303/01 with respect to the
rights of preferred shares, which, by amending the Brazilian
Corporate Law, determined that will be only allowed for
negotiation in the stock market the preferred shares which are
entitled to one of the following rights:
I. participation in the minimum obligatory dividends of 25% of
the Company's Net Income, with:
(a) priority in receiving 3% of the equity value of the share,
and (b) participation on the distribution of net income balance
in equal conditions with the common shares, after being secured
to such common shares a dividend equal to the minimum priority
established on item (a) above;
II. to receive dividend, per preferred share, at least ten
percent higher than the dividend assigned to each common share;
or
III. to be included in the public offering for the sale of a
Company's control (tag-along), according to article 254-A of the
Brazilian Corporate Law, granting a dividend at least equal to
the one assigned to the common shares.
The Law determines that the companies have until March 01, 2003
to amend their Bylaws, provided that the alterations made until
December 31, 2002 do not give redemption rights to dissenting
shareholders.
The Brazilian Comissao de Valores Mobiliarios - CVM stated,
through its collegiate, on November 22, 2002, that the new shares
to be issued by the companies need to have at least one of the
rights described above. On the other hand, it understood that it
is not necessary to alter the rights of the currently outstanding
preferred shares but, at the same time, recommended that: (i) it
would be allowed the conversion of the existing preferred shares
into a new class of preferred shares that should include one of
the above mentioned rights, or (ii) it should be added to the
current rights of the existing preferred shares, at least one of
the of the above mentioned rights.
We consider that CVM's understanding, in face of Law 10,303/01,
is still controversial and therefore our management is still
analyzing the subject to submit, until the date of the
Shareholders' Meeting, a proposal to our shareholders, in
accordance with the Law.
Right after the conclusion of this Meeting, Tele Norte Leste will
call a Shareholders' Meeting, only with the participation of the
holders of the Company's preferred shares, so as to ratify the
deliberations made by the voting shareholders in the Meeting
scheduled for December 16, 2002.
Marcos Grodetzky
Investor Relations Officer
Tele Norte Leste Participa‡oes
See Summons Notice for the Meeting
TELEMAR: Extraordinary General Meeting Minutes Released
-------------------------------------------------------
Minutes of the Extraordinary General Meeting of TELEMAR NORTE
LESTE S.A. held on November 29, 2002, drawn up in the form of a
summary as established in article 130, paragraph 1 of Law 6,404/
76.
1. DATE, TIME AND PLACE: On November 29, 2002, at 4:30 p.m., at
the conference hall on the 5th floor of the Company's head
offices, located at Rua General Polidoro, 99, Botafogo, in the
City and State of Rio de Janeiro.
2. AGENDA: Acquisition by the Company of 99.999% of the shares
representing the capital stock of Pegasus Telecom S.A.
3. CALL NOTICE: Published in the Official Gazette of the State of
Rio de Janeiro (Diario Oficial do Estado do Rio de Janeiro),
section V, on June 14, 2002, page 10, on June 17, 2002, page 5,
and on June 18, 2002, page 07, in Jornal do Commercio on June 14,
2002, page A-5, on June 15, 2002, page A-5, and on June 17, 2002,
page A-22; and in Gazeta Mercantil, on June 14, 2002, page 02, on
June 17, 2002, page 03 and June 18, 2002, page 03.
4. ATTENDANCE: The shareholders of TELEMAR NORTE LESTE S.A,
representing more than two thirds of the voting capital, as per
the records and signatures contained in the Shareholders'
Attendance Book, as well as Mr. Ronaldo Iabrudi dos Santos
Pereira, the Company's Chief Executive Officer, Mr. Francisco
Valim Tosta Filho, the Company's Finance Officer, and the
representatives of PricewaterhouseCoopers, of Goldman Sachs & Co.
and of UBS Warburg, were present at the meeting.
5. PRESIDING BOARD: Chairman: Mr. Leandro Luiz Zancan; Secretary:
Ms. Eur¡dice Mason, elected by the shareholders in attendance.
6. RESOLUTIONS: Beginning the works, the Chief Executive Officer
of the Company, Mr. Ronaldo Iabrudi, expounded the main reasons
for the acquisition of Pegasus Telecom S/A ("Pegasus") by Telemar
Norte Leste S/A (the "Company"), emphasizing the benefits that
the TELEMAR NORTE LESTE S.A. Extraordinary General Meeting held
on November 29, 2002 transaction would bring to the Company.
Following, the matter listed in the agenda was put to vote, and
the majority shareholders attending the meeting approved the
acquisition by the Company of the shares representing 99.999% of
the capital stock of Pegasus, based on the following components:
(i) R$ 221,803,704.00, to be adjusted by the difference between
the actual value of Pegasus financial debt, ascertained on the
date of signing of the stock purchase and sale agreement and on
June 30, 2002, and (ii) the additional tax credit amount arising
from tax losses, to be calculated on the date of consummation of
the business, the amount of which is estimated at R$ 44 million,
as of June 30, 2002. Payment to sellers shall be made if and to
the extent that the Company and/or Pegasus actually use the tax
credit available. The abstention of shareholder Secretaria de
Estado da Fazenda de Minas Gerais (Minas Gerais State Treasury
Office) and the dissenting votes were recorded, which will be
filed at the Company's head offices. Subsequently, payment of the
amount of R$ 114 million, recommended by the Company's Executive
Office, by way of synergy and savings for the Company as a result
of the transaction, was then put to vote, with the abstention of
the controlling shareholder Tele Norte
Leste Participacoes S/A. Payment of the respective amount was
approved by a majority of the other shareholders present, and the
following abstentions were recorded: Secretaria de Estado da
Fazenda de Minas Gerais (Minas Gerais State Treasury Office),
Sergio Bernstein, Manoel
Horacio Francisco da Silva and Instituto de Previdˆncia do
Munic¡pio de Fortaleza - IPM (Fortaleza Municipality Social
Security Institute), and the Pernambuco State Government,
dissenting votes, which will be filed at the Company's head
offices. The shareholders further authorized these Minutes to be
drawn up in the form of a summary and published with the omission
of the shareholders' signatures, as provided for in article 130,
paragraphs 1 and 2 of Law 6,404/76. Finally, Mr. Jos‚ Teixeira de
Oliveira stated his favorable vote to the acquisition in point,
and congratulated the managers for conduction of the transaction.
7. CLOSING: As there was nothing else to be discussed, these
Minutes were drawn up, and were duly approved and signed by the
shareholders listed below, which constituted the necessary quorum
for such approvals.
Rio de Janeiro, November 29, 2002.
Euridice Mason
Secretary
Leandro Luiz Zancan
Chairman
Shareholders Present:
Tele Norte Leste Participacoes S/A
by: Francisco Tosta Valim Filho
FRANCISCO DEUSMAR DE QUEIROS
by: C¡cero Antonio de Menezes Sobreira
GOVERNO DO ESTADO DA PARAIBA
Cristiane Pinheiro Diogenes
GOVERNO DO ESTADO DE RORAIMA
Cristiane Pinheiro Di¢genes
CSFB EQUITY INVESTMENTS (NETHERL) BV,
Marcos Duarte Santos
FUNDACAO SANEPAR DE PREV E ASS. SOCIAL FUSAN
Celso Ferreira
MANOEL HORACIO FRANCISCO DA SILVA
Celso Ferreira
SERGIO BERNSTEIN
Bernardo Medeiros Coelho da Rocha
ARX STRIKE FDO DE INVESTIMENTO FINANCEIRO
Rodrigo Schramm da Fonseca
GOVERNO DO ESTADO DE PERNAMBUCO
Oscar Vilaca de Melo Filho/ Tarciana Ramos de Albuquerque Xavier
SUPERINTENDENCIA DO DESENVOLVIMENTO DO ESTADO DO CEARA - SUDEC
Francisco Alfredo da Silveira Fortuna
GOVERNO DO ESTADO DO PIAUI
Kildere Ronne de Carvalho Souza
SECRETARIA DE TRIBUTACAO DO ESTADO DO RN
Vera Maria Ol¡mpio Guedes
SECRETARIA DA FAZENDA DO ESTADO DA BAHIA
Marco Aurelio de Castro Junior
BOM JARDIM DA SERRA AGROPECUARIA LTDA
Nelson Rodrigues Froes
INSTITUTO DE PREVIDENCIA DO MUNICIPIO IPM
Rose Mary Freitas Maciel
GOVERNO DO ESTADO DE SERGIPE
Felipe Moreira de Godoy e Vasconcelos
SERGIPE ASSEMBLEIA LEGISLATIVA
Felipe Moreira de Godoy e Vasconcelos
PROCURADORIA GERAL DE JUSTI€A
Felipe Moreira de Godoy e Vasconcelos
MINAS GERAIS SECRETARIA DE ESTADO DA FAZENDA
Juliana Campos Horta de Andrade
NELSON IZECKSON
MARCOS DUARTE SANTOS
JOSE TEIXEIRA DE OLIVEIRA
* Brazilian State Ceases Payment of Obligations
-----------------------------------------------
Espiritu Santo, a state in southeast Brazil had stopped paying
its financial obligations due to the federal government and
financial institutions, according to a report from local paper, O
Estado de Sao Paulo.
According to the report, the federal government had suspended
transfer of revenue to the state because of the lack of payment.
However, the report had not indicated the source of the
information, nor the amount of the state's debts to particular
lenders.
A report from Bloomberg News indicates that Espiritu Santo owes
the central government and treasury about BRL1.9 billion, citing
Brazil's federal government.
Lenders that have not received payment from the state include the
World Bank, and the Inter-American Development Bank.
The local paper also reports that the state has also failed to
pay the last five installments on a loan worth BRL213 million
(US$58.1 million) to Brazil's development bank, BNDES, which is
controlled by the federal government.
CONTACT: BNDES Main Office
Av. Republica do Chile,
100 Rio de Janeiro - RJ
Phone: (021) 2277-7447/6978
Home Page: http://www.bndes.gov.br/english/welcome.htm
Contacts:
Enterprise Information Center
Main Office
Av. Rep£blica do Chile,
100 - 13§ andar - Sala 1301
Tel.: (21)2277-8888
Fax: (21) 2220-2615
Email: contact@bndes.gov.br
=========
C H I L E
=========
TELEX-CHILE: Adopting Chilesat Trademark
----------------------------------------
Telex-Chile will soon adopt the Chilesat trademark, though it
will have to add a distinguishing extension, in a bid to benefit
from the trademark's brand recognition. A report from the
Wednesday issue of Business News Americas indicates that full
name will be made public at the next Telex shareholders' meeting
mid-December.
IDC Chile telecoms analyst Natalia Vega said that the change of
name should not take a long time since from the authorities'
point of view, the Company is identified by the same taxpayer ID
number.
She added that the name change and the accompanying image change
is part of the global tendency for operators to become solutions
providers.
The Company, which would be the first Chilean operator to have a
multi-service network, plans to emphasize the potential of its
IP-based MPLS network. Investment firms Southern Cross and GE
Capital own 96 percent in Telex.
CONTACT: Telex Chile SA
Head Office
202 Rinconada El SaLto
Huechuraba
Santiago
Chile
Tel +56 2 382 5786
Web: http://www.telex.cl
Contact:
Engr. Norberto Morita, Chairman
===============
C O L O M B I A
===============
BANCAFE: Regulator Urges Sale
-----------------------------
Colombia's securities and exchange regulator Andres Florez said
that the government should sell off Bancafe sooner than later. He
says the state-owned bank represents a permanent drain on already
strained public finances. In a Business News Americas report, Mr.
Florez revealed that the bank currently costs the government
about US$150 million monthly.
The government has been trying to privatize Bancafe since 1998,
but all attempts proved to be futile, Mr. Florez indicated. A
sale now would also prove to be tough due to a recessive economy
and the bank's poor financial health. Selling it now would imply
a high political cost, since people would say the government gave
the bank away, he noted.
Bancafe is now being cleaned-up to improve its finances and
value. The bank's greatest strength is its strong focus on
consumer lending and its branch-network, which is one of the
largest in Colombia, Mr. Florez said. He added that the bank
would be an attractive investment under improved conditions.
CONTACT: BANCAFE
Street 28 Not 13 To 15
Bogota District of Colombia
Phone: 5600999 EXT. 4338
E-mail: ma.pulido@bancafe.com.co
Fax: 336 76 77
Home Page: www.bancafe.com
Contact:
Pedro Nel Ospina Santamaria, Legal Representative
===========
M E X I C O
===========
AOL LATIN AMERICA: AOL Mexico, AmEx Reach Agreement
---------------------------------------------------
-- American Express Cards to be Prominently Promoted Across
the AOL Mexico Service and the AOL Mexico Web Site
-- New American Express Members Registering Through AOL
Mexico Will Receive Special Benefits and Promotions
America Online Latin America Inc. (NASDAQ-SCM:AOLAC), a leading
interactive services provider in Latin America, announced
Wednesday an interactive marketing agreement between its
subsidiary AOL Mexico S. de R.L. de C.V. and American Express
Mexico under which the American Express card is being prominently
promoted across the AOL Mexico service.
The agreement builds upon an earlier successful program for
American Express in which it registered new members by targeting
a very specific consumer market segment using the AOL Mexico
service.
As part of this agreement, the American Express (AMEX) card is
being promoted through various efforts across the AOL Mexico
service including online promotions on the AOL Mexico Welcome
Screen, creating a special content area for the AMEX card,
directing AOL Keyword searches to the AMEX card Web site, and
conducting animated polls and surveys of its members. In
addition, promotions are also being extended to the AOL Mexico
Web site at www.aol.com.mx.
The agreement incorporates an integrated marketing communications
campaign with online promotions, direct mail marketing materials
through bill inserts, and various consumer advertising
initiatives. AOL Latin America's Interactive Marketing group
worked hand-in-hand with American Express in Mexico to develop a
promotional campaign that would enable American Express to easily
and cost-effectively reach their target audience using the online
medium as a major element of the campaign.
Eduardo Escalante, President of AOL Mexico, said: "We are very
pleased to expand our relationship in Mexico with such a
respected global brand as American Express, a company committed
to the Mexican market. Working together, we have developed a
marketing campaign designed to effectively reach out to a large
base of Mexican consumers to introduce them to the American
Express card and to the ease and convenience of the AOL
interactive experience that more than 1 million Latin American
consumers have already made a part of their everyday lives. We
are helping our partners, like American Express, achieve their
marketing goals through strategic solutions that use interactive
tools and promotions to enable them to reach their target
audience effectively and cost-efficiently."
Lorenzo Soriano, Marketing Director of American Express Co.
(Mexico), commented: "The agreement we announced with AOL Mexico
is one more step in our growth strategy in the Mexican market. We
are proud to begin this initiative with AOL, a company that will
give access to a greater number of potential American Express
Cardmembers. This initiative will support our growth and
leadership objectives."
About AOL Latin America
America Online Latin America, Inc. (NASDAQ-SCM:AOLAC) is the
exclusive provider of AOL-branded services in Latin America and
has become one of the leading Internet and interactive services
providers in the region. AOL Latin America launched its first
service, America Online Brazil, in November 1999, and began as a
joint venture of America Online, Inc., a wholly owned subsidiary
of AOL Time Warner Inc. (NYSE:AOL), and the Cisneros Group of
Companies. Banco Itau, a leading Brazilian bank, is also a
minority stockholder of AOL Latin America. The Company combines
the technology, brand name, infrastructure and relationships of
America Online, the world's leader in branded interactive
services, with the relationships, regional experience and
extensive media assets of the Cisneros Group of Companies, one of
the leading media groups in the Americas. The Company currently
operates services in Brazil, Mexico and Argentina and serves
members of the AOL-branded service in Puerto Rico. It also
operates a regional portal accessible at www.aola.com. America
Online's 35 million members worldwide can access content and
offerings from AOL Latin America through the International
Channels on their local AOL services.
About American Express Company
American Express is an international Travel Related Services
Company, offering in Mexico The American Express Card(R), The
Gold Card(R), The Platinum Card(R), Corporate Card(R), Gold
Corporate Card(R), Corporate Platinum Card(R), The American
Express Corporate Purchasing Card(R), American Express(R)
Aeromexico, The Gold Card(R) American Express Aeromexico, The
Platinum Card(R) American Express Aeromexico, Travel Services,
American Express(R) Travelers Cheques, Insurance and Foreign
Exchange Services. In addition, it has the American Express Bank
(Mexico), which offers the American Express Credit Card(R), The
Gold Credit Card American Express(R) and Blue de American
Express(R), as well as investment products: Centurion Time
Deposit, Centurion Cash, Centurion Cash Plus, Amex MD, Amex 30
and Amex Cob. For further information visit our webpage:
http://www.americanexpress.com.mx.
CONTACT: America Online Latin America, Inc., Fort Lauderdale
Financial Community
Monique Skruzny, 954/689-3256
aolairr@aol.com
or
News Media
Fernando Figueredo, 954/689-3256
LatAmPressMail@aol.com
GRUMA SA: S&P Revises Outlook to Positive
-----------------------------------------
Standard & Poor's Ratings Services said Wednesday it revised the
outlook on Gruma S.A. de C.V. to positive from stable. The 'BB'
corporate credit rating was affirmed. Gruma is a Mexican producer
of corn flour and tortillas.
"The outlook revision follows the company's continued improvement
in its financial profile derived from higher sales in its U.S.
operation, improved cost structure, and lower debt levels,"
stated Standard & Poor's credit analyst Beatriz Coll.
As of September 2002, the company had US$649.9 million in total
debt.
During 2002, the company continued to benefit from higher sales
in its U.S. operation, good growth opportunities in this market
as a result of the increasing demand and acceptance of Mexican
food, and better cost controls and improved productivity. These
factors have resulted in an improvement of the company's
profitability and have offset the lower level of sales in its
Mexican operation, which is still affected by the lower
conversion to corn flour, as the low price of corn results in
higher competition from the traditional method, and limits the
company's ability to increase volume and sales in this market.
Throughout 2002 sales have not increased, nevertheless Gruma's
management has proven its commitment to focus on profitability.
The company's EBITDA margins have increased to 12% for the last
12 months as of September of 2002, from 10% as of September 2001,
as a result of lower costs and higher prices in its U.S.
operations. During 2002 the company also reduced US$68 million in
debt and expects to reduce US$50 more during 2003. The lower debt
coupled with the increase in cash flow has allowed for an
increase in the company's credit protection measures.
EBITDA interest coverage and total debt to EBITDA improved to 4.1
times (x) and 2.9x, respectively, for the last 12 months as of
September 2002, from 2.6x and 3.8x, respectively, as of September
2001. Capital expenditures are expected to remain within
expectations at about US$70 million for 2002 and to remain around
this level for 2003. Lower investments, together with the
company's focus on profitability and the increase in cash flow,
should allow Gruma to continue generating free operating cash
flow, providing it with sufficient liquidity to continue to
reduce debt.
The company's liquidity is considered adequate. As of September
2002, Gruma had US$56 million in cash and short-term investments
and around US$70 million in short-term debt that matures in 2002
and 2003. Part of this debt will be refinanced and is expected to
be paid during the first half of 2003 via internally generated
cash flow. The company has around S$400 million in uncommitted
and US$70 million in committed lines of credit available as a
source of additional liquidity.
If Gruma is able to maintain its current credit protection
measures as well as continue generating free operating cash flow,
an upgrade could be considered. The outlook also incorporates the
expectation that the company will be able to refinance its
February 2004 US$300 million maturity.
ANALYST: Beatriz Coll, Mexico City (52) 55-5279-2016
GRUPO MEXICO: Restructures Unit's Debt With Creditors
-----------------------------------------------------
Mining giant Grupo Mexico SA said Wednesday creditors have agreed
to extend to March 2007 maturity of the US$879 million of bank
and bond debt that its local unit Grupo Minero Mexico defaulted
on earlier this year. Lenders include Bank of America Corp. and
Bank of Nova Scotia.
In a filing with the Mexican stock exchange, Grupo Mexico said
that it also agreed to increase the unit's capital by US$110
million. The Company expects a definitive agreement to be signed
as soon as paperwork is completed.
Grupo Mexico, the world's third-largest copper miner, ran into
trouble making debt payments as copper prices fell following its
purchase of U.S.-based Asarco Inc. in 1999 for US$2.25 billion in
cash and debt. At the end of September, Grupo Mexico's net debt
was US$2.4 billion. It reported a loss of MXN247 million
($1=MXN10.2780) in the third quarter, compared with a MXN1.41
billion net loss in the same period last year.
"The current restructuring represents an important step in the
financial strengthening process of the Company's Mexican mining
sector," the Company said in the filing.
The deal would also increase operating efficiency to confront
sagging metals prices, Grupo Mexico added.
Asarco also reached an agreement two weeks ago to delay the
payment on US$450 million of defaulted debt until Jan. 31.
CONTACT: GRUPO MEXICO S.A. DE C.V.
Avenida Baja California 200,
Colonia Roma Sur
06760 M,xico, D.F., Mexico
Phone: +52-55-5264-7775
Fax: +52-55-5264-7769
Home Page: http://www.gmexico.com
Contacts:
Germ n Larrea Mota-Velasco, Chairman and CEO
Xavier Garca de Quevedo Topete, President and COO
Alfredo Casar P,rez, COO, Ferrocarril Mexicano
Daniel Ch vez Carre n, COO, Industrial Minera M,xico
Daniel Tellechea Salido, VP and Administration and
Finance President
ASARCO
2575 E. Camelback Rd., Ste. 500
Phoenix, AZ 85016
Phoenix City
Phone: 602-977-6500
Fax: 602-977-6701
Home Page: http://www.asarco.com
Contacts:
Germ n Larea Mota-Velasco, Chairman and CEO
Genaro Larrea Mota-Velasco, President
Daniel Tellechea Salido, VP and CFO
UNEFON: Files Arbitration Case Against Canada's Nortel
------------------------------------------------------
Mexican mobile operator Unefon informed the country's stock
exchange that it has asked a New York arbitration panel to hear
its case against Canadian equipment vendor Nortel Networks,
reports Business News Americas.
"Unefon sustains, among other points, that Nortel Networks has
failed to comply with a supply and service contract by not
handing over a PCS digital mobile telephony network in Mexico,
under the terms agreed between the [two] parties," Unefon said.
Unefon filed the arbitration case on November 11, the same week
that it was reported to be suing Nortel for failure to deliver
US$70 million worth of equipment. The lawsuit was at around
US$900 million.
In the Company's third quarter results, Unefon CEO Adrian Steckel
said that future growth might be restricted because of the legal
dispute with Nortel, its principal creditor.
Unefon froze interest payments to Nortel, saying the vendor had
failed to fulfill loan obligations. In response, Nortel filed a
notice of default against Unefon.
Unefon is majority owned by local business magnate Moises Saba
and TV Azteca.
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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 Oona G. Oyangoren, Editors.
Copyright 2002. All rights reserved. ISSN 1529-2746.
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