/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/021219.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 Thursday, December 19, 2002, Vol. 3, Issue 251 Headlines A R G E N T I N A AEROLINEAS ARGENTINAS: Expanding To Four LatAm Countries CTI MOVIL: Seeks New Owner Despite Improving Results TELEFONICA DE ARGENTINA: To Leave Buenos Aires HQ * Japanese Paper Predicts Argentina $411M Samurai Bond Default B E R M U D A GLOBAL CROSSING: Court Confirms Reorganization Plan B O L I V I A REPUBLIC: S&P Lowers Bolivia's LT LC Credit Rating to 'B+' B R A Z I L EMBRATEL: To Restructure $750M In Debt This Month ENRON: Bankruptcy Complicates Two Brazilian Unit's Disposition TELEMAR: Schedules Another Extraordinary Shareholders' Meeting TELEMAR: Notice To Shareholders C H I L E SAESA: To Seek Shareholders Approval On $34.4M Capital Increase C O L O M B I A * Colombia to Receive $700M CAF Loan M E X I C O AHMSA: Creditor Banks Trash Debt Proposal HAYES LEMMERZ: Files Plan of Reorganization HYLSA: Moody's Assigns, Confirms Ratings SAVIA: Defaults On $60M Bank Loan; In Debt-Restructuring Talks P A N A M A BLADEX: Announces Proposed Rights Offering P E R U EMPRESAS LUCCHETTI: Takes Case To International Arbitration S T. V I N C E N T & G R E N A D I N E S CABLE & WIRELESS: Regulator Threatens Action As Clash Continues T R I N I D A D & T O B A G O BWIA: Exec Blasts Subsidy To Caribbean Star As Unfair CARONI LTD: VESP To Get $1B In Government Support V E N E Z U E L A PDVSA: Former Directors Slam Efforts To Restart Operations VENEZUELAN BANKS: Asobanca Denies Bank Freeze, Assures Liquidity - - - - - - - - - - ================= A R G E N T I N A ================= AEROLINEAS ARGENTINAS: Expanding To Four LatAm Countries -------------------------------------------------------- Aerolineas Argentinas, a unit of Spanish travel group Marsans, plans to set up regional subsidiaries in four Latin American countries - Chile, Bolivia, Paraguay, and Uruguay - next year, reports El Cronista. The expansion plan, which requires Aerolineas to invest up to US$30 million, is aimed at preventing too much dependence on the domestic market where the Company holds an 80% share. The subsidiaries are to start flights in the 3rd quarter of 2003 for both national and international destinations. The Ezeiza airport, at Buenos Aires, would play as a hub and offer maintenance and logistic services while the crews would come from each country. To fund the expansion, Marsans will inject capital worth ARS500 million during the first quarter of 2003. The subsidiaries are expected to add US$200 million to the turnover of Aerolineas. The Argentine airline is expecting to end this year with a turnover of US$1.05 billion, from which 70% corresponds to international flights. Marsans acquired Aerolineas from Spanish state-owned holding company SEPI for ARS2.5 billion (US$700 million) in October 2001 and provided a ARS1.23-billion (US$346 million) capital infusion to pull the airline out of bankruptcy. CONTACT: AEROLINEAS ARGENTINAS Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA Phone: (54-11) 4310-3000 Fax: (54-11) 4310-3585 E-mail: volar@aerolineas.com.ar Home Page: www.aerolineas.com.ar Contact: Patricio Zabalia Lagos, President CTI MOVIL: Seeks New Owner Despite Improving Results ---------------------------------------------------- Despite a 4% increase in its subscriber base this year and being on track to grow revenues 9% year-over-year to ARS570 million, CTI Movil is still searching for new ownership, according to the Argentine mobile operator's chairman Walter Forwood. CTI Movil has Verizon Communications as its largest shareholder with 48% stake. Verizon originally owned 65% of CTI but that stake went down to 48% when it sold a 17% stake to its 1,300 employees at the beginning of the year. However, Verizon managed to return to 65% ownership in July when CTI Movil's local shareholder Grupo Clarin exercised an option to sell 17% of the mobile operator to Verizon for US$240 million. Instead of keeping the stake, Verizon decided to set up a trust company called Latin American Holdings. But with Verizon's long-term commitment to Argentina in doubt, "We are betting on the arrival of a strategic partner that will take control of the company," Forwood said. CTI has a total of US$1.05 billion in debt, which includes a US$450 million vendor financing contract with Lucent Technologies and a US$210 million syndicated bank loan led by Citibank. The debt is something that potential "strategic partners" may have to consider. Meanwhile, CTI Movil halted coupon payments to bank creditors at the beginning of the year, but now looks to get back on track with restructured debt maturities. "We believe the process of renegotiation with our creditors will be concluded in the first quarter of 2003," Forwood stated. CTI Movil's other shareholders are Latin American Holdings (17%), employees (17%), investment funds Blackstone Group (10%) and Deutsche Morgan Grenfell (5%), and Argentina's Grupo Clarin through Telfone (3%). TELEFONICA DE ARGENTINA: To Leave Buenos Aires HQ ------------------------------------------------- Telefonica de Argentina, a wholly owned subsidiary of Spanish telecommunications holding Telefonica, let its lease expire at one of Buenos Aires' most emblematic buildings several months ago. Subsequently, the Company, which has been severely battered by the country's deepening recession, the impact of devaluation on its debt, the suspension of tariff adjustments and the tariff pesofication, will move out of the city. Telefonica looking for a cheaper location for its Argentine headquarters. Telefonica de Argentina has operations in Spain, Brazil, Argentina, Chile, Mexico and Peru providing local exchange, long distance, residential Internet access and directory publishing services. Until October 1999, the Company was the exclusive provider of telecommunications services in southern Argentina and controlled nearly two-third of the Buenos Aires metropolitan area market. Telefonica Argentina is now allowed to provide telecommunication services to northern Argentina, where Telecom Argentina Stet France Telecom S.A. is the incumbent operator. CONTACT: TELEFONICA DE ARGENTINA Tucuman 1, 18th Floor, 1049 Buenos Aires, Argentina Phone: (212) 688-6840 Home Page: http://www.telefonica.com.ar Contacts: Carlos Fernandez-Prida Mendez Nunez, Chairman Paul Burton Savoldelli, Vice Chairman Fernando Raul Borio, Secretary * Japanese Paper Predicts Argentina $411M Samurai Bond Default -------------------------------------------------------------- Argentina would default on 50 billion yen (US$411 million) of Samurai bonds on Friday, reports Japanese newspaper Nihon Keizai, citing Argentine government officials. The six-year bonds, which were sold in Japan in 1996, would be the first to mature since Argentina defaulted on a record US$95 billion of debt in December last year, Bloomberg quoted the newspaper. Earlier, Argentina failed to pay the World Bank for a US$250 million bond guarantee payment, and a US$680 million payment to the Inter-American Development Bank. Argentina's failure to meet its financial obligations has reduced its chances of receiving a new loan agreement from the International Monetary Fund. The country has been negotiating with the IMF over terms for the last several months. ============= B E R M U D A ============= GLOBAL CROSSING: Court Confirms Reorganization Plan --------------------------------------------------- - The U.S. Bankruptcy Court confirms Global Crossing's plan of reorganization. - Global Crossing one step closer to emerging from Chapter 11 in early 2003 Global Crossing announced Tuesday that the U.S. Bankruptcy Court for the Southern District of New York has confirmed its chapter 11 plan of reorganization. The confirmation is subject to the entry of a formal confirmation order and documentation of the resolution of the last objection. Today's [Tuesday] decision represents another major milestone in the restructuring process that Global Crossing started on January 28, 2002. Having reached an agreement with its creditors, Global Crossing now stands poised to emerge from the chapter 11 process a significantly stronger enterprise. On August 9, 2002, Global Crossing announced that Hutchison Telecommunications Limited and Singapore Technologies Telemedia Pte. Ltd. had agreed to invest $250 million, for 61.5% ownership position in a newly constituted Global Crossing upon its emergence from chapter 11. The balance of the equity will be issued to Global Crossing's prepetition creditors. Subject to obtaining the approval of the Supreme Court of Bermuda and to satisfying various contractual closing conditions and the receipt of regulatory approvals, Global Crossing expects to emerge from bankruptcy in the first half of 2003. "Today [Tuesday], Global Crossing's customers, employees and leadership team received a clear vote of confidence in our future," said John Legere, CEO of Global Crossing. "During the past twelve months, we've focused acutely on streamlining Global Crossing's cost structure while delivering outstanding customer service and leading-edge products and services. As we work to secure the remaining regulatory approvals, we'll build on these successes to emerge a strong competitor with an unmatched global IP-based network." Between January and October 2002, Global Crossing signed 1,663 new and renewal customer contracts, representing an estimated $783 million of revenue over the life of the contracts. Global Crossing's cash position remains secure, with total cash in bank accounts at $683 million as of October 31, 2002. Furthermore, the availability of Global Crossing's global, IP-based network increased to 99.999%, enhancing reliability and resiliency for customers throughout the restructuring. Global Crossing's plan of reorganization does not include a capital structure in which existing common or preferred equity would retain any value. ABOUT GLOBAL CROSSING Global Crossing provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. Global Crossing operates throughout the Americas and Europe, and provides services in Asia through its subsidiary, Asia 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's shareholders. CONTACT: GLOBAL CROSSING Press Contacts Tisha Kresler + 1 973-410-8666 Tisha.Kresler@globalcrossing.com Mish Desmidt Europe + 44 (0) 7771-668438 Mish.Desmidt@globalcrossing.com Kendra Langlie Latin America + 1 305-808-5912 Kendra.Langlie@globalcrossing.com Analysts/Investors Contact Ken Simril +1 310-385-3838 investors@globalcrossing.com ============= B O L I V I A ============= REPUBLIC: S&P Lowers Bolivia's LT LC Credit Rating to 'B+' ---------------------------------------------------------- Standard & Poor's Ratings Services said on Tuesday that it lowered its long-term local currency sovereign credit rating on the Republic of Bolivia to 'B+' from 'BB'. Standard & Poor's also affirmed its 'B+' long-term foreign currency sovereign credit rating on the republic. The outlook on the long-term ratings was revised to negative from stable. "The downgrade of local currency rating and the negative outlook reflect prolonged economic weakness and political constraints on President Gonzalez S nchez de Lozada's ability to garner broad- based support to implement policy," said Standard & Poor's sovereign analyst Lisa M. Schineller. According to Ms. Schineller, per-capita real GDP has stagnated over the past five years, and prospects for a strong and sustained recovery remain uncertain. "Domestic investment and savings have declined sharply to among the lowest levels both in Latin America and among rated sovereigns, and are at half their levels of five years ago," Ms. Schineller noted. "Widespread discontent with past economic policies that have failed to deliver improved living standards has generated increased support for an alternative, albeit undefined, strategy for economic development. President S nchez de Lozada must manage these pressures and controversy over coca eradication while continuing to satisfy policy demands from multilateral organizations to secure access to low-cost funding," she said. Standard & Poor's said that Bolivia's general government debt net of liquid assets increased to an estimated 73% of GDP at end- 2002, up from 54% at end-2000. The increased debt burden reflects high fiscal deficits due mainly to higher-than-anticipated transition costs of pension reform. While the government has now begun to adopt measures to deepen the market for issuing in local currency (Bolivian bolivianos), more than 90% of central government locally issued debt is denominated in U.S. dollars. Effective use of fiscal and monetary policies is constrained by the inability to issue debt in local currency. This, in turn, increases Bolivia's external vulnerability. "The negative outlook reflects the government's limited room to maneuver given the challenges of satisfying a disenchanted population amid economic stagnation, maintaining an effective government coalition, and implementing multilateral demands for additional market-oriented reform," Ms. Schineller said. "Commitment and progress on negotiating a new three-year Poverty Reduction and Growth Facility with the International Monetary Fund and World Bank should limit policy backtracking, but risks remain," she added. According to Ms. Schineller, social pressures that impede policy aimed at correcting fiscal imbalances and strengthening growth prospects could lead to a downgrade. Conversely, signs of a sustainable increase in investment levels that boosts medium term growth prospects and evidence of broader political support for government initiatives (such as tax reform) could lead to a stable outlook. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Fixed Income in the left navigation bar, select Credit Ratings Actions. Analyst: Lisa M Schineller New York Tel (1) 212-438-7352 Sebastian Briozzo New York Tel (1) 212-438-7342 =========== B R A Z I L =========== EMBRATEL: To Restructure $750M In Debt This Month ------------------------------------------------- Brazilian long distance operator Embratel plans to renegotiate this month US$750 million in debt held by 20-25 local and international banks, and development agencies, reports Business News Americas. According to the report, the debt-restructuring talks will be mediated by Bank of America with the assistance of Maria Silvia Marques, former head of steel company Companhia Siderurgica Nacional. About 90% of the debt comes due mid-2004 and the rest is short- term debt. The initial proposal includes the rescheduling of long-term debt and immediate payment of 10% of the short-term debt. Embratel is struggling with debts totaling US$1.3 billion and is facing a possible takeover by Brazil's three fixed line incumbents - Telemar, Telesp and Brasil Telecom. Reports have it that these three incumbents have created an investment fund to make a takeover bid for Embratel in their behalf. However, Embratel claims the three operators are bluffing and the "rumored" takeover plan is designed to destabilize the Company's debt restructuring talks. "If they were seriously interested, they would have kept it secret, because [Embratel] shares jumped 30% [when the market learned about the plan], which any buyer would try to avoid," Panorama Brasil quoted Embratel external matters VP Purificacion Carpinteyro as saying. CONTACT: EMBRATEL PARTICIPACOES S.A. Investor Relations Silvia Pereira Tel. (55 21) 2519-9662 Fax: (55 21) 2519-6388 Email: Silvia.Pereira@embratel.com.br invest@embratel.com.br or Press Relations: Helena Duncan/Mariana Palmeira Tel: (55 21) 2519-3653/3654 Fax: (55 21) 2519-8010 Email: hduncan@embratel.com.br mpalm@embratel.com.br ENRON: Bankruptcy Complicates Two Brazilian Unit's Disposition -------------------------------------------------------------- The bankruptcy of US power company Enron has clouded the sale of its shares in two Brazilian natural gas distributors to the federal energy company Petrobras. In early 2001, Petrobras agreed to buy the 25.38% of CEG and 37.05% of CEG Rio owned by Enron for US$240 million. But the subsequent collapse of Enron has made Petrobras think twice about pushing through with the purchase. According to Petrobras natural gas manager Antonio Luiz Silva de Menezes, his company is concerned that Enron's shares in the two companies could be included in the US bankruptcy proceedings. If Petrobras were to buy the shares now, there is a chance it could end up being sued by Enron creditors. "If we put money into buying [the CEG shares], we are becoming involved in a big risk. It would be a bad use of the company's money," Menezes said. "We don't know what will happen with Enron. That's why we'd have to discuss again how much that stake is worth." CONTACTS: Mark Palmer of Enron Corp., +1-713-853-4738 Enron Corp. Investor Relations Dept. P.O. Box 1188, Suite 4926B Houston, TX 77251-1188 (713) 853-3956 Email: investor-relations@enron.com Enron Corp. Public Relations Dept. P.O. Box 1188, Suite 4712 Houston, TX 77251-1188 (713) 853-5670 TELEMAR: Schedules Another Extraordinary Shareholders' Meeting -------------------------------------------------------------- The Board of Directors of TELE NORTE LESTE PARTICIPACOES S.A. calls the Company's shareholders for an Extraordinary Shareholders' Meeting on December 27, 2002, at 10:00 am at the Company's headquarters, located in the city of Rio de Janeiro, RJ, at Rua Humberto de Campos, 425, Leblon, 3rd floor, to deliberate and vote on the items of the agenda which include to: (i) ratify the alteration of article 11 of the Company's Bylaws as approved in the General Shareholders meeting held on September 30, 2002, to correct a cross reference to an article which has been renumbered; and (ii) change article nine of the Company's Bylaws in order to adequate it to the terms of Law 10303/2001, with respect to the rights of preferred shares. General Information 1. In accordance with Brazilian Corporate Law (Lei 6404/76), the meeting, in its second call, will be installed with any quorum; 2. The documentation related to the items to be voted at the Meeting will be available to the Company's Shareholders at the Company's headquarters; 3. All proxies must be delivered to the attention of the Company's legal department at the Company's headquarters, 7th floor, at least two business days prior to the date of the Meeting. 4. Shareholders whose shares are registered with a custodial agent, wishing to vote their shares at the Extraordinary Meeting, must present a statement issued no more than two business days prior to the date of the Meeting by the custodial agent, indicating the amount of the Company's shares held by them as of such date. Rio de Janeiro, December 17, 2002 Carlos Francisco Ribeiro Jereissati Chairman of the Board of Directors TELEMAR: Notice To Shareholders ------------------------------- Telemar Participacoes S.A. (the "Cont rolling Shareholder") and Tele Norte Leste Participacoes S.A. (the "Company") announce to the public, in accordance with the provisions set forth in Instrucao CVM nr. 358, dated January 03, 2002, that the Controlling Shareholder will proceed with the sale, either directly or in groups, of up to 3,813,397,116 (three billion, eight hundred and thirteen million, three hundred and ninety seven thousand, one hundred and sixteen) nominative preferred shares issued by the Company, subject to the following terms and conditions: 1. The sale of the above mentioned shares will be carried out in Sao Paulo's Stock Exchange - BOVESPA and thus comply with the rules and regulations of the above-mentioned institution; 2. Merrill Lynch S.A., Corretora de Titulos e Valores Mobiliarios, registered with CNPJ under nr. 02.670.590/0001-95, with headquarters at Avenida Paulista, 37 - 3rd floor, will be the broker working on the sale of the shares; 3. The sale of these shares shall begin on December 18, 2002 and shall remain valid for a 40-day-period, which may be extended, if necessary. The shares contemplated by this sale result from the capital increase carried out by the Company in accordance with the 173rd Board of Directors Meeting, held on the April 26, 2002, as well as from the capitalization of the goodwill (reserva especial de agio) approved by the Ordinary Shareholders Meeting of 2002, and thus do not characterize any reduction of Telemar Participacoes' current interest of 54.74% of the voting capital of the Company. Rio de Janeiro, December 17, 2002 Celso Fernandez Quintella Marcos Grodetzky Investors' Relation Officer of Telemar Participacoes S.A. Investors' Relation Officer of Tele Norte Leste Participacoes S.A. ========= C H I L E ========= SAESA: To Seek Shareholders Approval On $34.4M Capital Increase --------------------------------------------------------------- The board of directors at Chilean distribution holding company Saesa approved a plan to boost capital by CLP23.8 billion (US$34.4mn). The plan, according to Business News Americas, will be presented to the Company's shareholders for approval at a meeting scheduled for December 30. If shareholders don't agree on the amount, the Company would seek approval on a capital increase of "another amount that the shareholders agree," according to a statement sent to Chile's securities regulator (SVS). Saesa will issue new shares or convert existing debts into shares, the statement said. The proposal follows a December 3 approval by Saesa's shareholders on a CLP27.3-billion capital increase to capitalize debts with its US-based parent PSEG and to boost cash flow. CONTACT: SAESA Gerencia y Administracion Zonal de Osorno Bulnes 441, Osorno Telefono: (64) 206400 Fax: (64) 206209 - Casilla: 21 -0 =============== C O L O M B I A =============== * Colombia to Receive $700M CAF Loan ------------------------------------ Colombia will be receiving US$700 million in loans from the Andean Development Corporation, or CAF, reports paper El Tiempo on Tuesday. The loans, which are part of the US$3.5 billion in loans CAF had promised to the country during the next four years, were aimed to finance infrastructure projects and provide working capital, said the report. CAF is a regional financial institution whose members include the five Andean Community members: Bolivia, Colombia, Ecuador, Peru and Venezuela; Spain; Argentina; Uruguay; Costa Rica; Brazil; Chile; Jamaica; Mexico; Panama; Paraguay; Trinidad & Tobago; and 18 private banks in the Andean region. The lender is one several organizations that have promised Colombia a total of US$10 billion in loans to be disbursed until 2006, when the term of President Alvaro Uribe ends. =========== M E X I C O =========== AHMSA: Creditor Banks Trash Debt Proposal ----------------------------------------- One of Mexican steelmaker Ahmsa's creditor banks ditched a plan by the Monclova-based company's controller GAN that gives creditor banks only 40% of the Company in exchange for writing off US$1.3 billion of its US$1.85-debt.El Financiero reports that the Mexican unit of US financial giant Citigroup is not exactly pleased with the proposal. In a letter dated December 9, the bank noted that based on previous proposals that would have given the banks 40% for converting US$530 million of the debt and which were never implemented by Ahmsa, the banks should receive 98% of the Company if it they were to write off US$1.3 billion of debt. Another creditor, Banamex, also showed objection to the plan. The bank wants to receive 10% more of Ahmsa, or 50% in total, if they agree to capitalize the extra US$770 million in debt. But Ahmsa reportedly told Banamex that the banks had not completely understood its latest restructuring offer. Under the plan, the remaining US$500 million in debt would be paid off over 15 years, while the banks would take on the steel assets and GAN would have Ahmsa's coal mines. The creditor banks have long accused Ahmsa's board of not being serious about striking a restructuring deal and last month failed in an attempt to oust the Company's chairman Xavier Autrey and its CEO Alonso Ancira. CONTACT: AHMSA Prolongacion B. Juarez s/n, Monclova , Coahuila 25770 Mexico http://www.AHMSA.com Phone: +52 86 33 81 72 Fax: +52 86 33 65 66 Contacts: Alonso Ancira Elizondo, CEO, Vice Chairman, Pres./CEO Jorge Ancira Elizondo, Chief Financial Officer Manuel Ancira Elizondo, Chief Operating Officer HAYES LEMMERZ: Files Plan of Reorganization ------------------------------------------- Hayes Lemmerz International, Inc. (OTC: HLMMQ) announced Tuesday that it has filed a Plan of Reorganization with the U.S. Bankruptcy Court for the District of Delaware. Filing of the Plan is a key step forward for the Company in its efforts to emerge successfully from Chapter 11 proceedings under the U.S. Bankruptcy Code. "Throughout our Chapter 11 process, we have retained substantially all of our existing business and have won new business. We have fulfilled all of our production obligations to customers, and continued to deliver quality products, on schedule, around the globe," said Curt Clawson, Chairman and Chief Executive Officer. "We believe the future business prospects of Hayes Lemmerz are good. Moreover, we believe that our proposed Plan of Reorganization represents the best recovery available to maximize value for our stakeholders." "We remain focused on our goal of operating as a premier supplier to the automotive industry," Mr. Clawson said. "The combination of our new management team, new business plan, excellent global network of efficient production facilities, and a strong balance sheet upon emergence from Chapter 11 will allow us to fulfill that vision." The Plan requires approval by creditors and final approval by the Court before it can be implemented. The Company noted that the Plan of Reorganization could be modified before it is submitted to its creditors for approval. Hayes Lemmerz said it presently expects to emerge from bankruptcy sometime during the first half of 2003. Major corporate initiatives, many of which have already been implemented, include rationalizing manufacturing capacity, thereby reducing fixed costs; rationalizing marketing, general and administrative expenses; implementing operational improvements at the plant level focusing on lean manufacturing, thereby reducing variable costs; enhancing the leadership team and restructuring the role of the corporate center; increasing oversight over the corporate, business unit and plant level finance function, thereby improving reliability of reported financial results; divesting certain non-core assets; and since the Petition Date, rejecting and/or renegotiating unfavorable contracts and leases. Hayes Lemmerz said it would seek to obtain listing of the new common shares on a national stock exchange, but that it could provide no assurance it would be able to obtain such listing. Hayes Lemmerz International, Inc. is one of the world's leading global suppliers of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company has 44 plants, 2 joint ventures and 11,400 employees worldwide. On December 5, 2001, Hayes Lemmerz International, Inc., all of its U.S. subsidiaries and one Mexican subsidiary filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, to reduce their debt and strengthen their competitive position. CONTACT: HAYES LEMMERZ INTERNATIONAL, INC. Marika P. Diamond +1-734-737-5162 HYLSA: Moody's Assigns, Confirms Ratings ---------------------------------------- Moody's Investors Service performed various rating actions on Mexican steelmaker Hylsa. The ratings agency assigned a Caa3 rating to Hylsa's US$161 million of 10.5% senior unsecured notes, due 2010. Hylsa offered these notes to holders of its 9.25% senior unsecured notes, due 2007, as part of a bond swap related to a debt restructuring that was completed in the third quarter of this year. Moody's also confirmed the following ratings - Caa3 for the remaining US$139 million of 9.25% senior unsecured notes due 2007; - Caa2 for the senior implied rating; and - Caa3 for the senior unsecured issuer rating. "The ratings reflect continuing difficult steel market conditions brought on by excess capacity, weak North American and global economies, and declining spot prices for many of Hylsa's products," Moody's said, adding the ratings were influenced by the fact that the Company emerged from its restructuring with very limited liquidity of US$40 million. However, the ratings benefit from the approximately 35% reduction in total debt effected by the debt restructuring, the longer average life of Hylsa's debt, and a recovery in steel prices from very low levels earlier this year, the agency said. And Moody's said Hylsa's rating outlook has changed to stable from negative. "North American and Latin American steel markets remain challenged by soft overall demand, excess capacity, import threats, and, as a result, intense competition and renewed downward pressure on prices for most products," the statement said. "Therefore, there is much uncertainty about the sustainability of Hylsa's operating results, which improved in the first three quarters of 2002." Monterrey-based Hylsa is the wholly owned steelmaking subsidiary of Hylsamex, which in turn is 90%-owned by Mexico's Alfa conglomerate. Hylsa is one of Mexico's largest steel producers and had net sales of US$905 million in 2001. SAVIA: Defaults On $60M Bank Loan; In Debt-Restructuring Talks -------------------------------------------------------------- Mexico's Savia SA, the world's largest vegetable-seed company, said Tuesday it defaulted on a US$60-million bank loan and is in talks with creditors to renegotiate the terms of the debt. The Company told the Mexican Stock Exchange that the renegotiation is related to its recently announced plan to partner with Fox Paine & Company LLC, relates Dow Jones. Under the proposed transaction, which has a total enterprise value in excess of US$650 million, the San Francisco-based private equity firm and certain Savia related parties will acquire all of the outstanding shares of Seminis, Inc., the world's largest developer, producer and marketer of fruit and vegetable seeds. Under the transaction, Fox Paine will invest US$222 million. The transaction will probably be closed by March or April. Seminis, which is more than 70%-owned by Savia, had debt of US$279 million at the end of September. According to Bernardo Jimenez, Savia's chief financial officer, the Company is selling shares in Seminis to raise about US$45 million to pay part of the bank loan to JP Morgan Chase, Bank of America, Nomura Holdings, Banco Latinoamericano de Exportaciones SA, Citibank's Banamex unit and Grupo Financiero BBVA Bancomer. The bank loan was due Oct. 31 and extended to Dec. 6, Jimenez said. In the first nine months this year, Savia registered Ebitda (earnings before interest, taxes, depreciation and amortization) of US$68 million, compared with a loss of US$22 million in the same period last year. CONTACT: SAVIA Francisco Garza Tel +52-818-1735500 Email fjgarza@savia.com.mx or Media Francisco del Cueto Tel +55-56-623198 Email delcueto@mail.internet.com.mx Website: http://www.savia.com.mx/ JOELE FRANK Andy Brimmer or Nina Covalesky Web site: http://www.foxpaine.com FOX PAINE Wilkinson Brimmer Katcher Tel +1-212-355-4449, for Fox Paine/ Web site: http://www.seminis.com =========== P A N A M A =========== BLADEX: Announces Proposed Rights Offering ------------------------------------------ Banco Latinoamericano de Exportaciones, S.A. (NYSE: BLX) ("BLADEX" or the "Bank"), a specialized multinational bank established to finance trade in the Latin American and Caribbean region, announced Tuesday the filing of a Registration Statement with the Securities and Exchange Commission regarding a proposed rights offering to holders of the Bank's Class A, Class B and Class E common stock. As indicated in the Registration Statement, the Bank proposes issuing to the holders of each class of its common stock non- transferable rights entitling the holders to subscribe for shares of the class to which their rights relate at the rate of one share of common stock for each right held. The number of rights per common share that will be issued and the aggregate number of shares that may be subscribed through the rights offering have not yet been determined. The Bank currently has preliminary commitments or expressions of intent from a group of existing Class A and Class B shareholders and a small number of other institutions including multilateral organizations and development banks (the "Core Support Group") to purchase for investment over $100 million of shares to the extent that shareholders do not subscribe for such shares in the rights offering. The Bank expects to formalize these commitments by entering into subscription agreements with Core Support Group members as promptly as possible. The sale of any shares in the rights offering is conditioned on the receipt by the Bank of aggregate share sale proceeds of at least $100 million through the purchase of shares by shareholders and Core Support Group members. Shareholders that fully exercise their rights in the primary subscription will be entitled to subscribe for additional shares of the class to which their rights relate as part of an over-subscription privilege. The subscription price per share will be the lowest of the three averages of the last reported sales price of a Class E share on the New York Stock Exchange for three periods consisting of 90, 30 and 10 trading days, respectively, each ending on the expiration date of the offering. The Bank anticipates that the rights will be issued to shareholders as of a record date in February 2003 and that the closing for the issuance of shares to shareholders and Core Support Group members will take place by the end of the first quarter of 2003. BNP Paribas Securities Corp. and Deutsche Bank Securities Inc. have been selected by the Bank to act as sole soliciting dealers for the rights offering. A Registration Statement relating to the shares being offered in the rights offering has been filed with the Securities and Exchange Commission but has not yet become effective. These shares may not be sold nor may offers to buy be accepted prior to the time the Registration Statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. To obtain a written prospectus meeting the requirements of Section 10 of the United States Securities Act of 1933, as amended, or for further information, please contact: Carlos Yap S. Senior Vice President, Finance and Performance Management BANCO LATINOAMERICANO DE EXPORTACIONES, S.A. Head Office Calle 50 y Aquilino de la Guardia Apartado 6-1497 El Dorado Panama City, Republic of Panama Tel No. (507) 210-8581 Fax No. (507) 269 6333 E-mail Internet address: cyap@blx.com - Or - William W. Galvin The Galvin Partnership 76 Valley Road Cos Cob, CT 06807 U.S.A. Tel No. (203) 618-9800 Fax No. (203) 618-1010 E-mail Internet address: wwg@galvinpartners.com ======= P E R U ======= EMPRESAS LUCCHETTI: Takes Case To International Arbitration ----------------------------------------------------------- Chilean pasta maker Empresas Lucchetti SA may have to shut its pasta plant in Lima Peru immediately after the city government rejected its request to delay an eviction order until March. However, Lucchetti, which is majority-owned by Chile's Luksic family through the Quinenco SA holding, plans to seek international arbitrage to delay the order. Claiming that it is being discriminated against, Lucchetti plans to take the case before the World Bank's International Centre for Settlement of Investment Disputes. "Meantime, our company will continue operating in Peru, offering high quality products and employing hundreds of Peruvians," the Company said in a statement. Lucchetti and the city of Lima have been locked in a battle over the construction and operation of the plant over the last five years. In August 2001, the city ordered the plant closed within 12 months on environmental concerns and the order was ratified four months ago. The Company requested for an extension of the eviction order but early this week, majority of Lima's city council members rejected the request. Lucchetti accused the City of Lima for objecting to the plant's construction only after the Company had spent US$40 million to build the facility that currently employs about 400 workers. In November, a Peruvian judge dismissed charges that Chilean businessmen Andronico Luksic and one of his executives, Gonzalo Menendez, bribed officials five years ago to win a Lucchetti lawsuit against the city over construction approval. Lucchetti had earlier sold assets in Argentina and renegotiated the Company's debts last year to reduce financing costs. The Company hasn't posted a profit since 1997. As of December, it has debts worth CLP56.4 billion (US$85 million), which is equivalent to 120% of its net worth. The Lucchetti plant in Peru reportedly involved about US$135 million in total investments. CONTACT: EMPRESAS LUCCHETTI S.A. 2600 Av Vicuna Mackenna Comuna de Macul Santiago Chile Phone: +56 238 2711 +56 238 6592 Home Page: http://www.lucchetti.cl/ ============================================= S T. V I N C E N T & G R E N A D I N E S ============================================= CABLE & WIRELESS: Regulator Threatens Action As Clash Continues --------------------------------------------------------------- St. Vincent's National Telecommunications Regulatory Commission (NTRC) threatened to place an interim interconnection agreement on or about the 18th of December 2002 until a final agreement is reached, between battling operators Cable and Wireless (C&W) and main rival Digicel. Digicel filed a formal complaint in Saint Vincent, alleging that C&W is delaying the conclusion of negotiations for interconnectivity, which would allow Digicel to start services in the island. The telecoms regulator wrote C&W manager, Fred Walcott, requesting the Company to speed up negotiations for interconnectivity with Digicel. The Business Observer, having obtained a copy of the letter signed by NTRC secretary/director Apollo Knights, quoted a few parts of it. The report revealed that according to Knights, Digicel's letter of complaint `alleges among other things that the negotiations for an interconnection agreement has been ongoing for in excess of four months and to date they have been unable to agree with you on the terms," he told Walcott in the letter. The NTRC told C&W that it was "imperative" for interconnection to be done in a manner that reflected the spirit of the liberalization movement, and the letter of the Telecommunications Act of 2001, said the report. The report indicated that the differences between the two operators are bearing out of the promise by both companies to take the fight beyond the shores of Jamaica. CONTACT: Cable & Wireless PLC Head Office 124 Theobalds Road London England WC1X 8RX Tel +44 (0)20 7315 4000 Fax +44 (0)20 7315 5000 Web http://www.cw.com Contacts: Sir Ralph Robins, Non Executive Chairman Sir Winfried W. Bischoff, Non Executive Deputy Chairman Graham M. Wallace, Chief Executive Robert E. Lerwill, Executive Director Finance ================================= T R I N I D A D & T O B A G O ================================= BWIA: Exec Blasts Subsidy To Caribbean Star As Unfair ----------------------------------------------------- The chairman of BWIA, Lawrence Duprey claims that any state subsidy given the rival Caribbean Star would be unfair, according to a report from the Trinidad Guardian's Tuesday edition. "I don't think that's fair. That's exporting capital," said Duprey. An earlier report from the same newspaper revealed that Caribbean Star chief Paul Moreira wants his company to receive subsidy for the US$200 dollar reduced fare on the Tobago airbridge. The report quoted Moreira saying that it is only fair for all airlines servicing the Tobago airbridge to receive subsidies. Caribbean Star and LIAT, both of which serve the airbridge, are not receiving state subsidy. Under the airbridge, the government said that BWIA and Tobago Express would be receiving US$6 million annually as subsidy for the reduced fare. However, the government had not made any announcements as to whether Caribbean Star and LIAT would be offered subsidies. Airline officials said that a Memorandum of Understanding, stipulating all the details of any subsidies the State will provide is yet to be finalized. CONTACT: British 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, CFO (Trinidad) Caribbean Star Airlines Coolidge Industrial Estate P.O. Box 1628W, Airport Road, St. John's, Antigua West Indies Tel. 1 (268) 480-2500 Homepage: http://www.flycaribbeanstar.com/ Contact: Paul Moreira - Chief Executive Officer Sandra Scotland - Director of Marketing CARONI LTD: VESP To Get $1B In Government Support ------------------------------------------------- Caroni Ltd.'s voluntary separation plan (VESP) for daily-paid workers will get almost US$1 billion from the government of Trinidad and Tobago, reports the Trinidad Express, citing Agriculture Minister John Rahael. In June, this year, Rahael had announced that the government intends to establish a new company to oversee Caroni's transformation. However, the report said, the VESP is unwelcome to the members of the Trinidad Sugar and general Workers Trade Union. The union's general secretary, Rudy Indarsingh, had repeated complained on the government's failure to consult them on matters concerning the plan. Prime Minister Patrick Manning countered Indarsingh's statement saying, the unions involved will be consulted once the voluntary separation plan is finalized and approved by the Cabinet. Deliberations on the VESP are expected to be complete during the Cabinet's regular meeting on Thursday, after two sessions failed to wrap things up. CONTACT: Caroni Limited Old Southern Main Road, Caroni, Trinidad & Tobago Phone: (868) 663-1781 or 662-0879 Fax: (868) 663-1404 All Trinidad Sugar and General Workers' Trade Union Rienzi Complex Exchange Village Southern Main Road, Couva. President: Mr. Boysie Moore-Jones General Secretary: Mr. Rudranath Indarsingh Tel. 868-636-2354 Fax. 868-636-3372 E-mail: atsgwtu@opus.co.tt ================= V E N E Z U E L A ================= PDVSA: Former Directors Slam Efforts To Restart Operations ---------------------------------------------------------- The Venezuelan government's efforts to put an end to the more- than-two-week-old strike that has thrown the country's oil industry into chaos has received nothing but bad criticisms from the directors of state oil company Petroleos de Venezuela SA, who resigned December 6. Speaking for the group, PdVSA First Vice President Jorge Kamkoff said the government is trying to restart operations using unqualified workers and that's "putting at risk workers' security, the installations and neighboring communities," relates Dow JOnes. Resuming production without the striking workers is no way to "normalize operations," Kamkoff said, adding, "This industry won't accept improvisations." The government is trying to run PdVSA with retired oil workers and military personnel, but analysts have said the plan is likely to fail. Opposition leaders launched the strike December 2 to force the government into accepting an immediate non-binding referendum on Chavez's leadership. After three protesters were killed by gunmen at an opposition rally Dec. 6, strike leaders demanded Chavez resign immediately and call elections. But the president has repeatedly said he would not step down early and has blamed the recession on an "economic coup" by his opponents. VENEZUELAN BANKS: Asobanca Denies Bank Freeze, Assures Liquidity ---------------------------------------------------------------- Banking association Asobanca said that banks in Venezuela have no reason to freeze public deposits, reports Business News Americas, citing a high-ranking source at the association. According to the report, Venezuela's banking industry is very solvent, thus it does not need to impose a banking freeze, as Argentina had done in December last year. President Hugo Chavez' administration alleged that banks had imposed a defacto deposit freeze, citing the shorter banking hours. Earlier, financial institutions announced during a nationwide general strike asking for Chavez resignation or early elections, that banks would be open to the public for only three hours. The new business hours, which would be from 9am until noon, was approved by banking regulator Sudeban. Nervous Venezuelans queued outside the banks, eager to withdraw their money, said the source, adding that moving funds by armored car have also been delayed. Meanwhile, the regulator said that banks that closed their doors without authorization on that day would be fined. The source said that the fine had not been issued, adding that the amount is unknown. Opposition groups that called the strike claim that Chavez mismanaged the economy and was becoming increasingly authoritarian said the report. *********** 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. 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