/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030117.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, January 17, 2003, Vol. 4, Issue 12 Headlines A R G E N T I N A PEREZ COMPANC: Extends Exchange Offer to Jan 22 REPSOL YPF: Ex-Employees File Suit For Unfair Dismissal * Argentina Seeks Brief Debt Payment Extension From IADB B R A Z I L ACESITA: Posts Improved 2002 Financial Results C H I L E ENERSIS: Weak Financial Performance Prompts Moody's Downgrades MADECO: Stands To Benefit From Settlement Over Beer Conflict J A M A I C A JUTC: 300-Worker Lay-off Expected Next Week KAISER ALUMINUM: Filings Won't Affect Jamaican Operations M E X I C O CORPORACION DURANGO: Misses Jan 15 Interest Payment FEMSA: Contradicts Reports Suggesting Spin Off Of Beer Division GRUPO TMM: Moody's Cuts Ratings On Concern Bond Swap May Fail GUILFORD MILLS: Reveals Closure of Mexican Ops In Annual Filing T R I N I D A D & T O B A G O CARONI LTD: Staff Protest Halts Operations U R U G U A Y UTE: Price Hike Proposal Awaits President's Approval - - - - - - - - ================= A R G E N T I N A ================= PEREZ COMPANC: Extends Exchange Offer to Jan 22 --------------------------------------------------- Perez Companc S.A. (Buenos Aires: PC NYSE: PC), informed Wednesday that its subsidiary Pecom Energia S.A. (Buenos Aires: PECO) announced that the expiration date of the Exchange Offer announced on January 8, has been extended until 3:00 P.M., Buenos Aires time, on Wednesday, January 22, 2003. Except for the extension of the Expiration Date described herein, the terms and conditions of the Exchange Offer and the New Notes described in the Pricing Supplement remain unchanged. Pecom Energia S.A., controlled by Perez Companc S.A., is a leading company in an important Argentine and Latin American industry sector, including oil and gas production and transportation, refining and petrochemicals and power generation, transmission and distribution. CONTACT: PECOM ENERGIA S.A. DE PEREZ COMPANC S.A. Maipo 1 - Piso 22 - C1084ABA Buenos Aires, Argentina Phone: (54-11) 4344-6000 Fax: (54-11) 4344-6315 URL: http://www.pecom.com.ar/ REPSOL YPF: Ex-Employees File Suit For Unfair Dismissal ------------------------------------------------------- Former employees of the Bolivian subsidiary of Spain's Repsol- YPF, who got fired for malpractice, lodged legal proceedings against the Company, claiming they were not properly paid, reports Business News Americas. The 16 employees are are initiating legal action against Repsol for unfair dismissal. The suit seeks almost US$600,000 in compensation. The employees said they did not receive the correct redundancy payments. According to Repsol Bolivia's legal affairs representative Martin Anez, "Repsol-YPF has already presented a claim establishing its disagreements with the errors committed by the plaintiffs." The dismissal of the employees came after an internal investigation carried out by US risk consulting firm Kroll found they were accomplices in a ring that was stealing crude oil and fuel, as well as taking kickbacks for awarding contracts. Some of the plaintiffs were Argentine employees transferred to work in Bolivia. They were claiming rights under Argentine laws, despite the fact that they were employed in Bolivia under local work contracts, Repsol Bolivia spokesperson Miguel Cirbian said. CONTACT: REPSOL YPF SA Head Office Paseo de la Castellana 278 28046 Madrid Spain Tel +34 91 348 81 00 Fax +34 91 348 28 21 Telex 48162 RESOLE Web http://www.repsol.com Contact: Alfonso Cortina de Alcocer, Chairman Jose Vilarasu Salat, Vice Chairman Antonio Hernandez, Vice Chairman * Argentina Seeks Brief Debt Payment Extension From IADB -------------------------------------------------------- Argentina is seeking to postpone a debt payment to the Inter - American Development bank after failing to make the US$680 million payment due on Wednesday. Earlier reports suggested that the country would use central bank reserves to make the required payment. However, Ambito Financiero reported that the country is waiting for a sign that the International Monetary Fund will grant it a new loan package before paying its lenders. Meanwhile a report from the Associated Press said that the IMF wants the country to meet all its obligations with multilateral lenders before it agrees to lend the Argentina money to rollover debts maturing within the first half of this year. The IADB is expecting only a brief delay in the repayment, according to AP. The payment to the IADB was originally due last month, but an automatic 30-day rollover period allowed the country to pay until today. The country faces another US$90 million debt due to the IMF maturing on Friday. Earlier, Argentina and the IMF had signed a draft letter of intent. Members of the IMF negotiating team stayed in the country until yesterday, in case the LoI may need some modification. =========== B R A Z I L =========== ACESITA: Posts Improved 2002 Financial Results ---------------------------------------------- Brazilian stainless steelmaker Acesita said net revenue grew in 2002 because of its focus on value-added products, relates Business News Americas. According to preliminary results submitted to the Sao Paulo stock exchange (Bovespa), Acesita registered net revenue of BRL1.7 billion in 2002, a 29.3% increase from the previous year's record. The Company also registered a 53% increase in Ebitda to BRL432 million in 2002 compared to the year before. "We hope to close 2003 with Ebitda of US$200 million," Lima Fernandes said. Acesita plans to release final results for 2002 including its full income statement in March. Total sales volumes fell 4.7% last year compared to 2001, or from 704,000t to 671,000t. Domestic sales volumes dropped 4% in 2002, although Lima Fernandes forecasts the figure will rise 6-7% in 2003. Exports are also forecast to increase this year. Acesita exported 52% of its output or 315,000t in 2002, and predicts exports will total 430,000t or 60.4% of 2003's total output. Katia Brollo, a steel analyst for investment bank Unibanco, said Acesita's results were "excellent" and within the market's forecasts. "The increase in sales revenues and exports show that the investment Acesita made to concentrate on higher valued-added steel is right on target," she said. Acesita is planning to sell its stake in Espirito Santo-based CST worth US$205 million in an effort to reduce debts this year to US$500 million. 80% of the total debt amount will be tied to the dollar. At the end of 2002, Acesita's debt stood at US$700 million. The Company, whose owners include Luxembourg-based steel group Arcelor, is Latin America's sole integrated producer of flat- rolled stainless and silicon steels with an annual production capacity of 850,000 tons of liquid steel. CONTACT: Acesita SA Registered Office Av Joao Pinheiro, 580 Centro 30130-180 Belo Horizonte - MG Brazil Tel +55 31 3235-4211 Fax +55 31 3235-4300 Web http://www.acesita.com.br Contacts: Valmir Marques Camilo, Chairman Bruno Le Forestier, Vice Chairman ========= C H I L E ========= ENERSIS: Weak Financial Performance Prompts Moody's Downgrades -------------------------------------------------------------- Moody's Investors Service announced that it placed under review for possible downgrade the Baa3 senior unsecured ratings of Chilean power sector holding Enersis and its generation subsidiaries Endesa Chile and Pehuenche. Moody's attributed the review to the following factors: - weak financial performance for their rating category; - lower than anticipated earnings and cash flow; - concerns about return on investments from Argentina and Brazil; - substantial refinancing needs; and - concerns about the pace of announced initiatives to sell assets and improve cash flow and balance sheet. Moody's said the review of Pehuenche and Endesa Chile reflects its view that the credit risk of each is closely linked to the strength of Enersis. Poor results from Argentina and Brazil, as well as debt resulting from past acquisition and expansion, have contributed to Enersis' weak financial performance, Moody's said, adding that debt- reduction plans have been delayed by not completing announced asset sales. Enersis faces approximately US$700 million in public bonds coming due in 2003, and is negotiating the refinancing of US$2.2 billion in bank debt. Moody's senior credit officer Robert Johnson said there is not much doubt that Enersis will secure the funds for the bond payments. A bigger concern is whether it can secure the funds on terms and conditions consistent with its credit rating, Johnson added. To see financial statements: http://bankrupt.com/misc/Enersis.pdf CONTACT: ENERSIS Investor Relations: Ricardo Alvial Chief Investments & Risks Officer of Enersis Email: ram@e.enersis.cl Phone: (562) 353-4682 Contacts: Susana Rey, srm@e.enersis.cl Ximena Rivas, mxra@e.enersis.cl Pablo Lanyi-Grunfeldt, pll@e.enersis.cl MADECO: Stands To Benefit From Settlement Over Beer Conflict ------------------------------------------------------------ Chilean Luksic group's holding company Quinenco is expected to launch an equity issue for its ailing copper wire and cable manufacturer Madeco after reaching settlement with Germany's Schorghuber. Estrategia reports that Chilean brewer CCU, also controlled by Quinenco, resolved a conflict with Schorghuber at the Paris International Court of Arbitration. Under the terms of the settlement, the German beer-maker will pay Quinenco US$50 million by the end of this month. In addition, Quinenco will also receive dividends pending from 2002 and previous years of US$73 million. All in all, Quinenco is expected to receive a total of US$123 million, a large part of which will be used for an equity issue in Madeco, according to analyst Roberto Guzman. The Luksic group has committed to providing some US$70 million to the equity issue, in order to raise around US$130 million. Under a bank-sponsored restructuring plan, Madeco will use the new capital to pay 30% of what it owes each creditor upfront. This will be the second attempt Madeco has made to launch an equity issue to raise capital in order to restructure debts. The first attempt in September last year, hoped to raise US$90 million, collapsed when only Quinenco, which has 56.5% of Madeco, took up the offer. Madeco's debts total some US$325 million, including US$100 million in long-term bonds and US$100 million related to its subsidiaries. CONTACT: MADECO Ureta Cox, 930 San Miguel, Santiago, Chile Phone: 56-2 5201461 Fax: 56-2 5516413 E-mail: mfl@madeco.cl Home Page: http://www.madeco.cl Contacts: Oscar Ruiz-Tagle Humeres, Chairman Albert Cussen Mackenna, Chief Executive Officer Investor Relations Phone: 56-2 5201380 Fax: 56-2 5201545 E-mail: ir@madeco.cl ============= J A M A I C A ============= JUTC: 300-Worker Lay-off Expected Next Week ------------------------------------------- The Jamaica Urban Transit Company (JUTC) will fire 300 employees beginning next week, reports The Jamaica Gleaner. The workforce reduction is being carried out on the recommendation of the Company's Swiss consultants. Roughly 10% of the total number of employees will lose their jobs. According to the report, about 40% of the inspectors/dispatchers will be axed along with 10% of conductors, 3% of drivers. Other employees to be affected by the job cuts are a number of cleaners, janitors and middle managers. The report said the name of the employees to be axed may be given to the unions tomorrow. Employees were informed of the impending retrenchments at a meeting at the Lyndhurst Road depot in Kingston. The University and Allied Workers' Union (UAWU), representing 2,500 out of 3,000 JUTC workers, was also present during the meeting. UAWU Vice President Clifton Graft warns that a bigger job cut will be done by the end of January. The job cuts, initially scheduled to start this week, were postponed at the UAWU's request, in the hopes of discussing the developments with its members. The Company aims to reduce the worker-to-bus ratio to 6:1 from 8:2. The union held its first meeting on Tuesday. Yesterday, the meeting was scheduled in Ashenheim Road, but took place in Pertmore, south St. Catherine. Tomorrow, the parties will meet at the Spanish Town head office, central Ct. Catherine. KAISER ALUMINUM: Filings Won't Affect Jamaican Operations --------------------------------------------------------- Kaiser Aluminum & Chemical Corporation filed Tuesday voluntary petitions with the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of the Federal Bankruptcy Code. The filing included legal entities through which Kaiser owns interests in Jamaica. However, Business News Americas reports the Company said that from an operating perspective, the filings were a non-event and said that its local investments - Alpart, the alumina refinery, and KJBC (Kaiser Jamaica Bauxite Company) - were not directly included in the filings. Kaiser added the filings were not prompted by cash flow concerns, business conditions, or balance sheet issues and should have no impact on the day-to-day operations at Alpart or KJBC, or the rest of Kaiser, its employees, customers, and suppliers. "They will not interfere with the ability of Alpart or KJBC to continue to make payments in the normal course of business (including payments of pre-petition amounts) to creditors and others for items such as materials and supplies, freight, taxes and, of course, salaries, wages, and benefits for employees," said Jack A. Hockema, Kaiser's president and chief executive officer, in a statement. CONTACT: Kaiser Aluminum Corporation, Houston Scott Lamb, 713/332-4751 =========== M E X I C O =========== CORPORACION DURANGO: Misses Jan 15 Interest Payment --------------------------------------------------- Just as Fitch expected, Mexican paper and packaging concern Corporacion Durango SA missed an interest payment Wednesday on its 13.75% notes due 2009. Dow Jones reports that in a filing with the Mexican Stock Exchange, the Company said that 30 days after a missed payment, the notes will be considered in default under terms of the issue. Durango has retained Rothschild Inc. and PricewaterhouseCoopers to advise it about debt restructuring alternatives. The Company also hopes to begin formal discussions with creditors in the near future. Fitch Ratings recently downgraded the unsecured corporate foreign and local currency ratings of Durango to 'C' from 'B+'. In conjunction with the rating action, Fitch also downgraded the ratings of the senior unsecured notes due in 2003, 2006, 2008 and 2009 to 'C' from 'B+', signaling an imminent default. Fitch said the outstanding amount of debt for these notes is US$18.2 million, US$301.7 million, US$10.3 million and US$175 million, respectively. CONTACTS: CORPORACION DURANGO, S.A. DE C.V. Mayela R. Velasco +52 (1) 829 1008 mrinconv@corpdgo.com.mx Arturo Diaz Medina +52 (1) 829 1015 adiaz@corpdgo.com.mx FEMSA: Contradicts Reports Suggesting Spin Off Of Beer Division --------------------------------------------------------------- Fomento Economico Mexicano (Femsa), one of the top drinks companies in Latin America, is not planning to spin off its 112- year-old brewery, Cuauhtemoc-Moctezuma, as what recent reports are suggesting, says Reuters. Femsa quashed those reports and said those were "totally false." Since the Dec. 23 announcement from its soft drinks arm Coca-Cola Femsa of plans to buy Panamerican Beverages Inc for US$2.7 billion plus debt, reports have come out that Femsa might sell its ailing beer division and focus on its Coke bottling business. Coca-Cola Femsa, which is 51% owned by Femsa, wants to merge Panamco and Coca-Cola Femsa to create the world's No. 2 Coca-Cola bottler and the top Coke bottler in Latin America with the acquisition. But some see it as a move away from Femsa's beer roots. Also, Femsa's national beer market share has been down to about 43% from more than half domestic sales a decade ago, adding more fuel to speculation that Femsa might abandon beer before its brews become an embarrassing historical luxury and financial burden. "It's not far fetched at all for me that Femsa should look at selling its beer division," said one analyst who declined to be named. "If a big name came along offering five times book value, Femsa would seriously have to look at the offer." Cuauhtemoc-Moctezuma is a producer of brands such as Sol, Tecate, Superior, and XX Lager. CONTACT: FEMSA Fomento Economico Mexicano Sa de Cv Head Office Gen Anaya 601 Poniente Col Bella Vista Monterrey Nueva Leon Mexico CP Mexico 64410 Tel +52 81 8328 6000 Fax +52 81 8328 6080 Web http://www.femsa.com Contacts: Eugenio Garza Laguera, Honorary Chairman Jose Antonio Fernandez Carbajal, Chairman and CEO Juan Carlos Braniff, Director GRUPO TMM: Moody's Cuts Ratings On Concern Bond Swap May Fail ------------------------------------------------------------- Moody's Investor Services downgraded Grupo TMM's debt rating to seven levels below investment grade on concern investors may not accept an exchange offer to lengthen maturities on its bonds. Grupo TMM, Mexico's largest transportation company, had the ratings on US$400 million worth of bonds downgraded by Moody's to Caa1 from B2, with a negative outlook on the rating. "In the absence of a successful exchange, there is a high probability of default on TMM's bonds," Moody's said in a statement. In December, TMM announced a planned offer to exchange its US$200 million of 9 1/2 bonds due in May next year and US$200 million of 10 1/4 bonds due in 2006 for US$400 million of 10 3/4 bonds that mature in 2009. The new bonds will be guaranteed by the holding company that owns TFM, the Company's rail unit. That will leave those bondholders who don't participate in the exchange with debt that has fewer guarantees, Moody's said. The bond exchange offer expires on Feb. 11, but could be extended by the Company. To see financial statements: http://bankrupt.com/misc/Grupo_TMM.htm CONTACT: Grupo TMM Jacinto Marina, 011-525-55-629-8790 jacinto.marina@tmm.com.mx Brad Skinner (IR), 011-525-55-629-8725 brad.skinner@tmm.com.mx Luis Calvillo (MR), 011-525-55-629-8758 luis.calvillo@tmm.com.mx Dresner Corporate Services Kristine Walczak (MR, IR), 312/726-3600 kwalczak@dresnerco.com GUILFORD MILLS: Reveals Closure of Mexican Ops In Annual Filing --------------------------------------------------------------- Guilford Mills Inc. revealed in its annual report for the year ended Sept. 29, 2002, filed late Tuesday with the Securities and Exchange Commission that it has closed its dyeing and finishing plant in Altamira, Mexico, reports Dow Jones. Closure is part of the Company's efforts to scale down its apparel segment. When it emerged from Chapter 11 bankruptcy protection in October, the Company said it expects to continue to allocate resources primarily to its automotive business because management believes the segment to be less susceptible to competition from foreign imports than apparel and home fashions fabrics. As reported, Guilford Mills and 13 affiliates filed Chapter 11 petitions March 13, 2002, with the parent company listing assets of US$551 million and debts of US$409 million as of Sept. 30, 2001. The Company's reorganization plan took effect Oct. 4. To see financial results: http://bankrupt.com/misc/Guilford_Mills.htm CONTACT: GUILFORD MILLS, INC. 4925 West Market Street, Greensboro, NC Phone: (336) 316-4000 Home Page: http://www.guilfordmills.com Contact: David H. Taylor, Interim Chief Financial Officer ================================= T R I N I D A D & T O B A G O ================================= CARONI LTD: Staff Protest Halts Operations ------------------------------------------ Operations at Caroni Ltd.'s sugar factories were unable to commence grinding operations as members of its joint staff association assembled outside the embattled company's head office on Tuesday in protest of the government's handling of its restructuring. The joint staff association includes the Association of Technical, Allied and Supervisory Staff (ATASS); Sugar Industry Staff Assoc (SISA); Estate Police Assoc (EPA) and the Sugar Boilers' Assoc (SBA). A report released by the Trinidad Guardian revealed that the association was asking for a meeting with Caroni Chairman, Kusha Harracksingh. Although, the staff unions are not against the restructuring, they want it to be done in a "humane and transparent" manner. Staff representatives met with Harracksingh after a closed-door meeting with the Company's chief executive officer William Washington. Harracksingh reportedly promised them to take their concerns to the ministerial committee overseeing Caroni's restructuring. Harracksingh then went to meet with Dr Lenny Saith, chairman of the Committee, promising to return to the staff. According to Jairam Ramkissoon, president-general of SISA, said that the protesting employees will remain outside until Harracksingh returns from his meeting with Saith. He added that the staff unions' demands must be met first, before any restructuring is done to Caroni. The report did not indicate whether Harracksingh returned to protesting workers that day. Meanwhile, the Company's operations in itd two sugar factories in Brechin Castle and Usine Ste Madeleine remain at a standstill.. Canefarmers were advised to stop cutting canes before the issue with the staff is resolved. CONTACT: Caroni Limited Old Southern Main Road, Caroni, Trinidad & Tobago Phone: (868) 663-1781 or 662-0879 Fax: (868) 663-1404 ============= U R U G U A Y ============= UTE: Price Hike Proposal Awaits President's Approval ---------------------------------------------------- Uruguay's state power company UTE is close to implementing a proposal to raise power prices by an average of 12%, Business News Americas indicates. According to UTE Chairman Ricardo Scaglia, the proposal, which already has the approval of the board, needs the final approval of Uruguayan President Jorge Batlle for it to become effective. Such process normally takes only a few days. Recently, UTE implemented an 8% price hike in November. But that wasn't enough to help the Company recover from the effects of the devaluation of the Uruguayan peso against the US dollar, as 50% of the Company's costs are linked to the dollar, Scaglia said. UTE officials wanted to a price hike of 16%, he added. CONTACT: UTE (Administracion Nacional de Usinas y Transmisiones Electricas) Jujuy 2627 Montevideo 11800 Uruguay Phone: (5982) 2003062 E-mail: ute@ute.com.uy Home Page: http://www.ute.com.uy/presenta.htm Contacts: Esc. Ricardo Scaglia, President Jaime Pienica, Vice President *********** 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 2003. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *