/raid1/www/Hosts/bankrupt/TCRLA_Public/030311.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
Tuesday, March 11, 2003, Vol. 4, Issue 49
Headlines
A N T I G U A & B A R B U D A
LIAT: BWIA Introduces Unfair Competition on Routes, Paper Says
LIAT: Air Jamaica CEO Denies Talk Suggesting Possible Merger
A R G E N T I N A
AGUAS ARGENTINAS: Etoss Reviewing Report On Rates Hike Proposal
FLEETBOSTON FINANCIAL: Shares Dip on Argentine SC's Ruling
NII HOLDINGS: Corrects Previously Reported Earnings Results
B E R M U D A
TYCO INTERNATIONAL: New Board Makes Committee Assignments
TYCO INTERNATIONAL: Reviewing Plan To Consolidate HQ Ops
TYCO INTERNATIONAL: PwC Replaces Lead Partner on Tyco Account
B R A Z I L
AES SUL: Aneel Publishes Figures For Upcoming Price Revisions
BCP: Exec. Sees Forthcoming Sale Following BSE Deal
TELEMAR: Pays Fine To Waive Conditions Surrounding $810M Loan
VARIG: Allowed to Borrow Seized Plane
VESPER: Finnish Ambassador Trying to Block License
C H I L E
ENERSIS: Requesting Approval On $1.43B Credit Capitalization
INVERLINK: Slowly Caving In To Woes Brought By Scandal
MADECO: Reduces Losses In 2002
C O L O M B I A
BELLSOUTH COLOMBIA: Acknowledges Error In 2002 Lawsuit
EMCALI: Regulator Moves To Block Liquidation
J A M A I C A
KAISER ALUMINUM: Seeks Approval To Amend DIP Financing Pact
M E X I C O
CFE: Warns of Power Shortage as Gas Supply Lowers
PEMEX: Reveals Existence of 2,700 New Oil Locations
PEMEX: Announces New Appointments After Another Shakeup
N I C A R A G U A
ENITEL: Six Bidders Prequalify For Sale
V E N E Z U E L A
CANTV: Govternment's Ruling To Hamper Plan To Boost Rates
CERRO NEGRO: Restarts Operations After Snag
PDVSA: President Chavez Appoints New Board
* No Solution Reached in Venezuelan Political Conflict
- - - - - - - -
=================================
A N T I G U A & B A R B U D A
=================================
LIAT: BWIA Introduces Unfair Competition on Routes, Paper Says
--------------------------------------------------------------
Troubled Trinidadian airline BWIA is offering lower fares on
routes it shares with LIAT, reports the Antigua Sun. BWIA, which
owns 29 percent of LIAT, was offering round trip tickets between
Barbados and Trinidad for US$77, despite Barbadoan authorities'
request that BWIA withdraw the unauthorized fares, said the
report.
The report also reveals that BWIA is offering roundtrip flights
between Barbados and Grenada for US$50 and between Port of Spain
and Grenada for US$45. Both rates are unapproved.
The newspaper said that this is not the first time BWIA has
employed fare cutting. BWIA's pricing allegedly pushed Air
Jamaica to abandon the Port of Spain - Kingston route.
BWIA is LIAT's single largest shareholder.
CONTACT: LIAT Corporate Headquarters
V.C. Bird International Airport,
P.O. Box 819,
St. John's, Antigua West Indies
Tel. 1 (268) 480-5600/1/2/3/4/5/6
Fax: 1 (268) 480-5625
Homepage: http://www.liatairline.com/
Contacts:
Garry Cullen, Chief Executive Officer
David Stuart, Vice President of Marketing
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)
LIAT: Air Jamaica CEO Denies Talk Suggesting Possible Merger
------------------------------------------------------------
Chris Zacca, the CEO of Air Jamaica, contradicted his LIAT
counterpart's claims that there is a strong possibility of a
merger involving the two airlines and BWIA.
In a report released earlier by the Antigua Sun newspaper, LIAT
CEO Gary Cullen indicated that a merger could take place between
his airline, Air Jamaica and BWIA. Cullen also said that two
meetings have already been held involving the three CEOs and
Liat's chairman, something that Zacca has denied.
LIAT is looking at the merger as a way to save the cash-strapped
airline. The airline is in urgent need of a $25 million capital
boost. Cullen said that the money would be used to purchase
additional engines, make repayment on aircrafts leased from
General Electric and Bombardier, and staff redundancy payment.
=================
A R G E N T I N A
=================
AGUAS ARGENTINAS: Etoss Reviewing Report On Rates Hike Proposal
---------------------------------------------------------------
Argentine waterworks regulator Etoss is still preparing a report
regarding the proposed rate increase that would help finance
waterworks concessionaire Aguas Argentinas' 2003, ARS155-million
(some US$48.3M) improvement and service expansion plan.
After finalizing the report, Etoss will then pass it on to the
economy ministry that has until May 2 to render a decision.
Business News Americas recalls that Etoss was established to
regulate Aguas Argentinas, which provides drinking water to 7.6
million residents and sewerage services to 5.7 million in the
Greater Buenos Aires area.
France's Suez group, which owns Aguas Argentinas, is seeking a
15% rate increase for the concessionaire. It has said it would
turn to the World Bank's International Center for Settlement of
Investment Disputes (Icsid) if the Argentine government does not
go forward with a water rates adjustment.
Raising rates, though highly unpopular, is considered necessary
to keep Argentina's utilities from going bankrupt following the
peso's devaluation. Companies such as Aguas Argentinas saw their
costs skyrocket last year, while revenues have remained flat or
even declined.
CONTACT: SUEZ
Media:
Antoine Lenoir
Phone: +331-4006-6715
or
Investors:
Arnaud Erbin
Phone: +331-4006-6489
or
Belgium
Guy Dellicour
Phone: +322-507-02-77
FLEETBOSTON FINANCIAL: Shares Dip on Argentine SC's Ruling
----------------------------------------------------------
Shares in FleetBoston Financial closed 58 cents, or 2.5% lower,
at $22.10 on Friday after Argentina's Supreme Court declared
unconstitutional a government ruling that converted dollar bank
accounts to devalued pesos, reports Bloomberg.
FleetBoston has 109 branches in Argentina operating under the
name BankBoston Argentina.
Argentine customers have been fighting to recover devalued or
frozen deposits from the country's banks, including the troubled
BankBoston, and the court's ruling could allow thousands to
restore the value of their savings.
"Fleet is more susceptible to the risks in the economy in Latin
America than other banks, and this is another example," said
Jason Goldberg, analyst at Lehman Brothers.
FleetBoston took a US$559-million net loss last year in its
Argentina bank after a net loss of US$513 million the year
before.
Losses are attributed to devalued currency, customer defaults on
loans, and the abolition of fixed currency exchange rates.
CONTACT: FleetBoston Financial
Media Contact:
James E. Mahoney, 617/434-9552
or
Investor Contact:
John A. Kahwaty, 617/434-3650
NII HOLDINGS: Corrects Previously Reported Earnings Results
-----------------------------------------------------------
On February 12, 2003, NII Holdings, Inc. (Nasdaq:NIHD) issued a
press release that announced its earnings for fiscal year 2002,
which included operating results for the ten months ended October
31, 2002 prepared in connection with the Company's emergence from
Chapter 11 reorganization proceedings.
The announced ten-month, pre-restructuring results included the
recognition of a one-time, non-recurring gain of $4.0 billion in
net non-operating and non-cash gains in connection with the
restructuring of the Company's debt and equity. This amount
included a $1.8 billion elimination of the Company's prior
equity. The Company evaluated alternative accounting treatments
and sought the advice of its independent auditors.
The Company's independent auditors advised it to treat this
elimination as a reorganization gain using "fresh-start"
accounting principles resulting from the reorganization. The
independent auditors have now notified the Company that upon
further review they have reversed their earlier advice and
advised the Company to record this write-off as an adjustment to
stockholders' equity on the Company's balance sheet.
Therefore the Company has revised its operating results as
previously reported on February 12, 2003 to reflect a
reorganization gain of $2.2 billion rather than the $4 billion
amount previously announced. This correction neither impacts the
Company's operating income for the ten months ended October 31,
2002 as previously reported, nor the post-restructuring results
of operations for the two months ending December 31, 2002 nor its
financial position as of December 31, 2002 or outlook for 2003.
Attached is a revised summary of the Company's operating results.
The Company's Annual Report on Form 10-K for the year ended
December 31, 2002 will reflect the revised accounting treatment
for the reorganization gain.
About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in Reston, Va.,
is a leading provider of mobile communications for business
customers in Latin America. NII Holdings, Inc. has operations in
Argentina, Brazil, Chile, Mexico and Peru, offering a fully
integrated wireless communications tool with digital cellular
service, text/numeric paging, wireless Internet access and Nextel
Direct Connectr, a digital two-way radio feature. NII Holdings,
Inc. trades on the NASDAQ market under the symbol NIHD. Visit the
Company's website at http://www.nextelinternational.com.
Nextel, the Nextel logo, Nextel Online, Nextel Business Networks
and Nextel Direct Connect are trademarks and/or service marks of
Nextel Communications, Inc.
To see operating results:
http://bankrupt.com/misc/NII_HOLDINGS.htm
=============
B E R M U D A
=============
TYCO INTERNATIONAL: New Board Makes Committee Assignments
---------------------------------------------------------
Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI) announced
that its new Board of Directors, meeting Thursday for the first
time since its election Thursday at the Annual General Meeting of
Shareholders, voted to take several actions, beyond those that
had already been implemented under the Company's new management,
to improve corporate governance at Tyco.
The new measures include:
-- The re-election by the independent directors of John A. Krol
as Lead Director. In this role, Mr. Krol facilitates and chairs
executive sessions of the Board, which are held after every Board
meeting, sets the agenda for Board meetings, and coordinates the
information flow to the Company.
-- New assignments for membership on the Board's committees.
-- The adoption of new Board Governance Principles, which
document the responsibilities of the directors in overseeing the
management of Tyco's businesses in the best interests of
shareholders.
-- The adoption of a new employee Guide to Ethical Conduct, which
provides explicit guidelines on conduct that is expected of
everyone at Tyco.
-- The adoption of a new Delegation of Authority policy to
strengthen control over cash disbursements at the Company.
-- A decision to study in detail the issues related to the
Company's incorporation in Bermuda.
-- A decision to adopt new severance guidelines for senior
executives at the next Board meeting.
The Board also determined that, except for Chairman and CEO
Edward D. Breen, all members of the Board are considered
"independent members."
Institutional Shareholder Services, Inc., one of the world's
leading providers of proxy voting and corporate governance
services, has also determined these nine members of the Board are
independent according to its standards.
"Tyco now has in place an entirely new Board of Directors elected
by our shareholders," commented Edward D. Breen, Chairman and
Chief Executive Officer of the Company. "The clear mission of
this Board is to ensure that the new Tyco adheres to the highest
standards of corporate governance and that all of us at the
Company dedicate ourselves to building value for our
shareholders."
"The actions taken today [Thursday] are only among the first
steps in a continuing drive by the Board and management to
establish clear and uncompromising standards of conduct in every
aspect of our management and financial reporting and to
strengthen specifically the performance of our businesses. The
Board as a whole, together with each of its committees, will work
to achieve these goals through informed, substantive and probing
deliberations. We are determined to distinguish Tyco for its
leadership in corporate governance while also unlocking the
potential of the strong portfolio of businesses that make up this
Company."
Board Reorganization
In organizing its committees, the Board appointed the following
members:
-- John A. Krol is to chair the Corporate Governance and
Nominating Committee. Bruce S. Gordon and H. Carl McCall were
also appointed as committee members. The Senior Vice President
for Corporate Governance reports to Mr. Krol as Chairman of this
committee.
-- Jerome B. York is to chair the Audit Committee. Brendan
O'Neill and Sandra Wijnberg were also appointed as committee
members. Additionally, all three of these directors were
determined by the Board to be "financial experts" according to
SEC regulations. The Vice President of Corporate Audit and the
Corporate Ombudsman report to Mr. York as Chairman of this
committee.
-- Mackey J. McDonald is to chair the Compensation Committee.
Adm. Dennis C. Blair (U.S. Navy, Ret.) and George W. Buckley were
also appointed as committee members.
Other Governance Actions
The governance initiatives announced today [Thursday] are the
product of an in-depth five-month review and analysis that
involved benchmarking proposed changes at Tyco against "best
practices" companies. The Board drew upon the expertise of such
recognized governance specialists as Charles Elson, of the
University of Delaware Corporate Governance Center, Michael Useem
of the Wharton School of Business at the University of
Pennsylvania, and Jay Lorsch of Harvard Business School. Tyco
also formed a special working group of the Board, with Ira
Millstein of law firm Weil, Gotshal & Manges, serving as an
expert outside advisor, to advance the process.
As one key outcome of this comprehensive review analysis, the
Board approved new Board Governance Principles, a new Delegation
of Authority policy to strengthen control over cash disbursements
at the Company, and a new employee Guide to Ethical Conduct.
The new Board Governance Principles describe the mission and
values of the Board of Directors of the Company. The document
delineates the responsibilities of the Directors in overseeing
the management of Tyco's businesses in the best interest of
shareholders and in a manner that is consistent with good
corporate citizenship. The Board Governance Principles reflect
the Board's belief that good governance requires not only an
effective set of specific practices, but also a company-wide
culture of integrity and accountability that starts with its
leadership.
The Company's Delegation of Authority policy provides precise
guidelines and matrices that draw clear lines of authority and
accountability, coupled with budgetary responsibility, for
expending company funds. This policy encompasses such areas as
employee compensation, borrowings and capital expenditures,
acquisitions, travel and entertainment, investments and
charitable contributions.
The employee Guide to Ethical Conduct provides explicit
guidelines on what is expected of everyone who works at Tyco. It
includes the four core values of the company -- integrity,
excellence, teamwork and accountability. It also provides a
close look at a variety of on-the-job issues such as ethical
conduct, fraud, financial controls, conflicts of interest,
record-keeping, protection of confidential information,
harassment, substance abuse, and inappropriate gifts. The Guide
also clearly explains how employees worldwide can report a
violation of the code of conduct or seek guidance on particular
issues, with complete confidentiality, by calling Tyco's toll
free CONCERNline or by contacting the office of the Tyco
Ombudsman. Tyco recently announced the hiring of Richard Baran
as its first Corporate Ombudsman.
The governance practices announced today [Thursday] implement and
in some instances exceed the requirements of the Sarbanes-Oxley
Act, New York Stock Exchange listing requirements and the
Company's own high standards of good corporate governance.
ABOUT TYCO INTERNATIONAL LTD.
Tyco International Ltd. is a diversified manufacturing and
service company. Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services and the world's largest
manufacturer of specialty valves. Tyco also holds strong
leadership positions in medical device products, and plastics and
adhesives. Tyco operates in more than 100 countries and had
fiscal 2002 revenues from continuing operations of approximately
$36 billion.
CONTACT: Gary Holmes (Media) 212-424-1314
Kathy Manning (Investors) 603-334-3900
TYCO INTERNATIONAL: Reviewing Plan To Consolidate HQ Ops
--------------------------------------------------------
Several employees at Tyco International are likely to lose their
jobs if the Company consolidates headquarters operations as part
of Chief Executive Officer Ed Breen's plan to cut costs.
"We have three offices, one of which is in Boca Raton. We're
reviewing how best to use our resources to be as productive as
possible," company spokesman Gary Holmes said Wednesday.
In a teleconference with Wall Street analysts in January, Breen
said he would be "evaluating (how) to consolidate our
manufacturing and facility footprint." That means headquarters,
too.
Holmes declined to be specific about the review and when it would
be completed.
While the company employs 1,600 people in Boca Raton, only 155
are in corporate jobs. The remainder work in Tyco's Fire and
Security Division and home-alarm unit, ADT Ltd.
Tyco is incorporated in Bermuda, but if union pension funds have
their way, it will move back to the states.
TYCO INTERNATIONAL: PwC Replaces Lead Partner on Tyco Account
-------------------------------------------------------------
PricewaterhouseCoopers LLC, the outside auditor of Bermuda-based
Tyco International, Ltd. said that Richard Scalzo, who signed off
Tyco's 2002 audit, has been replaced as lead partner, according
to Reuters. PwC announced Mr. Scalzo's removal from the account
on Friday, as prosecutors examine transactions in line with the
investigations in the case against Tyco's former executives.
Mr. Scalzo was responsible for the clean auditing opinion given
to Tyco's annual financial statement, being PwC's engagement
partner on the Tyco account. He came under increasing scrutiny
when the criminal investigation on former Tyco CEO Dennis
Kozlowski was going strong.
Prosecutors in New York contend that PwC knew of the bad loans
the Mr. Kozlowski and former finance chief, Mrak Swartz awarded
themselves. The two men were charged of grand larceny and
enterprise corruption in a Manhattan court, but entered pleas of
not guilty. Both are currently out on bail.
According to Tyco's proxy statement, it paid some US$51 million
to PwC for audit work and other services. Tyco also said that it
has not committed to keep PwC as its outside auditor beyond
fiscal year 2003.
Citing people privy to the matter, Reuters says that Mark Ondash
took Mr. Sclazo's place.
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
Contacts:
Gary Holmes (Media)
Phone: +1-212-424-1314
or
Kathy Manning (Investors)
Phone: +1-603-778-9700
===========
B R A Z I L
===========
AES SUL: Aneel Publishes Figures For Upcoming Price Revisions
-------------------------------------------------------------
Brazil's power regulator Aneel on Friday published provisional
figures for the five-yearly price revisions at distributor AES
Sul, reports Business News Americas.
Aneel is suggesting an overall price hike of 17.13% and a 1.81%
percentage known as Factor X, which will be discounted from
future inflation adjustments to account for operating
improvements at the company.
Public consultations for the price revision will be carried out
on March 19 in Sao Leopoldo in Rio Grande do Sul state. Aneel
plans to publish the definitive price revision a month after.
According to Mauro Storino, energy analyst at credit rating
agency Atlantic Rating, markets will be watching whether the
price revision covers the significant costs that the Company has
accrued over the last year. Since the last annual price
adjustment last year, the distributor's costs have increased
significantly, due to pressure from inflation as measured by the
IGPM index, and the depreciation of the Brazilian real, which has
increased US dollar-denominated expenses.
These extra costs are placed into a separate account for advanced
payments that does not show up in the bottom line, and should be
compensated during the annual price adjustments.
BCP: Exec. Sees Forthcoming Sale Following BSE Deal
---------------------------------------------------
Luis Felipe Schiriack, vice president of administration and
finance at BCP SA, expects that America Movil SA's acquisition of
sister company BSE will accelerate talks for the purchase of the
bankrupt BCP.
Business News Americas recalls that on Wednesday, America Movil,
Mexico's biggest wireless operator, agreed to buy 95% of BSE (BCP
Nordeste) from Atlanta-based BellSouth Corp. (BLS) and principals
of local bank Banco Safra for US$171 million.
"Without a doubt the sale of BSE will help, it's easier to sell
one company at a time than both," Schiriack told Dow Jones
Newswires, However, according to him, it's still impossible to
provide a timeframe for the sale.
Much still depends on the renegotiation of BCP's US$1.8-billion
debt with its creditors. Schiriack said talks were proceeding
very well but declined to comment on what would be the outcome.
Market rumors say creditors are prepared to write off about 50%
of the debt's value. Such a discount would help conclude a sale
faster after BCP defaulted on a US$375-million debt last March.
According to analyst Ana Carolina Gava of BES Securities, debt
renegotiation and a sale of BCP's core operation could be put
together before the end of the first half of this year.
CONTACT: BCP S.A.
Rua Florida, 1970 4o andar
Sao Paulo - SP
Tel: 55 11 5509-6428
Fax: 55 11 5509-6257
Home Page: http://www.bcp.com.br
BELLSOUTH CORPORATION
1155 Peachtree St. NE
Atlanta, GA 30309-3610
Phone: 404-249-2000
Fax: 404-249-5599
Home Page: http://www.bellsouth.com/
Contacts:
Investor Relations
Phone (US): 800.241.3419
Fax: 404.249.2060
E-mail: investor@bellsouth.com
TELEMAR: Pays Fine To Waive Conditions Surrounding $810M Loan
-------------------------------------------------------------
Brazilian telecoms holding company Tele Norte Leste Participacoes
(Telemar) agreed to pay a fine to 10 local banks to waive
conditions surrounding a BRL2.83-billion (US$810mn) syndicated
loan, reports Business News Americas.
Telemar took the loan from a syndicate of banks lead by Banco
Itau and Banco do Brasil on the condition that it maintains its
assets 20% above liabilities due in the coming year or Ebitda 20%
above that figure. The condition will be suspended for 12 months
from the date Telemar pays the fine.
Telemar ended 2002 with total debt in excess of BRL9.1 billion.
EBITDA for 2002 was negative BRL303 million.
CONTACT: TNE - INVESTOR RELATIONS
Roberto Terziani
Email: terziani@telemar.com.br
Tel: 55 21 3131 1208
Fax: 55 21 3131 1155
Carlos Lacerda
Email: carlosl@telemar.com.br
Tel: 55 21 3131 1314
Fax: 55 21 3131 1155
GLOBAL CONSULTING GROUP
Rick Huber
richard.huber@tfn.com
Tel: 1 212 807 5026
Fax: 1 212 807 5025
Mariana Crespo
Email: mariana.crespo@tfn.com
Tel: 1 212 807 5026
Fax: 1 212 807 5025
VARIG: Allowed to Borrow Seized Plane
-------------------------------------
General Electric Capital Aviation Services released late Friday
an aircraft it seized from Varig following negotiations on the
leasing agreement, reports AP. Neither the details of the
agreement nor the amount of money Varig owed to the leasing
company were disclosed.
U.S. justice authorities seized a Boeing 767 from Varig, Latin
America's largest airline, at the behest of General Electric
Capital Aviation Services. The leasing company on Friday allowed
Varig to use the jet again. However, in a telephone interview
with the AP, Varig spokesman Paulo Cesar Fonseca said that the
airline will return the aircraft, as well as five other planes to
General Electric Capital Aviation Services.
It was the second time this year that a plane used by the
troubled airline had been seized on an airport outside Brazil.
In January, a division of insurance giant American International
Group (AIG) repossessed a Boeing 777 from Varig at Paris' Charles
de Gaulle airport for lack of payments.
Varig is struggling under more than US$746 million in debt. Last
month, the airline announced it would merge with another
Brazilian airline, TAM, to stave off a threatening bankruptcy.
CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.)
Rua 18 de Novembro No. 800, Sao Joao
90240-040 Porto Alegre,
Rio Grande do Sul, Brazil
Phone: (51) 358-7039/7040
(51) 358-7010/7042
Fax: +55-51-358-7001
Home Page: www.varig.com.br/english/
Contacts:
Dorival Ramos Schultz, EVP Finance and CFO
E-mail: dorival.schultz@varig.com.br
Investor Relations:
Av. Almirante Silvio de Noronha,
n 365-Bloco "B" - s/458 / Centro
Rio de Janeiro, Brazil
KPMG Brazil
Belo Horizonte
Rua Paraba, 1122
13th Floor
30130-918 Belo Horizonte MG
Telephone 55 (31) 3261 5444
Telefax 55 (31) 3261 5151
or
Brasilia
SBS Quadra 2 BL A N 1
Edificio Casa de Sao Paulo SL 502
70078-900 Braslia - DF
Telephone 55 (61) 223 2024
Telefax 55 (61) 224 0473
BAIN & CO
Primary Contact: Wendy Miller
Two Copley Place, Boston, MA 02116
USA
Phone: +1-617-572-2000
Fax: +1-617-572-2461
Email: miles.cook@bain.com
URL: http://www.bain.com
TAM
Daniel Mandelli Martin, President
Buenos Aires
Tel. (54) (11) 4816-0001
URL: www.tam.com.br
VESPER: Finnish Ambassador Trying to Block License
--------------------------------------------------
Finland's ambassador to Brazil, Hannu Uusi-Videnoja, is lobbying
against the approval of the request of local exchange carrier
Vesper to use the 1900MHz spectrum for mobile telephony, reports
local daily Agencia Estado.
According to Mr. Uusi-Videnoja, the country's regulatory
stability will be jeopardized if Anatel approves Vesper's
application. He added that it would also alter market conditions
for GSM providers.
The board of Anatel is preparing to vote on Vesper's request,
although its private services committee has already turned it
down.
Mr. Uusi-Videnoja reportedly wrote to Brazil's communications
minister Miro Teixeira, but the latter has advised the country's
regulator, Anatel that he is in favor of approving Vesper's
petition. According to a Business News Americas report, Mr.
Teixeira is keen to boosting competition in the market.
Vesper, which is providing fixed wireless services in Sao Paulo,
Minas Gerais, and the other northeastern states in region 10, has
spent some US$84.4 million in November last year for three
1800MHz licences covering the said Brazilian states.
Despite being qualified as a mobile operator, the company is
limited to using GSM technology as its controlling shareholder,
Qualcomm, does not produce CDMA chips for the frequency.
"In September 2002 Anatel passed a resolution allowing the use of
1900MHz for mobile services where a concessionaire has 1800MHz
spectrum, on condition that the 1900MHz spectrum would be used on
a secondary basis," said independent analyst Jose Otero.
"Vesper interpreted this resolution as tacit approval of its
request to use 1900MHz on a primary basis," he added.
Mr. Otero elucidated that Vesper desperately needs to diversify
from simply being a FWA provider, warning that the consequences
would be "catastrophic from the financial point of view" for the
company, if it fails to receive approval to operate on the
1900MHz band.
"In today's market, any potential contract is attractive. If
Nokia can prove that Vesper's (or Qualcomm's) plan for CDMA-based
PCS services on 1900MHz go against the current rule it will try
to make the government enforce it. If this is the case, one can
expect more parties to join the complaint," said Mr. Otero.
Yankee Group analyst Adriana Menezes said that Vesper has
virtually no infrastructure on which to build a 1800MHz network,
and Anatel has prohibited it from using the existing 1900MHz
infrastructure alone.
According to Ms. Menezes, Nokia wants to help Brazilian GSM
operators by blocking Vesper, removing a seamless CDMA roaming
opportunity for Brazil's largest mobile player Brasilcel, a CDMA
operator.
CONTACT: Qualcomm Inc
5775 Morehouse Dr.
San Diego, CA 92121-1714
Phone: 858-587-1121
Fax: 858-658-2100
Web: http://www.qualcomm.com
Contact:
Dr. Irwin M. Jacobs, Chairman & Chief Executive
=========
C H I L E
=========
ENERSIS: Requesting Approval On $1.43B Credit Capitalization
------------------------------------------------------------
Chilean power sector holding Enersis will seek approval from
shareholders at a meeting scheduled for March 31 of a plan to
capitalize US$1.43 billion credits, reports Business News
Americas.
Enersis plans to capitalize loans totaling 58.7 million UFs
(Chile's index-linked financial unit, currently worth US$1.3B)
from parent company Endesa Spain to Enersis and Elesur; and
5.87mn UF (US$130mn) of local bond issues.
The final amount, price and dates for the subscription period
will be determined at the March 31 meeting.
The plan, according to Enersis in a statement, is part of a
previously-announced US$2 billion capital increase. The balance
between the US$1.43bn credits and the US$2 billion total share
issue would be made in cash from existing or new investors.
Endesa has committed to maintain its existing share in Enersis,
and would also buy up any shares that are not subscribed.
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
INVERLINK: Slowly Caving In To Woes Brought By Scandal
------------------------------------------------------
Chilean financial group Inverlink continues to suffer the
consequences of the scandal involving its former CEO Enzo
Bertinelli.
According to a Business News Americas report, the country's
securities and insurance regulator, the SVS, intervened the life
insurer Inverlink's subsidiary, Le Mans Seguros de Vida and has
put the unit under the administration of SVS attorney Fernando
Perez.
At the same time, the SVS also suspended Inverlink's
stockbrokerage unit Inverlink Corredores de Bolsa and ordered the
immediate liquidation of mutual funds administrated by Inverlink
Administradora General de Fondos.
Bertinelli, who resigned in late January, was accused of paying
central bank chairman Carlos Massad's secretary for divulging
classified information. Bertinelli and the secretary, Pamela
Andrada, are now under arrest.
Business News Americas recalls that the financial ramifications
of the scandal came home to roost in the last week of February
when Inverlink Corredores de Bolsa failed to pay US$13 million
owed to Le Mans Seguros de Vida. The SVS ordered the brokerage to
temporarily suspend its operations at that time. Things went from
bad to worse for Inverlink on March 4, when Le Mans told
regulators that it was short CLP2.4 billion (US$3.2mn).
In its latest action, the SVS slapped Le Mans CEO a fine of 7,000
UF (Chile's indexed currency unit), some US$155,000, and
Inverlink Corredores de Bolsa CEO 3,000 UF.
MADECO: Reduces Losses In 2002
------------------------------
Chilean copper and aluminum products manufacturer Madeco reported
to the country's securities regulator that its net loss in 2002
narrowed 29.1% to US$55.9 million from a loss of US$78.8 million
in 2001.
Madeco blamed its losses on economic woes in Argentina and
Brazil.
The Company recorded revenues of US$357 million for 2002, a 31.7%
drop on US$522 million the previous year.
Madeco also revealed that it continues to make progress in its
financial restructuring program.
As previously reported, Madeco repaid 30% of the US$120 million
in debt that it is renegotiating with creditors and obtained a
seven-year extension for the repayment of the remaining US$84
million debt balance, and subject to a three-year grace period.
The successful restructuring was made possible after controlling
shareholders, the Luksic group's Quinenco holding company, signed
up to its US$70-million portion of a roughly US$130-million
equity issue. Of the amount, US$36 million was used to pay the
banks.
The bank debt restructuring was agreed in December last year but
depended on the success of the equity issue.
In addition to cables, Madeco makes finished and semi-finished
non-ferrous products based on copper, aluminum, related alloys
and optical fiber, as well as flexible packaging products for use
in the mass consumer market for food, snacks and cosmetics
products.
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
===============
C O L O M B I A
===============
BELLSOUTH COLOMBIA: Acknowledges Error In 2002 Lawsuit
------------------------------------------------------
Larry Smith, chairman of BellSouth, informed Colombia's telecoms
minister Martha Pinto that the US-based telco will drop the
lawsuit it filed last year against the government. The BellSouth
executive also promised to send the ministry COL70 million
(US$24,000) to cover its related legal costs.
A statement to the Bogota Chamber of Commerce regarding
BellSouth's decision will be made this week.
Business News Americas recalls that in August 2002, BellSouth
filed a lawsuit against the state, demanding financial
compensation for failing to match its optimistic economic growth
projections made in 1994. According to the Company, the decline
in Colombians' purchasing power prevented many potential
consumers from subscribing because the Company had adjusted its
rates according to the economic projections.
However, the lawsuit came across as frivolous, if not ludicrous,
because BellSouth was not actually active in the Colombian market
when the licenses were purchased. BellSouth entered Colombia only
in 2000, when it acquired stakes in three of the country's then
six mobile operators - Celumovil, Celumovil de la Costa and
Cocelo.
"There is the impression that BellSouth is trying to cover up the
failure of its business plan with desperate legal maneuvers,"
Pinto said.
EMCALI: Regulator Moves To Block Liquidation
--------------------------------------------
Colombian public services regulator Superservicios suspended
Emcali's payments of outstanding debts, a move seen by the
country's president, Alvaro Uribe, essential toward ensuring the
utility's survival.
As such, the utility will still provide water, power and telecom
services to city residents, and will continue payments needed to
keep administrative functions afloat.
The Company, which was taken over by Superservicios in April
2002, is heading for liquidation due to its cash flow deficit of
COP540 billion pesos (US$182mn currently). However, if Emcali can
resolve its financial problems this semester, the government will
not move forward with liquidation.
President Uribe was scheduled to meet with regional political
leaders on March 10 to discuss the issue.
URL: http://www.emcali.com.co/
=============
J A M A I C A
=============
KAISER ALUMINUM: Seeks Approval To Amend DIP Financing Pact
-----------------------------------------------------------
Kaiser Aluminum Corp. is seeking approval from the U.S.
Bankruptcy Court in Wilmington, Delaware for a fourth amendment
to its debtor-in-possession financing pact.
The amendment ensures that Kaiser won't be put in default if it
fails to make payments to its pension plans. Citing papers
obtained from the court, Dow Jones Newswires reveals that
Kaiser's failure to meet pension funding requirements would
trigger default under the pact's credit line.
In its court motion, Kaiser said that it probably won't make
future minimum payments due on its pension plans.
The Company's lenders temporarily waived the pension funding
requirements in January, and DIP credit line agent Bank of
America N.A. has since agreed to amend the financing to avoid a
potential default, court papers said. The amendment would also
allow extension of the credit line regardless of some liens
against the Company and its affiliates.
Kaiser Aluminum said it has circulated the amendment among its
lenders, and anticipates gaining approval from enough of the
lenders by a hearing set for March 17 to go ahead with the
amendment.
As a condition of the amendment, Kaiser Aluminum affiliates Alwis
Leasing LLC, Kaiser Center Inc., Alpart Jamaica Inc., KAE Trading
Inc., Kaiser Bauxite Co., Kaiser Center Properties, Kaiser Export
Co. and Kaiser Jamaica Corp. are to give the lenders unsecured
guarantees of the DIP facility and grant super-priority
administrative status to any claims under the credit agreement.
Kaiser and several of its affiliates filed for Chapter 11
bankruptcy protection Feb. 12, 2002, listing assets of US$3.3
billion and debts of US$3.1 billion.
CONTACT: Kaiser Aluminum Corporation, Houston
Scott Lamb, 713/332-4751
===========
M E X I C O
===========
CFE: Warns of Power Shortage as Gas Supply Lowers
-------------------------------------------------
Mexican state power company CFE warned that power supplies in the
country would be cut to a minimum this summer because of the
reduction in natural gas supplies from Pemex, coupled with the
worst drought Mexico has had in 13 years.
According to a Business News Americas report, the Company is
hastening the construction of thermo projects in order to reduce
the possibility of disruptions to power supplies. The Company is
also stepping up its maintenance program, and the completion of
three north-south transmission lines.
Thermo projects due for completion are Campeche (in March),
Mexicali and Naco-Nogales (April), Chihuahua III, Tuxpan III and
IV and Los Azufres (May), Los Azufres II (June), and El Sauz and
Altamira III and IV (October), as well as Rio Bravo III and
Guerrero Negro II (April 2004), said the report.
The Company is expecting the completion of an US$87-million gas
pipeline from Texas to Monterry, constructed by U.S. company
Kinder Morgan by April.
CFE may also buy more power surplus from Pemex, and renting
capacity of about 200MW from temporary units, which should be
operational in December this year. However, the Company may also
have to resort to using diesel and fuel oil at its combined cycle
plants as gas supply from Pemex is declining.
The Company may also buy gas under the terms of a 15-year
contract and supply two power plants in the country, the report
suggests.
CONTACT: COMISION FEDERAL DE ELECTRICIDAD
Rio Rodano 14, Col. Cuauhtemoc
06598 Mexico, D.F., Mexico
Phone: +52-55-5229-4400
Fax: +52-55-5310-4614
http://www.cfe.gob.mx
Contacts:
Alfredo Elias Ayub, General Director
Arturo Hernandez Alvarez, Director of Operations
Francisco J. Santoyo Vargas, Director of Finance
PEMEX: Reveals Existence of 2,700 New Oil Locations
---------------------------------------------------
Mexican state oil company Pemex has discovered 2,700 new oil
locations, Business News Americas reports, citing Pemex's
upstream unit (PEP) director Luis Ramirez Corzo.
The new discovery could contain between 17 billion and 24.4
billion barrels, said Mr. Corzo, who is hoping that his team
would discover another Cantarell field.
Cantarell, located in the Bay of Campeche is the second largest
producing complex after the Ghawar field in Saudi Arabia.
Mr. Ramirez said that during the last two years, the Company has
tripled drilling so that it expects 113 percent of annual
production in 2006, compared to 40 percent in 2002. But the PEP's
business plan anticipated only a 75 percent reserve replacement
ratio by 2006, rising to 100 percent in 2010, the report
suggests.
The Company has completed drilling at 335 out of the 2,700
locations. Presently, 1,600 of these depend on results of seismic
studies. Local paper El Financiero reported that the Company had
a 67 percent success in the 54 exploration wells it has dug. The
said wells were estimated to contain 561 million barrels
reserves.
CONTACT: PETROLEOS MEXICANOS
Marina Nacional 329, Colonia Huasteca
11311 Mexico, D.F., Mexico
Phone: +52-55-5531-6061
Fax: +52-55-5531-6321
Home Page: http://www.pemex.com
Contacts:
Raul Munoz Leos, General Director
Jose A. Ceballos Soberanis, Director Corporate
Operations
Jose Juan Suarez Coppel, Director Corporate Finance
PEMEX: Announces New Appointments After Another Shakeup
-------------------------------------------------------
Mexican state oil monopoly Petroleos Mexicanos (E.PEM), or Pemex,
announced the appointment of Carlos de Garza as its new corporate
director. Dow Jones Newswires reports that Mr. De Garza took the
place of Julio Camelo effective Friday last week.
Pemex director Raul Munoz, appointed Mr. De Garza, a public
accountant, and described as having broad private sector
experience in finance and management, to the post, following a
management shakeup at the company's exploration and production
unit. However, Luiz Ramirez remains head of the said unit.
Mr. Munoz was known to have conducted several management shakeups
since his appointment to his post in December 2000, by President
Vicente Fox.
Meanwhile, Pemex also confirmed the appointment of Sergio Guaso
as executive director of its multiple service contracts. The
Company is planning to tender multiple se4rvice contracts later
this year, said the report. The offer will likely be made for the
natural gas production in the northeastern region of the
country.
=================
N I C A R A G U A
=================
ENITEL: Six Bidders Prequalify For Sale
---------------------------------------
Six bidders made it through the Nicaraguan government's pre-
qualification stage in a process to select a buyer for its 49%
stake in fixed line operator Enitel, according to Enitel share
administrator Carlos Fernandez.
The companies pre-selected, according to Business News Americas,
are France's BNP Paribas, Spain's Banco Bilbao Viscaya Argentaria
and Banco Santander Central Hispano, US-based Credit Suisse First
Boston, Peruvian investment bank Latin Pacific Capital and US-
based consultancy DiamondCluster.
Potential bidders for the stake will be announced mid-April. The
sale, which is expected to fetch around US$100 million, is
scheduled for September 30, and will conform with guidelines laid
down by the World Bank, which will pay the investment bank's
fees, Fernandez said.
Fernandez revealed that the government has formed a privatization
committee of two government officials (one of which is Fernandez)
and three businessmen to manage the selection process and liaise
with the winning bank during the sale.
Enitel was partially in 2001 after the government sold its 40%
stake to the Megatel consortium, comprised of Sweden's Telia
Swedtel and Honduran electricity company EMCE. Megatel paid US$33
million for the stake and will pay US$10 million each year
through April 2006 for a five-year management contract.
The remaining 11% of Enitel is set aside for the Company's
employees.
=================
V E N E Z U E L A
=================
CANTV: Govternment's Ruling To Hamper Plan To Boost Rates
---------------------------------------------------------
Venezuelan ISP Cantv.net's plan to increase rates this month are
likely to hit a snag, Business News Americas indicates.
Rate increases apply to corporate clients of Internet access
services, and will vary from 10-20%, depending on the number of
users per client company. Residential and corporate broadband
access rates will also rise by approximately the same percentage
amount.
Internet rate adjustments do not require regulatory approval.
However, the government of President Hugo Chavez has implemented
a price freeze, which may prevent Cantv from raising its rates to
keep up with inflation.
Cantv is 28.5% owned by Verizon Communications Inc., 6.9% by
Spain's Telefonica SA, 6.6% by the government, and 12% by
employees. The rest, or about 46%, is traded.
CERRO NEGRO: Restarts Operations After Snag
-------------------------------------------
ExxonMobil said that the Cerro Negro crude upgrade project
restarted operations on Friday, after complications in one of the
Cerro Negro's furnaces forced it to shut down operations on
Thursday, Business News Americas relates.
The plant restored its operations a week before it closed again
on Thursday. Even during the period of the national strike, the
plant continued to produce some 60,000 barrels of extra heavy oil
per day. The report said that the plant's output was stored until
the processing operations resume.
A shortage of natural gas supplies brought about by the national
strike forced the Cerro Negro to shut down on December 8. But the
ExxonMobil spokesperson Richard Bailey express confidence that
the plant would soon be producing its pre-strike output of
synthetic crude was 108,000 barrels per day.
Cerro Negro is in the Anzoategui state, and is jointly owned by
ExxonMobil, Venezuela's state oil company PDVSA, and Vega Oel fom
Germany. ExxonMobil and PDVSA each own 42% of Cerro Negro, and
Germany's Vega Oel owns the remaining stake.
The plant can process up to 120,000 barrels per day of heavy
crude to produce 108,000 barrels per day of 16.5 degree API
crude, reveals Business News Americas.
PDVSA: President Chavez Appoints New Board
------------------------------------------
President Hugo Chavez appointed a new board at state oil company
Petroleos de Venezuela, S.A., reports Bloomberg. The seven new
appointees, all political supporters of Mr. Chavez, said
analysts, were sworn in last Thursday.
Mr. Chavez said that he would now be taken more seriously since
he has faced down the two-month general strike aimed at deposing
him. The new appointment solidifies his control on the country's
biggest revenue source, said the report.
Aires Barreto, a former board member was appointed to the board,
along with Luis Vierma, a deputy energy and mines minister.
Union leaders Rafael Rosales and Nelson Nunez were also appointed
as board members. Mr. Rosales is from the Fedepetrol oil union,
and Mr. Nunez is from Sunapetrol.
Luis Marin, another appointee, will oversee the company's
operations in the western part of the country, while Felix
Rodriguez watch over the eastern part.
Local paper El Nacional reported that Army Colonel Dester
Rodriguez will be managing the overhaul of the company's human
resources department.
The new appointees will take charge of PdVSA's restructuring.
Some 16,000 employees were fired in the course of the national
strike, which had almost totally crippled the country's oil
industry. Some reports suggest that the company will split itself
into two.
The appointments did not go without its share criticisms. Antonio
Szabo, president of energy researcher Stone Bond Corp. in Houston
said, "This is going to be a rubber-stamp board. If they dare to
think freely, they'll be out."
Edgar Paredes, former president of the state chemical company
said that the board is made of "persons who sole merit is a
political outlook similar to" Mr. Chavez.
* No Solution Reached in Venezuela Political Conflict
-----------------------------------------------------
The political conflict between President Hugo Chavez and the
opposition in Venezuela is still unresolved after four months of
negotiations. Mediators, which include the Organization of
American States have failed to get the two parties to agree on an
election sought by the opposition.
The Associated Press noted that the mediators also failed to
convince the clashing sides to refrain from an exchange of
unpleasant words.
A number of incidents resulting in the death of military officers
have added to the squabbling. Each side places the blame on the
other.
Venezuela's opposition staged a two-month-long strike, asking for
Mr. Chavez' resignation or to call early elections. The strike
resulted in the removal of thousands of workers from state oil
company PdVSA, but Mr. Chavez remains in his position.
According to the opposition, Mr. Chavez' authoritarian policies
have weakened the economy and drove away investors. A coup
following the April violence briefly ousted Mr. Chavez, but
loyalists returned him to power two days later.
Nevertheless, mediators are serving as "containment mechanism" to
regulate the country's political conflict, despite achieving no
substantial improvement in the negotiations.
Various parties have attempted to resolve the conflict. Former
U.S. President Jimmy Carter the creator of the "Group of
Friends," a forum of six nations backing negotiation efforts, did
not contribute much to the attainment of an understanding between
the clashing parties.
But mediators are not giving up easily. Delegates from the United
States, Spain, Portugal, Mexico, Brazil and Chile, all member
nations of the "Group of Friends," were slated to meet in Brazil
yesterday to discuss the talks.
***********
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 * * *