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/raid1/www/Hosts/bankrupt/TCRLA_Public/030401.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, April 1, 2003, Vol. 4, Issue 64 Headlines * A R G E N T I N A * DISCO: Dutch Parent to Capitalize $58.5M Worth of Loans TGS: To Restructure $150M in Debt * New Argentine Bank Deposit Procedure Proposed * B E R M U D A * ALPHASTAR INSURANCE: Agrees to Sell Three Subsidiaries GLOBAL CROSSING: Releases Operating Results for January 2003 * B R A Z I L * AES CORP.: Extends Consent Solicitation CEMIG: Reports BRL1 Bln Net Loss for 2002 COSIPA: Posts 155% Increase in Net Loss ESCELSA: Losses Widen in 2002 ENERSUL: Reports BRL94.1 Mln in Net Losses in 2002 TUPY: Issues Debt to Pay Another Maturing Debt VESPER: Fears Downfall, But Ministry Slams Anatel Decision * C H I L E * AES GENER: Registers $44.5M in Net Profits for 2002 ENDESA CHILE: S&P Comments on Canutillar Sale ENERSIS: Agrees To Sell Rio Maipo for $203M to CGE INVERLINK: BBVA Under Investigation for Alleged Involvement * J A M A I C A * AIR JAMAICA: To Cut 52 Flights to the United States by End-April JUTC: Continues To Be in Conflict With Employees * M E X I C O * AZTECA HOLDINGS: S&P Lowers Ratings, Off Watch GODVEN INTERNATIONAL: Tangled With Frida Problems, Goes Bankrupt GRUPO ELEKTRA: Holds Annual Shareholders Meeting GRUPO IUSACELL: S&P Keeps on Watch Neg HAYES LEMMERZ: Motion to Extend Solicitation Period Through Apr 4 PEMEX: S&P Rates 'BBB-' EUR750 Mln Bonds * T R I N I D A D & T O B A G O * BWIA: Issues 24-Hour Ultimatum to T&T Government * V E N E Z U E L A * CANTV: Seeks 19% Tariff Increase for 2003 ELECAR: Reports Red in 2002 PDVSA: CEPR Report Emphasizes Need for Restructuring * Investors Doubt Venezuelan Chief's Default Warnings ================= A R G E N T I N A ================= DISCO: Dutch Parent to Capitalize $58.5M Worth of Loans ------------------------------------------------------- Dutch supermarket operator Royal Ahold NV will not ask payment for the US$58.5 million in loans it has extended to its Argentine unit Disco SA. Instead, it will capitalize the loans to boost the Argentine unit's capital base, reports Dow Jones. The capitalization of the former loans, as well as of some US$29 million already agreed to in January, would take place "as soon as possible," Disco said in a statement to the bourse. Disco said Ahold and its subsidiaries have capitalized some US$162.4 million since it took complete control of the supermarket chain last August. Last year, Ahold wrote off Disco- related losses of US$482 million and paid the chain's debts of US$70 million. CONTACT: DISCO S.A. Larrea 847, Piso 1 1117 Buenos Aires, Argentina Phone: +54-11-4964-8000 Fax: +54-11-4964-8076 Home Page: http://www.disco.com.ar TGS: To Restructure $150M in Debt --------------------------------- Argentine gas transport company TGS informed the Buenos Aires bourse of its plans to restructure a US$150-million bond issue that expired on Thursday (Mar.27), relates Business News Americas. Although TGS did not pay the capital amount of the debt, which was issued March 2000, it did pay US$1.65 million in interest corresponding to the period December 27, 2002 to March 27, 2003. The planned restructuring is part of TGS' plans to restructure some US$450 million in debt due in 2003. The company hired financial advisors Merrill Lynch to advise it on the restructuring process, which may involve extending the terms and lowering interest rates. As of December 2002, TGS had approximately US$1 billion of debt. The company is owned by Companhia de Inversiones de Energia SA, or Ciesa, which is in turn co-owned by Perez Companc SA and bankrupt Enron Corp. CONTACTS: IN BUENOS AIRES Investor Relations: Eduardo Pawluszek, Finance & Investor Relations Manager Gonzalo Castro Olivera, Investor Relations (gonzalo_olivera@tgs.com.ar) Mara Victoria Quade, Investor Relations (victoria_quade@tgs.com.ar) Tel: (54-11) 4865-9077 Media Relations: Rafael Rodriguez Roda Tel: (54-11) 4865-9050 ext. 1238 * New Argentine Bank Deposit Procedure Proposed ----------------------------------------------- Argentina's Minister of Economy has announced the proposal of a deposit release procedure for Argentine bank deposits, said a new Standard & Poor's Ratings Services report released on Friday. "If this initiative finally materializes, and the depositors accept it en masse, the potential risks of redollarization of deposits that have been threatening banks for the past few months would finally disappear, as the government has accepted the burden of redollarization on behalf of taxpayers," said credit analyst Carina Lopez. The report, The End of the Argentine "Corralon" Is in Sight, examines the details and the potential consequences of enaction of the proposed plan. ============= B E R M U D A ============= ALPHASTAR INSURANCE: Agrees to Sell Three Subsidiaries ------------------------------------------------------ AlphaStar Insurance Group Limited last week reported that it has entered into a definitive agreement to sell three subsidiaries to an affiliate of American Insurance Managers, Inc., of Atlanta, Georgia ("AIM"). The subsidiaries being sold pursuant to the agreement are Realm National Insurance Company ("RNIC"), a New York-domiciled property-casualty insurer; World Trade Services, Inc. ("WTS"), a managing general agency headquartered in New York; and Stirling Cooke New York Insurance Agency Services, Inc., doing business as World Trade Services. The purchase price, which is subject to potential adjustment, will be based on the GAAP shareholder's equity of RNIC at December 31, 2002, which will be determined in the near future. The company expects that the ultimate purchase price will be approximately $9,000,000. Pursuant to the agreement, and subject to its terms and conditions, AIM or an affiliate has agreed to make two separate down-payments in the form of a loan, the latter no later than May 2, 2003, at which time additional purchase consideration in the form of a letter of credit is to be deposited in an escrow account for the benefit of Stirling Cooke North American Holdings Ltd. ("SCNAH"), an AlphaStar subsidiary that owns the equity interest in the subsidiaries being sold. Upon receipt of the loan and the letter of credit (which, together with a loan previously made to AlphaStar by an affiliate of AIM, will total approximately 75% of the total purchase price) and subject to other conditions precedent, including a capital contribution to RNIC by AIM or its affiliate, RNIC will undertake to write a workers compensation insurance program to be produced by AIM. If the required payments are not made, either party may terminate the agreement. The agreement is also subject to regulatory approval of a recovery plan to be submitted by RNIC under the Risk Based Capital guidelines of the National Association of Insurance Commissioners, as well as other customary conditions. The remainder of the purchase price is to be paid into the escrow account subsequent to May 1 pursuant to a formula. The agreement provides that the loan is to be forgiven, and the letter of credit and all subsequent payments of purchase consideration turned over to SCNAH, no later than July 31, 2003. The transfer of control of RNIC is subject to the prior approval of the State of New York Insurance Department of an application to be submitted by the buyer. Until such approval, AlphaStar will continue to own all of the stock of RNIC and WTS, and RNIC's management and Board of Directors will continue to maintain operating control of its underwriting, claims, and all other functional areas of the company. In October, 2002, AlphaStar and AIM entered into a non-binding letter of intent outlining a similar transaction. Events occurring subsequent to the signing of that letter resulted in disputes between the parties. Pursuant to the agreement being announced herewith, all disputes relating to those events will be resolved upon the initial funding of the purchase price, and issuance of coverage, discussed above. Stephen A. Crane, Chairman, President & Chief Executive Officer of AlphaStar, stated, "We are pleased to have reached an agreement that offers fair value to AlphaStar and its shareholders for these assets. In light of the Company's fragile financial health, we will not be able to provide Realm National and World Trade Services with the financial support they will need to grow and achieve significant profitability. As a result, our Board has decided that the best strategy for safeguarding the financial integrity of the Company and preserving value for shareholders is to effect a sale of these operating companies and pursue alternatives for realizing the value of other assets. "The AlphaStar Board is also pleased to note that the actions stipulated in the agreement will result in the enhancement of the capital and capacity of RNIC and WTS and, therefore, create greater security for RNIC's policyholders and increased opportunity for the employees of both companies," Mr. Crane concluded. A company spokesman added that AlphaStar has still not received a decision in the U.K. court case between certain London subsidiaries of the Company and Sphere Drake Insurance Holdings Limited. The spokesman added that the outcome of that case may have a significant bearing on the value that can be achieved on behalf of shareholders. AlphaStar Insurance Group Limited is a Bermuda-domiciled holding company with operating subsidiaries in the United States and United Kingdom. Among its subsidiaries are a property-casualty insurance company, managing general agencies, and reinsurance intermediaries. CONTACT: ALPHASTAR INSURANCE GROUP LIMITED Stephen Crane +1-212-422-0770 GLOBAL CROSSING: Releases Operating Results for January 2003 ------------------------------------------------------------ Global Crossing filed a Monthly Operating Report (MOR) on Friday with the U.S. Bankruptcy Court for the Southern District of New York, as required by its Chapter 11 reorganization process. Unaudited results reported in the January 2003 MOR include the following: For continuing operations in January 2003, Global Crossing reported consolidated revenue of approximately $236 million. Consolidated access and maintenance costs were reported as $181 million, while other operating expenses were $66 million. "In January, we continued to manage costs of the business and our cash levels," said John Legere, Global Crossing's chief executive officer. "We also began to strategically grow our sales force, which we believe will contribute favorably to Global Crossing's top line growth." Global Crossing reported a consolidated cash balance of approximately $668 million as of January 31, 2002. The cash balance is comprised of approximately $287 million in unrestricted cash, $331 million in restricted cash and $50 million of cash held by Global Marine. Global Crossing reported a consolidated net loss of $93 million for January 2003. Consolidated EBITDA was posted at a loss of $11 million. MOR RESULTS - NOVEMBER THROUGH JANUARY 2003 MONTHLY CONSOLIDATED CONSOLIDATED NET INCOME REVENUE EBITDA (LOSS) January 2003 $236mn $(11)mn $(93)mn December 2002 $178mn* $(82)mn $192mn** November 2002 $239mn $(10)mn $(32)mn*** * $238 million before the impact of restating certain transactions involving exchanges of capacity. ** Reflects $389 million of gains on settlements, other income items, and tax benefits. *** Reflects $71 million of gains on settlements and tax benefits. Notes The MOR reports revenue and cash balances according to generally accepted accounting principles in the United States of America (US GAAP). US GAAP revenue includes revenue from sales of capacity in the form of indefeasible rights of use (IRUs) that occurred in prior periods, recognized ratably over the lives of the relevant contracts. Beginning on October 1, 2002, Global Crossing ceased recognizing revenue from exchanges of leases of capacity. As discussed more fully in the footnotes to the financial statements contained in the MORs, Global Crossing has not yet filed its Annual Report on Form 10-K for the year ended December 31, 2001. On November 25, 2002, the United States Trustee appointed Martin E. Cooperman, a partner of Grant Thornton LLP, as the Examiner in Global Crossing's bankruptcy proceedings. In general, the Examiner's role is limited to reviewing the financial statements of the Global Crossing companies in bankruptcy for the fiscal years ended December 31, 2001 and 2002 and earlier periods if any restatement of those periods is necessary. As part of his role, the Examiner, with the assistance of Grant Thornton LLP, will audit any revised financial statements and issue a report as to such financial statements. Separately, on January 8, 2003, Grant Thornton was appointed as independent auditors of Global Crossing effective as of November 25, 2002. The Examiner's first interim report to the Bankruptcy Court was filed on February 24, 2003. Certain matters relating to Global Crossing's accounting for, and disclosure of, concurrent transactions for the purchase and sale of telecommunications capacity between Global Crossing and its carrier customers are being investigated by the Securities and Exchange Commission (SEC) and other governmental authorities. In addition, the U.S. Department of Labor is conducting an investigation into the administration of Global Crossing's benefit plans. These and other investigations are described more fully in footnote one to the financial statements contained in the January MOR. Any changes to the financial statements resulting from any governmental investigations and adjustments arising out of the 2001 and 2002 financial statement audits could materially affect the unaudited consolidated financial statements contained in the MORs and the information presented in this press release. On October 21, 2002, Global Crossing announced that it would restate certain financial statements previously filed with the SEC. These restatements, which are more fully described in footnote one to the financial statements contained in the January MOR, will record exchanges between carriers of leases of telecommunications capacity at historical carryover basis, resulting in no recognition of revenue. Reflecting this accounting treatment, the January MOR excludes amounts previously recognized as revenue over the lives of the lease contracts governing these capacity exchanges. The restatements have no impact on cash flow. As previously announced, Global Crossing's net loss for the three months ended December 31, 2001, which has not yet been reported pending the completion of the audit of financial statements for 2001, is expected to reflect the write-off of the remaining goodwill and other intangible assets, which total approximately $8 billion. Furthermore, as previously disclosed, Global Crossing has determined that it will write down its tangible assets in light of the terms contained in the previously announced agreement with Hutchison Telecommunications and Singapore Technologies Telemedia, and the bankruptcy filings of Asia Global Crossing and its subsidiary, Pacific Crossing Ltd. Global Crossing is in the process of evaluating its cash flow forecasts and other pertinent data to determine the amount of the impairment of its long-lived tangible assets. The impairment is now anticipated to be at least $7 billion, an estimate that excludes any amounts attributable to the restatement of exchanges of capacity leases described above and excludes any impairment attributable to the assets of Asia Global Crossing and its subsidiaries, which Global Crossing deconsolidated effective November 18, 2002. The financial information included within this press release and the January MOR reflects the restatement of exchanges of capacity leases as described above and the $8 billion write-off of all of the goodwill and other identifiable intangible assets, but does not reflect any write-down of tangible asset value. Accordingly, the net loss of $93 million for the month of January 2003 would have been reduced substantially if the financial statements in the January MOR had reflected the reduction in depreciation and amortization expense resulting from this tangible asset write-down. The write- off of the intangible assets and the write-downs of tangible assets are described more fully in the January MOR. 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. 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 was confirmed by the Bankruptcy Court on December 26, 2002, does not include a capital structure in which existing common or preferred equity will retain any value. Global Crossing expects to emerge from bankruptcy in the first half of 2003. On November 17, 2002, Asia Global Crossing Ltd., a majority-owned subsidiary of Global Crossing, and its subsidiary, Asia Global Crossing Development Co., 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, both of which are separate from the cases of Global Crossing. Asia Global Crossing has announced that no recovery is expected for Asia Global Crossing's shareholders. Asia Netcom, a company organized by China Netcom Corporation (Hong Kong) on behalf of a consortium of investors, has acquired substantially all of Asia Global Crossing's operating subsidiaries except Pacific Crossing Ltd., a majority-owned subsidiary of Asia Global Crossing that filed separate bankruptcy proceedings on July 19, 2002. Global Crossing no longer has control of or effective ownership in any of the assets formerly operated by Asia Global Crossing. Please visit www.globalcrossing.com for more information about Global Crossing. Statements made in this press release that state Global Crossing's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause Global Crossing's actual results to differ materially from those projected in such forward-looking statements. These risks, assumptions and uncertainties include: the impact of Global Crossing's bankruptcy proceedings on sales, customer and employee retention, supplier relationships and operations; the ability to complete systems within currently estimated time frames and budgets; the ability to compete effectively in a rapidly evolving and price competitive marketplace; possible reductions in demand for our products and services due to competition changes in industry conditions; changes in the nature of telecommunications regulation in the United States and other countries; changes in business strategy; the successful integration of acquired businesses; the impact of technological change; and other risks referenced from time to time in Global Crossing's filings with the Securities and Exchange Commission. CONTACT: GLOBAL CROSSING Press Contacts Becky Yeamans Phone: + 1 973-410-5857 E-mail: Rebecca.Yeamans@globalcrossing.com Kendra Langlie Latin America Phone: + 1 305-808-5912 E-mail: Kendra.Langlie@globalcrossing.com Mish Desmidt Europe Phone: + 44 (0) 7771-668438 E-mail: Mish.Desmidt@globalcrossing.com Analysts/Investors Contact Ken Simril Phone: + 1 310-385-3838 E-mail: investors@globalcrossing.com =========== B R A Z I L =========== AES CORP.: Extends Consent Solicitation --------------------------------------- The AES Corporation (NYSE:AES) announced Friday that it has extended the Expiration Time for the consent solicitation it launched on March 14, 2003 (the "First Consent Solicitation") relating to its 8.75% Senior Notes, Series G, Due 2008, 9.50% Senior Notes, Series B, Due 2009, 9.375% Senior Notes, Series C, Due 2010, 8.875% Senior Notes, Series E, Due 2011, 7.375% Remarketable or Redeemable Securities Due 2013 (puttable in 2003), 8.375% Senior Subordinated Notes Due 2007, 10.25% Senior Subordinated Notes Due 2006, 8.50% Senior Subordinated Notes Due 2007 and 8.875% Senior Subordinated Notes Due 2027 from 5:00 pm, New York City time, on March 27, 2003 to 5:00 pm, New York City time, on April 1, 2003. All of the terms of the First Consent Solicitation (other than the Expiration Time which has been extended as described above) remain the same. AES has extended the Expiration Time of the First Consent Solicitation so that it will expire concurrently with the similar consent solicitation that AES launched on March 26, 2003 (the "Additional Consent Solicitation") relating to its 8.00% Senior Notes, Series A due 2008, 8.375% Senior Notes, Series F due 2011 and 4.50% Convertible Junior Subordinated Debentures due 2005. AES did not launch the Additional Consent Solicitation on March 14, 2003 because of its need to comply with certain notification and filing requirements under the Securities Exchange Act of 1934, as amended, and the listing requirements of the New York Stock Exchange and the Luxembourg Stock Exchange. The AES Corporation has been informed by the tabulation and information agent that, as of 5:00 p.m., New York City time, on March 27, 2003, the Requisite Consents (as defined in the consent solicitation statement) for the First Consent Solicitation had been obtained. Although the Requisite Consents for the First Consent Solicitation have been obtained, consummation of the First Consent Solicitation remains subject to a number of significant conditions, which have not yet been satisfied, including AES' completion of the Additional Consent Solicitation. In the consent solicitations AES is seeking consents to amend certain of the events of default contained in its outstanding debt securities to generally conform such provisions to those contained in its recently issued senior secured notes due 2005. In the First Consent Solicitation AES is offering a consent fee of $1.25 per $1,000 principal amount to holders of record at the close of business on March 13, 2003 that validly provide their consents to the proposed amendments by 5:00 p.m., New York City time, on April 1, 2003, unless further extended. Holders of all of the debt securities mentioned above are urged to read the applicable consent solicitation statement because it contains important information. Holders can obtain a copy of the applicable consent solicitation statement free of charge from AES. In addition, the consent solicitation statement applicable to the 4.50% Convertible Junior Subordinated Debentures is publicly available for free from the Securities and Exchange Commission's website at www.sec.gov. Questions concerning the terms of the consent solicitations or requests for copies of the consent solicitation statements, the consent form or other related documents should be directed to the solicitation agent: Salomon Smith Barney, 390 Greenwich Street, New York, New York 10013, Attn: Liability Management Group. The solicitation agent can also be reached at (212) 723-6106 or (800) 558-3745 (toll free). AES is a leading global power company comprised of contract generation, competitive supply, large utilities and growth distribution businesses. The company's generating assets include interests in 160 facilities totaling over 55 gigawatts of capacity, in 30 countries. AES's electricity distribution network sells 108,000 gigawatt hours per year to over 16 million end-use customers. For more general information visit our web site at www.aes.com or contact investor relations at investing@aes.com. CONTACT: The AES Corporation Kenneth R. Woodcock, 703/522-1315 CEMIG: Reports BRL1 Bln Net Loss for 2002 ----------------------------------------- Minas Gerais-based Companhia Energetica de Minas Gerais (Cemig) posted disappointing results last year with net losses of BRL1.001 billion ($1 = R$ 3.37) against year-earlier profits of BRL477.92 million. The Brazilian utility reported net revenue of BRL5.12 billion last year, while net financial losses totaled BRL615.46 million. Operational losses amounted to BRL89.99 million last year, against operational profits of BRL694.39 million in the previous year. At the end of 2002, Cemig's net equity amounted to BRL5.68 billion. CONTACT: Companhia Energetica de Minas Gerais Luiz Fernando Rolla, Investor Relations Officer Phone: +55-31-3299-3930 Fax: +55-31-3299-3933 E-mail: lrolla@cemig.com.br or The Anne McBride Company Vicky Osorio Phone: +1-212-983-1702 Fax: +1-212-983-1736 E-mail: vicky@annemcbride.com COSIPA: Posts 155% Increase in Net Loss --------------------------------------- Brazilian steelmaker Cosipa reported a 155% increase in its annual net loss for 2002. The net loss for the previous year was US$548.65 million for 2002, although net revenues went up 58.9 percent to BRL2.71 billion, and gross profits went up 122.86 percent to BRl831.75 million. The company's good performance was shadowed by a sharp decline in net financial expenses, which topped BRL1.54 billion. Operating losses soared 197.44 percent to BRL816.78 million. Business News Americas reported that the loss corresponds to a BRL0.13693 per share, and net equity stood at BRL1.04 billion. Cosipa is owned by Usiminas. CONTACT: COSIPA Avenida do Cafe, 277 Torre B, 8 e 9 andar Vila Guarani 04311-000 Sao Paulo, Brazil Phone: +55-11-5070-8800 Fax: +55-11-5070-8863 URL: http://www.cosipa.com.br ESCELSA: Losses Widen in 2002 ----------------------------- Escelsa, which distributes electricity in the state of Esp�rito Santo, saw its losses balloon at the end of 2002. Citing Agencia Estado, Business News Americas reports that the Brazilian utility posted net losses of BRL509.2 million, a 1,848% increase from losses of BRL26.1-million at the end of 2001. Operating expenses in 2002 were 3.76% higher at BRL1.1 billion against that of last year. Financial expenses totaled BRL670.4 million, 184.2% bigger from that of 2001. The utility also reported operational losses of BRL556 million, reversing operating profits of BRL7.4 million in 2001. The Company ended 2002 with net equity of BRL223 million. Escelsa is controlled by EDP of Portugal. CONTACT: ESPIRITO SANTO POWER PLANTS S/A - ESCELSA Rua Sete de Setembro, 362, Centro CEP 29015-000 Vit>ria ES Brasil Phone: (5527) 3321-9000 E-mail: investidor@escelsa.com.br Contact: Fernando Noronha Leal, Chairman Adir Pereira Keddi, Vice-Chairman ENERSUL: Reports BRL94.1 Mln in Net Losses in 2002 -------------------------------------------------- Brazilian utility Enersul, which is based in the center-western state of Mato Grosso do Sul, ended 2002 with net losses of BRL94.1 million ($1 = R$ 3.38), reversing profits of BRL46.9 million posted in 2001. According to Business News Americas, the company's net revenues dropped 12.2% to BRL424.3 million in 2002. Operating expenses were at BRL397.1 million, a 10.41% rise, and net financial expenses totaled BRL70 million, a 53.54% increase. The Company posted operating loss of BRL42.8 million in 2002, which compares with operating profits of BRL78.1 million in 2001. Enersul's net equity as of Dec 31 was BRL427.4 million. Enersul, which transmits and distributes electricity within Mato Grosso do Sul, a more agrarian inland state, is 65% owned by Escelsa. CONTACT: ESPIRITO SANTO POWER PLANTS S/A - ESCELSA Rua Sete de Setembro, 362, Centro CEP 29015-000 Vit>ria ES Brasil Phone: (5527) 3321-9000 E-mail: investidor@escelsa.com.br Contact: Fernando Noronha Leal, Chairman Adir Pereira Keddi, Vice-Chairman TUPY: Issues Debt to Pay Another Maturing Debt ---------------------------------------------- Struggling to raise money to roll over debt that expired in March, Brazilian foundry issued commercial papers even though it had to pay a steep price to float the paper. According to Business News Americas, Tupy placed BRL150 million (currently US$44mn) in six-month commercial papers, which pays interest equivalent to 31% a year. Tupy president Luiz Tarquinio acknowledged that the yield is very high for such a short-term debt issue, but he justified the operation saying that it will give the company time to renegotiate its total debts of more than BRL850 million. "We are not doing this issue with the goal of buying back the paper in six months' time. It is more of a bridge loan so that we can pay this debt by the end of the debt re-negotiation," Tarquinio said. CONTACT: Tupy SA Head Office Rua Albano Schmidt 3,400 Boa Vista 89206-900 Joinville - SC Brazil Tel +55 47 441-8514 Fax +55 47 441-8321 Web http://www.tupy.com.br Contacts: Mario Fernando Engelke, Chairman Francisco Parra Valderrama, BOD Member Norberto J Hoffmann, BOD Member VESPER: Fears Downfall, But Ministry Slams Anatel Decision ---------------------------------------------------------- Luiz Faufmann, chief executive of Brazilian telco Vesper, confirmed analysts' forecasts that the company's business model will fall if the country's telecoms regulator Anatel will prevent it from launching mobile services over its 1900MHz CDMA network. Independent consultant Jose Otero said that the company needs a quick resolution, otherwise, its competitors would gain market share at the expense of Vesper being idle. Business News Americas noted that it could drag longer, as the GSM association threatened that it will file charges against Anatel, if the regulator reverses its decision. But Anatel chairman Luiz Schymura de Oliveira seems adamant on the regulator's position. Telling local press at the Telexpo conference in Sao Paulo that he is not concerned about Vesper's delimma. "I am not the least bit sensitive to financially troubled companies. The total focus always has to be the end-user," said Mr. Schymura, as quoted by Business News Americas. Vesper bought 3 PCS licenses in the 1800MHz band in November over Sao Paulo state (Region 2), Minas Gerais state (Region 4) and the six northeastern states that make up Region 10. Resolution 314, which Anatel issued in September, said that the 1800MHz concessionaires may use the 1900MHz band for "secondary" mobile operations. Vesper took the decree as a privilege to offer mobile services over its existing WLL CDMA network. Simply deploying GSM over the 1800MHz concessions is not much of an option for Vesper as its controlling shareholder Qualcomm (Nasdaq: QCOM) is the patent holder of competing CDMA technology, said the report. In the meantime, the country's communications minister Miro Teixeira indicated that Vesper's quandary is partly caused by Anatel. He said that the regulator was wrong in tying network technology requirements to spectrum bands. Mr. Teixeira accused the regulator of "making solitary decisions resulting in the loss of technological neutrality," referring to Anatel's decision to assign the 1800MHz for PCS, rather than the 1900MHz. "I would like to see Vesper compete," Mr. Teixeira said that the Telexpo. In the meantime, Mr. Otero noted that while the communications ministry does not have a direct say over Anatel, it does have a lot of leverage, as the regulator is part of the ministry. Mr. Otero noted that Mr. Teixeira might be able to put a lot of public pressure on Anatel. Mr. Teixeira has been known to criticize Anatel, saying the regulator lacks transparency and inefficient. He said that Anatels' policymaking power will be diminished under president Lula da Silva's administration, and that the power would be transferred to the communications ministry. The officer also said that the ministry may announce the name of its new telecoms specialization department within days. But Mr. Teixeira clarified that the new body will not replace Anatel, but simply serve as a complementary body. The department will have the objective of analyzing policy concerns of the sector and making recommendations to the ministry, said the report 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 ========= AES GENER: Registers $44.5M in Net Profits for 2002 --------------------------------------------------- Chilean generator AES Gener returned to black in 2002, posting consolidated net profits of CLP32.4 billion (today US$44.5mn) from net profits of CLP5.18-billion in 2001, Business News Americas reports. The company's operating margin increased 35.6% to BLP139 billion, thanks to lower marginal generation costs in the central grid, which on average fell to US$0.0117/kWh in 2002 from US$0.014/kWh in 2001, as well as higher capacity payments in the northern grid (SING) and a 30.3% fall in administration and sales costs to CLP20.9 billion. The central grid (SIC) accounted for 43% of total sales, the SING 25%, Colombia - where AES Gener owns generator Chivor - 22%, and advising and fuel sales 10%. AES Gener saw non-operating losses increase 16.4% to CLP79.2 billion. Chilean credit rating agency Feller Rate, a Standard & Poor's affiliate, recently downgraded its rating on the shares of AES Gener to first class level 4 from first class level 3 citing the Company's "sustained fall in liquidity indicators." AES Gener faces debt payments of US$500 million in 2005 and US$200 million in 2006. Financial support from AES Corp. is very unlikely to come since the U.S. parent also has problems on its own to contend with, Feller said. AES Gener is owned by U.S.-based AES Corporation. CONTACT: AES GENER S.A Head Office 3rd Floor Mariano Sanchez Fontecilla 310 Santiago Chile Tel +56 2 686 8900 Fax +56 2 686 8991 Web http://www.gener.cl Contact: Robert Morgan, Chief Executive ENDESA CHILE: S&P Comments on Canutillar Sale --------------------------------------------- Chile's largest electricity power generator, Empresa Nacional de Electricidad S.A. (Endesa Chile; BBB-/Negative), announced yesterday that its Board of Directors has approved a US$174 million offer made by Hidroel,ctrica Guardia Vieja S.A for its 172MW hydro power plant Canutillar. Endesa Chile is projected to receive the funds on April 30th. Endesa Chile and its 60% parent, Chile-based electricity provider, Enersis S.A. (Enersis; BBB-/Negative), are undergoing a financial strengthening plan involving the refinancing of US$2.3 billion of bank debt, the repayment of US$700 million in bonds in 2003, asset sales, and a capital increase. The sale of Canutillar is a positive step that enhances Endesa Chile's liquidity and reduces the risk posed by the US$551 million bond maturities that are due in 2003. Lower revenues of around 950 Gwh per year (about US$20 million) after the sale are projected to be more than offset by the start up of Ralco by mid 2004. Ralco will have a 570MW of installed capacity with annual sales of about 3,000 Gwh (about US$70 million). Nevertheless, Standard & Poor's will continue to closely monitor the evolution of Enersis and Endesa Chile's bank refinancing as well as the companies' liquidity to face their upcoming maturities (at the level of Pehuenche, Endesa Chile, and Enersis) that will become due between May and December 2003. ANALYSTS: Sergio Fuentes, Buenos Aires (54) 114-891-2131 Marta Castelli, Buenos Aires (54) 114-891-2128 ENERSIS: Agrees To Sell Rio Maipo for $203M to CGE -------------------------------------------------- Chile-based energy holding Enersis, the Latin American unit of Spain's Endesa SA, agreed to sell distributor Cia. Electrica del Rio Maipo for US$203 million to Compania General de Electricidad (CGE). The deal comes after Enersis agreed to sell its Canutillar generator to Hidroelectrica Guardia Vieja SA, which belongs to the Chilean conglomerate Grupo Matte, for US$174 million. The abovementioned transactions are part of the Spanish parent's financial restructuring plan to reduce its Latin American unit's US$9.1-billion debt. Enersis said US$170 million of the sale price corresponded to Enersis' equity stake in Rio Maipo and the remaining US$33 million was for the unit's debt. Rio Maipo is Chile's fifth-largest electrical distributor in terms of energy sales, with a 5.8% market share in the central- south region of the country. Meanwhile, Enersis also said in a statement to Chilean regulators that it plans to buy as much as US$50 million of Yankee bonds sold in 1996 from shareholders that agree to use the proceeds to buy more stock in the Company, as part of its plan to reduce debt. Enersis said in February it would sell, or allow shareholders to swap debt, for as much as US$2 billion of stock. CONTACT: Enersis S.A. Avenida Kennedy Vitacura No 5454 Santiago Chile 1557 Phone: +56 2 353 4400 Fax: +56 2 378 4768 Home Page: http://www.enersis.cl Contacts: Engr Alfredo Llorente Legaz, Chairman Engr Rafael Miranda Robredo , Vice Chairman Endesa SA Principe de Vergara 187 28002 Madrid Spain Phone: +34 91 213 10 00 Fax: +34 91 563 81 81 Telex: 22917 ENE Home Page: http://www.endesa.es Contacts: Rodolfo M. Villa, Chairman Rafael Miranda Robredo, Managing Director INVERLINK: BBVA Under Investigation for Alleged Involvement ----------------------------------------------------------- Spanish financial group BBVA is now in hot water for its alleged involvement in the scandal surrounding bankrupt Chilean financial services group Inverlink, reports Business News Americas. Inverlink was recently declared bankrupt following intervention by the authorities on March 7 after a series of financial irregularities were discovered at its subsidiaries. The securities regulator, the SVS, is now investigating the alleged involvement of BBVA in the scandal. BBVA Chile recently fired Juan Pablo Prieto from its stock brokerage unit BBVA Corredores de Bolsa after he confessed to receiving a CLP5 million (US$7,000) "gift" from Inverlink representatives at a dinner to celebrate a successful transaction between the two firms. The regulator has charged Prieto in a criminal court and BBVA claims all operations between the group and Inverlink were conducted according to the law, even though Prieto broke the group's internal ethics code. ============= J A M A I C A ============= AIR JAMAICA: To Cut 52 Flights to the United States by End-April ---------------------------------------------------------------- The management of beleaguered Caribbean airline Air Jamaica announced that 52 flights to the United States will be temporarily withdrawn by the end of this month. Air Jamaica's Deputy Chairman and Chief Executive Officer Chris Zacca said the measure will save the airline some $1.5 billion over a year. RJRNews.Com said that the move is part of the airline's efforts to cushion the effects of multi-million dollar losses from the fall-out caused by the ongoing conflict in the Middle East. The airline's workers may have to agree to reduced work hours or take voluntary leave, as a result of the move. However, the airline made it clear that it is not considering more job cuts. The airlines daily morning flight from New York to Jamaica will be cut to two weekly flights, said the report. Meanwhile, the airline's six-round-trips-a-week between Atlanta and Montego Bay will be reduced to four, while Chicago to Montego Bay flights will be reduced from five to three. Mr. Zacca said that the temporary withdrawals are based on a reduction of forward bookings and could be adjusted on based on future changes in the booking figures. Mr. Zacca indicated that Air Jamaica might approach the government for a US$30 million loan. The Company said that the loan is necessary to cushion the crippling effect of the fall- out. CONTACT: Air Jamaica 4 St. Lucia Avenue Kingston 5, Jamaica Phone: 876/922-3460 Fax: 929-5643 Email: webinfo@airjamaica.com Contact: Gordon Stewart, Chairman Allen Chastanet, Vice President for Marketing and Sales JUTC: Continues To Be in Conflict With Employees ------------------------------------------------ The management of the Jamaica Urban Transit Company (JUTC) is still at odds with some of its employees, and the conflict is getting worse, RJRNews.com indicates. On Friday, a protest was lodged in front of the company's Twickenham Park headquarters by JUTC inspectors, supervisors and clerical staff who felt that the company was about to embark on a fresh round of redundancies. And while the protest did not disrupt the regular service offered by the state owned bus company, the workers, who are represented by the Union of Clerical Administrative and Supervisory Employees (UCASE) have vowed that if the management does not stop its present redundancy program they will step up their protest. The JUTC management and UCASE have been at odds since earlier this year when it was announced that the bus company would make several posts redundant in keeping with recommendations of a team of Swedish experts which reviewed its operations. =========== M E X I C O =========== AZTECA HOLDINGS: S&P Lowers Ratings, Off Watch ---------------------------------------------- Standard & Poor's Ratings Services said Friday that it lowered the corporate credit and senior secured debt ratings on Mexican TV and radio broadcaster Azteca Holdings S.A. de C.V. to 'CC' from 'B-' following the company's offer to exchange its outstanding 10 1/2% senior secured notes due 2003 for its new 10 3/4% senior secured amortizing notes due 2008. The ratings were removed from CreditWatch, where they were placed March 3, 2003. The outlook is negative. The holding company's debt totals $279 million as of December 2002. According to Standard & Poor's criteria, the exchange offer is considered distressed as it recognizes, in effect, that the company will not meet all of its obligations as originally promised. In a distressed exchange offer the company may not be able to meet its debt service absent the restructuring involved in the exchange. Thus, Standard & Poor's views this exchange as "coercive" given the lack of liquidity at the holding company and the inability for TV Azteca to dividend sufficient cash to repay the maturing Azteca Holdings' bond on time and in full. "Upon completion of the offer, if successful, the corporate credit rating of Azteca Holdings would be lowered to 'SD', the rating of the 10 3/4% issue would be lowered to 'D', and the rating of the 12 1/2% notes due 2005 would be maintained at 'CC'," stated Standard & Poor's credit analyst Beatriz Coll. Subsequent to the completion of the exchange offer, Standard & Poor's will reassess Azteca Holdings ratings, which may depend on the degree of success of the offer. At the same time, Standard & Poor's affirmed the 'B+' corporate credit rating on subsidiary TV Azteca S.A. de C.V. The outlook on TV Azteca remains stable. Azteca Holdings controls 55.5% of TV Azteca. The negative outlook on Azteca Holdings is based on Standard & Poor's expectations that the exchange offer will be completed, which will result in the rating being lowered to indicate default. The stable outlook on TV Azteca reflects Standard & Poor's expectation that the company should be able to continue generating sufficient cash flow that will allow for the gradual repayment of its own debt and the restructured Azteca Holdings' debt, without having to increase net debt. ANALYSTS: Beatriz Coll, Mexico City (52) 55-5279-2016 Patricia Calvo, Mexico City (52) 55-5279-2073 GODVEN INTERNATIONAL: Tangled With Frida Problems, Goes Bankrupt ---------------------------------------------------------------- Mexican perfume company Godven International has filed for bankruptcy, local newspaper Reforma reports. The Company, which released a perfume line featuring paintings by Diego Rivera and Frida Kahlo on their labels, sent a letter explaining their situation to Isolda Pineda Kahlo, hier to the rights of Frida Kahlo's paintings. However, Isolda Kahlo's lawyer, Jose Hinojosa, said they are still waiting for invoices, return vouchers and other evidence showing that the company has gone bankrupt. "Otherwise, we ill not allow the contract to be terminated," said Mr. Hinojosa. The Company agreed to pay Isolda Kahlo a percentage on the perfume sales after she complained that the company was making unauthorized use of the artist's name. EFE relates that the company apparently intended to sell a clothing line, cosmetics, and ornaments using Frida Kahlo's paintings and signature without the consent of Isolda Kahlo. Before news of it bankruptcy cropped up, Godven hoped to sell about 100,00 bottles of the perfume featuring Frida Kahlo's works for about US$62 dollars per bottle. Meanwhile, an article from ArtNet.Com said that the Rivera-Kahlo Trust, headed by Jose Luis Perez Arredondo and overseen by the Bank of Mexico, reportedly okayed the deal, and receives unspecified royalties towards operation of the Frida Kahlo Blue House and Rivera's Anahuacalli Museum. GRUPO ELEKTRA: Holds Annual Shareholders Meeting ------------------------------------------------ Grupo Elektra S.A. de C.V. (NYSE: EKT) (BMV: Elektra*), Latin America's leading specialty retailer, consumer finance and banking services company, announced Friday that its annual shareholders meeting declared and approved a dividend and appointed some new members to its Board of Directors. The approved dividend of Ps. 0.77284 per Elektra* share (equivalent to US$ 0.07189), or Ps. 3.09137 per ADR (equivalent to US$ 0.28757), totals approximately Ps. 184 million (equivalent to US$ 17.1 million). This represents approximately 6 percent of Grupo Elektra's EBITDA for the year 2002. The dividend is expected to be paid on April 4, 2003. Rodrigo Pliego, Chief Financial Officer of Grupo Elektra, commented: "The dividend approved by the annual shareholders meeting represents a significant yield of 3.2%, one of the highest among Mexican corporations. In addition, Grupo Elektra has one of the best dividend payout ratios in Mexico. Over the past five years, the company has distributed an average of 6.1 percent of EBITDA in dividends, which represent more than Ps 785 million." In addition, the shareholders meeting appointed four new members to the Board of Directors of the company: Manuel Rodriguez de Castro, President of Agencia Hispana, an investment bank targeting cross-businesses between European and American companies. He is also a board member of Grupo Oda, a Spanish distributor of telecommunications systems and wireless telephony. Jorge Bellot, President and Chairman of the Board of Grupo Cardinal, a leading insurance broker headquartered in Mexico City. Prior to that Mr. Bellot was Delegate Director of Oriente de Mexico, an insurance company in Mexico. Gonzalo Brockmann, President of Best Western Hotels in Mexico, Central America and Ecuador. Luis J. Echarte, current President and Chief Executive Officer of Azteca America Network. He was previously Chief Financial Officer of TV Azteca and Grupo Elektra. Mr. Echarte rejoins the Board in order to continue with the efforts he initiated back in 1999 in the corporate governance area for the company. Grupo Elektra - Tradition with Vision Grupo Elektra is Latin America's leading specialty retailer, consumer finance and banking services company. Grupo Elektra sells retail goods and services through its Elektra, Salinas y Rocha and Bodega de Remates stores and over the Internet. The Group operates almost 900 stores in Mexico, Guatemala, Honduras and Peru. Grupo Elektra also sells and markets its consumer finance and banking products and services through its Banco Azteca branches located within its stores. Financial services include consumer credit, money transfers, extended warranties and savings accounts. CONTACT: Investor and Press Inquiries Esteban Galindez, CFA Director of Investor Relations Tel. +52 (55) 8582-7819 Fax. +52 (55) 8582-7822 egalindez@elektra.com.mx Rolando Villarreal Investor Relations Tel. +52 (55) 8582-7819 Fax. +52 (55) 8582-7822 rvillarreal@elektra.com.mx Web site: www.grupoelektra.com.mx GRUPO IUSACELL: S&P Keeps on Watch Neg -------------------------------------- Standard & Poor's Ratings Services said Friday that its 'CCC+' corporate credit rating on Mexican wireless cellular and PCS service provider Grupo Iusacell S.A. de C.V. remains on CreditWatch with negative implications, where it was placed Nov. 5, 2002. Iusacell's debt totals about US$817 million. "Standard & Poor's is still concerned with Iusacell's liquidity and refinancing ability," said Standard & Poor's credit analyst Patricia Calvo. Grupo Iusacell's principal subsidiary Grupo Iusacell Celular S.A. de C.V. received a notification from creditors related to its $266 million secured bank loan that it failed to seek approval from them to open and close bank accounts and to register a mortgage on assets acquired during the 2001 purchase of cellular phone company Grupo Portatel S.A. Under the bank loan covenants, these actions constitute a technical default. Although the mortgage has already been registered today, the company has requested consent from the banks to avoid the demand of immediate payment on the loan and is waiting for approval. Although Standard & Poor's expects that the creditors will refrain from demanding the payment, in the event that they do, the company's liquidity position would not be sufficient to honor its financial obligations and ratings would be lowered to 'D'. On Nov. 6, 2002, the company announced that it had begun the process of evaluating different alternatives to restructure its debt. Standard & Poor's will monitor the progress on the company's restructuring plan. Standard & Poor's is concerned about Iusacell's operating and financial measures, its liquidity, and the challenging business environment that the company faces as a result of weak economic conditions and increased competition. If cash flows do not improve with the somewhat recent implemented measures aimed at retaining and attracting higher-end postpaid and prepaid customers, Iusacell's ratings will be lowered. HAYES LEMMERZ: Motion to Extend Solicitation Period Through Apr 4 ----------------------------------------------------------------- Hayes Lemmerz International, Inc. (OTC: HLMMQ) announced Friday that, at the request of certain creditors, it has moved to extend the deadline for submitting votes on its Plan of Reorganization from March 28, 2003, to April 4, 2003. The extension covers two classes of its creditors (holders of the pre-petition credit facility secured claims and holders of synthetic facility secured claims) and provides these creditors additional time to complete their evaluation of the Plan of Reorganization. The company intends to continue to work with its key creditor constituents and is optimistic that these discussions will result in a consensus regarding the Plan. A hearing to confirm the Plan is scheduled before the Bankruptcy Court on April 9, 2003. Hayes Lemmerz and its subsidiaries located in the United States and one subsidiary in Mexico filed voluntary petitions for reorganization under Chapter 11 of the bankruptcy code in the U.S. Bankruptcy Court for the District of Delaware on December 5, 2001. 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, 3 joint venture facilities and 11,400 employees worldwide. PEMEX: S&P Rates 'BBB-' EUR750 Mln Bonds ---------------------------------------- Standard & Poor's Ratings Services said Friday that it assigned its 'BBB-' rating to Pemex Project Funding Master Trust's Eur750 million 6.625% bonds due 2010. Proceeds will be used to finance the investment program of its parent company, Petroleos Mexicanos (Pemex; local currency: A-/Stable/--, foreign currency: BBB- /Stable/--). The foreign currency corporate credit rating on the Pemex Project Funding Master Trust is 'BBB-'. The outlook is stable. The ratings on Pemex, the state-owned Mexican oil and gas company, and on the United Mexican States are equalized because of the government's ownership of the company, Pemex's importance to the Mexican economy, the government's heavy dependence on oil- related revenue, and the considerable government oversight of the company, particularly with respect to all fiscal aspects of management. Pemex established Pemex Project Funding Master Trust as a Delaware trust with Pemex as the sole beneficiary. All debt issued by the Pemex Master Trust benefits from the irrevocable and unconditional guarantee of Pemex and its subsidiary entities, including Pemex Exploraci�n y Producci�n, Pemex-Refinaci�n, and Pemex-Gas y Petroqu�mica B sica. "The company enjoys an above-average business position, with commodity price volatility and government interference representing the primary risks to its business," stated Standard & Poor's credit analyst Jose Coballasi. Pemex's extensive proved developed and undeveloped reserve base of about 21 billion barrels of oil equivalent (boe) (if determined in accordance with Rule 4-10(a) of Regulation S-X of the Securities Act of 1933, which is the reporting standard of the U.S. SEC) and its constitutionally protected monopoly status in most aspects of the large Mexican oil and gas market support its business position. Pemex is one of the most formidable oil and gas companies in the world. Pemex's crude oil reserves-to-production ratio stands at 17 years, which ranks among the longest in the oil and gas universe and its operating costs remain among the best in the world at $3.34 per boe. Standard & Poor's believes that Pemex's future projects are likely to have development costs around $4.5 per barrel, which would also rank among the best in the world. Pemex's liquidity is adequate. The company's liquidity is supported by its strong EBITDA generation (about $18 billion in 2001) and its ample access to the international capital markets. ANALYSTS: Jose Coballasi, Mexico City (52) 55-5279-2014 Manuel Guerena, Mexico City (52) 55-5279-2011 ================================= T R I N I D A D & T O B A G O ================================= BWIA: Issues 24-Hour Ultimatum to T&T Government ------------------------------------------------ Trinidad and Tobago national carrier BWIA is set to issue an ultimatum to the government, warning that the airline will close if the government fails to agree to aid the ailing carrier financially. The ultimatum, which the Trinidad Express described as "dramatic and desperate", demanded that the government should give its answer before March 29, about 24-hours after the ultimatum was issued. BWIA issued the ultimatum after Prime Minister Patrick Manning said categorically that the government is prepared to let the airline go under. Mr. Manning also indicated that a national airline is not needed. However, the government is giving BWIA two weeks to present a plan that would ensure the airline's future viability. The airline's management has come up with a plan outlining BWIA's options for survival to be presented to Mr. Manning. The plan also indicates that the executives may have to commence shut down procedures if the government rejects its pleas for help. But BWIA may have a hard time persuading the government as Mr. Manning commented, "Let us see if BWIA is able to convince us, it will not be easy." The Trinidad Guardian relates that BWIA's revenues are way below its US$700,000 daily operating expenses. "An immediate solution includes financial assistance to generate the cash that is needed for the continuance of BWIA's operations as we know it," Mr. William emphasized. 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) ================= V E N E Z U E L A ================= CANTV: Seeks 19% Tariff Increase for 2003 ----------------------------------------- Venezuelan largest telecommunications company is asking for approval for a 19 percent increase in telephone charges this year compared to an average 25 percent increase last year. However, an article from Reuter's News indicated that the company has not defined tariffs, because Venezuela's residential charges remain frozen by a presidential decree, in line with price controls imposed to curb inflation. Nevertheless, the company remains optimistic. CANTV President Gustavo Roosen said, "We are hoping for approval of the new tariffs, which have been worked out with Conatel (state telecommunications commission)." In the meantime, Mr. Roosen declined to reveal details on its first-quarter forecast, but said that he believes the results would be better than what the company is expecting. At a recent shareholders' assembly, authorized the board to issue up to VEB150 billion in Shareholders also authorized the board to issue up to 150 billion bolivars (about $94 million at the current exchange rate of 1,600 bolivars to the dollar) in commercial paper coming due June, 30, 2004. CANTV shareholders also approved an ordinary dividend of VEB71 per share, or VEB497 per American Depository Share, to be paid on April 23. The company's net profits fell 27.7 percent to VEB61.03 billion. Inflation and currency adjustments were blamed. In the fourth quarter alone, the company posted a US$2 million loss as the country was besieged by a national strike aimed at deposing President Hug Chavez. ELECAR: Reports Red in 2002 --------------------------- Venezuelan utility Electricidad de Caracas (Elecar) registered a net loss of VEB53.1 billion (US$33.2mn) for 2002, reversing the previous year's net profit of VEB89.2 billion, Business News Americas reports, citing local paper El Nacional. At the end of last year, the company's long-term debts soared to VEB693 billion from VEB651 billion at the end of 2001. Short-term debt fell to VEB397 billion from VEB423 billion over the same period. Elecar is part of the EDC Group, which is in turn a subsidiary of the US power giant AES Corp.. EDC provides electric generation, transmission and distribution services in Venezuela. EDC serves 1.2 million customers in metropolitan Caracas and Guarenas, situated in Venezuela's strongest and most diverse economic region. AES acquired 87% of EDC in June 2000 through a public tender offer. CONTACT: AES VENEZUELA Avenida Rio de Janeiro Qta. Tres Pinos Chuao, VE-1061 Caracas, Venezuela Phone: +58 14 929 2552 Fax: +58 2 9937296 E-mail: venezuela@aes.org Contact: Elmar Leal, Chairman Juan Font, Vice Chairman AES CORP Investor Relations Kenneth R. Woodcock, 703/522-1315 www.investing@aes.com Website: http://www.aesc.com/ PDVSA: CEPR Report Emphasizes Need for Restructuring ---------------------------------------------------- A report by a U.S. think-tank, the Center for Economic and Policy Research (CEPR) suggested that Venezuela's state oil company PDVSA may need to restructure its operations if it wants to reverse a "poor and deteriorating performance," relates Business News Americas. In its report entitled 'What Happened to Profits?: The Record of Venezuela's Oil Industry', CEPR challenges the view that managers at PDVSA have built up a highly efficient world-class oil company, and argues instead that when judged on the ability to produce shareholder income, managers have "fared badly." The report highlights three key financial indicators to support its view of mismanagement at PDVSA. First, compared to other state and private oil companies, PDVSA's operating expenses to total revenues ratio is much higher. In 2001, the ratio for PDVSA's was 23.5%, about three times higher than US oil companies ChevronTexaco, Conoco, and ExxonMobil. Second, PDVSA's costs are driven up by the high cost of operating service agreements that PDVSA has signed with private corporations: in 2001, these agreements accounted 43.9% of production costs. Third, PDVSA's downstream losses have climbed to US$1.35 billion in 2001 from US$75mn in 1998. Since PDVSA is wholly owned by the Venezuelan government, its performance can be measured based on its fiscal contributions to the state. * Investors Doubt Venezuelan Chief's Default Warnings ----------------------------------------------------- Raphael Kassin from ABN Amro Asset Management said Venezuelan President Hugo Chavez' warning that the country could default on international bonds is a bluff. "Venezuela has good credit numbers - it's a non-event," he said. Bloomberg News reported that Venezuelan bonds reflected Mr. Kassin's views, changing little since Mr. Chavez said that the country wants to "restructure" its foreign debt. Venezuela has US$3.3 billion of international debt due this year, including about US$1.6 billion of bond payments, according to UBS Warburg LLC. A total US$561 million of international bond payments come due in June. Venezuela's 9.25 percent dollar-denominated bond due 2027 was down 0.25 cent on the dollar to 59.75, raising the yield to 15.74 percent at 3:30 p.m. in New York, according to J.P. Morgan Chase & Co. prices. The bond fell 2.65 cents yesterday, said the report. Meanwhile, the Finance Ministry said it may propose a swap of international bonds in the second quarter. The report added that the government may even resort to bank loans and overseas financing, vowing to pay its debts. "Venezuela's ability to pay debt will be improved if a restructuring happens on friendly terms," said Jana Benesova, who helps manage about US$750 million at Credit Suisse Asset Management in London. Venezuela's revenues nose-dived after a two-month national strike almost completely crippled its main source of income: oil. Venezuela is the world's fifth-largest oil producer in the world. ************ 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. 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