/raid1/www/Hosts/bankrupt/TCRLA_Public/030404.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, April 4, 2003, Vol. 4, Issue 67
Headlines
A R G E N T I N A
PEREZ COMPANC: Antitrust Regulator Delays Petrobras Deal OK
TELECOM ARGENTINA: Various Bonds Rated `D(arg)' by Local Fitch
TELECOM ARGENTINA: Fitch Rates Various Bonds `C(arg)'
TRANSENER: Reaffirms Decision To Suspend All Payments
* Notice to Holders of Argentine Bonds Due 2005
B E R M U D A
CAMBRIDGE REINSURANCE: Notice to Creditors, Contributories
TRENWICK GROUP: Subsidiary Defaults On Senior Notes
TRENWICK GROUP: S&P Takes Ratings Off Watch, Revises to 'D'
TRENWICK GROUP: A.M. Best Drops Financial Strength, Debt Ratings
TYCO INTERNATIONAL: Files $400M Lawsuit Against Ex-CFO
B O L I V I A
* IMF Approves One-Year $118M Stand-By Arrangement for Bolivia
B R A Z I L
AES CORP.: Successfully Completes Consent Solicitations
SAESA: 2002 Results Show Revenues Down, Net Loss Swells
USIMINAS: Prepares US$350 Million Debt Issue For Coal Exports
VARIG: Earnings Statement Late, Potential Investigation Looms
C H I L E
INVERLINK: SVS Files Lawsuit Anew
C O L O M B I A
AVIANCA: Seeks Extension on Schedules Filing Through April 20
AVIANCA: Court Orders Initial Case Conference
AVIANCA: Seeks Court OK for GE Capital Aviation Services Deal
AVIANCA: Stipulation Providing Adequate Protection To GE Capital
M E X I C O
EMPRESAS ICA: Continues Talks With WestLB To Secure $748M Credit
GRUPO MEXICO: Fitch Drops Rating of Asarco's 2003 Notes
N I C A R A G U A
ENITEL: Stake Sale Management Deal Opens April 8
P E R U
BACKUS: Bavaria Buys 2.7M Class A Shares To Boost Stake
T R I N I D A D & T O B A G O
BWIA: Angry Workers Reject Two Weeks Pay Offer
BWIA: Rival Decries Alleged Predatory Pricing
U R U G U A Y
BANCO DE CREDITO: Cash Refund For Depositors Still Under Study
V E N E Z U E L A
PDVSA: Resumes Gasoline Exports
* Venezuela May Promote Debt Swap to Avoid Default
* Notice of STG Interest Reduction on Venezuelan Bonds Due 2007
* Notice of USD Interest Reduction on Venezuelan Bonds Due 2007
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A R G E N T I N A
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PEREZ COMPANC: Antitrust Regulator Delays Petrobras Deal OK
-----------------------------------------------------------
Argentine energy giant Perez Companc is yet to consummate its
sale to Brazilian counterpart Petroleo Brasiliero S.A. as
Argentina's Secretariat for the Defense of Competition has again
delayed a decision on whether to approve the sale, reports Dow
Jones.
"It was decided to postpone the decision to analyze in details
the case," a senior official at the antitrust body said. "It's
possible that we'll have some kind of decision by the middle of
April," the official said, adding that it would not be delayed
much beyond that.
The official said that the head of the antitrust body, Gustavo
Stafforini, previously asked for more time to consider the sale.
Stafforini had just nine days to go through some 500 pages of
material on the subject and felt that was too little time, the
official said.
"This is a very important case ... there was a great deal of
information and no one can seriously analyze a case like this in
nine days," the official added.
In October 2002, Petrobras agreed to pay US$1.03 billion in cash
and notes for a 58.6% stake in Perez Companc. The transaction
spurred apprehensions from senior government leaders.
In January, Argentine President Eduardo Duhalde said he had
"doubts" about the deal and later discussed those concerns with
Brazilian President Luiz Inacio Lula da Silva.
The delay in the approval of the deal has in recent months hurt
Perez Companc's stock, which has underperformed the broader
market. Whereas the company's stock, currently trading at around
ARS2.07, is up 3% from the end of September last year, the Merval
index of large-cap stocks is up more than 44% over the same
period.
CONTACT: PECOM ENERGIA S.A. DE PEREZ COMPANC S.A.
Maipo 1 - Piso 22 - C1084ABA
Buenos Aires, Argentina
Phone: (54-11) 4344-6000
Fax: (54-11) 4344-6315
URL: http://www.pecom.com.ar/
Contacts:
Jorge Gregorio C. Perez Companc, Chairman
Oscar Anibal Vicente, Vice Chairman
TELECOM ARGENTINA: Various Bonds Rated `D(arg)' by Local Fitch
--------------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. rated several
corporate bonds of Telecom Argentina Stet-France Telecom S.A.
`D(arg)' on Wednesday, said the National Securities Commission of
Argentina.
The affected bonds include:
-- bonds described as "Serie C emitada bajo el Programa Global de
Obligaciones Negociables vencido en agosto de 1999", worth US$126
million due on Nov 1, 2002. These are classified under "series
and/or class"
-- bonds due on May 2, 2005, and described as "Seri E emitada
bajo el Programa Global de Obligaciones Negociables vencido en
agosto de 1999", classified under "series and/or class"
-- bonds under "series and/or class", described as "Serie H
emitada bajo el Programa Global de Onligaciones Negociables
vencido en agosto de 1999", worth ITL40 billion, and matures on
March 3, 2008.
-- bonds maturing on July 1, 2002, described as "Serie K emitada
bajo el Programa Global de Obligaciones Negociables vencido en
agosto de 1999", worth EUR250 million.
The `D(arg)' rating is given to obligations which are in default
said the rating agency, which based the ratings on the Company's
financial performance as of December 31, 2002.
In related news, the Company's stocks, described as "Acciones
Ordinarias en Circulacion Clase A, B y C de 1 voto c/u, V/N US$1"
were rated `3' by the same rating agency.
CONTACT: TELECOM ARGENTINA STET - FRANCE TELECOM SA(TELECOM)
Alicia Moreau de Justo 50, 10th Floor
Capital Federal (1107) Repoblica Argentina
Phone: +54 11 4968 4000
Home Page: http://www.telecom.com.ar
Contacts:
Alberto J. Ricciardi, Chief Financial Officer
Elvira Lazzati, Finance Director
Pedro Insussarry, Investor Relations Manager
Phone: (5411) 4968-3626/3627
Fax: (5411) 4313-5842/3109
Email: inversores@intersrv.telecom.com.ar
TELECOM ARGENTINA: Fitch Rates Various Bonds `C(arg)'
-----------------------------------------------------
Various corporate bonds issued by Telecom Argentina Stet-France
Telecom S.A., were rated `C(arg)' by Fitch Argentina Calificadora
de Riesgo S.A. on Wednesday.
According to the National Securities Commission of Argentina, the
following bonds received the junk rating:
-- US$1.5 billion worth of "Programa de obligaciones
negociables", classified as "Program", with undisclosed maturity
date.
-- ITL40 billion of "Serie F emitada bajo el Programa Global de
Obligaciones Negociables vencido en agosto de 1999", classified
under "Series and/or Class" and matures on May 02, 2007.
-- Bonds described as "Serie I emitada bajo el Programa Global de
Obligaciones Negociables vencido de agosto de 1999", worth EUR200
million due on April 1, 2004. These are classified under "Series
and/or Class."
-- Bonds due on August 2, 2004, and described as "Programa Global
de Ons autorixado por Asamblea de fecha 16.3.99", worth a total
of US$1.5 billion, under the type "Program".
According to Fitch, the `C(arg)' rating, based on the Company's
financial position as of December 31, 2002, denotes an extremely
weak credit risk relative to other issuers or issues in
Argentina. Capacity for meeting the financial commitments is
solely reliant upon favorable sustaimed business or economic
developments.
TRANSENER: Reaffirms Decision To Suspend All Payments
-----------------------------------------------------
Argentine transmission company Transener has been in default on
all its debts since April last year. In a statement sent to the
Buenos Aires stock market Tuesday, the Company reaffirmed its
decision to suspend capital and interest payments on all debts.
Business News Americas relates that payment for the US$100
million in debentures that came due April 1 was also included in
the suspension. The five-year debentures were issued in 1998.
Transener is still in the process of renegotiating some US$460
million in debt and has hired Morgan Stanley to advise it to
develop the restructuring plan.
"Nothing much has changed since April last year, and we are still
working to reach an agreement with our creditors," a Transener
source told Business News Americas.
"[Electricity] rates have not been changed since January 2002 so
the negative effect is still the same, and the macroeconomic
factors have not changed significantly, so they don't change our
situation," the source said.
For now, Transener's creditors are being patient with the company
because "they understand that the company's situation was caused
by external factors, not by mismanagement," the source said.
Nevertheless, "the company will continue to use its resources to
maintain the operation and quality of service in the transport of
electricity," the company said in the statement.
Transener, which is owned by Pecom Energia and the UK's National
Grid, owns the concession to operate the extra high voltage
electricity transmission network in the Argentine Republic. Since
its creation in 1993, the Company has remained a leader in the
field.
CONTACT: COMPANIA DE TRANSPORTE DE ENERGIA ELECTRICA EN ALTA
TENSION (Transener S.A.)
Av. Paseo Colon 728, 6"Piso - (1063)
Buenos Aires, Argentina
Tel. (5411) 4342-6925
Business Development:
Carlos A. Jeifetz (jeifecar@transx.com.ar)
Gerardo Baseotto (baseoger@transx.com.ar)
Tel.: (54-11) 4334-0182 / 4342-6925
Fax: (54-11) 4342-4861
* Notice to Holders of Argentine Bonds Due 2005
-----------------------------------------------
This notice is given pursuant to Section 6(e)(3) of the Floating
Rate Bond Fiscal Agency Agreement, dated as of April 7, 1993,
among the Republic of Argentina, Citibank, N.A. and Citibank
(Luxemburg) S.A.
Citibank, N.A., as Fiscal Agent, hereby notifies the holders of
the Bonds that Argentina has failed to deposit with the Fiscal
Agent sufficient funds to pay the interest and principal
amortization due on the Bonds on March 31, 2003.
Inquiries from holders may be sent via facsimile to the Fiscal
Agent at (212) 657-4009. All inquiries must be accompanied with
proof of status as a shareholder.
CONTACT: CITIBANK, N.A.
Fiscal Agent
(212) 657-4009
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B E R M U D A
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CAMBRIDGE REINSURANCE: Notice to Creditors, Contributories
----------------------------------------------------------
In the Supreme Court of Bermuda Companies (Winding Up)
In the Matter of the Companies Act, 1981, and in the Matter of
Cambridge Reinsurance Limited (In Liquidation)
Notice is hereby given that the Joint Liquidators of the above-
named company, intend to apply to the Court for their release,
and further take notice that any objection you may have to the
granting of the release must be notified to the Court within
twenty-one days of the date hereof.
DAVID E.W. LINES,
Joint Liquidator
March 25, 2003
TRENWICK GROUP: Subsidiary Defaults On Senior Notes
---------------------------------------------------
Trenwick Group Ltd. ("Trenwick")(OTC: TWKGF) (NYSE:TWK) stated
Monday that its wholly owned subsidiary, Trenwick America
Corporation, is in default under the Indenture with respect to
its 6.70% Senior Notes due April 1, 2003 (the "Senior Notes"),
for failure to pay principal and interest on the Senior Notes due
on April 1, 2003.
Trenwick also stated, however, that it has reached an agreement
in principle with the beneficial holders of all of the Senior
Notes (the "Senior Noteholders") to waive the default and to
extend the maturity date of the Senior Notes until August 1,
2003. Under the terms of the agreement in principle, Trenwick
America Corporation will pay to the Senior Noteholders all
interest accrued through April 1, 2003, in the amount of
$2,512,500.
Trenwick stated that the terms of the agreement in principle are
subject to negotiation and execution of definitive agreements,
including agreements among the Senior Noteholders, and that there
can be no assurance that definitive agreements will be reached
with, or among, the Senior Noteholders. Trenwick also stated that
the terms of the agreement are subject to the approval of certain
banks that have issued letters of credit on behalf of
subsidiaries of Trenwick in support of its Lloyd's operations
under a senior secured credit facility and that the terms have
been submitted to such banks for their approval.
In addition, Trenwick stated that the default under the Senior
Notes Indenture is deemed an event of default with respect to the
aforementioned senior secured letter of credit facility and under
certain other indebtedness of Trenwick America Corporation.
Trenwick stated that it is in discussions with the letter of
credit banks and will engage in discussions with other creditors
as necessary to seek waivers from, or amendments to agreements
with, these parties, consistent with its agreement with the
Senior Noteholders.
If any of the above-mentioned creditors should determine to
exercise the rights available to them as a result of the default
described above, or take other action with respect to the assets
of Trenwick or its subsidiaries, Trenwick and/or one or more of
its subsidiaries may be forced to seek protection from creditors
through proceedings commenced in Bermuda and other jurisdictions
including the United States. In addition, at any time, the
insurance regulatory authorities having jurisdiction over
Trenwick's insurance company operating subsidiaries may commence
voluntary or involuntary proceedings for the formal supervision,
rehabilitation or liquidation of such subsidiaries, or one or
more of the creditors of Trenwick or its subsidiaries may
commence proceedings against Trenwick or its subsidiaries.
Background Information
Trenwick is a Bermuda-based specialty insurance and reinsurance
underwriting organization with two principal businesses operating
through its subsidiaries located in the United States, the United
Kingdom and Bermuda. Trenwick's reinsurance business provides
treaty reinsurance to insurers of property and casualty risks
from offices in the United States. Trenwick's operations at
Lloyd's of London underwrite specialty insurance as well as
treaty and facultative reinsurance on a worldwide basis. In 2002,
Trenwick voluntarily placed into runoff its U.S. specialty
program business and its specialty London market insurance
company, Trenwick International Limited, and sold the in-force
business of LaSalle Re Limited, its Bermuda based subsidiary.
TRENWICK GROUP: S&P Takes Ratings Off Watch, Revises to 'D'
-----------------------------------------------------------
Standard & Poor's Ratings Services said Wednesday that it removed
from CreditWatch its counterparty credit ratings on Trenwick
Group Ltd., Trenwick America Corp., and LaSalle Re Holdings Ltd.
and revised them to 'D' from 'CCC-' following the announced non-
payment of interest and principal on the $75 million senior notes
due April 1, 2003.
"Although there is an agreement in principal with the beneficial
holders of all the senior notes to waive the default and extend
the final maturity to Aug. 1, 2003, the prospect for significant
recoveries to the senior note holders is very low," said Standard
& Poor's credit analyst Karole Dill Barkley.
The 'CCC' counterparty credit and financial strength ratings on
Trenwick Group Ltd.'s operating subsidiaries remain on
CreditWatch with negative implications because of their weakened
condition and the possibility of regulatory action.
CONTACT: STANDARD & POOR'S
Karole Dill Barkley, New York (1) 212-438-7167
Jason A Jones, New York (1) 212-438-7174
TRENWICK GROUP: A.M. Best Drops Financial Strength, Debt Ratings
----------------------------------------------------------------
A.M. Best Co. has withdrawn the financial strength rating of C
(Weak) and assigned a NR-4 rating (Company Request) to Trenwick
America Reinsurance Corporation (Stamford, CT). Concurrently,
A.M. Best has downgraded the debt rating of the group's U.S.
holding company, Trenwick America Corporation, to "d" from "c"
relating to its $75 million 6.7% senior notes, which was due on
April 1, 2003. All debt ratings have also been withdrawn. (See
list below.)
These rating actions follow the company's announcement that it
defaulted on senior notes due April 1, 2003. Trenwick is in
negotiations with the senior note holders to extend the maturity
date on these notes until August 1, 2003, and it has in fact
reached an agreement in principal in this regard. The financial
strength rating of Trenwick America Reinsurance Corporation had
previously been downgraded to C (Weak) from B- (Fair) on February
3, 2003. At that time, the ratings for all the runoff operations
of the company were withdrawn, and the company's debt ratings
were all downgraded to "c".
The following debt rating of "c" has been downgraded to "d" and
then withdrawn:
Trenwick America Corporation--
-- $75 million 6.7% senior notes, due 2003
(guaranteed by Trenwick Group, Ltd.)
The following debt ratings of "c" have been withdrawn:
Trenwick America Corporation--
-- senior unsecured debt under shelf registration
Trenwick Capital Trust I--
-- $110 million 8.82% subordinated capital securities, due
2037
LaSalle Re Holdings--
-- $75 million Series A preferred shares
The following indicative debt ratings of "c" have been
withdrawn:
Trenwick Group Ltd.--
Securities available under shelf registration:
-- senior unsecured debt
-- subordinated debt
-- preferred stock
Trenwick America Capital Trust I, II and III--
-- preferred securities
A.M. Best Co., established in 1899, is the world's oldest and
most authoritative insurance rating and information source. For
more information, visit A.M. Best's Web site at www.ambest.com .
CONTACT: A.M. Best, Oldwick
Public Relations:
Jim Peavy
908/439-2200, ext. 5644
james.peavy@ambest.com
OR
Rachelle Striegel
908/439-2200, ext. 5378
rachelle.striegel@ambest.com
OR
Analyst:
Keith Lennox
908/439-2200, ext. 5062
keith.lennox@ambest.com
TYCO INTERNATIONAL: Files $400M Lawsuit Against Ex-CFO
------------------------------------------------------
Bermuda-based Tyco International Ltd filed civil charges against
its former finance chief Mark Swartz on Tuesday in a Manhattan
federal court, accusing the former executive of looting the
Company for personal gain.
But Mr. Swartz's legal counsel, Charles Stillman downplayed the
charges as "no more than a public relations stunt."
According to the Associated Press, the US$400 million lawsuit
accuses Mr. Swartz of using Company funds to buy a US$16.5
million Manhattan apartment, tickets to Miami Heat basketball and
Florida Panthers hockey games, cable television service, country
club memberships and concert tickets for Billy Joel and Elton
John, aside from granting himself tens of millions of dollars in
authorized bonuses.
Furthermore, Mr. Swartz allegedly accepted over US$134 million in
pay for "services that were never rendered" between 1997 and
2002.
The civil suit also says Swartz made millions of dollars by
abusing Tyco loan programs to speculate in real estate and
investments and by paying former Tyco director Frank Walsh a
US$20 million fee without telling company directors, said the
report.
The lawsuit seeks the court to order Mr. Swartz to account for
all the money, legal and otherwise, that he received from Tyco.
The Company also said the Mr. Swartz blocked its efforts to take
the former executive to arbitrations in October to resolve the
complaints, adding that Mr. Swartz only agreed to the arbitration
process when he left the Company in August.
Mr. Stillman argued that the proper time for arbitration is at
the end of the criminal proceedings against Tyco, as Mr. Swartz
is yet to go to trial.
Mr. Swartz is currently out on a US$50 million bail from larceny
and corruption charges he is facing in Manhattan.
CONTACT: TYCO INTERNATIONAL LTD.
Corporate Office
The Zurich Centre, Second Floor
90 Pitts Bay Road
Pembroke HM 08, Bermuda
Phone: 441-292-8674
Home Page: http://www.tyco.com
=============
B O L I V I A
=============
* IMF Approves One-Year $118M Stand-By Arrangement for Bolivia
--------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
approved Wednesday a one-year SDR 85.75 million (about US$118
million) Stand-By Arrangement for Bolivia to support the
country's economic program through April 2004. The approval opens
the way for the immediate release of SDR 42.88 million (about
US$59 million).
Following the Executive Board discussion, Anne Krueger, First
Deputy Managing Director and Acting Chair, said:
"The Bolivian authorities are putting in place a program to
stabilize the economic situation in 2003 and lay the basis for
sustained economic growth and poverty reduction. The core
elements of the economic program are fiscal consolidation, a
strengthening of the banking and corporate sectors, and
protecting and making more efficient social safety net spending.
"The 2003 budget begins a phased reduction in the fiscal deficit
consistent with putting the public finances on a sustainable
basis over the medium term. The program relies on a balanced
package of measures, especially higher taxation of the
hydrocarbon sector, introduction of a new tax procedures code,
collection of tax arrears, and control of public spending. If
needed, the government stands ready to rephase low-priority
public investment, while protecting the social safety net and
other poverty-reducing expenditures, in order to achieve the
fiscal targets under the program.
"The authorities are introducing a coordinated strategy to
strengthen the corporate and banking sectors and, thereby, help
restore economic growth. The main elements of this strategy are
the appointment of a high level management committee;
modernization of the bankruptcy law; introduction of a framework
for voluntary, out-of-court corporate restructuring agreements;
and strengthening of the regulatory framework for the banking
sector. The strategy should improve the corporate sector's
financial position and thereby also strengthen the banking
sector.
"The government has carefully sequenced reforms to address social
tensions and restore public confidence. It is working with
Congress and civil society to help advance its fiscal and
legislative agenda, and to develop the medium-term structural
reforms that could be supported as soon as possible by a
successor arrangement under the Poverty Reduction and Growth
Facility. The participatory approach is necessary to build broad
popular support for the government's economic reforms and
stabilization measures. These reforms and measures are crucial
for raising Bolivia's economic growth prospects, creating job
opportunities, and reducing poverty.
"In the context of the difficult economic and political
challenges ahead, the Fund stands ready to work in close
cooperation with the Bolivian authorities as they take firm steps
to ensure the success of the economic program supported by the
Stand-By Arrangement, and as they develop their medium-term
structural reform program," Ms. Krueger said.
Recent economic developments
Real growth in Bolivia has been weak for the last four years at
1« percent on average. Adverse shocks included the impact of coca
eradication on incomes, the impact of low metal export prices on
mining output and foreign direct investment, and contagion from
the regional financial and economic developments. The economy's
vulnerabilities have been heightened by fiscal imbalances and
highly dollarized financial and corporate sectors.
The external and current account deficit remained relatively high
at 4 percent of GDP in 2002 despite stagnant economic activity.
Foreign direct investment was also very high at more than 7
percent of GDP, although it has been declining since 1999.
The fiscal deficit more than doubled over the last two years to
8_ percent of GDP in 2002. Revenues were restrained by weak
domestic demand, delays in tax reforms, and a freeze on domestic
fuel prices. At the same time, expenditure surged reflecting
increased real wages and a stepped-up public investment program.
Monetary policy was accommodative of a large government financing
need. In addition, the central bank had to contend with two
rounds of deposit instability, in mid-2002 and in February 2003,
that left the dollar deposit base 17 percent below its level at
end-2001.
Financial vulnerabilities in the highly dollarized financial
system have increased significantly. Banks recorded losses in two
out of the three last years and the average nonperforming loan
ratio more than doubled in this period, although all banks in the
system report capital adequacy ratios in excess of the minimum
requirement.
The nonfinancial public sector debt rose sharply in 2002 to 62.25
percent of GDP. Both domestic and nonconcessional external debt
have increased rapidly to finance the large fiscal deficits. As a
result, debt indicators have deteriorated significantly from the
path envisaged in 2001.
Program Summary
The economic program for 2003 focuses on stabilizing the economy
after the recent civil disturbances and resulting financial
instability, and laying the basis for a return to growth. The
program projects a gradual economic recovery led by the
hydrocarbon sector, with real GDP growth reaching about 3 percent
in 2003, and rising to 4-5 percent in the medium term. Growth
will also be fostered by the boost to manufacturing, in
particular textiles, from the expanded preferential access to the
US market for the Andean countries; and by agricultural growth
benefiting from improved irrigation systems and road
infrastructure.
The fiscal program aims to reduce the combined public sector
deficit from 8_ percent of GDP in 2002 to 6« percent of GDP in
2003. The authorities intend to sustain the adjustment over 2004-
05, so that the deficit can fall to 3-3« percent of GDP by 2005.
The program is based on the 2003 budget and will allow for an
increase in social spending financed by higher external funding
from multilateral and bilateral sources. The authorities have
emphasized that the budget emerged from consensus-building
efforts with key groups of public sector employees and within the
legislative branch. The fiscal program depends on a combination
of revenue measures, such as the elimination of some tax
exemptions and a broadening of the base of some taxes, and
expenditure measures that involve the reduction of the size of
government and savings in pension costs.
The monetary program in 2003 will be conducted through control of
the central bank's net domestic assets and targets a small
buildup of US$65 million in net international reserves. Some
increase in broad money in US dollar terms can be expected to
take place as confidence returns to the economy and bank deposits
recover, providing room for a gradual resumption of private
credit.
As part of strengthening the corporate and banking sectors, the
authorities intend to put in place the legal framework,
mechanisms, and instruments needed to carry forward the corporate
restructuring process. A flexible out-of-court workout mechanism
will be introduced, coupled with modern formal bankruptcy
proceedings. Plans to strengthen financial regulation over the
next several months are also part of the program. This includes
putting into place a framework for bank resolution and clarifying
the institutional responsibility for the broad oversight over the
financial sector.
Bolivia joined the IMF on December 27, 1945; its quota is SDR
171.5 million (about US$236 million). Bolivia's outstanding use
of IMF credits totals SDR 142 million (about US$195 million).
CONTACT: IMF EXTERNAL RELATIONS DEPARTMENT
Public Affairs: 202-623-7300 - Fax: 202-623-6278
Media Relations: 202-623-7100 - Fax: 202-623-6772
International Monetary Fund
700 19th Street, NW
Washington, D.C. 20431 USA
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B R A Z I L
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AES CORP.: Successfully Completes Consent Solicitations
-------------------------------------------------------
The AES Corporation (NYSE:AES) announced Wednesday the successful
completion of its consent solicitations launched on March 14 and
March 26, 2003 associated with twelve issues of debt securities
representing approximately $4.1 billion in parent-level debt.
Pursuant to the completion of the consent solicitations, the
indentures governing these debt securities will be amended to
conform the definition of "Material Subsidiary" and certain
events of default contained therein to those contained in the
indenture governing its recently issued senior secured notes due
2005.
As a result of these conforming changes, no subsidiaries of The
AES Corporation currently classify as "Material Subsidiaries" for
purposes of the subsidiary bankruptcy event of default under the
indentures governing these debt securities.
Paul Hanrahan, President and Chief Executive Officer of AES,
commented, "The success of these consent solicitations provides
AES with increased operating and financial flexibility. We
appreciate the continued strong show of support from our
bondholders."
Each of the consent solicitations expired at 5:00 p.m., New York
City time, on Tuesday, April 1, 2003. The AES Corporation
received the requisite consents for each consent solicitation and
has accepted for payment all valid consents received prior to the
expiration time.
The consents relate to the following debt securities: 8.00%
Senior Notes, Series A, Due 2008, 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, 8.375% Senior Notes, Series F, Due 2011, 7.375%
Remarketable or Redeemable Securities Due 2013, 10.25% Senior
Subordinated Notes Due 2006, 8.375% Senior Subordinated Notes Due
2007, 8.50% Senior Subordinated Notes Due 2007, 8.875% Senior
Subordinated Notes Due 2027, and 4.50% Convertible Junior
Subordinated Debentures Due 2005.
Salomon Smith Barney acted as solicitation agent with respect to
each of the consent solicitations. Questions concerning the
consent solicitations 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: AES Corporation
Kenneth R. Woodcock, 703/522-1315
SAESA: 2002 Results Show Revenues Down, Net Loss Swells
-------------------------------------------------------
Chile's Osorno-based distributor Sociedad Austral de Electricidad
(Saesa) reported to the securities commission SVS the following
financial results for 2002:
- Consolidated net loss of CLP15.9 billion (US$22.1mn) for 2002,
against the previous year's loss of CLP6.44 billion.
- Operating revenues of CLP69.2 billion in 2002, down 23.9% year-
on-year (yoy), while operating costs fell by 24.6% to reach
CLP48.9 billion
- Operating profit was down 20.4% yoy to CLP18 billion.
- Non-operating costs in 2002 were CLP34.7 billion, compared to
just CLP14.7 billion in 2001, mainly as a result of financial
expenses of CLP16.2 billion and a CLP6.52-billion write off on a
related company investment.
Saesa operates in Regions IX and X in the south of Chile.
CONTACT: SAESA
Gerencia y Administracion Zonal de Osorno
Bulnes 441, Osorno
Telefono: (64) 206400
Fax: (64) 206209 - Casilla: 21 -0
USIMINAS: Prepares US$350 Million Debt Issue For Coal Exports
-------------------------------------------------------------
Paulo Penido Pinto Marques, finance chief of Brazilian flat
steelmaker Usiminas said the Company is preparing a US$350
million debt issue to finance coal imports, reports AE Setorial
news services.
Mr. Marques also commented that costs of raising funds for coal
imports are now up to 7-9 percent, from 4-5 percent previously.
In other domestic financial operations, Usiminas has had to pay
interest of 12-13 percent, while foreign issues are around Libor
plus 3 percent, the report says. This year, the Company plans to
reduce its debt.
"Our principal concern is with the concentration of short-term
debt maturations, but we intend to keep the same hedging policy
to protect our cash flow," he said.
The Company has a total of BRL9.5 billion (US$2.7 billion) in
debt at the close of 2002. The steelmaker's hedging policy is to
keep 47 percent of its debt in foreign currency, the report says.
Mr. Marques also mentioned that Usiminas subsidiary is awaiting a
prepaid export finance issue of US$150 million being arranged by
a group of banks led by Banco do Brasil. The operation should
take place in the middle of this year, according to the report.
CONTACT: Usinas Siderurgicas de Minas Gerais Usiminas PN A
Rua Prof. Jose Vieira de
Mendonca, 3011
Engenheiro Nogueira
31310-260 Belo Horizonte - MG
Brazil
Phone: +55 31 3499-8000
Fax: +55 31 3499-8475
Home Page: http://www.usiminas.com.br
Contact:
Jose Augusto Muller de Oliveira Gomes, Chairman
VARIG: Earnings Statement Late, Potential Investigation Looms
-------------------------------------------------------------
Brazilian airline Varig missed the deadline for filing 2002
earnings statements Monday, leading the country's securities
regulator to fine the embattled carrier. The securities regulator
also warned that the Company's executives will be subjected to an
investigation if the delay continues. However, the regulator
didn't set a specific deadline.
The nearly bankrupt airline was three months late in filing its
third-quarter results. The numbers were finally released March 21
after the securities regulator threatened to remove Varig's
corporate governance status. The release showed that the Company
lost BRL2 billion in the first nine months of last year.
Varig is planning to merge its operations with rival carrier TAM
Linhas Aereas in a bid to avert bankruptcy. A merger plan is
currently under study by both companies.
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
=========
C H I L E
=========
INVERLINK: SVS Files Lawsuit Anew
---------------------------------
Legal woes at bankrupt Chilean financial services group Inverlink
keep on coming. On Wednesday, the country's securities and
insurance regulator, the SVS, filed new criminal charges against
Inverlink executives for alleged conspiracy, reports Business
News Americas. The executives face a maximum prison term of 20
years if proven guilty.
Inverlink was declared bankrupt last week after it was intervened
on March 7. The charges against the group's executives include
spying on the central bank and stealing US$95 million in CDs from
a development agency.
===============
C O L O M B I A
===============
AVIANCA: Seeks Extension on Schedules Filing Through April 20
-------------------------------------------------------------
Aerovias Nacionales de Colombia S.A. Avianca and Avianca, Inc.,
wants to extend their time period within which they must file
their schedules of assets and liabilities, statements of
financial affairs and lists of executory contracts and unexpired
leases required under 11 U.S.C. Sec. 521(1). The Debtors tell
the U.S. Bankruptcy Court for the Southern District of New York
that they need until April 20, 2003 to finish the requirement and
file it with the Court. The Debtors relate that their financial
affairs and the books and records are extraordinarily complex
thus prompting them to ask for more time to file their schedules.
The Debtors further assures the Court that the U.S. Trustee has
no objection to their request of extension.
Aerovias Nacionales de Colombia S.A. Avianca, the oldest airline
in the Western Hemisphere, operates a domestic (Colombia) and
international airline passenger business, but it also carries
mail and freight cargo on its domestic and international routes.
The Company filed for chapter 11 protection on March 21, 2003
(Bankr. S.D.N.Y. Case No. 03-11678). Ronald E. Barab, Esq., at
Smith, Gambrell & Russell, LLP and Howard D. Ressler, Esq., at
Anderson, Kill & Olick, P.C., represents the Debtors in their
restructuring efforts. When the Company filed for protection
from its creditors, it listed estimated debts and assets of more
than $100 million each.
AVIANCA: Court Orders Initial Case Conference
---------------------------------------------
Aerovias Nacionales de Colombia S.A. Avianca and Avianca, Inc.,
as the debtors and debtors-in-possession (collectively, "the
Debtors"), having each filed a petition for reorganization under
chapter 11 of the Bankruptcy Code on March 21, 2003, and the
Court having determined that a case management conference will
aid in the efficient conduct of the cases, it is hereby
ORDERED, that pursuant to 11 U.S.C. 105(d), an initial case
management conference will be conducted by the undersigned
Bankruptcy Judge in Room 617, United States Bankruptcy Court, One
Bowling Green, New York, New York, 10004, on April 24, at 10:00
a.m. (the "Conference"), or as soon thereafter as counsel may be
heard, to consider the efficient administration of the cases,
which may include, inter alia, such topics as retention of
professionals, creation of a committee to review budget and fee
requests, use of alternative dispute resolutions, timetables, and
scheduling of additional case management conferences; and it is
further
ORDERED, that the Debtors shall give notice by mail of this Order
at least seven days prior to the conference to each committee
appointed to serve in the case pursuant to 11 U.S.C. 1102 (or,
if no committee has been appointed, to the holders of the 20
largest unsecured claims), the holders of the five largest
secured claims, any postpetition lender to the Debtors, and the
United States Trustee, and shall promptly file proof of service
of such notice with the Clerk of this Court.
DATED: New York, New York
April 2, 2003
/s/ Allan L. Gropper _
UNITED STATES BANKRUPTCY JUDGE
AVIANCA: Seeks Court OK for GE Capital Aviation Services Deal
-------------------------------------------------------------
COMES NOW Aerovias Nacionales de Colombia S.A. Avianca ("Avianca
S.A."), as debtor and debtors in possession in the above-
captioned case (the "Debtor" or "Avianca"), by and through its
undersigned counsel and, pursuant to sections 361 and 363(e) of
Title 11, United States Code (the "Bankruptcy Code", hereby files
this Emergency Motion for Entry of an Order Pursuant to Sections
361 and 363(e) of the Bankruptcy Code Approving Stipulation
Providing Adequate Protection to GE Capital Aviation Services,
Inc., ("GECAS") in its capacity as the lease and aircraft
servicer and manager for certain owners and lessors (the
"Lessors") of various aircraft ("GECAS Aircraft"), of its
Interests in Certain Leased Aircraft (the "Motion"), and in
support thereof respectfully states as follows:
JURISDICTION
1. The Debtor commenced the above-styled chapter 11 case on March
21, 2003 (the "Petition Date"). The United States Trustee has
appointed a Committee of Unsecured Creditors consisting of the
following seven creditors: debis AirFinance B.V., Banco De
Bogota-Colombia,
United Aerospace Corporation, Caja de Auxilios y Prestaciones de
Acdac, Monumental Life Insurance Company, Pegasus Aviation Inc.
and Asociacion Colombiana de Aviadores Civiles.
2. The Debtor is continuing in possession of its property and is
operating and managing its business as a Debtor in possession
pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
3. The Court has jurisdiction over this matter pursuant to 28
U.S.C. 157 and 1334. This is a core proceeding pursuant to 28
U.S.C. 157(b)(2).
4. Venue is proper in this Court pursuant to 28 U.S.C. 1408
and 1409.
5. The statutory basis for the relief sought in this Motion is
sections 361 and 363(e) of the Bankruptcy Code and Rules 4001(d)
and 9014 of the Federal Rules of Bankruptcy Procedure (the
"Bankruptcy Rules").
BACKGROUND
6. Avianca is the oldest airline in the Western Hemisphere. The
company operates a domestic (Colombian) and international airline
passenger business, but it also carries cargo (mail and freight)
on its domestic and international routes.
7. Avianca has destinations in 14 cities in Colombia, two cities
in the United States, and 12 cities in other countries, for a
total of 28 destinations.
8. As of March, 2003, Avianca's operating fleet consisted of 31
aircraft, including 13 MD-83, 6 Fokker-50, 6 Boeing 767 and 6
Boeing 757 aircraft. Avianca leases all 31 aircraft.
9. GECAS acts as the lease and aircraft servicer and manager of
the GECAS Aircraft under certain aircraft leases between the
Lessors and Avianca (the "GECAS Leases"). The GECAS Aircraft are
listed and described in Schedule "A" attached to the Stipulation
Providing Adequate Protection to GE Capital Aviation Services,
Inc. of its Interests in Certain Leased Aircraft, a true and
correct copy of which is attached hereto as Exhibit "A" and
incorporated herein as if fully stated (the "Agreement").
10. Since the Petition Date, GECAS has asserted, on behalf of the
Lessors, a right to receive periodic cash payments as adequate
protection of the Lessors' interests in the GECAS Aircraft
pursuant to section 361 and 363(e) of the Bankruptcy Code. GECAS
has indicated its intention to move this Court for entry of an
order, pursuant to sections 362(d)(1) and 362(d)(2) of the
Bankruptcy Code, for relief from the stay imposed by section
362(a) of the Bankruptcy Code absent such adequate protection
payments. GECAS has also indicated its intention to pursue its
remedies under the GECAS Leases and to obtain possession of the
GECAS Aircraft.
RELIEF REQUESTED
11. Section 363(e) of the Bankruptcy Code provides that at any
time, on request of an entity with an interest in property that
is proposed to be used, sold or leased, the court, with or
without a hearing, shall prohibit or condition such use, sale or
lease as is necessary to provide adequate protection. Section
363(e) applies to personal property leases. If adequate
protection cannot be offered, such use, sale or lease of the
collateral may be prohibited. See Vienna Park
Prop. v. United Postal Sav. Assoc. (In re Vienna Park Prop.), 976
F.2d 106, 114 (2d Cir.1992).
12. It is critical to the Debtor's reorganization that the Debtor
retains possession and operates the GECAS Aircraft, until such
time, if any, as the Debtor determines that the continued use and
operation of any particular GECAS Aircraft is not in the best
interest of the estate.
Accordingly, the Debtor and GECAS have entered into the
Agreement, which provides adequate protection to GECAS and
authorizes the Debtor to operate the GECAS Aircraft. The salient
terms of the Agreement are set forth below:
i. GECAS will refrain from moving the Court for relief from
the automatic stay, provided the Debtors are not in
default under the Agreement or do not cure any such
default within ten (10) days of receiving written notice
of such default;
ii. The Debtors shall comply in all material respects with
the terms and conditions of the GECAS Leases respecting
each GECAS Aircraft (including, without limitation, the
terms thereof regarding insurance, operation of the
GECAS Aircraft, maintenance of the GECAS Aircraft and
keeping the GECAS Aircraft free and clear of all liens,
security interests, encumbrances and other claims of
mechanics, hangar keepers, Eurocontrol and others, but
exclusive of return condition requirements), provided,
however, that:
a) The Debtors shall not be obligated to pay "Rent" or
"Supplemental Rent" that is due and payable or becomes due and
payable during the sixty (60) day period commencing on March 21,
2003, to and excluding May 20, 2003. Such provision shall not
operate as a waiver by
GECAS of any rights under the GECAS Leases or pursuant to 11
U.S.C. 503(b)(1)(A); and
b) Beginning on May 20, 2003, and continuing thereafter during
the chapter 11 case, the Debtors shall pay on the Payment Date
"Rent" and "Supplemental Rent" in amounts that are less than
those amounts that would normally be due and owing under the
GECAS Leases; or
c) On the Payment Date, reject the lease of such GECAS Aircraft
and return such GECAS Aircraft, to a location in the United
States designated by GECAS in the condition set forth in the
Agreement.
iii. The Debtors shall be entitled to retain possession and
operate the GECAS Aircraft until the earlier of the date the
Debtors are (a) no longer in compliance with the payment,
monetary or insurance terms of the Agreement; (b) any date that
the Debtors are no longer in compliance in all material respects
with any of the other terms and conditions of the GECAS Lese of
such GECAS Aircraft and such noncompliance is not cured within
ten (10 working days after receipt by the Debtors of written
notice of such nocompliance; the date after conversion of the
Debtors' chapter 11 cases to cases under chapter 7 of the
Bankruptcy Code when the Debtors cease to operate as an air
carrier or a plan of reorganization is confirmed by the Court.
13. Nothing in the Agreement shall be deemed as a waiver by the
Debtor of its right to assume or reject any GECAS Lease pursuant
to section 365 of the Bankruptcy Code.
14. The terms of the Agreement do not require Avianca to make any
payment to GECAS during the 60-day period commencing on the
Petition Date and require thereafter payments in amounts lower
than those stipulated in the GECAS Leases, and are otherwise
beneficial to the estate and its creditors.
15. The Agreement was negotiated by the parties at arms-length,
and each party was represented by counsel of its choosing.
16. Notice of this Motion has been provided by facsimile,
electronic transmission, Federal Express or hand delivery to (i)
the U.S. Trustee, (ii) the members of the Debtors' Official
Committee of Unsecured Creditors, (iii) the attorneys for the
lenders under the Debtors' debtorin-possession credit facilities,
(iv) the attorneys for The Bank of New York, (v) each party who
has served a notice of appearance, (vi) the United States
Attorney, (vii) the attorneys for GECAS, and (viii) the Internal
Revenue Service. The Debtors submit that, under the
circumstances, no other or further notice need be provided.
17. Given that there are no novel issues of law presented herein
and that the legal authority for the relief being sought is set
forth herein, the Debtors respectfully request that this Court
waive the requirement that the Debtors file a memorandum of law
in support of this Motion as provided in Rule 9013-1(b) of the
Local Bankruptcy Rules for the United States Bankruptcy Court for
the Southern District of New York.
18. No prior motion for the relief sought herein has been made to
this or any other court.
WHEREFORE, the Debtor respectfully requests that the Court (i)
grant the Motion and approve the Agreement in its entirety, and
(ii) grant such other and further relief as is just and proper.
Dated: Atlanta, Georgia
April 1, 2003
Respectfully submitted,
/s/Ronald E. Barab
Ronald E. Barab (RB4876)
Of Counsel:
SMITH, GAMBRELL & RUSSELL, LLP
Suite 3100, Promenade II
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
(404) 815-3500
and
ANDERSON, KILL & OLICK, P.C.
1251 Avenue of the Americas
New York, New York 10020
(212) 278-1000
Attorneys for the Debtor
AVIANCA: Stipulation Providing Adequate Protection To GE Capital
----------------------------------------------------------------
WHEREAS, GE Capital Aviation Services, Inc. ("GECAS") acts as the
lease andaircraft servicer and manager for certain owners and
lessors (the "Lessors") of various aircraft (the "GECAS
Aircraft") more particularly described in Schedule A annexed
hereto and made a part hereof, together with all engines, parts,
records and documents referred to in the GECAS Leases (as
hereinafter defined), and leased to Aerovias Naciaonales de
Colombia S.A. Avianca ("Avianca") pursuant to certain lease
agreements (the "GECAS Leases") heretofore entered into by
Avianca with the Lessors more particularly described in said
Schedule A; and
WHEREAS, GECAS has indicated its intention to move the Bankruptcy
Court, pursuant to 362(d)(1) and 362(d)(2) of the Bankruptcy
Code, for relief from the stay imposed by 362(a) of the
Bankruptcy Code, so as to permit it to pursue its remedies under
the GECAS Leases and obtain possession of the GECAS Aircraft,
asserting that Avianca has not provided GECAS with adequate
protection of its interests in the GECAS Aircraft and/or that
Avianca does not have equity in the GECAS Aircraft and the GECAS
Aircraft are not necessary to an effective reorganization of
Avianca's estate; and
WHEREAS, as long as Avianca retains the continued use and
possession of the GECAS Aircraft, GECAS asserts it is entitled to
receive periodic cash payments as adequate protection of GECAS's
interests therein pursuant to 363(e) and 361 of the Bankruptcy
Code, as without such adequate protection the value of GECAS's
interests in the GECAS Aircraft will decline; and
WHEREAS, prior to the filing of the petition herein, and by
virtue of payment defaults under the GECAS Leases, GECAS issued
Notices of Lease Cancellation (the "Notices") with respect to all
of the GECAS Aircraft and the GECAS Leases were cancelled as a
result thereof; and
WHEREAS, after the issuance of the Notices, and on February 26,
2003 and at Avianca's request, Avianca and GECAS entered into a
letter agreement (the "Letter") and a related summary of
commercial terms (the "Summary") whereby, in consideration of
entering into the Letter (which contemplated discussions
regarding a restructuring of the lease rental rates under the
GECAS Leases) and at Avianca's request, GECAS revoked the Notices
ab initio; and
WHEREAS, in accordance with the Letter, GECAS agreed to discuss a
restructuring of the lease rental rates, in accordance with the
Summary, to be incorporated in the definitive documents; and
WHEREAS, since the GECAS Leases had already been cancelled by
virtue of the Notices, the only basis on which GECAS was willing
to revoke the Notices and reinstate the GECAS Leases was to
obtain from Avianca its consent, upon any filing by it of any
bankruptcy or reorganization proceeding, to the termination of
the automatic stay, including on the basis of "cause" under
362(d)(1) of the Bankruptcy Code and its agreement that it would
provide for such a termination in any of its "first day orders;"
and
WHEREAS, no such provision was included in any of the first day
or other orders entered by the Court; and
WHEREAS, Avianca has asserted that 1110 of the Bankruptcy Code
does not apply to it, the Lessors, the GECAS Aircraft or the
GECAS Leases, as Avianca alleges it does not hold the air carrier
operating certificate as required by 1110(a)(3)(A)(i) of the
Bankruptcy
Code; and
WHEREAS, as a result of the imposition of the stay provided by
362(a) of the Bankruptcy Code, GECAS and the Lessors are
prohibited from foreclosing upon or otherwise taking possession
of the GECAS Aircraft; and
WHEREAS, Avianca is desirous of retaining possession and use of
the GECAS Aircraft while it pursues it restructuring efforts and
GECAS is willing to allow Avianca to do so only on the terms and
conditions provided herein.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and between
Avianca and GECAS, on behalf of the Lessors, without conceding or
acknowledging that 1110 of the Bankruptcy Code is or is not
applicable to Avianca, the Lessors, the GECAS Aircraft and the
GECAS Leases, as adequate protection to GECAS of its interests in
the GECAS
Aircraft, that:
1. So long as Avianca is not in default (a) of any payment or
monetary or insurance obligation of this Stipulation or (b) in
any material respect of any term or condition of this Stipulation
which is not cured within ten (10) working days after receipt of
notice thereof from GECAS, GECAS will refrain from moving the
Court, pursuant to 362(d)(1) and 362(d)(2) of the Bankruptcy
Code, for relief from the stay imposed by 362(a) of the
Bankruptcy Code, so as to permit GECAS and/or the Lessors to
pursue their remedies under the GECAS Leases and obtain
possession of the GECAS Aircraft, by asserting that Avianca has
not provided GECAS with adequate protection of their interests in
the GECAS Aircraft and/or that Avianca does not have equity in
the GECAS Aircraft and the GECAS Aircraft are not necessary to an
effective reorganization.
2. Avianca shall, with respect to each GECAS Aircraft not
returned to GECAS as provided hereinbelow, comply in all material
respects with the terms and conditions of the GECAS Leases
respecting each such GECAS Aircraft (including, without
limitation, the terms thereof regarding insurance, operation of
the GECAS Aircraft, maintenance of the GECAS
Aircraft and keeping the GECAS Aircraft free and clear of all
liens, security interests, encumbrances and other claims of
mechanics, hangar keepers, Eurocontrol and others but exclusive
of return condition requirements), provided, however, that:
(a) during the period from and including March 21, 2003 to
and excluding May 20, 2003 (the "60-Day Period"), and
solely for the purpose of retaining possession of the
GECAS Aircraft hereunder (and without being deemed to
have amended, waived or otherwise modified any term of
the GECAS Leases or waived any claim thereunder which may
be entitled to payment and priority as an administrative
expense under 503(b)(1)(A) of the Bankruptcy Code),
Avianca shall not be obligated to pay "Rent" or
"Supplemental Rent" that is due and payable or which
hereafter becomes due and payable on a date occurring
during the 60-Day Period; and
(b) beginning on May 20, 2003 and continuing thereafter
during the pendency of this Chapter 11 case, and on each
day on and after May 20, 2003 on which Rent or
Supplemental Rent is due under the terms of the GECAS
Leases (each such day for the payment of Rent or
Supplemental Rent being a "Payment Date"), Avianca shall
(i) pay (A) Rent in the monthly amount for the applicable
GECAS Aircraft set forth in the Summary and (B)
Supplemental Rent for each GECAS Aircraft retained by it
in the amounts and otherwise as provided in the terms of
the applicable GECAS Lease or (ii) on such Payment Date
reject the lease of such GECAS Aircraft and return such
GECAS Aircraft, to a location in the continental United
States designated in a notice by GECAS (together with all
records and documents related thereto including those
required to be returned in accordance with the terms of
the GECAS Leases), free and clear of all post-petition
liens, post-petition security interests or post-petition
encumbrances applicable thereto, and thereupon such GECAS
Aircraft will be deemed free and clear of all rights of
Avianca or SAM (as defined below) under any GECAS Lease
or otherwise with respect to a GECAS Aircraft.
3. The period during which Avianca is entitled to retain
possession of each GECAS Aircraft as provided in paragraph 2
hereof shall terminate (the "Termination Date") on the earliest
of (x) any date on which Avianca is not in compliance with any
payment or monetary or insurance obligation of this Stipulation
or (y) any date on which Avianca is not in compliance in all
material respects with any of the other terms and conditions of
the GECAS Lease of such GECAS Aircraft (except as expressly
modified by paragraphs 2(a) or 2(b) hereof) and such non-
compliance is not cured within ten (10) working days after
receipt by Avianca of notice in writing thereof from GECAS or the
applicable Lessor or (z) the date that this Chapter 11 case is
converted to a Chapter 7 case under the Bankruptcy Code or
Avianca ceases to operate as an air carrier or a plan of
reorganization under Chapter 11 of the Bankruptcy Code is
confirmed by the Court. For avoidance of doubt, the existence of
Events of Default based upon (i) cross-defaults to other
transactions (including, without limitation, any other GECAS
Lease) or judgments involving third parties, (ii) any filing
under any other applicable bankruptcy or insolvency law or (iii)
insolvency or similar defaults, shall not be deemed to be non-
compliance with any GECAS Lease for purposes of paragraph 2
hereof or this paragraph 3.
4. Exclusive of but notwithstanding the foregoing, an Event of
Default shall be deemed to exist for all purposes under any GECAS
Lease at all times unless and until Avianca cures all payment
defaults and other Events of Default under such GECAS Lease as
they exist without reference to the Summary (other than (i) the
Event of Default that occurs as a result of the filing of the
petition in this case or under any other applicable bankruptcy or
insolvency law, any insolvency or (ii) cross-defaults to other
transactions involving persons other than GECAS, any Lessor or
any affiliates of GECAS or any Lessor (it being understood that
an Event of Default shall exist for cross-defaults involving
GECAS, any Lessor or any affiliates of GECAS or any Lessor) or
(iii) judgments of third parties), provided, however, that the
Lessor shall, except as provided in the next sentence, only be
obligated to make maintenance contribution payments to Avianca
under and subject to the terms of any GECAS Lease if and only so
long as Avianca has paid in full all amounts contemplated to be
paid (including those payable during the 60 Day Period) to all
Lessors under the terms of the Summary. Notwithstanding the
foregoing, a Lessor shall be obligated to make maintenance
contribution payments to Avianca (without any commingling) under
and subject to the terms of the particular GECAS Lease for and
only in respect of maintenance obligations incurred by Avianca
after the 60- Day Period and only if, so long as and to the
extent that Avianca has paid Supplemental Rent to such Lessor
(without commingling) after the 60-Day Period. For the avoidance
of doubt, it is understood and acknowledged that no Lessor shall
be entitled to withhold maintenance contribution payments after
the 60-Day Period based on any Event of Default existing
prepetition or upon any Event of Default occurring post-petition
other than a payment default in respect of amounts required to be
paid under paragraph 1 hereof or a failure to maintain insurance
as required by such GECAS Lease.
5. From the date hereof to and excluding the Termination Date,
GECAS for itself and on behalf of the Lessors will forbear from
instituting legal proceedings against Sociedad Aeronautica de
Medellin Consolidada S.A. ("SAM") anywhere in the world,
provided, however, that such forbearance shall not to be
construed as any amendment, waiver or other modification of any
terms of the GECAS Leases or as a waiver of any right, remedy or
other claim any Lessor may have against SAM, and such forbearance
shall terminate automatically on any Termination Date without
further action of GECAS, any Lessor or the Court.
6. On any Termination Date, any stay imposed under 362(a) of the
Bankruptcy Code, or any similar protection under any other
applicable law for Avianca or its assets, shall be deemed
automatically terminated without further action by GECAS, any
Lessor or the Court and GECAS and each Lessor shall be entitled
to exercise with respect to Avianca, the GECAS Aircraft and any
and all other property all rights and remedies available under
the GECAS Leases or any other applicable document or available at
law or in equity.
7. The provisions of this Stipulation shall be irrevocable and
this Stipulation may not be amended or modified, and shall not be
subject to amendment or modification by the Court, unless
pursuant to a joint request of Avianca and GECAS.
8. This Stipulation is subject to the approval of the Bankruptcy
Court and, if such approval is not obtained by April 11, 2003,
GECAS may terminate this Stipulation ab initio and thereupon
exercise any all rights and remedies available to it.
Dated: New York, New York
March 31, 2003
SMITH, GAMBRELL & RUSSELL, LLP
By: /s/ Ronald E. Barab
Ronald E. Barab (RB4876)
Attorneys for Debtor Aerovias Nacionales de Colombia
S.A. Avianca
Suite 3100, Promenade II
1230 Peachtree Street
Atlanta, GA 30309-3592
Tel: (404) 815-3500
PAUL, HASTINGS, JANOFSKY & WALKER LLP
By: /s/ Harvey Strickon
Harvey A. Strickon (HS5210)
Attorneys for GE Capital Aviation Services, Inc.
75 East 55th Street
New York, New York 10022-3205
Tel.: (212) 318-6000
The foregoing Stipulation is hereby APPROVED and SO ORDERED at
New York, New York, this ___ day of April, 2003.
U.S.B.J.
Schedule A
Aircraft Aircraft Type Lessor/Lessee/Sublessee
Manufacturer's
Serial Number
49942 McDonnell Douglas GECAS Technical Services
MD-83 Limited, as lessor,
Aerovias Nacionales de
Colombia S.A. Avianca, as
lessee, and Sociedad
Aeronautica de Medellin,
as sublessee
49944 McDonnell Douglas GECAS Technical Services
MD-83 Limited, as lessor, and
Aerovias Nacionales de
Colombia S.A. Avianca, as
Lessee 49945 McDonnell
Douglas MD-83 GECAS
Technical Services Limited,
As lessor, and Aerovias
Nacionales de Colombia S.A.
Avianca, as lessee
49947 McDonnell Douglas GECAS Technical Services
MD-83 Limited, as lessor, and
Aerovias Nacionales de
Colombia S.A. Avianca, as
Lessee
49948 McDonnell Douglas GECAS Technical Services
MD-83 Limited, as lessor,
Aerovias Nacionales de
Colombia S.A. Avianca, as
lessee, and Sociedad
Aeronautica de Medellin
, as sublessee
53122 McDonnell Douglas GECAS Technical Services
MD-83 Limited, as lessor, and
Aerovias Nacionales de
Colombia S.A. Avianca, as
Lessee
53123 McDonnell Douglas GECAS Technical Services
MD-83 Limited, as lessor, and
Aerovias Nacionales de
Colombia S.A. Avianca, as
lessee
49939 McDonnell Douglas Airplanes III Limited, as
MD-83 lessor, and Aerovias
Nacionales de Colombia S.A.
Avianca, as lessee
49946 McDonnell Douglas Airplanes III Limited, as
MD-83 lessor, and Aerovias
Nacionales de Colombia S.A.
Avianca, as lessee
53120 McDonnell Douglas Airplanes III Limited, as
MD-83 lessor, and Aerovias
Nacionales de Colombia S.A.
Avianca, as lessee
53125 McDonnell Douglas Airplanes III Limited, as
MD-83 lessor, and Aerovias
Nacionales de Colombia S.A.
Avianca, as lessee
26154 Boeing 757-200 Airplanes Holdings Limited,
as lessor, and Aerovias
Nacionales de Colombia S.A.
Avianca, as lessee
25421 Boeing 767-200? AeroUSA, Inc., as lessor,
and Aerovias Nacionales de
Colombia S.A. Avianca, as
lessee
===========
M E X I C O
===========
EMPRESAS ICA: Continues Talks With WestLB To Secure $748M Credit
----------------------------------------------------------------
Constructora Internacional de Infraestructura, the consortium led
by Mexico's largest construction firm ICA, continues talks with
German bank WestLB to secure a US$748-million credit for the
construction of the 750MW El Cajon hydroelectric project in
Nayarit state.
Susana Vivares, a WestLB spokesperson, was quoted by Mexican
newspaper El Norte as saying that talks "are on the right path."
West LB has already granted a US$90-million bridging loan, which
allowed construction to start last week.
Talks to finalize the rest of the funding are underway Vivares
said, adding that it was the financial creditworthiness of the
project itself that would be considered rather than that the
financial health of ICA.
"The financial situation of ICA was no hindrance to obtaining
resources," Vivares said, adding that funds will be dispersed
roughly every month throughout El Cajon's construction phase.
CONTACT: Dr. Jos, Luis Guerrero
(5255) 5272-9991 x2060
jose.guerrero@ica.com.mx
Lic. Paloma Grediaga
(5255) 5272-9991 x3470
paloma.grediaga@ica.com.mx
In the United States:
Zemi Communications
Daniel Wilson
(212) 689-9560
d.b.m.wilson@zemi.com
GRUPO MEXICO: Fitch Drops Rating of Asarco's 2003 Notes
-------------------------------------------------------
Fitch Ratings has withdrawn the 'DDD' rating of Asarco Inc.'s
(Asarco) notes due in 2003. This rating action is a result of the
company's $100 million principal payment on March 31, 2003 on the
notes that was originally due February 3, 2003.
Asarco has also repaid a $450 million bank loan that was due in
November 2002. These two payments were made from the proceeds
Asarco received from the sale of its 54% stake in Southern Peru
Copper Corporation (SPCC) to its parent company, Americas Mining
Corporation, a subsidiary of Grupo Mexico S.A. de C.V. (Grupo
Mexico). In addition to principal, Asarco also paid in full all
accrued interest and the associated fees for each obligation.
Fitch maintains the 'C' ratings for Asarco's bonds due in 2013
and 2025 but has changed the Rating Outlook to Stable from Rating
Watch Negative.
CONTACTS: Joe Bormann CFA, 1-312-368-3349, Chicago
Anita Saha CFA, 1-312-368-3179, Chicago
Media Relations: James Jockle 1-212-908-0547, New York
=================
N I C A R A G U A
=================
ENITEL: Stake Sale Management Deal Opens April 8
------------------------------------------------
Enitel share administrator Carlos Fernandez said that the
government will open financial offers on April 8 from investment
banks vying for a contract to manage the sale of its 49% stake in
the fixed line operator, relates Business News Americas.
Six firms made it to the pre-qualification stage. These are
France's BNP Paribas; Spain's DiamondCluster (a division of BBVA)
and SCH; US-based Credit Suisse First Boston and telecoms
consulting firm Appliance Technology; and Peruvian investment
bank Latin Pacific Capital.
The report says the authorities are studying technical offers
from the pre-qualifiers. According to Fernandez, 70% of each
bidder's eventual rating will correspond to the technical
evaluation.
The sale of the stake, 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.
In other news, Fernandez said 20% of Enitel employees eligible
for shares in the Company have yet to decide whether to buy them,
and must do so by August.
Enitel was partially privatized 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 was set aside for the Company's
employees.
=======
P E R U
=======
BACKUS: Bavaria Buys 2.7M Class A Shares To Boost Stake
-------------------------------------------------------
Information contained on the Web site of Peru's stock exchange
regulator revealed that Bavaria SA, Colombia's largest brewery,
ordered its Peruvian stock broker to acquire more than 2.7
million Class A shares worth about US$74 million of Union de
Cervecerias Backus y Johnston SA shares.
The decision was in line with Bavaria's plan to boost its stake
in Peru's largest brewer.
The stock regulator revealed on its Web site that Bavaria ordered
Continental Bolsa SA to buy up to 2,730,124 shares in the brewer
in trading on the Peruvian stock market Wednesday.
In the beginning of this year, Bavaria said it was going to place
offers to buy Backus voting shares at US$27, half in cash and the
other half in an IOU with a one-year maturity. Bavaria already
owns 49.1% percent of the voting shares.
According to Bloomberg data, Backus has 87.2 million outstanding
Class A shares. The share traded Monday at PEN92.5 ($26.66).
CONTACT: Union de Cervecerias Peruanas Backus y Johnston SA
Head Office
No 594 Jiron Chiclayo
Rimac
Lima, Peru
Tel +51 1 311 3000
Fax +51 1 311 3059
Web http://www.backus.com.pe
Contacts:
Elias Bentin Peral - Chairman
Atty. Victor Montori Alfaro - Vice Chairman
Catalina Bentin Grande - Director
=================================
T R I N I D A D & T O B A G O
=================================
BWIA: Angry Workers Reject Two Weeks Pay Offer
----------------------------------------------
Troubled regional carrier BWIA is offering two weeks' worth of
salary to the workers it dismissed in January, reports the
Trinidad Guardian. The move comes after the workers picketed at
the Company's base in Piarco claiming they have to received their
separation pay.
BWIA spokesman Clint Williams said, "BWIA understands people need
to eat...so...we are going to make available to all the
retrenched staff at least something, along the line of perhaps a
half a month's pay."
However, the disgruntled workers rejected the carrier's offer,
shouting "Let the management take two weeks' pay. We want our
whole salary."
The workers argued that the Company assured them earlier that
money has been allocated for their severance pay.
The workers also complained that the company had been giving
foreign workers full salaries while "nationals have to stand here
by the gate without money."
Mr. Williams explained that the airline is suffering from
cashflow problems and the military conflict in Iraq is making
matter worse for the entire aviation industry.
He assured workers that the management has taken steps to begin
"some form of payment" to the workers. BWIA hopes the money will
aid the workers until the government approves the airline's
proposal for financial aid.
Mr. Williams also said that BWIA will approach lending
institutions to "basically make a case to give BWIA and BWIA's
workers a little time."
He said the company will make available to the lending
institution information on how much each worker is expected to
receive to assure them that money is coming in, according to the
report.
Christopher Abraham, president of the Aviation, Communication and
Allied Workers Union, said that the union will discuss the issue
with the junior Finance Minister on Wednesday.
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)
BWIA: Rival Decries Alleged Predatory Pricing
---------------------------------------------
Caribbean Star chief executive Paul Moriera accused Trinidad and
Tobago flag carrier BWIA of starting the "price war", which
almost ruined regional carrier, LIAT, reports the Trinidad
Express. Mr. Moreira said that Caribbean Star owner Texan
billionaire Allen Stanford presented evidence to Prime Minister
Patrick Manning during their meeting on Friday that BWIA started
the predatory pricing practices in the region.
"For years now this has been BWIA's approach to competition and
we saw it starkly when Air Jamaica started flying from Kingston
to Piarco. BWIA started flying directly to Jamaica, slashed their
prices and then drove the airline off the route. When that was
accomplished they promptly returned to their old route and
doubled the fares," said Mr. Moreira.
Moreira said this was also done by BWIA when Air Caribbean
started flying the Miami route, according to the report. In the
meantime, BWIA is reportedly in financial trouble again, while
the government has categorically said that it will let the
carrier go under. The report did not indicate any comments from
BWIA officials concerning Caribbean Star's accusations.
=============
U R U G U A Y
=============
BANCO DE CREDITO: Cash Refund For Depositors Still Under Study
--------------------------------------------------------------
Whether depositors of the defunct Uruguayan bank Banco de Credito
will get their money back is still unclear. However,
representatives from the economy ministry, central bank and the
depositors will try to determine if the bank has sufficient
current assets to repay depositors in cash.
The government intervened and suspended Banco de Credito and four
other banks in July and August last year due to capital and
liquidity problems, aggravated by contagion from neighboring
Argentina's crisis. It then negotiated with minority shareholder
St George to re-open the bank. However, the talks were called off
after St. George, an investment company that belongs to the
controversial South Korean Moon group, rejected a proposal to buy
back a majority stake in the ailing bank, forcing the central
bank to liquidate Banco de Credito.
Early this week, the government announced it will stage a public
auction in May to sell the best assets of Banco de Credito.
"The idea is to sell or hand over for administration Banco de
Credito's assets in the most open way possible and through an
auction process," Julio de Brun, President of the Central Bank of
Uruguay, said.
=================
V E N E Z U E L A
=================
PDVSA: Resumes Gasoline Exports
-------------------------------
Petroleos de Venezuela SA (PDVSA) was scheduled to ship on
Tuesday 360,000 barrels of gasoline from the Paraguana refinery
complex for the U.S. East Coast, signaling that gasoline exports
have resumed at the Venezuelan state oil company, reports
Bloomberg.
PDVSA was forced to shut down shipments four months ago following
an oil strike. Prior to the strike that began Dec. 2, Venezuela
was a major exporter of petroleum products to the U.S. The Latin
American country was daily exporting about 43,200 barrels of
gasoline to the U.S., or 8.7 percent of total imports, according
to the Department of Energy.
The strike was aimed at forcing President Hugo Chavez from
office. The strike reduced oil production and exports from the
country, which had been the world's fifth-largest supplier.
Meanwhile, PDVSA dismissed another 711 employees in the wake of
the strike. The firings came on top of the estimated 16,000 that
were let go previously by company President Ali Rodriguez.
* Venezuela May Promote Debt Swap to Avoid Default
--------------------------------------------------
The Venezuelan government may push through its plans for a
voluntary debt swap, said the Financial Times, citing unnamed
bankers. The move is seen as the country's effort to avoid
defaulting on foreign debt payments.
U.S. investment bankers will reportedly meet with Venezuelan
Finance Minister Tobias Nobrega in new York on Tuesday to
formulate plans to exchange the country's US$22.4 billion in
external debt. The paper added that the country faces an
obligation to pay part of the said debt in June.
Last week, president Hugo Chavez warned that the country may have
to default on debt this year in the wake of the two-month long
strike that almost completely crippled the country's oil
industry, which accounts for 43 percent of the government's
revenue.
Recent reports indicate that analysts doubt that Venezuela will
indeed default on its debt. According to them, Mr. Hugo's warning
may only be a bluff as the country has strong finances.
* Notice of STG Interest Reduction on Venezuelan Bonds Due 2007
---------------------------------------------------------------
The Republic of Venezuela
SFr 153,280,000
Front Loaded Interest Reduction Bonds due 2007
SFr Interest Reduction Series
In accordance with the provisions of the bonds, notice is hereby
given that for the Interest Period from March 31, 2003 to
September 30, 2003 the Bonds will carry an Interest Rate of 1.25
percent per annum. The interest payable on the relevant interest
payment date September 30, 2003 will be SFr2.42 per SFr1,000
nominal amount of which SFr380.94 remains outstanding.
CONTACT: JPMorgan Chase Bank, Agent Bank
London
* Notice of USD Interest Reduction on Venezuelan Bonds Due 2007
---------------------------------------------------------------
The Republic of Venezuela
US$1,670,370,000
Front Loaded Interest Reduction Bonds due 2007
USD Interest Reduction Series A
In accordance with the provisions of the Bonds, notice is hereby
given that for the Interest Period from March 31, 2003 to
September 30, 2003 the Bonds will carry an Interest Rate of
2.1875 percent per annum. The interest payable on the relevant
payment date September 30, 2003 will be US$4.24 per US$1,000
nominal amount of which US$380.94 remains outstanding.
CONTACT: JPMorgan Chase Bank, Agent Bank
London
***********
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
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Information contained herein is obtained from sources believed to
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