/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030422.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 22, 2003, Vol. 4, Issue 78 Headlines A N T I G U A & B A R B U D A LIAT: Prime Minister OKs TT$29.37 Million Merger Prep Loan A R G E N T I N A LAPA: President Steps Down; Employees Go On Strike TGN: Dealing With Main Creditors Now TGS: Company Says Bankruptcy Proceedings Report Unfounded B E R M U D A GLOBAL CROSSING: Releases Operating Results for February 2003 GLOBAL CROSSING: J.P. Morgan Sues Deputy Chairman B O L I V I A COTEL: Corporate Structure Subject of Upcoming Meeting B R A Z I L CEMIG: Irape Plant Costs Increasing TCP: TCO Shareholders Resist Share Swap Terms C H I L E COEUR D'ALENE: Completes Union Agreement at Silver Valley TELEFONICA CTC: CRA To Study Deregulation Report C O L O M B I A PAZ DEL RIO: Better Conditions Pique Italian Investor Interest E C U A D O R BANCO DEL PACIFICO: BNP Paribas To Prepare Bank For Sale M E X I C O GRUPO TMM: Extends Exchange Offers for Outstanding Bonds MATTEL: Mexican Facilities Consolidation Prompts $11.6M Charge T R I N I D A D & T O B A G O BWIA: Fails To Complete Severance Payments On Deadline BWIA: Trinidad & Tobago Government Provides TT$16.8 Million Loan BWIA: Unions Accuse Government Reversal On Funding BWIA: Government Demands Board To Conduct Management Review BWIA: Ex-Workers March, Demand Payment, Executive Resignations - - - - - - - - - - ================================= A N T I G U A & B A R B U D A ================================= LIAT: Prime Minister OKs TT$29.37 Million Merger Prep Loan ---------------------------------------------------------- Trinidad and Tobago Prime Minister Patrick Manning agreed to advance an interest-free loan of TT$29.37 million to Antigua- based LIAT, preparing the way for a merger with T&T flag carrier BWIA. A report by the Trinidad Guardian reveals that Trinidad and Tobago's loan contribution, which has a repayment moratorium of five years, is part of a $54.28-million rescue package to which five regional countries will contribute to give LIAT some financial breathing space until the end of June. Other countries will contribute to LIAT's bailout, too. Antigua will put $11.28 million; Barbados, $7.05 million; Grenada, $705,000; and St Vincent, $5.875 million. Mr. Manning commented, "I am very heartened by the decision that has been taken to have one carrier in the south and eastern Caribbean to envision arrangements that would arrive at a final determination of that carrier. It represents a new level of co- operation and collaboration among governments of the region." "Effectively, what we are doing is taking the first steps towards rationalising the provision of airline capacity in the south and eastern Caribbean. This financing will enable LIAT to continue its operation until June, such that the important work that has already started, which will lead to LIAT restructuring and furthering an appropriate relationship with BWIA. The existence of a viable sub-regional and regional airline industry is crucial at this juncture for development of a true Caribbean community," said Barbados PM Owen Arthur, who is the Caricom leader responsible for guiding the region towards a single market and economy, as quoted by the report. The BWIA/LIAT merger is expected to be completed by June. Speculations that troubled carrier Air Jamaica will join in were doused off as Air Jamaica chief Gordon Stewart clarified that his airline will not take part in the merger. CONTACT: LIAT Corporate Headquarters V.C. Bird International Airport, P.O. Box 819, St. John's, Antigua West Indies Phone: 1 (268) 480-5600/1/2/3/4/5/6 Fax: 1 (268) 480-5625 Home Page: http://www.liatairline.com/ Contacts: Garry Cullen, Chief Executive Officer David Stuart, Vice President of Marketing ================= A R G E N T I N A ================= LAPA: President Steps Down; Employees Go On Strike -------------------------------------------------- Argentina's Lapa airline lost its president while struggling to deal with a serious economic crisis. On Wednesday, Mario Folchi relinquished his post as Lapa president, according to an EFE report. His resignation came while some 300 Lapa ground employees went on strike to demand payment of overdue wages. The Buenos Aires airport was in chaos as Lapa cancelled its flights for lack of fuel, grounding hundreds of tourists ready to begin the Holy Week holidays. However, the strikers returned to work later when the Labor Ministry imposed a "mandatory reconciliation." LAPA filed for protection from creditors in May 2001 due to increasing costs of fuel, excessive taxes and the recession plaguing the region. The filing listed debts of US$130 million to local bank units of Citibank (C), BBVA Banco Frances (BBV), Banco BanSud and Banco Rio. The airline also owed around US$52 million to energy company Repsol YPF SA; Royal Dutch Shell; Exxon Mobile Corp; Aeropuertos 2000, the concession that runs most of Argentina's airports; and the Argentine air force for airspace fees. TGN: Dealing With Main Creditors Now ------------------------------------ Argentine gas transporter TGN will undertake a negotiation with major creditors now to restructure its debts, which total US$572 million, reports Business News Americas. TGN is seeking a long- term solution to resolve its gloomy financial situation. "We need to have some structure in our finances, we can't continue to be up in the air," a TGN source said, adding that because Argentina's financial and economic situation has improved, "we can negotiate a long-term solution rather than just continuing to pay interest." With the devaluation of the peso in January 2002, TGN stopped paying interest and principal on all debts, but in July the Company reached a 'stand-still' agreement with creditors, by which it paid all outstanding interest and agreed to continue paying interest at a cap of 3.5% to all creditors, while not paying any of the capital. "Last year we were in freefall and we didn't know how bad things would get, but Argentina has started to recover...so on that basis we can make an offer to restructure our debts," the source said. Among TGN's main creditors are the International Financial Corporation, Spanish bank Santander and the US' Boston Bank of America. TGN is 29.4% owned by US energy company CMS and 70.4% by the Gasinvest consortium of France's TotalFinaElf (27.2%), Argentina's Compania General de Combustibles (27.2%), Argentina's Techint (27.2%), and Malaysia's state oil company Petronas (18.4%). CONTACT: TRANSPORTADORA DE GAS DEL NORTE (TGN) Don Bosco 3672, (C120ABF) Buenos Aires, Argentina. Phone: (+54 11) 4959-2000 Fax: (+54 11) 4959-2242 Home Page: www.tgn.com.ar/ TGS: Company Says Bankruptcy Proceedings Report Unfounded --------------------------------------------------------- Argentine gas transporter TGS denied a report by local media Infobae that Boston-based Fleetbank, a creditor of TGS, has started bankruptcy proceedings against the utility, relates Business News Americas. "The Infobae report was the first we have heard about the existence of such proceedings," TGS said in a statement to the Buenos Aires stock market. TGS, which is 70%-owned by local energy company Pecom Energia and bankrupt US energy company Enron through the Ciesa consortium, has been negatively impacted by the devaluation of the peso and the pesofication of gas rates in Argentina. Since the start of last year, the Company has not paid capital on any of its debts. Just recently, it failed to obtain approval from its creditors to renegotiate its debt. In recent meetings, TGS did not obtain the necessary 66.6% approval from bondholders to renegotiate US$1 billion in total debt. Bondholders of US$400 million debt approved the renegotiation of US$219 million, which represents only about 33% of the amount required to proceed with the restructuring. Consequently, TGS was forced to default on the capital payment of a US$150 million loan due last Tuesday. However, the Company did pay US$7.8 million interest on the loan, the Company said in a separate statement to the stock market. Last Tuesday's default brought TGS' defaulted debt to a total of US$450 million. CONTACTS: IN BUENOS AIRES Investor Relations: Eduardo Pawluszek, Finance & Investor Relations Manager Gonzalo Castro Olivera, Investor Relations Email: gonzalo_olivera@tgs.com.ar Mara Victoria Quade, Investor Relations Phone: (54-11) 4865-9077 Email: victoria_quade@tgs.com.ar Media Relations: Rafael Rodriguez Roda Phone: (54-11) 4865-9050 ext. 1238 ============= B E R M U D A ============= GLOBAL CROSSING: Releases Operating Results for February 2003 ------------------------------------------------------------- Global Crossing filed a Monthly Operating Report (MOR) 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 February 2003 MOR include the following: For continuing operations in February 2003, Global Crossing reported consolidated revenue of approximately $222 million. Consolidated access and maintenance costs were reported as $168 million, while other operating expenses were $63 million. "While February proved to be a challenging month, we did see some bright spots in our business," said John Legere, Global Crossing's chief executive officer. "Although our overall revenues were slightly lower in February due in part to fewer calendar days, our gross profit margin improved. We also made strides in February to drive our EBITDA closer to profitability." Global Crossing reported a consolidated cash balance of approximately $604 million as of February 28, 2003. The cash balance is comprised of approximately $226 million in unrestricted cash, $331 million in restricted cash and $47 million of cash held by Global Marine. Global Crossing reported a consolidated net loss of $142 million for February 2003. February's net loss increased from January primarily due to foreign exchange losses. Consolidated EBITDA was posted at a loss of $8 million. MOR RESULTS MONTHLY RESULTS DECEMBER THROUGH FEBRUARY 2003 MONTH CONSOLIDATED CONSOLIDATED NET INCOME REVENUE EBITDA (LOSS) February 2003 $222mln $(8)mln $(142)mln January 2003 $236mln $(11)mln $(93)mln December 2002 $178mln* $(82)mln $192mln** * $238mln before the impact of restating certain transactions involving exchanges of capacity. ** Reflects $389mln of gains on settlements, other income items, 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. The information contained in this press release is qualified in its entirety by reference to the MORs for the months of February 2002 through February 2003, including the footnotes to the financial statements contained therein, copies of which are available through the U.S. Bankruptcy Court for the Southern District of New York and on Global Crossing's Web site at http://www.globalcrossing.com/pdf/investors/inv_mor_feb_03.pdf. These MORs have been prepared pursuant to the requirements of the Bankruptcy Code and the unaudited consolidated financial statements contained in these MORs do not include all footnotes and certain financial presentations normally required under GAAP. In addition, any revenues, expenses, realized gains and losses, and provisions resulting from the reorganization and restructuring of Global Crossing are reported separately as reorganization items in these MORs. 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 February 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 February 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 February 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 February 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 $142 million for the month of February 2003 would have been reduced substantially if the financial statements in the February 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 February 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 18, 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. CONTACT: GLOBAL CROSSING Press: Tisha Kresler +1-973-410-8666 Tisha.Kresler@globalcrossing.com Kendra Langlie, Latin America, +1-305-808-5912 Kendra.Langlie@globalcrossing.com Mish Desmidt, Europe, +44 (0) 7771-668438 Mish.Desmidt@globalcrossing.com Analysts/Investors: Ken Simril +1-310-385-3838 investors@globalcrossing.com GLOBAL CROSSING: J.P. Morgan Sues Deputy Chairman ------------------------------------------------- Lodwrick Cook, the deputy chairman of Global Crossing Ltd., now finds himself as a defendant in a federal lawsuit filed in Manhattan federal court late Wednesday, the AP indicates. The lawsuit accuses Cook of hiding behind the telecommunications company's bankruptcy to avoid paying back a US$7.5 million personal loan. According to the suit, Global Crossing's board of directors loaned the money to Cook in 2001 under a special lending program for senior executives. J.P. Morgan Chase, which filed the suit, was the bank that backed the loan. The suit claims Cook took out the loan because he needed money to cover a separate US$14 million margin loan and did not want to sell his personal Global Crossing stock. Cook also owned a Las Vegas driving range and expected a US$2.4-million federal tax refund that year, but said he could use neither of those assets to cover the margin loan, the suit says. The suit claims Cook was to pay the loan back by July 5, 2002. But he "has attempted to rely on Global Crossing's subsequent bankruptcy to avoid his obligation to repay the millions of dollars loaned to him," it says. ============= B O L I V I A ============= COTEL: Corporate Structure Subject of Upcoming Meeting ------------------------------------------------------ The Bolivian government-appointed, temporary administrator of Cotel plans to organize a meeting of members to decide on the La Paz-based local telephony cooperative's corporate structure. Business News Americas recalls that Cotel's current structure consists of dual administration and oversight boards. The meeting, which will be held at a yet-to-be-announced date, will decide whether to maintain the current structure or turn the cooperative into a public company. The government is working on legislation to ensure that Javier Tapia, appointed by the telecoms regulator Sittel to intervene Cotel, can convene such meetings. In 2000-2001, when Cotel was intervened by current Sittel head Rene Bustillo, the regulator had to rely on the administrative boards to convene general assemblies, Bustillo said. Sittel intervention followed a breakdown in relations between the independent Cotel administrator Detecon and the cooperative's management boards. Detecon won a five-year contract to manage Cotel starting in May 2001, but is now negotiating permission to annul the contract so that it can abandon Cotel within 60 days of the intervention start date, Bustillo said. CONTACT: COOPERATIVA DE TELEFONOS DE LA PAZ-COTEL Avenida Mariscal Santa Cruz 980 La Paz Bolivia Phone: 591 2373432 Fax: 591 2310331 Home Page: Homepage: http://www.cotel-bo.net/ Contact: Jurgen Kurz DETECON Germaniastra? 18 - 20 D-12099 Berlin Phone: (+49-30) 7508-1100 Fax: (+49-30) 7508-1444 Home Page: http://www.detecon.com/ Contact: Karen Litters Phone: (0049) (0)6196-903-131 Fax: (0049) (0)6196-903-465 E-Mail: info@detecon.com =========== B R A Z I L =========== CEMIG: Irape Plant Costs Increasing ----------------------------------- Brazil's Minas Gerais state power company Cemig is now facing BRL740 million in total costs for the construction of the 360MW Irape hydroelectric power plant, Business News Americas reports. The figure, according to Cemig new business advisor Geraldo Ney, is BRL70 million higher than originally expected due to costs associated with relocating people living in the flood plain. The federal government is providing BRL90 million, while Cemig plans to seek 70% in financing from Brazil's national development bank BNDES to fund the remaining amount. Furthermore, it will provide 30% in equity. Cemig said previously that it wants to find a partner to join in the venture, but Ney would not comment on any progress in that direction. The construction of the plant began in April 2002 and the first unit should begin generating power by August 2005, Ney said. CONTACT: COMPANHIA ENERGETICA DE MINAS GERAIS Luiz Fernando Rolla, Investor Relations Phone: + 011-5531-299-3930 Fax: + 011-5531-299-3933 E-mail: lrolla@cemig.com.br TCP: TCO Shareholders Resist Share Swap Terms --------------------------------------------- The share swap operation between Telesp Celular Participacoes and mobile operator Tele Centro Oeste (TCO) suffered a setback. Business News Americas recalls that TCP is engineering the share swap on the behalf of parent company Vivo, the recently branded Brazilian joint venture between Spain's Telefonica Moviles and Portugal Telecom. Last Monday, local telecoms regulator Anatel gave Vivo approval to proceed with the acquisition. However, TCO's minority shareholders claimed that the operation was unfair. They say the price TCP is offering for its shares is far below fair value. The shareholders noted that TCP is offering only BRL5.6 (US$1.84) per preferred share, compared to BRL14.6 per ordinary share. The chairman of Brazil's securities regulator CVM, Luiz Leonardo Cantidiano, sided with the TCO shareholders, saying: "The preferred shareholders have near 70% of the company, but will only receive a third of the total value [after the acquisition]. This seems unfair." "It appears to us that this price disparity is not justified," Cantidiano said. But according to a Business News Americas report, Cantidiano's stance has no legal weight on the process because the CVM cannot force TCP to modify its price offer. ========= C H I L E ========= COEUR D'ALENE: Completes Union Agreement at Silver Valley --------------------------------------------------------- Coeur d'Alene Mines Corporation (NYSE: CDE) announced Thursday that the Company's wholly owned subsidiary, Coeur Silver Valley, Inc., which operates the Galena Mine in the Coeur d'Alene Silver Mining District in Idaho, has reached a new 3-year labor agreement with the United Steel Workers of America Local 5114-03. The term of the agreement is from March 26, 2003 through March 1, 2006. The mine has operated without interruption since the previous agreement expired December 13, 2002. Robert Martinez, President and Chief Operating Officer, commented, "During our negotiations and while working without a contract, the Company and represented employees worked together to achieve record production at substantially lower operating costs. We are pleased to reach this agreement and look forward to a long-term relationship with the union while continuing to improve the economics of the mine." In 2002, Coeur Silver Valley produced a record 5.3 million ounces of silver. Coeur d'Alene Mines Corporation is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile and Bolivia. CONTACT: Coeur d'Alene Mines Corporation Tony Ebersole, Investor Relations Phone: +1-208-665-0335. TELEFONICA CTC: CRA To Study Deregulation Report ------------------------------------------------ Fixed line operator Telefonica CTC Chile is close to getting an answer to its request to gain rate-setting freedom. According to Business News Americas, Chile's antimonopoly commission CRA already received a report from the country's fair trade regulator FNE detailing arguments for and against a review of the need to regulate the rates offered by CTC. The CRA must decide this month which services must be regulated, so that the telecoms regulator Subtel can start working on a tariff decree to establish rate ceilings for 2004-2008. CTC filed the request believing that there are certain zones of the country where competition now prevails, and it should at least have rate-setting freedom in those areas. However, Konrad Buchardt, commercial VP of rival company Entel Chile, last week said that the market conditions have not changed since CTC's last request for deregulation, which the CRA rejected in June 2001. CONTACT: TELEFONICA CTC Avenida Providencia 111, Piso 2 Santiago, Chile Phone: +56-2-691-2020 Fax: +56-2-691-2392 Homepage: http://www.ctc.cl Contacts: Mr. Bruno Philippi, President Mr. Jacinto Daz, Vice President Gisela Escobar, Head of Investor Relations =============== C O L O M B I A =============== PAZ DEL RIO: Better Conditions Pique Italian Investor Interest -------------------------------------------------------------- The improved situation at Colombian steelmaker Acerias Paz del Rio has lured Italian technology provider Danieli to put in an offer to construct a continuous casting machine required by the debt-ridden firm as part of its industrial conversion plan. Carlos Zambrano, a Paz del Rio consultant suggested that the steel industry worldwide has picked up, bringing improved fortunes for the Colombian company. Business News Americas relates that Acerias Paz del Rio is in the grips of Law 550, Colombia's bankruptcy protection legislation, and has to sign an agreement with its creditors before July 19 to begin phasing out its obligations under the terms of the law. The US$13.5-million conversion project is seen as an essential feature of the creditors' agreement as it provides a formula by which debts can be repaid. CONTACT: ACERIAS PAZ DEL RIO S.A. Carrera 8 # 13-31, Pisos 7 al 11 Bogota, D.C. Phone: (091) 282-8111 Fax: (091) 282-6268 282-3480 E-mail: apdr@multi.net.co ============= E C U A D O R ============= BANCO DEL PACIFICO: BNP Paribas To Prepare Bank For Sale -------------------------------------------------------- French bank BNP Paribas, S.A. was chosen to evaluate the worth of and put up for sale Ecuador's failed Banco del Pacifico, reports Business News Americas. The Ecuadorian bank is expected to be sold by the end of July. The French is reportedly negotiating with Ecuador's central bank. The report indicates that this negotiation has to be completed before a contract is signed. The said talks are expected to go on for 10 days. An Ecuadorian commission decided that the French bank's offer was more attractive than those from other investment banks, including Chile's Ecofin International LLC, and the U.S.`s Provident Group. Banco del Pacifico is one of 17 banks seized by the state beginning in 1998, when a financial crisis beset the sector. Pacifico reported US$1.8 million in net profits in the first quarter of the year, with assets hitting US$632 million and deposits amounting to US$332 million, said the report. The Ecuadorian government promised to contract an investment bank for the sale of Banco del Pacifico, to satisfy the International Monetary Fund, under its present program. =========== M E X I C O =========== GRUPO TMM: Extends Exchange Offers for Outstanding Bonds -------------------------------------------------------- Grupo TMM, S.A. (NYSE:TMM and BMV:TMM A), the largest Latin American multi-modal transportation and logistics company, announced Thursday that in light of the pending sale of the company's interest in its ports and terminals division, Grupo TMM expects that it will amend the terms of its previously announced exchange offers and consent solicitations for all of its outstanding 9 1/2 percent Senior Notes due 2003 and its 10 1/4 percent Senior Notes due 2006. While considering the terms of such an amendment, the company is extending the expiration of the offers to 5:00 p.m., New York City time, on Friday, April 25, 2003. This expiration may be further extended at Grupo TMM's discretion, and will be further extended in the event that the offer is restructured. All terms and conditions of the exchange offers and consent solicitations other than the expiration date remain unchanged pending amendment. As of 5:00 p.m., New York City time, on April 17, 2003, approximately 29.09 percent of the outstanding 2003 notes, or $51,447,000 principal amount, had been tendered and not withdrawn, and 85.69 percent of the outstanding 2006 notes, or $171,372,000 principal amount, representing a majority of the 2006 notes, had been tendered and not withdrawn. Withdrawal rights will expire at 5:00 p.m., New York City time, on the Expiration Date as extended. Citigroup Global Markets Inc. is acting as the dealer manager for the exchange offers and consent solicitations. Headquartered in Mexico City, Grupo TMM is Latin America's largest multimodal transportation company. Through its branch offices and network of subsidiary companies, Grupo TMM provides a dynamic combination of ocean and land transportation services. Grupo TMM also has a significant interest in Transportacion Ferroviaria Mexicana (TFM), which operates Mexico's Northeast railway and carries over 40 percent of the country's rail cargo. Visit Grupo TMM's web site at www.grupotmm.com and TFM's web site at www.tfm.com.mx. Both sites offer Spanish/English language options. The exchange offers and consent solicitations are made solely by the prospectus dated March 5, 2003, as amended and supplemented. Copies of the prospectus and transmittal materials can be obtained from Mellon Investor Services LLC, the information agent for the exchange offers and consent solicitations, at the following address: Mellon Investor Services 44 Wall Street, 7th Floor New York, NY 10005 (888) 689-1607 (toll free) (917) 320-6286 (banks and brokers) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Grupo TMM Notes. The exchange offers and consent solicitations are not being made to, nor will tenders be accepted from, or on behalf of, holders of existing Notes in any jurisdiction in which the making of the exchange offers and consent solicitations or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdiction where securities, blue sky laws or other laws require the exchange offers and consent solicitations to be made by a licensed broker or dealer, the exchange offers and consent solicitations will be deemed to be made on behalf of Grupo TMM by the dealer manager or one or more registered brokers or dealers licensed under the laws of such jurisdiction. MATTEL: Mexican Facilities Consolidation Prompts $11.6M Charge -------------------------------------------------------------- Mattel, Inc. (NYSE:MAT) reported Thursday 2003 first quarter financial results. For the quarter, excluding non-recurring charges, income was $40.8 million, or $0.09 per share, versus last year's income of $10.3 million, or $0.02 per share. The company reported GAAP (Generally Accepted Accounting Principles) net income of $32.8 million, or $0.07 per share, compared to last year's net loss of $256.2 million, or $0.59 per share. Last year's GAAP loss includes, as a result of implementing SFAS No. 142, a transition charge of $252.2 million, net of tax, as the cumulative effect of change in accounting principles resulting from the transitional impairment test of Pleasant Company goodwill. For the quarter, net sales were $745.3 million, flat compared to last year's $742.0 million. Operating income, excluding charges, was up 56 percent at $64.2 million. On a regional basis, domestic first quarter gross sales decreased by 5 percent while international first quarter gross sales increased by 13 percent, or flat in local currency. "As I have said previously, many of the challenges we experienced last year, including a lackluster economy, low consumer confidence, and the conflict in the Middle East, have continued, if not worsened, in 2003," said Robert A. Eckert, chairman and chief executive officer of Mattel. "Focusing on our long-term strategies has allowed us to execute well through these challenges." Mattel Brands Business Unit On February 28, 2003, Mattel announced the consolidation of its Girls and Boys/Entertainment divisions into one business unit, renamed Mattel Brands. The new global division includes the Barbie, Other Girls Brands, Wheels, and Entertainment categories. As part of the reorganization, American Girl Brands was separated from the previous Girls business unit and will now be reported separately. Worldwide gross sales for the Mattel Brands business unit were $532.3 million, a 1 percent increase. Worldwide gross sales for the Barbier brand were down 1 percent with double-digit international gains offset by declines in domestic sales. Worldwide gross sales for Other Girls Brands, which include the Polly Pocket!r, What's Her Face!TM and elloTM brands, were up 7 percent for the quarter driven by solid performances by Polly Pocket!r and elloTM. For the quarter, worldwide gross sales for the Wheels category, which includes the Hot Wheelsr, Matchboxr and Tycor R/C brands, were down 6 percent. Double-digit international growth of Hot Wheelsr was offset by domestic declines in the Hot Wheelsr, Matchboxr and Tycor R/C brands. Worldwide gross sales for the Entertainment category, which also includes the Games and Puzzles and Male Action segments, were up 20 percent for the quarter led by the re-launch of the He Manr and Masters of the Universer brand, strong gains in the Games and Puzzles segment, as well as solid performances by Yu-Gi-Oh!TM and the new Warner Bros. properties. Fisher-Price Brands Business Unit First quarter, worldwide gross sales for the Fisher-Price Brands business unit, which includes the Fisher-Pricer, Little Peopler, Rescue HeroesTM, and Power Wheelsr brands, were $233.3 million, up 3 percent. Worldwide gross sales of the core Fisher-Pricer brand increased 8 percent, bolstered by strong international sales of the BabygearTM product line, while Power Wheelsr sales declined. Worldwide gross sales for Fisher-Price character brands increased, led by gains in the Dora the ExplorerTM product line. American Girl Brands Business Unit First quarter, worldwide gross sales for the American Girl Brands business unit, which offers American Girlr branded products direct to consumers, were $46.4 million, down 8 percent, as increases in the historically-based American Girls Collectionr were more than offset by declines in American Girl Todayr. Financial Realignment Mattel recorded pre-tax charges of $11.6 million in the quarter as part of its $250 million financial realignment plan. The first quarter charges were largely related to the consolidation of its Girls and Boys/Entertainment divisions, consolidation of two manufacturing facilities in Mexico and streamlining back office functions. These charges are included in Cost of Sales ($1.7 million), Other Selling and Administrative Expenses ($1.2 million) and Restructuring and Other Charges ($8.7 million) in the consolidated statement of operations. Since the announcement of the plan in September 2000, Mattel has recorded $235.3 million in pre-tax charges. The company is on track to deliver at least the targeted initial cumulative pre-tax cost savings of approximately $200 million over the three-year duration of the plan. About Mattel Mattel, Inc., (NYSE: MAT, www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products, including Barbier, the most popular fashion doll ever created. Leading the toy and game market, the Mattel family is comprised of such best-selling brands as Hot Wheelsr, Matchboxr, American Girlr, and Tycor R/C, as well as Fisher-Price brands (www.fisher-price.com), including Little Peopler, Rescue HeroesTM, Power Wheelsr and a wide array of entertainment-inspired toy lines. With worldwide headquarters in El Segundo, Calif., Mattel employs more than 25,000 people in 36 countries and sells products in more than 150 nations throughout the world. The Mattel vision is to be the world's premier toy brands --- today and tomorrow. ================================= T R I N I D A D & T O B A G O ================================= BWIA: Fails To Complete Severance Payments On Deadline ------------------------------------------------------ Trinidad and Tobago flag carrier BWIA did not pay out all its severance benefits on the April 15 deadline, according to a report by the Trinidad Express. Of the 471 employees the airline severed in Trinidad and Tobago on January 28, only 128 former employees were paid total Board of Inland Revenue-approved severance packages of $100,000 or less. "We are doing what we can and we will continue to proceed paying former employees," corporate communications director Clint Williams said. As of 2pm on Wednesday last week, the airline has paid more than $5.7 million in severance. BWIA announced that 78% of the 164 BIR-cleared former employees who were to receive severance benefits have been paid. However, its failure to pay all the severance benefits puts the carrier at risk of facing legal action from the unions representing its workers. Mr. Williams said that BWIA would continue to pay severance benefits in the meantime. 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: Trinidad & Tobago Government Provides TT$16.8 Million Loan ---------------------------------------------------------------- Cash-strapped British West Indies Airways received the government's nod to a TT$16.8 million loan Thursday, reports the Barbados Nation. However, the report adds that the airline could still be shut down to make way for a new regional airline. In addition to the financial assistance, the government also plans to enlist the services to a consultant to review the airline and determine the feasibility of a merger between BWIA and fellow regional airline LIAT. The loan will be used to pay off outstanding debts on aircraft leases and transport taxes. About one-half of the said amount will be used to cover the severance payments of the 617 workers retrenched in January. The government's decision to make the money available to BWIA was met with criticism. Earlier reports said that the government has categorically said that it is prepared to let BWIA go under. "What would happen in terms of air transport in Trinidad and Tobago (if BWIA stopped flying)? We are lending BWIA money that they need to continue flying," Public Administration Minister Lenny Saith defended the government's stance. BWIA: Unions Accuse Government Reversal On Funding -------------------------------------------------- Two unions representing workers of troubled carrier, BWIA, said that the government of Trinidad and Tobago broke its promise not to lend anymore taxpayer's money to the ailing airline without financial support from its private investors, according to the Trinidad Guardian. Instead, the unions said, the government should have regained control of the airline. The union's statements came after the Cabinet agreed to a $116.8 million State Loan to the carrier. "We feel the Government has caved in under pressure from the private shareholders. There is no equity," said Jagdeo Jagroop, president of the Communication, Transport and General Workers' Trade Union and Aviation Communication. "They should have held if they put in tax-payers' money again, they should have gotten equity or else regained full control of the airline," he added. Mr. Jagroop said Government should have asked for the additional two per cent in shares it needs to regain control of BWIA from its private shareholders and immediately change the airline's management, added the report. Meanwhile, Allied Workers' Union president, Christopher Abraham, affirmed Mr. Jagroop's statements. The two leaders said that they do not believe the loan stipulation of a review of BWIA's management by its Board will result in any change in the airline's leadership which the Government expressed its dissatisfaction with on Thursday. In the meantime, the unions were reportedly happy to see that a provision for severance payments has been included in the new loan. A report from the Barbados Nation indicated that about one- half of the TT$16.8 million loan will go to the severance pay of the 617 workers sent home in January. BWIA: Government Demands Board To Conduct Management Review ----------------------------------------------------------- BWIA's board must review its management team after the T&T government expressed dissatisfaction over the team's performance. The review is one of the requirements for TT$16.8 million loan the government is extending to the troubled carrier. However, the Trinidad Guardian relates that BWIA spokesperson Clint Williams warned that no one should speculate on whether the airline's management is guilty of any wrongdoing. Trade and Industry Minister Ken Valley reportedly commented, "If we were happy with the management team, we would not ask for a review of the management team." Mr. Williams reacted to the comment saying, "The statement was they (Government)) asked the board to review (management). I don't think we should read into it beyond that." Mr. Williams added that the review will be the responsibility of BWIA's board, as it was the body that appointed the management team. In related news, the spokesperson refused to comment whether the review would put Conrad Aleong's position as BWIA CEO in jeopardy. BWIA: Ex-Workers March, Demand Payment, Executive Resignations -------------------------------------------------------------- About 60 former workers of BWIA marched outside the Colonial Life Building on St Vincent Street, Port of Spain on Wednesday, demanding their severance pay and the resignation of the airline's CEO Conrad Aleong and chairman Lawrence Duprey. The contingent represented general staff like ramp and line attendants, engineers and duty-free shop attendants, maintenance and middle management from the engineering, IT departments and systems operation control, said the Trinidad Guardian. Theo Oliver, chairman of the BWIA Superintendents' Association said that the protest was "to let the public know the situation with BWIA," and "to bring it to the attention of each of the local board members." He accused the airline of "not negotiating in good faith." The report quoted Mr. Oliver saying the company's period of notification had expired on March 15 as the company, by law, has 45 days in which to give staff appropriate notice. Christopher Abraham, president of the Aviation, Communication and Allied Workers Union (Acawu), accused BWIA of making excuses, saying that Inland Revenue had not issued clearances on time, according to the report. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Oona G. Oyangoren, Editors. Copyright 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. 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