/raid1/www/Hosts/bankrupt/TCRLA_Public/030721.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
Monday, July 21, 2003, Vol. 4, Issue 142
Headlines
A R G E N T I N A
AA2000: National, International Warrants Issued For Eurnekian
AGRISUR INT: Seeks "Concurso Preventivo"
AOL LATIN AMERICA: NASDAQ Grants Compliance 90-Day Extension
BANKBOSTON/BANCO FRANCES/CITIBANK: S&P Removes Ratings From 'SD'
CAISSA: Inittiates Reorganization Process Through Court
CICCONE CALCOGRAFICA: Gets Approval To Proceed With Restructuring
COMPANIA MEGA: S&P Raises Note Ratings to 'CCC+'
HSBC BANK ARGENTINA: S&P Upgrades Ratings to 'CCC+'
LAPA: President Authorizes Replacement Decree
LENS EXPRESS: Submits Concurso Motion To Court
MANTRA: Court Orders Bankruptcy
MULTICANAL: Extends Solicitation To Execute APE, Cash Tender
OROFRUTAL: Court Announces Bankruptcy
PECOM ENERGIA: Gets Legal Approval To Change Name
RODADOS: Claims Verification to Expire Soon
SOL PETROLEO: Reaches Agreement With Petrolera Over Debt Payment
TELEARTE: Court Approves Request For "Concurso Preventivo"
B E R M U D A
GLOBAL CROSSING: Committee Re-Affirms Support for SingTel Pact
GLOBAL CROSSING: Asks Court to Approve Microsoft Settlement Pact
B R A Z I L
ARACRUZ CELULOSE: Reveals Plans To Sell Up To $400M, 8-Yr. Bonds
BRASKEM: Buys Stakes in Trikem, Polialden
CESP: Meeting With Creditors To Renegotiate $520M Bonds
GERDAU: Bear Stearns Lowers Recommendation
SABESP: Announces New Economic, Financial Officer
SCOR: Fitch Comments on Life Reinsurance Spin Off
C H I L E
AES GENER: Modifies Bylaws to Accommodate Current Financing
TELEFONICA CTC: LD Unit Agrees To Sell Terra Stake to Telefonica
C O L O M B I A
ECOPETROL: S&P Revises Outlook to Stable
IFI: Fitch Withdraws Ratings
OLEODUCTO CENTRAL: S&P Ups Tranche A Debt Rating to Stable
C O S T A R I C A
ICE: New $60M Bond Offering Approved
ICE: Comptroller Ditches ECI Bid After Rivals Lodge Legal Action
J A M A I C A
AIR JAMAICA: To Exit Port Antonio
M E X I C O
AHMSA: $1M Furnace Maintenance Shutdown Complete
CFE: Suspends El Paso Power Purchase Contract
SATMEX: S&P's Comments On Parent's Bankruptcy Filing
SATMEX: Loral Bankruptcy Won't Affect Company
V E N E Z U E L A
PDVSA: Explosive Device Set Off Behind Chuao Building
- - - - - - - - - - - - - - - -
=================
A R G E N T I N A
=================
AA2000: National, International Warrants Issued For Eurnekian
-------------------------------------------------------------
National and International warrants are now out for the arrest of Argentine
businessman Eduardo Eurnekian, the owner of Aeropuertos Argentina 2000, says
EFE. Argentine judge, Julio Cruciani, issued the warrants on Thursday on
charges of tax evasion after Eurnekian failed to voluntarily appear in court
by the July 17 deadline.
Mr. Eurnekian was indicted July 1 following a complaint filed by the Federal
Public Revenue Board (AFIP), accusing Eurnekian of failing to disclose money
sent abroad in his income tax statement. On that same day, Judge Cruciani
also ordered to freeze Eurnekian's assets worth ARS40 million ($14.2
million).
Aeropuertos Argentina 2000 operates many of the country's principal
airports.
AGRISUR INT: Seeks "Concurso Preventivo"
----------------------------------------
Argentine frozen food producer Agrisur INT S.A. submitted a motion for
"Concurso Preventivo", reports El Cronista Comercial. The Company stopped
making debt payments in January last year.
According to the report, the motion was submitted to Court No. 20 of Buenos
Aires, which is under Dr. Raul Taillade. The report, however, did not
indicate whether a receiver has been assigned to the case.
CONTACT: Agrisur INT S.A.
1st Floor 8
Lavalle 2762
Buenos Aires
AOL LATIN AMERICA: NASDAQ Grants Compliance 90-Day Extension
------------------------------------------------------------
America Online Latin America, Inc. (Nasdaq:AOLA), one of the leading
interactive services providers in Latin America, announced Thursday that it
had received a 90-day extension from NASDAQ to comply with the $1 minimum
bid price requirement for continued listing of its class A common stock on
the NASDAQ SmallCap Market. In order to satisfy the Nasdaq continued listing
requirement AOL Latin America's class A common stock must have a closing bid
price of $1.00 or higher for at least ten consecutive trading days
commencing no later than September 30, 2003.
AOL Latin America noted that NASDAQ granted the extension because the
Company's market capitalization, as measured by the closing bid price of its
outstanding class A common stock on Monday, July 14, 2003 was $208.1
million. This was in excess of the $50 million market capitalization
required to obtain the aforementioned extension. The closing bid price of
AOL Latin America's class A common stock on July 14, 2003 was $1.54.
There can be no assurances that the Company will remain listed on the NASDAQ
SmallCap Market. In the event that the Company is no longer able to continue
trading on the NASDAQ SmallCap Market, the Company expects that its class A
common stock would trade on the Over-the-Counter Bulletin Board (OTCBB). The
OTCBB is a regulated quotation service that displays real-time quotes,
last-sale prices, and volume information for more than 3,600 equity
securities.
About AOL L tin America
America Online Latin America, Inc. (Nasdaq:AOLA) is the exclusive provider
of AOL-branded services in Latin America and has become one of the leading
Internet and interactive services providers in the region. AOL Latin America
launched its first service, America Online Brazil, in November 1999, and
began as a joint venture of America Online, Inc., a wholly owned subsidiary
of AOL Time Warner Inc. (NYSE:AOL), and the Cisneros Group of Companies.
Banco Itau, a leading Brazilian bank, is also a minority stockholder of AOL
Latin America. The Company combines the technology, brand name,
infrastructure and relationships of America Online, the world's leader in
branded interactive services, with the relationships, regional experience
and extensive media assets of the Cisneros Group of Companies, one of the
leading media groups in the Americas. The Company currently operates
services in Brazil, Mexico and Argentina and serves members of the
AOL-branded service in Puerto Rico. It also operates a regional portal
accessible at http://www.aola.com.America Online's 34.4 million members
worldwide can access content and offerings from AOL Latin America through
the International Channels on their local AOL services.
BANKBOSTON/BANCO FRANCES/CITIBANK: S&P Removes Ratings From 'SD'
----------------------------------------------------------------
Standard & Poor's Ratings Services removed the national scale ratings on
Citibank N.A. Sucursal Buenos Aires, BankBoston, N.A.-Sucursal Argentina,
and BBVA Banco Frances S.A. from 'SD'.
Standard & Poor's is in the process of reviewing the relative financial
position of each rated Argentine bank to assign new national scale ratings
to reflect the institutions' diverse abilities to repay their finally
restructured liabilities.
The ratings on all Argentine banks had been placed in 'SD' following the
government's decision to impose limitations on cash withdrawals, an
indication that banks had failed to return deposits under the conditions
originally contracted. The subsequent restructuring of frozen deposits that
took place during 2002 (conversion into pesos, indexation to inflation, and
extension of maturities) also conveyed the default of Argentine financial
entities.
"Since restrictions on cash withdrawals from sight accounts were lifted in
December 2002 and the restructuring of deposits can now be deemed to be
final-risks of a potential Supreme Court ruling against pesification have
significantly diminished-defaulted deposits can be now considered
extinguished and there are no further reasons to maintain the 'SD' rating on
financial institutions," said credit analyst Carina Lopez.
The stable outlook reflects the improvement in the Argentine operating
environment, where banks now enjoy ample liquidity and the cost of funding
through deposits has notably declined. Additionally, by means of the
different deposits exchanges and release plans successively implemented in
the past few months, the amount of the restructured deposits ('CEDROS') on
the banks' balance sheets has reduced to a low 15% of total deposits. In
this relatively more benign environment, the concentration of deposits
maturities in July and August (a consequence of the implementation of the
latest deposit release plan, by which a significant part of restructured
deposits were converted into 90- and 120-day CDs) is not posing additional
risks to the banks' liquidity situation, as the improved confidence in the
Argentine financial system is leading most depositors to maintain their
funds in local banks.
ANALYSTS: Carina Lopez, Buenos Aires (54) 11-4891-2118
Ursula M Wilhelm, Mexico City (52) 55-5279-2007
CAISSA: Inittiates Reorganization Process Through Court
-------------------------------------------------------
Caissa S.A. makes the first move towards reorganizing its business by filing
a motion for "Concurso Preventivo" at Court No. 12 of Buenos Aires, which is
under Dr. Juan Manuel Ojea Quintana.
The Company ceased making debt payments on October 18 this year, says El
Cronista Comercial. However, the source did not reveal whether a receiver
was assigned to the case.
CONTACT: Caissa S.A.
5th Floor 20
San Martin 201
Buenos Aires
CICCONE CALCOGRAFICA: Gets Approval To Proceed With Restructuring
-----------------------------------------------------------------
The formal restructuring proceeding of the printing company Ciccone
Calcografica has been approved by court Nø 8, judge Atilio Gonzalez. The
Company, which has a contract with the Argentine State for the making of
passports and ID cards, revealed assets totaling ARS237.98 million (US$85.6
million) and liabilities of ARS190.44 million (US$68.5 million). The
appointed trustee is the firm Estudio Stolkiner y Asociados, domiciled in
1367 Cordoba Av., 9th floor, apartment 41, Buenos Aires city.
COMPANIA MEGA: S&P Raises Note Ratings to 'CCC+'
------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on Compa¤¡a
Mega S.A.'s (Mega) US$169.7 million secured floating-rate notes series D,
US$102.0 million secured floating-rate notes series E, and US$173.3 million
secured fixed-rate notes series G to 'CCC+' from 'CC'.
"The rating action is based on the project's adequate financial and
operating performance despite the challenging conditions in Argentina," said
credit analyst Pablo Lutereau.
Standard & Poor's expects this level of performance to continue, therefore
resulting in adequate debt service coverage ratios, notwithstanding the
institutional challenges for companies operating in the Argentine economy.
In addition, the ratings assume that the regulations for the oil and gas
sector will not be subject to changes that significantly affect the
operating environment in the country.
The rating on Argentina-based Mega reflects the risks associated with
operating in the country's unsettled economic and social environment,
potential risks of higher governmental intervention, and the exposure to
market price volatility. These factors are partially offset by the fact that
more than 60% of Mega's revenues are expected to come from exports and,
therefore, remain U.S.-dollar-denominated.
Mega is an operating project involving a natural gas separation plant, a
pipeline, and a gas fractionation facility devoted to the separation of
natural gas into ethane, butane, natural gasoline, and liquefied petroleum
gas (LPG). Mega is owned by YPF S.A. (38%), Petrobras (34%), and Dow Quimica
Argentina (28%).
ANALYSTS: Pablo Lutereau, Buenos Aires (54) 114-891-2125
Marta Castelli, Buenos Aires (54) 114-891-2128
FARGO: Promecap To Pay $30M For Acquisition
-------------------------------------------
Mexican fund Promotora Mexicana de Capitales (Promecap) agreed to acquire
Argentina's major bread producer Fargo. Promecap would pay US$30 million
plus a commitment to absorb Fargo's US$120 million in liabilities. Fernando
Chico Pardo, head of the Mexican firm, is visiting Buenos Aires this week in
order to sign the deal. Deutsche Bank, major creditor of Fargo, has been
leading the negotiations with Chico Pardo and might keep a minority stake in
the Company. Fargo is carrying out a formal restructuring proceeding and is
under the administration of a financial trust called Global Foods.
GAYOSO Y COMPANIA: Seeks Court Permission For Reorganization
------------------------------------------------------------
Argentine company Gayoso y Compania SACEI filed for "Concurso Preventivo",
seeking permission from Buenos Ai•es Court No. 7 to start its reorganization
process, reports local newspaper El Cronista Comercial
Th† Company decided to submit the motion after failing to make debt payments
since December 2001. The report, however, did not indicate whether a
receiver was assigned to the case.
CONTACT: Gayoso y Compania SACEI
Bartolome Mitre 3677/3681
Buenos Aires
GIMO'S: Restructuring Deal Presented to Local Banks
---------------------------------------------------
Argentine children's wear manufacturer and retailer Gimo's wants to
restructure a debt with local banks. The firm has been holding meetings with
creditors, in an attempt to balance its accounts and take advantage of the
good perspectives of the textile industry.
The restructuring process is being led by Eduardo Terrab, a specialist in
the retail business, who heads a group of local investors that would take a
stake in Gimo's once the refinancing has been agreed on.
Textile market sources said that Gabriel Gimenez, director of the Company,
wants to solve the indebtedness issue so as to develop new businesses.
Gimo's has 30 outlets, of which 18 are franchised. It also has presence in
300 multi-brand shops in Argentina, Spain, Bolivia, USA, Panama and
Paraguay. The firm registers annual turnover of some ARS7 million.
HSBC BANK ARGENTINA: S&P Upgrades Ratings to 'CCC+'
------------------------------------------------
Standard & Poor's Ratings Services said Thursday that it raised its ratings
on HSBC Bank Argentina S.A. to 'CCC+' from 'SD'. The outlook is stable.
Standard & Poor's is in the process of reviewing the relative financial
position of each rated Argentine bank to assign new national scale ratings
to reflect the institutions' diverse abilities to repay their finally
restructured liabilities.
The ratings on all Argentine banks had been placed in 'SD' following the
government's decision to impose limitations on cash withdrawals, an
indication that banks had failed to return deposits under the conditions
originally contracted. The subsequent restructuring of frozen deposits that
took place during 2002 (conversion into pesos, indexation to inflation, and
extension of maturities) also conveyed the default of Argentine financial
entities.
"Since restrictions on cash withdrawals from sight accounts were lifted in
December 2002 and the restructuring of deposits can now be deemed to be
final-risks of a potential Supreme Court ruling against pesification have
significantly diminished-defaulted deposits can be now considered
extinguished and there are no further reasons to maintain the 'SD' rating on
financial institutions," said credit analyst Carina Lopez.
The stable outlook reflects the improvement in the Argentine operating
environment, where banks now enjoy ample liquidity and the cost of funding
through deposits has notably declined. Additionally, by means of the
different deposits exchanges and release plans successively implemented in
the past few months, the amount of the restructured deposits ('CEDROS') on
the banks' balance sheets has reduced to a low 15% of total deposits. In
this relatively more benign environment, the concentration of deposits
maturities in July and August (a consequence of the implementation of the
latest deposit release plan, by which a significant part of restructured
deposits were converted into 90- and 120-day CDs) is not posing additional
risks to the banks' liquidity situation, as the improved confidence in the
Argentine financial system is leading most depositors to maintain their
funds in local banks.
ANALYSTS: Carina Lopez, Buenos Aires (54) 11-4891-2118
Ursula M Wilhelm, Mexico City (52) 55-5279-2007
LAPA: President Authorizes Replacement Decree
---------------------------------------------
President Nestor Kirchner finally signed the decree that establishes the
establishment of a new state-owned airline that will replace paralyzed
carrier LAPA and absorb its 750 employees.
Intercargo, holder of a 20% stake in the new firm, was due to hold an
assembly on July 8 in order to conform the corporation, approve its
memorandum of association and name the three directors that will manage it.
The next step will be the outlining of a business plan.
The new company will be called Linea Aerea Federal Sociedad Anonima (LAFE)
and its share capital will be composed as follows: 40% in hands of the
Ministry of Economy, 40% owned by the Ministry of Planning and the other 20%
owned by the state-owned firm Intercargo.
Private analysts think the new firm will cost US$6 million, while the
government affirms it will not cost more than ARS8 million. Julio De Vido,
Minister of Planning, reminded LAFE would be privatized within a 180-day
term.
LENS EXPRESS: Submits Concurso Motion To Court
----------------------------------------------
Court No. 4 of Buenos Aires, which is under Dr. Fernando Ottolenghi,
received a motion for "Concurso Preventivo" from Lens Express S.A.,
according to Boletin Oficial. The Company stopped making debt payments
earlier this month. Dr. Carlos Anta from Secretary No. 8 assists the Court
on the matter.
CONTACT: Lens Express S.A.
4th Floor
Montevideo 140
Buenos Aires
MANTRA: Court Orders Bankruptcy
-------------------------------
Buenos Aires Court No. 23 rules that local company Mantra S.R.L. be put
under bankruptcy, according to a report by local news portal Infobae. The
report adds that Secretary No. 45 assists the Court on the matter. It did
not indicate, however, whether a receiver has been assigned to the case.
MULTICANAL: Extends Solicitation To Execute APE, Cash Tender
------------------------------------------------------------
Once again, cable TV operator Multicanal -a unit of Argentine media holding
Clarin- extended its solicitation to execute an out-of-court agreement (APE)
and cash tender offer. The new expiration date was set on July 18, 2003.
OROFRUTAL: Court Announces Bankruptcy
-------------------------------------
Buenos Aires-based company Orofrutal S.A. was declared bankrupt by the
city's Court No. 9, with the assistance of Secretary No. 17, reports
Infobae, without disclosing the reasons behind the ruling.
Creditors are advised to submit their claims for verification to the
designated receiver, Mr. Raul Jose Abella before August 25. The receiver is
expected to file the individual reports on October 6 this year. The general
report will be submitted on November 19.
CONTACT: Raul Jose Abella
Uruguay 660
Buenos Aires
PECOM ENERGIA: Gets Legal Approval To Change Name
-------------------------------------------------
Argentina oil firm Pecom Energia S.A. informed the Buenos Aires stock
exchange that it has obtained legal approval to change its name to Petrobras
Energia S.A., relates Dow Jones. The Company is now completing the process
of having its code changed on Argentina's stock exchange.
The action follows the purchase of a majority 58.6% stake in Pecom's parent,
Perez Companc, last October by Brazilian energy giant Petroleo Brasileiro
S.A. (Petrobras) for an amount of US$1.03 billion.
CONTACT: PETROBRAS ENERGIA S.A.
Maipu 1 - Piso 22 - C1084ABA
Buenos Aires, Argentina
Phone: (54-11) 4344-6000
Fax: (54-11) 4344-6315
www-informaciongeneral@petrobrasenergia.com
RODADOS: Claims Verification to Expire Soon
-------------------------------------------
Creditors of Argentine company Rodados Industriales Argentinos S.A.I.C. must
submit their claims for verification to the receiver, Ms. Sonia Vega
Pellaro, before September 22 this year.
The Company was recently declared bankrupt by Court No. 7 of Quilmes,
according to local news source, Infobae. The Court expects the receiver to
hand in the individual reports on November 3 followed by the general report
on December 16 this year.
CONTACT: Sonia Vega Pellaro
Sarmiento 873
Quilmes
SOL PETROLEO: Reaches Agreement With Petrolera Over Debt Payment
----------------------------------------------------------------
Uruguayan holding company Petrolera del Conosur reached an agreement with
Argentine refiner Sol Petroleo that would give the companies until December
to resolve a dispute over Sol Petroleo's debts to Petrolera.
Citing a Sol Petroleo source, Business News Americas reports that the two
companies got into a conflict over the scale of Sol Petroleo's debts to the
other company after the pesofication of the debt in early 2002.
In a statement to the Buenos Aires Bourse, Petrolera said it agreed to hold
off starting legal action against Sol Petroleo until December this year,
which should give the companies time to reach a resolution. Until then, Sol
Petroleo will continue to pay its debt to Petrolera in pesos.
"I don't think this will reach the stage of legal proceedings because the
companies are closely related," the source said.
Petrolera and Sol Petroleo are both subsidiaries of Uruguayan state oil
company Ancap's Argentine holding company Ancsol. Petrolera currently has a
contract to manage Sol Petroleo, but Ancap could take over the management
itself after December, the source said.
TELEARTE: Court Approves Request For "Concurso Preventivo"
----------------------------------------------------------
Court No. 16 of Buenos Aires, which is under Dr. Alfredo Kolloker Frers,
approved Telearte S.A. Empresa de radio y Television's motion for "Concurso
Preventivo." According to El Cronista Comercial, Telearte stopped making
debt payments since last month.
The court, with assistance from Mr. Jorge Yacante of Secretary No. 32,
assigned three receivers for the Company's case: Estudio Carelli-Martino,
Estudio Giacumbo-H‚rnandez or Estudio Waistein-Sasuli y Asociados.
Creditors of the Company may submit their claims to the receivers for
verification. The deadline for claims verification is December 22, 2003.
CONTACT: Estudio Carelli-Martino
12th Floor B
Esmeralda 770
Buenos Aires
Phone: (005411) 4394.3948
Estudio Giacumbo-H‚rnandez
11th Floor E
Av. Corrientes
Buenos Aires
Phone: (005411)4382.9439.
Estudio Waistein-Sasuli y Asociados
5th Floor
Per¢n 1558
Buenos Aires
Phone: (005411) 4373.0302
=============
B E R M U D A
=============
GLOBAL CROSSING: Committee Re-Affirms Support for SingTel Pact
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Global Crossing Chapter
11 proceedings reaffirmed its support for the company's reorganization plan
under which Singapore Technologies Telemedia will acquire a majority stake
in the reorganized telecom firm.
The ST Telemedia transaction was the culmination of an extensive auction
process, complex negotiations among Global Crossing, its creditor groups, ST
Telemedia and other parties, and lengthy proceedings to confirm the Chapter
11 Plan in both the U.S. and Bermuda courts. The Creditors' Committee
believes that this transaction provides the Global Crossing unsecured
creditors -- who have suffered severe losses -- with the best means to
recoup some of their losses. Under the ST Telemedia transaction, unsecured
creditors collectively will be receiving a substantial equity interest in a
reorganized Global Crossing. The Creditors' Committee remains optimistic
that the transaction will be approved on a timely basis by the Committee on
Foreign Investment in the United States and other federal regulatory
authorities.
Recently, other parties such as XO Communications and IDT Corporation have
publicly announced their interest in acquiring Global Crossing. The
Creditors' Committee has carefully reviewed these expressions of interest,
but does not believe any of them provides a greater value for creditors or
is a viable alternative to the ST Telemedia transaction. Pursuing any of
these alternatives would carry multiple execution and timing risks that
would inject substantial delay into Global Crossing's efforts to emerge from
bankruptcy. Global Crossing would be required to undertake a new auction
process, due diligence and negotiations with prospective investors,
renegotiation of a new Chapter 11 Plan among the various creditor groups,
additional confirmation proceedings in the U.S. and Bermuda courts, and new
regulatory approval processes. These steps could require several months for
completion, and carry the risk that Global Crossing could not timely
reorganize. The benefits of the ST Telemedia transaction under the confirmed
Chapter 11 Plan far outweigh these risks. The Creditors' Committee continues
to believe that the ST Telemedia transaction provides the greatest
likelihood of achieving the maximum value for the unsecured creditors of
Global Crossing and will be timely approved by the federal regulatory
authorities. (Troubled Company Reporter - July 15, 2003, Vol. 7 Issue No.
138)
GLOBAL CROSSING: Asks Court to Approve Microsoft Settlement Pact
----------------------------------------------------------------
The Global Crossing Debtors, Microsoft, and Softbank are parties to a
Subscription and Shareholders Agreement, dated September 8, 1999. Pursuant
to the Shareholders Agreement, the GX Debtors transferred portions of their
telecommunications network to a new company, Asia Global Crossing Ltd. The
GX Debtors, Microsoft, and Softbank each acquired equity ownership in AGX,
with the GX Debtors as the controlling shareholder.
According to Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, in New
York, the GX Debtors, Microsoft, and Softbank entered into a Capacity
Commitment Agreement in connection with the Shareholders Agreement, among
other reasons, as consideration for Microsoft's and Softbank's purchase from
Global Crossing of their interest in AGX and to facilitate the sale of
network capacity by the GX Debtors to Microsoft and Softbank. Pursuant to
the CCA, Microsoft and Softbank each agreed to purchase $100,000,000 in
network capacity on specified portions of the Network from the GX Debtors
under certain terms and conditions. Each of Microsoft and Softbank are
severally liable for their own commitments.
Mr. Walsh states that Microsoft made the first two purchases required by the
Microsoft Agreement and has paid a portion of the remaining amounts due. On
October 18, 2002, the GX Debtors invoiced Microsoft for amounts that were
due under the Microsoft Agreement. According to the Invoice, $76,135,000
was allegedly due from Microsoft to Global Crossing under the Microsoft
Agreement. Microsoft disputes the GX Debtors' allegations. Since October
2002, Microsoft has made certain payments under the Microsoft Agreement.
Pursuant to the Court's Order approving procedures for assumption of
contracts and unexpired leases dated October 31, 2002, the Debtors created a
database with a listing of those executory contracts and unexpired
non-residential real property leases that the Debtors intended to assume as
of the effective date of the Plan. The Debtors listed the entirety of the
CCA, along with other executory contracts with Microsoft, on the Database.
Microsoft objected to the assumption of the CCA. The Objection alleged that
the Debtors:
(i) had failed to maintain certain minimum standards for
performance availability on the Network,
(ii) were incapable of performing under the CCA, and
(iii) were incapable of providing adequate assurance of
future performance.
In addition, Microsoft asserted claims against the Debtors related to the
proposed formation of a joint venture between their one time web-hosting
subsidiary, GlobalCenter, and AGX, which was not consummated and was later
abandoned. The Debtors dispute Microsoft's allegation that it has any
claims related to the Proposed Venture.
Following extensive, arm's-length negotiations, the Debtors and Microsoft
entered into a Settlement Agreement, which amends the Microsoft Agreement,
to provide for, among other things, a reduction in the Capacity Commitment
and revised payment terms. The salient terms of the Settlement Agreement
are:
A. The Remaining Commitment is reduced to $60,581,371, to be
paid in these installments:
-- $7,500,000, 31 days after the Settlement Date;
-- $22,790,685, 31 days after the Effective Date;
-- $15,145,343, by the later of December 31, 2003 or 31
days after the Effective Date; and
-- $15,145,343, 31 days after the later of the Effective
Date or successful completion of the Performance Test.
B. The Reduced Commitment may be applied towards all capacity
and services offered by the Debtors.
C. Microsoft will receive most favored nation pricing for the
Capacity and the Services, which is the lowest price paid
to the Debtors for reasonably comparable Capacity and
Services of reasonably similar volume and reasonably
similar terms and conditions taking into account the
totality of the Reduced Commitment and the payment
schedule.
D. Microsoft will have the right to market or resell the
Services either directly or indirectly through marketing
representatives.
E. The Debtors will complete a satisfactory performance test
on 13 private line circuits under lease by Microsoft. The
Performance Test requires six consecutive months of
individual circuit availability no less than 99.995%,
which must be completed before December 31, 2003. Any
failure in the Performance Test will result in a 25%
reduction of the Reduced Commitment.
F. Microsoft fully releases and forever discharges the
Debtors from any claims related to the Proposed Venture.
G. The Debtors will assume the Amended Microsoft Agreement as
of the Effective Date. Effective Date will mean the
"Closing Date" as defined in the Purchase Agreement,
provided, however, that for the purposes of the Settlement
Agreement, the Effective Date will be deemed not to occur
unless:
a) The $237,500,000 aggregate purchase price, in
consideration of the issuance by the reorganized
Debtors of the New Common Shares and the New Preferred
Shares, as provided for in the Purchase Agreement is
paid by:
(i) Hutchison and STT, either jointly or severally,
(ii) a purchaser that is a telecommunications provider
like Hutchison or STT, to which Microsoft
consents, which consent will not be unreasonably
withheld, or
(iii) a purchaser that is not a telecommunications
provider, to which Microsoft, in its sole
discretion, consents; or
b) The occurrence of the Effective Date, as defined in a
modified or new plan of reorganization, including a
"stand-alone" plan by Global Crossing, to which
Microsoft in its sole discretion consents, provided,
that, if the new plan provides for the payment of
$237,500,000 by a purchaser that is a
telecommunications provider like Hutchison or STT,
Microsoft's consent will
not be unreasonably withheld.
Mr. Walsh contends that the Settlement is fair and equitable and falls well
within the range of reasonableness as it enables the parties to avoid the
costs of litigation relating to Microsoft's allegations that the Debtors are
unable to perform their obligations under the Microsoft Agreement or provide
adequate assurance of future performance. Given the complexity of the
factual issues relating to the parties' claims under the Microsoft Agreement
and the dollar amounts at stake, the litigation of the issues surrounding
the Microsoft Agreement could be lengthy and expensive. These undertakings
would continue to be a drain on the Debtors' monetary resources and divert
the attention of their management and legal personnel from the
reorganization efforts. (Global Crossing Bankruptcy News, Issue No. 43;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
LORAL SPACE: Chapter 11 Filing Leads to Ratings Cuts
----------------------------------------------------
Standard & Poor's Ratings Services lowered the corporate credit rating,
senior unsecured debt rating, and preferred stock rating on New York, New
York-based satellite leasing and manufacturing company Loral Space &
Communications Ltd. to 'D' from 'CCC+', 'CCC-', and 'CC', respectively. The
unsecured debt rating on the company's wholly owned subsidiary Loral Orion
Inc. is also lowered to 'D' from 'CCC+'. The rating actions follow the
company's announced filing of Chapter 11 bankruptcy protection with the U.S.
Bankruptcy Court for the Southern District of New York. At March 31, 2003,
the company had about $2.2 billion of total debt outstanding.
The bankruptcy filing will allow the company to sell six North American
satellites to Intelsat Ltd. free from encumbrances for as much as $1.1
billion in cash. The actions do not affect the ratings on Mexican satellite
service provider Satelites Mexicanos S.A. de C.V. (CCC+/Negative/-), in
which Loral has a 49% voting interest. SatMex was not part of the bankruptcy
filing and there are no cross-defaults of debt at SatMex.
Loral has been hurt by weakness in demand for telecommunications services,
along with softness in its satellite manufacturing business. These factors,
coupled with an aggressive capital structure, have resulted in an extremely
weak financial profile for the company, with debt to annualized EBITDA
totaling about 35x for the quarter ended March 31, 2003. (Troubled Company
Reporter - July 17, 2003, Vol. 7, Issue 141)
TYCO INTERNATIONAL: The Pomerantz Firm Charges Merrill Lynch
------------------------------------------------------------
A class action lawsuit has been commenced by Pomerantz Haudek Block Grossman
&Gross LLP (www.pomerantzlaw.com) against Merrill Lynch Pierce Fenner &Smith
('Merrill Lynch') and Phua K. Young ('Young'), a managing director of
Merrill Lynch, on behalf of investors who purchased the securities of Tyco
International Ltd. ('Tyco'or the 'Company') (NYSE: TYC) during the period
from September 9, 1999 through May 28, 2003, inclusive (the 'Class Period').
The lawsuit alleges that defendants engaged in an illegal scheme to defraud
Tyco investors in violation of Securities &Exchange Commission ('SEC') Rule
10b-5. According to the complaint, Young wrote and publicly issued hundreds
of research reports on Tyco representing that he was an 'independent'Merrill
Lynch analyst, when in fact, Young described himself in an internal email as
a 'LOYAL TYCO EMPLOYEE.'It is further alleged that Young regularly sent
drafts of his research reports to Tyco's Investor Relations Department for
review of his opinions and conclusions, flew on Tyco corporate jets for
business trips, accepted unlawful gifts from Tyco CEO Dennis Kozlowski, and
with respect to at least one published research report, asked Tyco Investor
Relations 'did I not sound pumped up enough?'
On May 28, 2003, the National Association of Securities Dealers ('NASD')
filed a disciplinary proceeding against Young alleging numerous violations
against him for issuing research opinions to the marketplace that he did not
personally believe in and which had no reasonable basis.
If you purchased the securities of Tyco during the Class Period, you have
until August 4, 2003 to ask the Court to appoint you as lead plaintiff for
the Class. To serve as lead plaintiff, you must meet certain legal
requirements. If you wish to review a copy of the Complaint, to discuss this
action or have any questions, please contact Andrew G. Tolan, Esq. of the
Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at
agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to
include their mailing address and telephone number.
SOURCE: Pomerantz Haudek Block Grossman &Gross LLP
Andrew G. Tolan, Esq.
Phone: 888-476-6529
Email: agtolan@pomlaw.com
===========
B R A Z I L
===========
ARACRUZ CELULOSE: Reveals Plans To Sell Up To $400M, 8-Yr. Bonds
----------------------------------------------------------------
Brazilian pulp exporter, Aracruz Celulose S.A. plans to sell up to US$400
million in bonds, according to an article from Bloomberg News, citing the
Company's Chief Financial Officer, Isac Zagury.
The bonds, with 7- to 8-year maturities, will be backed by the sales of
pulp, said the officer. In the meantime, pricing will be determined next
week, when the company completes presentations to international investors.
Aracruz Celulose is the largest pulp exporter in Latin America. The
Company's main activities are the production, distribution and export of
bleached eucalyptus, high-grade hardwood and eucalyptus pulp and other
related activities. Its products are mainly used in the manufacture of
products such as tissue and high-quality printing, writing and specialty
papers. The Company has distributors in Italy, Spain, Belgium, Holland,
Luxembourg, Scandinavia and France.
CONTACT: Aracruz Celulose SA
Cam. Barra do Riacho, s/n - Km 25
Barra do Riacho
29197-000 Aracruz - RJ
Brazil
Phone: +55 27 3270-2442
Fax: +55 27 3270-2590
Home Page: http://www.aracruz.com.br
Contact:
Carlos A. Lira Aguiar, Chairman
BRASKEM: Buys Stakes in Trikem, Polialden
-----------------------------------------
Standard & Poor's Ratings Services said Thursday that the ownership increase
in Trikem S.A. (B+/Stable/--) and in Polialden Petroqu¡mica S.A. undertaken
by Braskem S.A. (local currency: BB-/Negative/--; foreign currency:
B+/Stable/--) has no impact on the ratings or outlook assigned to either
Braskem or Trikem.
Braskem increased its controlling ownership in Trikem by acquiring 10.06% of
the company's voting shares from Nissho Iwai Corp. and 13.41% from
Mitsubishi Chemical Corp. As for Polialden, Braskem acquired the stakes held
by Nissho Iwai and Mitsubishi of 16.67% each. While Braskem will pay
approximately US$15.5 million in four years (with a down payment of US$1.6
million) to Mitsubishi, Nissho Iwai will exchange its stakes in Trikem and
Polialden for shares of Braskem. Braskem's cash outlay in this transaction,
even including the future tender offer to be extended to Trikem's minority
shareholders and a conditional payment of $8 million to Mitsubishi, should
not affect Braskem's liquidity. Standard & Poor's expects that Braskem will
continue sustaining adequate credit measures, while gradually improving them
by reducing total debt and strengthening cash flow. Braskem's total debt of
US$2.1 billion remains a key factor constraining the rating.
The current transaction improves Braskem's strategic positioning in Trikem
and Polialden, and it is in line with the integration process initiated in
2001. After the deal, Braskem will own 100% of Polialden's voting shares
(56.3% of the economic value) and 92.9% of Trikem's voting shares (51.6% of
the economic value).
ANALYST: Reginaldo Takara, Sao Paulo (55) 11-5501-8932
CESP: Meeting With Creditors To Renegotiate $520M Bonds
-------------------------------------------------------
Sao Paulo's state-controlled generator Cesp will seek to extend the maturity
of two series of bonds worth about US$520 million, reports Business News
Americas. In a statement to the Sao Paulo bourse, the Company revealed that
it has set a meeting with creditors on August 14 in London to renegotiate
the terms on the first series of bonds, totaling EUR200 million, and the
second series, totaling US$300 million.
According to the Company's adviser, Robert Helbling of US investment bank JP
Morgan Chase, Cesp is offering creditors two alternative bonds.
The first would mature in 2011, pay a 14% coupon and a 5% consent fee, said
Helbling. Including the consent fee, investors would receive US$105 of new
bonds for every US$100 of old bonds, and Cesp would amortize US$10 of the
debt in 2004 and the remaining US$95 in 2011.
The second option is for those investors, which are looking for a faster
return on their assets. Holders would receive a new series of bonds due
2008, paying a 13% coupon and a 3% consent fee, Helbling revealed. Cesp
would amortize US$10 in February 2004, US$20 in February 2006, US$30 in
February 2007, and the remaining US$43 in February 2008.
Of the investors contacted so far, there has been a 50:50 split on
preferences between the first and second options, he said.
Cesp has already rolled over until May 2005 US$150mn of debts for which
there was a put option in May this year, Helbling said. That rollover is
subject to Cesp completing this current renegotiation, he added. If this
cannot be completed then the whole debt is accelerated and must be repaid in
January 2004.
CONTACT: Companhia Energetica De Sao Paulo (CESP)
Rua da ConsolaO o, 1.875
CEP 01301 -100 S o Paulo, Brazil
Phone: +55-11-234-6322
Fax: +55-11-287-0871
Home Page: http://www.CESP.com.br/
Contact:
Mauro G. Jardim Arce, Chairman
Ruy M. Altenfelder Silva, Vice Chairman
Vicente Kazuhiro Okazaki, Finance Director
GERDAU: Bear Stearns Lowers Recommendation
------------------------------------------
Bear Stearns lowered its recommendation on Brazilian long steelmaker Gerdau
to peer perform from outperform, reports Business News Americas, citing the
Company's deteriorating disclosure standards. The bank also changed its
end-2003 price target for Gerdau to US$13.5/ADR.
Bear Stearns analysts Daniel C. Altman and Roberto Ellinhaus said, "The
reporting standards of Gerdau are lagging those of its Brazilian steel/iron
peers. We think this is a key stumbling block to attracting new global
investors to the stock."
They added that despite the company's solid upside, it is reportedly
unlikely to outperform Brazilian peers. The Company's rating is currently
pegged at market weight.
SABESP: Announces New Economic, Financial Officer
-------------------------------------------------
In compliance with CVM Instruction no. 358 of January 3, 2002, Sabesp - Cia.
de Saneamento Basico do Estado de Sao Paulo (NYSE: SBS) (Bovespa: SBSP3),
the largest water and sewage utility company in the Americas and the third
largest in the world (in terms of number of customers), hereby informs the
BOVESPA and NYSE stock markets, financial and capital markets and investors
in general that its Board of Directors, in a meeting held on Thursday, has
elected Mr. Rui de Britto Alvares Affonso as the Economic and Financial
Officer of the Company, which includes responsibility for all Investor
Relations activities.
CONTACT: Helmut Bossert
Phone: (5511) 3388-38664
Email: hbossert@sabesp.com.br
Marisa Guimaraes
Phone: (5511) 3388-9135
Email: marisag@sabesp.com.br
SCOR: Fitch Comments on Life Reinsurance Spin Off
-------------------------------------------------
Fitch Ratings, the international rating agency, views SCOR's announced plan
to spin off its life reinsurance operations as a defining strategic step for
its future. The reinsurer recently restructured its operations in Latin
America, opting for Brazil as its corporate headquarters, Chile as its life
insurance base, and Colombia for property and casualty. SCOR also announced
plans to transfer its worldwide life reinsurance business and corresponding
assets to a separate entity, as part of a wider ongoing reorganization
program.
Fitch commented that, should the plan be executed, it is likely to influence
the agency's view on the group's business position and diversification as
well as projected profitability and capital adequacy. Which direction the
rating assessment will take can only be determined once further details of
the restructuring are known.
As part of its plans, SCOR is considering opening up the capital of the new
entity to outside partners. Fitch will carefully monitor the evolution of
the proposed restructuring, in close contact with management, and take
appropriate rating actions when the final details of the operation are
announced. The restructuring process is expected to conclude before the end
of 2003.
Although it is too early to judge with certainty the impact of the
restructuring exercise, the proposed operation may change SCOR's business
position and ability to generate relatively uncorrelated earnings from
different business lines. Life reinsurance represents a material proportion
of the company's business, and in 2002 accounted for around 30% of its gross
premium written. At the same time, possible capital injection from third
parties could lead to improved capital adequacy depending on the terms and
conditions of the transaction, especially the sale price and the percentage
of interest to be disposed of. However, the projected restructuring involves
some execution risk which could affect the company's life reinsurance
operation.
SCOR is France's largest reinsurer and one of the industry's world leaders
with a presence in over 150 countries.
CONTACT: Marc-Philippe Juilliard
Paris
Phone: +33(0)1 4429 9137
Chris Waterman
London
Phone: +44(0)20 7417 6328
Media Relations:
Campbell McIlroy
London
Phone: +44 20 7417 4327
=========
C H I L E
=========
AES GENER: Modifies Bylaws to Accommodate Current Financing
-----------------------------------------------------------
Chilean energy holding AES Gener has modified its bylaws, in an attempt to
meet debt maturities totaling US$700 million between 2005 and 2006. Felipe
Ceron, general manager of the holding, said AES Gener might possibly sale
some non-profitable assets. AES Gener is 98.65% owned by US-based power
company AES Corp.
CONTACT: AES GENER S.A.
Mariano Sanchez Fontecilla 310 Piso 3
Santiago de Chile
Phone: (56-2) 6868900
Fax: (56-2) 6868991
Home Page: www.gener.com
Contact:
Robert Morgan, Chief Executive
Laurence Golborne Riveros, Chief Financial Officer
TELEFONICA CTC: LD Unit Agrees To Sell Terra Stake to Telefonica
----------------------------------------------------------------
Chilean telco Telefonica CTC Chile informed the securities regulator SVS
that its long distance division Telefonica Mundo, agreed to sell its 1.1%
stake in Spain-based Terra Lycos to Telefonica, relates Business News
Americas.
In May, Telefonica, which already has 38.7% of Terra, offered to pay
minority shareholders EUR5.25 (US$5.86) for each of their shares in order to
take full control of Terra. Therefore, Telefonica Mundo, whose stake
consists of 2.9 million Terra shares, stands to receive about US$17 million.
According to the report, Telefonica Mundo obtained its 1.1% stake in Terra
in 1999 in exchange for 100% of its Internet unit Telefonica.Net. At that
time the stake was worth EUR39 million, meaning CTC will receive only 40% of
its original outlay.
===============
C O L O M B I A
===============
ECOPETROL: S&P Revises Outlook to Stable
----------------------------------------
Standard & Poor's Ratings Services said Wednesday that it revised its rating
outlook on Empresa Colombiana de Petroleos (Ecopetrol) to stable from
negative.
"The outlook revision follows Standard & Poor's decision to revise the
outlook on its 'BBB' local and 'BB' foreign currency sovereign ratings on
the Republic of Colombia to stable from negative," said credit analyst Jose
Coballasi. The outlook change reflects the sovereign's improved fiscal
performance, higher growth prospects, and better security in the country.
The 'BB' long-term foreign currency corporate credit rating on Ecopetrol is
affirmed. The company had $347 million in debt as of Dec. 31, 2002.
The rating on Ecopetrol reflects the strong implicit support of the
government of the Republic of Colombia, and the importance of the company to
public sector revenues and to the economy of the republic. These strengths
are offset by the depletion of the country's oil reserves and the difficult
security environment in Colombia.
The decision of the government of Colombia to split Ecopetrol's activities
into two separate entities has no immediate impact on the ratings or
outlook. Although the decree implies a number of changes for Ecopetrol, the
most important being that the company will no longer manage the country's
oil reserves, the government will remain as the controlling stockholder of
Ecopetrol with a 95% interest, which is a key factor in Standard & Poor's
assessment of Ecopetrol's credit quality. Furthermore, the government
declared that Ecopetrol's current operations and association contracts
signed through 2003 are not to be affected by the decree.
Ecopetrol is Colombia's largest company. In 2002, the company's revenues
were US$3.4 billion and its total crude production was 578,800 barrels/day
(bpd). As of Dec. 31, 2002, the company's crude oil reserves stood at 1,632
million boe.
Although Colombia does not explicitly guarantee Ecopetrol's debt, the
company's close ties to the sovereign are based upon its government
ownership and the oil sector's strategic importance to the economy.
Ecopetrol is the largest contributor to the public sector coffers,
accounting for approximately 10% of total public sector revenue. The company
plays an important role in Colombia's economy, as it is the largest
recipient of foreign-exchange resources, from both trade and investment.
ANALYSTS: Jose Coballasi, Mexico City (52) 55-5279-2014
Eduardo Uribe, Mexico City (52) 55-5279-2008
IFI: Fitch Withdraws Ratings
----------------------------
Fitch Ratings affirms the long-term rating of 'BB' (Negative Rating Outlook)
and support rating of '4T' assigned to Colombia's Instituto de Fomento
Industrial (IFI) and simultaneously withdraws the ratings. The ratings
withdrawal was at the request of the issuer and Fitch will no longer provide
analytical services or coverage of this issuer. On June 1, 2003, the cession
of specific assets and liabilities from IFI to government development bank
Banco de Comercio Exterior de Colombia (Bancoldex) was finalized.
IFI ceded COP859 billion in assets, consisting of wholesale loans granted to
financial intermediaries for on-lending to micro, small and medium-size
companies (mipymes) (69% of the total) and fixed income securities (31%),
which were transferred at market prices. Bancoldex received liabilities of
COP614 billion, consisting of locally issued bonds and CDs. In addition,
roughly 20 employees from IFI's credit origination area with expertise in
mipymes lending were incorporated into Bancoldex to strengthen its lending
in these sectors.
IFI continues to hold COP400 billion in low quality assets including
impaired loans and loans classified as restructured under the Colombian
equivalent of U.S. Chapter 11. These assets will continue to be managed by
IFI until the government passes a decree allowing it to sell the assets to
other financial intermediaries and/or to transfer them to the government's
collection agency Cisa. A two-year time limit has been set for the full
liquidation of the entity.
CONTACT: Ricardo Chaves +1-212-908-0606, New York
Linda Hammel +1-212-908-0303, New York
Peter Shaw +1-212-908-0553, New York
Glaucia Calp +57-1-347-4573, Bogota
MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York
OLEODUCTO CENTRAL: S&P Ups Tranche A Debt Rating to Stable
----------------------------------------------------------
Standard & Poor's Ratings Services said Wednesday that it revised its rating
outlook on Oleoducto Central S.A.'s (Ocensa) tranche A debt to stable from
negative.
"The outlook revision follows Standard & Poor's decision to revise the
outlook on its 'BB' long-term foreign currency corporate credit rating of
Empresa Colombiana de Petroleos (Ecopetrol), the Republic of Colombia's
national oil company, to stable from negative," said Standard & Poor's
credit analyst Jose Coballasi.
The 'BB' long-term foreign currency rating on Ocensa's tranche A debt is
affirmed. Ocensa had $833 million in debt as of Dec. 31, 2002.
The ratings on Ocensa mirror those of Ecopetrol and reflect Ocensa's ability
to service its debt that is derived mainly from Ecopetrol's contractual
payments to Ocensa. The ratings on Ocensa's tranche A debt take into account
Ocensa's strategic importance to Ecopetrol, who holds a 35% stake in
Ocensa's capital stock. These strengths are offset in part by a potential
increase in the number of guerilla attacks along the pipeline, which could
lead to delays in crude shipments, and weaker-than-originally expected
production at the Cusiana and Cupiaga oil fields.
Ocensa is a capital stock company formed to acquire, develop, own, and
operate the 840-kilometer Oleoducto Central pipeline, which transports crude
from the Cupiagua and Cusiana oil fields, in Colombia's Llanos Basin, to the
Port of Covenas.
Ocensa's debt is divided into four tranches, each of which is supported
almost exclusively by contractual payments (including tariffs, advance
tariff payments, transportation notes, and tariff advances) that can be
allocated to an initial shipper and deposited in a designated offshore
account. Ecopetrol is the initial shipper in the case of Ocensa's tranche A
debt.
The initial shipper tariff covers the full amount of Ocensa's costs and is
established by OCENSA annually and adjusted monthly. The tariff incorporates
Ocensa's operating and maintenance costs, scheduled payments of principal
and interest on senior debt of the related senior debt tranche, and a fixed
return on equity to each of the pipeline's owners. If tariff payments are
insufficient to cover interest payments in any period, the initial shippers
are obligated to advance the shortfall to OCENSA through the payment of
advanced tariffs or the purchase of transportation notes. If an initial
shipper fails to make such payments as they come due, OCENSA is authorized
to sell the Cusiana petroleum (other than that from Royalty Oil) delivered
to it by that initial shipper and to retain the proceeds to pay the amount
of any unpaid tariffs. The terms of the borrowing agreements also compel
Ecopetrol unconditionally to make minimum tariff payments to OCENSA for 180
days following the declaration of "force majeure" or any other excusable
event, providing additional flexibility for OCENSA to weather service
interruptions.
ANALYSTS: Jose Coballasi, Mexico City (52) 55-5279-2014
Eduardo Uribe, Mexico City (52) 55-5279-2008
===================
C O S T A R I C A
===================
ICE: New $60M Bond Offering Approved
------------------------------------
Costa Rica's state electric power and telecoms monopoly ICE cleared hurdles
for its planned US$600-million bond issue.
According to Business News Americas, the central bank gave the Company
authority to proceed with the bond issue, which represents the second
tranche of a US$100-million overall debt plan. The central bank approved the
first US$40 million tranche in late May.
The bond issues follow a 20-day strike last month, when workers walked out
in a dispute over funding and to what extent the government would allow ICE
to go into debt. Employees had claimed the government had not kept its
February 16 promise to allow a US$100 million bond issue.
ICE: Comptroller Ditches ECI Bid After Rivals Lodge Legal Action
----------------------------------------------------------------
ICE failed to gain the comptroller's approval for its decision to award
Israel's ECI Telecom an US$18-million contract for the supply of the DSL
lines, reports Business News Americas.
The comptroller attributed its decision to the legal challenges filed by
rival bidders Lucent and Samsung. As a result, ICE must now put forward one
of their bids for the comptroller's approval.
According to ICE telecoms head Alvaro Retana, the Company now expects its
Advanced Internet DSL network to become operational during 1H04. However,
installation of routers required for the network has already begun and ICE
has about 200 switching centers ready for the lines to be connected.
=============
J A M A I C A
=============
AIR JAMAICA: To Exit Port Antonio
---------------------------------
Following an announcement earlier this month that it is pulling its flights
to Negril by the end of July, Air Jamaica Express made another announcement
that it will cease flights to Port Antonio in the next two weeks, reports
RJRNews.com
When it revealed plans to exit Negril, the airline said it made the decision
due to a decline in revenues on the route following last year's opening of
the new highway from Negril to Montego Bay. Air Jamaica Express said it
could no longer absorb the losses being incurred in order to maintain the
route.
The Air Jamaica statement said the overall travel industry continues to face
major difficulties despite the implementation of numerous initiatives aimed
at encouraging air travel.
CONTACT: Air Jamaica
4 St. Lucia Avenue
Kingston 5,
Jamaica
Phone: 876/922-3460
Fax: 929-5643
E-mail: webinfo@airjamaica.com
Contact:
Gordon Stewart, Chairman
Allen Chastanet, Vice President for Marketing and Sales
===========
M E X I C O
===========
AHMSA: $1M Furnace Maintenance Shutdown Complete
------------------------------------------------
Blast furnace No. 5 at troubled Mexican steelmaker Ahmsa is back in
operation following a maintenance shutdown that lasted for a week, reports
local newspaper El Norte.
About US$1 million, which was taken from the company's own coffers, was
spent on the recently completed procedure, said the report. The furnace was
reported fitted with new refractive tiles and a new stack is now
operational.
Monterrey-based Ahmsa expects to maintain last year's 3 million ton average
annual production.
Recently, the company announced that it will delay the publication of its
annual report and best corporate practices code.
The Company, which is controlled by Mexican industrial holding
GAN (Grupo Acereros del Norte), has been in a form of bankruptcy
protection for the last four years.
CONTACT: AHMSA
Prolongacion B. Juarez s/n,
Monclova , Coahuila 25770
Mexico
http://www.AHMSA.com
Phone: +52 86 33 81 72
Fax: +52 86 33 65 66
Contacts:
Alonso Ancira Elizondo, CEO, Vice Chairman, Pres/CEO
Jorge Ancira Elizondo, Chief Financial Officer
Manuel Ancira Elizondo, Chief Operating Officer
CFE: Suspends El Paso Power Purchase Contract
---------------------------------------------
Regional electric utility, El Paso Electric Company said that Mexico's state
power company CFE has suspended power purchases from El Paso. The suspension
was caused by a decline in power demands in the country, brought about by
mild weather conditions and mechanical problems with some transformers.
CFE has a three-month contract to buy up to 100MW of non-firm power from El
Paso, said Business News Americas. Non-firm power is power that is not
guaranteed to be continuously available, and is bought or sold as needed.
El Paso provides generation, transmission and distribution service to
customers in Texas and southern New Mexico.
SATMEX: S&P's Comments On Parent's Bankruptcy Filing
----------------------------------------------------
Standard & Poor's Ratings Services said Wednesday that the announcement by
Mexican satellite services provider Satelites Mexicanos S.A. de C.V.'s
(SatMex, CCC+/Negative/--) parent company Loral Space & Communications Ltd.,
that it had filed for Chapter 11 bankruptcy protection, has no impact on the
rating or outlook of SatMex. Although Loral has a 50% economic interest, and
a 49% voting interest in SatMex, the latter was not part of the bankruptcy
filing and there are no cross-defaults of debt at SatMex. Standard & Poor's
is still concerned with SatMex's financial profile due to its high debt
levels coupled with lower revenues and cash flows, and tight liquidity.
However, the company is soon expected to obtain loans from Eximbank and
Coface, which would alleviate the liquidity pressure related to its
floating-rate notes, and is working on restructuring alternatives for the
refinancing of its high-yield notes.
ANALYST: Patricia Calvo, Mexico City (52) 55-5279-2073
SATMEX: Loral Bankruptcy Won't Affect Company
---------------------------------------------
Satmex said that the entry of Loral Space Communications into Chapter 11
bankruptcy protection will have no effect on Satmex, as there are no
juridical connection between the two companies. Loral is the company that
designed the Satmex VI satellite, which is due for launching later this
year.
Satmex vice president of operations and corporate communications Mr. Arturo
Gonzalez Arquieta relates that Satmex has received a restructuring guarantee
from Eximbank and its French equivalent Coface, providing flexibility on the
part of Satmex's other creditors, despite its immediate financial
commitments being onerous. Mr. Arquieta also expressed confidence in the
company's future, with the launching of the new satellite and the
government's plan to connect the schools in 10,000 small communities by
satellite.
However, a report by South American Business Information indicates that
analysts think Satmex is facing a turbulence that is likely to last for
several years, judging from its financial obligations coming due next year.
=================
V E N E Z U E L A
=================
PDVSA: Explosive Device Set Off Behind Chuao Building
-----------------------------------------------------
Considerable material damage and one hurt passerby were the toll taken by an
explosive device which went off this Wednesday morning at approximately
1:30am behind the PDVSA building at Chuao, in eastern Caracas. The wounded
passerby presented acute hearing problems.
According to the report released by the corporate Loss Prevention and
Control management unit, the explosion in question took place in the
environs of the parking lot's access-control hut, located close by the
south-eastern end of the building. The resultant shock wave damaged windows,
emergency doors and beams up to the 13th floor, as well as the building's
rear fa‡ade and basement-access ramps.
Units of police-intelligence DISIP's Anti-Explosives Division, the CIPC
criminal investigations organization, the Federal District fire-brigade and
the Chacao police visited the scene. It transpired that a currently
unidentified taxi driver had been taken to the Domingo Luciani hospital
suffering from acute hearing problems, presumably caused by the explosion.
Federal District firemen are currently in the building for the purpose of
undertaking an exhaustive evaluation of the structural damage caused and
clearing the damaged windows. Because of safety measures, occupancy of the
building will be reduced to the minimum personnel needed. The security of
the internal installations remains the responsibility of the National Guard,
while the Chacao police have undertaken the custody of the outside of the
building.
According to Loss Prevention and Control's report, the police experts on the
scene are of the opinion that the explosive used may have been of the C-4
Cocktail type.
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter Latin American is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc.,
Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Oona G.
Oyangoren, Editors.
Copyright 2003. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or publication
in any form (including e-mail forwarding, electronic re-mailing and
photocopying) is strictly prohibited without prior written permission of the
publishers.
Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.
The TCR Latin America subscription rate is $575 per half-year, delivered via
e-mail. Additional e-mail subscriptions for members of the same firm for
the term of the initial subscription or balance thereof are $25 each. For
subscription information, contact Christopher Beard at 240/629-3300.
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