/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030722.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, July 22, 2003, Vol. 4, Issue 143 Headlines A R G E N T I N A AUTOPISTAS DEL SOL: BBVA Seeks Bankruptcy Declaration AUTOPISTAS DEL SOL: To Analyze Capital Increase August 8 BANCO NACION: Takes Steps To Recoup $1.34B In Bad Debts BERETTA HERMANOS: Seeks Court Permission To Reorganize EPI: Court Declares Bankruptcy FINDING: Bankruptcy Process Official GRUTTI: Creditors Called To Verify Claims INTERBAIRES: London Supply Acquires Majority Stake LABORATORIO OMEGA: Bankruptcy Proceeds With Claims Verification LAS CANITAS: Court Announces Bankruptcy LOMA NEGRA: Initiates Debt Restructuring Offer MUSIMUNDO: Pegasus Agrees To Take Control SYBYSA: Court Orders Bankruptcy VINCULOS: Court Approves Concurso Request B E R M U D A GLOBAL CROSSING: Committee Hires Greenberg as Special Counsel LORAL SPACE: Gets Court Nod to Honor $15 Million Vendor Claims TYCO INTERNATIONAL: Unit's Two Top Executives Quit Posts B R A Z I L EMBRATEL: Ceara Federal Court Authorizes Additional Rates Hike LIGHT SERVICOS: 5 Firms Get Into Race For Restructuring Adviser C H I L E AES GENER: Fitch Affirms 'B+' Rating; Revises Outlook to Stable BELLSOUTH CHILE: Provides SMS Service For Fixed-Line Phones ENDESA CHILE: Fitch Issues Proposed Issuance Credit Analysis ENDESA CHILE: Places Three Times US$200M Expected Bond Issue TELEFONICA CTC: Dividend Payment OK for Cashflow, S&P Says C O L O M B I A BELLSOUTH COLOMBIA: Regulator Requests Comcel Interconnection EMCALI: Standard & Poor's Withdraws Ratings D O M I N I C A N R E P U B L I C * DR-IMF Pact Agreement Postponed E C U A D O R ECUADORIAN BANKS: AGD To Re-Set Debt Auction Dates PACIFICTEL: President Gutierrez Seeks Board Resignation PETROECUADOR: Lowers Yearly Production Target M E X I C O GRUPO IUSACELL: Announces Fintech Buyout Offer ROHN INDUSTRIES: To Be Delisted From Nasdaq SmallCap Market P A R A G U A Y * Paraguayan Government Admits Debt Payments Will Be Missed P A N A M A CSS: Privatization Not An Option To Remedy Ailing Finances T R I N I D A D & T O B A G O CARONI: To Start Paying VSEP Settlement Next Month U R U G U A Y ANCAP: Opposition Leader Backs JV Law V E N E Z U E L A CITGO: Energy Minister Bullish on New Opportunities PDVSA: Seeks To Increase Production Capacity to 6mb/day by 2010 - - - - - - - - - - ================= A R G E N T I N A ================= AUTOPISTAS DEL SOL: BBVA Seeks Bankruptcy Declaration ----------------------------------------------------- Spanish bank BBVA has filed a claim against toll concessionaire Autopistas del Sol (Ausol), asking the court to declare the Company officially bankrupt due to an unpaid US$5.2 million loan granted back in 1996. Now Ausol has to work things out with Spanish insurance firm Cesce, which it hired to cover political and exchange risks. The crisis that hit Argentina in 2001 led to the Company's default status. BBVA sent a letter to Ausol in April 2003, demanding payment of the last three semi-annual installments and threatening to take legal action. Ausol answered the demand claiming the settlement of these installments was Cesce's responsibility. Finally, BBVA filed the claim before commercial court 17, secretariat 33, advised by law firm Gimenez Hutton. Ausol did not include this debt in the text of its out-of-court agreement (APE), a fact that upset BBVA and led to the "involuntary" bankruptcy filing. "We are dealing with Cesce and working towards a solution," said Guillermo Diaz, from Ausol's financial department. According to Mr. Diaz, the insurance firm has already paid BBVA part of the debt. Ausol is about to close the first stage of a program destined to restructure its US$490 million debt. July 23 is the last day to accept the terms of the APE offer. So far, creditors representing US$ 334 million principal amount of debt (68% of the total) have expressed their acceptance to the proposal. AUTOPISTAS DEL SOL: To Analyze Capital Increase August 8 -------------------------------------------------------- Toll concessionaire Autopistas del Sol (Ausol), controlled by Spanish holding Aurea, will evaluate a possible capital increase during its upcoming shareholder's meeting that will take place on August 8. The proposal will be analyzed taking into account the current US$500 million formal restructuring proceeding being carried out by the company. BANCO NACION: Takes Steps To Recoup $1.34B In Bad Debts ------------------------------------------------------- Banco de la Nacion, Argentina's largest bank both in terms of assets and deposits, will initiate legal proceedings against a total of 876 clients, whose debts exceed ARS400,000, reports local online news agency Empresasnews. The bank will deal with debtors on a case-by-case basis and will only proceed with a debt-restructuring program in cases where the debtor shows the will and financial capability to repay their individual debts. The move is part of Banco Nacion's campaign to recover ARS3.8 billion (US$1.34bn) in bad debts. The bank will use recovered funds to help finance its new credit lines, totaling ARS500 million. According to Rafael Ber, managing director of capital market firm Argentine Research, the move to recover the debts is important because the BRL3.8 billion in debts represent some 30% of the bank's total loan portfolio. CONTACT: Banco de la Nacion Argentina Bartolome Mitre, 326 1036 Buenos Aires, Argentina Phone: +54-11-4347-6000 Fax: +54-11-4347-8078 Home Page: http://www.bna.com.ar/ Contacts: Enrique Olivera, President Adolfo Martin Prudencio Canitrot, Deputy VP BERETTA HERMANOS: Seeks Court Permission To Reorganize ------------------------------------------------------ Argentine company Beretta Hermanos S.R.L. filed for "Concurso Preventivo" at the Civil and Commercial Tribunal of San Luis. If the motion is approved, the Company may then start its reorganization process. Infobae reports that the court assigned Ms. Maria del Rosario Pavon as receiver for the process. Creditors have until August 22 to have their claims verified. CONTACT: Beretta Hermanos S.R.L. Mariscal Sucre 1031 Buenos Aires Maria del Rosario Pavon Florida 441 San Luis EPI: Court Declares Bankruptcy ------------------------------ Court No. 4 of Buenos Aires rules that Establecimientos Productores Integrados S.A. (E.P.I.) be put under bankruptcy process, reports local news source Infobae. The report adds that Secretary No. 8 aids the Court in the process. Mr. Carlos Alberto Vicente is assigned receiver for the process. Creditors are advised to have their claims verified by August 18 this year. CONTACT: Mr. Carlos Alberto Vicente Avenida Corrientes 2166 Buenos Aires FINDING: Bankruptcy Process Official ------------------------------------ A ruling from Court No. 10 of Buenos Aires puts local company Finding S.R.L. under bankruptcy. A report from Infobae relates that Secretary No. 19 assists the court on the matter. The designated receiver for the case is Mr. Eduardo Vasini, said the report. He will verify claims until October 6 this year, giving him enough time to prepare the individual reports. CONTACT: Finding S.R.L. Avenida Cordoba 873 Buenos Aires Eduardo Vasini Avenida Rivadavia 4783 Buenos Aires GRUTTI: Creditors Called To Verify Claims ----------------------------------------- Creditors of Buenos Aires-based company Grutti S.A., which was recently declared bankrupt, are hereby informed that the deadline for verification of claims is August 28 this year. Credit claims must be submitted to the receiver, Mr. Oscar Luis Serventich. Court No. 3 of Buenos Aires, which handles the case, ordered that the individual reports be submitted by October 9, followed by the general report on November 20 this year. CONTACT: Oscar Luis Serventich Piedras 1319 Buenos Aires INTERBAIRES: London Supply Acquires Majority Stake -------------------------------------------------- London Supply, a firm that administrates several airports in Argentina and Uruguay, has acquired a majority stake in the firm Interbaires - concessionaire of the main duty free shops in Argentina- from Deutsche Bank. Even though the amount and details of the operation remain undisclosed, it is known that with the sale of Interbaires, Deutsche Bank wanted to recover part of the US$40 million the former owed it. As a result of this debt, the bank took control of the company, previously owned by The Exxel Group. London Supply has already been managing Interbaires, in which it had a 12% stake. The Deutsche Bank had 68% of the shares and the other 20% belongs to the Argentine State. LABORATORIO OMEGA: Bankruptcy Proceeds With Claims Verification --------------------------------------------------------------- The deadline for the verification of credit claims for creditors of Buenos Aires-based Laboratorio Omega S.A. is September 15 this year, reports local news source Infobae. The Company, which was recently declared bankrupt by the city's Court No. 26, is now in the hands of the receiver, Ms. Nelida Cunarro. The receiver will file the individual reports on October 27, followed by the general report on December 9. CONTACT: Laboratorio Omega S.A. Guemes 4227 Buenos Aires Nelida Cu¤arro Paraguay 1269 Buenos Aires LAS CANITAS: Court Announces Bankruptcy --------------------------------------- Court No. 10 of Buenos Aires announced the bankruptcy of Las Canitas S.A., and assigned Mr. Jorge Jalfin as receiver for the case. According to local news source Infobae, the deadline for claims verification is September 10 this year. Secretary No. 19 assists the court on the matter. CONTACT: Las Canitas S.A. Baes 207 Buenos Aires Jorge Jalfin Sarmiento 1452 Buenos Aires LOMA NEGRA: Initiates Debt Restructuring Offer ---------------------------------------------- Argentine cement company Loma Negra has officially launched a proposal to restructure US$400 million in debts. Back in April, the firm announced it had agreed on the basic aspects of the proposal with a committee of creditors composed by Hypo- Vereinsbank, JP Morgan, Citibank, BankBoston and Banco Rio, which represent 65% of the debt. Creditors will have until August 1 to accept the proposal, which involves an exchange of the current notes for new ones with longer terms. MUSIMUNDO: Pegasus Agrees To Take Control ----------------------------------------- After five months of negotiations, investment holding Pegasus Capital agreed on the acquisition of Argentine chain of record stores Musimundo. Although Pegasus has refused to make any comments, its main aim would be to balance Musimundo's accounts and then initiate an expansion plan. The firm is carrying out a formal restructuring proceeding. A few months ago, it subscribed an accord with its creditors that involved a 60% cut in its debt, which currently amounts to some Ps. 100 million (US$ 35.71 million). Musimundo has 57 outlets and holds a 60% stake in the sale of records. It is currently managed by a pool of banks, led by Citibank. Musimundo's former owner, The Exxel Group, had some overdue debts with these banks, situation that led to the transfer of the Company. Pegasus was founded by a group of entrepreneurs headed by Mario Quintana and Dirk Donath, former executives of the drugstore chain Farmacity. At first, Pegasus planned to acquire Musimundo partnered with the holding Ilhsa, owner of the book and CD retailer Yenny-El Ateneo. However, Ilhsa decided to withdraw its offer and Pegasus decided to continue on its own. SYBYSA: Court Orders Bankruptcy ------------------------------- Sybysa S.A. was put under bankruptcy by Court No. 25 of Buenos Aires, according to a report by Infobae. The Court is assisted by Secretary no. 49 on the matter, the report adds. The designated receiver is Mr. Luis Maria Escobar, to whom creditors must submit their claims for verification before September 4 this year. The deadline for the individual reports is October 17. The general report will be filed on November 28. CONTACT: Luis Maria Escobar Viamonte 1646 Buenos Aires VINCULOS: Court Approves Concurso Request ----------------------------------------- Argentine company Vinculos Internacionales S.A.C.I.F. is now under "Concurso Preventivo", as ruled by the Civil and Commercial Tribunal of San Luis, according to Infobae. Ms. Maria del Rosario Pavon is assigned as receiver, to whom creditors must submit their claims for verification before August 22 this year. The case is handled by Court No. 3 of San Luis. CONTACT: Vinculos Internacionales S.A.C.I.F. San Martin 482 San Luis Maria del Rosario Pavon Florida 441 San Luis ============= B E R M U D A ============= GLOBAL CROSSING: Committee Hires Greenberg as Special Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of the Global Crossing Debtors seeks the Court's authority to retain Greenberg Traurig, LLP as special conflicts counsel, nunc pro tunc to June 2, 2003. Greenberg will review and analyze alternative bids for the GX Debtors' stock and assets made by XO Communications, Inc. or its affiliates and present to the Court the Committee's view regarding these bids. Committee Chairman Joel L. Klein reminds the Court that on May 30, 2003, XO Communications, Inc. proposed a bid to purchase the GX Debtors' assets. By e-mail communication that day, the counsel to the Committee, Brown Rudnick Berlack Israels LLP, informed the Committee of the Firm's potential conflict of interest with respect to the Proposed XO Bid, and called an emergency conference call meeting of the Committee on June 2, 2003 to select a special conflicts counsel. At the June 2 meeting, Mr. Klein reports that the Committee selected Greenberg Traurig as special conflicts counsel to review and analyze the Proposed XO Bid and other possible bids that might be forthcoming from XO Communications, Inc. or its affiliates to purchase the GX Debtors' stock and assets. The need to select special conflicts counsel on an expedited basis arose from the impending hearing on the GX Debtors' request to amend the Chapter 11 Plan of Reorganization to confirm Singapore Technologies Telemedia Pte Ltd. as the sole Investor under the Plan. Accordingly, the Committee sought an expedited review of the Proposed XO Bid to respond to the Plan Amendment Request. The Committee and its professionals have continued to review the Proposed XO Bid and might be required to review other bids which might be forthcoming from XO before the ST Telemedia purchase receives regulatory approval and closes. Although the Committee has not yet received it, XO is reported in the press to have made a modified bid. The Committee requires the continuing assistance of a special conflicts counsel to review the XO Bids. Mr. Klein believes that Greenberg Traurig is well qualified to represent the Committee in these cases with respect to the XO Bids in a cost-efficient and timely manner. Greenberg Traurig has been involved in these cases since March 2002, when it began its representation of the Subcommittee, and has participated extensively in the Committee's deliberations in these cases and in the structuring of the Chapter 11 plan. The Committee selected Greenberg Traurig based on this past experience in these cases, due to the need to conduct an immediate review of the Proposed XO Bid and respond adequately to the pending Plan Amendment Request. Greenberg Traurig is expected to: A. assist the Committee with respect to the review, investigation and analysis of the XO Bids; B. provide the Committee with legal advice with respect to its rights, duties and powers in these cases with respect to the XO Bids; C. prepare reports, pleadings, motions, applications, objections and other papers as may be necessary in furtherance of the Committee's position with respect to the XO Bids; D. consult, discuss and negotiate with the Debtors, their counsel, the accountants and financial advisors for the Debtors, the Committee, its lead counsel, other professionals retained in these cases, the United States Trustee, and XO and their counsel, accountants and financial advisors, arising from or related to the XO Bids; and E. represent the Committee in hearings and other judicial proceedings as necessary in furtherance of the Committee's position with respect to the XO Bids. Greenberg Traurig has previously conducted an extensive conflicts check in connection with its retention as counsel to the Subcommittee. Greenberg Traurig will be compensated in accordance with the same terms and conditions of its retention by the Subcommittee, and in accordance with all orders of this Court applicable to the compensation of Committee professionals. (Global Crossing Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900) LORAL SPACE: Gets Court Nod to Honor $15 Million Vendor Claims -------------------------------------------------------------- Loral Space & Communications Ltd., and its debtor-affiliates sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of New York to pay the pre-petition claims of certain critical vendors. The Debtors report that in connection with the operation of their fixed satellite services and satellite design and manufacturing businesses, certain specialty and other vendors supply essential services and equipment. The Debtors' ability to continue their operations will largely depend upon the continued access to these Critical Vendors. These critical services include maintenance, construction and security services related to ensuring the reliability of their crucial satellite communications equipment and network software. The Debtors' fixed satellite services business also rely on other Critical Vendors. The custom tailored networks used to access satellite capacity require specialized equipment that is available from only a handful of companies worldwide. "At this precarious stage in the Debtors' business operations, an interruption in the provision of services, equipment and other goods by the Critical Vendors will have a severely prejudicial effect on the Debtors' efforts to rehabilitate and reorganize," Loral Space tells the Court. "The services and supplies provided by the Critical Vendors must continue unabated for the duration of these chapter 11 cases if substantial harm and loss of enterprise value is to be avoided. " Additionally, because many of the Critical Vendors are integrally involved in the Debtors' billing and collection efforts, the cessation of the services provided by such Critical Vendors would have an immediate negative impact on the Debtors' ability to generate revenue which would irreparably harm its operations and severely impede its prospects for successful rehabilitation. In the case of the Critical Vendors that provide specialized satellite accessing equipment, an inability to obtain such equipment would delay or perhaps even prevent the ability to provide capacity to the various television networks and other large services customers of the Debtors. Such an outcome would endanger some of the Debtors' most valuable customer relationships. The Debtors estimate that the amount of outstanding obligations to the Critical Vendors relating to the period prior to the Commencement Date aggregates to a total of $15,000,000. The Debtors submit that authority to pay the Critical Vendor Claims will not create an imbalance of their cash flows because many of these obligations have customary payment terms and will not be payable immediately. Cash maintained by the Debtors, together with the cash gene rated in the ordinary course of the Debtors' businesses, will provide more than sufficient liquidity for payment of the Critical Vendor Claims in the ordinary course of business. Loral Space & Communications Ltd., headquartered in New York, New York, and together with its affiliates, is one of the world's leading satellite communications companies with substantial activities in satellite-based communications services and satellite manufacturing. The Company filed for chapter 11 protection on July 15, 2003 (Bankr. S.D.N.Y. Case No. 03-41710). Stephen Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, it listed $2,654,000,000 in total assets and $3,061,000,000 in total debts. (Troubled Company Reporter, Monday, July 21, 2003, Vol. 7, Issue 142) TYCO INTERNATIONAL: Unit's Two Top Executives Quit Posts -------------------------------------------------------- The two presidents at Tyco International Ltd.'s Tyco Plastics & Adhesives division left their posts amid a reshuffling at the unit's senior management. According to Reuters, James Prendergast, president of Tyco Plastics, and Mark Brandon, the president of Tyco's adhesives unit, left the Company last week. Tyco spokesman Gary Holmes revealed Mr. Brandon will be replaced on July 28 by Tom Salmon, who recently worked at Honeywell International Ltd., while Mr. Prendergast's replacement is expected to be announced soon. The leadership at Plastics & Adhesives includes a new finance chief, general counsel, human resources chief, a vice president of operations and an executive to oversee the Company's Six Sigma program, which is an initiative to improve efficiency, Mr. Holmes said. =========== B R A Z I L =========== EMBRATEL: Ceara Federal Court Authorizes Additional Rates Hike -------------------------------------------------------------- Brazilian incumbent telco Embratel received authorization on Friday to raise rates in line with the IGP-DI inflation index, a full 10 percentage points higher than previously allowed by a federal court in Ceara state. The decision overrides July 11 Supreme Court ruling that allowed operators to increase rates by 17.2 percent, a figure based on the IPCA consumer inflation index, reports Business News Americas. The ruling renders ineffective a move by consumer rights group that blocked operations from raising rates altogether. The protest came after a June 26 announcement by the country's regulator to allow fixed line operators to hike their rates near the IGP-DI, at an average of 28.8% for all services combined. The Ceara federal court decision overrides the Supreme Court decision as the latter has delegated further decisions to the former. LIGHT SERVICOS: 5 Firms Get Into Race For Restructuring Adviser --------------------------------------------------------------- Rio de Janeiro power distributor Light, which defaulted on a BRL210-million (today US$73mn) payment due July 1, received proposals from at least five Brazilian and foreign banks to advise it on the process, Business News Americas reports without revealing the names of the competing banks. The winner will work alongside US investment bank Goldman Sachs, which was hired on June 18 for the same purpose by light's controller, French state-owned power company EDF, says the report. The BRL210-million debt payment, which Light defaulted on, included BRL150 million of debentures owed to Brazil's Unibanco and a US$25 million repayment on a US$200-million loan with a syndicate of 15 banks led by Citibank. According to a report by business newspaper Valor Economico, the Company sought extension on the two debts until September 30, but so far, just one of the 15 banks has agreed to the extension, In a statement Thursday to the Sao Paulo stock exchange, Light denied it has defaulted on repayments to Brazil's national development bank BNDES, and said that it was maintaining payments to other creditors as well. Light "is facing a liquidity crisis which has affected its capacity to meet with part of its financial obligations," Light CFO Paulo Pinto said in the statement, reiterating the Company's stock phrase. CONTACT: LIGHT SERVICOS DE ELETRICIDADE S.A. Avenida Marechal Floriano, 168 20080-002 Rio de Janeiro, Brazil Phone: +55-21-2211-2794 Fax: +55-21-2211-2993 Home Page: http://www.lightrio.com.br Contact: Bo Gosta Kallstrand, Chairman Michel Gaillard, President and CEO Joel Nicolas, Executive Director, Operation Paulo Roberto Ribeiro Pinto, Executive Director, Investor Relations and CFO ========= C H I L E ========= AES GENER: Fitch Affirms 'B+' Rating; Revises Outlook to Stable --------------------------------------------------------------- Fitch Ratings has affirmed the senior unsecured local and foreign currency ratings of AES Gener S.A. (Gener) at 'B+' and the Chilean national scale rating at 'Chl BB+'. The Rating Outlook has also been revised to Stable from Negative. The ratings of Gener and Stable Outlook reflect the reduction of near-term liquidity concerns supported by recent financial performance, improving sector fundamentals and stabilizing financial markets. The Stable Outlook also reflects Fitch's view of the company's ability to address the refinancing of US$503 million of convertible bonds (CB) due in March 2005 and US$200 million of Yankee bonds due in January 2006. The ratings further reflect the company's continued strong position in the Chilean electricity market, its portfolio of thermal generating plants, its strategy of focusing on core electricity generation in Chile, a soundly administered regulatory system, an economically sound and growing service area and experienced management. Gener is currently pursuing refinancing alternatives for the CB and Yankee bonds and to assist in this process, the company has hired a financial advisor and a local electricity consultant to determine a neutral fair valuation of the company. The company has begun talking with the CB holders, primarily represented by the local Chilean pension funds (AFP), and discussions have centered around the potential recapitalization of Gener via the voluntary conversion of the debt (CB and Yankee) to equity. The AFPs generally participate in both debt and equity of Chilean companies and in fact, were previously holders of Gener shares prior to the acquisition by AES in 2000 and 2001. While additional steps and further refinement of the restructuring proposal are needed, the proactive refinancing activities by management, positive sector fundamentals to support financial performance and developing capitalization and/or refinancing opportunities have stabilized Gener's credit profile. In the event of a successful capital increase or debt reduction, Fitch would expect a positive impact on Gener's credit ratings as the company's credit protection measures should show immediate improvement. Material delays into the first quarter of 2004 in addressing the 2005 maturity could result in downward ratings pressure. In order to facilitate its restructuring plans, Gener has also begun addressing the Intercompany loan with Inversiones Cachagua, Gener's direct holding company. As a first step to approach this matter, in April 2003, AES negotiated the distribution of 100% of Gener's net income (approximately US$41 million) as a dividend to immediately repay a portion of the intercompany loan. Cachagua then, on May 15, 2003, pledged all of its shares of Gener in favor of the company as collateral for the intercompany loan, which matures in February 2004. Also, there was a shareholder's meeting on July 9, 2003 to make some changes to Gener's by-laws regarding the company's ringfencing structure; the changes do not have an impact on its credit ratings. As a result of the active steps taken by AES and Gener, the company has become more palatable to both debt and local equity markets. Operating performance has been solid with financial results that are considered above-average for the assigned rating. Through March 2003, Gener reported EBITDA-to-interest of 2.7 times (x) with total consolidated leverage, as measured by debt-to-EBITDA, of 5.77x. As of June, total consolidated debt is comprised of US$759 million at Gener, US$147 million at its Chilean operating subsidiaries, US$146 million of project finance debt at TermoAndes and InterAndes, and US$307 million of non-recourse debt at Chivor, its Colombian hydroelectric plant. Omitting the effects of a potential equity conversion, leverage should decline as the company aggressively amortizes bank debt through next year. The operating fundamentals of Gener continue to reflect the company's sound position in the Chilean electricity market. Electricity demand in Chile has recently been increasing, up to almost 7% since March compared to 4% during 2002, and regulated prices have continued their upward trend, increasing 3.5% in U.S. dollar term in April 2003 tariff adjustment. Gener further benefits from its project-like structural characteristics, including long-dated power purchase agreements (PPAs) with financially strong customers and fuel supply contracts that reduce business risk. The result for Gener is an underlying, relatively stable base of long-term cash flows that should support a more appropriate capital structure, either with longer- term debt without the equity conversion, or as a much stronger credit with lower debt and increased equity. BELLSOUTH CHILE: Provides SMS Service For Fixed-Line Phones ----------------------------------------------------------- The Chilean unit of US-based Bellsouth Corporation now provides short text messaging for fixed line telephones, reports local paper El Diario Financiero recently. The new service operates along the same line as mobile SMS. For fixed line phones lacking data fields, the information can be converted to voice, said Business News Americas. Bellsouth Chile is SMS-interconnected with its competitors. The report, however, did not indicate whether the new service is included in this interconnection. In related news, Bellsouth's Colombian unit received yet another request from the country's telecoms regulator, requesting it interconnect with main competitor, Comcel. ENDESA CHILE: Fitch Issues Proposed Issuance Credit Analysis ------------------------------------------------------------ Fitch Ratings has released a Credit Analysis of Empresa Nacional de Electricidad S.A. (Endesa). This report details the credit fundamentals and rating outlook for Endesa's proposed $200 million senior unsecured notes offering rated 'BBB-'. The 10-year notes will carry a fixed interest rate and semiannual payments. The proceeds will be used to pay in portion of a US$381 million of euro medium-term notes issued in 2000 by Endesa-Chile International, which matures on July 24, 2003. The Rating Outlook is Stable. Endesa-Chile is primarily a hydroelectric-generation company operating in competitive generation markets throughout Latin America and maintains a very strong market position in the region. The company is the largest generator in Chile and represents a material proportion of generation capacity in Colombia, Peru and Argentina. The company owns and operates 20 generation facilities in Chile, with a total installed capacity of 3,935 MW which represents approximately 40% of Chile's total generating capacity. CONTACT: Jason Todd Chicago Phone: +1-312-368-3217 Carlos Diez Santiago Phone: +011 562 206 7171, ext. 25 Media Relations: Matt Burkhard New York Phone: +1-212-908-0540 ENDESA CHILE: Places Three Times US$200M Expected Bond Issue ------------------------------------------------------------ - Strong demand in international markets, which exceeded US$ 1,500 million, led the generator to increase the amount initially announced. The transaction consisted of the issue of two series of bonds: one for 10 years and the other for 12 years. The proceeds will be used to repay a eurobond issue of 400 million euros (US$ 381 million) which expires this month and further strengthen the company's financial structure. Endesa Chile, a subsidiary of Enersis, made a successful bond issue for a total of US$ 600 million, against an initially expected US$ 200 million. The demand for the bonds exceeded US$ 1,500 million. The transaction therefore became the most important to be made this year in emerging markets. The transaction is structured in two tranches. The first was for an amount of US$ 400 million of unsecured bonds that mature in 2013 (10-year term) at a rate of 8.35%. The second was for a total of US$ 200 million of unsecured bonds maturing in 2015 (12- year term) at 8.625% A little over a half of the proceeds of the issue will be employed in repaying a three-year eurobond issue of 400 million euros which matures on July 24, 2003. These bonds were issued by Endesa Chile Internacional, a wholly-owned subsidiary of the Chilean generator. The dollar value of these bonds is US$ 381 million as the company swapped its euro obligation for US dollars three years ago. Once this issue is repaid, the rest of the proceeds will be used to prepay other financial obligations and thus further strengthen the financial structure of Endesa Chile by improving its debt maturity pattern and increasing the company's financial flexibility. This transaction complements the Financial Strengthening Plan approved in October 2002 which foresaw a series of divestments and debt restructuring and reduction in order to reinforce the company's equity and financial position, and thus those of its Chilean and foreign subsidiaries. TELEFONICA CTC: Dividend Payment OK for Cashflow, S&P Says ---------------------------------------------------------- Yesterday, Chilean telecom provider Compania de Telecomunicaciones de Chile S.A. (CTC; BBB/Positive/--) announced an extraordinary dividend of Chilean peso 17.50 per share for a total of US$24 million. The announcement does not affect the rating or outlook given that liquidity remains adequate on account of CTC's strong cash generation, and the fact that the company has been repaying a significant amount of debt. Following the trend started in 2002, during the second quarter of 2003, CTC repaid US$165 million in debt covering all major maturities for the year. Therefore, the expected reduction of cash reserves to about US$25 million in July from over US$150 million in March 2003 is not a major concern, since, additionally, cash generation is expected to allow CTC to maintain average cash reserves of about US$50 million in the second half of the year. Although Standard & Poor's Ratings Services expects CTC to continue improving financial measures in the short-to-medium term through further debt and cost reductions, the ratings are not likely to be raised until the next regulatory setting process is finalized in 2004, in a way that is favorable for the company's performance and business position. ANALYST: Marta Castelli, Buenos Aires (54) 114-891-2128 =============== C O L O M B I A =============== BELLSOUTH COLOMBIA: Regulator Requests Comcel Interconnection ------------------------------------------------------------- Bellsouth Colombia and Comcel received a request to interconnect their systems for mobile short text messages from the country's telecoms regulator CRT, reports local business daily Portafolio, citing a letter from the CRT to the two companies. According to Business News Americas, the request comes after Colombian telecoms users association Asucom, filed a petition seeking the regulator's guarantee of an interconnection and guard against SMS spam. However, this is not the first time CRT requested the two operators to interconnect. Previous requests failed to prompt the operators to strike an interconnection agreement. BNAmericas added that other Bellsouth subsidiaries in Chile and Venezuela are SMS-interconnected with its competitors. BellSouth Colombia is a unit of US-based BellSouth (NYSE: BLS), while Mexico's America Movil (NYSE: AMX) owns Comcel. CONTACT: BellSouth Corp 1155 Peachtree Street NE Atlanta GEORGIA United States 30309-3610 Phone: +1 404 249-2000 Fax: +1 404 249-5599 Home Page: http://www.bellsouth.com EMCALI: Standard & Poor's Withdraws Ratings ------------------------------------------- Standard & Poor's Ratings Services withdrew its 'D' corporate credit rating on Empresas Municipales de Cali (Emcali). After Emcali's default on payment to TermoEmcali I SCA ESP on March 6, 2003, Standard & Poor's lowered its rating on Emcali to 'D' from 'CCC' on March 11, 2003. Emcali defaulted on payment of US$4.25 million due to TermoEmcali, following the issuance of Resolution 562 by the Colombian Public Services Agency--the Colombian federal agent managing the administrative takeover of Emcali. Emcali continues to breach the power purchase agreement it has with TermoEmcali, failing to deliver complete and timely payment to the power generator. Emcali is a diversified, municipally owned utility providing electricity, water, sewage, and local landline telephone services to the city of Cali, Colombia and to neighboring municipalities. Analyst: Donaji Valencia Mexico City Phone: (52) 55-5279-2054 =================================== D O M I N I C A N R E P U B L I C =================================== * DR-IMF Pact Agreement Postponed --------------------------------- The government of the Dominican Republic and the International Monetary Fund (IMF) postponed the signing of an agreement that was supposed to facilitate the Caribbean country's access to loans of US$1 billion. According to Xinhua News Agency, differences between the Dominican government and the IMF on some parts of the economic program that the country is implementing delayed the signing. The Dominican authorities requested assistance from the IMF following an enormous US$2-billion fraud by Banco Intercontinental. The fraud amounts to 12% of the gross domestic product of the Latin American country. ============= E C U A D O R ============= ECUADORIAN BANKS: AGD To Re-Set Debt Auction Dates -------------------------------------------------- Ecuador's deposit insurance agency AGD once again failed in its attempt to auction reconstructed debts from intervened banks, indicates Business News Americas, citing local daily La Hora. Two weeks ago, the agency attempted to auction the restructured debts at a base price of US$2.75 million, but the process failed to attract takers. On Thursday, the bank made another attempt to sell the debts at US$2 million, which is 20% less than the original base price. But that attempt also failed due to lack of interest parties. The AGD reported that no potential buyer purchased the bidding rules. As a result, the agency's auction committee will now convene to set the date for a direct sale of the banks' bad debt portfolio. The failure to auction the reconstructed debts comes as a blow to the AGD given that funds emanating from the sale are targeted to repay creditors of the closed banks, says La Hora. In a previous report, the TCR-LA suggested that the sale of the debts is part of Ecuador's move to expedite the fulfillment of conditions for the second disbursement under its International Monetary Fund (IMF) aid program. The Fund's board is poised to meet in the days ahead to discuss the approval of the US$42 million disbursement. PACIFICTEL: President Gutierrez Seeks Board Resignation ------------------------------------------------------- Ecuadorian daily El Telegrafo reports that president Lucio Gutierrez is seeking the resignation of all the board members of state-owned fixed-line operator Pacifictel. Mr. Gutierrez issued the request publicly during his visit to Guayaquil on Thursday. According to the president, it is now time to appoint apolitical and technical people to the telco's board. Earlier this year, the president appointed mostly military to the boards of Andinatel and Pacifictel, relates Business News Americas. Recently, the country's regulator, Conatel decided against intervening the troubled company. Instead, it allowed more time for Pacifictel to reach certain quality and coverage goals. PETROECUADOR: Lowers Yearly Production Target --------------------------------------------- Ecuador's state oil company Petroecuador lowered its annual production target to 74 million barrels from 76.8mb, Business News Americas reports. A source from the Company attributed the move to lower production during a workers strike in June, drilling delays, and a leak in the Sote pipeline in May. A Dow Jones report relates that energy minister Carlos Arboleda said that reaching the 76.8mb/year target would mean increasing production by 18,500 barrels a day (b/d) to 210,000b/d this year. This calls for a US$30.8-million new investment, covering the reconditioning of 47 wells at the Auca, Sacha, Shushufindi, Libertador and Lago Agrio fields. The government plans to award service contracts for the five fields in August on condition that the winner of the bidding process agrees to make necessary investments and maintain the project for 20 years. Arboleda estimated that about US$455 million would need to be invested in the five fields. =========== M E X I C O =========== GRUPO IUSACELL: Announces Fintech Buyout Offer ---------------------------------------------- Grupo Iusacell, S.A. de C.V. (BMV:CEL) (NYSE:CEL) ("Iusacell" or the "Company") announced on Friday that, on July 17, 2003, its Board of Directors and Audit Committee received a letter from Fintech Advisory Inc., a Delaware corporation ("Fintech"), indicating that it intends to file an application with the Comision Nacional Bancaria y de Valores (the Mexican Securities and Exchange Commission) to commence offers in Mexico and the United States to acquire 100% of the outstanding shares of capital stock of the Company for an aggregate cash purchase price of U.S.$20.0 million and otherwise on the same terms as the offer by Movil Access, S.A. de C.V., a wholly-owned subsidiary of Biper, S.A. de C.V., for all of the outstanding shares of capital stock of the Company, which was commenced on June 30, 2003 (the "Movil Access Offer"). The Company subsequently announced that its principal shareholders, Verizon Communications Inc. and Vodafone B.V., informed the Company that (i) on July 17, 2003, they received a letter from Fintech in which Fintech invited them to evaluate Fintech's offers and to withdraw their tendered securities from the Movil Access Offer and that (ii) the principal shareholders notified Fintech that they have determined not to engage in discussions with Fintech regarding a possible transaction involving the Company and do not intend to tender their shares of the Company into any offer by Fintech. The Company will make further public announcements in connection with the tender offers at the appropriate time and as required by Mexican and United States securities laws. This press release is for informational purposes only. It does not constitute a solicitation/recommendation statement under the rules and regulations of the United States Securities and Exchange Commission ("SEC"). The Company filed with the SEC a solicitation/recommendation statement on Schedule 14D-9 on July 14, 2003 (the "Schedule 14D-9") and an Amendment No.1 to the Schedule 14D-9 on July 16, 2003. The Company's shareholders should read the Schedule 14D-9, the Amendment No. 1 and the Amendment No. 2 to the Schedule 14D-9, which will be filed later with the SEC, as they contain important information. The Schedule 14D-9, the Amendment No. 1, the Amendment No.2 and other public filings made from time to time by the Company with the SEC are available without charge from the SEC's web site at www.sec.gov. About Iusacell Grupo Iusacell, S.A. de C.V. (Iusacell) (NYSE:CEL) (BMV:CEL) is a wireless cellular and PCS service provider in seven of Mexico's nine regions, including Mexico City, Guadalajara, Monterrey, Tijuana, Acapulco, Puebla, Leon and Merida. The Company's service regions encompass a total of approximately 92 million POPs, representing approximately 90% of the country's total population. CONTACT: Grupo Iusacell, S.A. de C.V. Mexico City Investors: Russell A. Olson Phone: 011-5255-5109-5751 Email: russell.olson@iusacell.com.mx Carlos J. Moctezuma Phone: 011-5255-5109-5759 Email: carlos.moctezuma@iusacell.com.mx ROHN INDUSTRIES: To Be Delisted From Nasdaq SmallCap Market ----------------------------------------------------------- ROHN Industries, Inc., (Nasdaq: ROHNE), (the "Company") a provider of infrastructure equipment to the telecommunications industry, announced Friday that the Nasdaq Listing Qualifications Panel (the "Panel") has advised the Company that the securities of the Company will be delisted from the Nasdaq Stock Market with the opening of business on Monday, July 21, 2003 due to the fact that the Company is unable to meet the minimum bid price requirement as set forth in Marketplace Rule 4310c(4). Also as of the opening of business on July 21, 2003, the Company's securities are eligible for inclusion on the OTC Bulletin Board. The OTC Bulletin Board symbol assigned to the Company will be ROHN. About the Company The Company is a manufacturer and installer of telecommunications infrastructure equipment for the wireless industry. Its products are used in cellular, PCS, radio and television broadcast markets. The Company's products include towers, poles, related accessories and antennae mounts. The Company also provides design and construction services. The Company has a manufacturing location in Frankfort, IN along with offices in Peoria, IL and Mexico City, Mexico. =============== P A R A G U A Y =============== * Paraguayan Government Admits Debt Payments Will Be Missed ----------------------------------------------------------- Peter Hansen, representative of the World Bank in Paraguay, paid a visit to Finance Minister Alcides Jimenez to request disbursement of US$9 million of Paraguay's debt to the World Bank. The debt, according to EFE, was due at the beginning of the month and is now within the grace period. Mr. Jimenez admitted Friday that his government is unable to meet all its debts and would have to prioritize payments. "It is a question of assigning priorities. We have many commitments, not only to service the (foreign) debt, but to state providers," he told reporters after meeting with Mr. Hansen. Mr. Jimenez was complaining that the government had not been paid by companies managing the Yacyreta and Itaipu dams, which Paraguay shares with Argentina and Brazil, respectively. Yacyreta owes Paraguay some US$20 million in profits, and Itaipu owes some US$29.5 million because of changes in the value of the local currency against the dollar. EFE reports that an International Monetary Fund (IMF) mission that visited Asuncion this month projected that if measures are not taken, the Paraguayan treasury would be short US$158 million at the end of the year and forecast a "very harsh" second half for the country. =========== P A N A M A =========== CSS: Privatization Not An Option To Remedy Ailing Finances ---------------------------------------------------------- The Panamanian government will be presenting new proposals to confront the financial problems at the state-run social security agency CSS. However, before the review, the government must have the results of a technical analysis first, newspaper El Panama America reports, citing finance minister Norberto Delgado. Mr. Delgado assured that the government's proposal to redress the ailing finances of CSS will not include any form of privatization or an increase in the retirement age for women. Privatization and a hike in women's retirement age are two issues "that are not under debate," said Mr. Delgado. In a report released by newspaper El Critica last month, Teresita Yaniz, a member of congress was quoted as calling for a referendum to allow Panamanians to decide whether the agency should be rescued from a threatening bankruptcy. ================================= T R I N I D A D & T O B A G O ================================= CARONI: To Start Paying VSEP Settlement Next Month -------------------------------------------------- The government of Trinidad and Tobago has secured funds for the $955-million VSEP settlement for the workers of Caroni (1975) Ltd., the Trinidad Guardian reports, citing Agriculture Minister John Rahael. As such, the Finance Ministry will soon begin preparing VSEP cheques for the sugar company's workforce, which comprises 8,116 daily paid workers and 1,094 monthly paid workers. Monthly paid workers are to be paid on or before August 2 and daily paid workers by August 15. The distribution of money follows an agreement between the All Trinidad Sugar and General Workers Trade Union and Caroni. Initially, the two were at loggerheads over the issue with the union filing an injunction to stop the VSEP process. It took the intervention of the Industrial Court to get the parties to reach an amicable solution. The court consented to the agreement last week. In an immediate reaction, president general of the union, Rudy Indarsingh, told workers to accept the settlement or otherwise face retrenchment, the Trinidad Guardian recalls. ============= U R U G U A Y ============= ANCAP: Opposition Leader Backs JV Law ------------------------------------- The Uruguayan government gained support from senator Danilo Astori on a law that would allow state oil company Ancap to find an international party, reports Business News Americas. Mr. Astori is the head of Asamblea Uruguay, a political party, which is part of the Frente Amplio (Broad Front), opposition coalition. Other coalition members oppose the law. The Frente has collected enough signatures to call for a referendum on the law, which will probably be held sometime in the next two or three months. But Senator Astori, in reaffirming his support for the government's position in the referendum, said, "I respect the position adopted by most of the Frente, but I won't campaign in favor of a public consultation." Mr. Astori has said he would not resign from the party. ================= V E N E Z U E L A ================= CITGO: Energy Minister Bullish on New Opportunities --------------------------------------------------- Two new licensing opportunities will be offered next month authorizing the exploration and production of gas in Blocks 3 and 5 of the Deltana Platform, while additional production and exploration opportunities will open by the end of this year in seven offshore blocks in the Gulf of Venezuela and the State of Falcon. The announcement was made in Washington DC during the Symposium "Venezuela: A Reliable Partner. Securing U.S. Energy Needs and Enhancing Business Opportunities." . Rafael Ramirez, the Minister of Energy, Luis Vierma, the Vice-Minister of Hydrocarbons, Aires Barreto, the Vice-President of PDVSA, Bernardo Alvarez, the Venezuelan Ambassador for the United States and many representatives of the Oil Chamber of Venezuela, the Venezuelan Association of Hydrocarbons; the World Bank, U.S. Congress members and energy firms such as ChevronTexaco, Shell, Mitsubishi, Statoil, ConocoPhillips, Petrobras, Schlumberger y ExxonMobil. The invitations for the upcoming exploration and production opportunities are part of the offshore strategy advanced by the government of Venezuela through the Ministry of Energy and with the technical support of the Venezuelan State Oil Company, PDVSA. The aim of the strategy is to achieve sustainable development through energetic diversification. "Eight companies have been chosen to participate in the exploration and production process for Blocks 3 and 5 of the Deltana Platform," informed Luis Vierma, the Vice-Minister of Hydrocarbons, referring to the blocks of approximately 3 thousand square kilometers expected to contain large amounts of gas. Regarding the licensing opportunities authorizing the exploration and production in the seven offshore blocks in the Gulf of Venezuela and the State of Falcon, Carlos Barbieri, the General Manager of the Deltana Platform Project pointed out that they expect to find important gas and oil reserves that will encourage oil development and satisfy gas needs in the western part of Venezuela. "Previous experience in the exploitation of gas, financial capacity, access to the international markets and sustainable development issues are among the requisites that the Ministry of Energy takes into consideration when it evaluates the candidates", said Mr. Vierma. The Vice-Minister of Hydrocarbons also highlighted that it is estimated that the combined reserves of the Deltana Platform and Mariscal Sucre projects are so significant that they will be capable of supplying the demand of gas in the East Coast of the United States and locally in Venezuelan during the next 35 years. CITGO Will Be Strengthened Minister Rafael Ramirez ratified that CITGO, an affiliate of PDVSA, will be strengthened, and reinforce its presence in the United States. "The internationalization is part of a series of strategic policies that include the rise in the base of resources, the aggregate value of exports, the development of national capital, the strengthening of the industrialization of hydrocarbons and the reinforcement of a long term commitment with OPEC in order to achieve an equilibrium between the producing country, consumers and investors", said Ramirez. At the same time, the Head of the Office of Energy and Mines praised the benefits of the new legal and fiscal framework that will establish advantages for investors. Ram¡rez commented that "Our reserves will convert Venezuela into an excellent energy center in the Western Hemisphere. It is necessary for the Hydrocarbon sector to contribute to sustainable development, and in order to do this, we are counting on the support of our international business partners, because private capital is a friend of the government of Venezuela." Regarding the nation's position with respect to the entrance of new foreign investors, Bernardo Alvarez, Venezuelan Ambassador in the United States, explained that "We are committed to welcoming these types of investors because we know that we cannot prosper as a nation without participating in international business. We are diligently working to make known the advantages and benefits that Venezuela has to offer." Additionally, Alvarez underlined that "Venezuelan petroleum is a critical factor of national security not just for the United States, but also for all nations in the Western Hemisphere." Business Plan 2004-2009 "In its Business Plan 2004-2009, PDVSA will focused on four main activities: exploration for light and medium crude oils in traditional areas, the heavy oil monetization, aggressive program for gas development and enhancing refining and petrochemicals business", explained Aires Barreto, Vice President of PDVSA. As an other main activity, Mr. Barreto announced that PDVSA will also keep their efforts in optimizing its ongoing business portfolio. "We estimate reaching a production capacity of 5 million barrels per day for the medium term", Mr. Barreto added. At the same time, PDVSA will sustain and increase the economic contribution for the shareholder based on the development of its huge oil and gas resources. Additionally, PDVSA will be always acting as a social responsible state-own company. PDVSA: Seeks To Increase Production Capacity to 6mb/day by 2010 --------------------------------------------------------------- Aires Barreto, Vice President at Venezuela's state oil company PDVSA, revealed that the Company plans to increase production capacity to 5-6 million barrels a day (mb/d) by 2010, relates Business News Americas. Currently, the Company produces about 3.1mb/d, government officials say, although private studies put the figure closer to 2.6mb/day. Mr. Barreto, who spoke at a conference in Washington DC last week, revealed that the Company will allot US$40bn-45bn for the production expansion. In its business plan through 2010, PDVSA will focus on four main activities: monetizing heavy crude production, exploring for medium and light crude, developing its gas business, and downstream activities, PDVSA said in a statement. The Company will invest about US$5bn a year in the next few years, with emphasis on exploration and production, followed by investment in strategic associations, which will mainly be in integrated projects in the Orinoco belt, according to Mr. Barreto. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Oona G. Oyangoren, Editors. Copyright 2003. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *