/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030724.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 Thursday, July 24, 2003, Vol. 4, Issue 145 Headlines A R G E N T I N A A 4: Court Declares Company Bankrupt ALCALOR: Starts Reorganization Process ARTES GRAFICAS ACONCAGUA: Enters Bankruptcy Post-Court Ruling AUTOPARTES Y SERVICIOS: Receiver Verifies Claims For Bankruptcy BANCO DE GALICIA: Cayman Unit Wins Approval For Deposit Plan BANCO HIPOTECARIO: Moody's Assigns Default Ratings To Bonds CLAXSON INTERACTIVE: Fitch Rates Bonds `CC'(arg) DPI GRAPHICS: Court Sets Deadline For Claims Authentication CONTRUCCIONES DEL RIO: Court Assigns Receiver For Bankruptcy DIM: Court Orders Bankruptcy EDENOR: French Parent Sues Argentina To Recoup Losses EUROMAYOR: $10M in Bonds Gets Default Rating From Moody's FARGO: Acquisition By Grupo Bimbo Unit Won't Affect Ratings FM SPORT: General Report Deadline Moved IMPECOR: Calls Creditors Together Following Debt Default IMPSA: To Place More Than $7M Worth of Bonds LATINA SUR: Goes Into Bankruptcy On Court Ruling LEDESMA PINTURAS: Nonpayment of Debt Ends in Bankruptcy LOST: Bankruptcy Process Proceeds With Claims Verification MANAGEMENT ONE: Court Orders Bankruptcy PENTA SALUD: Court Assigns Receiver For Bankruptcy Process UNIDAD DE COBRANZAS: Voluntarily Seeking Bankruptcy Protection B R A Z I L BCP: Confirms Layoff Plans EMBRATEL: In Charge Of Banco Do Brasil 0800 Traffic EMBRATEL: Signs Contract With Telarix EMBRATEL: Among Top Gainers On The Brazilian Stock Market C H I L E INVERLINK: Appealing Stolen Amount Established By Judge SANTA ISABEL: Ahold Execs To Visit Chile To Finalize Sale TELEFONICA CTC: Announces Extraordinary Dividend TELEFONICA CTC: Entel Balks at Tariff Recommendations E C U A D O R PETROECUADOR: Starting Technology Talks With Geotec JV Next Week M E X I C O GRUPO IUSACELL: Fintech Seeks Bond Payment Acceleration PEMEX: Places EUR500Mln Worth of Bonds P A R A G U A Y MULTIBANCO: Judicial Liquidation Draws Nearer V E N E Z U E L A PDVSA: Series of Accidents Caused By Saboteurs, Says President * Venezuela Considers Selling Up To $700M Bonds In Global Market - - - - - - - - ================= A R G E N T I N A ================= A 4: Court Declares Company Bankrupt ------------------------------------ Court No. 21 of Buenos Aires, which is assisted by Secretary No. 42, ruled that local company A 4 S.A. must undergo bankruptcy proceedings, Infobae reports, without revealing the reasons behind the Court's decision. Mr. Hector Kaijer is designated as receiver for the process. The deadline for authentication of credit claims is September 23, 2003. CONTACT: A 4 S.A. Libertad 877 Buenos Aires Hector Kaijer Azcuenaga 1930 Buenos Aires ALCALOR: Starts Reorganization Process -------------------------------------- Argentine company Alcalor S.A. started its reorganization process following the court's acceptance of its "Concurso Preventivo" application. Court No. 8 of Buenos Aires, which handles the case, assigned Mr. Mario Bertolot as receiver, and set the deadlines for the necessary procedures. The deadline for verification of claims is October 6, while the individual reports are due on November 18 this year. The receiver will then file the general reports on February 4 next year. An informative assembly will be held on August 3, 2004. CONTACT: Mario Bertolot Uruguay 660 Buenos Aires ARTES GRAFICAS ACONCAGUA: Enters Bankruptcy Post-Court Ruling ------------------------------------------------------------- Artes Graficas Aconcagua S.A., which is based in Buenos Aires, went into bankruptcy, following a ruling by the city's Court No. 1, Infobae reports. The receiver assigned is Esudio Cupito y Asociados, who will verify credit claims until October 3 this year. CONTACT: Estudio Cupito y Asociados Posadas 1546 Buenos Aires AUTOPARTES Y SERVICIOS: Receiver Verifies Claims For Bankruptcy --------------------------------------------------------------- Court No. 1 of Buenos Aires, which ordered Autopartes y Servicios S.R.L.'s bankruptcy, decided the claims verification for the Company's creditors ends September 23, 2003. Infobae relates that the receiver, Mr. Luis Alberto Guevara, also from Buenos Aires, will verify claims until the date, then proceed to preparations of the necessary individual reports. CONTACT: Luis Alberto Guevara Ayacucho 242 Buenos Aires BANCO DE GALICIA: Cayman Unit Wins Approval For Deposit Plan ------------------------------------------------------------ Argentine Banco de Galicia y Buenos Aires S.A. informed the country's stock exchange that its sister bank in the Cayman Islands, Banco de Galicia (Cayman) Ltd., can now push through with a deposit return plan. According to Dow Jones, this announcement follows a July 16 authorization issued by a Cayman Islands court on the proposal, which will see clients recover 100% of the original dollar amount of their trapped deposits. Meanwhile, Galicia also announced that having received legal approval, its sister unit will pay 5% of the money owed to clients in the first week of August. Already, the proposal has won the backing of 99.7% of the institution's clients. Galicia's Cayman unit began to experience financial crunch during Argentina's financial crisis at the end of 2001. Amid a run on bank deposits that ended with the government imposing a strict banking freeze, many Argentines transferred their savings out of the country, Dow Jones recalls. The savings were later sent on to the U.S. or other countries with solid financial systems, sparking fresh deposit runs on banks that had received the funds in the meantime, the report adds. BANCO HIPOTECARIO: Moody's Assigns Default Ratings To Bonds ----------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. assigned default ratings to a total of US$14.207 billion and EUR166 million worth of corporate bonds issued by Banco Hipotecario S.A. last Friday. The National Securities Commission of Argentina relates that the `D' rating applies to the following bonds: -- US$107 million of "Serie XXIV en d▍ares dentro del Programa Global a Mediano Plazo por us$ 2000000000," which matures on March 15, 2005. -- US$2 billion of "Serie I en dolares del Programa Global de ON a Mediano Plazo por USD 2.000 millones", whose maturity date was not indicated. -- US$100 million of "Serie III en d▍ares dentro del Programa en Euros a Mediano Plazo por US$ 500000000", due on August 07, 2006. -- US$2 billion of "Serie IV en dolares del Programa Global de ON a Mediano Plazo por USD 2.000 MM", with undisclosed maturity date. -- US$2 billion of "Serie VI en dolares del Programa Global de ON a Mediano Plazo por USD 2.000 MM", whose maturity date was not disclosed. -- US$2 billion of "Serie XVI en dolares del Programa Global de ON a Mediano Plazo por USD 2.000 MM", no maturity date provided. -- US$2 billion of "Serie XVII en Euros del Programa Global de ON a Mediano Plazo por USD 2.000 MM", with unknown due date. -- US$2 billion of "Serie XXII en Euros del Programa Global de ON a Mediano Plazo por USD 2.000 MM", also with unknown due date. -- US$2 billion of "Serie XXIII en Euros del Programa Global de ON a Mediano Plazo por USD 2.000 MM", no maturity date indicated. -- EUR166 million of "Serie XXV en Euros dentro del Programa Global a Mediano Plazo por US$ 2000000000", due on June 15, 2005. The bonds were all classified under "Series and/or class", but their CUSIP were not indicated. Moody's issued the ratings based on the Company's finances as of the end of March this year. CONTACT: Banco Hipotecario SA 151 Reconquista Buenos Aires Argentina Phone: +54 011 4347 5546 Home Page: http://www.hipotecario.com.ar Contact: Miguel K. Kiguel, Chairman CLAXSON INTERACTIVE: Fitch Rates Bonds `CC'(arg) ------------------------------------------------ Fitch Argentina assigned a `CC'(arg) rating on bonds issued by Claxson Interactive Group. The bonds, worth US$44,400,000, are described as 'Obligaciones Negociables, ON' simples. The rating implies a credit risk extremely vulnerable in relation to other placements within the country. CONTACT: Press: Alfredo Richard, SVP, Communications Phone: 305 894 3588 Investors: Jose Antonio Ituarte, Chief Financial Officer Phone: 011 5411 4339 3700 DPI GRAPHICS: Court Sets Deadline For Claims Authentication ----------------------------------------------------------- The deadline for the verification of credit claims for the bankruptcy of D.P.I. Graphics S.R.L. is September 19, 2003. The Company, which Court No. 10 of Buenos Aires declared bankrupt recently, is now in the hands of receiver Ms. Maria Julia Luz Veiga, relates Infobae. Ms. Veiga is expected to hand in the individual reports on October 31. The general report will be submitted on February 02 next year. CONTACT: Maria Julia Luz Veiga Neuquen 539 Buenos Aires CONTRUCCIONES DEL RIO: Court Assigns Receiver For Bankruptcy ------------------------------------------------------------ Mr. Jorge Oswaldo Stanislavsky was assigned as receiver for the bankruptcy of Construcciones del Rio S.R.L., relates local news source, Infobae. The verification of claims will end on October 6 this year. Court No. 7 of Buenos Aires ordered the bankruptcy, the report recalls, without mentioning the grounds for the ruling. Secretary No. 13 assists the Court on the case. CONTACT: Jorge Osvaldo Stanislavsky Talcahuano 768 Buenos Aires DIM: Court Orders Bankruptcy ---------------------------- Court No. 17 of Buenos Aires, under Dr. Eugenio Bavastro Modet, ruled the data processing company, DIM S.A., must enter bankruptcy proceedings. The declaration grants a motion filed by the Company's creditor, ICQ S.R.L., to whom it owes some ARS8,652. The court assigned Ms. Eva Bogado as receiver for the case. Creditors must have their claims verified by Miss Bogado before the September 25 deadline expires. CONTACT: DIM S.A. Bocayuba St. No. 326 Buenos Aires Eva Bogado 4th Floor A Paraguay St. No. 1465 Buenos Aires Phone: 481 20548 EDENOR: French Parent Sues Argentina To Recoup Losses ----------------------------------------------------- French electricity group EDF is taking steps to recover losses at its Argentine unit, caused by the Argentine government's economic measures. According to South American Business Information, the French owner of Argentinean electricity company Edenor filed a complaint against Argentina with the World Bank's International Centre for Investment-Related Dispute Settlement (CIRDS). Through direct and indirect holdings, EDF owns 90% of Edenor, which serves 2.3 million clients in the northern part of Buenos Aires. At the end of March 2003, Edenor's unpaid and expired debt totaled US$125 million. CONTACT: EDENOR S.A. Azopardo Building Azopardo 1025 (1107) Capital Federal Phone: (54-11) 4346-5000 Fax: (54-11) 4346-5300 E-mai: to ofitel@edenor.com.ar Home Page: http://www.edenor.com.ar EUROMAYOR: $10M in Bonds Gets Default Rating From Moody's --------------------------------------------------------- Corporate bonds issued by Argentine company Euromayor S.A. de Inversiones received default ratings from Moody's Latin America Calificadora de Riesgo S.A., relates the National Securities Commission of Argentina. The rating, based on the Company's finances as of April 30, 2003, applies to some US$10 million worth of bonds described as "Primera Serie por 10 millones de U$S dentro de un Programa Global." The bonds, which matured in April this year, were classified as "Series and/or class." FARGO: Acquisition By Grupo Bimbo Unit Won't Affect Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services said Tuesday that Grupo Bimbo S.A. de C.V.'s (local currency: BBB+/Stable/--; foreign currency: BBB-/Stable/--) recent announcement that it acquired a minority interest in a Mexican consortium that in turn acquired certain property and debt rights of the Argentine food company, Compania de Alimentos Fargo S.A., will have no impact on the ratings or outlook of Bimbo. Grupo Bimbo invested US$5 million, which came from its cash position, in a 30% stake of the consortium's capital stock and will have no active role in Fargo's management. Grupo Bimbo's current operations in Argentina enjoy an estimated market share of 21% of the packaged bread segment and generate less than 1% of the company's total sales. After the consortium restructures Fargo's debt, Bimbo will evaluate the possibility of increasing its direct or indirect participation in Fargo. ANALYST: Federico Mora, Mexico City (52) 55-5279-2036 FM SPORT: General Report Deadline Moved --------------------------------------- The deadline for the general report on the reorganization process of FM Sport Business S.A. was moved to August 21, 2003, relates Infobae. The informative assembly date remains on February 2 next year. Court No. 1 of Buenos Aires handles the Company's case with assistance from Secretary No. 1 CONTACT: FM Sport Business S.A. Onofre Betbeder 1252 Buenos Aires Ruben Hugo Faure Rivadavia 1227 Buenos Aires IMPECOR: Calls Creditors Together Following Debt Default -------------------------------------------------------- Buenos Aires-based clothing company Impecor S.A. is calling its creditors to a formal meeting, reports a local source, without indicating the intended time and venue. The Company is currently undergoing reorganization after it stopped making debt payments since October last year. Court No. 23 of Buenos Aires, which is under Dr. Julia Villanueva, handles the case with assistance from Dr. Stella Maris Timpanelli of Secretary No. 45. CONTACT: Impecor S.A. Santa Fe Ave. No. 2402 Buenos Aires IMPSA: To Place More Than $7M Worth of Bonds -------------------------------------------- Argentine company Industrias Metalurgicas Pescarmona S.A. (IMPSA) approved the issuance of the series 13 of the 'Obligaciones Negociables (ON) worth US$7,086,000, reports Infobae. The bond issuance is part of the Company's global program to issue up to US$250 million worth of bonds. LATINA SUR: Goes Into Bankruptcy On Court Ruling ------------------------------------------------ Latina Sur S.A., which is domiciled at Avenida San Juan 1370 in Buenos Aires, enters bankruptcy upon order from the city's Court No. 18. Infobae relates that the Court is assisted by Secretary No. 35 on this particular case. The designated receiver is Mr. Juan Carlos Sanguineti. Credit claims verification will end on December 12 this year. CONTACT: Latina Sur S.R.L. Avenida San Juan 1370 Juan Carlos Sanguineti Lavalle 1563 Buenos Aires LEDESMA PINTURAS: Nonpayment of Debt Ends in Bankruptcy ------------------------------------------------------- Nonpayment of some $26,270 in debt to Ana Ortigoza resulted in the bankruptcy of Ledesma Pinturas S.A., relates a local source. Court No. 24 of Buenos Aires, which is under Dr. Ballerini granted Ms. Ortigoza's motion to have the Company declared bankrupt. Ms. Alicia Zurron is assigned receiver for the case, with instructions to verify credit claims up to September 8 this year. CONTACT: Ledesma Pinturas S.A. 6th Floor 53 Esmeralda St. No. 1075 Buenos Aires Alicia Zurron Corrientes Ave. 2963 Buenos Aires LOST: Bankruptcy Process Proceeds With Claims Verification ---------------------------------------------------------- Creditors of Buenos Aires-based Lost S.R.L. were advised to have their claims verified by the receiver, Ms. Raquel Steinhaus, following a ruling from the city's Court No. 19 that declared the Company bankrupt. The deadline for claims verification is September 2 this year. The Court has also set the necessary dates for filing the individual and general reports. The receiver will submit the individual reports on November 7, and the general report on December 22. CONTACT: Lost S.R.L. Ladines 3047 Buenos Aires Raquel Steinhaus Paraguay 577 Buenos Aires MANAGEMENT ONE: Court Orders Bankruptcy --------------------------------------- Argentine company, Management One S.A., entered bankruptcy peoceedings following a ruling by Court No. 1 of Buenos Aires, relates Infobae, adding that Secretary No. 1 aids the court on the case. Ms. Lydia Albite was assigned as receiver for the bankruptcy proceedings. The Company's creditors must have their claims verified by the receiver before the August 12 deadline expires. CONTACT: Lydia Albite Tacuari 119 Buenos Aires PENTA SALUD: Court Assigns Receiver For Bankruptcy Process ---------------------------------------------------------- Penta Salud S.A., which was recently declared bankrupt by Court No. 17 of Buenos Aires, is now in the hands of Mr. Antonio Gerardo Pennacchio, who will act as receiver for the bankruptcy process. Creditors must have their claims verified before October 14, says Infobae. The receiver will submit the individual reports on November 12, followed by the general report on December 29. Infobae, however, did not indicate whether the court has set a date for an informative assembly. CONTACT: Penta Salud S.A. Boedo 414 Buenos Aires Antonio Gerardo Pennacchio Cramer 2175 Buenos Aires UNIDAD DE COBRANZAS: Voluntarily Seeking Bankruptcy Protection -------------------------------------------------------------- Argentine company Unidas de Cobranzas S.A., which specializes in the collection of overdue credit payments, is voluntarily seeking bankruptcy protection at Court No. 25 of Buenos Aires, according to a local source. The Court, under Dr. Silvia Rey, is assisted by Mr. Fernando Pennacca of Secretary No. 49. CONTACT: Unidad de Cobranzas S.A. Sarmiento St. No. 1113 Buenos Aires =========== B R A Z I L =========== BCP: Confirms Layoff Plans -------------------------- Sao Paulo mobile operator BCP confirmed it will be laying off employees. The Company didn't say how many employees will be affected, but Brazilian news agency Ultimo Segundo suggested around 100 employees are about to lose their jobs. The Company, which serves 1.7 million subscribers in greater Sao Paulo, has been reducing staff since January 2002, from 2,100 employees to 1,000 workers at present. BCP is now being administered by its bank creditors, after its two controlling shareholders BellSouth and Banco Safra decided in March 2002 to default on a US$375-million debt payment. CONTACT: BCP S.A. Rua Fl>rida, 1970 4o andar Sao Paulo - SP Tel: 55 11 5509-6428 Fax: 55 11 5509-6257 Home Page: http://www.bcp.com.br EMBRATEL: In Charge Of Banco Do Brasil 0800 Traffic --------------------------------------------------- Embratel will be the sole entity responsible for providing 0800 service to Banco do Brasil and to the companies making up the institution's conglomerate. The carrier won the 2003/0073 (8616) electronic trading for the provision of voice and data traffic from non-geographic codes (0800) and special services. The trading (which works as a lower-bid auction) took place last Thursday (July 17) between 3 pm and 8 pm and had over three hundred bids. The agreement will be valid for 36 months. Embratel won a tight competition against a consortium headed by Telemar including Brasil Telecom, Sercomtel, CTBC and Telef忛ica.as well. Embratel's successful trading offer, the biggest ever carried out by Banco do Brasil this year, brings about handling of a monthly traffic of more than 50 million minutes. Winning the competition for providing 0800 service to Banco do Brasil means a great deal to Embratel, indicating the Company spares no efforts for being the sole telecommunications provider for Banco do Brasil, renowned for providing top quality services to the marketplace. Banco do Brasil is a customer of all Embratel families. In 2002 Embratel achieved another significant result: it was chosen to be the worldwide provider of global services to Worldnet network, connecting Banco do Brasil to 25 cities from 18 countries, through thirty circuits spanning over North and South America, Europe and Asia. 0800 service is intended for customer care, teleshopping, technical support and banking queries, in addition to many other applications. The service uses the intelligent network and offers facilities whose bottom line is cost reduction and prompt reply. Additionally, it offers management reports comprising performance assessment and supervision 24 hours a day, seven days a week. Embratel is the premium telecommunications provider in Brazil, offering a wide range of telecommunication services, such as advanced voice, high-speed data transmission, internet, data communication by satellite and corporate networks. The company is national leader in data and internet services, in a privileged position to become the Latin American carrier with an all- distance network. Embratel network has national coverage with almost 17,500 miles of optic cables, representing around one million miles of fiber optics. CONTACT: EMBRATEL Advertising, Press and Public Relations Department Further info: Tel. (02121) 2121 7837 / 2121 6291 Fax: (02121) 2121 7791 E-mail: cmsocial@embratel.net.br Embratel on the Internet: www.embratel.com.br EMBRATEL: Signs Contract With Telarix ------------------------------------- Telarix, Inc., formerly known as Emerging Technologies Group, on Tuesday announced the second signed contract for iXTools, a web- based interconnect traffic management solution, with Embratel Participacoes S.A. (NYSE: EMT) (BOVESPA: EBTP3; EBTP4), Brazil's premium communications provider and the national leader in data and Internet services. As Embratel expands its scope of services and geographic reach, this next-generation deployment of iXTools will support the company's continued focus on interconnect operational efficiencies. The new version will deliver enhanced visibility in managing local-to-local services and provide increased flexibility in handling special interconnection agreements. "We have been very pleased with the work that Telarix has performed for Embratel this past year. iXTools' powerful rating and business intelligence platform allows us to more accurately manage our interconnection settlements and optimize our network," said Carlos Eduardo Vieira, Telco-Finance Director of Embratel. "This next phase of our revenue and cost control solution and the functionality we are able to leverage from iXTools will help ensure our continuing market leadership." Last year's initial deployment of iXTools provided Embratel with an innovative web-enabled telecommunications cost management solution for the domestic long-distance network. The most recent version of the iXTools solution will continue to give Embratel near real-time control over the originating and terminating costs of traffic carried over their domestic long- distance, as well as the expanding local network. "We're very excited to deliver our next-generation of software to help Embratel support their rapid growth and manage their interconnection revenues and access costs," said Hormoz Hekmat, Executive Vice President of Telarix. About Telarix Telarix, Inc. delivers the leading Interconnect Business Optimization (IBO) software solution, which gives telecommunications companies the ability to easily manage costs and drive profitability on their interconnect traffic. Telarix's innovative platform, iXTools, maximizes carrier profitability by leveraging operational intelligence to enable real-time business decisions. The company's web-based tools analyze and report on traffic, rates, and destinations almost as quickly as the calls move across the global network. The company was founded in 1996 and is headquartered in Vienna, VA. Please visit www.telarix.com for more information. About Embratel Embratel is the premium telecommunications provider in Brazil and offers an ample variety of telecom services -- local and long distance telephony, advanced voice, high-speed data transmission, Internet, satellite data communications, and corporate networks. The company is a leader in the country for data services and Internet, and is highly qualified to be an all-distance network carrier in Latin America. Embratel's network spreads countrywide, with almost 29 thousand kms of optic cables, which represents about one million and sixty-nine thousand km of fiber optics. CONTACT: Embratel Participacoes S.A. Helena Duncan, Public Relations Phone: +55 21 2121 3653 Fax: +55 21 2121 8010 Email: hduncan@embratel.com.br Telarix, Inc. Lyn Chamness, Corporate Communications Phone: +1-703-564-9622 Fax: +1-703-448-5531 Email: lchamness@telarix.com EMBRATEL: Among Top Gainers On The Brazilian Stock Market --------------------------------------------------------- Consulting firm Economatica Monday revealed Monday that Brazilian long distance carrier, Embratel, was among top gainers on the local stock market last week. According to a report released by Agencia Estado, Embratel's preferred shares rose 12.5% on 4,695 transactions, while its common shares gained 9.4%. Embratel has been surrounded with market rumors, the latest have it either being sold by parent MCI or buying local fixed-line carrier Vesper. ========= C H I L E ========= INVERLINK: Appealing Stolen Amount Established By Judge ------------------------------------------------------- Chilean Judge Patricio Villaroel investigating the Inverlink fraud said financial instruments stolen from state-run development agency, Corfo, earlier this year amounted to CLP75 billion. However, Corfo claims that the amount stolen by the intervened financial group from its coffers amounted to CLP85 billion. In this light, Corfo will make an appeal in court to increase the established amount, local financial daily El Diario reports, citing Corfo sources. The paper also relates that Villaroel has established that half of the CLP75 billion remain in Chile with US-based fraud specialist Kroll charged to scour the overseas markets to find the other half. SANTA ISABEL: Ahold Execs To Visit Chile To Finalize Sale --------------------------------------------------------- Executives from the Dutch Royal Ahold supermarket company will travel to Chile the last week of July to finalize the sale of its Santa Isabel chain to Cencosud, reports South American Business Information. Chilean retailer Cencosud agreed to pay about US$100 million for Royal Ahold NV's 97% stake in the Santa Isabel supermarket chain. Santa Isabel has 72 supermarkets and four superstores, but not all of these outlets will pass to Cencosud, as some are rented, and others are being passed on to other companies. The deal was initially expected to close in April but was delayed after Ahold revealed a devastating accounting scandal that saw profits overstated by more than US$900 million and triggered a legal probe that touched on Latin American assets. Santa Isabel's 2002 accounts were delayed because auditors did not approve them. TELEFONICA CTC: Announces Extraordinary Dividend ------------------------------------------------ Compa丑a de Telecomunicaciones de Chile S.A.(NYSE:CTC) ("Telef▋ica CTC Chile" or the "Company") announced the following relevant facts: 1. Extraordinary Shareholders' Meeting agreements: On July 11, 2003, the Extraordinary Shareholders' Meeting of Telef▋ica CTC Chile approved the following: -- Payment of an extraordinary dividend amounting to Ch$17.5 per share. This dividend will be paid to all shareholders of record as of July 24, 2003. The dividend will be paid in Chile on July 30, 2003 and will be paid to ADR holders by Citibank N.A. on August 1, 2003. The gross dividend will amount to Ch$70.0 per ADR (equivalent to approximately US$0.10 per ADR based on the observed exchange rate as of 6/30/03), and the net dividend payable, less withholding tax, will amount to Ch$69.97 per ADR (equivalent to approximately US$0.10 per ADR based on the observed exchange rate as of 6/30/03). -- Modification of Article five of Telef▋ica CTC Chile's By- laws, as a result of an increase in paid-in capital due to the capitalization of Ch$114,512,355,656, corresponding to a share premium accounted for in the Company's balance sheet under shareholders' equity as of December 31, 2002. This account was generated as a result of past stock issues, when the Company's shares were paid at a premium with respect to their issue price. The capitalization of this account is only for the purpose of increasing clarity in the Company's financial statements, and was subject to shareholder's approval due to the modification in the Company's By-laws (Article 5). This capitalization will not imply a change in the Company's Total Shareholders' Equity. As a result, the new text of Item 1 of Article 5 of the By-laws reads as follows: "The capital of the Company amounts to Ch$850,980,475,453, divided into 957,157,085 shares without par value, totally paid and subscribed." 2. CTC agreed to participate in the tender offer for Terra Networks Shares The Board of Directors of the Company's subsidiary Telef▋ica Mundo S.A. and the Board of Directors of Telef▋ica CTC Chile, agreed to participate in the tender offer launched by Telef▋ica S.A. for Terra Networks' shares. In the event that in early August 2003, Telef▋ica S.A. declares the bid successful, Telef▋ica CTC Chile would sell 2,984,986 shares of Terra Networks S.A. at 5.25 euros per share. At March 31, 2003 those shares were accounted in the Company's Financial statements at 4.40 euros per share. The effect on results of this operation will depend on the exchange rate of euro at the date of payment. * The observed exchange rate as of 6/30/03 was US$ 1= CH$699.12 Compa丑a de Telecomunicaciones de Chile S.A., the first South American company to list shares on the New York Stock Exchange, is the largest telecommunications enterprise in Chile, providing local service, as well as domestic and international long distance services throughout the country. Additionally, the Company provides equipment marketing, data transmission, value- added services and information systems services and operates a nationwide cellular network. CONTACT: Ver▋ica Gaete Phone: 56-2-691-3867 Fax: 562-691-2392 Email: vgaete@ctc.cl M. Jos� Rodr︹uez Email: mjrodri@ctc.cl Florencia Acosta Email: macosta@ctc.cl TELEFONICA CTC: Entel Balks at Tariff Recommendations ----------------------------------------------------- Recommendations made by an independent panel of experts regarding the 2004-2008 tariff decree for dominant fixed line operator Telefonica CTC met heavy opposition from a CTC rival. According to Business News Americas, Chile's second largest telco Entel strongly rejected the recommendations submitted by the three-person panel to the country's telecoms regulator Subtel on Friday. In a statement Tuesday, Entel CEO Richard Buchi said Entel "will undertake all possible legal actions to challenge" the recommendations if they are accepted by the government in CTC's next tariff decree. Buchi urged Subtel not to follow the panel's recommendations, which according to him, revealed the experts' lack of familiarity with the telecoms sector. He argued that they contradict the country's General Telecommunications Law in addition to four other laws (389, 515, 616 and 686). The laws in question protect competition, provide for unbundling of networks and mandate access rates to be charged according to direct cost, outlawing the practice of subsidizing end-user rates with high interconnection rates. "If the authority lets access rates become a windfall for Telefonica we would go back to a scenario where the company could use its dominant position to lower rates to the public, which would obligate competitors to do the same [producing a price war] that would be unsustainable for the competition," he said. ============= E C U A D O R ============= PETROECUADOR: Starting Technology Talks With Geotec JV Next Week ---------------------------------------------------------------- Ecuador's state oil company Petroecuador is expected to commence talks with a joint venture of Florida-based oil and gas well treatment company, Geotec Thermal Generators, and Ecuadorian partner, Barki Cia, next week regarding incremental production technology, according to a Geotec statement. According to the technology's designer, Russian company FR & PC Altai, the technology, which is distributed by Geotec, can increase production by 6,000 barrels a well a year, or 300-500% for volume producing wells. However, that is on older, completed wells typically found in the US, Geotec CEO Richard Lueck said in an interview with Business News Americas. In South America "the wells are hugely prolific. The formations are different, wells are free flowing, the potential is enormous," he said. Petroecuador recently cut its annual production target for 2003 to 74 million barrels from close to 77mb; reaching the original target would mean increasing production by some 18,500 barrels a day. The Geotec technology would probably not make an impact on production this year because of the time needed to start up, Lueck said, adding that depending on how next week's talks pan out, production could start to rise from 2004. =========== M E X I C O =========== GRUPO IUSACELL: Fintech Seeks Bond Payment Acceleration ------------------------------------------------------- As part of an effort to block the sale of Grupo Iusacell to Ricardo Salinas Pliego, Fintech Advisory Inc., threatened to take steps to force immediate payment on US$350 million in bonds, of which it holds an undisclosed amount. Bloomberg relates that David Martinez, Fintech's managing director, said he plans to organize investors to request early payment on bonds maturing in 2006 if Verizon Communications Inc. and Vodafone Group Plc., which own 73.9% of Iusacell's shares, don't reject Salinas Pliego's offer to buy the shares for US$10 million. Fintech needs investors holding at least 25% of the 14.25% bonds to request early payment from the bond's trustee, Martinez said. If the bond is declared due immediately, any bondholder can then force Iusacell into Mexican bankruptcy court, he said. "It won't be that difficult," Martinez said. Verizon and Vodafone have already tendered their shares in an offer that expires July 29 from Movil@ccess SA, a pager company controlled by Salinas Pliego, who is also chairman of Mexican broadcaster TV Azteca SA, says Bloomberg. Fintech is threatening to block the sale after concern was voiced that bondholders won't get much back on their bonds with Iusacell controlled by Salinas Pliego. Salinas Pliego offered to swap bonds of his broadcasting holding company, Azteca Holdings, SA., in a transaction Standard & Poor's said would be considered a default, if carried out. On Friday, the New York-based distressed bond fund said it would double Salinas Pliego's offer for the Company's shares. On Tuesday, Fintech sent a letter to Vodafone and Verizon management saying it could "materially increase" its US$20- million offer if the two telecommunications companies participated in negotiations with Fintech. Martinez said Fintech's tender offer is set to be approved by the Securities and Exchange Commission and the Mexican Stock Exchange, and could begin as early as Wednesday. PEMEX: Places EUR500Mln Worth of Bonds -------------------------------------- Mexico's state oil company Pemex sold bonds Tuesday worth of approximately EUR500mn, a company source announced, without revealing the term or price of the bonds. Business News Americas relates that the source said an official statement would be made when the placement is formalized, around the beginning of August. Prior to the issue, Bloomberg reported that the bonds were for 10 years, and would be sold at a price to yield about 2.25 percentage points more than the mid-swap rate. Pemex placed US$750 million in 10-year bonds in June, EUR750 million in 7-year bonds in April, US$500 million in 20-year bonds in March, US$750 million in 5.5-year bonds in February and GBP250 million in January. =============== P A R A G U A Y =============== MULTIBANCO: Judicial Liquidation Draws Nearer --------------------------------------------- An official from Paraguay's central bank indicated that intervened local bank Multibanco will be in judicial liquidation in a month's time, relates Business News Americas. Local authorities intervened in the business of Multibanco last month after they uncovered a US$10 million bank deficit. The deficit has since widened to US$21 million after a closer look into Multibanco's dealings showed it had transferred large amounts of deposits to an offshore bank with 50 related fictitious companies. The deficit figure is likely to continue to rise as the authorities dig deeper into Multibanco's offshore transactions, the official said. Owners of the bank are in jail pending court proceedings. The government hopes the courts will be able to recover a significant amount of Multibanco's deficit from assets belonging to the former owners. Last month, the government recovered some US$5.6 million when it sold Multibanco's credit card portfolio to Interbanco, Sudameris and local finance companies Atlas and Familiar. ================= V E N E Z U E L A ================= PDVSA: Series of Accidents Caused By Saboteurs, Says President ------------------------------------------------------------- The series of accidents last week at Venezuela's state oil company PDVSA is caused by saboteurs, suggested company president Ali Rodriguez, according to a report by Business News Americas. "There are sufficient elements to think that a more open and more violent campaign of sabotage has begun," Rodriguez said. Last week, a bomb exploded outside a PDVSA building in Caracas, injuring one person and causing material damage. Also, an accident happened at a natural gas processing plant in the east of the country. Moreover, a gas valve at El Palito refinery's alkylation plant ruptured causing suffocation, which resulted to deaths of two workers. * Venezuela Considers Selling Up To $700M Bonds In Global Market ---------------------------------------------------------------- Venezuela plans to sell between US$500 million and US$700 million worth of international, 10-year bonds in September, Bloomberg reports, citing a person familiar with the transaction. Venezuela expects to price to yield at about 10 percent. The government has already hired ABN Amro Bank NV and Citigroup Inc. to manage the sale of the bonds, Venezuela's first global debt sale since December 2001 when EUR250 million (US$222 million) of 18-month bonds priced to yield 10.69 percent. According to Bloomberg, Venezuela is trying to take advantage of the longest rally in emerging-market bonds in six years that has reduced developing nations' borrowing costs. Higher oil prices and restrictions on foreign currency trading also have helped Venezuela boost foreign reserves this year to US$17.5 billion from US$12 billion. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Oona G. Oyangoren, Editors. Copyright 2003. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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