/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030812.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, August 12, 2003, Vol. 4, Issue 158 Headlines A R G E N T I N A AHOLD: Delays Deadline for Delivery of Financial Statements BANCO GALICIA: Soon To Complete Debt Restructuring BANCO GALICIA: Argentine Fitch Assigns Default Ratings To Bonds BANCO GALICIA: Bonds Get `BB(arg)' Rating from Fitch Argentina BENEDETTI: Court Orders Liquidation BODEGAS Y VINEDOS: Opens Reorganization Process CAJA DE VALORES: S&P Comments On Effects of `Pesification' CENTRAL COSTANERA: Sees Profits In the 1H03 CIT: Bonds Receive Junk Ratings From Local Fitch DUETO: Creditors Called To Formal Meeting FARMACIA PLASTANI: Enters Liquidation Process MANAGEMENT ONE: Last Day For Credit Verification Today LIBRERIA Y PAPELARIA: Credit Authentication Ends Today MTM: Asks Court's Permission To Reorganize NET GROUP CONSULTING: Credit Verification Process Ends Today PEDRO VILLEGAS: Court Calls Creditors To Meeting REMEDIAR: Holding Informative Assembly Today REPSOL-YPF: To Maintain Investment In Argentina SIDERAR: Results Improve in the 1H03 SIDERAR/SIDOR: Unite To Become Region's Main Steel Exporters SWEET VICTORIAN: Court Assigns Receiver to Reorganization TELEFONICA DE ARGENTINA: S&P Cuts COINTEL's Notes TELEFONICA DE ARGENTINA: Fitch Assigns Default Ratings To Bonds TELEFONICA DE ARGENTINA: Fitch Rates Various Bonds `BBB(arg)-' TGS: Reports Declining Profit in 2Q03 B E R M U D A LORAL: EchoStar IX/Telstar Satellite Successfully Launched TYCO INTERNATIONAL: SEC Concludes Review of Financial Statements TYCO INTERNATIONAL: Shelf Registration Statement Deemed Effective B R A Z I L ACESITA: 1H Earnings of BRL101 Mln Confirms Profitability COPEL: To Sign New Power Purchase Agreement With Cien Soon C H I L E ENERSIS: To Outsource Operations at Five Units During 2004-2008 J A M A I C A AIR JAMAICA: To Resume Toronto Flights Next Year C&WJ: Oceanic Files Lawsuit to Overturn Restriction M E X I C O PEMEX: To Become LatAm's Biggest Firm In Terms of Sales P U E R T O R I C O DORAL: Declares Quarterly Cash Dividend on Common Stock U R U G U A Y ANCAP: Signs Accord to Manage Petrolera del Conosur, Sol Petroleo V E N E Z U E L A CITGO: Fitch Ups CITGO's Ratings; Withdraws PDV America's Rating EDC: Narrows Losses Amid Cost Cutting Efforts - - - - - - - - ================= A R G E N T I N A ================= AHOLD: Delays Deadline for Delivery of Financial Statements ----------------------------------------------------------- Ahold announced Friday that it has reached an agreement with its syndicate of banks to extend the deadline for the delivery of audited consolidated fiscal year 2002 financial statements to September 30, 2003. After the completion of all internal forensic accounting investigations, as announced on July 1, 2003, Ahold is determining and processing the accounting adjustments required as a result of these investigations and as a result of the audit. In consultation with its auditors, Deloitte & Touche, Ahold has concluded that this process is taking longer than expected. The delay in completion of the audited consolidated fiscal year 2002 financial statements will further delay the publication of its Annual Report and the filing of its Annual Report on Form 20- F for fiscal year 2002. Ahold will publish and file the Annual Report as soon as possible after completion of the audited consolidated financial statements. Under its Euro 2.65 billion credit facility negotiated in March 2003, Ahold was required to deliver its audited consolidated fiscal year 2002 financial statements by August 15, 2003 to the syndicate of banks involved. Delivery by August 15, 2003 was a condition for the availability of the unsecured tranche of USD 915 million and for the continuing availability of the secured tranche, which totals USD 1.285 billion and EUR 600 million. That deadline has now been extended to September 30, 2003. The company does not foresee the need for drawing on the USD 915 million unsecured tranche based on its current cashflow projections. This reflects Ahold's confidence in its ability to meet its obligations in 2003, including the cash payment in full of Ahold's outstanding EUR 678 million convertible subordinated notes that mature on September 30, 2003. The currently remaining USD 270 million capacity under the USD 450 million back-up facility, also announced in March, remains available to Ahold as necessary for further support of the U.S. Foodservice securitization programs. BANCO GALICIA: Soon To Complete Debt Restructuring -------------------------------------------------- Banco Galicia S.A., Argentina's biggest private bank, is now a step closer to restructuring its US$1.365-billion debt, Dow Jones reports, citing an executive of the bank. According to the bank's director, Daniel Llambias, the institution is now working through counteroffers to the bank's primary restructuring offer to creditors. He said that in "no way" does the proposal allow for a change in ownership at the bank. Banco Galicia, the main operating unit of Grupo Financiero Galicia S.A., was severely hurt by massive withdrawals during the early days of the crisis in 2001 and was ultimately forced to accept more some US$5.6 billion in discount loans from the central bank to stay afloat. The bulk of those loans remain outstanding and are considered a major stumbling block to the bank's recovery. BANCO GALICIA: Argentine Fitch Assigns Default Ratings To Bonds --------------------------------------------------------------- A total of US$412 million worth of corporate bonds issued by Banco de Galicia y Buenos Aires received default ratings from Fitch Argentina Calificadora de Riesgo S.A. on August 1. The rating applies to the following bonds: -- US$200 million of "Obligaciones Negociables a Largo Plazo" -- US$150 million of "Obligaciones Negociables" -- US$62 million of "Obligaciones Negociables (con garantia MIGA)" These were classified under "Simple Issue" but their maturity dates were not indicated, according to the National Securities Commission of Argentina. Fitch said that the ratings are assigned to debts that are currently in default. BANCO GALICIA: Bonds Get `BB(arg)' Rating from Fitch Argentina -------------------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. rates US$116 million worth of Banco de Galicia y Buenos Aires' corporate bonds `BB(arg)', recently. The National Securities Commission of Argentina relates that the rating applies to US$73 million of "Programa Global Clase 6". The remaining US$43 million of "Programa Global Clase 7" matured in June this year. Fitch said that the rating, which was based on the company's finances as of the end of March 2003, denotes a fairly weak credit risk relative to other issues in Argentina. Within the context of the same country, payment for these financial commitments is uncertain to some degree and capacity for timely repayment remains more vulnerable to adverse economic change over time. BENEDETTI: Court Orders Liquidation ----------------------------------- The Civil and Commercial Tribunal of Rio Negro ordered the liquidation of Argentine company, Benedetti Agropecuaria S.C.A., according to an announcement from local news source Infobae. The bankruptcy proceeds with the credit verification process. Creditors must submit proof of claims to the designated receiver, Ms. Maria Cristina Aloisio. The report did not indicate the deadline for the submission of claims. The court expects the individual report to be filed on September 23 this year, followed by the general report on November 4. CONTACT: Maria Cristina Aloisio J F Kennedy 1470 Rio Negro BODEGAS Y VINEDOS: Opens Reorganization Process ----------------------------------------------- Bodegas y Vindos Pascual Potenzoni Limitada received permission to start its reorganization process. Argentine news portal Infobae said that the Civil and Commercial Tribunal of San Juan approved its motion for "Concurso Preventivo". However, the report did not indicate whether the court has assigned a receiver to the case. CAJA DE VALORES: S&P Comments On Effects of `Pesification' ---------------------------------------------------------- On May 30, 2003, the Argentine government issued a decree mandating Caja de Valores S.A. (Caja), Argentina's central securities depository, to swap the guaranteed government loans that are in the hands of investors who had rejected last year's pesification into the original dollar government bonds, which are currently in default. The original terms of the transaction, which took place in 2001, gave investors the right to undo the exchange under certain circumstances, but this was at the option of the shareholders rather than the government. In the November 2001 swap, investors (local Argentine holders) agreed to swap various foreign currency bonds issued by the Republic of Argentina for $U.S.-denominated loans that had a longer maturity date, a lower interest rate, and were guaranteed by certain local tax revenues. Since the pesification of local contracts in early 2002, there has been an ongoing dispute as to whether these loans were to be pesified as well. Therefore, the decree is mandating a swap that could be against the will of the beneficiaries, whose interests are to be protected by Caja's (B+/Negative/B) status as trustee of the government securities. In this scenario, Caja is torn between the best interest of investors and a government decree that demonstrates the high legal insecurity of Argentina's operating environment. The rating on Caja is currently well above the 'SD' rating on the sovereign, reflecting the institution's exposure to the risk inherent to operating in Argentina but also its critical role in the Argentine capital markets, adequate financial safeguards, and strong balance sheet. Standard & Poor's will be reviewing whether the above-mentioned conflict is resolved promptly in a way that does not affect Caja's reputation or the investors' best interest. CENTRAL COSTANERA: Sees Profits In the 1H03 ------------------------------------------- Argentine thermo generator Central Costanera returned to black in the first half of the year with a ARS23.5-million (US$8mn) profit from a loss of ARS142 million in the same period of 2002, says Business News Americas. The Company, in a statement to the Buenos Aires stock market, said the results reflect Argentina's macroeconomic situation, particularly the conditions in the electric sector such as high hydro availability and the pesofication of rates, and lower than expected exports to Brazil. Lower energy sales led to a 23.2% in total sales revenues to ARS173 million in the first semester of 2003, from ARS225 million in the same period last year. Operating income fell 15% to ARS71.4 million in the first half, while EBITDA fell 8.8% to ARS111 million. Non-operating losses were ARS39.4 million, compared to ARS225 million in losses in the first six months of 2002, mainly due to exchange rate differences. The peso appreciated significantly in the first semester, impacting positively on the Company's US dollar denominated debts, but financial expenses as a result of exchange rate differences outweighed the benefit. Central Costanera, a subsidiary of Endesa Chile, has 2,982MW installed capacity. CIT: Bonds Receive Junk Ratings From Local Fitch ------------------------------------------------ Corporate bonds issued byCompnia Internacional de Telecomonicaciones were rated `C(arg)' by Fitch Argentina Calificadora de Riesgo S.A., relates the country's National Securities Commission. The rating issued last Thursday was based on the Company's financial health as of March 31, 2003. It applies to US$225 million of "Clase A bajo el Programa de U$S 800 millones" and US$175 million of "Clase B bajo el Programa de U$S 800 millones". The bonds were classified as "Series and/or Class", but maturity dates were not disclosed. Fitch said the bonds rated `C(arg)' have an extremely weak credit risk relative to other issues in Argentina's capacity for meeting financial commitments is solely reliant upon sustained, favorable, business or economic conditions. DUETO: Creditors Called To Formal Meeting ----------------------------------------- Creditors of Dueto S.A. are called to a formal meeting by Court No. 1 of Buenos Aires, which is under Dr. Juan Jose Dieuzeide. Dr. Martha Bellusci de Pasina, Buenos Aires Clerk No. 2, assists the court on the case. The Company is currently undergoing reorganization with Ms. Adriana Esnaola as receiver. The credit verification process will end on September 3 this year. The Court requires the receiver to submit the individual reports by October 17 this year. The general report is due on November 28. Creditors are invited to an informative assembly on June 4 next year in the audience court. CONTACT: DUETO S.A. 2nd Floor Office 4 No. 1342 Rivadavia Ave. Buenos Aires Adriana Esnaola 10th Floor G No. 615 Juncal St. Buenos Aires Court No. 1 Dr. Juan Jose Dieuzeide Ground Floor No. 533 Libertad St. Buenos Aires FARMACIA PLASTANI: Enters Liquidation Process --------------------------------------------- Buenos-Aires based Farmacia Plastani will undergo liquidation as ordered by the city's Court no. 7. Argentine news portal Infobae relates that Clerk No. 13 assists the court on the case. The designated receiver is Mr. Miguel Lostau. Creditors must submit their claims for verification before October 6 this year. The report, however, did not mention whether the court has set the deadlines for the individual and general reports. CONTACT: Farmacia Plastani S.R.L. Juan B Alberdi 1900 Buenos Aires Miguel Lostau Viamonte 993 Buenos Aires MANAGEMENT ONE: Last Day For Credit Verification Today ------------------------------------------------------ Today, August 12, is the last day for the credit verification process concerning the bankruptcy of Management One S.A.. An earlier report by the Troubled Company Reporter - Latin America indicated that Court No. 1 of Buenos Aires declared the Company bankrupt recently. Creditors must submit their claims for verification to the receiver, Ms. Lydia Albite. She will then proceed to make preparations for the individual reports. CONTACT: Lydia Albite Tacuari 119 Buenos Aires LIBRERIA Y PAPELARIA: Credit Authentication Ends Today ------------------------------------------------------ Ms. Daniela Frisone, the receiver for the reorganization of Argentine library Libreria y Papelaria A.W.S.R.L. will end the credit authentication process today, August 12. The receiver will then prepare the required individual reports. Earlier, local newspaper El Cronista Comercial reported that the Company received permission to start its reorganization after the court approved its motion for "Concurso Preventivo". The Company stopped making debt payments since April this year. CONTACT: Librarias y Papelarias A.W.S.R.L. Cufre 241 Buenos Aires Ms. Daniela Frisone Sarmiento 1371 7 Piso 701 Buenos Aires Phone: (005411) 4373 3608 MTM: Asks Court's Permission To Reorganize ------------------------------------------ MTM S.R.L., which makes uniforms for companies, is seeking court permission to start its reorganization process after it stopped making debt payments on November 30 last year. A local source reveals that the Company has submitted its motion for "Concurso Preventivo" at Buenos Aires Court No. 19, which is under Dr. Adela Fernandez, added that Clerk. No. 37, Dr. Fernando Durao aids the court on the case. CONTACT: MTM S.R.L. 3rd Floor, Room 303/304 No. 567 Parana Buenos Aires NET GROUP CONSULTING: Credit Verification Process Ends Today ------------------------------------------------------------ The credit verification process for the bankruptcy of telecommunications firm Net Group Consulting SA ends today, August 12. Creditors were required to submit their claims to the receiver, Mr. Alberto Eduardo Scravaglieri for authentication. The Company was declared bankrupt by Court No. 8 of Buenos Aires, which is under Dr. Gonzales, granting a petition from Metrored Telecommunications S.R.L., to whom the Company owed some ARS5609,70. CONTACT: NET GROUP CONSULTING SA 4th Floor No 875 Rivadavia Street Buenos Aires Argentina Mr. Alberto Eduardo Scravaglieri 4th Floor No. 651 Roque Saenz Pena Street Buenos Aires Argentina PEDRO VILLEGAS: Court Calls Creditors To Meeting ------------------------------------------------ Creditors of Pedro S. Villegas S.A., which is under "Concurso Preventivo," are called to a formal meeting by the Civil and Commercial Tribunal of Rio Negro. A local source relates that the Company is undergoing reorganization. Court No. 3 of Rio Negro, which is under Dr. Susana Teresa Burgos, handles the company's case. The clerk is Ms. Maria del Carmen Villalba. The receiver for the process is Mr. Omar Minena, an accountant from General Roca City. Creditors have until September 23 to submit their claims for verification. CONTACT: PEDRO S. VILLEGAS S.A. No. 746 Roca Ave General Roca City Rio Negro Omar Roberto Minena No. 1470 Kennedy St. General Roca City Rio Negro Rio Negro Court No. 3 Dr. Susana Teresa Burgos No. 1.047 Roca Ave. General Roca City R�o Negro REMEDIAR: Holding Informative Assembly Today -------------------------------------------- The informative assembly for the reorganization of Buenos Aires- based health services company Remediar S.A. will be held today. Earlier, local news portal Infobae reported that the court has approved the Company's motion for "Concurso Preventivo". Buenos Aires Court No. 22 handles the Company's case, Infobae said. REPSOL-YPF: To Maintain Investment In Argentina ----------------------------------------------- Executives of Spanish oil company Repsol-YPF met with Argentine President Nestor Kirchner on Wednesday to inform the latter of the Company's intention to maintain its investment in the country. Repsol-YPF invested US$800 million in 2002, and plans to maintain the same level of investment and production this year, according to a company source. Repsol-YPF's exploration and production operating profits in Argentina increased 82.5% to EUR865 million (today US$984mn), and operating revenues increased 17.5% to EUR2.07 billion in the first semester 2003 compared to the same period 2002. SIDERAR: Results Improve in the 1H03 ------------------------------------ Siderar, Argentina's largest integrated steelmaker, reported a first half net profit of ARS154 million (US$53mn), compared with a loss of ARS41.7 million in the same period of 2002, Business News Americas reveals. According to analysts, Siderar is one of the few companies to have emerged from Argentina's four-year economic crisis in good shape. Last year, the Company's exports benefited strongly from the 70% devaluation of the peso in 2002. This year, the Company has gained from the pickup in domestic demand, not least in the construction industry. The Buenos Aires-based company said sales revenues came in at ARS1.33 billion (US$459mn) in the first six months of this year, up from ARS1.16 billion in 1H02. Ebitda totaled ARS531 million for the first half, up from ARS235 million, and Ebitda margins stood at 40% compared to 20%. The Company said it produced 1.23Mt of steel in the first six months of 2003, compared with 937,000t in 1H02, and sold 1.10Mt, up from just over 1Mt. Domestic sales rose 56% to 558,000t and exports were off 21% at 544,000t. Siderar said the decline in exports was explained largely by fewer slab sales abroad. The Company reported shareholders' equity of ARS1.33 billion on June 30, 2003, against ARS1.18 billion six months earlier. Analysts say that given the improving economy, Siderar's strong operating results and the successful debt restructuring of Venezuelan company Sidor - in which Siderar has a 21% stake - the Argentine company should perform well in the period ahead. Siderar is controlled by the Techint group. CONTACT: Leonardo Stazi Siderar S.A.I.C. Phone: 54 (11) 4018-2308/2249 Home Page: www.siderar.com SIDERAR/SIDOR: Unite To Become Region's Main Steel Exporters ------------------------------------------------------------ Argentine steelmaker Siderar and Venezuelan counterpart Sidor, both controlled by the Techint group, have joined forces, says Business News Americas. The move is part of an attempt to become the Americas' principal steel exporters. Siderar has capacity of 2.2Mt, while Sidor 3.5Mt. According to Daniel Novegil, executive VP of the flat steel division of the Techint group, the group plans to expand via mergers, acquisitions and alliances, but he ruled out the creation of another Tenaris-like giant, referring to the group's steel tube holding company that has 13% of the global market for seamless pipes for the oil industry. "We could be buying something out there in the next three years," Novegil said. Usiminas, one of Brazil's biggest steelmakers, controls 8.97% of Sidor and 5% of Siderar. "Usiminas is natural ally," said Novegil. Techint has 51% of Siderar and did have 28% of Sidor through its stake in the Amazonia consortium, but in recent negotiations to reduce Sidor's debt, it ploughed US$90 million into the Venezuelan company and took its share up to 35.9%. SWEET VICTORIAN: Court Assigns Receiver to Reorganization --------------------------------------------------------- Court No. 23 of Buenos Aires assigns Estudio Carreiro, Harvey y Asociados as receiver for the reorganization of lingerie maker Sweet Victorian S.A., reports Boletin Oficial. Creditors must submit their proofs of claim to the receiver before October 10 this year. The Court, under Dr. Julia Villanueva is assisted by Clerk No. 46, Dr. Stella Maris Timpanelli. The Company is undergoing reorganization following the court's approval of its motion for "concurso preventivo". The Company's failure to meet its financial obligations since June 20 this year prompted the need to reorganize. CONTACT: Sweet Victorian S.A. Azar 764 Buenos Aires Estudio Carreiro, Harvey y Ascociados Per�n 1143 PB '6' Buenos Aires Phone: (005411) 4382.1243 TELEFONICA DE ARGENTINA: S&P Cuts COINTEL's Notes ------------------------------------------------- Standard & Poor's Ratings Services said Friday that it lowered its ratings on several note issues of Argentine-based telecommunication incumbent, Telef�nica de Argentina S.A. (TASA) and holding company Compania Internacional de Telecomunicaciones S.A. (COINTEL), to 'D' from 'CC', following the completion of the exchange offer launched by TASA in May 2003. At the same time, the foreign currency corporate credit rating on TASA and the foreign and local currency corporate credit ratings on COINTEL were lowered to 'SD' from 'CC'. Subsequently, Standard & Poor's raised the ratings on the notes issues to 'CCC-'. The notes exchanged were: -- TASA's $300 million, 11.875% senior unsecured notes due November 2004 (acceptance: 73%). -- TASA's $368.5 million, 9.125% notes due May 2008; COINTEL's $225 million, 8.85% notes due August 2004 (acceptance: 66%). -- COINTEL's Argentine pesos (ArP) 175 million, 10.375% notes due August 2004 (acceptance: 73%). "Although an important percentage of the holders of the original notes have exchanged them for the new notes, Standard & Poor's views the concluded exchange as a default because recovery of the exchanged bonds is deferred beyond the original maturity date," said Standard & Poor's credit analyst Marta Castelli. The exchange offer has resulted in a lengthening of the maturity schedule for TASA and COINTEL. As a result, the corporate credit rating, the new notes, and the old issues on both companies will be rated 'CCC-'. In addition, the senior unsecured ratings on Telefonica Holding de Argentina S.A. (THA) are raised to 'CCC-' due to the link between THA's credit quality and that of TASA and COINTEL, which constitute THA's only sources of funds. In spite of the relief of TASA's short-term refinancing risk, the company has to overcome the challenges regarding the tariff renegotiation and the economic recovery and stability in Argentina. In addition, COINTEL still faces the maturity of its capital market debt in August 2004. The negative outlook on the corporate credit ratings reflects Standard & Poor's expectations that TASA's cash flow generation will remain unclear as log as the renegotiation of tariffs is not resolved. In addition, even after the exchange, TASA and COINTEL's liquidity is tight. Funding flexibility is impaired by the limited credit availability for Argentine companies, the mismatch between peso flows and a high dollar debt burden, and the weaker expectations of support from its Spanish parent, Telefonica S.A. (TESA), who directly and indirectly owns almost 100% of both Argentine entities. With THA, TASA and COINTEL are Spain's TESA fixed-line and long distance operations in Argentina. As of March 2003, aggregated debt at TASA, COINTEL, and THA was approximately $2.8 billion, including the bonds mentioned above and $1.5 billion in intercompany loans provided by TESA, which demonstrate the parent's strong financial support in 2001. ANALYST: Ivana Recalde Buenos Aires Phone: (54) 114-891-2127 Marta Castelli Buenos Aires Phone: (54) 114-891-2128 TELEFONICA DE ARGENTINA: Fitch Assigns Default Ratings To Bonds --------------------------------------------------------------- The National Securities Commission of Argentina relates that Fitch Argentina Calificadora de Riesfgo S.A. assigned default ratings to Telefonica de Argentina S.A.'s corporate bonds last Thursday. The bonds rated `D(arg)' includes US$300 million of "Obligaciones Negociables", which is classified as "Simple Issue". The rating also applies to US$386.5 million of "Serie por U$S 368.5 millones bajo el Programa de Ons por U$S1.500 millones", classified as "Series and/or Class", which mature on May 7, 2008. The rating, which is based on the Company's finances as of March 31 this year, is given to financial commitments that are currently in default, said the ratings agency. TELEFONICA DE ARGENTINA: Fitch Rates Various Bonds `BBB(arg)-' -------------------------------------------------------------- A number of corporate bonds issued by Telefonica de Argentina S.A. were rated `BBB(arg)-' by Fitch Argentina Calificadora de Reisgo last Thursday. The rating, which was based on the Company's finances as of the end of March this year, denotes an adequate credit risk relative to other issues in the country. According to the National Securities Commission of Argentina, the rating applies to the following bonds: -- Over US$71.37 million of "Serie por U$S 71.375.350 bajo el Prog. de Ons. por U$S1.500", under "series and/or class", due on July 1, 2006. -- US$277.5 million of "ONS por hasta U$S 277.5 millones vencimiento 2007, en canje por Ons vencimiento 2004", under "simple issue", which matured in June this year. -- US$351 million of "ONS por hasta U$S 351 millones vencimiento 2010, en caje por Ons vencimiento 2008", under "simple issue", also matured in June 2003. -- US$290 million of "Obligaciones Negociables vencimiento 2011", under "Simple Issue", matured on June 19, 2003. -- US$162 million of "Obligaciones Negociables por hasta Ar$162 millones con vencimiento 2011", under "Simple Issue", and undisclosed maturity date. TGS: Reports Declining Profit in 2Q03 ------------------------------------- Argentine natural gas pipeline company Transportadora de Gas del Sur SA (TGS) reported late Thursday that net profit in the second quarter of the year fell to ARS96.4 million (US$32.8mn) from ARS218 million in the first quarter of the same year, relates Business News Americas. Spokesperson Maria Victoria Quade attributed slumping profit mainly to a lower exchange rate difference and an inflation adjustment in the first quarter that was not applicable in the second quarter. According to Quade, TGS was able to apply deferred tax benefits of ARS95 million in its first quarter results in line with Argentina's new tax regulations. However, the amount fell to ARS41 million in the second quarter after the Company was banned to adjust its results for inflation. Non-operating profit stood at ARS30 million in the first quarter due to the positive effect on its US$1 billion debt of a favorable exchange rate difference between December and March. However, the Company posted a ARS39-million non-operating loss in the second quarter because the peso did not gain as much against the dollar during the quarter, rising only ARS0.1 from ARS2.90/US$ on March 31 to ARS2.80 on June 30, Quade said. Thus, the difference in non-operating income from the first quarter was about ARS70 million, which combined with the ARS54 million drop in deferred tax benefits, was behind the Company's lower second quarter net profit. Meeting its financial obligations hasn't been easy for the Company, which defaulted on most of its US$430 million debt due in 2003, Quade said. TGS is renegotiating its US$1 billion debt with other creditors. Many Argentine utilities have reported poor results in the past 18 months, squeezed by the government's rates freeze and the crushing burden of servicing dollar debts following the peso's decline. CONTACT: Transportadora de Gas del Sur SA 5th Floor 3672 Don Bosco Buenos Aires Argentina Phone: +54 11 4865 9050 Home Page: http://www.tgs.com.ar Contacts: Rafael Fernandez Morande, Chairman Eduardo Ojea Quintana, Vice Chairman & General Manager ============= B E R M U D A ============= LORAL: EchoStar IX/Telstar Satellite Successfully Launched ---------------------------------------------------------- EchoStar IX/Telstar 13, a powerful multi-band satellite built for EchoStar Communications Corporation and Loral Skynet by Space Systems/Loral (SS/L), was successfully launched Thursday at 11:31 pm EDT. The satellite, to be positioned at 121 degrees West longitude, was sent into space from the Odyssey Launch Platform, positioned on the Equator in the Pacific Ocean, on a Sea Launch Zenit-3SL rocket. In a unique satellite sharing arrangement, EchoStar will operate the Ku- and Ka-band payloads as EchoStar IX; Loral Skynet, a subsidiary of Loral Space & Communications, will initially own and operate the C-band payload as Telstar 13. In July, Loral reached a definitive agreement to sell Telstar 13, along with five other North American telecommunications satellites to Intelsat, Ltd., Hamilton, Bermuda. The spacecraft's Ku-band fixed satellite services (FSS) transponders are designed to enhance EchoStar's current U.S. DISH Network satellite TV service. EchoStar IX will join EchoStar's current fleet of eight satellites that provide DISH Network customers with hundreds of all-digital television channels, including interactive TV services, sports programming, high definition television and international programming. The spacecraft is also equipped with the first U.S. commercial Ka-band spot-beam payloads. The successful launch of EchoStar IX brings EchoStar's fleet to nine satellites, including three satellites previously built by SS/L. Telstar 13's 24 C-band FSS transponders operating at 36 MHz will provide Skynet's cable programming customers with coverage throughout North America, including Alaska, Hawaii and Puerto Rico. Skynet's current satellite serving cable programmers, Telstar 7, is operating nearby at 127 degrees West longitude. Together the satellites form a very attractive platform to cable programmers looking for the benefits of a strong neighborhood and restoration solutions. "Building this satellite has been a tremendous success for all parties involved," said Patrick DeWitt, SS/L's president and chief operating officer. "Our close relationships with EchoStar and Skynet have been an important part of SS/L's success, and our shared commitment to quality remains our top priority." Built at Space Systems/Loral's Palo Alto, Calif., facility, EchoStar IX/Telstar 13 is based on SS/L's space-proven 1300 geostationary satellite platform, which has an excellent record of reliable operation. The 1300 is designed to achieve a long life, in this case 15 years, excellent station-keeping and orbital stability by using bipropellant propulsion and momentum- bias attitude control systems. A system of high-efficiency solar arrays and batteries provide uninterrupted electrical power. In all, SS/L satellites have amassed nearly 1,000 years of on-orbit service. On July 15, 2003, Loral announced that it had reached a definitive agreement to sell its North American telecommunications satellites to Intelsat, Ltd. In conjunction with this sale, Loral and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The transaction with Intelsat is expected to close within four to six months, pending Bankruptcy Court and regulatory approval. After this transaction, Loral Skynet will continue to operate an integrated fixed satellite and network services business using its fleet of five telecommunications satellites and its established VSAT/fiber global network infrastructure. EchoStar Communications Corporation (NASDAQ:DISH), through its DISH NetworkT, is a leading U.S. provider of satellite television entertainment services with 8.53 million customers. DISH Network provides advanced digital satellite television services to the home, including hundreds of video, audio and data channels, personal video recording, HDTV, sports and international programming, professional installation and 24-hour customer service. For more information, visit DISH Network at www.dishnetwork.com. A pioneer in the satellite industry, Loral Skynet continues to deliver the superior service quality and range of satellite solutions that have made it an industry leader for more than 40 years. With its fleet of satellites and its established hybrid VSAT/fiber global network infrastructure, Skynet offers a unique, single source for all broadcast, data network, Internet access and IP needs. Headquartered in Bedminster, New Jersey, Skynet is dedicated to providing secure, high-quality connectivity and communications. For more information, visit www.loralskynet.com. Space Systems/Loral, a subsidiary of Loral Space & Communications (OTC BB:LRLSQ), is a premier designer, manufacturer, and integrator of powerful satellites and satellite systems. SS/L also provides a range of related services that include mission control operations and procurement of launch services. Based in Palo Alto, Calif., the company has an international base of commercial and governmental customers whose applications include broadband digital communications, direct-to-home broadcast, defense communications, environmental monitoring, and air traffic control. For more information, visit www.ssloral.com. Loral Space & Communications is a high technology company that concentrates primarily on satellite manufacturing and satellite- based services. For more information, visit Loral's web site at www.loral.com. TYCO INTERNATIONAL: SEC Concludes Review of Financial Statements ---------------------------------------------------------------- The Securities and Exchange Commission notified Tyco International Ltd. that it has completed a review of the Company's financial reports, according to the AP Online. The review covered last year's annual report and quarterly statements from the periods ending Dec. 31 and March 31, Tyco said. The reports restated financial results dating to 1998. Investigators, which declined to comment on the results of the investigation, continue to study the conglomerate's accounting practices. Tyco recently filed additional restatements, mostly related to business practices at its ADT security unit, which lowered previously reported profits from 1998 to 2001 by US$1.15 billion, while adding US$183 million to last year's earnings. Results also were boosted for the first half of the current fiscal year. Tyco's accounting practices remain a top concern for investors. The Wall Street Journal reported Friday that accounting analyst Albert J. Meyer has said Tyco overstated "free cash flow" in the most recent quarter by US$152 million. In a conference call with investors and analysts last week, Tyco chief executive Edward Breen called the US$844 million in free cash flow reported for the period ending June 30 "excellent." Tyco officials contacted Friday said the accounting of fiscal third-quarter cash flow was appropriate. Tyco defines free cash flow as cash generated from operations, minus capital expenditures, dividends and several other items. TYCO INTERNATIONAL: Shelf Registration Statement Deemed Effective ----------------------------------------------------------------- Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI) announced Friday that its shelf registration statement on Form S-3 has been declared effective by the U.S. Securities and Exchange Commission. Tyco announced earlier Friday that it had requested that the Securities and Exchange Commission accelerate the effectiveness of the registration statement. The registration statement was filed pursuant to a registration rights agreement entered into in January 2003 upon the private placement of Tyco International Group S.A.'s 2.750% Series A Convertible Senior Debentures due 2018 and 3.125% Series B Convertible Senior Debentures due 2023 under Rule 144A of the Securities Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor will there be any sale of these debentures in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Copies of the registration statement, including the prospectus and prospectus supplement subject to completion contained therein, are available on the SEC's web site at www.sec.gov and may also be obtained on the Company's web site at www.tyco.com under Investor Relations. ABOUT TYCO INTERNATIONAL Tyco International Ltd. is a diversified manufacturing and service company. Tyco is the world's largest manufacturer and servicer of electrical and electronic components; the world's largest designer, manufacturer, installer and servicer of undersea telecommunications systems; the world's largest manufacturer, installer and provider of fire protection systems and electronic security services and the world's largest manufacturer of specialty valves. Tyco also holds strong leadership positions in medical device products, and plastics and adhesives. Tyco operates in more than 100 countries and had fiscal 2002 revenues from continuing operations of approximately $36 billion. More detailed information about these and other factors is set forth in Tyco's Annual Report on Form 10-K for the fiscal year ended September 30, 2002, as amended, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, as amended. Tyco is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. CONTACT: Gary Holmes (Media) Phone: 212-424-1314 Ed Arditte (Investors) Phone: 212-424-1390 =========== B R A Z I L =========== ACESITA: 1H Earnings of BRL101 Mln Confirms Profitability --------------------------------------------------------- ACESITA S.A. (BOVESPA: ACES3 and ACES4, OTC: ACAEY/ACAIY), the only integrated stainless and silicon flat steel producer in Latin America, released Thursday its results for the second quarter of 2003 (2Q03). All operating and financial information, except where otherwise indicated, is in Reais, based on the Parent Company's figures as per Brazilian corporate legislation. All comparisons in this release, except where otherwise stated, are with the second quarter of 2002 (2Q02). Comments from Mr. Gilberto Audelino Correa, CFO and Investor Relations Officer: "Acesita ended another quarter with net positive earnings, reaping the benefits of the restructuring that was implemented over the past several years. We have completed 12 consecutive months of operations in accordance with the new industrial profile, taking into consideration the definitive shutdown of the mechanical bars production that occurred at the end of June 2002. The results of the strategy that was implemented are evident in the company's performance: during the period between July/02 and June/03, sales reached R$ 2 billion, reiterating its new potential, while cash flow was above R$ 560 million, with the EBITDA margin higher than 26%. The performance during the preceding 12 months (July/01 to June/02) showed net revenues of R$ 1.4 billion, cash flow slightly below R$ 270 million and an EBITDA margin of about 20%. During this quarter, we reduced indebtedness as a result of the entry of US$ 162 million through the sale of portion of the last remaining relevant asset not associated with our core business - the shares not linked to the CST shareholders agreement. Today, we have a balanced operating structure, focused on higher value added products, while the first part of our financial restructuring has been concluded. We are proceeding with the final phase of adjustments that have been scheduled for Acesita, whose purpose is to lengthen the average maturity of remaining debt. The Company's current profile, with its new operating structure concluded and the financial structure in a final phase of adjustment permits us to put forward an optimistic view of our prospects over the short and medium term". With the ending of this quarter, Acesita completed 12 consecutive months of activities without mechanical bars line in its portfolio and, thus, was entirely focused on the production and sale of specialty steels. In order to highlight the evolution of the Company's profile and how it reflects on operating and commercial performances, on an exceptional basis this report makes comparisons over 12-month periods. MARKET AND SALES Acesita recorded good sales during the quarter despite the fact that the local and international specialty steel markets remained sluggish, thereby confirming the quality and competitiveness of its products and, consequently, allowing it to maintain the same sales level. The total sales volume was 172.1 thousand tons, a 9.7% increase when compared to 1Q03. When compared to the same period a year ago, there was a 2.4% reduction in volume. Acesita's sales performance during the quarter, with volumes and mix compatible with what was recorded during the previous quarters, is specially positive considering the operating mishaps at the mill during the period. In the month of May, the delivery of gases used by different pieces of equipment, that was the responsibility of an outsourced supplier with facilities at the plant, was disrupted as a result of breakdowns involving pumping machinery. The problem was quickly attenuated by using trucks to transport these inputs, and subsequently resolved by fixing the damaged equipment. In order to minimize the impact on the production process, alternative production paths were used in an effort to supply customers within the established deadlines. These were not always the most efficient paths, and compromised the plant's operating results, temporarily compressing the margins. At the same time, an additional sales effort was made to reorient available inventory, seeking to guarantee normal supply of the market. Yet in this period, Acesita decided to take advantage of the opportunity to move up regular preventive maintenance of its hot strip mill (HSM), previously scheduled for the second half of 2003, and thus minimizing the impact on annual production. During the past 12 months, the total sales volume was 673.0 thousand tons, equivalent to the volume posted during the 12 previous months (670.3 thousand tons) with nearly 19% in terms of mechanical bars included; today, higher value added products have substituted them. During this period, Acesita's sales of stainless steel increased by 37.1%, demonstrating the change in the production structure of the Company. It should be mentioned that both of the periods under analysis suffered extraordinary impacts: in the first period, the Tim�teo mill was the target of strategic investments and the subsequent learning curve of the new equipment; in the latter case, the operation was influenced by the momentary problems mentioned above. Exports Acesita's exports are almost exclusively represented (96.3% during the quarter) by the sale of stainless steel. With the expansion of its production capacity and taking the limitation of the domestic market into account, today the international market is the main destination of Acesita's stainless steel. The volume shipped abroad during the quarter represented 56.4% of overall sales of the product, which once again surpassed sales to the local market. Exports during the quarter rose 62.7% over the same period of the previous year, reaching 53.1 thousand tons. Asia was the main destination for international shipments, responsible for 56.6% of the total volume exported in the quarter. Considering a 12-month period, the total volume of the Company's exports rose by 85.5%. According to the Ministry of Development's Foreign Trade, the growth of Acesita's exports between the first half of 2003 and the same period in 2002 was 207.2%, the highest percentage increase of the 40 largest Brazilian exporters. NET OPERATING REVENUE During the quarter, specialty steel prices did not vary significantly. On the international market, prices in dollars increased slightly, although, when converted to local currency, a small decline in net export revenues occurred due to the appreciation of the Real. On the domestic market, only the prices of silicon steel declined during the quarter. Relatively stable prices and an effort to place products, mainly on the international market, ensured good performance of Acesita's net operating revenue, which was R$ 536.6 million for the quarter. This quarter's revenue practically maintained the same pattern as the previous quarters and showed a 46.3% increase year-over-year. Compared to the first quarter of the year, there was an 0.85% drop because of small variations in the sales mix and the reduction in export revenues due to the appreciation of the Real during the period. Evaluating the last 12 months during which the Company operated without the mechanical bars line and was fully adapted to the new equipment and processes that were installed, Acesita's net revenues totaled R$ 2,106.8 million, representing a 54.6% growth compared to the accumulated total during the preceding 12 months. The amount confirms the expectation announced by the Company to maintain the pace of its revenues at R$ 2 billion per year. In conformance with the Company's planning and in accordance with its new profile, export sales are playing a more important role in Acesita's overall profile. Export revenues during the quarter totaled R$ 200.7 million (US$ 67.6 million), or 37.4% of total net revenues. Sales of stainless steel represented 74.6% of the total net revenue of the period, reaching R$ 400.2 million in the quarter, or a 69.8% growth as compared to the same period the previous year. Mainly, this was due to higher sales volumes. Sales performance maintained the characteristics observed during the past four quarters, demonstrating the Company's greater focus on specialty steel. Net sales revenues from silicon flat steel were R$ 69.0 million for the quarter, representing a 7.1% increase of in sales obtained with the product during the same period a year earlier. Sales of carbon steel/alloyed were responsible for 7.6% of sales revenues, totaling R$ 40.9 million. Acesita's sales in this segment were almost exclusively to the local market, achieving a market niche with a product containing sophisticated technical specifications and greater value added than the standard product. OPERATING PERFORMANCE Operating Cash Generation - EBITDA The Company's EBITDA margin, which after the shutdown of the mechanical bars line had been varying between 28 and 31%, reached its lowest level during the second quarter of 2003, posting an 18.6% return on net revenues. The decline was caused principally by the operating difficulties and also by an increase in the price of some inputs. Nickel, which is a main item in the cost of production of stainless steel, hit US$ 9,500/ton, 14% higher than the average seen in March/03. Although the majority of sales contracts incorporates an adjustment mechanism for these variations (alloy surcharge), there is a time lag between the appropriation of the cost of production by the accounting process and its transfer to the sales price via the alloy surcharge mechanism; this mismatch causes the momentary additional compression of operating margins. Financial Result Financial expenses during the quarter reflected the improvement in the macroeconomic situation and the reduction of US$ 161.8 million of Acesita's debt through the sale of a portion of the shares in Companhia Sider�rgica de Tubarao (CST). As announced by the Company, the proceeds were entirely used to pay off 92% of the debentures belonging to the 5th issue (R$ 456.9 million) and debentures contracted with the BNDES in the amount of R$ 67.0 million. The 14.4% appreciation of the Real against the dollar during the period also favorably contributed to the reduction of financial expenses, causing a positive foreign exchange effect, translating into a gain of R$ 68.5 million. The position as of June 30 reflected a net debt of R$ 1.6 billion (including Acesita Internationals figures and reducing swap/margin account). This represented a reduction of 29.9% (R$ 669.0 million) during the past six months. This trajectory is confirmation of the Company's strategy to adjust its level of debt to the new operating performance reached after concluding capital expenditures in the Tim�teo mill. During this phase, taking into account the current annual pace of the EBITDA, Acesita already has reached a net debt/EBITDA ratio of 3.2 times, being compatible with its payment capacity. In April, swap (hedge) operations totaling US$ 100 million were canceled. These operations exceeded the amount necessary to protect the Company's cash flow (overhedge) and presented an opportunity for gains as a result of the strong downward tendency of the FX rate seen during a quarter. With the canceling of the swap operations, the result was an increase of R$ 42.4 million in the Company's cash flow, despite the fact that these same operations had generated a negative accounting adjustment of R$ 19.7 million (expense recognized in March/03). This adjustment was justified by the difference in the amount required for settlement of the operations under market conditions versus the load position on the books (using the "swap curve"). After the canceling of these operations, the Company has maintained strict policies to protect its cash flow from exchange swings, bringing greater predictability to financial management. Although it has reduced its debt to a level that is compatible with the new level of cash flow, Acesita still presents a high concentration of short-term debt (58.6%). The next step in financial restructuring, already underway, will result in the lengthening of the debt profile. For this, alternative long-term operations are being evaluated, totaling between US$ 200 million and US$ 250 million. These operations are expected to be concluded during the second half of 2003. After raising these funds, the Company should have approximately 65% of its funding allocated over the long-term. Net Income The situation in the quarter saw a combination of generally inactive local and international markets together with operating mishaps in the production activity and an increase in the price of inputs that led costs to pressure margin, but Acesita's response was quite positive. The flexibility offered by the new operating structure made it possible to quickly overcome the problems and maintain sales levels. On the other hand, the debt restructuring and subsequent decline in financial costs, coupled with the positive effects of the appreciation of the Real versus the US dollar, caused financial expenses to reduce pressure on Acesita's final earnings. As a result, the Company confirmed that it had reached a position of balance and posted net earnings of R$ 46.4 million in the quarter, accumulating net earnings of R$ 101.3 million for the first half of the year. It is important to emphasize that the deep structural changes that Acesita underwent over the past few years were taken to safeguard the Company's condition of profitability. This condition has been achieved during the past three quarters despite facing adversity. The R$ 292.1 million net income obtained during the past three quarters confirm this assertion. Capital Expenditures (CAPEX) During the first quarter, Acesita invested R$ 6.3 million. In accordance with the guidelines of the strategic plan capital expenditures must be limited to what is needed to maintain industrial competitiveness. During the first six months of the year, capital expenditures totaled R$ 14.2 million, with the scheduled expenditures for the full year being maintained at R$ 47 million for the year. Outlook The domestic steel market has accompanied the country's low level of economic activity. The recent reduction in the basic interest rate and the prospect of a continuation of this trend has created a general expectation for a gradual reheating of the Brazilian economy. In the event this recovery prospect is confirmed through further reduction in interest rates, the positive effects should begin to be felt as of the fourth quarter of the year. The international market is showing signs of uncertainty due to high levels of inventories, high nickel price volatility and, as a consequence, pressure on the price of stainless steel. With the Company now aligned to its strategic profile of a focus on the production and sale of specialty steel, and with the substantial operating flexibility achieved through the new model and a debt reduction that had been negatively impacting earnings, Acesita foresees good future prospects, in spite of the macro- economic situation. ACESITA S.A. is an integrated steel company reporting net revenues of R$1,698 million in 2002. With its head office in Belo Horizonte and its plant in Tim�teo, in the Vale do A�o region of Minas Gerais State, it has an annual production capacity of 900 thousand tons of molten steel. The Company is the only integrated producer of flat stainless and silicon steel in Latin America. CONTACTS: ACESITA Fabio Abreu Schettino Financial Operations and Investor Relations Manager Tel: (55 31) 3235-4241 Adriana L�cia Fernandes Investor Relations Coordinator Tel: (55 31) 3235-4270 Flavia Bozzolla Vieira Analyst Tel: (55 31) 3235-4235 www.acesita.com.br ri@acesita.com.br THOMSON Doris Pompeu Brasil Consultant Tel: (55 11) 3897-6408 PABX (55 11) 3897-6857 doris.pompeu@thomsonir.com.br COPEL: To Sign New Power Purchase Agreement With Cien Soon ---------------------------------------------------------- Parana state power companu Copel and transmission company Cien are about to strike a new power purchase agreement, reports local newspaper Jornal do Brazil. The new contract is expected to lower costs for Copel. Copel is likely to cut out any take-or-pay commitment on power purchases from Cien, the report sats. The price is projected to fall to US$11.5/MWh from US$28/MWh. The report added that under the new contract, Copel will be paying only US$40 million annually, compared to US$200 million/year under its contract with local power plant Araucaria. Parana state governor Roberto Requiao nullified the original PPA contract with Araucaria, claiming the excessive costs were driving Copel into bankruptcy. Cien is owned by Endesa Spain (NYSE: ELE) and its Chilean generation subsidiary Endesa Chile (NYSE: EOC). It delivers power through Argentine trader Cemsa, which is also controlled by Endesa Spain. ========= C H I L E ========= ENERSIS: To Outsource Operations at Five Units During 2004-2008 --------------------------------------------------------------- For the second time since 2000, Chilean power sector holding Enersis will outsource technical and commercial operations at five distribution subsidiaries for the period 2004-2008. According to Business News Americas, the Company has kicked off the bidding process for four-year contracts for the operations at the five distributors, namely, Chile's Chilectra, Peru's Edelnor, Colombia's Codensa, and Brazil's Cerj and Coelce. There are six separate contracts for technical operations, and one contract for commercial operations. Companies can bid on one or all contracts at the same distributor, or for the same contract(s) at more than one distributor. Bidding rules can be viewed at the Enersis website (www.enersis.cl). Technical bids should be presented by October 10 and economic bids by October 31. The exact start dates vary between contracts, says Business News Americas. CONTACT: Enersis SA Avenida Kennedy Vitacura No 5454 Santiago Chile 1557 Phone: +56 2 353 4400 Fax: +56 2 378 4768 Home Page: http://www.enersis.cl Contacts: Engr Alfredo Llorente Legaz, Chairman Engr Rafael Miranda Robredo, Vice Chairman ============= J A M A I C A ============= AIR JAMAICA: To Resume Toronto Flights Next Year ------------------------------------------------ Air Jamaica announced on Wednesday that it would resume flights to Toronto, Canada on April 5 next year. The airline's chief executive Christopher Zacca projects that the move will produce profits for the airline, says a report released by RJRNews.Com. "With Air Jamaica's new fleet of state-of-the-art airbus aircraft, we now have the capacity and capability to return to that route and service it in true lovebird style," said the executive. Air Jamaica ceased servicing the Toronto route due to heavy losses in March 1990. The airline, which was then under government control entered a code share agreement with Air Canada. The airline is expecting its target market of tourists and ethnic travelers to prove the operation viable. The Jamaica Observer reports that there is a "large pocket" of Jamaicans in Toronto. Mr. Zacca said that Jamaicans in Canada has been asking for the service, adding that it is the airline's mandate to fly to places where there are large Jamaican communities. C&WJ: Oceanic Files Lawsuit to Overturn Restriction --------------------------------------------------- British telecommunications giant Cable & Wireless (C&WJ) found itself a defendant of a lawsuit lodged by Oceanic Digital, Jamaica's third largest cellular provider, says the AP. Oceanic filed the suit after the incumbent fixed line operator blocked some incoming international calls to its customers. The restriction, according to Oceanic, violated interconnection agreement with C&WJ, which it accused of trying to slow down Jamaica's deregulation process and drive up mobile service prices. Company executive Al Gencarella claimed that New York-based Oceanic is losing revenues of up to US$400,000 (Jamaican $23 million) a month due to the restriction. "Oceanic intends to fight for its position," a company statement said of the lawsuit, which was filed July 31 in Jamaica's Supreme Court. A court date has been set for Wednesday. In response to the lawsuit, C&WJ said it "will vigorously defend (its) action and is confident that it will prevail." C&WJ is a unit of London-based C&W plc. CONTACT: Cable & Wireless PLC 124 Theobalds Road London England WC1X 8RX Phone: +44 (0)20 7315 4000 Fax: +44 (0)20 7315 5000 Home Page: http://www.cw.com =========== M E X I C O =========== PEMEX: To Become LatAm's Biggest Firm In Terms of Sales ------------------------------------------------------- Mexico's state oil company Pemex is poised to become the biggest company in Latin America in terms of sales, CEO Raul Munoz Leos said at the third commission of the Mexican congress' permanent commission on Thursday. Citing a company statement, Business News Americas reports that the Company is projecting MXN590 billion in domestic and international sales this year. The total value of the Company's assets increased 25% in real terms to MXN697 billion in the four years to end-2002, making Pemex the world's sixth largest oil company, Munoz said. It also the world's third largest oil company in terms of production, he added. On the downside, Pemex debt increased 50% to MXN103 billion from January to May this year compared to the same period in 2002, newspaper El Universal cited Munoz. Pemex lacks sufficient funds to cover its operational and administrative costs, Munoz said. ===================== P U E R T O R I C O ===================== DORAL: Declares Quarterly Cash Dividend on Common Stock ------------------------------------------------------- Doral Financial Corporation (NYSE:DRL), a diversified financial services company, announced Friday that the Board of Directors declared a quarterly cash dividend of $0.14 per common share to be paid on September 6, 2003 to shareholders of record on August 18, 2003. The Company, financial holding company, is the largest residential mortgage lender in Puerto Rico, and the parent company of Doral Bank, Puerto Rico's fastest growing commercial bank, Doral Securities, a Puerto Rico based investment banking and brokerage firm, Doral Insurance Agency, Inc. and Doral Bank, FSB, a federal savings bank based in New York City. CONTACT: Doral Financial Corporation Richard F. Bonini, Senior Executive VP & CFO Phone: 212-329-3728 or Mario S. Levis, Senior Executive VP & Treasurer Phone: 787-474-6709 ============= U R U G U A Y ============= ANCAP: Signs Accord to Manage Petrolera del Conosur, Sol Petroleo ----------------------------------------------------------------- In a bid to coordinate strategies and increase the efficiency in Argentine fuels distributor Petrolera del Conosur and petrochemicals company Sol Petroleo, Uruguayan parent, state oil company Ancap, agreed to manage the companies. Under the management agreements signed separately with the two companies, Ancap will provide the companies with administration and technical support services, Business News Americas reports, citing Sol Petroleo CEO Nestor Ramirez. For its services, Ancap will receive a US$144,000 annual payment from each company, the companies said in separate statements to the Buenos Aires stock market. "This is the minimum amount the companies could agree on to cover Ancap's expenses," Ramirez said. The parties could extend the contracts next year, Ramirez added. Ancap will manage the companies with a single corporate vision, Ramirez said, adding it is too early to know if the Company plans to make any more investments in either company. CONTACT: Administracion Nacional de Combustibles, Alcohol y Portland (ANCAP) Central Administration Paysando s/n esq. Avenida del Libertador Montevideo, 11100 Uruguay P.O. Box 1090 Phones: +598(2) 902 0608 902 3892 902 4192 Fax +598(2) 902 1136 902 1642 Telex ANCAP UY 23168 E-mail: info@ancap.com.uy Home Page: www.ancap.com.uy Contact: Benito E. Pi eiro, Chief Executive Officer Phone +598(2) 900 2945 +598(2) 902 0608 Ext. 2253 Fax +598(2) 908 9188 ================= V E N E Z U E L A ================= CITGO: Fitch Ups CITGO's Ratings; Withdraws PDV America's Rating ---------------------------------------------------------------- Fitch Ratings has upgraded the senior unsecured debt rating of CITGO Petroleum Corporation to 'BB-' from 'B+' and the rating of CITGO's $200 million secured term loan to 'BB+' from 'BB'. With the payment of the $500 million maturity of senior notes on August 1, Fitch is withdrawing its rating on PDV America, Inc. CITGO is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A. (PDVSA), the state- owned oil company of Venezuela. The Rating Outlook for the debt of CITGO is Stable. The rating action recognizes the continued improvement in CITGO's liquidity position since the general strike in Venezuela and the company's strong operating performance over the last several months. Despite the 63-day national strike in Venezuela that lasted from December 2002 through February 2003, CITGO's refineries have continued to perform well, generating significant EBITDA and free cash flow for the company. Based on CITGO's new credit profile, Fitch would expect the company to generate EBITDA-to-interest coverage of approximately 5.0 times (x) during a mid-cycle margin environment. The ratings, however, also reflect the potential for further interference from PDVSA as CITGO enters a period of high capital requirements to meet the upcoming low sulfur regulations. CITGO estimates the total capital expenditures to meet environmental regulations to be approximately $1.3 billion over the next five years. Financial flexibility could be limited by further dividend payments or additional force majeure situations interrupting CITGO's supply of heavy Venezuelan crude. As discussed in previous reports, the indentures of CITGO's recent $550 million bond offering do place significant restrictions on future dividend payments. Fitch will evaluate future upstreaming of dividends to PDVSA from CITGO and take appropriate rating actions if necessary. Despite the company's strong performance, CITGO's credit profile also reflects the addition of the $550 million of 11-3/8% senior unsecured notes and the $200 million secured term loan which were added earlier this year. On July 25, 2003, CITGO paid $500 million in dividends to PDV America which was used to pay for the maturity of PDV America's $500 million senior notes which matured on August 1. Fitch has viewed the PDV America senior notes to ultimately be an obligation of PDVSA which were supported by Mirror Notes issued by PDVSA and held by PDV America. Following the dividend, CITGO had approximately $518 million available on its revolving credit facility and $8 million in cash. CITGO is one of the largest independent crude oil refiners in the United States with three modern, highly complex crude oil refineries and two asphalt refineries with a combined capacity of 756,000 barrels per day. The company also owns approximately 41% interest in LYONDELL-CITGO Refining L.P. (LCR), a limited liability company that owns and operates a 265,000-barrel per day (BPD) crude oil refinery in Houston, Texas. CITGO branded fuels are marketed through approximately 13,000 independently owned and operated retail sites. CONTACT: Bryan Caviness Chicago Phone: +1-312-368-2056 Alejandro Bertuol New York Phone: +1-212-908-0393 Media Relations: James Jockle New York Phone: +1-212-908-0547 EDC: Narrows Losses Amid Cost Cutting Efforts --------------------------------------------- Efforts by Venezuela's largest private energy generator and distributor, Electricidad de Caracas (EDC), to increase cost cutting helped the Company narrow its losses in the second- quarter of the year. According to Reuters, EDC recorded a loss of VEB5.6 billion for the quarter ended June 30 compared with VEB49.5 billion a year earlier. The Company's quarterly EBITDA -- earnings before interest, taxes, depreciation and amortization -- rose to VEB123.7 billion from VEB97.6 billion a year earlier. Operating revenues were near flat at VEB214.5 billion compared with VEB214.7 billion a year earlier. Venezuela's government last month signed a deal to use national public debt bonds to pay a debt of VEB40 billion it owes to EDC. The deal would cover outstanding debts to EDC up to the end of 2002. EDC is based in capital city Caracas and is a subsidiary of US power company AES. CONTACT: AES VENEZUELA Avenida Rio de Janeiro Qta. Tres Pinos Chuao, VE-1061 Caracas, Venezuela Phone: +58 14 929 2552 Fax: +58 2 9937296 E-mail: venezuela@aes.org Contact: Elmar Leal, Chairman Juan Font, Vice Chairman AES CORP Investor Relations Kenneth R. Woodcock, 703/522-1315 www.investing@aes.com Website: http://www.aesc.com/ *********** 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 America 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 * * *