/raid1/www/Hosts/bankrupt/TCRLA_Public/030917.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
Wednesday, September 17, 2003, Vol. 4, Issue 184
Headlines
A R G E N T I N A
ALIMENTOS BEIRO: Bankruptcy Proceeds With Authentication Process
CABLEVISION: Argentine Fitch Assigns Default Ratings
CELINA Y ASOCIADOS: Court Announces Bankruptcy
COLORIN: Evaluadora Assigns `D' Rating To Bonds
DIRECTV LA: Motion To Approve Equipment & Data Center Leases
ELECGAS: Receiver Verifies Bankruptcy Claims
EOSE: Submits "Concurso Preventivo" Motion to Court
ESTANCIAS DEL SUR: Seeks To Open Formal Restructuring Proceeding
IEBA: US$100M of Bonds Rated `D(arg)' by Fitch
INDUPACK: Reorganization Ends In Bankruptcy
INSTALACIONES SERVICOM: Receiver Takes Over
INTERNATIONAL TRADE: Kicks off Reorganization
JEANVAC: Court Sets Deadlines For Receiver's Reports
JORGE MARA: Verifications Accepted Until November 03
MULTICANAL: Fitch Rates $1.175B in Bonds `D(arg)'
NACSA: Chaco Tribunal Announces Bankruptcy
PRIDE INT'L: Negative Free Cash Flow Results From Weak Market
TERRIBETTI: Court Orders Bankruptcy
B R A Z I L
AES CORP.: BNDES Exempted From Units' Debt With Private Creditors
BANCO ALFA: Fitch Withdraws International Ratings
EMBRATEL: Conar Grants Right To Use "Voce pode" (You Can)
EMBRATEL: Offers $110M For ATTL
TELEMAR: Files Appeal To Overturn Rates Increase Injunction
USIMINAS: Overhauls Blast Furnace
C H I L E
CHILECTRA: Sabotage Hits Power Service
COEUR D'ALENE: Underwriters' Option Exercised on Public Offering
INVERLINK: Vida Plena To Settle Debts Before Sale Completion
C O L O M B I A
TELECOM: Minister's Fate To Be Determined Wednesday
E C U A D O R
EEQ: CEO Sees Financial Meltdown in the Near Term
H O N D U R A S
AES HONDURAS: Questions Legality of ENEE's Decision
M E X I C O
GRUPO TMM: Kansas City Southern Confirms Start of Negotiations
P A N A M A
CSS: Struggles To Restore Financial Health
V E N E Z U E L A
PDVSA: Venezuela's August Oil Production Averaged 3.3mb/d
PDVSA: Bitor Restructuring Likely To Impact Export to China
- - - - - - - -
=================
A R G E N T I N A
=================
ALIMENTOS BEIRO: Bankruptcy Proceeds With Authentication Process
----------------------------------------------------------------
The bankruptcy of Alimentos Beiro S.R.L. proceeds with the
receiver verifying creditors' claims. According to a report by
local news source Infobae, Ernesto Iob is assigned receiver on
orders from Buenos Aires Court No. 4. Verifications are scheduled
to continue until October 27 this year.
Aside from authenticating creditors' claims, the receiver must
also prepare the individual and general reports. However, the
source did not mention whether the court has set the deadlines
for filing these. The receiver expresses his opinions on the
factors that led to the Company's bankruptcy in these reports.
CONTACT: Ernesto Iob
Presidente Peron 1186
Buenos Aires
CABLEVISION: Argentine Fitch Assigns Default Ratings
----------------------------------------------------
A total of US$1.5 billion of Cablevision S.A.'s corporate bonds
were given default ratings by Fitch Argentina Calificadora de
Riesgo S.A., according to the Comision Nacional Valores (CNV),
the country's securities regulator.
The `D(arg)' rating is given to financial obligations in
Argentina that are currently in default, said the ratings agency.
The rating was based on the country's finances as of the end of
June this year.
The CNV described the affected bonds as "obligaciones negociable
simples", but did not reveal the maturity date. These were
classified under "Program".
CELINA Y ASOCIADOS: Court Announces Bankruptcy
----------------------------------------------
Buenos Aires Court No. 21 announces the bankruptcy of Celina y
Asociados S.R.L. (Continuardora de Celina Electromecanica
S.R.L.), reports local news portal Infobae.
Working with Clerk No. 41, the court assigned local accountant
Mr. Jose Salem Ini as the Company's receiver with instructions to
authenticate creditors' claims until November 12 this year.
The receiver is also required to prepare the individual reports
once the authentications are completed. These reports must be
presented to the court on December 26 this year followed by the
general report on March 9, 2004.
CONTACT: Jose Salem Ini
Presiente Peron 1730
Buenos Aires
COLORIN: Evaluadora Assigns `D' Rating To Bonds
-----------------------------------------------
Evalaudora Latinoamericana S.A. Calificadora de Riesgo assigned
`D' ratings to US$47 million of corporate bonds issued by Colorin
Industia de Materiales Sintet., according to an announcement from
Argentina's securities regulator, Comision Nacional Valores
(CNV).
The affected bonds were described as "Obligaciones Negociables"m
and were slated to mature on March 31, 2006. The CNV classified
the bonds under "Simple Issue".
The rating, which was determined by the Company's finances as of
June 30 this year, is given to issues that are in default, said
the reatings agency.
DIRECTV LA: Motion To Approve Equipment & Data Center Leases
------------------------------------------------------------
DirecTV Latin America LLC sought and obtained the Court's
authority to enter into:
(i) a computer equipment lease, including a trade-in of
current equipment for new computer equipment, and
(ii) a lease for a data center at Wilton Manors to
house the New Computer Equipment.
Joel A. Waite, Esq., at Young Conway Stargatt & Taylor, LLP, in
Wilmington, Delaware, relates that the Debtor currently owns
certain computer equipment consisting of four IBM servers and one
EMC disk storage machine. The Current Equipment is used to:
* report subscriber count;
* audit subscriber statues (including age analysis);
* pay royalties to programming providers; and
* verify financial information and other related
functionalities.
The Current Equipment is near the end of its useful life, Mr.
Waite reports. The costs to maintain the Current Equipment far
exceeds how much DirecTV must pay to lease new computer equipment
as replacements and to lease a data center to house the new
equipment.
Mr. Waite states that the Debtor negotiated the lease for and
maintenance of an IBM P650 server and an EMC high-reliability
disk storage machine, including associated hardware and software
and the lease for the Wilton Manors data center. Wilton Manors
transmits all of the Debtor's communication links between its
Current Equipment and its local operating companies. By locating
the data center at Wilton Manors, the Debtor lessens its expenses
by eliminating communication costs.
The Debtor may save a substantial amount of money by entering
into the leases. Its projected annual costs by using the Current
Equipment can be compared to the annual costs it would incur upon
entering into the New Computer Equipment Lease and the Wilton
Data Center Lease:
Current New Computer
Equipment Computer Equipment Equipment
--------- ------------------ ------------
Communication Cost $586,104 $265,296
Servers - Maintenance/Leasing 40,996 49,825
Disk Storage - 139,200 115,820
Maintenance/Leasing
Wilton Manors Data Center Lease 0 93,600
Moving Cost 0 11,000
Trade-In 0 (44,000)
=========== ==========
Total Annual Cost $766,300 $491,540
The New Computer Equipment Lease provides for the trade-in of the
Debtor's Current Computer Equipment for a $44,000 credit, since
the Current Equipment will be useless once the New Lease is
initiated. The Debtor does not believe that it could obtain more
than $44,000 for the Current Equipment through any alternative
method of sale. (DirecTV Latin America Bankruptcy News, Issue No.
12; Bankruptcy Creditors' Service, Inc., 609/392-0900)
ELECGAS: Receiver Verifies Bankruptcy Claims
--------------------------------------------
Agustin Cueli Gomez, the court-appointed receiver to Elecgas S.A.
is verifying creditors' claims to examine the Company's debts. A
report by Argentine news portal Infobae says that the
verification process is set the end on October 20.
The report adds that the city's Court No. 13 ordered the
Company's bankruptcy by announcing that the Company is "Quiebra
Decretada". Clerk No. 26 aids the court on the process.
Meanwhile, the source did not reveal whether the court has set
the deadlines for the individual and general reports. The
receiver's duties include the preparation of these reports and
handing them over to the court at the designated time.
CONTACT: Agustin Cueli Gomez
Ave. Corrientes 915
Buenos Aires
EOSE: Submits "Concurso Preventivo" Motion to Court
---------------------------------------------------
Buenos Aires-based company Estudio Orbe de Servicios Empresarios
S.A. has submitted its motion for "Concurso Preventivo" to the
city's Court No. 7 relates local news portal Infobae. The Company
will start its reorganization process if the court approves the
petition.
CONTACT: Estudio Orbe de Servicios Empresarios S.A.
Maipu 459
Buenos Aires
ESTANCIAS DEL SUR: Seeks To Open Formal Restructuring Proceeding
----------------------------------------------------------------
Argentine slaughterhouse Estancias del Sur has applied for the
opening of a formal restructuring proceeding. The Company
attributed its financial crisis to the government's decision of
taking the firm out of the list of companies authorized to export
to the European Union under the Hilton quota.
Company CEO Luis Resio said Estancias del Sur would continue
operating with the current production levels.
Last week, the local food and health bureau, Senasa, carried out
an inspection in Estancias del Sur's plant in order to decide
whether to reauthorize the firm to export under the Hilton quota
and Resio said he was optimistic about the results.
Vicente Aznar, legal advisor of the firm, explained to newspaper
La Voz del Interior that exports to Europe used to total from
1,500 to 2,000 tons a year, which meant some US$15 million.
Estancias del Sur's ownership changed two months ago, when Socma
agreed on the sale of an 80% stake -60% of its own and 20% that
belonged to Juan Carlos Grimaldi- to Rexcel. Jose Luis Grimaldi
remained as a minority shareholder.
In his filing with Judge Paz, Resio denounced assets of ARS28
million (US$9.65 million) and ARS27 million (US$9.31 million) in
liabilities.
Rexcel, which has been operating Estancias del Sur under leasing
for the past 18 months, has settled its commercial debt and the
only debt that remains is to banks.
IEBA: US$100M of Bonds Rated `D(arg)' by Fitch
----------------------------------------------
A total of US$100 million worth of corporate bonds issued by
Inversora Electrica de Buenos Aires S.A. received default ratings
from Fitch Argentina Calificadora de Riesgo S.A., last week.
According to the Comision Nacional Valores, the country's
securities regulator, rating applies to bonds called
"obligaciones negocibales clase A". These are classified under
"Series and/or Class", but the maturity date was not revealed.
The rating given was based on the Company's finances as of the
end of June this year. Fitch said that such ratings are given to
issues in Argentina that are in default.
INDUPACK: Reorganization Ends In Bankruptcy
-------------------------------------------
Indupack S.R.L., which was undergoing the reorganization process,
was declared bankrupt by the Civil and Commercial Triunal of
Rosario, Santa Fe in Argentina.
Without revealing the name of the receiver assigned to the
Company, local news portal Infobae says that the individual
reports must be submitted to the court on October 24 this year
followed by the general report on December 22.
The report, however, did not mention the deadline for the
verification of credit claims.
CONTACT: Indupack S.R.L.
Ave. Rosario 2751
Rosario Santa Fe
INSTALACIONES SERVICOM: Receiver Takes Over
-------------------------------------------
Monica Di Iorio, takes charge as receiver of Rosario-based
company Instalaciones Servicom S.A., relates Infobae. The
province's Court No. 15 appointed the accountant to the position,
the source adds.
The Company is undergoing the bankruptcy process on orders from
the Civil and Commercial Tribunal of de Rosario, Santa Fe in
Argentina. The source, however, did not reveal the deadline for
the credit verification process.
The court expects the receiver to prepare the individual and
general reports on the process and have them ready by October 21
and December 2, respectively.
CONTACT: Monica Di Iorio
San Luis 1778
Rosario, Santa Fe
INTERNATIONAL TRADE: Kicks off Reorganization
---------------------------------------------
International Trade and Investment S.A., which is domiciled in
Buenos Aires, started its reorganization process after the city's
Court No. 4 approved its motion for "Concurso Preventivo".
A report by local news portal Infobae relates that the court
assigned local accountant, Mr. Mario Kahan, as the Company's
receiver. Creditors are given until December 17 to have their
claims verified by the receiver.
The receiver is also required to prepare the individual and
general reports on the process. However, the source did not
indicate whether the court has set the deadlines for the filing
of these reports.
CONTACT: International Trade and Investment S.A.
Paraguay 419
Buenos Aires
Mario Kahan
Lavalle 2306
Buenos Aires
JEANVAC: Court Sets Deadlines For Receiver's Reports
----------------------------------------------------
Buenos Aires Court No. 4 has set the deadlines for the reports on
the bankruptcy of local company Jeanvac S.R.L. recently.
Argentine news portal Infobae relates that the individual and
genera reports must be presented to the court on December 2,
2003, and March 1, 2004, respectively.
In the meantime, the court-appointed receiver, Mr. Gustavo
Guillermo Vignale, is verifying creditors' claims. The
authentication period is scheduled to end on October 21 this
year.
The city's Clerk No. 10 aids the court on this particular case,
the report adds.
CONTACT: Gustavo Guillermo Vignale
Vuelta de Obligado 2717
Buenos Aires
JORGE MARA: Verifications Accepted Until November 03
----------------------------------------------------
The credit verification process for the bankruptcy of Buenos
Aires company Jorge Mara S.A. ends on November 3 this year. A
report by Infobae indicates that the Company was declared
bankrupt by the city' Court No. 17.
Working with Clerk No. 33, the court assigned Mr. Antonio
Pennachio as the Company's receiver who will verify the claims.
The receiver is also required to prepare the individual and
general reports on the process.
In the meantime, the source did not mention whether the court has
set the deadlines for these reports.
CONTACT: Jorge Mara S.A.
Ave. Lisandro de la Torre 1650
Buenos Aires
Antonio Pennacchio
Cramer 2175
Buenos Aires
MULTICANAL: Fitch Rates $1.175B in Bonds `D(arg)'
-------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. issued a `D(arg)'
rating to Multicanal S.A.'s corporate bonds, said the country's
securities regulator, Comision Nacional Valores (CNV).
The rating, which was given last week, was determined by the
Company's finances as of June 30, 2003. According to the ratings
agency, `D(arg)' is assigned to financial obligations in
Argentina that are currently in default.
The rating applies to bonds called "obligaciones negociables".
Some US$1.05 billion of it are classified under "program", while
the remaining US$125 million are under "simple issue". The
maturity dates of both sets of bonds were not revealed.
NACSA: Chaco Tribunal Announces Bankruptcy
------------------------------------------
The Civil and Commercial Tribunal of Chaco announced the
bankruptcy of local company Nacsa S.R.L., reports Argentine news
source Infobae. The Company is placed in the hands of local
accountant, Ms. Rosa Itati Dri, who is designated as receiver.
The receiver is instructed to verify creditors' claims. However,
the report did not reveal the deadline for this process. The
individual and general reports, which are prepared after the
verification is completed, must be presented to the court on
October 16 and November 27, respectively.
CONTACT: Nacsa S.R.L.
Monte Alto 223
Chaco
Rosa Itati Dri
Entre Rios 338
Chaco
PRIDE INT'L: Negative Free Cash Flow Results From Weak Market
-------------------------------------------------------------
Fitch Ratings has assigned Pride International Inc. (Pride) a
senior unsecured debt rating of 'B+'. Fitch has also assigned a
'BB' rating to the U.S. senior secured credit facility and a 'BB-
' rating to the non-U.S. senior secured credit facility. The
Rating Outlook is Stable. The ratings reflect Pride's relatively
weak credit profile, the regions where Pride operates and the
company's competitive position in the oil and gas drilling
market. These ratings were initiated by Fitch as a service to
users of its ratings. The ratings are based on public
information.
Debt-funded capital expenditures to finance newbuilds and
upgrades to its fleet in the past five years has resulted in a
levered balance sheet. Pride's latest twelve months (LTM) EBITDA
was $367 million, providing adjusted interest coverage of 2.3x
and adjusted debt to EBITDA of 5.6x. Development of its
drillships, several Amethyst-class semisubmersibles and
refurbishments on nearly all of its other semisubmersible fleet
have been funded primarily with debt. Additionally, it has
operated primarily in the shallow waters of the Gulf of Mexico
and onshore Argentina and Venezuela, markets that have been
particularly weak recently.
These factors have led Pride to generate negative free cash flow
in each of the past five years. However, its credit profile
should improve during the remainder of 2003 and 2004 as it
benefits from the completion of its newbuild/refurbishment
program, increased demand for its rigs by PEMEX and the return of
drilling activity in Argentina and Venezuela.
Additionally, management intends to reduce debt by $400 million
within 12 months. As part of that goal, Pride recently redeemed
$150 million of 9 3/8% senior notes. Approximately $175 million
of the 9 3/8% senior notes remains outstanding. Subsequent to the
$150 million redemption, total debt outstanding is approximately
$1.8 billion. Also, management has stated that proceeds from $50
million to $100 million in potential asset divestitures would be
applied towards debt reduction.
Fitch has concerns with two regions where Pride has significant
operations. Fitch is unenthusiastic in the intermediate term for
the prospects of shallow water domestic drillers, given the fact
that demand in the shallow water Gulf of Mexico has been limited
despite strong cash flows from the upstream. This is evident by
the weakness in the number of active jackups and second tier
semisubmersibles in the Gulf of Mexico. The focus of operators
domestically has shifted to the deep Gulf where Pride does not
have much of a presence. Additionally, Fitch has a cautious view
of businesses operating in Argentina or Venezuela due to the
political uncertainty in each country. Fitch currently has a
soveriegn rating of 'DDD' for Argentina and 'B-' for Venezuela.
Pride competes in the offshore drilling market and is a market
leader in the South American land drilling and service segment.
Pride's commodity fleet of 35 jackup rigs includes 25 that are
currently based in the Gulf of Mexico (14 in Mexico/ 11 in the
U.S.) and 10 in international waters. Its jackup fleet is best
suited for shallow waters with 80% of its fleet designed to drill
in less than 300 feet of water. Nearly all of its jackups are
equipped to drill up to 20,000 feet. Its fleet of floating
deepwater units consists of 10 semisubmersibles and two
dynamically positioned drillships; of these 12 vessels, only six
are capable of drilling in water depths greater than 5,000 feet.
Pride also operates 21 platform rigs, 5 tender assisted rigs and
3 barge rigs. Pride's onshore fleet consists of 261 land rigs,
177 of which are workover rigs and 84 of which are drilling rigs.
The majority of these rigs are located in Argentina and
Venezuela.
Pride also provides a variety of oilfield services to customers
in Argentina, Venezuela, Bolivia and Peru. Services provided
include integrated project management, directional and horizontal
drilling, environmental drilling, cementing and stimulation. A
fourth business line for Pride is its Technical Services group,
which provides design, engineering and construction services for
operators. It currently is constructing four platform drilling
rigs. Two are being developed for BP for use in the Gulf of
Mexico and two are being developed for ExxonMobil's Kizomba
project off Angola. This business line has been problematic for
Pride recently and the company is uncertain whether or not it
will remain committed to this segment.
TERRIBETTI: Court Orders Bankruptcy
-----------------------------------
Buenos Aires' Court No. 4 orders the bankruptcy of Terribetti
S.R.L., reports Infobae. The Company was turned over to its
receiver, Ms. Silvia Amanda Ferrandina for the bankruptcy
process.
The court ordered the receiver to authenticate creditors' claims
until October 1 this year. After that, he is instructed to
prepare the individual and general reports where he may voice out
his opinions on the factors that led to the Company's bankruptcy.
The source did not reveal whether the court has set the deadlines
for these reports.
CONTACT: Silvia Amanda Ferrandina
Asuncion 4642
Buenos Aires
===========
B R A Z I L
===========
AES CORP.: BNDES Exempted From Units' Debt With Private Creditors
-----------------------------------------------------------------
Brazil's development bank BNDES is exempt from any obligations
that local units of AES Corp. have with private debt holders, a
top company executive said Monday.
"The debt of each AES unit that will make up Novacom will be
their own responsibility," Joseph Brandt, vice president of AES,
told journalists at a press conference in Sao Paulo. Brandt was
referring to a new company that will be created under a
preliminary debt-rescheduling agreement between the U.S. power
group and BNDES.
The parties last week agreed on a plan to restructure AESUS$ 1.2
billion debt with the federally-controlled bank through the
creation of a joint venture, Novacom, that will hold AES's
interests in Brazil. They include power distributor Eletropaulo
Metropolitana, gas-powered thermoelectric plant AES Uruguaiana
and hydroelectric generator AES Tiete.
After the announcement of the deal last week, market participants
started to question the inclusion of AES Tiete in the debt-
rescheduling deal because it was given as collateral in a US$ 300
million bond deal in the U.S. BNDES officials were also concerned
there could be ownership issues about Tiete in case AES failed to
pay bondholders.
"Debt and guarantees are different things. BNDES is our partner,
while bondholders aren't...BNDES wont have any responsibility
regarding these liabilities," Brandt said.
Brandt said the companies' cash flow would be enough to honor the
liabilities.
"I estimate that in three to five years the companies will
generate profits between US$125 million and US$175 million,
depending on the scenario.
Out of those gains, a big part will go to debt payments. In the
first years, 100% will go to pay the debt and after that about
90% will be debt payments while the remaining 10% will be
distributed as dividends to AES and BNDES," the executive said,
adding "I believe well pay the debt in about seven or eight
years."
Under the accord, Novacom will be 50.1%-owned by AES and 49.9%-
owned by BNDES. About 50%, or US$ 600 million of the outstanding
AES debt, will be converted into equity in the new company.
Another US$ 515 million will be payable over 10 to 12 years. AES
and its subsidiaries will also contribute US$85 million as part
of the restructuring, with US$60 million of that paid at closing
and US$25 million paid after closing. BNDES will pardon about
US$118 million in interests.
BANCO ALFA: Fitch Withdraws International Ratings
-------------------------------------------------
Fitch Atlantic Ratings has withdrawn Monday Banco Alfa de
Investimento's (Alfa) Short- and Long-term foreign and local
currency ratings of 'B', and Individual 'C/D'.
At the same time, Fitch has affirmed Alfa's Long- and Short-term
National ratings at 'A(bra)' and 'F1(bra)', and Support at '5'.
The Long-term International rating Outlook was Positive, while
the National Outlook is Stable. Contacts: Peter Shaw, +1 212 908-
0553, New York; Rafael Guedes, +55-11-287-3177, Sao Paulo; or
Maria Rita Goncalves,+55-21-2224-3558, Rio de Janeiro. Media
Relations: Jaqueline Ramos de Carvalho, +55-21-2224-3558, Rio de
Janeiro.
Note to Editors: Fitch Ratings' Support and Individual Ratings
for Banks Fitch's Individual ratings assess how a bank would be
viewed if it were entirely independent and could not rely on
external support. Its Support ratings deal with the question of
whether a bank would receive support from its owners or from the
state if it were to get into difficulty. These ratings are not
debt ratings but rather, respectively, an assessment of the
intrinsic strength of a bank and of any level of outside support
that may, or may not, be available to it.
Fitch's National ratings provide a relative measure of
creditworthiness for rated entities in countries with relatively
low international sovereign ratings and where there is demand for
such ratings. The best risk within a country is rated 'AAA' and
other credits are rated only relative to this risk. National
ratings are designed for use mainly by local investors in local
markets and are signified by the addition of an identifier for
the country concerned, such as 'AAA(bra)' for National ratings in
Brazil. Specific letter grades are not therefore internationally
comparable.
Media Relations: Campbell McIlroy +44 20 7417 4327, London
EMBRATEL: Conar Grants Right To Use "Voce pode" (You Can)
---------------------------------------------------------
Conar decided in favor of Embratel regarding its petition against
Telemar for unduly using the expression "VOCE PODE ` (YOU CAN).
This expression has been used by Embratel on its direct mail sent
to customers since March of 2002. Last May, Telemar used the same
expression on a flyer/direct mail.
Since the utilization of the aforementioned expression occurs
under the very same concept conceived by Embratel, Conar's
opinion with respect to petition 141/03 was in favor of Embratel.
Through an injunction of May, 2003 Embratel had been granted the
suspension of the release of the competitor's material. Now the
decision was made by the 2nd Chamber of Conar's Ethics Council,
which once more suspended the release of Telemar flyers.
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 information: (02121) 2121 7837 / 2121 6291
Fax: (02121) 2121 7791
Mid-West- Phone: (02161) 242-9058 / 2845 / 916-9188
Attention: Flavio Resende
E-mail: cmsocial@embratel.net.br
Embratel on the internet: www.embratel.com.br
EMBRATEL: Offers $110M For ATTL
-------------------------------
Brazilian holding company Embratel Participacoes offered US$110
million to take control of regional carrier AT&T Latin America
(ATTL).
According to Business News Americas, the offer was accepted by
ATTL on September 3, but at that time, no amount was disclosed.
Brazilian financial paper Valor Economico reports that under the
terms of the deal, Embratel would offer US$74 million of the
total in cash and take on US$36 million of ATTL's debt,
equivalent to a 70% discount on the operator's total current debt
level of US$240 million.
Chile's Grupo GTD Teleductos is also making a bid for ATTL. GTD,
in partnership with Spain's Telefonica Data, offered US$100
million for the operator. Other parties reported to be interested
are Mexico's Telmex and Chile's Chilesat.
The auction process will be run by the US bankruptcy court, which
is overseeing AT&T Latin America's Chapter 11 proceedings.
TELEMAR: Files Appeal To Overturn Rates Increase Injunction
-----------------------------------------------------------
Brazilian telecoms operator Telemar has filed an appeal with the
Federal Regional Tribunal (TRF) to overturn an injunction that
maintained the IPCA inflation index for adjusting fixed line
telecom tariffs, reports Business News Americas.
The federal public ministry wants to use the IPCA inflation index
because it is less volatile than IGP-DI inflation index, which is
what Telemar would rather use.
According to a TRF spokesperson, Telemar is seeking to overturn
the injunction until the federal district court makes its final
decision on the merits of the case. Telemar's appeal will be
handled by TRF Judge I'talo Mendes, and a ruling is expected
within days, the spokeswoman said.
USIMINAS: Overhauls Blast Furnace
---------------------------------
Brazilian flat steelmaker Usiminas turned off its No.2 blast
furnace on Monday, the third time since it began operations in
1965.
Usiminas turned off the furnace for 80 days to do a scheduled
maintenance work, which involves replacing mechanical equipment
and refractories that are at the end of their useful life, as
well as updating electrical and automated equipment.
The work is estimated to cost US$40 million. Federal development
bank BNDES is financing about half of the project.
The suppliers for the work include the Belo Horizonte-based
steelmaker's metals arm Usiminas Mecanica, Alstom Brasil, Voest
Alpine Industrieanlagenbau (VAI), Paul Wurt, Ibar and Likstrom.
The principal construction contractors are Usiminas Mecanica,
Paranasa, Delta, Real and Reframax.
CONTACT: Breno Julio de Melo Milton
bmilton@usiminas.com.br
Tel: (55 31) 3499-8710
Paulo Esteves
paulo.esteves@thomsonir.com.br
Tel: (55 11) 3897-6466
=========
C H I L E
=========
CHILECTRA: Sabotage Hits Power Service
--------------------------------------
Chilean distributor Chilectra, a subsidiary of Chilean holding
Enersis, revealed it was hit Thursday night by several instances
of sabotage as Chile marked the 30th anniversary of the bloody
coup that ended communist President Salvador Allende's term,
relates Dow Jones Business News.
In a release, the Company said that vandalism in lower-income
areas of metropolitan Santiago struck 43 medium voltage
transformers, leaving some 327,000 households without power,
"almost 25% of the homes in the (Chilectra) concession."
However, 90% of those homes had their power restored early
Friday, the Company added.
"The losses for the company have been copious, both in the
decrease in supplied power, as in the material damage to
installations, without counting the increased administrative and
logistical aspects to confront this type of contingency," the
Company said, without specifying damages.
Chilectra distributes power to some 1.33 million customers in the
Santiago area.
COEUR D'ALENE: Underwriters' Option Exercised on Public Offering
----------------------------------------------------------------
Coeur d'Alene Mines Corporation (NYSE: CDE) announced Monday that
the underwriters of the Company's recent public offering have
elected to exercise in full their option to purchase an
additional 3,095,250 shares of common stock at the previously
announced public offering price of $3.40, in order to cover over
allotments. Coeur now expects that the proceeds of the
underwriters' option, when added to the proceeds of the
previously announced offering of 20,635,000 shares of common
stock at the same $3.40 offering price, will result in total net
proceeds, after payment of the underwriters' discount, of
approximately $76.4 million.
The offering is being managed by CIBC World Markets. A copy of
the final prospectus related to the offering can be obtained from
CIBC World Markets by e-mail: useprospectus@us.cibc.com or fax:
212-667-6136.
The net proceeds will be used for exploration and development
activities, debt reduction, acquisitions, and/or general
corporate purposes.
Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile and Bolivia.
This press release shall not constitute an offer to sell or the
solicitation of any offer to buy the securities described above,
nor shall there be any sale of these securities in any state in
which such an offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of
such a state.
CONTACT: Tony Ebersole
Director of Investor Relations
208-665-0335
INVERLINK: Vida Plena To Settle Debts Before Sale Completion
------------------------------------------------------------
Chile's private health care regulator Manuel Inostroza said that
local health insurer Vida Plena will repay all outstanding debts
before the completion of its sale to consortium Issis, relates
local financial news service Valor Futuro.
Inostroza assured that the insurer's finances would be
appropriately regulated by September 22 through the payment of
outstanding debts to doctors and medical clinics.
Furthermore, Vida Plena's estimated 90,000 affiliates will
continue to enjoy the same healthcare benefits under the new
administration, Inostroza added.
Earlier this year, Issis, made up of local group Larchmont and
Swedish investors, agreed to buy intervened Chilean financial
group Inverlink's former health insurance subsidiary Vida Plena.
The consortium offered CLP840 million (US$1.2mn) in cash for the
health insurer, added to the promise of a US$2.9 million capital
increase.
===============
C O L O M B I A
===============
TELECOM: Minister's Fate To Be Determined Wednesday
---------------------------------------------------
Colombia's communications minister Martha Pinto comes under
attack for participating in a decision last June to liquidate
state-run telco Telecom.
According to Business News Americas, congress plans to hold a
vote of confidence in the minister come Wednesday. The minister's
detractors are seeking to remove her for participating in the
decision to liquidate Telecom.
But given the ruling party's strong majority in congress, the
vote is very unlikely to succeed, said Pyramid Research analyst
Carlos Rodriguez.
Telecom was liquidated and subsequently replaced by Colombia
Telecomunicaciones, which was formed using Telecom's best assets
and incorporating its subsidiaries and affiliates.
Just recently, Colombia Telecomunicaciones chairman Alfonso Gomez
announced that as a result of the streamlining, the Company is
expected to have its first profitable half in years, which will
greatly undermine opposition's case.
=============
E C U A D O R
=============
EEQ: CEO Sees Financial Meltdown in the Near Term
--------------------------------------------------
Carlos Andrade Faini, chief executive officer of Ecuadorian power
distributor EEQ, admits that the utility, which serves Quito, is
close to going bankrupt, relates Business News Americas.
According to the top executive, EEQ spent US$83.4 million on
buying power in the first six months of the year, and sold the
power for US$85.7 million. The US$2.3-million surplus is
"insufficient to manage the company," he said.
"We can neither carry out maintenance in the networks or
installations nor carry out investment in a number of projects
that have been held back, and we can't carry on reducing
technical and non-technical losses," he added.
Andrade pointed out that the distributor's main problem is the
higher prices that EEQ has to pay generators. In the first
semester this year, power purchase costs were 21% higher than in
the same period in 2002, said Andrade.
While higher oil prices could explain such an increase for
thermoelectric power, the fact that water costs the same as it
did in 2002 means that hydroelectric power "should not cost any
more," he said.
Andrade expects the Company, which is 52.5% owned by the
Government and 34.3% by the Quito municipality, will lose some
US$20 million this year, up from US$12 million in 2002, due to
rates insufficiencies.
===============
H O N D U R A S
===============
AES HONDURAS: Questions Legality of ENEE's Decision
---------------------------------------------------
AES Honduras representative Carlos Larach said the recent
decision by Honduran state power company Empresa Nacional de
Energia Electrica (ENEE) to cancel a 200MW supply contract with
the local unit of US company AES is illegal, relates Business
News Americas.
ENEE, according to manager Angelo Botazzi, cancelled the contract
with AES Honduras because the latter failed to provide guarantees
and meet its deadlines.
"I don't know if this decision is within the legal framework, but
we will consult with our advisors," Larach said, adding that the
move would deprive the country of benefits that could be obtained
through the contract.
But Botazzi said that AES failed to pay a guarantee and is behind
on its own construction schedule for the 780MW El Faro thermo
power project that would have supplied the power.
Rather than calling for bids again, ENEE will award the contract
directly to one of the other six companies that participated in
the original bidding round last year.
===========
M E X I C O
===========
GRUPO TMM: Kansas City Southern Confirms Start of Negotiations
--------------------------------------------------------------
Reacting to a report in the Friday, September 12, 2003, El
Economista, a Mexican business newspaper, Kansas City Southern
(KCS)(NYSE:KSU) on Monday confirmed that negotiations with Grupo
TMM, S.A. (TMM) have begun under the dispute resolution process
contained in the Acquisition Agreement between KCS and TMM for
TMM's interest in Grupo Transportacion Ferroviaria Mexicana, S.A.
de C.V. (GTFM).
"Representatives of both companies did meet on Thursday,
September 13, for the first of what we expect to be numerous
meetings," said Warren Erdman, KCS Vice President of Corporate
Affairs. "However, under the terms of the Acquisition Agreement,
all negotiations to resolve the disputes between the parties must
remain confidential."
KCS delivered a notice of dispute to TMM dated August 29, 2003,
in accordance with the dispute resolution provisions of the
Acquisition Agreement. This initiated a 60-day negotiation period
between the parties. If the parties are unable to resolve the
disputes within that period of time, KCS intends to initiate a
binding arbitration in accordance with the terms of the
Acquisition Agreement. KCS maintains that the Acquisition
Agreement is still valid and in effect until December 31, 2004.
Under that Agreement, TMM and its affiliates are precluded from
initiating or participating in any negotiations or discussions
with anyone other than KCS for the acquisition or purchase of all
or a substantial portion of the assets of GTFM or any equity
interest in GTFM. KCS has filed a complaint in the Delaware Court
of Chancery seeking a preliminary injunction to preserve the
parties' positions while KCS and TMM carry out the dispute
resolutions' provisions provided for in the Acquisition
Agreement.
"We remain very committed to this process and believe the
Acquisition Agreement is valid and in effect," said Erdman. "We
plan to pursue this for as long as it takes."
In April, KCS and TMM jointly announced their signing of
agreements that would place TFM, S.A. de C.V., The Texas-Mexican
Railway Company and The Kansas City Southern Railway Company
under the common control of a single transportation holding
company, NAFTA Rail, to be headquartered in Kansas City,
Missouri. Under the Acquisition Agreement, TMM Multimodal, S.A.
de C.V., a subsidiary of TMM, would receive 18 million shares of
NAFTA Rail representing approximately 22 percent (20% voting, 2%
subject to voting restrictions) of the company, $200 million in
cash (or a combination of cash and KCS common securities), and a
potential incentive payment of between $100 million and $180
million based on the resolution of certain future contingencies.
In May, KCS completed financing totaling $200 million through its
offering of Redeemable Cumulative Convertible Perpetual Preferred
Stock in a private offering. The net proceeds from the offering
had been expected to be used to pay a portion of the purchase
price for the proposed acquisition of a controlling interest in
GTFM. KCS has retained this cash for this or other corporate
purposes.
CONTACT: Kansas City Southern
Investors Contact:
William H. Galligan
Phone: 816-983-1551
Email: william.h.galligan@kcsr.com
Media Contacts:
Mexico
Gabriel Guerra
Phone: 011-5255-5273-5359
Email: gguerra@gcya.net
U.S.
Warren K. Erdman
Phone: 816-983-1454
Email: warren.k.erdman@kcsr.com
===========
P A N A M A
===========
CSS: Struggles To Restore Financial Health
------------------------------------------
Managerial changes at Panama's state-run social security agency
CSS will not resolve the Company's administrative problems nor
its ailing finances, Business News Americas reports, citing CSS
board member Cesar Tribaldos.
Earlier, CSS removed director Juan Jovane based on his failure to
present a budget for 2004. But according to Tribaldos, his
removal will not be enough to lift the Company out of the red.
The board member said the US$25.4 million increase in the
agency's deficit during this year's first quarter could more than
double to US$50-60 million by the end of this year.
The Panamanian government is already preparing new proposals to
address the agency's deteriorating financial health. It is
awaiting the results of a technical analysis before presenting
these proposals.
=================
V E N E Z U E L A
=================
PDVSA: Venezuela's August Oil Production Averaged 3.3mb/d
---------------------------------------------------------
The figures were endorsed by the Ministry of Energy and Mines
(MEM) and OPEC. "They signal both the consolidation of the
industry's operations and the solvency of its financial
situation".
At the end of August, overall Venezuelan oil production,
including extra-heavy crudes and natural gas liquids, averaged
3,334,000 barrels per day. This was achieved through PDVSA's own
efforts and the contributions made by third-party associations
and strategic agreements.
This information was provided by Energy and Mines Minister Rafael
Ramirez, who pointed out that: " the statistics clearly show that
our oil production has remained stable and consolidated, way
above the figures being manipulated by political sectors which
are trying to damage the Venezuelan energy corporation's image".
RamĦrez explained that out of the total August production,
2,974,000 barrels corresponded to medium and heavy-gravity
crudes, and the remainder to extra-heavy crudes, natural gas
liquids (NGL) and condensates. These figures were endorsed by MEM
and OPEC technical reports.
Regarding total crude production (2,974,000 bpd), he said,
"1,987,000 barrels per day were produced in western Venezuela;
1,257,000 bpd in the east of the country, and 89,000 bpd in
Barinas-Apure".
The Venezuelan Energy Minister underlined the fact that
"production stability has had a positive impact on Petr˘leos de
Venezuela's finances. This, in turn, has contributed to
ameliorating the effects of the oil sabotage on the economic and
social life of the country".
In his opinion, "the figures for August presented by the oil
industry signal both the consolidation of the industry's
operations and the solvency of its financial situation".
PDVSA: Bitor Restructuring Likely To Impact Export to China
-----------------------------------------------------------
An official from a China-based oil trading company revealed
qualms regarding the ongoing reorganization at Venezuela's state-
owned oil company PDVSA, relates Dow Jones Business News.
The official said Monday that PDVSA's restructuring of its unit
Bitumenes Orinoco, S.A. (BITOR), by incorporating it into PDVSA's
eastern division, may have some initial impact on its export of
Orimulsion fuel to China.
"There will be some delivery problems due to the frequent change
of personnel (at PDVSA)," he said.
But China's trading official said that so far, there hasn't been
any change in the term supply volume or price of Orimulsion to
China.
Under a term supply contract, China will import 1 million metric
tons of Orimulsion from Venezuela this year. The next cargo of
292,000 tons is scheduled to arrive in China late this month or
early October.
"That cargo is fixed," the trading official said.
China National Petroleum Corp. and Bitor are building a US$330
million Orimulsion plant in eastern Venezuela.
***********
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.
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