/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/031009.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, October 9, 2003, Vol. 4, Issue 200 Headlines A R G E N T I N A ALCASAL: Creditor's Petition For Bankruptcy Gets Court's OK ANTON HERMANOS: Individual Reports Due For Filing Today CORREO ARGENTINO: Restructuring Proceeding To Expire Soon CTG: Moody's Assigns Default Ratings To $54M of Bonds Due 2010 CTI HOLDINGS: Over $262.8M of Bonds Get `D' From Latam Moody's FRANSPORTAR: Claims Verification Deadline Expires Today GAS ARGENTINO: Moody's Rates $130M of Bonds `D' GATIC: Bakchellian Resumes Control GRUTTI: Individual Reports Due For Filing IMAGEN SATELITAL: Fitch Assigns Default Ratings To $80M of Bonds IMP Y EXP DE LA PATAGONIA: Fitch Rates Bonds `BB(arg)' LUIS ROMERO: Court Requires Individual Reports Filing MICROCURROGADO GUARDIANI: Credit Check For Bankruptcy Ends PETROBRAS ENERGIA: Fitch Ratings Upgrades Ratings to 'B-' REPSOL YPF: Joins Initiative for Transparency of Payments RIBEIRO: $25M of Bonds Get `C' Rating From Moody's Latin America TRANSENER: $450M of Bonds Get `D(arg)' from Argentine Fitch TURBINE POWER: Moodys' Rates $20M of Bonds `D' UNIDAD DE COBRANZAS: Files For Bankruptcy B R A Z I L BCP: America Movil Offers 28% Stake to Telemar for $175M CEMIG: In Talks With BNDES to Participate in Loan Program CEMIG: Formalizes Listing of ADRs on NYSE ENDESA CHILE: Brazilian Unit Forced To Curtail Operations GERDAU: Considering Another Debt Issue C H I L E COEUR D'ALENE: S&P Issues Positive Outlook ENDESA CHILE/ENERSIS: Merrill Lynch To Reinstate Coverage TELEFONICA CTC: Lower House to Hear Ministers' Testimonies C O L O M B I A ELECTROCARIBE/ELECTROCOSTA: Shareholders Agree To Inject Capital MILLICOM INTERNATIONAL: Announces Subscriber Growth for 3Q03 D O M I N I C A N R E P U B L I C BANCO POPULAR: Moody's Cuts Ratings Following Sovereign Downgrade TRICOM: Moody's Concludes Rating Review, Downgrades Ratings E C U A D O R PETROECUADOR: Defies Court Ruling PETROECUADOR: Three Companies Submit Bid For Insurance Policies M E X I C O CFE: Sells $230M Worth of Stock Market Certificates GRUPO IUSACELL: Gets Injunction Against Service Quality Rules PROTEL: Plans To Restructure Debts By End October - - - - - - - - ================= A R G E N T I N A ================= ALCASAL: Creditor's Petition For Bankruptcy Gets Court's OK ----------------------------------------------------------- Argentine lubrication company Alcasal S.A., which is based in Buenos Aires, enters bankruptcy on orders from Judge Braga of the city's Court NO. 22. The insolvency judge approved a petition for bankruptcy filed by the Company's creditor for nonpayment of debt. Clerk No. 44, Dr. Julianelli, assists the court on the case. Mr. Alberto Vilela, a local accountant, was assigned as the Company's receiver, La Nacion relates. The credit verification period will run through November 19 this year. The receiver is also required to prepare the individual and general reports on the process, but the source did not mention whether the court has set the deadlines for the submission of these reports. CONTACT: Alcasal S.A. Tte. Gral. Peron 683 Buenos Aires Alberto Vilela 2nd Floor Rodriguez Pena 431 Buenos Aires ANTON HERMANOS: Individual Reports Due For Filing Today ------------------------------------------------------- Ms. Maria Centiempo, the receiver for Anton Hermanos S.R.L., must submit the individual reports for the Company's bankruptcy today. These reports were prepared after the credit verifications were completed earlier this year. An earlier report by the Troubled Company Reporter - Latin America revealed that the general report, which is to be prepared after the individual reports are processed in court, must be filed on November 20 this year. It is likely that the Buenos Aires' Court No. 3, which handles the Company's case, will order the liquidation of the Company's assets to repay creditors. CONTACT: Maria Cenatiempo Ave. de Mayo 1365 Buenos Aires CORREO ARGENTINO: Restructuring Proceeding To Expire Soon --------------------------------------------------------- The term of the formal restructuring proceeding initiated by postal operator Correo Argentino in September 2001 is expiring next Thursday. Unless the judge in charge of the process approves an extension, there are three alternatives: a last minute agreement between the Company and its creditors; the application of a cram down mechanism, which implies a creditor of a third party taking over the concession; or the bankruptcy of the Company. Correo Argentino's formal restructuring proceeding involves a debt of US$126 million and ARS597 million, ARS296 million of which have to do with the annual fee the Company stopped paying the State in 1999. The firm proposed a 60% to 70% write-off in the amount of debt, payable through a 25-year bond with a 15-year grace period. The proposed interest rate would be an annual 1%. The government has rejected this proposal. The Ministry of Economy prefers a "cram down"--- where an investor takes over the debt and operation of the Company. If the bankruptcy is decreed, nobody will collect a single peso. "It's a procedure we don't want to apply," an official said. Last week, the Company held a series of meetings with its creditors, but no agreement was reached. The Company asked judge Javier Dubois for a 120-day extension so as to continue the negotiations, but the judge refused to accept the request. Then Correo Argentino asked for a 30-day extension and Dubois is supposed to make a decision today. Correo Argentino is controlled by Socma and its minority shareholders are Banco Galicia, with an 11.77% stake and its employees with 14%. Banco Galicia, Citibank, Banco Rio, the Inter-American Development Bank and the International Finance Corporation are Correo Argentino's main creditors. Even after it had initiated its formal restructuring proceeding, Correo Argentino continued to default in the payment of the fee. For this reason, the State claims a debt of ARS497 million. However, the Company paid ARS28 million in September and considered this debt settled. CTG: Moody's Assigns Default Ratings To $54M of Bonds Due 2010 -------------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. assigned default ratings to corporate bonds issued by Argentine company Central Termica Guemes recently. The `D' rating assigned was based on the Company's finances as of the end of June 2003. The country's securities regulator, the Comision Nacional Valores (CNV), described the affected bonds as "Obligaciones Negociables Simples". These bonds, worth a total of US$54 million, were classified under "Simple Issue" and would mature on September 25, 2010. CTI HOLDINGS: Over $262.8M of Bonds Get `D' From Latam Moody's -------------------------------------------------------------- Over US$262.8 million worth of corporate bonds issued by Argentine company CTI Holdings S.A. received default ratings from Moody's Latin America Calificadora de Riesgo S.A., according to the Comision Nacional Valores, Argentina's securities watchdog. The rating, based on the Company's finances as of the end of June 30 this year, applies to bonds, which the CNV described as "Seri A por US$262.848.000 con cupon diferido". The bonds mature on April 15 2008. FRANSPORTAR: Claims Verification Deadline Expires Today ------------------------------------------------------- The credit verification process for the reorganization of Buenos Aires-based Fransportar S.R.L., ends today, October 9, 2003. The Company's receiver, Estudio Escandell Hurovich, which verified the claims, will prepare the individual reports. Buenos Aires' Court No. 25 approved the Company's petition for reorganization, according to an earlier report by the Troubled Company Reporter - Latin America. Clerk No. 50 aids the court on the case. Local sources, however, did not indicate the deadlines for the filing of the receiver's reports. CONTACT: Fransportar S.R.L. Pedro Chutro 2928 Buenos Aires Estudio Escandell Hurovich Presidente Peron 1509 Buenos Aires GAS ARGENTINO: Moody's Rates $130M of Bonds `D' ----------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. assigned a `D' rating to corporate bonds issued by Argentine company Gas Argentino S.A., based on the Company's finances as of June 30 this year. The rating, which is assigned to financial obligations that are in default, applies to a total US$130 million of the Company's corporate bonds. Argentine securities regulator Comision Nacional Valores described the affected bonds as "Obligaciones negociables simples por US$130.000.000". The bonds were classified under "Simple Issue", and the maturity date was given as June 07, 2000. The CNV, however, did not indicates the bonds' CUSIP. GATIC: Bakchellian Resumes Control ---------------------------------- Fabian Bakchellian has reassumed the control at Argentine textile company Gatic, in replacement of his father Eduardo, who founded the firm 40 years ago and has been unable to solve its deep crisis. Fabian had managed Gatic until October 2002, when he let his father take control of the Company. By that time, Gatic was in the middle of a formal restructuring proceeding and was also restructuring its operations, a process that led to the closure of several plants and the suspension or dismissal of 1,500 employees. Gatic's troubles are partly related to the loss of the license to manufacture Adidas products in 2001, after 32 years of joint operations. Eduardo decided to reopen some plants and rehire staff, promising he would solve Gatic's financial crisis, reach an annual billing of ARS130 million and recover lost contracts with international brands like Adidas. However, Eduardo Bakchellians projections have not come true. Nowadays, Gatic's 9 plants are out of operation, 4,500 employees are suspended and with unpaid salaries the firm has accrued ARS10 million in post-restructuring liabilities. Gatic defaulted on its debt payments on July 24, 2001, with US$340 million in liabilities. The Company initiated its formal restructuring proceeding in the end of 2001 and a couple of months ago the proceeding was approved by court. The Company obtained a 30% write-off in the amount of debt. The government has proposed a plan to help the firm solve its financial crisis, through the creation of a mixed company with participation of the federal government, the government of the Buenos Aires province, employees and auditors. The governments would invest some US$30 million, which would be used to reopen Gatic's 8 plants. GRUTTI: Individual Reports Due For Filing ----------------------------------------- Buenos Aires' Court No. 1 expects the receiver for local company Grutti S.A. to file the individual reports for the Company's bankruptcy today. The Troubled Company Reporter - Latin America earlier reported that the Company's receiver, Mr. Oscar Luis Serventich has completed the verification of creditors' claims in August. The receiver will start preparing the general report after the individual reports are processed at court. This report must be submitted to the court on November 20 this year. CONTACT: Oscar Luis Serventich Piedras 1319 Buenos Aires IMAGEN SATELITAL: Fitch Assigns Default Ratings To $80M of Bonds ---------------------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. assigned default ratings to Imagen Satelital S.A.'s corporate bonds called "obligaciones negociables". The country's securities regulator, Comision Nacional Valores, indicated that the bonds, worth a total of US$80 million, were classified as "Simple Issue". Fitch said that the `D(arg)' rating is assigned to financial commitments which are currently in default. The Company's finances as of June 30, 2003 determined the given rating. IMP Y EXP DE LA PATAGONIA: Fitch Rates Bonds `BB(arg)' ------------------------------------------------------ A total of US$100 million of corporate bonds issued by S.A. Importadora y Exportadora de la Patagonia were rated `BB(arg)' by Fitch Argentina Calificadora de Riesgo S.A. recently. The rating was based on the Company's finances as of June 30, 2003. The Comision Nacional Valores, Argentina's securities regulator, revealed that the bonds were called "Obligaciones Negociables", under the classification "Program". The maturity date and the CUSIP were not revealed, however. Fitch said that `B' national ratings denote a significantly weak credit risk relative to other issued in the country. Financial commitments are currently being met but a limited margin of safety remains and capacity for continued timely payments is contingent upon a sustained, favorable economic environment, the ratings agency adds. LUIS ROMERO: Court Requires Individual Reports Filing ----------------------------------------------------- The individual reports for the bankruptcy of Argentine company Luis Romero S.R.L. must be submitted to the court today. Mr. Mario Eduardo Guimpel, the appointed receiver to the case, prepared the reports after the credit verification process was completed. Buenos Aires' Court No. 9, which handles the Company's case, ordered the receiver to hand in the general report on November 25, the Troubled Company Reporter - Latin America reported in an earlier issue. This report is to be prepared after the individual reports are processed at court. CONTACT: Mario Eduardo Guimpel Parana 768 Buenos Aires MICROCURROGADO GUARDIANI: Credit Check For Bankruptcy Ends ---------------------------------------------------------- Today is the last day for the verification of creditors' claims regarding the bankruptcy of Microcurrogado Guardiani S.R.L., which is based in Buenos Aires. The Company's receiver, Mr. Luis Abranzon will prepare the individual reports. An earlier report by the Troubled Company Reporter - Latin America revealed that the Company's creditor, Klabin Argentina S.A. successfully sought for its bankruptcy. The Company's assets will likely be liquidated at the end of the process to reimburse creditors. Judge Norma Di Noto of Buenos Aires' Court No. 15 handles the case. CONTACT: Microcorrugado Guardiani S.R.L. 2nd Floor Tucuman 834 Buenos Aires Luis Abranzon Pringles 835 Buenos Aires PETROBRAS ENERGIA: Fitch Ratings Upgrades Ratings to 'B-' --------------------------------------------------------- Fitch Ratings upgrades the senior unsecured foreign currency rating of Petrobras Energia S.A. (PE) to 'B-' from 'CC'. Fitch also upgrades PE's senior unsecured local currency rating to 'B-' from 'CC'. Both ratings were assigned Stable Rating Outlooks. The rating actions reflect the inherent benefits of PE's acquisition by Petroleo Brasileiro S.A. (Petrobras), revenue stream diversification through export sales and cross border operations, achievement of productivity and efficiency gains and the successful refinancing of US$1.7 billion in capital market and bank debt last year. Notwithstanding these factors, the company's financial flexibility and credit protection measures remain under significant pressure, reflecting the combination of sizable capital expenditure requirements, limited access to external financing and a debt structure largely denominated in hard currencies. A degree of implicit parent support from Petrobras is incorporated in the rating actions. PE's financial flexibility and credit profile continue to reflect fallout from Argentina's sovereign crisis. The shift in government policies away from market-oriented frameworks, coupled with the adverse effects of the ARP's devaluation on a leveraged capital structure largely denominated in hard currencies, the loss of value of some assets and operations, a sharp reduction in capital expenditures and lower realized revenues associated with Venezuelan operations due to that nation's oil strike, contributed to a fiscal year 2002 net income loss of ARP1.19 billion, compared to an ARP222 million profit the previous period. Although results through June 30, 2003, reflect a strengthening in PE's credit protection measures, with EBITDAX to interest coverage improving to 4.4 times (x) from 2.4x the previous comparable period, the gains are largely attributed to the ARP's appreciation in relation to the U.S. dollar and related effect on the company's consolidated interest expense and total debt levels. As of June 2003, 25% of PE's total debt of ARP6.18 billion was categorized as short-term. Virtually all of the company's long- term obligations are denominated in U.S. dollars. Negotiable obligations account for approximately 94% of total non-current debt. The aforementioned refinancings improved PE's debt maturity profile, extending near-term maturities for a final term of up to five years. As of Dec. 31, 2002, the average life for PE's total debt equaled 3.9 years and for its capital markets obligations 5.7 years. An estimated 58% of the company's consolidated obligations carry fixed interest rates. The balance is floating. Although PE's EBITDAX and free cash flow generation should benefit from anticipated increases in upstream and petrochemical production volumes over the medium-term, the company's near-term financial flexibility remains constrained. The combination of scheduled maturities, interest expense and projected capital expenditures limit credit protection measures, especially when analyzed on a projected free cash flow basis. These constraints are accentuated by limited access to external financing sources for Argentine corporates. Over the medium-term, improved upstream output, coupled with value chain strategies, measured international expansion efforts, emphasis on core business activities, competitive cost structures and gradual completion of its capital expenditure program, should strengthen PE's financial flexibility and credit profile. It is important to note, however, that expectations for the company's medium-term evolution will have to incorporate Petrobras strategic plans for PE. Fitch understands that these will be announced in early 2004. Petrobras Energia S.A. is one of the most vertically integrated energy conglomerates in Latin America with operations encompassing virtually all segments of the energy value chain. Core business activities, in order of importance, include oil and gas exploration, production, and transportation; refining and marketing; petrochemicals; and electricity. PE is controlled by Petrobras Energia Participacoes S.L. (Participacoes), a holding company controlled by Brazil's national oil company, Petrobras. PE constitutes Participacoes' sole operating asset. In May 2003, the Argentine antitrust commission (Comision Nacional de Defensa de la Competencia) approved Petrobras' proposal to acquire a 58.6% controlling interest in Perez Companc S.A. (Perez), the holding company controlling Pecom Energia S.A. (Pecom). Following the acquisition, Pecom's corporate name was changed to PE and Perez's to Participacoes. PE is consolidated as a Petrobras subsidiary and its obligations are non-recourse to the Brazilian parent. Fitch rates Petrobras' senior unsecured foreign currency obligations 'B' with a positive outlook. CONTACT: Fitch Ratings Alejandro Bertuol Phone: 212-908-0393 Ana Paula Ares Phone: +54 11-4327-2444 Cecilia Minguillon Phone: +54 11-4327-2444 Matt Burkhard (Media Relations) Phone: 212-908-0540 REPSOL YPF: Joins Initiative for Transparency of Payments --------------------------------------------------------- Repsol YPF has joined the Extractive Industry Transparency Initiative (EITI), whose principal objective is to increase transparency in the payments to the governments of countries, where there are exploration and production activities, of taxes and royalties that should be an important engine for economic and social progress in developing countries that are rich in natural resources. With the adherence to EITI, Repsol YPF makes a commitment to promote and work in collaboration with governments and other companies in the development of a framework of good payment transparency practices for extractive activities in those countries where it operates, especially in Latin America. Repsol YPF considers that "knowledge on the part of the citizens and institutions of the oil and gas production revenues earned by governments, can help improve economic and social development, allowing responsible companies to benefit from a more secure and predictable environment and developing economies to make better use of the advantages derived from an improvement in legal security, economic prosperity and social coherence, attracting more direct foreign investment." This proposal was presented by the UK Prime Minister Tony Blair, at the World Summit on Sustainable Development, in Johannesburg in September 2002 and included in the agenda of the G8 Summit held in Evian, France. This past June, the British Primer Minister urged government and business representatives to ratify the principles of EITI, in order to encourage other companies, governments and institutions to participate in the effective development of this transparency initiative. The governments and companies were formally invited to express their support of the declaration of principles of EITI, that aims to be a forum of discussion for companies, governments, institutional investors and ONGs. RIBEIRO: $25M of Bonds Get `C' Rating From Moody's Latin America ---------------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. assigned a `C' rating to corporate bonds issued by Argentine company Ribeiro S.A.C.I.F.A. e I., according to the country's securities regulator Comision Nacional Valores. Moody's said that the rating, which was based on the Company's finances as of the end of June this year, denotes that the bonds posses a risk of nonpayment. The CNV described the affected bonds as "Obligacion Negociable Simple", worth a total of US$25 million. The maturity date was not revealed , but the type was given as "Program". TRANSENER: $450M of Bonds Get `D(arg)' from Argentine Fitch ----------------------------------------------------------- Some US$450 million of Transener S.A.'s corporate bonds were rated `D(arg)' by Fitch Argentina Calificadora de Reisgo S.A. last week. The Comision Nacional Valores, Argentina's securities regulator, described the bonds as "obligaciones negociables", but did not reveal the maturity date. Fitch said that the rating is assigned to financial commitments that are currently in default. It was based on the Company's finances as of the end of June this year. The bonds were classified under "Simple Issue", but its CUSIP was not revealed. TURBINE POWER: Moodys' Rates $20M of Bonds `D' ---------------------------------------------- Some US$20 million of corporate bonds issued by Turbine Power Company S.A. received default ratings from Moody's Latin America Calificadora de Riesgo S.A. recently. Argentina's securities regulator, the Comision Nacional Valores, revealed that the rating applies to bonds called "obligaciones negociables garantizadas", which matured in November last year. The bonds were classified under "Simple Issue". The `D' rating, which was based on the Company's finances as of June 30, 2003, is assigned to bonds that are in default, the ratings agency said. UNIDAD DE COBRANZAS: Files For Bankruptcy ----------------------------------------- Unidad de Cobranzas S.A., domiciled in Buenos Aires, has voluntarily filed for bankruptcy, reports local newspaper La Nacion. According to documents submitted to the court, the Company stopped making debt payments on March 25 this year. Judge Rey of Buenos Aires' Court NO. 25 handles the Company's case. Clerk No. 49, Dr. Pennaca, assists the court, the source adds. CONTACT: Unidad de Cobranzas S.A. Sarmiento 113 Buenos Aires =========== B R A Z I L =========== BCP: America Movil Offers 28% Stake to Telemar for $175M -------------------------------------------------------- Mexico's America Movil, through its Brazilian unit Claro, offered a 28% stake in Sao Paulo wireless operator BCP to Telemar for US$175 million. In a statement, Claro said that the option to buy the stake expires at the end of October and that the price is proportional to the US$625 million America Movil agreed to pay for BCP. America Movil, part of the empire of tycoon Carlos Slim, inked a deal in late August to buy BCP. The deal awaits approval from the Brazilian regulators. The approval would formalize the exit of U.S. phone company BellSouth, which owned part of BCP, from Brazil's fiercely competitive wireless market. Earlier on Tuesday, Luiz Guilherme Schymura, the president of Brazil's National Telecommunications Agency (Anatel), said the sector regulator expected to begin processing the paperwork this week that would allow for the transfer of BCP to America Movil. CONTACT: BCP S.A. Rua Fl>rida, 1970 4o andar Sao Paulo - SP Tel: 55 11 5509-6428 Fax: 55 11 5509-6257 Home Page: http://www.bcp.com.br CEMIG: In Talks With BNDES to Participate in Loan Program --------------------------------------------------------- Brazil's Minas Gerais state integrated power company Companhia Energetica de Minas Gerais (Cemig) hopes to secure as much as BRL700 million of the BRL3-billion in loans being offered by federally owned development bank BNDES for the cash-strapped energy sector, Dow Jones reports, citing Cemig chairman Wilson Nelio Brumer. The report says the Company is currently in discussions with the government to participate in the new financing program that could cover next year's debt obligations, which roughly total US$250 million. "If we raise this money with BNDES, 100% of it will be solved," Brumer told Dow Jones Newswires. The executive acknowledged that Cemig will have to clear some hurdles to qualify for the federal program. But he expressed optimism about the final outcome for his company. "We are still negotiating with both the federal government and BNDES. I think they have demonstrated that they want to be flexible with us," Brumer said. Despite the ongoing talks, the official didn't rule out tapping international capital markets next year - something Cemig hasn't done since 1996. The Company has US$1.4 billion in foreign obligations, roughly two-thirds of its total debt load. "I think it's very important for Cemig to be in the international markets," Brumer said. CONTACT: COMPANHIA ENERGETICA DE MINAS GERAIS Luiz Fernando Rolla, Investor Relations Phone: + 011-5531-299-3930 Fax: + 011-5531-299-3933 E-mail: lrolla@cemig.com.br CEMIG: Formalizes Listing of ADRs on NYSE ----------------------------------------- Cemig's level 2 ADRS have been traded on the New York Stock Exchange since 2001 but the commemoration of the event didn't come until the 6th of this month. The delay, according to Business News Americas, was due to the September 11 attacks. Foreign investors currently hold 42% of Cemig's preferred shares and 25% of its total capital. "Cemig today is one of the companies that invests the most in generation in the country. Currently, five plants are being built individually or in partnership with other companies," company chairman Wilson Brumer said. He believes that the Company's operational result will improve in the second half due to a combination of currency stability and rate hikes. ENDESA CHILE: Brazilian Unit Forced To Curtail Operations --------------------------------------------------------- Chilean power company Empresa Nacional de Electricidad SA (Endesa Chile) said it received an order from Brazil's Goias Environmental Agency to cut back operations at its local hydroelectric plant. The environmental agency ordered Endesa's plant, Cachoeira Dourada SA, to shut down nine of its 10 turbines late last Friday, reducing operations to a capacity of 17 megawatts from 658 megawatts normally. The agency said the plant lacked environmental permits, required by law since 1996. Endesa, a unit of Spain's Endesa, called the ruling "arbitrary" and "discriminatory" in a filing to Chile's stock market regulator and said it would seek to have the order reversed. The filing said that Endesa Chile acquired Cachoeira Dourada in 1997 as part of Brazil's privatization program. At the time, the Company didn't have an environmental permit. However, it said it had applied for the permit in 1998 and was still waiting for it to be issued. While its application hasn't yet been approved, the filing said the Company "is most advanced in this process as compared to the other electricity companies in the state of Goias." Therefore, Endesa Chile said, the order "should be lifted soon as it is clear that there is a conflict of competence that cannot be allowed to drag on." GERDAU: Considering Another Debt Issue -------------------------------------- A spokesperson from Brazilian long steelmaker Gerdau revealed that the Company is contemplating another debt issue on foreign markets, relates Business News Americas. Local news reports suggest that the issue will consist of commercial paper totaling US$50 million and mature in one year paying 4.38%. But according to the spokesperson, the Company has not yet finalized the amount, maturity or yield. Spanish bank Santander is reportedly coordinating the debt issue that will be guaranteed by Gerdau and slated to take place on October 10. CONTACT: Press Office +55(51) 3323-2170 imprensa@gerdau.com.br www.gerdau.com.br ========= C H I L E ========= COEUR D'ALENE: S&P Issues Positive Outlook ------------------------------------------ Coeur d'Alene Mines Corporation, the world's largest primary silver producer, announced Tuesday that Standard and Poor's (S&P) rating agency has upgraded its outlook on Coeur to positive and affirmed its overall rating on the Company. In its new rating announcement issued Monday, S&P noted that the upgraded outlook on the Company to positive from negative reflects the improvement in Coeur's liquidity, as a result of the Company's recently completed $76.4 million equity offering. The agency noted that the increased liquidity provides Coeur with the capital needed to implement plans to improve the Company's profitability and production growth. "We are extremely pleased with the positive outlook rating issued by Standard and Poor's," said Dennis E. Wheeler, Chairman and Chief Executive Officer. "The improved rating is a confirmation of our success in not only strengthening Coeur's balance sheet, but also our ability to bring on line a new generation of high- grade/low-cost mines in South America, and our ability to reduce operating costs. Combined with our much stronger cash flow profile, we are in a position to continue our growth strategy, including the acceleration of our development properties, which will further ensure our position as the world's leading primary silver producer, as well as a growing gold producer." Coeur d'Alene is also completing a feasibility study at its San Bartolome silver project in Bolivia, which holds 126 million ounces of new proven and probable reserves in high-grade ore. With positive feasibility study results, construction at San Bartolome could commence as soon as 2004, with production following as soon as late 2005. Coeur is also completing development studies at its Kensington, Alaska, gold project, which has the potential to produce 175,000 ounces of gold per year at an operating cost of $225 per ounce. In its report, S&P also reaffirmed its CCC corporate credit rating on the Company, and a CCC subordinated debt rating. The agency noted that ratings on the Company could be raised if it can successfully develop its developmental properties, while preserving adequate liquidity and reducing cash costs. The agency noted Coeur's significant debt reduction efforts, which brought down total indebtedness from $211 million at December 2000 to the current $19.1 million level, with potential for additional reductions in the near term. 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. CONTACT: COEUR D'ALENE MINES CORPORATION Tony Ebersole Tel: +1-208-665-0335 ENDESA CHILE/ENERSIS: Merrill Lynch To Reinstate Coverage --------------------------------------------------------- Merrill Lynch disclosed in a report Monday that it will reinstate coverage of Chilean generator Endesa, reports Business News Americas. Endesa is rated neutral with high volatility risk, the report said, adding that the company is expected to see improving results over the next few years. Merrill Lynch also expects an improvement in the next few years from Endesa's Brazilian and Argentine operations. The company's balance sheet has benefited asset sales and debt paydown as part of a broader restructuring of the finances at parent Enersis. Business News Americas also reports that Merrill Lynch will reinstate coverage of Endesa Chile's parent, Enersis. According to Merrill Lynch, Enersis is rated at buy, with a high volatility risk. The rating is based on three main factors: earnings and cash flow, which should benefit from continuing strong growth in Chile and Argentina; recent balance sheet restructuring which reduced net debt/net capitalization; and attractive valuation. TELEFONICA CTC: Lower House to Hear Ministers' Testimonies ---------------------------------------------------------- Chile's Economy Minister Jorge Rodriguez, Transport and Communications Minister Javier Etcheberry and telecoms Undersecretary Christian Nicolai were due to present their evidence to the lower house Wednesday in relation to claims that the government has illegally favored telecom operator Telefonica CTC Chile. Afterwards, the lower house will decide whether to lodge an investigation into claims by several senators and executives at rival operators that the government, principally the economy ministry, has taken CTC's side in its battle to be allowed to set its own prices, instead of being subjected to regulated tariffs. They want to investigate claims that Sergio Espejo, one of the CRA members opposed to CTC, was forced by the government to resign, paving the way for the CRA to allow more freedom for CTC to set its own rates should there be a secondary ruling on the matter. CONTACT: TELEFONICA CTC CHILE Gisela Esobar, gescoba@ctc.cl Veronica Gaete, vgaete@ctc.cl M.Jos, Rodriguez, mjrodri@ctc.cl Florencia Acosta, macosta@ctc.cl Tel: 562-691-3867 Fax: 562-6912392 =============== C O L O M B I A =============== ELECTROCARIBE/ELECTROCOSTA: Shareholders Agree To Inject Capital ---------------------------------------------------------------- Struggling Colombian electricity generation companies Electricaribe and Electrocosta are to receive a capital injection of COP256 billion from their majority owner, Union Fenosa, and the Colombian government as well. According to a report by Portafolio, Spanish-based Fenosa agreed to inject COP178 billion, of which COP135 billion will got to Electrocaribe and COP43 billion to Electrocosta. The Colombian government, on the other hand, agreed to inject COP78 billion, of which COP18 billion will go to Electrocosta and COP60 billion to Electrocaribe. The power companies are having a rough time at present due to a high degree of arrears and an average 23% rate of energy loss. At the end of August, the two companies had accumulated more than COP700 billion in arrears. MILLICOM INTERNATIONAL: Announces Subscriber Growth for 3Q03 ------------------------------------------------------------ Millicom International Cellular S.A. (MIC), the global telecommunications investor, announced Tuesday that in the third quarter of 2003 its worldwide operations in Asia, Latin America and Africa added 832,006 net new cellular subscribers, including some 460,000 for Telemovil, MIC's operation in El Salvador, which was re-consolidated in September. Underlying subscriber additions for the quarter, excluding El Salvador were the highest since the last quarter of 2000. On a proportional basis, 722,691 subscribers were added. At September 30, 2003, MIC's worldwide cellular subscriber base increased to 5,303,841 cellular subscribers from 3,715,731 as at September 30, 2002. Particularly significant percentage increases were recorded in Ghana, Senegal, Pakistan, Cambodia and Vietnam. MIC Africa recorded its best ever quarter in terms of subscriber growth, adding 86,201 subscribers, an increase of 19% from June 30, 2003. At September 30, 2003, MIC's proportional subscriber base increased to 3,806,646 from 2,601,769 at September 30, 2002. Cellular Operations including El Salvador (i) Proportional Proportional Annua- Total Total Annua- (ii) (ii) lized Subs at Subs at lized Subs at Subs at Increase Sept 30, Sept 30, Incre- Sept 30, Sept 30, 2003 2002* ase 2003 2002* Asia 1,534,322 1,055,478 45% 2,437,759 1,662,352 47% Latin America 1,907,642 1,294,547 47% 2,334,339 1,665,919 40% Africa 364,682 251,743 45% 531,743 387,460 37% Total Cellular Ops 3,806,646 2,601,769 46% 5,303,841 3,715,731 43% (i) All numbers and comparatives exclude divested operations (ii) Proportional subscribers are calculated as the sum of MIC's percentage ownership of subscribers in each operation. * Excluding El Salvador Within the 3,806,646 proportional cellular subscribers reported at the end of the third quarter, 3,341,001 were pre-paid customers. Excluding El Salvador, proportional prepaid subscribers increased by 33% from September 2002. Pre-paid subscribers currently represent 88% of gross reported proportional cellular subscribers. Millicom International Cellular S.A. is a global telecommunications investor with cellular operations in Asia, Latin America and Africa. It currently has a total of 16 cellular operations and licenses in 15 countries. The Group's cellular operations have a combined population under license of approximately 382 million people. In addition, MIC provides high- speed wireless data services in five countries. CONTACTS: Millicom International Cellular S.A., Luxembourg Marc Beuls, President and Chief Executive Officer Telephone: +352 27 759 101 URL: http://www.millicom.com Shared Value Ltd, London Andrew Best Telephone: +44 (0) 20 7321 5022 =================================== D O M I N I C A N R E P U B L I C =================================== BANCO POPULAR: Moody's Cuts Ratings Following Sovereign Downgrade ----------------------------------------------------------------- Moody's Investors Service downgraded Banco Popular Dominicano's (BPD) key ratings: To From - Foreign currency deposit rating B2 Ba3 - Bank financial strength rating (BFSR) D (Neg.) D+ (Stable) - Local currency deposit rating Baa2 Baa1 The outlook on all the ratings, except BFSR, remain stable. The downgrades follow Moody's downgrade of the Dominican Republic's foreign currency ceilings. Moody's attributes the downgrades of the sovereign and BPD to the deterioration in the country's general economic conditions. In spite of a financial assistance package from multilateral institutions, the DR's international liquidity position remains low, a condition that may limit the authorities' ability to manage adverse shocks, rendering the economy vulnerable to such events in the future. TRICOM: Moody's Concludes Rating Review, Downgrades Ratings ----------------------------------------------------------- Concluding a review which commenced December 2002, Moody's Investors Service downgraded the ratings of Tricom S.A. The ratings affected are (to/from): - Senior Implied Rating Ca Caa1 - US$200 million of Senior Unsecured Notes due 2004 Ca Caa2 - Senior Unsecured Issuer Rating Ca Caa3 The rating outlook is now stable. The downgrade follows the recent default on the Senior Unsecured Notes and the ensuing recognition that the ratings depend more significantly on expected loss severity for the company's creditors given the current event of default scenario. In particular, Moody's had largely anticipated the need for a major debt restructuring when the company's ratings were put under review for possible downgrade back in December 2002, mainly the result of low cash flow generation relative to very high debt levels, reliance on short-term funding, a low liquidity, and a heavy debt amortization schedule. Even so, Moody's believes that the most likely outcome is for Tricom to remain a going concern after the expected debt restructuring, and that the Company will most likely avoid a liquidation scenario. Tricom generates positive EBITDA, which is more than enough to finance future capex requirements, and owns valuable assets such as the only fully digitalized fixed telephone network in the country, switching facilities in the U.S. and Puerto Rico, a CDMA network covering around 75% of the local population, and a cable network which will be fully bidirectional by the end of the current year. The growth potential of the DR's telecommunications market is also still considered to be fairly substantial due to the comparatively low penetration of these types of services. With headquarters in the Dominican Republic, Tricom is an integrated telecommunications company providing local telephone, international and domestic long distance, wireless, cable, and data and Internet services, among others. ============= E C U A D O R ============= PETROECUADOR: Defies Court Ruling --------------------------------- An Ecuadorian administrative court has determined that Guillermo Rosero's June dismissal from the presidency of state-run Petroecuador, was not done for legitimate reasons. As such, the former company head should be allowed to return to the post, the ruling said. But according to a report released by Business News Americas, Ecuador's government will not reinstate Rosero to his former position. Energy Minister Carlos Arboleda has appealed the ruling and said that there will be no change in Petroecuador's management while the appeal is being heard. Petroecuador's current president, Pedro Espin, said Monday that he will remain in the job since he has the support of Ecuadorean President Lucio Gutierrez. Rosero, for his part, plans to return to his old post by Friday, the date set by the court for him to do so. PETROECUADOR: Three Companies Submit Bid For Insurance Policies --------------------------------------------------------------- Eduardo Naranjo, a spokesperson for Petroecuador, revealed that the state oil company received three bids for insurance policies, relates Business News Americas. The bids came from Panamericana, which came in with the lowest bid at US$18.2 million including taxes; Colonial, Petroecuador's current insurer, with an US$19.1-million bid; and Rocafuerte with a US$21.9-million bid. Business News Americas notes that Petroecuador paid US$28 million in premiums from 2002 to 2003. Petroecuador will study the bids and award the contract by October 15, Naranjo said, adding that Panamericana would likely win the contract unless it is disqualified for technical reasons. The companies bid on two major policies to cover Petroecuador's estimated US$3.6 billion in assets. Petroecuador is seeking coverage of up to US$500 million, the maximum estimated cost of any catastrophic event. =========== M E X I C O =========== CFE: Sells $230M Worth of Stock Market Certificates --------------------------------------------------- Mexico's state power company CFE on Monday sold stock market certificates worth MXN2.6 billion (US$230mn), Business News Americas reports, citing a company statement. BankBoston was the agent for the issue - the first in a MXN6- billion series that will help finance the CFE's public works program, the statement said. Purchase offers totaled MXN4.3 billion. Private pension fund managers (Afores) purchased 65% of the issue. According to Fitch Ratings analyst Sergio Rodriguez, the 10-year papers pay interest twice a year at a floating rate equivalent to the 182-day federal treasury rate (Cetes) plus 0.85%. Each 182- day period will amortize MXN130 million in capital plus interest, he added. The issue was generally "successful," Rodriguez said. Fitch Mexico and ratings agency Standard and Poor's (S&P) rated the issue at AAA(mex) and mxAAA, respectively. However, Rodriguez said that the decision by ratings agency Moody's to consider downgrading the currency bond ratings of state oil company Pemex injected a sense of uncertainty in the market. As both Pemex and the CFE are government owned, investors could associate Moody's scrutiny of Pemex with the CFE's financial health, he said. CONTACT: COMISION FEDERAL DE ELECTRICIDAD Rio Rodano 14, Col. Cuauhtemoc 06598 Mexico, D.F., Mexico Phone: +52-55-5229-4400 Fax: +52-55-5310-4614 Home Page: http://www.cfe.gob.mx Contacts: Alfredo Elias Ayub, General Director Arturo Hernandez Alvarez, Director of Operations Francisco J. Santoyo Vargas, Director of Finance GRUPO IUSACELL: Gets Injunction Against Service Quality Rules ------------------------------------------------------------- Grupo Iusacell, Mexico's third largest mobile operator, obtained an injunction against new service quality rules implemented since August, Business News Americas reports, citing local daily Reforma. Iusacell's legal action against the rules was a sign of "clear resistance to making service quality information public," Jorge Arredondo, the head of telecom regulator Cofetel, was quoted as saying. The rules require operators to report service quality indicators to Cofetel on a monthly basis and subject these operators to different quality measurements based on the kind of technology they use in their networks. Mexico's four mobile operators - Telcel, Telefonica Moviles, Iusacell and Unefon - use AMPS, TDMA, CDMA and GSM technologies. Iusacell reportedly opposes the geographic areas subject to service quality measurements, Cofetel's faculties to verify indicators submitted by the company, and the publishing of service quality results by the regulator. "It's more an issue of cost rather than unwillingness to monitor quality because the regulations would require operators to absorb the personnel and technical costs of monitoring [quality] on a local rather than regional level," one company source told Business News Americas. Grupo Iusacell is a wireless cellular and PCS service provider in seven of Mexico's nine regions, including Mexico City, Guadalajara, Monterrey, Tijuana, Acapulco, Puebla, Leon and Merida. The Company's service regions encompass a total of approximately 92 million POPs, representing approximately 90% of the country's total population. CONTACT: Grupo Iusacell S.A. De C.V. Prolongacion Paseo dela Reforma 1236 Col Santa Fe Delegacion Cuajimalpa 05348 Mexico Distrito Federal Mexico Phone: +52 5 109 4400 Home Page: http://www.iusacell.com.mx PROTEL: Plans To Restructure Debts By End October ------------------------------------------------- Mexican long distance operator Protel is hoping to reach a debt restructuring accord with creditors by the end of the month. According to local daily Reforma, the Company's main creditors are fixed line giant Telmex, to which it owes US$15 million, and investment group Darby, which is owed US$20 million. Protel is said to be looking to extend by a year debt payments due next year. A drop in margins on long distance traffic between the US and Mexico reportedly cost the Company US$10 million - 15 million in revenues, according to Business News Americas. *********** 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. 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