/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/031203.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, December 3, 2003, Vol. 4, Issue 239 Headlines A R G E N T I N A BANCO HIPOTECARIO: Nearly All Creditors Okay Debt Plan BEIZET: Claims Processing to End February 23 Next Year BRACO ARGENTINA: Court Approves Creditor's Bankruptcy Petition CELULAR COM: Receiver Verifies Claims in Bankruptcy DISCO: Cencosud Upholds Purchase Plans EDITORIAL LUMI: Court Grants Permission to Reorganize FRANCIONI: Reorganization Motion Presented at Court IEBA: S&P Assigns Default Ratings to $100M of Bonds INDUSTRIAS METALURGICAS: Fitch Rates Bonds `C(arg)' INSTITUTO ARGENTINO: Seeks Reorganization LIMSMERIL: Files Moves to Reorganize Under Court Authority PET SUPPLIES: Court Approves Motion to Reorganize PUBLICIDAD & CO: Court Orders Bankruptcy RALIMET: Court Declares Company Bankrupt RICHVAN: Enters Bankruptcy on Court Orders TEMPO DE TEMPORA: Voluntarily Files for Bankruptcy TURBINE POWER: $20M of Bonds Get `D(arg)' from Fitch * IDB Reaffirms Support For Argentina's Economic Recovery B E R M U D A CRP: Parent To Pursue Disengagement TYCO INTERNATIONAL: S&P Assigns 'BBB-' Bank Loan Rating B R A Z I L TELEMAR: Announces Proposed New Notes Offering TELEMAR: Releases Additional Info On JCP Payment TELEMAR: Merrill Lynch Releases Favorable Analysis C O L O M B I A AVIANCA: Pilots' Protest Creates Mounting Costs EMCALI: Signs Energy Purchase Agreement with TermoEmcali J A M A I C A JPSCO: Senior Management Changes Revealed M E X I C O ALESTRA: S&P Withdraws Ratings at Company's Request INTERNATIONAL WIRE: Bondholders Form Committee in Bankruptcy TV AZTECA: Fitch Assigns 'B+' Senior Unsecured Rating P A N A M A CEFISA: Future Plans Expected to Be Revealed Soon P E R U MINERA VOLCAN: BCP Ups Recommendation To `Hold' T R I N I D A D & T O B A G O CARIBBEAN ISPAT: Union Warns of "Mass Action" U R U G U A Y GALICIA URUGUAY: Central Bank Extends Suspension Anew - - - - - - - - - - ================= A R G E N T I N A ================= BANCO HIPOTECARIO: Nearly All Creditors Okay Debt Plan ------------------------------------------------------ Argentine bank Banco Hipotecario announced that more than 90% of the holders of its US$900 million in debt agreed to an exchange offer, meeting the minimum level of acceptance set as a condition by the bank. The bank, in a statement to the Buenos Aires stock exchange Monday, also said it has postponed the expiration date on the exchange offer to December 18. Banco Hipotecario said the total offers received from bondholders in response to its proposal amounted to more than 91% of total bonds outstanding, ensuring that it can proceed with the exchange. Some 93% of the holders of US$562 million in dollar-denominated bonds replied positively and 88% of EUR326.3 million in euro- denominated bonds replied in the affirmative, the Company said, noting that it will go ahead with the transactions while simultaneously keeping the offer opening. In a bid to extend its bond repayment deadlines, Banco Hipotecario is offering to swap existing debts coming due in various years up until 2008 for new securities that will instead come due in 2013. The longer term bonds would pay creditors interest of 3% to 6%, instead of the 8% to 13% originally agreed upon. In a secondary phase of the exchange offer, creditors can also swap the new 2013 notes for a government bond with a shorter life of seven years, but they would then take a 30% loss. Alternatively, they can receive a payment of 45% of the face value of those bonds that would see them canceled altogether. The wholesale mortgage bank, whose main shareholder is the Argentine government, defaulted on its debt last year. Other shareholders include an investment fund owned by financier George Soros and Argentine real estate firm IRSA (Inversiones y Representaciones SA). BEIZET: Claims Processing to End February 23 Next Year ------------------------------------------------------ The credit verification process for the bankruptcy of Buenos Aires company Beizet S.A. ends February 23 next year. Creditors must present their claims to the Company's receiver, Mr. Mariana Alicia Nadales for authentication before the said date. Buenos Aires Court No. 4 handles the Company's case with assistance from Clerk No. 8, reports Infobae without mentioning the deadlines for the receiver's reports. CONTACT: Mariana Alicia Nadales Hipolito Yrigoyen 1349 Buenos Aires BRACO ARGENTINA: Court Approves Creditor's Bankruptcy Petition -------------------------------------------------------------- OSDE Organizacion de Servicios Empresarios successfully sought for the bankruptcy of Buenos Aires company Braco Argentina S.A., relates Argentine newspaper La Nacion. Court No. 12, under Judge Ojea Quintana, approved the bankruptcy petition recently. The Company's receiver, Mr. Julio Castronuovo, has instructions to verify creditors' claims until February 19 next year. This is done to determine the nature and amount of the Company's debts. The receiver's duties also cover the preparation of the required individual and general reports. Dr. Medici Garrot, the city's Clerk No. 24, works with the court on the case. CONTACT: Braco Argentina S.A. Samuel Spiro 5973 Buenos Aires Julio Castronuovo 2nd Floor Tte Gral Juan Domingo Peron 1509 Buenos Aires CELULAR COM: Receiver Verifies Claims in Bankruptcy --------------------------------------------------- Mr. Aldo Markman, receiver for Buenos Aires company Celular Com S.A., verifies creditors' claims for the Company's bankruptcy process. A report by local newspaper La Nacion indicates that the verification process will be closed on February 11 next year. Buenos Aires Court No. 19, under Judge Fernandez, issued the bankruptcy order in approval of a petition filed by the Company's creditor Imaxes S.A. on grounds of nonpayment of debt. Clerk No. 38, Dr. Johnson, assists the court on the case. CONTACT: Celular Com S.A. Florida 571 Buenos Aires Aldo Markman 3rd Floor, Office 307 Alsina 1441 Buenos Aires DISCO: Cencosud Upholds Purchase Plans -------------------------------------- Chilean retail holding company Cencosud remains undeterred by the challenges presented by local businessman Francisco de Narvaez to block Cencosud's take over of Disco. According to a report by El Cronista, Cencosud has vowed it will maintain its offer for Disco. Horst Paulmann, chairman of Cencosud, noted that his company has priority in the negotiations and it would be very bad for Ahold's image if it decided to change plans and include someone else in the negotiations at this point. Narvaez has said that he has agreed with partner Casino, the French supermarket group, to improve Cencosud's final offer for Disco. In the meantime, Cencosud is planning to list its shares on both the Chilean and Argentinean stock markets by April 2004. The company is planning to float between 20% and 25% of its share capital. EDITORIAL LUMI: Court Grants Permission to Reorganize ----------------------------------------------------- Editorial Lumi S.R.L.'s motion for "Concurso Preventivo" has been granted by the court. The Company will undergo reorganization with Buenos Aires accountant Jaime Feigielson as receiver. Judge Fernandez of the city's Court No. 19 ordered the receiver to verify creditors' claims until March 16 next year. The receiver is also required to prepare the individual and general reports on the process. The reorganization will close with an informative assembly to be held on November 25 next year. Clerk No. 37, Dr. Mazzoni, assists the court on the case. CONTACT: Editorial Lumi S.R.L. Avalos 1221/23 Buenos Aires Jaime Fiegielson 8th Floor, Rooms 1&2 Sarmiento 1287 Buenos Aires FRANCIONI: Reorganization Motion Presented at Court --------------------------------------------------- Judge Ottolenghi of Buenos Aires Court No. 4 is to decide in the coming days whether to approve a "Concurso Preventivo" motion filed by local company Francioni S.A., relates La Nacion. Dr. Juarez, Clerk No. 7 cooperates with the court on the case. The Company, which manufactures eyeglasses, seeks to undergo reorganization after failing to meet its financial obligations to creditors. CONTACT: Francioni S.A. 1st Floor, Room B Parana 777 Buenos Aires IEBA: S&P Assigns Default Ratings to $100M of Bonds --------------------------------------------------- A total of US$100 million worth of Inversora Electrica de Buenos Aires S.A.'s bonds received default ratings from Standard & Poor's International Ratings, Ltd. Sucursal Argentina. The bonds, which are classified as "Simple Issue", matured in September last year. S&P said that the `raD' rating is assigned when it is in payment default or if the obligor has filed for bankruptcy. The rating may also be used when principal payments are not made on the due date even if the applicable grace period has not expired, unless the ratings agency believes that such payments will be made during such grace period. INDUSTRIAS METALURGICAS: Fitch Rates Bonds `C(arg)' --------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. rates $250 million worth of corporate bonds issued by Industrias Metalurgicas Pescarmona `C(arg)', relates the Comision Nacional de Valores. The bonds were described as "Programa de Obligaciones Negociables" with undisclosed maturity date. The rating, issued last Wednesday, denotes an extremely weak credit risk relative to other issues in Argentina. Fitch said that capacity for meeting financial commitments is solely reliant upon sustained, favorable business and economic developments. INSTITUTO ARGENTINO: Seeks Reorganization ----------------------------------------- Instituto Argentino de Neurociencias S.A., which is based in Buenos Aires, filed a reorganization petition at the city's Court No. 7. Recently, the Company, which operates a psychiatric clinic, has failed to make debt payments. Judge Gutierrez Cabello handles the case, while Clerk No. 13, Dr. O'Reilly assists. CONTACT: Instituto Argentino de Neurociencias S.A. Mansilla 3057 Buenos Aires LIMSMERIL: Files Moves to Reorganize Under Court Authority ---------------------------------------------------------- Limsmeril S.R.L. is seeking court permission to undergo reorganization. Argentine newspaper La Nacion relates that the Company filed its motion for "Concurso Preventivo" at Buenos Aires Court No. 17. Judge Bavastro handles the Company's case with assistance from Dr. Vanoli, Clerk No. 34. The report did not mention whether the Company, which stopped making debt payments in July, would get its motion approved. CONTACT: Limsmeril S.R.L. 2nd Floor, Room A Palpa 3055 Buenos Aires PET SUPPLIES: Court Approves Motion to Reorganize ------------------------------------------------- Buenos Aires Court No. 2 grants local company Pet Supplies International S.A. permission to undergo reorganization. Working with Clerk No. 4, the court assigned Mr. Fernando Aquilino as receiver. Infobae relates that the credit verification period extends until March 5 next year. Creditors must have their claims authenticated by the receiver before the said date. The receiver will also prepare the individual and general reports. CONTACT: Pet Supplies International S.A. La Pampa 4340 Buenos aires Fernando Aquilino Lavalle 1459 Buenos Aires PUBLICIDAD & CO: Court Orders Bankruptcy ---------------------------------------- Buenos Aires Court No. 23, under Judge Villanueva, declared local company Publicidad & Co S.A. "Quiebra". The ruling comes in approval of a petition filed by the Company's creditor for failure to pay its debts. The Company, which manufactures plastic, will undergo bankruptcy. Assisted by Clerk No. 45, Dr. Timpanelli, the court assigned Mr. Ricardo Adrogue as the Company's receiver, reports La Nacion. He is instructed to verify creditors' claims until February 3 next year, after which he will prepare the individual reports. The receiver is also obliged to prepare the general report after the individual reports are processed at court. La Nacion, however, did not reveal the filing deadlines for the receiver's reports. CONTACT: Publicidad & Co S.A. Florida 826 Buenos Aires Ricardo Adrogue 5th Floor Bouchard 468 Buenos Aires RALIMET: Court Declares Company Bankrupt ---------------------------------------- Buenos Aires Court No. 4 declared Ralimet S.A. "Quiebra", placing the company under bankruptcy protection. Working with Clerk No. 8, the court assigned Mr. Juan Narbaitz as the Company's receiver. Credit verifications will end on February 12 next year. Creditors must have their claims authenticated by the Company's receiver before the said date in order to qualify for payments to be made at the end of the bankruptcy process. CONTACT: Juan Narbaitz Viamonte 1570 Buenos Aires RICHVAN: Enters Bankruptcy on Court Orders ------------------------------------------ Richvan S.A., which is based in Buenos Aires, entered bankruptcy on orders from the city's Court No. 4. The Company is placed in the hands of its receiver, Mr. Vicente Carlos Alberto, Infobae reveals. Before preparing the individual and general reports, the receiver must first verify creditors' claims. The court ordered the verification period to expire on February 11 next year. Verifications are done to determine the nature and amount of the Company's debts, and will serve as the basis for payments to be made after the Company's assets are liquidated at the end of the process. CONTACT: Vicente Carlos Alberto Ave Corrietes 2166 Buenos Aires TEMPO DE TEMPORA: Voluntarily Files for Bankruptcy -------------------------------------------------- Buckling under its debt burden, Argentine hotel Tempo de Tempora S.A. voluntarily filed for bankruptcy, reports La Nacion. Judge Vasallo is in charge of the case, while Clerk No. 10 Polo Olivera assists. The source, did not mention, however, whether the court is likely to approve the petition. CONTACT: Tempo de Tempora S.A. Cullen 4838 Buenos Aires TURBINE POWER: $20M of Bonds Get `D(arg)' from Fitch ---------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. rates bonds issued by Turbine Power Co. S.A. `D(arg)', according to the Comision Nacional de Valores, Argentina's securities regulator. The rating issued last Wednesday is assigned to bonds that are in default or whose obligor has filed for bankruptcy. The affected bonds were described as "obligaciones negociables garantizadas", worth a total of US$20 million. These matured in November last year and are classified under "Simple Issue". The Company's finances as of September 30 this year determine the rating assigned to these bonds. * IDB Reaffirms Support For Argentina's Economic Recovery --------------------------------------------------------- The Inter-American Development Bank announced last week that its loan portfolio to support Argentina's economic recovery has risen to $870 million after a reallocation of resources assigned $414 million to two key programs for the farm sector and micro, small and medium-size enterprises. The enhanced programs will bolster the recovery of the farm sector, Argentina's leading source of foreign revenue, and expand access to credit for small businesses, which were ravaged by the country's recent recession. The reallocation approved by the IDB's Board of Executive Directors will focalize financing on programs that will help strengthen Argentina's economic recovery by generating jobs, increasing output and boosting exports. "This operation constitutes an important step to focus IDB resources in two areas identified as priorities by the Argentine government to address the economic crisis and promote recovery in the short- and medium-term by employing technology, innovation and credit for small businesses," said IDB project team leader Flora Painter. "It also allows for a more effective portfolio management by reallocating available resources to reflect new priorities". Under the reallocation, resources are due to be disbursed over 4� years. Local counterpart funds for the enhanced programs will come to $519 million, which added to the IDB's financing provides a total $933 million. Farm services program The enhanced program for farm services will now have $233 million in IDB resources to support rural sector recovery by investing in the rehabilitation of infrastructure in areas with high potential for agriculture. These public works will help improve water resource management, mitigating floods and soil degradation and expanding the land available for raising cattle and growing grain, which will help boost farm output and exports. A key goal of the program is to increase the value of Argentine farm exports by improving the quality and volume of agricultural production. Credit for small businesses The enhanced global credit program will now have $181 million in IDB resources to help bolster micro, small and medium-size enterprises, a key sector for economic recovery since these businesses employ between 69 and 78 percent of Argentina's workforce and generate 61 percent of national output. The program's credit component provides resources to finance working capital, purchase fixed assets and contract services. Economic recovery portfolio The reallocation of resources to enhance key programs reflects the strategy agreed between the IDB and the Argentine government to promote sustainable growth of the country's productive sectors and to increase productivity by eliminating bottlenecks. The IDB portfolio includes other programs that support Argentina's recovery by providing resources for business restructuring, technological upgrading, border crossings and integration corridors, emergency flood rehabilitation and port modernization. The IDB's Multilateral Investment Fund is assisting Argentina through 24 projects, most of them aimed at small businesses. After the Board approved the reallocation, IDB President Enrique V. Iglesias said: "Argentina's strong economic recovery is a fact. It must be supported with appropriate loans. The reallocation of resources to these ends is a high priority for the Argentine government, and fully shared by the IDB." ============= B E R M U D A ============= CRP: Parent To Pursue Disengagement ----------------------------------- Troubled French reinsurer Scor SA announced it will pursue its disengagement from Commercial Risk Partners (CRP), its Bermuda- based subsidiary, relates Dow Jones. Jean-Marc Loiseau, head of research at Dexia Securities, interprets the announcement as good news for Scor. The report suggests that the inability of Scor to sell both its life unit Scor Vie and CRP had been the main cause of the dramatic turnaround in the group's strategy, announced Nov. 6, when shares plunged more than 22% after Chief Executive Denis Kessler said Scor would have to launch its second capital increase in the space of 12 months. The Company then revealed it had been forced to provision EUR241 million on U.S. policies, pushing the nine-month loss to EUR349 million. The announcement on CRP came before Monday's extraordinary shareholders meeting, whereby shareholders agreed to a bigger- than-expected rights issue of EUR750 million as part of the latest turnaround attempt by Kessler. Just before the meeting, the Company announced that the capital increase would be raised from the originally planned EUR600-million, a move Kessler said was intended to give Scor more financial flexibility. Already, Scor's shareholders have pledged EUR300 million for the rights issue, the remaining to be guaranteed by a bank syndicate, the Company said. Analysts were waiting for the issue's pricing to see if BNP Paribas and Goldman Sachs would try to talk the price down. Both BNP and Goldman previously agreed to underwrite the balance of any rights above those committed to by existing shareholders. Reports have it that a third bank, HSBC, might join in the syndicate. The pricing of the rights issue will be decided by the Company's board but no timeline has been set for the announcement, said a company spokeswoman. "A EUR750 million rights issue puts the company in a better situation to improve its ratings," said Loiseau. However, another unnamed analyst contradicted this saying that although the bigger-than-planned issue might bring more confidence among Scor's customers, it would increase dilution and fall short of getting Standard & Poor's to upgrade its ratings above the triple-B-plus level from the current triple-B-minus. TYCO INTERNATIONAL: S&P Assigns 'BBB-' Bank Loan Rating ------------------------------------------------------- Standard & Poor's Ratings Services said Monday that it assigned its 'BBB-' bank loan rating to the proposed $2.5 billion senior unsecured bank credit facility of Tyco International Group S.A. (TIGSA) (BBB-/Stable/A-3). Concurrently, Standard & Poor's affirmed its 'BBB-' corporate credit and its other ratings and stable outlook on parent Tyco International Ltd. (Tyco) and its subsidiaries. The Pembroke, Bermuda-based global industrial manufacturer had approximately $24 billion in total debt outstanding at Sept. 30, 2003. The bank facility is rated the same as the corporate credit rating, as the bank lenders are expected to fare about the same as other senior unsecured lenders. The proposed facility consists of a $1.5 billion three-year revolving credit tranche, due 2006, and a $1 billion 364-day tranche, which is expected to have a one-year term-out option. The facility is not expected to be guaranteed by TIGA's subsidiaries, and pricing will be based off of a ratings grid. Tyco International, with approximately $37 billion in revenues, is a diversified global manufacturer, with operations in five primary sectors: electronics, healthcare, fire and security, plastics, and the general industrial markets. In 2004, Tyco plans to take roughly $400 million in charges (requiring $280 million in cash payments), to further reduce headcount and its fixed-asset footprint, mainly in its fire and security unit. The company estimates that these actions will yield about $135 million in savings by year-end 2004 and $230 million by year-end 2005. In sharp contrast to recent years, Tyco's business strategy is now expected to focus primarily on internal growth, with the company increasing its R&D spending (particularly in its healthcare operations) in an effort to increase its ability to generate new products. These actions, combined with reduced security dealer account acquisitions, should enable Tyco to generate meaningful free cash flow, and gradually strengthen its earnings, even without meaningful pickup in end-markets. Several unresolved items are credit concerns, including investigations by the SEC's Enforcement division and uncertainty as to the resolution of shareholder class action lawsuits. "We view the potential impact from shareholder lawsuits and the SEC's investigation as the most meaningful of these risks," said Standard & Poor's credit analyst Joel Levington. "Most of the turbulent issues and distractions the company faced during the recent past should now be behind it. With new corporate governance policies in place and an improved liquidity position following recent refinancing activity, new management should be able to focus its efforts on the business and deliver operating improvements that are expected to yield a financial profile consistent with the ratings," Mr. Levington said. ANALYST: Joel Levington New York Phone: (1) 212-438-7802 =========== B R A Z I L =========== TELEMAR: Announces Proposed New Notes Offering ---------------------------------------------- Tele Norte Leste Participa�oes S.A. ("Telemar") announced Monday that it intends to offer notes due 2013 by means of a private placement to qualified institutional buyers under Rule 144A, and in offshore transactions pursuant to Regulation S, under the Securities Act of 1933, as amended (the "Securities Act"). The aggregate principal amount of such notes is anticipated to be US$300,000,000. Telemar will use the net proceeds from the offering for general corporate purposes. The notes have not been, at the time of the offering, and will not be registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration under, or an applicable exemption from, the registration requirements of the Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or a solicitation of an offer to buy the notes, nor shall there by any sale of these notes in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). The notes are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such notes will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents. CONTACT: Telemar IR Department Roberto Terziani Tel: 5521 3131-1208 Email: terziani@telemar.com.br Carlos Lacerda Tel: 5521 3131-1314 Email: carlosl@telemar.com.br Tarso Rebello Dias tarso@telemar.com.br Tel: (55 21) 3131-1276 Fax: (55 21) 3131-1383 TELEMAR: Releases Additional Info On JCP Payment ------------------------------------------------ TMAR's Notice to Shareholders dated November 26, 2003 concerning the payment of Interest on Capital (JCP) in the amount of BRL79,995,880.92 is in addition to the amounts of BRL150,472,774.50 and BRL300,887,179.00, pursuant to our Notices of September 25, 2003 and October 23, 2003, respectively. All such payments refer to the payment of JCP in the total amount of up to BRL870 million, as approved by Telemar Norte Leste's Board of Directors on September 25, 2003, applied to statutory dividends to be declared for fiscal year 2003. TELEMAR: Merrill Lynch Releases Favorable Analysis -------------------------------------------------- Merrill Lynch ranked Telemar (Tele Norte Leste Participa�oes, NYSE: TNE) with the highest score, toghether with America Movil (Mexico), Bharti (India), CANTV (Venezuela) e a MTN (South Africa), in a new research named "Analysis of Momentum and Sentiment Indicators for Global Emerging Market Telcos". The research evaluated thirty telecommunication companies in Emerging Markets. The ranking was based on eight categories: Macro Outlook, Sector Earnings Outlook, Global Emerging Markets (GEM) Momentum and Value Rank, Broker Optimism, GEM Fund Flows, Technicals, Catalysts and Credit Outlook. With regard to TNE, Merrill Lynch highlights that the continued reduction in net debt and fund flows into Brazil are supportive of their fundamental view, with a Buy-rating on the stock. =============== C O L O M B I A =============== AVIANCA: Pilots' Protest Creates Mounting Costs ----------------------------------------------- Colombia's flagship airline Avianca continues to struggle amid a go-slow action by pilots, Reuters indicates in a report. The airline has already lost more than US$3 million in just over a week following the disruption of hundreds of flights due to the so-called "Operation Turtle" lodged by the pilots unions since last Saturday. Avianca's commercial pilots, who have long complained about low salaries, are protesting over the recently announced job cuts aimed at making the bankrupt carrier more efficient. Representatives from the airline got into talks with the unions Sunday to find a solution to the labor conflict. However, talks proved to be futile as unions refused to accept the airline's offer. According to an Avianca spokesman, pilots are barred from striking by law as air travel is an essential public service in Colombia. Avianca filed for bankruptcy protection in the United States in March seeking to restructure some US$222 million in unsecured claims by creditors. EMCALI: Signs Energy Purchase Agreement with TermoEmcali -------------------------------------------------------- Colombia's Cali-based multi-utility Emcali now expects to save an estimated US$336 million through 2019 after signing a memorandum of understanding (MOU) for an energy purchase agreement (EPA) with thermo generator TermoEmcali. Citing government news agency SNE, Business News Americas reports that the EPA replaces a power purchase agreement (PPA), which was costing Emcali US$4.5 million a month. Under the EPA, Emcali will only pay for the energy it needs, thus the expected US$336- million in savings. The SNE suggested that the agreement guarantees Emcali's feasibility and continuity as a state-owned company, protects the collective labor agreement, and also benefits TermoEmcali because it "eliminates the risk of liquidation from the panorama, and guarantees its competitiveness." Emcali, which operates in the drinking water, wastewater, residential waste collection, power distribution and telecommunications sectors, was intervened by the utilities regulator Superservicios in April last year. Since then, talks have involved creditors, unions, and the renegotiation of the PPA with TermoEmcali. Emcali's creditors reached a preliminary agreement with the government in September to restructure its US$500 million in debts, and a collective labor agreement with workers' union Sintraemcali in June. ============= J A M A I C A ============= JPSCO: Senior Management Changes Revealed ----------------------------------------- The Jamaica Public Service Company (JPSCo) announced significant changes at the Company's senior management level as part of an ongoing organizational review, which began earlier this year, reports RadioJamaica. According to JPSCo President and CEO, Charles Matthews, a new top-level organizational structure has been created, with the Company now divided into four functional areas, each headed by a newly appointed Senior Vice President. The Company has appointed Pam Hill as Senior VP for Finance & Regulatory. He will provide strategic leadership and expertise for all of the Company's accounting and finance activities. Tom Dorsey takes up his position as Senior VP for Customer Operations next month. He will be responsible for the core areas of Transmission, Distribution and Customer Service areas. Robert Patrick, a former Chief Operating Officer, is now the Senior VP for Generation. He will be responsible for all of JPSCo's generation activities, including Planning and Generation Expansion. Carlton Watson has been named Senior VP for Administration. He will be responsible for Human Resource Services, Information Technology, Materials Management and Support Services. Matthews believes that the new structure will ensure greater accountability and will result in a much more streamlined organization. The next step in the Company's review process is for each Senior VP and their teams to take a comprehensive look at their operational areas. Matthews said they will also recommend the necessary adjustments for greater efficiency. =========== M E X I C O =========== ALESTRA: S&P Withdraws Ratings at Company's Request --------------------------------------------------- Standard & Poor's Ratings Services withdrew Monday its 'D' local and foreign currency corporate credit ratings on Alestra S. de R.L. de C.V. at the company's request. The ratings on the company's US$300 million 12.625% senior notes due May 15, 2009, and US$270 million 12.125% senior notes due May 15, 2006, were also withdrawn. "The company's new $304 million 8% senior notes due 2010, have not been rated by Standard & Poor's," said Standard & Poor's credit analyst Manuel Guerena. ANALYST: Manuel Guerena Mexico City Phone: (52) 55-5279-2011 INTERNATIONAL WIRE: Bondholders Form Committee in Bankruptcy ------------------------------------------------------------ International Wire Group, Inc. announced Monday that an Ad Hoc Committee (the "Committee") of Bondholders holding its 11 3/4% Senior Subordinated Notes and 14% Senior Subordinated Notes (collectively the "Senior Subordinated Notes") has been formed. The Committee represents approximately 61% of the Senior Subordinated Notes. The Committee has selected Stroock & Stroock & Lavan as its legal advisor and Houlihan Lokey Howard & Zukin as its financial advisor. As previously announced, the Company has engaged Rothschild, Inc. as the Company's financial advisor and Weil, Gotshal and Manges as legal advisors to assist in this process. International Wire expects as soon as practicable to commence negotiations with the Committee and its advisors regarding a recapitalization of its balance sheet. In addition, International Wire has decided to forego paying the interest due on December 1 on the Senior Subordinated Notes. The Company has a 30-day grace period before an event of default has occurred. "This is a very important event for our customers and suppliers," said Joseph Fiamingo, Chief Executive Officer. "We look forward to a successful completion of a recapitalization that will result in improved free cash flow, enhanced credit ratings and a stronger balance sheet through the reduction of certain of our debt. The economic downturn that has impacted many of the end markets we serve has caused our balance sheet to become overleveraged. While we have had many occasions to discuss our financial condition with our customers and suppliers, I have been pleased with the faith and support that our customers and suppliers have shown in us. I look forward to rewarding that support by ensuring that International Wire is a financially strong link in all of our partners' supply chains for the long term. It is also the Company's intention to maintain normal course payment to our vendors and suppliers during this period," Fiamingo concluded. International Wire Group, Inc., headquartered in St. Louis, Missouri, is a leading manufacturer and marketer of wire products, including bare and tin-plated copper wire and insulated copper wire. The Company's products include a broad spectrum of copper wire configurations and gauges with a variety of electrical and conductive characteristics that are utilized by a wide variety of customers primarily in the appliance, automotive, electronics / data communications and general industrial / energy industries. The Company manufacturers and distributes its products in 22 facilities strategically located in the United States, Mexico, France, Italy and the Philippines. TV AZTECA: Fitch Assigns 'B+' Senior Unsecured Rating ----------------------------------------------------- Fitch Ratings has assigned a 'B+' senior unsecured rating to TV Azteca S.A. de C.V. (TV Azteca). The Rating Outlook is Stable. The rating applies to $125 million 10.375% senior notes due 2004, $300 million 10.5% senior notes due 2007, and $122 million of long-term loans. TV Azteca's ratings are based on the company's solid business position, strong cash flow from its Mexican TV broadcasting business, leveraged financial position, near term liquidity and refinancing needs, and the indirect burden of debt at parent company Azteca Holdings in the form of associated dividend required to service this debt. TV Azteca is well positioned as the second largest TV broadcaster and producer of programming in Mexico. The company has a stable market share position with a prime time commercial audience share of approximately 36%. Competition in the Mexican broadcast TV market is moderate and limited primarily to one competitor, Televisa. Available broadcast spectrum is limited and unlikely to be developed into a competing network and competition from cable TV and DTH satellite business has been low. Pay TV penetration levels are low in the mid-single digit levels and is expected to remain at these levels due to low per capita income levels in Mexico and the programming quality currently available from free broadcast TV. TV Azteca is expected to maintain its market position over the foreseeable future given the significant barriers to entry. TV Azteca produces the majority of its programming content and has successfully expanded programming in the United States and other countries through subsidiary Azteca America. Azteca America has rapidly expanded into the U.S. Hispanic market, although these operations are small and do not currently materially impact the credit quality of TV Azteca. Over the last three years, TV Azteca's profitability has improved due to a rational pricing environment coupled with the company's cost containment efforts; EBITDA profitability margins improved to 47.9% during 2002 from 34.6% during 1999. Revenues and margins remain linked to Mexican GDP and ad spending. Ad spending is low on a per capita basis in Mexico and holds long term upside growth opportunities should disposable income increase. Short-term refinancing risk is present, but appears manageable. The company is expected to use a combination of balance sheet cash and short-term debt to refinance $125 million of senior notes due February 2004. At Sept. 30, 2003, cash balances were $116 million and total debt was $635 million. Dividend payouts are expected to be high at more than $500 million over the next 5 years and should use most of TV Azteca's free cash flow, limiting improvements in leverage over the foreseeable future. Dividends to Azteca Holdings, which owns 55% of TV Azteca, will be used to service holding company debt. Capital expenditures have been curtailed to around $25 million starting in 2003 and are expected to continue at these annual levels over the next five year as part of the company's financing strategy. A spin-off of wireless provider Unefon is expected to be neutral to slightly positive to TV Azteca's credit quality. Although the spin-off will not generate cash proceeds for TV Azteca, it will allow the company's managerial and financial resources to be fully focused on its core business, TV broadcasting. The spin-off of TV Azteca's 46.5% in Unefon should result in a non-cash equity capital reduction of approximately $180 million. The equity reduction is not expected to restrict dividends and the ability to upstream cash to the holding level to service debt. Mexican Corporate Laws restricts dividends to the amount of equity capital. Given the level of Azteca Holdings ownership interest, TV Azteca's dividend potential and the completion of the recent restructuring of the holding company debt, Fitch expects that Azteca Holdings should be able to meet its debt obligations, albeit tightly. TV Azteca's interest coverage as measured by EBITDA/Interest was 3.7x during the first nine months 2003 while its leverage as measured by Debt/EBITDA was 2.4x. These measures are strong for the rating category, however, if the ratios were adjusted to incorporate debt at Azteca Holdings, these ratios would be closer to 2.3x and 3.5x, respectively. TV Azteca is the second largest broadcasting company in Mexico. The company operates two national television channels, Azteca 13 and Azteca 7 through more than 300 owned and operated stations across the country. TV Azteca produces a large portion of the programming for its networks. TV Azteca also owns Azteca America, a new U.S. based television network focused on the Hispanic market; a 46.5% stake in Unefon, a Mexican wireless company; and a 50% stake in Todito.com, a Spanish language Internet Portal. CONTACT: Guido Chamorro Chicago Phone: +1-312-368-5473 Alberto Moreno Monterrey Phone: +5281 8335-7239 Media Relations: James Jockle New York. Phone: +1-212-908-0547 =========== P A N A M A =========== CEFISA: Future Plans Expected to Be Revealed Soon ------------------------------------------------- Panama's technical council expects to receive a report on December 17 outlining recommendations for the future administration of intervened insurer Central de Fianzas (Cefisa) and the Company's subsidiaries, says Business News Americas. The report, according to the insurer's trustee Elisa de Sagel, will also determine whether the intervened insurer should be liquidated or declared bankrupt. Panama's insurance regulator intervened Cefisa in October based on a US$2-million shortfall in liquidity as established under local law. ======= P E R U ======= MINERA VOLCAN: BCP Ups Recommendation To `Hold' ----------------------------------------------- The recent recovery of the zinc led Peru's Banco de Credito (BCP) to upgrade its recommendation for local zinc miner Volcan from `reduce' to `hold.' According to Business News Americas, the bank's analysts set a target price of PEN0.34/share for 2004, representing an upside of 5.6%. BCP said that it was waiting for the outcome of continuing negotiations of Swiss resource group Glencore International to buy a package of Volcan Class A shares from third parties. The embattled miner struck an accord with Glencore in September as part of an effort to free itself of its financial worries. The accord included a US$40-million credit from Glencore to be paid off over seven years, with two years' grace. The loan will be guaranteed by Volcan's Andachagua assets, part of its Yauli unit in central Peru's Junin department. The offer also included a long-term commercial agreement from 2004-2010 covering the sale of a part of Volcan's production of zinc, lead and copper concentrates, at international market terms and conditions. In the meantime, Volcan is completing negotiations to restructure a US$110-million loan with a banking syndicate led by Germany's WestLB. CONTACT: COMPANIA MINERA VOLCAN Av Gregorio Escobedo 710 Jesus Mara Lima, Peru Tel: +51 1 219-4000 Fax: +51 1 261-9716 Contact: Mr. FMG Sayan (Francisco), Chairperson ================================= T R I N I D A D & T O B A G O ================================= CARIBBEAN ISPAT: Union Warns of "Mass Action" --------------------------------------------- The Steel Workers Union of Trinidad and Tobago said it will embark on "mass action" to protest Caribbean Ispat Limited's (CIL) response on its requests for a meeting in connection with pension improvements, says the Trinidad Express. "After several letters from the Union and repeated excuses and postponements by CIL, the company wrote the union by way of letter dated August 21, stating their refusal/cessation of meetings on pension improvements," the union said in a release sent out very recently. According to the union, the pension plan at present has a surplus of $223.8 million dollars. The union's proposals, which include full pension after twenty-five years pensionable service, have been valued at $51 million. "We the workers contributed this money at great sacrifice to provide a pension plan on retirement." The union said while most pension plans in the country had seen improvements, ISPAT's had not. "Our pension plan can more than afford the pension benefits. This surplus must be used to improve benefits according to the rules of the pension plan." The union accused ISPAT of showing "contempt and disrespect" for the Industrial Relations Act by refusing to meet with them on the issue. "The Steel workers are calling on the nation to standby to join with us to force these foreign multinationals to respect the laws and people of Trinidad and Tobago. Workers will now embark on mass action by any means necessary to ensure improvements to their pension plan," said the Union. ============= U R U G U A Y ============= GALICIA URUGUAY: Central Bank Extends Suspension Anew ----------------------------------------------------- The Banco Central del Uruguay announced Friday on its Web site that it has extended the suspension of Banco Galicia Uruguay until March 31 next year, reports Dow Jones. Galicia Uruguay was intervened and suspended in February last year due to a liquidity crunch sparked by a run on deposits involving its numerous Argentine clients. Galicia's suspension, which has been extended repeatedly, was due to expire Nov. 30. Galicia Uruguay's deposits are currently frozen and the bank is in the process of returning funds to clients through a government-backed plan that has so far worked very well with full compliance to the pre-established repayment timetable. These have led to speculation in recent months that the bank would be reopened soon. However, in an interview with Dow Jones Newswires on Thursday, Uruguay's Central Bank President Julio de Brun said the central bank could not act before Galicia's Argentine parent had a completed debt deal with its creditors. Last week, Banco de Galicia y Buenos Aires S.A. announced it had reached a preliminary deal to restructure about US$1.4 billion in foreign debt. De Brun said only when a deal is formally approved by the Argentine central bank and the Uruguayan unit submits a plan for adequate recapitalization, will the central bank be able to consider reopening Galicia. De Brun said this should be the last extension of the suspension and that the bank's future should be decided one way or the other by next March. CONTACT: Banco de Galicia Y Buenos Aires Tte Gral Juan D Peron 407 Buenos Aires Argentina C1038AAI Phone: +54 11 6329 0000 Fax: +54 11 6329 6100 Home Page: http://www.bancogalicia.com.ar Contact: Juan Martin Etchegoyhen, Chairman Antonio R. Garces, Vice Chairman Grupo Financiero Galicia SA 2nd Floor No 456 Tte Gral Juan D Peron Buenos Aires Argentina 1038 Phone: +54 11 4343 7528/9475 Home Page: http://www.gfgsa.com Contact: Atty. Abel Ayerza, Chairman *********** 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., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and Oona G. Oyangoren, Editors. Copyright 2003. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *