/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/031223.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, December 23, 2003, Vol. 4, Issue 253 Headlines A R G E N T I N A ALTO BELGRANO: Court Rules on Bankruptcy Proceeding ARTES GRAFICAS: Receiver Verifies Claims in Bankruptcy Process CABILDO FOTO EXPRESS: Court Declares Company Bankrupt CLAXSON: Argentine Fitch Rates US$44M of Bonds `CC(arg)' CONSULTORES INTEGRALES: Bankruptcy Initiated on Court Orders CTECSAC: General Report Expected at Court Today DROGUERIA MAGNA: Local Moody's Gives US$5M Bonds `C' Rating EMPRESARIOS TRANSPORTE: Court OK's Reorganization Petition GRUPO AUT: Court Orders Bankruptcy LUSMAR: Voluntarily Files for Bankruptcy MASAY: Bankruptcy Approved by Court MASTELLONE HERMANOS: Moody's Assigns Default Ratings to Bonds RED FONICA: Court Approves Reorganization Petition TOP STAFF: Court Declares Company Bankrupt TRAVELCLUB: Proof of Claims Process to End March 3 Next Year B E R M U D A TK ALUMINUM: S&P May Cut 'B+' Long Term Corporate Credit Rating B R A Z I L BANCO SANTOS: Fitch Downgrades Individual Ratings to `D/E' GERDAU: Initiates Senior Notes Exchange Offer C H I L E ENDESA: Fitch Revises Outlook To Stable C O L O M B I A BANCAFE: Draws Seven Bidders to Pre-Qualification Process D O M I N I C A N R E P U B L I C BANCO POPULAR DOMINICANO: C por A Downgraded; Ratings Withdrawn TRICOM: Secures US$10 Million Financing G U Y A N A * IMF, WB Support US$334M Additional Debt Aid for Guyana M E X I C O PRECISION: Files for Chapter 11 Protection TV AZTECA: Shareholders Approve Unefon Split-Off - - - - - - - - - - ================= A R G E N T I N A ================= ALTO BELGRANO: Court Rules on Bankruptcy Proceeding --------------------------------------------------- Argentine company Alto Belgrano S.A. enters bankruptcy on orders from Buenos Aires Court No. 18. Local news portal Infobae reports that Clerk No. 35 assists the court on the case, which will close with the liquidation of the Company's assets. In order to qualify for payments, the creditors must file their claims before April 20, 2004. The court-appointed receiver, Mr. Osvaldo Nicolini, will validate claims and prepare the individual and general reports. CONTACT: Alto Belgrano S.A. Olleros 1800 Buenos Aires Osvaldo Nicolini Alvarez Thomas 3036 Buenos Aires ARTES GRAFICAS: Receiver Verifies Claims in Bankruptcy Process -------------------------------------------------------------- Mr. Jose Maria Nullo, receiver for Buenos Aires company Artes Graficas Corin Luna S.A., is verifying creditors' claims for the Company's bankruptcy process. A report from Argentine news source Infobae indicates that the deadline for credit verifications expires on March 22 next year. Court No. 17, which handles the Company's case, ordered the receiver to file the individual reports on April 20, 2004. After these are processed at the court, the receiver will prepare the general report, which is due for filing on May 18. The Company's assets will be liquidated at the end of the process to repay creditors. CONTACT: Artes Graficas Corin Luna S.A. Humberto I 3221 Buenos Aires Jose Maria Nullo Avenida Callao 420 Buenos Aires CABILDO FOTO EXPRESS: Court Declares Company Bankrupt ----------------------------------------------------- Court No. 7 of Buenos Aires declares local company Cabildo Foto Express S.R.L. "Quiebra", placing the Company under bankruptcy protection. Argentine news portal Infobae relates that the court assigned Mr. Jorge Berisso to oversee the bankruptcy process as the Company's receiver. Creditors are required to file their claims before March 22, 2004. The receiver will verify claims and prepare the individual and general reports. Infobae, however, did not mention whether the court has set the deadlines for the filing of these reports. Clerk No. 13 assists the court on the case. CONTACT: Cabildo Foto Express S.R.L. Ave Cabildo 1784 Buenos Aires Jorge Berisso Paraguay 866 Buenos Aires CLAXSON: Argentine Fitch Rates US$44M of Bonds `CC(arg)' -------------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. issued `CC(arg)' ratings to bonds issued by Claxson Interactive Group Inc. on Wednesday. The rating was based on the Company's financial status as of the end of September 2003. Argentina's securities regulator, the Comision Nacional de Valores relates that the bonds were called "Obligaciones negociables" with undisclosed maturity date. The bonds, worth a total of US$44.4 million, were classified under "Simple Issue". Fitch said that the issued rating denotes an extremely weak credit risk relative to others issues in Argentina. Capacity for meeting financial commitments is solely reliant upon sustained, favorable, business or economic conditions. CONSULTORES INTEGRALES: Bankruptcy Initiated on Court Orders ------------------------------------------------------------ Argentine news portal Infobae reports that local company Consultores Integrales De Gestion Empresaria S.A. entered bankruptcy. Buenos Aires Court No. 13 handles the Company's case with assistance from Clerk No. 25. The court assigned Mr. Omar Sergio Luis Vazquez, a local accountant, to oversee the bankruptcy process as the Company's receiver. He will verify claims until March 3 next year. The receiver is also required to prepare the individual and general reports. CONTACT: Omar Sergio Luis Vazquez Ave Santa Fe 1127 Buenos Aires CTECSAC: General Report Expected at Court Today ----------------------------------------------- The general report for the bankruptcy of Buenos Aires company Compania de Transporte El Colorado S.A.C. is due for filing at the court today. The Company's receiver, Ms. Mirta Addario, prepared the reports after the individual reports were processed at court. The receiver has completed the creditor claims verification process and the individual reports earlier this year. After the general report is processed at court, the Company's assets will be liquidated to repay its creditors. Payments will be based on the results of the validity of claims and amount of assets remaining as a result of the process. An earlier report by the Troubled Company Reporter - Latin America indicated that Buenos Aires Court No. 2 holds jurisdiction over the case. CONTACT: Mirta Addario Moreno 442 Buenos Aires DROGUERIA MAGNA: Local Moody's Gives US$5M Bonds `C' Rating ----------------------------------------------------------- A total of US$5 million worth of corporate bonds issued by Argentine company Drogueria Magna S.A. received junk ratings from Moody's Latin America Calificadora de Riesgo S.A., relates the Comision Nacional de Valores, Argentina's securities regulator. The ratings agency said the `C' rating means that the debt has a considerable amount of risk for nonpayment. The rating, issued on Wednesday, was based on the Company's assets as of the end of September this year. The bonds were called "Obligaciones Negociables Simples". The bonds, which matured on April 17, were classified under "Simple Issue". EMPRESARIOS TRANSPORTE: Court OK's Reorganization Petition ---------------------------------------------------------- Buenos Aires Court No. 9 approved a motion for "Concurso Preventivo" filed by local company Empresarios Transporte Automotor De Pasajeros S.A., relates local news portal Infobae. The Company will undergo reorganization. Estudio Cupito y Asociados was assigned as the Company's receiver. Creditors must present their claims to the receiver for verification before March 26, 2004. With assistance from Clerk No. 18, the court ordered the receiver to file the individual reports on May 12, 2004, followed by the general report on June 24. The informative assembly will be held on December 14 next year. This signals the end of the reorganization process. CONTACT: Empresarios Transporte Automotor De Pasajeros S.A. Nazarre 3138 Buenos Aires Estudio Cupito y Asociados Posadas 1564 Buenos Aires GRUPO AUT: Court Orders Bankruptcy ---------------------------------- Buenos Aires company Grupo Aut S.R.L. is declared bankrupt by the city's Court No. 20. A report from Argentine news portal Infobae indicates that Clerk No. 40 assists the court on the case. The credit verification process will end on February 27 next year. The Company's receiver, Ms. Maria Elena Mercante, will prepare the individual reports after verifications are completed. Infobae adds that the individual reports are due at the court on April 14 next year, followed by the general report on May 27. The Company's assets will be liquidated at the end of the process to repay creditors. Payments will be based on the results of the credit verification process. CONTACT: Grupo Aut S.R.L. Galicia 548 Buenos Aires Maria Elena Mercante Uruguay 772 Buenos Aires LUSMAR: Voluntarily Files for Bankruptcy ---------------------------------------- Lusmar S.A., which is based in Buenos Aires, voluntarily filed for bankruptcy. A report from local news portal Infobae indicates that the city's Court No. 16 is considering the Company's petition. Clerk No. 32 assists the court on the case. CONTACT: Lusmar S.A. Ave Cordoba 2448 Buenos Aires MASAY: Bankruptcy Approved by Court ----------------------------------- Argentine company Masay S.A., which was undergoing reorganization, now enters bankruptcy on orders from Buenos Aires Court No. 6. Clerk No. 12 assists the court on the case, reports local news source Infobae. The court ordered the credit verification to be done "por via incidental". The receiver, Mr. Luis Benedossi, will file the individual reports at the court on March 5, 2004. These reports are prepared after the verification process is completed. CONTACT: Luis Benedossi Maipu 812 Buenos Aires MASTELLONE HERMANOS: Moody's Assigns Default Ratings to Bonds ------------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. assigns default ratings to a total of US$375 million of corporate bonds issued by Argentine company Mastellone Hermanos S.A., relates the Comision Nacional de Valores, Argentina's securities regulator. The rating, based on the Company's finances as of September 30, 2003, is assigned to bonds that are in payment default, according to the ratings agency. The affected bonds included $225 million "Obligaciones Negociables, autorizadas por AGE de fecha 28.8.97.", due on April 1, 2008. These bonds were classified under "Simple Issue". The rest of the affected bonds are called "Programa de Obligaciones Negociables autorizado por AGE de fechas 11 y 23.6.99" with unknown maturity date. These were under "Program". RED FONICA: Court Approves Reorganization Petition -------------------------------------------------- Court No. 2 of the Civil and Commercial Court of Rosario in Santa Fe approves Red Fonica S.A.'s petition for reorganization. The Court assigned local accountant Alberto Tasca as the Company's receiver to oversee the process. The individual reports are due for filing on December 24 this year. The receiver prepared these reports after the verifications are completed earlier this year. The general report must be submitted to the court on March 12, 2004. The court ordered that the informative assembly, on of the last parts in a reorganization, be held on July 7 next year. CONTACT: Red Fonica S.A. Rodriguez Pena 3211 Rosario, Santa Fe Alberto Tasca Mitre 1454 Rosario, Santa Fe TOP STAFF: Court Declares Company Bankrupt ------------------------------------------ Buenos Aires Court No. 7 declared local company Top Staff S.A. Acciones promocionales bankrupt, reports Argentine news source Infobae. Clerk No. 14 assists the court on the case, which will end with the liquidation of the Company's assets. The source, however, did not mention whether the court has chosen a receiver to oversee the case. TRAVELCLUB: Proof of Claims Process to End March 3 Next Year ------------------------------------------------------------ The credit verification process of the bankruptcy of Argentine company Travelclub S.A. ends March 3 next year. Creditors are required to file their claims before the said date in order to qualify for payments to be made after the Company's assets are liquidated. The Company's receiver, Estudio Jose Antonio Calvi�o, who will verify creditors' claims, will prepare the individual reports, which are to be submitted to the court April 14 next year. The general report should follow on May 27. CONTACT: Estudio Jose Antonio Calvi�o Viamonte 1355 Buenos Aires ============= B E R M U D A ============= TK ALUMINUM: S&P May Cut 'B+' Long Term Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said on Friday it placed its 'B+' long-term corporate credit rating on Bermuda-based aluminum auto parts manufacturer TK Aluminum Ltd. (TKA) on CreditWatch with negative implications, due to the likelihood of slower profit growth in 2004. At the same time, the 'B-' senior unsecured debt rating on the EUR240 million ($298 million) bond issued by Teksid Aluminum Luxembourg S.a.r.l, S.C.A. was also placed on CreditWatch with negative implications. "The Creditwatch placement follows the group's indication that EBITDA growth for 2004 might be lower than Standard & Poor's expectations for the rating, as well as concerns about the company's ability to remain adequately in compliance with financial covenants," said Standard & Poor's credit analyst Martin Amann. In its review of the CreditWatch status, Standard & Poor's will focus on: -- The level of potential divergence between the company's 2004 budget---when completed--and Standard & Poor's expectations of the company's financial performance in 2004; -- Examination of whether TKA's financial profile is commensurate with the current 'B+' rating; and -- The company's liquidity and financial flexibility status, in particular with respect to compliance with financial covenants. The review is expected to be completed within the next three months. =========== B R A Z I L =========== BANCO SANTOS: Fitch Downgrades Individual Ratings to `D/E' ---------------------------------------------------------- Fitch Ratings, the international rating agency, downgraded on Friday Banco Santos S.A.'s (Santos) individual rating to 'D/E' from 'D', its long-term foreign and local currency ratings to 'B- ' from 'B', long-term national rating to 'BB+(bra)' from 'BBB- (bra)' and its short-term national rating to 'B(bra)' from 'F3(bra)'. At the same time Fitch affirmed the short-term foreign and local currency ratings at 'B' and support rating at '5'. The Rating Outlook is Stable. The rating action reflects Fitch's concerns regarding the deterioration in Santos' exposure to impaired loans over the first three quarters of 2003 and comparatively low reserve coverage ratios for loan losses. The agency is also concerned about the high exposure of equity to unreserved impaired loans in the context of declining capital ratios, and concentrations on both sides of the balance sheet. Despite much higher loan loss provisions, reported profitability has improved on the back of strong treasury results, but may come under further pressure from a need to improve reserve coverage and from lower contributions from treasury activities in a more stable local market environment. Santos' impaired loans rose to a high 15.4% of the rated credit exposure in September 2003, up from 13.9% in June 2003; 12.3% in March 2003; 7.1% in December 2002; and 3.9% in September 2002, which resulted principally from a regulatory review by the Central Bank of Brazil. Unlike most local banks that tend to exceed regulatory requirements, Santos provisions strictly in accordance with the Central Bank of Brazil's minimum requirement and in June 2003, reserves covered a low 36.7% of impaired loans (Dec02: 37.4%; Jun02: 33.8%). The deterioration in the profile of the loan portfolio has demanded increasing provisioning expenses; net provisions consumed a high 24% of net interest revenue in 1H03, up from 19.8% and 5.7% for the previous two semesters, respectively. A more appropriate level of reserves given the pace of deterioration and the potential further migration towards lower credit risk classifications would require significantly larger provisioning efforts which would, in turn, pressure profitability and internal capital generation at a time when Santos' risk adjusted capital ratios have dropped close to regulatory minimums. In June 2003, impaired loans, net of existing reserves, were equivalent to a high 42.1% of equity, up from 22.3% in December 2002 and 11% in June 2002. Historically, Santos' shareholder has provided support whenever necessary and Fitch sees evidence that he continues to do so. Support is possible but can not be relied upon, since Fitch is not in a position to assess an individual's capacity to support the bank. The bank's size and lack of retail operations renders support from authorities unlikely. Discussions with management have led Fitch to understand that Santos' management is taking corrective measures with full support from the shareholder. Despite these measures, which may result in some improvement in financial indicators, the credit profile of the bank is more appropriately mirrored by the new ratings. Headquartered in Sao Paulo, Santos is 98.9% controlled by Procid Participacoes e Negocios Ltda. (Procid), a holding company owned by Mr. Edemar Cid Ferreira. Santos operates through four branches in Brazil, in addition to a subsidiary on Madeira Island and two on the Cayman Islands. In mid-2003, Santos ranked 19th largest among banks operating in Brazil, by assets, or 24th largest by equity. Santos specializes in credit transactions backed by receivables and on-lending of federal government funds. Its ability to offer efficient services, often through the internet, has been noteworthy. CONTACT: Fitch Ratings Peter Shaw New York Phone: +1-212-908-0553 Rafael Guedes Sao Paulo Phone: +55-11-287-3177 Rita Goncalves Rio De Janeiro Phone: +55-21-2224-3558 James Jockle, Media Relations New York Phone: +1-212-908-0547 GERDAU: Initiates Senior Notes Exchange Offer --------------------------------------------- Gerdau Ameristeel Corporation (TSX:GNA.TO) announced on Friday the commencement of an exchange offer to exchange up to US$405,000,000 aggregate principal amount of registered 10 3/8% Senior Notes due 2011 (the "Exchange Notes") of Gerdau Ameristeel Corporation ("Gerdau Ameristeel") and GUSAP Partners (together with Gerdau Ameristeel, the "Issuers") for the Issuers' outstanding Notes (the "Existing Notes") which were offered in a private placement in June 2003. The Issuers received receipts for the prospectus relating to the exchange offer from the Ontario Securities Commission dated December 18, 2003 and the U.S. registration statement became effective today. The exchange offer is as contemplated in the Registration Rights Agreement dated June 27, 2003, pursuant to which the Issuers agreed to register substantially identical Notes, including unconditional guarantees on the Notes from certain of Gerdau Ameristeel's subsidiaries, and offer to exchange the registered Exchange Notes for the Existing Notes. The Exchange Notes (including the subsidiary guarantees) will have substantially the same form and terms as the outstanding Existing Notes, except that the Exchange Notes will be issued under a prospectus in Ontario and the Exchange Notes and subsidiary guarantees have been registered under the U.S. Securities Act of 1933, as amended, and will not be subject to restrictions on transfer. The Exchange Notes will bear a different CUSIP number from the Existing Notes. Any Existing Note not exchanged will continue to have restrictions on transfer. The Issuers will accept for exchange any and all Existing Notes that are validly tendered and not withdrawn on or before 5:00 p.m., New York City time, January 23, 2004, unless extended. Copies of the prospectus and transmittal materials governing the exchange are in the process of being mailed to noteholders. Additional copies can be obtained from the Exchange Agent, SouthTrust Bank, by calling Woodie Alston at (205) 254-4131 or Candace Miller at (205) 254-5486. About Gerdau Ameristeel Gerdau Ameristeel is the second largest minimill steel producer in North America with annual manufacturing capacity of over 6.8 million tons of mill finished steel products. Through its vertically integrated network of 11 minimills (including one 50%- owned minimill), 13 scrap recycling facilities and 26 downstream operations, Gerdau Ameristeel primarily serves customers in the eastern half of North America. The company's products are generally sold to steel service centers, fabricators, or directly to original equipment manufacturers for use in a variety of industries, including construction, automotive, mining and equipment manufacturing. Gerdau Ameristeel's common shares are traded on the Toronto Stock Exchange under the symbol GNA.TO. GUSAP Partners is a partnership formed between Gerdau Ameristeel and its wholly- owned subsidiary, Gerdau Ameristeel MRM Special Sections Inc. that was created for the purpose of borrowing and providing funds to Gerdau Ameristeel and its subsidiaries. ========= C H I L E ========= ENDESA: Fitch Revises Outlook To Stable --------------------------------------- Fitch Ratings, the international ratings agency, has changed the Outlook on Endesa S.A.'s (Endesa) ratings to Stable from Negative. At the same time, the agency affirmed the Senior Unsecured rating at 'A' and Short-term rating at 'F1'. The company is Spain's leading electric utility. Fitch's decision to revise Endesa's rating Outlook to Stable mainly reflects management's commitment to bring down debt levels. Reported debt reduced by EUR4.8 billion to EUR18bn in the first nine months of 2003, primarily due to strong operating cash flows, divestments totalling EUR2.4bn, and a EUR1.5bn preference share issue which Fitch treats as equit y-like. Going forward, Fitch expects the group to be able to maintain leverage (measured in terms of debt/EBITDA) of close to or below 4x, which is consistent with the current rating category. In addition to solid cash flows, this should partly be facilitated by a reduction in its investment programme, which has become less expansion driven and particularly emphasises development of its core Spanish electricity business and its European investments, including Endesa Italy. The change in Outlook was also driven by recent adjustments to the regulatory framework, which is more favourable than Fitch had originally anticipated. New legislation allowed tariffs to increase by 1.65% in 2003 and by a maximum of 2% per annum during 2004-2010; the expected tariff increase for 2004 is 1.6%. Utilities are also allowed to recoup the tariff deficit, as a result of pool prices reaching levels far beyond expectations: EUR658m has been allocated to Endesa. Fitch also notes the successful debt restructuring efforts of its Latin American electricity operations, the balance sheets of which had come under pressure during the turmoil that the region has been facing in recent years. Fitch particularly notes the capitalisation by Endesa of a USDE1.2 billion inter-company loan to 62% owned Enersis of Chile, with minority shareholders contributing an additional USD663m, underlining their confidence in the future potential of this business. At the 'A' level, ratings are supported by Endesa's position as the leading electric utility in Spain (57.2% of 1Q03-3Q03 operating profit), where it has a 44% market share in generation and distribution. Demand prospects in Spain are strong and Endesa's well-balanced generation mix allows for relatively stable cash flows under any weather conditions. Despite full supply market liberalisation from January 2003, the major utilities will continue to enjoy leading market shares in their historic franchises, where they are still able to benefit from regulated tariffs. Rating strengths are partly offset by the group's exposure to Latin America (34.5% of operating profit), where it has significant market share in Argentina, Brazil, Chile, Colombia and Peru. With the exception of Chile, these countries are non-investment grade, with volatile economies and currencies. The impact of this on the rating is limited somewhat by the fact that Enersis debt (EUR5.2bn at end-3Q03) is non-recourse to Endesa, although at the same time Fitch acknowledges the sizeable investments in the region. The potential sale of its less stable non-utility interests, including a 30% stake in Spain's second-largest telecom operator AUNA, would be seen as a positive factor for the rating if proceeds are used for debt reduction. CONTACT: Erwin van Lumich; Thomas Saul Barcelona Phone: +34 93 323 8400 Graeme Marks London Phone: +44 (0)20 7862 4086 Francesca Fraulo London Phone: +44(0)20 7417 4337 Media Relations: Alex Clelland London Phone: +44 20 7417 4222 =============== C O L O M B I A =============== BANCAFE: Draws Seven Bidders to Pre-Qualification Process --------------------------------------------------------- At least seven companies have expressed interest in acquiring intervened Colombian state bank Bancafe, Panamanian newspaper La Prensa quoted the bank's CEO Alfredo Naranjo as saying. The executive did not mention names, but said that the participants of the pre-qualification process are "first rate corporations, with lots of economic solvency." Local analysts say that the participants are likely local players, as many international groups are still wary of committing investments in the country or in the Latin American region, reports Business News Americas. Earlier reports indicate that local Gilinski family and fellow Colombian group Sarmiento were possible bidders. The World Bank's International Finance Corporation said earlier this year it might take up a minority stake in Bancafe to help generate confidence in the privatization, BNAmericas added. CSFB and local investment bank Inverlink will oversee the sale, wile Baker & McKenzie Bogota will oversee the legal side of the matter. The government has planned to complete the transaction this month, but delays in the pre-qualification process have affected the schedule. Mr. Naranjo will step down from his post on January 15 as part of the sale process. Colombia's deposit insurance agency Fogafin owns 99.99% of the bank's equity. BNAmericas notes that the agency has spent about COL887 billion cleaning up and streamlining Bancafe since it took over in 1999. Bancafe, which has offices in Panama and Miami, has 1.5 million clients and 276 branches. =================================== D O M I N I C A N R E P U B L I C =================================== BANCO POPULAR DOMINICANO: C por A Downgraded; Ratings Withdrawn --------------------------------------------------------------- Standard & Poor's Ratings Services said on Friday that it lowered its long-term local and foreign currency counterparty credit and CD ratings on Banco Popular Dominicano C por A to 'CCC' from 'B-' following the downgrade to 'CCC' of the Dominican Republic. The short-term local and foreign currency counterparty credit ratings were affirmed at 'C'. At the same time, Standard & Poor's lowered Banco Popular's survivability assessment to 'B' from 'BB'. "In a similar action, Standard & Poor's withdrew the ratings and the survivability assessment on Banco Popular Dominicano at the bank's request," said Standard & Poor's credit analyst Ursula M. Wilhelm. ANALYST: Ursula M Wilhelm Mexico City Phone: (52) 55-5279-2007 David Olivares Mexico City Phone: (52) 55-5279-2006 TRICOM: Secures US$10 Million Financing --------------------------------------- Tricom, S.A. (NYSE:TDR) announced on Friday that it has reached an agreement in principle with a group of existing creditors led by Mizuho International, PLC, a member of the Mizuho Financial Group, the world's largest banking group, to obtain a secured $10 million credit facility intended to provide liquidity financing to the Company while it pursues a financial restructuring plan. "This facility will assist the Company with its short-term working capital needs and provide sufficient financial flexibility to implement a financial restructuring plan in a steadfast and prompt manner," said Carl Carlson, Chief Executive Officer. "The Company expects to execute a restructuring that will strengthen its capital base, increase stakeholder value, provide liquidity, and enable the Company to assume its place as an industry leader. This is a strong and positive first step toward achieving our objectives," added Carlson. The one-year $10 million facility, secured by various Company assets, including its Latin American and U.S.-based assets, will mature on December 31, 2004. All transaction fees and interest amounts will be reserved from proceeds and placed in an escrow account. Mandatory prepayments to the loan have been established upon certain asset sales. Under the proposed agreement, the Company has the ability, at its option, to convert the loan to equity as part of a restructuring. In exchange, the financing grants lenders specific options related to future equity investments in Tricom, including rights of first refusal to provide up to $15 million of new equity to fund operations. About TRICOM Tricom, S.A. is a full service communications services provider in the Dominican Republic. We offer local, long distance, mobile, cable television and broadband data transmission and Internet services. Through Tricom USA, we are one of the few Latin American based long distance carriers that is licensed by the U.S. Federal Communications Commission to own and operate switching facilities in the United States. Through our subsidiary, TCN Dominicana, S.A., we are the largest cable television operator in the Dominican Republic based on our number of subscribers and homes passed. We also offer digital mobile integrated services including two-way radio and paging services in Panama using iDEN(R) technology. For more information about Tricom, visit www.tricom.net CONTACT: Miguel Guerrero, Investor Relations Phone: (809) 476-4044 / 4012 Email: investor.relations@tricom.net Home Page: http://www.tdr-investor.com/ =========== G U Y A N A =========== * IMF, WB Support US$334M Additional Debt Aid for Guyana -------------------------------------------------------- Press Release No. 03/224 International Monetary Fund 700 19th Street, NW Washington, D.C. 20431 USA The International Monetary Fund (IMF) and the World Bank's International Development Association (IDA) have agreed that Guyana has taken the steps necessary to reach its completion point under the enhanced framework of the Heavily Indebted Poor Countries (HIPC) Initiative. Guyana becomes the ninth country to reach this point, joining Bolivia, Burkina Faso, Mauritania, Mali, Mozambique, Tanzania, Uganda and Benin.1 Debt relief under the enhanced HIPC Initiative from all of Guyana's creditors amounts to US$334.5 million in net present value (NPV2) terms. This estimate has been adjusted upward by US$5.9 million from the calculation made at the time of the decision point in November 2000, on account of new information from non-Paris Club and commercial creditors and new calculations. This relief comes in addition to US$256.4 million in NPV that Guyana received when it reached the completion point under the original HIPC framework in May 1999. The total debt relief under the original and enhanced HIPC Initiatives reduces the debt stock (after traditional debt relief) by 54 percent, based on cumulating both relief totals at end 2002. Multilateral creditors are to provide debt relief amounting to US$202 million in NPV terms, which includes US$40 million from the IMF and US$41.2 million from the World Bank. Bilateral creditors are expected to provide relief amounting to US$132 million. Guyana has negotiated a debt rescheduling agreement with the Paris Club on Cologne terms (a debt reduction of 90 percent) and a number of Paris Club creditors have indicated that they would provide debt relief beyond that required under the HIPC Initiative. Approximately US$37 million in NPV of Guyana's debt relief is expected to be delivered by non-Paris Club and commercial creditors. Progress has been made, albeit slowly, in establishing agreement with a few of these creditors, and the Guyanese authorities will continue their efforts to obtain comparable treatment from them. Debt relief, in addition to bilateral assistance beyond HIPC relief (US$13 million in NPV terms) lowers Guyana's debt to revenue ratio to about 213 percent in 2003, 37 percent below the sustainability threshold for countries that qualify under the fiscal window. The debt is expected to build up over the next few years to peak at about 242 percent of revenues in 2007, associated with a large sugar investment currently taking place in Guyana. However, over the long run, the ratio is projected to decline considerably, to about 150 percent in 2022. The debt service burden is projected to decline sharply by 10 percentage points of revenue following enhanced HIPC relief, to 14 percent in 2004, with a further decline to about 12 percent of revenues over the long run. Beyond debt relief, the World Bank disbursed US$13.35 million in zero-interest financing from a Poverty Reduction Support Credit on December 11, 2003. The credit, which was approved on December 17, 2002, supports Guyana's efforts to stimulating economic growth; increase the country's productivity in key sectors such as sugar; improve the accountability and transparency of the public sector; and improving the delivery of public services, including health, education, and water supply. CONTACT: IMF EXTERNAL RELATIONS DEPARTMENT Public Affairs Phone: 202-623-7300 Fax: 202-623-6278 Media Relations Phone: 202-623-7100 Fax: 202-623-6772 =========== M E X I C O =========== PRECISION: Files for Chapter 11 Protection ------------------------------------------ Elamex S.A. de C.V. (NASDAQ:ELAM), a diversified manufacturing services company with food, plastics and metals operations and real estate holdings in Mexico and the United States, announced that its Metal Stamping segment wholly owned subsidiary Precision Tool, Die and Machine Company ("Precision") has voluntarily filed for protection under Chapter 11 of the Federal Bankruptcy Code in the U.S. Bankruptcy Court to implement a restructuring of its debt. As previously announced, Precision has debt agreements that contain a number of affirmative and negative covenants, including limitations on additional borrowings and maintenance of certain financial ratios. Precision was not in compliance with certain of these covenants as of and for the quarter ended October 3, 2003. Precision is not expected to generate sufficient near term cash flow to fund its short-term liquidity requirements, including the ability to repay the indebtedness due to the bank and to be in compliance with the covenants under the loan agreement. Elamex President and Chief Executive Officer Richard P. Spencer commented, "Precision's Chapter 11 filing is necessary to protect the interests of its creditors while we establish and implement a plan for financial restructuring. Precision has established a debtor-in-possession (DIP) financing package through its existing bank, which should enable it to address its short-term cash requirements for operations as it enters the Chapter 11 proceedings." For the most recent three and nine months ended October 3, 2003, Precision sales were $18.7 million and $54.9 million, respectively, or 49% and 46%, respectively, of Elamex's consolidated net sales for the period. Precision's third quarter 2003 net loss was $1.8 million. In related news, Elamex also announced that its Board of Directors has authorized the adoption of a plan to sell Precision. Elamex will initiate a process to actively market and sell the subsidiary as soon as practicable. Any sale will be subject to the approval of the U.S. Bankruptcy Court. Management intends to engage the services of an investment advisor to assist in these efforts. About Precision Tool, Die and Machine Company Precision manufactures and powder paints metal stampings primarily for the U.S. appliance and automotive industries. Precision employs over 500 personnel at three facilities located in Louisville, Kentucky, and generated annual revenue of $75.3 million in 2002. About Elamex Elamex ("the Company") is a Mexican company with manufacturing operations and real estate holdings in Mexico and the United States. The Company is involved in the production of food items related to its candy manufacturing and nut packaging operations, and metal and plastic parts for the appliance and automotive industries. Elamex's competitive advantage results from its demonstrated capability to leverage low cost, highly productive labor, strategic North American locations, recognized quality and proven ability to combine high technology with labor-intensive manufacturing processes in world- class facilities. As a value added provider, Elamex's key business objectives include superior customer satisfaction, long term supplier relationships and employee growth and development, with the ultimate goal of continuously building shareholder value. CONTACT: Elamex S.A. de C.V. Sam Henry, Chief Financial Officer Phone: +1-915-298-3071 Email: sam.henry@elamex.com Tom Hudson, President of Precision Phone: +1-502-479-0861 Email: thudson@precisionelamex.com Kristen McNally, Financial Relations Board Phone: +1-310-663-8007 Email: kmcnally@financialrelationsboard.com Home Page: http://www.elamex.com TV AZTECA: Shareholders Approve Unefon Split-Off ------------------------------------------------ TV Azteca, S.A. de C.V. (NYSE:TZA) (BMV: TVAZTCA), one of the two largest producers of Spanish- language television programming in the world, announced that it has approved a split-off of its 46.5% equity stake in Unefon, a Mexican mobile telephony operator focused on the mass market, and of its 50% equity stake in Cosmofrecuencias, a wireless broadband Internet access provider, at an extraordinary shareholders' meeting held today at its corporate offices in Mexico City. The split-off will completely separate TV Azteca from its telecommunications' investments. The telecommunications assets will form Unefon Holdings, which pursuant to Mexican law will become a separate entity approximately 45 days after the date of the registration of the minutes of the shareholders' meeting. TV Azteca anticipates that the shares of Unefon Holdings will be distributed in the second quarter of 2004 and that they will trade publicly in the Mexican stock market and in the United States. The split-off will entail a reduction of TV Azteca's assets and stockholders' equity equal to the book value of TV Azteca's investment in Unefon and Cosmofrecuencias, which totaled approximately US$193 million as of September 30, 2003. The advertising agreements between Unefon and TV Azteca, as well as the accounts receivable that Unefon is required to pay to TV Azteca, will remain unchanged. TV Azteca noted that the split-off does not affect its six-year plan for uses of cash, which, as previously announced, entails the allocation of a substantial portion of TV Azteca's expected cash generation within a six-year period, to make distributions to shareholders above US$500 million, as well as to gradually reduce the company's outstanding debt by an amount of approximately US$250 million in the six-year timeframe. "As scheduled, we are moving forward with our strategy to become a pure media play company in an efficient manner," said Pedro Padilla, TV Azteca's Chief Executive Officer. "The strategy will further reduce our credit risk, and will allow for increased market focus on the strength of our core business operations, further increasing stakeholder value." An information memorandum regarding the spin-off was filed with the Mexican National Banking and Securities Commission (Comision Nacional Bancaria y de Valores) pursuant to Mexican regulatory requirements on December 4, 2003, and a courtesy English translation of the report is on file with the Securities and Exchange Commission. Company Profile TV Azteca is one of the two largest producers of Spanish-language television programming in the world, operating two national television networks in Mexico, Azteca 13 and Azteca 7, through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing US Hispanic market; Unefon, a Mexican mobile telephony operator focused on the mass market; and Todito.com, an Internet portal for North American Spanish speakers. CONTACT: TV Azteca, S.A. de C.V. Bruno Rangel, Investor Relations Phone: +011-5255-3099-9167 Email: jrangelk@tvazteca.com.mx Omar Avila Phone: +011-5255-3099-0041 Email: oavila@tvazteca.com.mx Tristan Canales, Media Relations Phone: +011-5255-3099-5786 Email: tcanales@tvazteca.com.mx Daniel McCosh Phone: +011-5255-3099-0059 Email: dmccosh@tvazteca.com.mx Home page: http://www.tvazteca.com.mx/ *********** 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. 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