/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/031229.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 Monday, December 29, 2003, Vol. 4, Issue 255 Headlines A R G E N T I N A AGUAS ARGENTINAS: ETOSS Threatens Fine If Rates Not Lowered BANCO DE GALICIA: Commences $350M Bond-Swap Offer BIANAR: Last Day for Claims Filing Today BUENOS AIRES CHILDREN'S SCHOOL: Court Orders Bankruptcy COLEGIO MODELO: Today Marks Deadline For General Report Filing CROSS MATCH: Proofs of Claims Process Ends Today DEPOSITO COLOMBIA: Individual Reports Due at Court Today EL CID CAMPEADOR: Court Declares Company Bankrupt JAYPLEN: Receiver Closes Claims Verification Process Today LAMINADOS LAMDECO: Receiver Verifies Claims in Bankruptcy MARIA MATER: Court Approves Motion for Reorganization METROGAS: Extends Debt Offer To January 20 MGT: Claims Review End Today NAYCA: Court Assigns Receiver to Oversee Bankruptcy Process NEO COMUNICACIONES: Receiver Prepares Individual Reports PETROBRAS ENERGIA: Makes First IFC Loan Drawdown PETROBRAS ENERGIA: Antitrust Regulator Approves Sale to Arauco SUPERMERCADOS: Credit Verification Period Expires TELEFONICA DE ARGENTINA: Shareholders Approve Planned Bond Issue TRIANCO: Corrientes Tribunal OK's Reorganization Petition TRIVILLIN AUTOMOTORES: Receiver Validates Claims B E R M U D A ANNUITY & LIFE: Met Life To Recapture Reinsurance Agreement LORAL SPACE: Shareholders File Class Action Complaint B R A Z I L AES CORP.: Announces Partial Redemption of Notes Due 2005 CANBRAS COMMUNICATIONS: Closes Sale of All Broadband Operations ELETROPAULO METROPOLITANA: Debt Plan Gains 91% Creditor Approval TELEMAR: Fitch Affirms Ratings; Revises Outlook to Stable C O L O M B I A TRANSGAS DE OCCIDENTE: `BB' FC Rating Affirmed; Outlook Stable * S&P Affirms Colombia's `BB' Ratings, Stable Outlook E C U A D O R * Ecuador's `CCC+' Long-Term Foreign Currency Ratings Affirmed J A M A I C A AIR JAMAICA: Forecasts Improvement in Operations This Year M E X I C O TFM: S&P Lowers Ratings to 'B', Outlook Negative UNEFON HOLDINGS: Created As Legal Entity After Spin-Off UNEFON HOLDINGS: Seeks Independent Legal Counsel for Opinion P A R A G U A Y * Paraguay LT Local Currency Rating on CreditWatch Positive - - - - - - - - - - ================= A R G E N T I N A ================= AGUAS ARGENTINAS: ETOSS Threatens Fine If Rates Not Lowered ----------------------------------------------------------- Argentina's water regulator ETOSS will slap water utility Aguas Argentinas with a US$2.5-million fine if it won't reduce public rates. The water utility, which is controlled by France's Suez and Spain's Agbar, has 10 days from December 23 to make the payment. This fine adds to the ARS672,018 given to Aguas Argentinas last December 17 when it cut the provision of water without prior announcement. BANCO DE GALICIA: Commences $350M Bond-Swap Offer ------------------------------------------------- As part of an effort to restructure US$1.4 billion of debt, Argentine bank Banco de Galicia launched a bond-swap offer worth US$350 million targeting creditors holding negotiable bonds that came due in 2002 and this year. According to Business News Americas, Galicia is offering those creditors new dollar- denominated negotiable bonds and dollar-denominated subordinated negotiable bonds that will maintain the original value of the defaulted bonds but will mature in 2014 (75% of the total amount) and 2019 (25% of amount). The creditors have until February 18 to sign up to the offer and Galicia has set a 95% minimum acceptance rate to proceed with the swap, Business News Americas says. Creditors who accept the swap will then be offered a menu of alternatives, which permit them to recover their investment in a shorter timeframe. The menu for creditors accepting the first bond swap consists of three alternative payback schemes. Under the first, creditors would exchange their new bonds for dollar-denominated negotiable bonds, maturing in 2010, and for preferential shares in Galicia's parent Grupo Financiero Galicia (NasdaqSC: GGAL), which will be converted into ordinary shares after one year. The second alternative on the menu is an exchange of the new bonds for a cash payment with a 55% haircut of the original bond value. The third alternative would see the new bonds exchanged for the government bond Boden 2012, representing a 25% haircut. Banco de Galicia was among the banks hit hardest by the Argentine crisis in 2001 and 2002, which forced it to default on its obligations and start talks to renegotiate its debt with creditors, many of whom are international banks. 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 BIANAR: Last Day for Claims Filing Today ---------------------------------------- Today is the last day for filing creditors' claims for the bankruptcy of Buenos Aires-based company Bianar S.A., according to an earlier article by the Troubled Company Reporter. The Company's receiver, Ms. Mirta Calfun de Bendersky, will prepare the individual report, which are to be submitted to the court on March 10, 2004. After these are processed at court, the receiver will prepare the general report, which is due at the court on April 26, 2004. Buenos Aires Court No. 23 handles the Company's case with assistance from Clerk No. 46. CONTACT: Mirta A Calfun de Bendersky Humahuaca 4165 Buenos Aires BUENOS AIRES CHILDREN'S SCHOOL: Court Orders Bankruptcy ------------------------------------------------------- Buenos Aires Children's School S.A. entered an official bankruptcy proceeding on orders from the city's Court No. 20. Infobae reports that Clerk No. 39 assists the court on the case, which will close with the liquidation of the Company's assets. The credit verification period ends on April 26, 2004. Creditors must have their claims authenticated by the receiver, Mr. Roberto Mazzarella, before the said date. The receiver will prepare the individual reports, which are due at the court on June 7, after the verifications are closed. The general report, to be prepared after the individual reports are processed at court, must be submitted on August 2. The bankruptcy process will end with the liquidation of the Company's assets to reimburse creditors. Payments will be based on the results of the verification process. CONTACT: Roberto A Mazzarella Laprida 1411 Buenos Aires COLEGIO MODELO: Today Marks Deadline For General Report Filing -------------------------------------------------------------- The deadline for the filing of the general report for the bankruptcy of Argentine company Colegio Modelo de Buenos Aires S.R.L. expires today. The Company's receiver, Mr. Juan Lewin, prepared these reports after the individual reports were processed at the court. An earlier report released by the Troubled Company Reporter - Latin America indicated that the city's Court No. 3 issued the bankruptcy order and assigned the Company's receiver. Clerk No. 5 aids the court on the case. CONTACT: Colegio Modelo de Buenos Aires, S.R.L. Cochabamba 1601 Buenos Aires Juan Lewin Quirno 353 Buenos Aires CROSS MATCH: Proofs of Claims Process Ends Today ------------------------------------------------ The credit verification procedure for the bankruptcy of Cross Match S.A. will end today, December 29, 2003. The Company's receiver, Mr. Fernando Aquilino, who verified creditors' claims, will also prepare the individual and general reports. Clerk No. 3, Dr. Vassallo, works with the court on the case. According to an earlier report by the Troubled Company Reporter - Latin America, Buenos Aires Insolvency Judge Garibotto, of Court No. 2, approved a motion for the bankruptcy of local medical services company. The Company's creditor, Bioquimica Medica S.R.L., filed the petition after the Company failed to honor its debts. CONTACT: Cross Match S.A. Laprida 1857 Buenos Aires Fernando Aquilino Lavalle 1459 Buenos Aires DEPOSITO COLOMBIA: Individual Reports Due at Court Today -------------------------------------------------------- Today is the deadline for the filing of the individual reports on the bankruptcy of Argentine company Deposito Colombia S.R.L., the Troubled Company Reporter - Latin America indicated in an earlier article. The Company's receiver, Mr. Hugo Eduardo Sanguinetti, prepared the reports after the credit verification process was completed earlier this year. The receiver will then prepare the general report after the individual reports are processed at court. This report is to be filed at the court on February 27 next year. The Company entered bankruptcy on orders from the Civil and Commercial Tribunal of Rosario in Sante Fe. The Company's assets will be liquidated at the end of the process to reimburse creditors. CONTACT: Deposito Colombia S.R.L. Juan Jose Paso 6985 Santa Fe Hugo Eduardo Sanguinetti Gorriti 986 Rosario, Santa Fe EL CID CAMPEADOR: Court Declares Company Bankrupt ------------------------------------------------- Buenos Aires Court No. 10 declares local company El Cid Campeador S.R.L. "Quiebra", relates Argentine news source Infobae. Working with Clerk No. 20, the court assigned Mr. Luis Stamati as the Company's receiver. Creditors must file proof of their claims before July 1, 2004. The receiver will examine and validate claims to determine the nature and amount of the Company's debts. The result of the verification process will serve as basis for payments to be made after the Company's assets are liquidated. The receiver's duties include the preparation of the individual and general reports on the case. However, Infobae did not indicate whether the court has set the filing deadlines for these reports. CONTACT: El Cid Campeador S.R.L. Honorio Pueyrredon 1501 Buenos Aires Luis Stamati Avenida Rivadavia 3320 Buenos Aires JAYPLEN: Receiver Closes Claims Verification Process Today ---------------------------------------------------------- Buenos Aires accountant Jose Alfredo Alegre, receiver for local company Jayplen S.A., will close the credit verification process for the Company's bankruptcy today. As ordered by the city's Court No. 3, the receiver will now prepare the individual reports, which are to be submitted to the court on March 1 next year. The receiver will prepare the general report after the individual reports are processed at court. This report is due on April 29, 2004, according to an earlier report from the Troubled Company Reporter - Latin America. The Company's assets would be liquidated at the end of the process to reimburse its creditors. Payments would be based on the results of the credit verification process. CONTACT: Jose Alfredo Alegre Viamonte 1592 Buenos Aires LAMINADOS LAMDECO: Receiver Verifies Claims in Bankruptcy --------------------------------------------------------- Creditors for Buenos Aires company Laminados Lamdeco S.A. must have their claims authenticated by the receiver as the deadline for verifications expires today. Mr. Jose Maria Nullo acts as the Company's receiver for the bankruptcy proceedings. The verifications are done to determine the nature and amount of the Company's debts. The receiver will now prepare the individual reports, which must be submitted to the court on February 27 next year, after the verifications are closed. The city's Court No. 17, which handles the Company's case, requires the receiver to file the general report on March 26, 2003. Clerk No. 33 works with the court on the case. CONTACT: Laminados Lamdeco S.A. Moldes 2181 Buenos Aires Jose Maria Nullo Avenida Callao 420 Buenos Aires MARIA MATER: Court Approves Motion for Reorganization ----------------------------------------------------- Buenos Aires Court No. 6 approved the "Concurso Preventivo" motion filed by local company Maria Mater S.A., reports local news portal Infobae. The Company will undergo reorganization with local accounting firm Franqueiro y asociados as receiver. Creditors are required to file their claims before March 25, 2004. The receiver, who verifies the claims, will prepare the individual reports after verifications are closed. The individual reports must be submitted to the court on May 11, followed by the general report on June 25. The informative assembly, which signals the end of the reorganization process, will be held on December 7 next year. CONTACT: Franqueiro y Asociados Ave Corrientes 534 Buenos Aires METROGAS: Extends Debt Offer To January 20 ------------------------------------------ Argentine natural gas distributor Metrogas SA again extended its offer to restructure US$440 million in debt, says Dow Jones. Metrogas launched its offer on November 7 and set an original expiry date of December 10. However, as of Dec. 11, only creditors representing US$93.6 million of the debt had accepted the offer, prompting the Company to extend the offer to December 22. However, the Dec. 22 deadline saw only creditors representing around US$100.5 million of the debt agreeing to Metrogas' offer, leading the Company to extend the deadline again, this time, until Jan. 20. Metrogas' offer is to buy back up to US$100 million of its debts at half their face value. Alternatively, creditors can swap their holdings for new debt that would come due in nine years and pay 3% interest for the first two years, 4% for the following two years, 5% for the next two years and 6% for the remaining period. The company needs cooperation from creditors representing at least two thirds of its debts before it can ask the courts for approval to cram new agreements on its entire debt burden. Hammered by the peso's devaluation, Metrogas suspended payments on all its debt in March 2002. CONTACT: METROGAS, S.A. Gregorio Araoz de Lamadrid 1360 Buenos Aires Argentina CPA C 1267 Phone: +54 11 4309 1010 Fax: +54 11 4309 1025 Home Page; http://www.metrogas.com.ar Contact: William Harvey Alvarez, President MGT: Claims Review End Today ---------------------------- The credit verification process for the bankruptcy of Buenos Aires company ends today, according to the Troubled Company Reporter - Latin America in an earlier report. The Company's receiver, Mr. Alberto Antonio Vilela, who verified the claims, will now prepare the individual reports, which are due at the court on March 11 next year. The receiver will prepare a general report after the individual reports are processed at the court. This must be submitted at the court on April 27. Buenos Aires Court No. 22 handles the Company's case with assistance from Clerk No. 43. At the end of the bankruptcy process, the Company's assets will be liquidated to reimburse creditors. CONTACT: Alberto Antonio Vilela Rodriguez Pena 431 Buenos Aires NAYCA: Court Assigns Receiver to Oversee Bankruptcy Process ----------------------------------------------------------- Buenos Aires Court No. 12 assigns Mr. Hugo Daniel Pantaleo as receiver for Nayca S.R.L., which was recently declared bankrupt. The receiver has instructions to validate creditors' claims until February 24 next year. The individual reports, which contain the results of the verification process, must be filed at the court on April 6 next year, followed by the general report on April 18, according to local news portal Infobae. The general report is a consolidation of the individual reports after these are processed at court. Clerk No. 23 assists the court on the case. CONTACT: Nayca S.R.L. Ave Santa Fe 5180 Buenos Aires Hugo Daniel Pantaleo Ave Corrientes 1450 Buenos Aires NEO COMUNICACIONES: Receiver Prepares Individual Reports -------------------------------------------------------- Mr. Felipe Florio, receiver for bankrupt Argentine company Neo Comunicaciones Publicitarias S.R.L., will prepare the individual reports as the credit verification period expires today. These reports are to be submitted to the court on March 11 next year. The general report, which is to be prepared after the individual reports are processed at Buenos Aires Court No. 8, which handles the Company's case, is to be submitted on April 27, 2004. At the end of the bankruptcy process, the Company's assets will be liquidated to reimburse its creditors. Payments will be based on the results of the credit verification process, where the amount and nature of the Company's debts are determined. CONTACT: Neo Comucaciones Publicitarias S.R.L. Ave Rivadavia 1157 Buenos Aires PETROBRAS ENERGIA: Makes First IFC Loan Drawdown ------------------------------------------------ Petrobras Energia Participaciones S.A. (Buenos Aires: PBE, NYSE:PZE), controlling company with a 98.21% stake in Petrobras Energia S.A. (Buenos Aires: PESA), announces that under the loan agreements subscribed in July 2003 between Petrobras Energia Venezuela S.A., a subsidiary wholly owned by the Company, and the International Financial Corporation, the first drawdown was made in the amount of US$ 70 MM. The aggregate amount of said loan agreements is US$ 105 MM. The loan structure mainly consists of an 8 � -year tranche A loan in the amount of US$80 MM, including a one-year grace period, with a semi-annual repayment period at a nominal annual rate of Libor + 4.75%, and a 9 � -year tranche C loan in the amount of US$25 MM. The proceeds of these loans will be used in the investment plan related to the development of the Company's oil reserves in Venezuela, in the Acema, Mata, La Concepcion and Oritupano Leona areas. The remaining loan proceeds are estimated to be disbursed during the first semester of 2004. PETROBRAS ENERGIA: Antitrust Regulator Approves Sale to Arauco -------------------------------------------------------------- Argentina's antitrust and competition agency gave Petrobras Energia a go-ahead signal to sell its forestry assets to Alto Parana, the Argentine subsidiary of Chilean forestry group Arauco, reports La Nacion. The US$47-million sale that was finalized in 2002 involved a 60,000-hectare forest, including 25,000 hectares of tree plantations, and a processing plant with a capacity of 100,000 cubic meters per year, adds the report. SUPERMERCADOS: Credit Verification Period Expires ------------------------------------------------- The credit verification period for the bankruptcy of Supermercados 3C S.A. will end today, December 29. The Company's receiver, Ms. Haydee Kravetz, will now prepare the individual reports on the verification results. These reports are due for filing on March 10, followed by the general report on April 27. The general report is a consolidation of the information in the individual reports after these are processed at court. An earlier report by the Troubled Company Reporter - Latin America indicated that Buenos Aires Court No. 24 declared the Company bankrupt and appointed its receiver. Clerk No. 48 aids the court on the case. CONTACT: Haydee Kravetz Tucuman 1484 Buenos Aires TELEFONICA DE ARGENTINA: Shareholders Approve Planned Bond Issue ---------------------------------------------------------------- Argentine telco Telefonica de Argentina obtained approval from shareholders to issue up to ARS1.5 billion (US$500mn) in negotiable options, relates Business News Americas. The board of directors will draw up terms of the debt offering with help from external financial advisors, says Business News Americas. According to Rafael Ber of local market observer Argentine Research, the bonds would be used to finance new investments, rather than restructuring its existing debts. "The board would probably look to issue bonds at some point in 2004, once Telefonica determines its capital expenditures plan for the year," said Mr. Ber. However, the Company will only proceed if it can obtain favorable market conditions, which will in turn depend on how well Argentina's government resolves its debts with the International Monetary Fund and private creditors, he said. Telefonica de Argentina SA, the country's biggest telephone company, said last month it had a profit during the first nine months of the year. CONTACT: TELEFONICA DE ARGENTINA Tucuman 1, 18th Floor, 1049 Buenos Aires, Argentina Phone: (212) 688-6840 Home Page: http://www.telefonica.com.ar Contacts: Carlos Fernandez-Prida Mendez Nunez, Chairman Paul Burton Savoldelli, Vice Chairman Fernando Raul Borio, Secretary TRIANCO: Corrientes Tribunal OK's Reorganization Petition --------------------------------------------------------- Court No. 9 of the Civil and Commercial Tribunal of Corrientes in Argentina grants local company Trianco S.A. permission to reorganize. Argentine news portal Infobae reports that the court approved the Company's motion for "Concurso Preventivo". Ms. Delia Alcira Niveiro was assigned as the Company's receiver. She will authenticate creditors' claims until February 13 next year. She will also prepare the individual and general reports on the case. In the meantime, the source did not mention whether the court has set the filing deadlines for the receiver's reports. CONTACT: Delia Alcira Niveiro Chaco 1291 Corrientes TRIVILLIN AUTOMOTORES: Receiver Validates Claims ------------------------------------------------ Ms. Delia Alcira Niveiro, the appointed receiver for the reorganization of Trivillin Automotores S.A., will examine and validate creditors' claims until February 13 next year. Creditors are advised to present their proofs of claims to the receiver before the said date. The Company obtained permission to undergo reorganization from Court No. 9 of the Civil and Commercial Tribunal of Corrientes, where it is based. The court chose the receiver for the case, Infobae relates without indicating whether the court has set the deadlines for the submission of the individual and general reports. CONTACT: Delia Alcira Niveiro Chaco 1291 Buenos Aires ============= B E R M U D A ============= ANNUITY & LIFE: Met Life To Recapture Reinsurance Agreement ----------------------------------------------------------- Annuity and Life Re (Holdings), Ltd. (NYSE: ANR) announced Wednesday that the panel in its arbitration proceeding with Met Life has ruled that the Company's rate increase instituted in January 2003 and effective March 5, 2003 is valid. As a result of the ruling Met Life has chosen to recapture the business. In the fourth quarter of 2003 the Company will reverse premium revenue, benefits and expenses associated with the contract for the period March 6, 2003 through September 30, 2003. While the Company is still finalizing the terms of the recapture with Met Life, the net impact of these reversals, offset by the cost associated with the recapture, is not expected to have a material adverse effect on net income for the fourth quarter of 2003. Annuity and Life Re (Holdings), Ltd. provides annuity and life reinsurance to insurers through its wholly owned subsidiaries, Annuity and Life Reassurance, Ltd. and Annuity and Life Reassurance America, Inc. CONTACT: ANNUITY & LIFE RE (HOLDINGS), LTD. Jay Burke 441-296-7667 LORAL SPACE: Shareholders File Class Action Complaint ----------------------------------------------------- Pursuant to the direction of the United States District Court for the Southern District of New York that, on December 8, 2003, a class action lawsuit was filed in the United States District Court for the Southern District of New York, on behalf of all persons who purchased or acquired the securities of Loral Space & Communications, Ltd. ("Loral" or the "Company") (OTC Bulletin Board: LRLSQ.OB) between July 31, 2002, through June 29, 2003, inclusive, against defendant Bernard Schwartz, the Company's Chief Executive Officer and Chairman of the Board, and Richard J. Townsend, the Company's Chief Financial Officer, during the Class Period. The case name and index number are Christ, et al. v. Bernard Schwartz, et al., 03 CV 8262 (JES). The complaint alleges that during the Class Period, the defendants, among other things, materially misrepresented the Company's financial performance and condition by inflating the Company's revenues and net income, and by underreporting expenses. These misrepresentations of the Company's financial performance included: (a) failing to timely account for the obsolescence of its inventory; (b) inappropriately accounting for general and administrative costs ("G&A costs") in the second and third quarters of 2002; and (c) improperly recognizing revenue from its Telstar 18/Apstar V contract with APT Satellite Company Ltd. The Company finally recognized these improprieties in its financial report filed on Form 10-Q with the Securities and Exchange Commission ("SEC") on November 13, 2003, months after the July 15, 2003 bankruptcy. The complaint was filed by the law firms of Bernstein Liebhard & Lifshitz, Chitwood & Harley, and Wolf Haldenstein Adler Freeman & Herz LLP. If you purchased or otherwise acquired Loral securities during the Class Period, you may request, because the Court has not yet appointed lead plaintiff or lead counsel, that the Court appoint you as lead plaintiff for that Class Period by February 23, 2004, sixty days following the publication of this Notice, pursuant to the Private Securities Litigation Reform Act of 1995. CONTACT: BERNSTEIN LIEBHARD & LIFSHITZ 10 East 40th Street New York, New York 10016 Telephone: (877) 779-1414 CHITWOOD & HARLEY 2300 Promenade II 1230 Peachtree Street, N.E. Atlanta, Georgia 30309 Telephone: (888) 873-3999 WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP 270 Madison Avenue New York, New York 10016 Telephone: (212) 545-4600 =========== B R A Z I L =========== AES CORP.: Announces Partial Redemption of Notes Due 2005 --------------------------------------------------------- The AES Corporation (NYSE:AES) announced Wednesday that it had called for redemption $19,719,000 aggregate principal amount of its outstanding 10% Senior Secured Notes due 2005. The notes will be redeemed on a pro rata basis on January 22, 2004 at a redemption price equal to 100% of the principal amount thereof to be redeemed plus accrued and unpaid interest to the redemption date. The redemption is being made out of "excess asset sale proceeds" and reflects the portion of asset sale proceeds allocable to the notes primarily from AES's sale of a minority interest in AES Oasis Limited. AES is a leading global power company comprised of contract generation, competitive supply, large utilities and growth distribution businesses. The company's generating assets include interests in 116 facilities totaling over 45 gigawatts of capacity, in 27 countries. AES's electricity distribution network sells 89,614 gigawatt hours per year to over 11 million end-use customers. CONTACT: THE AES CORPORATION Kenneth R. Woodcock, 703-522-1315 Web site: www.aes.com Investor Relations: investing@aes.com CANBRAS COMMUNICATIONS: Closes Sale of All Broadband Operations --------------------------------------------------------------- Bell Canada International Inc. ("BCI" or the "Corporation") announced Wednesday that its 75.6%-owned subsidiary, Canbras Communications Corp. ("Canbras"), has completed the sale of all of its interests in Canbras Participacoes Ltda. ("CPAR"), through which Canbras holds substantially all of its broadband communications operations in Brazil, to Horizon Cablevision do Brasil S.A. ("Horizon"), pursuant to the agreement entered into by the parties in October 2003. Canbras received gross proceeds of $32.6 million, comprised of $22.168 million in cash and a one year promissory note bearing interest at 10% in the original principal amount of $10.432 million (subject to reduction in the event indemnification obligations of Canbras arise under the terms of the sale transaction). Canbras announced the closing of the sale followed its receipt of the requisite shareholder approval for the sale as well as for the wind-up and dissolution of Canbras following the final distribution of the net sale proceeds to the Canbras shareholders. Based on Canbras' announced estimate of the net amount (after payment of transaction expenses and winding-up costs) that it expects to distribute to its shareholders of approximately $28 million ($0.51 per share), which assumes full payment of the one-year note and no unforeseen claims against it, BCI expects to receive $21 million as its pro rata share of such net proceeds. The carrying value of BCI's investment in Canbras at September 30, 2003 was $15 million. BCI is operating under a court supervised Plan of Arrangement, pursuant to which BCI intends to monetize its assets in an orderly fashion and resolve outstanding claims against it in an expeditious manner with the ultimate objective of distributing the net proceeds to its shareholder and dissolving the company. BCI is listed on the Toronto Stock Exchange under the symbol BI and, until December 31, 2003, on the NASDAQ National Market under the symbol BCICF. Visit our Web site at www.bci.ca. ELETROPAULO METROPOLITANA: Debt Plan Gains 91% Creditor Approval ---------------------------------------------------------------- Brazil's largest power distributor, Eletropaulo Metropolitana, (ELPL4.SA), saw 91% of its private creditors accepting its proposal to reschedule BRL2.3 billion (US$787 million) of debt. Citing Eletropaulo's statement to the Sao Paulo Stock Exchange, Bloomberg News reports that the support is one percentage more than what it needed. "It's a process that lengthens out the maturities of the short term debt," said Luciana Puccetti, analyst at Itau Corretora de Valores in Sao Paulo. "For the investor it helps to alleviate the concern that they won't be able to honor commitments in the short-term." Under the agreement, creditors will accept debt coming due in 2006, 2007 or 2008 for debt that came due this year or is maturing by the end of 2006. The remaining creditors have until Feb. 16 to adhere to the plan, Eletropaulo said. The Company didn't disclose the interest rates it would pay. Last week, Eletropaulo's parent, Arlington, Virginia-based AES Corp. said it had an agreement to reschedule US$1.2 billion of loans with Brazil's state development bank, averting government seizure of Eletropaulo. CONTACT: ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes Gonzalves Jr., VP Finance/Investor Relations TELEMAR: Fitch Affirms Ratings; Revises Outlook to Stable --------------------------------------------------------- Fitch Ratings has affirmed the international scale local currency debt ratings of 'BB+' for Tele Norte Leste Participacoes S.A. (TNE) and 'BBB-' for its fixed-line operating subsidiary, Telemar Norte Leste S.A. (TMAR). The Rating Outlook for these ratings has been revised to Stable from Negative. Fitch has also affirmed the international scale foreign currency debt ratings of 'B+' Outlook Stable for TNE and TMAR, which are constrained by the sovereign rating of Brazil. TNE and TMAR are collectively known as Telemar. Fitch has also affirmed the national scale ratings of 'AA-(bra)' for TNE, which applies to its first issue of local debentures, and 'AA(bra)' for TMAR. All national scale ratings have a Stable Rating Outlook. The revision of the international scale local currency debt ratings outlook to Stable from Negative reflects the ability of Telemar to increase EBITDA and improve credit protection measures over the past year. Telemar was able to achieve these improvements despite competitive pressures due to the increasing liberalization of the Brazilian telecommunications sector since privatization in 1998, coupled with a more challenging regulatory environment as a court ruling earlier this year prevented fixed line local service operators from increasing tariffs according to the original concession agreement terms. Moreover, Telemar is expected to sustain these improvements over the medium term. EBITDA margins should remain stable at around 45%, EBITDA/Interest expense at around 5 times (x) and Debt/EBITDA at around 2x, which are solid within the rating category. The ratings continue to be based on Telemar's position as the leading provider of fixed-line telecommunications services in its service territory. Telemar has a leading market position in local service (more than 95% market share) and intra-region long distance (approximately 75%). Telemar derives a significant portion of revenues from its relatively stable local-exchange operations, which reduces cash flow volatility and business risk. The company has made substantial improvements in its infrastructure in previous years and is well positioned for a competitive marketplace. Telemar currently has 15.1 million lines in service, which implies penetration levels of 17%. The number of lines in service has remained stable over the past two years and is expected to remain largely unchanged over the near term. Because Telemar's fixed line business is profitable and does not require significant investments, it generates significant levels of free cash flow. Telemar's main growth opportunities are in less mature segments such as wireless. Telemar introduced wireless services in its service territory during 2002 through its subsidiary Oi. Since then, Oi has been able to grow the number of subscribers at a very rapid pace to over 3.5 million subscribers. The wireless market is very competitive due to the high number of wireless operators. Oi currently has an estimated market share of 15% in its service territory; it is currently the smallest of the five operators but is growing at a faster rate. Because wireless revenues account for less than 10% of Telemar's total revenues, Fitch Ratings does not expect significant near-term cash flow contribution from these operations. Telemar maintains a solid financial profile, with cash balances of R$2.5 billion, strong cash flow, and manageable debt levels. Total debt, net of hedging effects, was R$10.5 billion at 9/30/2003 and is expected to remain stable over the medium term as cash flow is sufficient to internally finance capital expenditure needs. Approximately three-quarters of debt is denominated in US$ dollars, with the remainder denominated in Brazilian Reais. Because Telemar already made large capital expenditures of around R$13 billion during 2000-2001 to modernize and expand its networks, capital expenditure needs over the medium term are moderate. Estimated capital expenditures during 2003 are R$1.6 billion compared to R$1.8 billion during 2002. Telemar is one of the leading telecommunications providers in Brazil with more than 15 million fixed lines in service and more than 3.5 million wireless subscribers. The company provides telecommunications services in 16 Brazilian states located in northern, northeastern and southeastern Brazil. Telemar also provides internet, data and long distance service. During the first nine months 2003, the company generated R$10.3 billion in revenues and R$4.6 billion of EBITDA. CONTACT: Guido Chamorro +1-312-368-5473, Chicago Mauro Storino +55 21 2224-3558, Rio de Janeiro MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York =============== C O L O M B I A =============== TRANSGAS DE OCCIDENTE: `BB' FC Rating Affirmed; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' foreign currency rating on TransGas de Occidente S.A.'s US$240 million notes due 2010. The outlook is stable. The rating on TransGas reflects the risk of a single source of bond repayment--the monthly tariff paid to TransGas by Colombia's state-owned oil company, Empresa Colombiana de Petr�leo (Ecopetrol, BB/Negative/- -). "Furthermore, the rating reflects sluggish natural gas demand in Colombia, which may affect economic incentives to operate the TransGas project," said Standard & Poor's credit analyst David Gonzalez. "However, positive mitigating factors include the fact that the tariff is linked to the pipeline's availability, which has been 100%, and there are protective clauses that either cancel or lessen risks derived from dispute resolution and exchange risk," added Mr. Gonzalez. Standard & Poor's also said that TransGas' dependence on payments from Ecopetrol links the rating to the creditworthiness of this state-owned entity. The rating on Ecopetrol is constrained by the foreign currency rating on the Republic of Colombia. A weakening of the Colombian government support for its gas plan or any other event that could jeopardize complete and timely payments to the project would result in a rating action by Standard & Poor's. ANALYST: David Gonzalez Mexico City Phone: (52) 55-5279-2062 * S&P Affirms Colombia's `BB' Ratings, Stable Outlook ----------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' long-term foreign and 'BBB' long-term local currency sovereign credit ratings on the Republic of Colombia. Standard & Poor's also affirmed its 'B' short-term foreign and 'A-3' short-term local currency sovereign credit ratings on the republic. The outlook remains stable. According to Standard & Poor's Credit Analyst Richard Francis, the affirmation reflects the government's recent success in obtaining congressional approval of tax measures in the wake of the failed October 2003 national referendum, which would have yielded savings of 1.3% of GDP in 2004 through a freeze in some public expenditure. "These tax measures, in combination with further expenditure cuts, should help the government come close to meeting its 2.5% overall public sector deficit target in 2004," Mr. Francis said. "In addition, the country's economic growth prospects are improving after five years of lackluster growth that averaged just 0.4%. Economic growth is now projected at over 3% in 2003 and expected to rise further to over 3.5% in 2004, reflecting President Alvaro Uribe's successful strategy of improving national security while maintaining macroeconomic stability," he added. The recently announced bilateral free-trade agreement with the U.S. could also underpin growth prospects in the medium term. Standard & Poor's said that the prospects of higher economic growth and continued fiscal consolidation have restored the balance of risk to Colombia's ratings. However, the government's underlying fiscal position remains highly inflexible due to large, legally mandated transfers to local governments and public pension systems and to the interest on the its debt. "Further reform in the areas of taxes, transfers and pensions will therefore be needed over the next three years in order to maintain fiscal discipline," noted Mr. Francis. "If there is significant fiscal slippage or a sharp deterioration in the nation's security, there could be renewed downward pressure on the government's creditworthiness. If, on the other hand, fiscal prospects improve further and the debt and interest burdens decline, the ratings could improve," he concluded. ANALYST: Richard Francis New York Phone: (1)-212-438-7348 ============= E C U A D O R ============= * Ecuador's `CCC+' Long-Term Foreign Currency Ratings Affirmed -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC+' long-term and 'C' short-term sovereign credit ratings and stable outlook on the Republic of Ecuador. Standard & Poor's said that the ratings and stable outlook balance the risk surrounding the government's ability to cover its financing needs (deficit and amortization), about US$1.9 billion in 2004. According to Standard & Poor's Credit Analyst Lisa M. Schineller, the affirmation assumes no disbursements from the International Monetary Fund (IMF) and, hence, only project lending by multilaterals of some US$400 million in 2004. "Even without IMF disbursements, timely debt service is possible under a set of strict assumptions," Ms. Schineller said. "These include continuation of the current high oil price environment (West Texas Intermediate of US$28 per barrel), the use of the funds slated for the oil stabilization fund ([FEIREP] estimated around US$700 million in 2004) and substantial local debt issuance placed with the social security fund (IESS)," she added. As per the fiscal responsibility law, Ms. Schineller explained that revenue from private oil production, essentially heavy crude oil flowing through the newly completed oil pipeline (OCP), accrues not to the budget, but to FEIREP, which implies a loss of "above-the-line" revenue of a projected 2.5% of GDP. "The 'CCC+' rating assumes insufficient reform or expenditure adjustment to permit these oil revenues to be set aside," Ms. Schineller noted. "The proposed 2004 budget (and that passed by Congress) incorporated little expenditure adjustment. Tight fiscal execution, aligning spending authorization with revenue, depends upon the political backing of the Minister of Finance Mauricio Pozo by President Lucio Guti�rrez, which is likely to be complicated by the president's low popularity rating (15% of those polled)," she said. Only recently, President Guti�rrez postponed better targeting of the subsidy for domestic cooking gas, which would have reduced spending. Advancement of fiscal measures to improve expenditure and revenue flexibility, evidence of a tight execution of the 2004 budget, prudent use of the FEIREP, and a coherent strategy to increase oil production would support improved creditworthiness. "Under this scenario, it is also likely that the program with IMF would be back on track," said Ms. Schineller. "Conversely, if oil prices fall or if the local market cannot fund the government's deficit, then the ratings could come under downward pressure," she concluded. ANALYST: Lisa M Schineller New York Phone: (1) 212-438-7352 ============= J A M A I C A ============= AIR JAMAICA: Forecasts Improvement in Operations This Year ---------------------------------------------------------- Jamaica's National airline, Air Jamaica, is projecting a 10% improvement this year compared to last year as Jamaicans and visitors travel to the island for the Christmas holidays, RadioJamaica reports. While acknowledging that there have been some delays in the arrival of baggage, the airline's president, Christopher Zacca, said that the matter has largely been resolved. Air Jamaica is still battling with the effects of competition and the September 11 terrorist attacks in the US. Recently, it asked all of its pilots to take a 25% reduction in overall pay to cut operational costs and secure financing from the Government. But the airline, according to Zacca, is not at all worried that the US-based Spirit Airlines is seeking to enter the Jamaican market. =========== M E X I C O =========== TFM: S&P Lowers Ratings to 'B', Outlook Negative ------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on TFM S.A. de C.V. (TFM) to 'B' from 'B+' and removed it from CreditWatch. The outlook is negative. TFM's rail lines connect with Mexico's most populated and industrialized regions and its principal U.S. border gateway at Laredo. This is the largest rail freight exchange point between Mexico and the U.S., where about 50% of all rail traffic between the two nations crosses that border. In addition, TFM's rail system serves three out of Mexico's four primary seaports at Veracruz and Tampico on the Gulf of Mexico and Lazaro Cardenas on the Pacific Ocean. The rating reflects TFM's position as the leading provider of rail transportation service in Mexico, its exclusive access to the Laredo gateway, and its potential switch to rail from truck. These strengths are more than offset by deterioration in operating margins, a financial policy driven by Grupo TMM S.A., the underperformance of the automotive industry (20% of TFM's 2002 total sales), and the deteriorated relationship between owners. The negative outlook reflects TFM's limited liquidity and concerns regarding the company refinancing risk. Moreover, in Standard & Poor's view, the potential acquisition from Kansas City Southern remains uncertain. TFM's liquidity is limited. TFM's total short-term debt is $132 million, which includes $95 million in a commercial paper program. This program is backed up by a two-year letter of credit, which is due on September 2004. Therefore, TFM's liquidity is tight to the company ability to renegotiate its PC Program; otherwise, it will face financial problems. The company's cash position as of Sept. 30, 2003, was US$8 million. ANALYST: Juan P Becerra Mexico City UNEFON HOLDINGS: Created As Legal Entity After Spin-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 Tuesday the creation of Unefon Holdings, a controlling company that owns a 46.5% equity stake in Unefon (BMV: UNEFONA) and a 50% stake in Cosmofrecuencias, a wireless broadband Internet access provider, as a legal Mexican entity (Sociedad Anonima) independent from TV Azteca. TV Azteca board members were a key element in the separation process. Starting early 2003 TV Azteca's Board unanimously decided against investing additional resources in Unefon. In June, the Board agreed that the settlement between Unefon and Nortel should be the sole responsibility of Unefon, with that company bearing the costs of the process. The Board took this stance because TV Azteca's six-year plan for cash usage is a financial priority for the company. As previously announced, the cash plan entails cash distributions to shareholders of over US$500 million and TV Azteca debt reduction of approximately US$250 million by 2008. In October, the Board approved the split off of TV Azteca's investment in Unefon. The decision to separate all telecommunications assets from TV Azteca was finally ratified by TV Azteca shareholders on December 19. As a consequence, TV Azteca has returned to a pure play media company, and existing TV Azteca shareholders will decide on their direct investment in the new telecommunications business. TV Azteca shareholders will be given shares of the new company in the same proportion of their TV Azteca ownership once Unefon Holdings is publicly traded, which is expected to occur by the second quarter of 2004. 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. Investor Relations: Bruno Rangel Phone: +011-5255-3099-9167 Email: jrangelk@tvazteca.com.mx Omar Avila Phone: +011-5255-3099-0041 Email: oavila@tvazteca.com.mx Media Relations: Tristan Canales 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/ UNEFON HOLDINGS: Seeks Independent Legal Counsel for Opinion ------------------------------------------------------------ Unefon Holdings, S.A. de C.V., a controlling company recently split off from TV Azteca (NYSE:TZA) (BMV: TVAZTCA) and owner of a 46.5% equity stake in Unefon (BMV: UNEFONA) and a 50% stake in Cosmofrecuencias, a wireless broadband Internet access provider, announced Tuesday that a specialized independent legal counsel is being selected to make recommendations regarding differences in opinion concerning disclosures relating to Unefon, in accordance with the Sarbanes-Oxley Act. There is currently a disagreement regarding the facts and law surrounding public filings. Although Mexican law does not require disclosure of the above- mentioned issues, a special committee comprised of the independent board members of the splitting company plans to promptly initiate a detailed review of the issues relating to certain transactions involving Unefon, with the assistance of a special U.S. independent legal counsel. This review process constitutes an "appropriate response" under the Sarbanes-Oxley Act. The transaction under review does not affect the financial statements of Unefon, as detailed in reported financial results for the third quarter of 2003, and is independent of the operations and the reported results of other Grupo Salinas companies. The company also noted the review process does not affect the split-off procedure of Unefon from TV Azteca. Company Profile Unefon Holdings, S.A. de C.V. is a controlling company that owns a 46.5% equity stake in Unefon -- a Mexican mobile telephony operator focused on the mass market -- and a 50% equity stake in Cosmofrecuencias -- wireless broadband Internet access provider. CONTACT: Unefon Holdings, S.A. de C.V. Hector Romero Mexico Phone: +011-5255-3099-0060 Email: hromero@gruposalinas.com.mx =============== P A R A G U A Y =============== * Paraguay LT Local Currency Rating on CreditWatch Positive ----------------------------------------------------------- Standard & Poor's Ratings Services placed the Republic of Paraguay's 'CCC' long-term local currency sovereign credit rating on CreditWatch with positive implications, as the government is about to conclude the restructuring of its US$138 million domestically issued U.S. dollar bonds now in default. Paraguay's current 'CCC' long-term local and 'SD' (Selective Default) long- and short-term foreign currency sovereign credit ratings were assigned on Feb. 13, 2003, when the government failed to honor a put option exercised by some holders of the defaulted government bonds. According to Standard & Poor's Credit Analyst Sebastian Briozzo, President Nicanor Duarte Frutos, who took office on Aug. 15, 2003, has advanced the restructuring of domestic debt, engineered passage of a social security reform, and plans to reform the administration and tax system. "Standard & Poor's expects the foreign currency default to be cured by mid-January 2004, once all the legal procedures accompanying the restructuring are implemented," Mr. Briozzo said. "New local and foreign currency ratings, which will represent Standard & Poor's post-default assessment of Paraguay's creditworthiness, will be assigned at that time," he concluded. ANALYST: Sebastian Briozzo New York Phone: 212-438-7342 Lisa M Schineller New York Phone: (1) 212-438-7352 *********** 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. 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