/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040119.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, January 19, 2004, Vol. 5, Issue 12 Headlines A R G E N T I N A AEROLINEAS ARGENTINAS: Discloses Fleet Inspection Timetable BANCO DE SAN JUAN: Evaluadora Rates Bonds ‘BB+’ BANCO RIO: Anounces Rights Issue Results CAPEX: Fitch Rates $150M of Bonds ‘C(arg)’ COMPANIA ESTANCIAS: Court OK’s Reorganization Petition CORREO ARGENTINO: Appeals Court Suspends Bankruptcy Decision CORREO ARGENTINO: Argentina Mulls Share Sale In May EUROMAYOR: Bonds Get Junk Ratings from Evaluadora Latinoamericana LA CANTERA: Reorganization Ends in Bankruptcy PLACIDO MARTINES: Court Orders Bankruptcy SIDECO AMERICANA: Seeks Legal Approval For Debt Offer TC: To Undergo Reorganization on Court Orders TGN: Enargas Criticizes Poor Services VENTMACA: Court Declares Company Bankrupt B R A Z I L AES CORP.: Abandons Plan to Sell AES Sul BRASKEM: To Merge With Trikem S.A. COSIPA: Moody’s Assigns B2 to $150M Medium Term Notes EMBRATEL: Expands Network Capacity, New Technology Added MRS LOGISTICA: Outlook Upgraded to Stable From Negative PARMALAT BRAZIL: Flour Mill Cuts Off Supplies C H I L E UNIMARC/INDUSTRIA FORESTAL: Facing Involuntary Bankruptcy C O L O M B I A CODAD: S&P Affirms ‘BB’ Rating, Stable Outlook J A M A I C A AIR JAMAICA: Auditor General Reports Divestment Discrepancy M E X I C O CFE: Delays Bidding Deadline For Mexicali II Project SATMEX: Launching New Programming Catering to U.S. Hispanics P E R U EMBONOR: Agrees to Sell Peruvian Unit to JRL P U E R T O R I C O CENTENNIAL COMMUNICATIONS: Announces New Credit Facility V E N E Z U E L A PDVSA: Restarts El Palito Refinery Following 60-Day Shutdown SIDOR: Aims to Up Production to 3.4Mt This Year - - - - - - - - - - ================= A R G E N T I N A ================= AEROLINEAS ARGENTINAS: Discloses Fleet Inspection Timetable --------------------------------------------------------------- Argentine’s flagship airline Aerolineas Argentinas revealed its timetable for the inspection of its fleet of four Airbus 340 aircraft. According to El Diario, the company will begin the task in May 2004 at its maintenance center at the Ezeiza airport. The inspection of each aircraft will take about seven weeks and the Company hopes to finish the inspection program by the first half of December 2004. The task is expected to require some US$2.1 million, including US$400,000 in the purchase of specialized tools. The same service done outside Argentina would cost the Company US$3.5 million. CONTACT: AEROLINEAS ARGENTINAS Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA Phone: (54-11) 4310-3000 Fax: (54-11) 4310-3585 E-mail: volar@aerolineas.com.ar Home Page: www.aerolineas.com.ar Contact: Patricio Zabalia Lagos, President BANCO DE SAN JUAN: Evaluadora Rates Bonds ‘BB+’ ----------------------------------------------- Evaluadora Latinoamericana S.A. Calificadora de Riesgo assigned a ‘BB+’ rating to corporate bonds issued by Banco de San Juan S.A., relates the Comision Nacional de Valores, Argentina’s securities regulator. The rating, based on the Company’s finances as of September 30 last year, denotes that the bonds possess some risk of nonpayment. The rating, issued last Wednesday, affects US$1 million worth of bonds, which the CNV described as “Serie 2 - Obligaciones Negociables Clase B - subordinadas”. The bonds were classified under “Series and/or Class”, with undisclosed maturity date. BANCO RIO: Anounces Rights Issue Results ---------------------------------------- Argentina’s Banco Rio de la Plata (BRIO.BA) concluded a rights issue, selling 89,115,505 new ordinary shares out of the 100 million shares offered, reports Dow Jones. Banco Rio, which is 99%-owned by Banco Santander Central Hispano SA (STD), told the Buenos Aires stock exchange that it has asked securities regulators to cancel authorization for the remaining 10,844,495 new shares that weren't purchased. The offer period for shareholders with a preferential right started Dec. 26 and ended Wednesday. Banco Santander will take on the new shares in lieu of payment on US$161 million the Argentine unit owes the Santander Group. The total amount raised from the rights issue is approximately ARS269 million out of a possible ARS301.8 million. CONTACT: BANCO RIO DE LA PLATA S.A. Bartolome Mitre 480 1036 Buenos Aires, Argentina Phone: +54-14-341-1081-1580 Fax: +54-14-341-1074-1084 Home Page: http://www.bancorio.com.ar Contacts: Ana Patricia B. S. de Sautuola y O'Shea, Chairman Jose L. E. Cristofani, Executive Vice Chairman and CEO Pablo Caride, Corporate Finance CAPEX: Fitch Rates $150M of Bonds ‘C(arg)’ ------------------------------------------ Fitch Argentina Calificadora de Riesgo S.A. assigned ‘junk’ ratings to corporate bonds issued by Argentine company Capex S.A., relates the Comision Nacional de Valores, the country’s securities regulator. The ‘C(arg)’ rating, issued on Wednesday, was based on the Company’s finances as of October 31, 2003. The rating applies to US$150 million of bonds called “Obligaciones negociables simples”. These are classified under “simple issue” and will come due on January 1, 2005. Fitch said that the rating assigned denotes an extremely weak credit risk relative to other issues in Argentina. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic conditions. COMPANIA ESTANCIAS: Court OK’s Reorganization Petition ------------------------------------------------------ Compania Estancias Pulmari Limitada S.A.I.A. will undergo reorganization after Buenos Aires Court No. 2 approved its motion for “Concurso Preventivo”. Argentine news portal Infobae indicates that Clerk No. 4 assists the court on the case. CORREO ARGENTINO: Appeals Court Suspends Bankruptcy Decision ------------------------------------------------------------ Argentina’s national postal concessionaire Correo Argentino SA won in its case to have its bankruptcy suspended, reports Dow Jones. Public service and infrastructure group Sideco Americana, which owns Correo Argentino, informed the Buenos Aires stock exchange Wednesday that the bankruptcy decision orginially handed down on December 16 has been suspended. In December, a judge declared Correo officially bankrupt. When it declared the bankruptcy, the judge also issued an order prohibiting company directors from leaving the country. However, it is not known whether this ruling was also suspended. In November, the government stripped Correo Argentino of its postal concession and assumed control of the service, saying it would re-privatize the Company within six months. On Wednesday, Sideco Americana said that Correo Argentino is "taking measures and formulating petitions" to recover administrative powers lost as a result of the bankruptcy and "regain control of decisions in relation to the same, including the defense of its rights and assets." CORREO ARGENTINO: Argentina Mulls Share Sale In May --------------------------------------------------- The Argentine government is considering a plan to open bidding for 20% of Correo Argentino's shares in May, with the remaining shares gradually floated on the stock exchange, says local business daily Ambito Financiero. The government would retain a golden share that would give the state veto power over company decisions, the reports says, adding that the new postal service operator won’t have to make regular payments to the government as Correo Argentino did in its contract. The government-appointed administrator running Correo Argentino, Eduardo Di Cola, said in a press conference last week that under state control, the postal service has increased production by an amount 10% above the Company's original budget projections while being able to reduce consumer costs on certain mail services. EUROMAYOR: Bonds Get Junk Ratings from Evaluadora Latinoamericana ----------------------------------------------------------------- Over US$7.4 million worth of corporate bonds issued by Argentine company Euromayor S.A. de Inversiones received less than investment grad ratings from local ratings agency Evaluadora Latinoamericana S.A. Calificadora de Riesgo last Wednesday. The affected bonds include some US$3.078 million worth of bonds called “Serie II Clase dólares”, and about US$4.42 million of “Serie II Clase pesos”. Both set of bonds are classified under “Series and/or Class”, and matured in June last year. The ratings agency said that the ‘C’ rating issued denotes that the bonds possess significant risk of nonpayment, based on the Company’s financial health as of October 31, 2003. LA CANTERA: Reorganization Ends in Bankruptcy --------------------------------------------- La Cantera S.A., which is based in the Argentine province of Santa Fe, entered bankruptcy on orders from Court No. 4 of the province’s Civil and Commercial Tribunal. According to local news portal Infobae, the Company was undergoing the reorganization process. The source, however, did not indicate the receiver’s name or the deadlines for the parts of the bankruptcy proceedings. CONTACT: La Cantera S.A. Colon 2037 Rosario, Santa Fe PLACIDO MARTINES: Court Orders Bankruptcy ----------------------------------------- Placido Martinez Sobrado S.A., which was undergoing reorganization, officially entered bankruptcy, reports Argentine news source Infobae. Buenos Aires Court No. 22 issued the bankruptcy order and assigned Mr. Juan Enrique Reinhardt as the Company’s receiver. Working with Clerk No. 44, the court set the schedule for the bankruptcy proceedings. The receiver will examine and authenticate creditors’ claims until April 1 this year. The individual reports, which contain the results of the verification process, must be submitted to the court on May 18, followed by the general report on June 30. The general report is a consolidation of the individual reports after these are processed at court. CONTACT: Juan Enrique Reinhardt Viamonte 1348 Buenos Aires SIDECO AMERICANA: Seeks Legal Approval For Debt Offer ----------------------------------------------------- Sideco Americana, the main asset of a consortium run by Argentine businessman Francisco Macri, continues to work on its debt restructuring options. In December, Sideco Americana announced that more than 90% of its creditors approved its proposal to restructure $125 million in debt through an out-of-court agreement known by its Spanish acronym as an APE. The deal now needs legal approval, after which the Company can impose the terms of the offer on all creditors. TC: To Undergo Reorganization on Court Orders --------------------------------------------- TC S.R.L., which is based in Santa Fe, will undergo reorganization on orders from Court No. 9 of the province’s Civil and Commercial Tribunal. Infobae relates that the Company was undergoing the bankruptcy process. Creditors must present their claims to the Company’s receiver, Mr. Angel Speranza, for verification. The receiver is also required to prepare the individual reports on the verification results. The court also requires the receiver to prepare a general report on the case, but the source did not mention the deadlines for these reports. CONTACT: TC S.R.L. Aristobulo Del Valle 8301 Santa Fe Angel Speranza Primera Junta 3052 Santa Fe TGN: Enargas Criticizes Poor Services ------------------------------------- Enargas, Argentina’s regulatory agency for the gas sector, named local gas transportation company TGN as one of the two companies, which present the most significant failures in complying with contract requirements, relates El Clarin. Enargas also said that TGN, and the other company Camuzzi Gas del Sur, have failed to provide their services in a responsible and safe way since 1993. Coincidently, of all the companies, which have appealed to Ciadi -the international center for the settlement of investment disputes - for arbitration in their case against the Argentinean government, CGS and TGN are the ones seeking the highest amount in compensatory damages caused by the devaluation of the peso against the US dollar and the tariff freeze. CGS is seeking more than US$600 million in damages from the government and TGN is seeking US$265 million. TGN is a natural gas transporter serving northern and central Argentina. It is 29.4% owned by US-based CMS and 70.4% by the Gasinvest consortium of France's TotalFinaElf (27.2%), Argentina's Compania General de Combustibles (27.2%), Argentina's Techint (27.2%), and Malaysia's state oil company Petronas (18.4%). CONTACT: TRANSPORTADORA DE GAS DEL NORTE (TGN) Don Bosco 3672, (C120ABF) Buenos Aires, Argentina Phone: (+54 11) 4959-2000 Fax: (+54 11) 4959-2242 Home Page: www.tgn.com.ar/ VENTMACA: Court Declares Company Bankrupt ----------------------------------------- Court No. 18 of the Civil and Commercial Tribunal of La Plata in Argentina declared local company Ventmaca S.R.L. “Quiebra”, reports Argentine news source Infobae. The Company will undergo the bankruptcy process with Mr. Fernando Daniel Agosta as receiver. The deadline for claims filing is March 10 this year. The Company’s receiver, who will verify claims, will prepare the individual reports, which are to be submitted to the court n May 12. The receiver will prepare the general report due on July 14, after the individual reports are processed at court. The Company’s assets will be liquidated at the end of the bankruptcy process to repay its creditors. Payment distribution will be based on the results of the credit verification process. CONTACT: Ventmaca S.R.L. Calle 34 No. 616 La Plata Fernando Daniel Agosta Calle 11 No. 467 La Plata =========== B R A Z I L =========== AES CORP.: Abandons Plan to Sell AES Sul ---------------------------------------- U.S.-based electric power company AES Corp. decided to scrap its plan to sell its Brazilian distribution unit AES Sul following futile attempts at attracting buyers for the unit since August of 2002, Valor Economico reported, citing the unit's new president, Eduardo Bernini. AES Corp., which recently restructured its US$1.2 billion debt with Brazilian development bank BNDES, now plans to reduce the unit's BRL1.85 billion (US$660 million) debt and extend the maturities on BRL220 million (US$78 million) worth of domestic bonds, Valor said. Then it intends to join AES Sul to Brasiliana Energia, a unit that was created as part of the U.S. company's agreement with BNDES, which owns 49.9% of it, the newspaper added. Furthermore, AES plans to invest BRL50.3 million (US$17.8 million) to expand AES Sul’s distribution network in the state of Rio Grande do Sul, the unit's director, Charles Lenzi, said. Most of the investment will be on increasing client numbers by 25,500, as well as replacing 18,000 posts, carrying out maintenance and building two transmission lines and one substation. AES Sul supplies power to over 990,400 clients in 116 cities in Rio Grande do Sul state. It was spun off from state power company CEEE in a partial privatization in 1997. BRASKEM: To Merge With Trikem S.A. ---------------------------------- Standard & Poor's Ratings Services said Thursday that the merger of Trikem S.A. (B+/Positive/--) into Braskem S.A. (local currency: BB-/Stable/--; foreign currency: B+/Positive/--; National Scale rating: brA/Stable/--) as approved by Braskem's and Trikem's Extraordinary General Assembly has no effect on the ratings assigned to Braskem, nor on the ratings on Braskem's domestic debentures. The rating analysis for Braskem has been based, since assignment, on Braskem's consolidated financial statements (which fully include Trikem's cash generation, debt, and liquidity). Likewise, the ratings on Braskem already factor all potential positive effects deriving from the merger (fiscal, administrative, and operating synergies). Upon the conclusion of the merger, the 'B+' foreign-currency corporate credit rating assigned to Trikem will be automatically withdrawn, and Braskem will become the legal successor of all Trikem's debt. ANALYST: Reginaldo Takara Sao Paulo Phone: (55) 11-5501-8932 COSIPA: Moody’s Assigns B2 to $150M Medium Term Notes ----------------------------------------------------- Approximately US$150 million of guaranteed medium term notes to be issued by Companhia Paulista (COSIPA) under a US$-500 million program were assigned a B2 foreign currency by Moody’s Investors Service. The notes have the benefit of an unconditional and irrevocable guarantee from Cosipa's parent company, Usinas Siderurgicas de Minas Gerais S.A. (USIMINAS). This is the first time that Moody's is rating an obligation issued by Cosipa or guaranteed by Usiminas, which together form the Usiminas System, one of the largest fully integrated steel manufacturers in Brazil and in Latin America. The rating outlook is stable. The B2 rating reflects the creditworthiness of the Usiminas System and additionally incorporates convertibility risk of the Brazilian Real, Moody’s said. As such, the rating is a function of the Company's underlying credit strength, the probability of a sovereign default implied by the Brazilian government's B2 foreign currency bond rating and the likelihood that, given a sovereign default, the government would impose a debt moratorium generally to companies domiciled in Brazil and specifically to debt issued by the Usiminas System. EMBRATEL: Expands Network Capacity, New Technology Added -------------------------------------------------------- Embratel, Brazil's leading network operator, has acquired the Tellabs 6300(R) managed SDH transport system, which supports Ethernet Private Networks and Ethernet Private Lines and will allow the carrier to provide differentiated voice and data services to its corporate customers. Adding Tellabs' 3rd- generation SDH (Synchronous Digital Hierarchy) with Layer 2 switching capabilities puts Embratel one step ahead of the competition with the most modern infrastructure in the country. Installation of Embratel's Ethernet-over-SDH solutions will initially comprise the Tellabs(R) 6350 switch node, which has become Tellabs fastest seller since its launch. It is the world's most dense digital cross-connect with 4/4/1 connectivity. The second phase will see the deployment of the Tellabs(R) 6345 switch node. The Tellabs' solutions will serve Embratel networks in Rio de Janeiro (RJ), Porto Alegre (RS), Curitiba (PR), Florianopolis (SC) and Sao Paulo the capital, as well as Sao Jose dos Campos, Campinas and Santos, Belo Horizonte (MG) and Brasilia (DF). "As Brazil's leading operator, Embratel values advanced technology that guarantees the operation of our networks with reliability and efficiency. The Tellabs 6300 series does just that, allowing us to support new profitable Ethernet services, while making greater operational and capital expenditure savings," said Rafael Alvarez, LAC vice president and general manager. The Tellabs 6300 Ethernet solution uses MPLS to provide a guaranteed Quality of Services (QoS) not available with standard Ethernet equipment. Instead of relying on simple Ethernet prioritisation mechanisms, the Tellabs 6300 series manages and guarantees the bandwidth delivery within a multipoint network for each data flow. Due to the Tellabs 6300 series advanced Layer 2 switching functionality, wide area Ethernet networks can be constructed with the same flexibility and scalability as smaller local area networks. "Network operators need to introduce new high-speed voice and data services to their customers today, and our solutions enable them to do this cost-effectively and efficiently," said Anders Gustafsson, president of Tellabs International. "Embratel will now be able to offer differentiated and highly flexible services such as Ethernet Private Networks or Ethernet Private Lines for applications, including Internet access, corporate intranets, voice over IP (VoIP) and video." Using MPLS, Embratel can offer flexible Service Level Agreements (SLAs) to corporate customers, separating the traffic of each. This flexibility allows superior scalability and security compared to virtual LAN network engines. It also provides a better usage of the network bandwidth than with TDM leased lines. With the transport network contributing Layer 2 switching, the number of physical interfaces between the transport network and its data customers is drastically reduced, also lowering the network's overall costs. By combining MPLS, QoS and a new protection scheme - Link Capacity Adjustment Scheme (LCAS) - Embratel is able to resize its capacity of links in the transport network at any time, with no impact on the traffic. Ethernet service bandwidth can be scaled instantly, according to needs. Further, LCAS offers more resiliency against network failures, doubling the efficiency by activating the redundant bandwidth reserved by traditional SDH protection. The Tellabs 6300 series is a 3rd-generation SDH-enabled product, allowing carriers to efficiently and profitably deliver data and voice through their existing transport platforms. The solution offers integrated data management, DWDM (Dense Wavelength Division Multiplexing) and SDH network management from a centralised platform, enabling simplified point-and-click operations in the entire network. The products increase the efficiency and reduce the costs of metro and regional networks. About Embratel Embratel is Brazil's leading telecommunications provider, offering a broad range of telecom services - local and long distance telephony, advanced voice, high speed data transmission, internet, data communication via satellites and corporate networks. The organisation is leader in data and internet services in the country and in an outstanding position to be the carrier with an end- to-end (all-distance) network in Latin America. Embratel's network has national coverage, with nearly 29 thousand kilometers of optical cables, representing around one million and sixty-nine thousand kilometers of optical fibers. For further information, contact the Advertising, Press and Public Relations Department by the telephones: (02121) 2121 7837/2121 6291 or mail cmsocial@embratel.net.br. About Tellabs Tellabs (Nasdaq: TLAB) provides innovative data switching and bandwidth management solutions to help carriers around the world move communications traffic efficiently, effectively and profitably. The world communicates through Tellabs™; more than two-thirds of telephone calls and Internet sessions in several countries, including the United States, flow through Tellabs equipment. Tellabs customers include many of the world's largest and strongest carriers. Tellabs experts design, develop, deploy and support our solutions throughout telecommunications networks in more than 100 countries. Tellabs has a presence in Brazil since 1996 and lists among its customers important fixed and mobile telephony carriers such as: Brasil Telecom, Embratel, Telefonica, Telemar and others. Tellabs recently launched the future-proof 8600 and 8800 solutions, which offer cost-effective high-speed IP/MPLS based connectivity services and applications. Embratel intends to test these Tellabs products as part of their agreement with Tellabs. MRS LOGISTICA: Outlook Upgraded to Stable From Negative ------------------------------------------------------- Standard & Poor's Ratings Services said Thursday that it affirmed its 'BB-' local-currency and its 'B+' foreign-currency corporate credit ratings on Brazilian railroad MRS Logística S.A. The local currency corporate credit rating outlook was changed to stable from negative. The foreign currency corporate credit rating outlook remains positive. The outlook change on the local currency global scale rating reflects MRS' improving credit ratios in 2003 and Standard & Poor's expectations that the company's strengthening cash generation will allow it not only to reduce debt balances in the medium term, but also finance a substantial portion of capital expenditures programmed for the years ahead. Prospects for iron ore transportation, MRS' main cargo, remain strong for 2004 due to increasing exports to China. Additionally, improving domestic market fundamentals should help MRS increase and diversify traffic and cargo in coming years. Refinancing risks are also fairly mitigated by the company's current strong liquidity and the improving conditions in the Brazilian financial and bank debt markets. "The ratings on MRS reflect the freight rail transportation company's high financial leverage and a weak, though improving, capital structure. These factors are partly offset by a favorable tariff model agreed on with its main captive clients, allowing MRS to pass cost increases on to customers and thereby maintain stable margins and sound cash generation to service debt," said Standard & Poor's credit analyst Reginaldo Takara. Additionally, the company has been continually improving its operating efficiency through cost reductions (in fuel consumption, operating cycle, and general expenses) and volume increases. MRS benefits from a 22-year concession to be the exclusive rail transportation provider, servicing several world- class iron ore exporters and steel makers in the region (some of which are also captive customers and shareholders in the company). MRS reported very strong operational results in 2003. The company transported a record 86.2 million tons last year (up 15.8% when compared with 2002's 74.4 million tons), thanks to higher iron ore export transportation from Minerações Brasileiras Reunidas S.A. (MBR; an indirect subsidiary of iron ore giant Companhia Vale do Rio Doce [CVRD], and one of MRS' shareholders), increasing iron ore and steel products transportation to MRS' steel clients, and remarkable growth in profitable general cargoes. The railroad has also been gaining market share in the transportation of soybean exports, benefiting from its strategic positioning as the core access to ports in the state of Rio de Janeiro. New contracts in market pulp, chemicals, and steel are recent positives whose gains will be entirely noticeable in 2004. Despite product diversification efforts, iron ore should remain MRS' main and captive cargo, accounting for 67% of the total cargo moved by the railroad in 2003, sustaining the company's fairly protected market position, as competition for this captive cargo is especially small. The railroad company has consistently reported improving coverage ratios and cash-flow protection measures, essentially due to the strengthening of its cash-flow fundamentals. Standard & Poor's believes that the bulk of the operating profitability gain gathered by the company in 2002 and 2003 will be preserved in the years ahead, as it derives from the strategy outlined by MRS with its shareholders, and is based on a long-term tariff agreement with its captive customers. This agreement has compensated MRS not only for fuel cost increases, but also other expenses, including incremental financial burden due to the currency depreciation. The stable local currency rating outlook reflects Standard & Poor's expectations that MRS' strong business fundamentals will allow the company to sustain strong cash flow, which is key for it to compensate for its relatively high leverage and keep comfortably servicing its debt. The stable outlook also factors more favorable domestic market conditions in Brazil, which should also benefit the company's overall business profile. The positive foreign currency outlook reflects that of the foreign currency sovereign rating of the Federative Republic of Brazil. ANALYST: Reginaldo Takara Sao Paulo Phone: (55) 11-5501-8932 Milena Zaniboni Sao Paulo Phone: (55) 11-5501-8945 PARMALAT BRAZIL: Flour Mill Cuts Off Supplies --------------------------------------------- Moinho Pacifico Industria e Comercio, a flour mill based in Santos, Brazil, stopped shipments of wheat flour to the Sao Paulo unit of Parmalat, Italy's largest food company, reports Bloomberg News. The suspension of supplies came after the Parmalat unit failed to make payments since December 15. The unit has struggled to pay banks and suppliers after its controlling company filed for protection from creditors last month. The back payments are a bad sign for banks such as Citigroup Inc. and Bank of America Corp., which are owed about US$450 million from the Parmalat unit, a person familiar with the matter said. “No doubt it will reduce chances of banks getting their money back,” Rafael Guedes, managing director for Fitch Ratings in Sao Paulo. “The risk is that more companies will stop supplying Parmalat.” In all, Parmalat in Brazil owes US$1.5 billion to bondholders, banks and suppliers, including thousands of dairy farmers. ========= C H I L E ========= UNIMARC/INDUSTRIA FORESTAL: Facing Involuntary Bankruptcy --------------------------------------------------------- Brazilian state-owned bank Banco do Brasil filed a bankruptcy lawsuit against Chilean supermarket chain Unimarc, and Chilean forestry company Industria Forestal Nacional, reports El Mercurio. The legal action came as a surprise to the companies’ owner, Chilean businessman Javier Errazuriz, who claimed that he had negotiated a deal with the bank to pay off Unimarc's expired debt. The amount of debt involved in the bankruptcy lawsuit wasn’t revealed in the report. =============== C O L O M B I A =============== CODAD: S&P Affirms ‘BB’ Rating, Stable Outlook ---------------------------------------------- Standard & Poor's Ratings Services said Thursday that it affirmed its 'BB' rating on Compania de Desarrollo Aeropuerto Eldorado S.A.'s (CODAD) US$116 million 10.19% notes due 2011. The stable outlook reflects the outlook assigned to the Republic of Colombia. The outlook also reflects the fact that CODAD currently is dependent on the minimum revenue guarantee from AEROCIVIL to service debt. "Given the limited liquidity of funds set aside, we remain somewhat concerned about the possibility of delays in timing under the guarantee," said Standard & Poor's credit analyst David Gonzalez. "Further declines in landings or evidence that AEROCIVIL may be distancing itself from its guarantee—an action which, to date, has not arisen--could result in a downgrade," added Mr. Gonzalez. CODAD is a special-purpose corporation, which was awarded a concession contract by the Republic of Colombia governmental unit AEROCIVIL, the operator of Colombian airports and the nation's equivalent to the U.S. FAA. The contract obliged CODAD to build a second runway, which opened in June 1998, at the Eldorado airport in Bogotá and maintain both runways through the end of the concession contract in 2015. In return, CODAD collects all landing fees through 2015. Landing fees, as well as minimum revenue guarantee payments from AEROCIVIL, secure the bonds. ANALYST: David Gonzalez Mexico City Phone: (52) 55-5279-2062 Santiago Carniado Mexico City Phone: (52) 55-5279-2013 ============= J A M A I C A ============= AIR JAMAICA: Auditor General Reports Divestment Discrepancy ----------------------------------------------------------- Jamaica’s Auditor-General revealed in a report to Parliament that he has uncovered a discrepancy concerning the divestment of the former Trans-Jamaica Airline. The discovery, according to a RadioJamaica report, came nearly seven years after the divestment. The Auditor-General’s report relates that in November 1997, the Government sold 80% of its holding in Trans-Jamaica Airline to Air Jamaica Express for $30 million. Under the agreement, the Government was to have been allotted 20% or 10 million ordinary shares of the new company. However, the Auditor-General says information he has received shows that only 16.6% or 8.2 million shares were allocated to the Government. The Auditor-General is now seeking explanation for the outstanding 1.7 million shares from the Accountant-General's Department. =========== M E X I C O =========== CFE: Delays Bidding Deadline For Mexicali II Project ---------------------------------------------------- Companies interested in making a bid for Mexico’s state power company CFE’s Mexicali II thermo/solar project have been given more time to study changes to the bidding rules, reports Business News Americas. A source connected to the project said that the January 21 bidding deadline has been postponed to June 30. The delay is designed to give interested companies more time to study the revised bidding rules. The revisions address how the winning bidder can sell excess power after meeting the requirements of its contract with the CFE. "The original bidding rules did not consider the option of having excess power in the plant and there were some companies that asked us to include clauses to consider this option," the source said. The project will generate 216-264MW combined cycle power and will have an optional 25MW solar unit. The World Bank's Global Environmental Facility (GEF) will grant the contractor US$50mn through a trust fund for the solar unit. Fund from the GEF for the solar unit should still be available despite the delay, the source said. The winning bidder will need to sign a gas supply contract for the plant in the US or locally in Mexico. Bidding rules are now available through June 24 and the CFE will open economic bids on August 14, the source said. Commercial operations are scheduled to begin in 2007. According to Business News Americas, the CFE will buy Mexicali II power under the terms of a 25-year power purchase agreement. The cost of the plant, excluding the solar unit, is expected to be some US$150 million. SATMEX: Launching New Programming Catering to U.S. Hispanics ------------------------------------------------------------ Satmex, a Mexican satellite firm, will introduce a new programming service aimed at the booming U.S. Hispanic market, reports Reuters. Satmex has picked 10 Latin American television channels to bundle into a single package under Satmex Maximo, a commercial alliance with Crawford Satellite Services. According to Satmex Vice President Arturo Gonzalez-Arquieta, the new program is expected to bring in more than US$20 million in revenue in five years. By 2009, the Company sees total annual sales of about US$140 million, the executive said. Satmex, which is 49% owned by Loral Space & Communications Ltd., is in the middle of restructuring its debt. It has US$525 million in high-yield bonds and floating rate notes maturing this year. The Company has delayed the launch of its new satellite, Satmex 6, until the second quarter and one of its satellites in orbit recently faced some operational problems. ======= P E R U ======= EMBONOR: Agrees to Sell Peruvian Unit to JRL -------------------------------------------- Peruvian soda company Corporacion Jose R. Lindley (JRL) confirmed Wednesday that it will go ahead with the purchase of ELSA, the Peruvian subsidiary of Chilean bottler Coca-Cola Embonor. "After long negotiations with Coca-Cola Embonor to buy its whole stake in Embotelladora Latinoamericana SA (ELSA) , we have signed a business deal today ... in Santiago de Chile," JRL said Wednesday in a letter to the Peruvian stock exchange. The deal is worth US$0.255310 per common share and $0.107032 per investment share. Both parties have until January 28 to sign a definitive contract for the deal. Embonor's general director Andres Vicuna has denied rumors that the company decided to withdraw from Peru because of ELSA's debt. The proceeds from the sale, however, will be used to reduce Embonor's US$295-million debt. ELSA bottles Coca-Cola, among other beverages. ===================== P U E R T O R I C O ===================== CENTENNIAL COMMUNICATIONS: Announces New Credit Facility -------------------------------------------------------- Centennial Communications Corp. (NASDAQ: CYCL) ("Centennial") announced Thursday that it has received a commitment for a new $750 million senior secured credit facility, consisting of a $600 million, seven-year term loan maturing in 2011 and a $150 million, six-year revolving credit facility maturing in 2010. In addition, Centennial announced Thursday its intention to sell, subject to market conditions, approximately $250 million in aggregate principal amount of senior notes due 2014 in a private placement pursuant to Rule 144A and Regulation S of the Securities Act of 1933. Term loan borrowings under the new senior secured credit facility, together with proceeds of the proposed senior notes offering, will be used to: - refinance and replace the Company's existing secured credit facilities, which have an outstanding principal balance of approximately $628 million as of November 30, 2003; - fund the repurchase of all of the Company's outstanding unsecured subordinated notes due 2009 (the "Mezzanine Debt"), which are currently accruing paid-in-kind interest at a rate of 13.0%. At November 30, 2003, the outstanding principal amount, including unaccreted value of the equity portion of the Mezzanine Debt, was approximately $194 million; and - pay related fees and expenses. Completion of each of the new senior secured credit facility and the senior notes offering is conditioned on the closing of the other transaction and is expected in early February. Each transaction is subject to customary closing conditions. There can be no assurance that either the new senior secured credit facility or the senior notes offering will be consummated as planned, or at all. The senior notes anticipated to be offered and sold will not be registered under the Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent registration under, or an applicable exemption from, the registration requirements of the Securities Act of 1933 and applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the senior notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under applicable securities laws, or absent the availability of an exemption from such registration or qualification requirements. About Centennial Centennial is one of the largest independent wireless telecommunications service providers in the United States and the Caribbean with approximately 17.3 million Net Pops and approximately 997,200 wireless subscribers. Centennial's U.S. operations have approximately 6.1 million Net Pops in small cities and rural areas. Centennial's Caribbean integrated communications operation owns and operates wireless licenses for approximately 11.2 million Net Pops in Puerto Rico, the Dominican Republic and the U.S. Virgin Islands, and provides voice, data, video and Internet services on broadband networks in the region. Welsh, Carson Anderson & Stowe and an affiliate of the Blackstone Group are controlling shareholders of Centennial. CONTACT: CENTENNIAL COMMUNICATIONS CORP. Eric S. Weinstein 732-556-2220 ================= V E N E Z U E L A ================= PDVSA: Restarts El Palito Refinery Following 60-Day Shutdown ------------------------------------------------------------ Venezuela state oil company Petroleos de Venezuela SA (PDVSA) restarted the 130,000-barrels/day El Palito refinery following a scheduled shutdown for maintenance which lasted for 60 days, reports Dow Jones. PDVSA first shut the refinery on November 17 for its largest overhaul since 1997. According to a spokesman, the refinery, which mostly services domestic fuel needs, and produces around 60,000 barrels a day in gasoline, is expected to be back at full capacity within the next 10 days. In the meantime, Business News Americas reports that the western division of PDVSA will sign a VEB10-billion (US$6.25 million) contract Friday, Jan. 16, with state-owned shipbuilder Dianca for conditioning work on the GP-24 barge. Dianca will carry out the work, which will take four months, in association with nine co-operatives and various contractors, PDVSA said in a statement. SIDOR: Aims to Up Production to 3.4Mt This Year ----------------------------------------------- Sidor, Venezuela's largest steelmaker, aims to produce 3.4Mt of steel this year and export 2.3Mt, or 67% of that production, reports Business News Americas. Those figures, however, depend on gas supplies, which are expected to be normal, according to Sidor commercial director Julian Eguren. "We shouldn't have any problems [with the gas supply] and we aren't having any problems," Mr. Eguren said. While Sidor had reached an output limit, meaning it was unable to venture into new markets, Eguren underscored that the Company was currently interested in consolidating its most important markets, which are the countries of the Andean trade pact, particularly Colombia, Ecuador and Peru. Other important markets for Sidor include Central America and the Caribbean as well as the countries of the North American Free Trade Agreement (NAFTA), namely the United States, Canada and Mexico. Sidor is based in Puerto Ordaz city in the Guayana region and is 60%-owned by the Amazonia consortium. Amazonia is made up of Mexican companies Hylsamex (Alfa group) and Tamsa (Techint group), Argentine company Siderar (Techint group), Brazil's Usiminas and Venezuela's Sivensa. The remaining 40% is owned by the Venezuelan state. CONTACT: SIDERURGICA DEL ORINOCO, C.A. (SIDOR) Edificio General, Piso 9 Avda. La Estancia Chuao, Caracas 1060 Venezuela Tel: (582) 902 3800/3917/3955 Fax: (582) 993 2930 Home Page: www.sidor.com.ve/ *********** 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 2004. 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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