/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040308.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, March 8, 2004, Vol. 5, Issue 47 Headlines A R G E N T I N A ADSUM: Files "Concurso Preventivo" Motion in Court AIMARETTI VISINTINI: Court Approves Reorganization Petition BAIDAL: Receiver to File General Report Today BANCO HIPOTECARIO: S&P Upgrades Securities Rating to `CCC' CLINICA MODELO: Court Studies Reorganization Motion CONSTRUCTORA MARTE: Credit Verification Process Ends Today DE LA TORRE: General Report Filing Deadline Today DISCO: De Narvaez Balks at Bid ESTABLICIMIENTO SAN IGNACIO: Credit Verification Period Ends ESTADIO: Court Sets Schedule for Bankruptcy Proceedings JM PRODUCCCIONES: Court Declares Company Bankrupt LA MODERNA: Enters Bankruptcy on Court Orders LA PASKANA: Court Approves Creditor's Bankruptcy Petition LAKAR: Court Assigns Receiver To Oversee Bankruptcy METAL CATAN: Enters Bankruptcy on Court Orders NOVOA HERMANOS: Bankruptcy Credit Review Ends PROFUNDO: Receiver Closes Credit Check for Bankruptcy PUDELKO: Court Declares Company Bankrupt RESIMAR: Credit Reorganization Review Ends Today SICOMPRRA: General Report Due in Court Today SUSPENSORES: Credit Review for Bankruptcy Ends June 30 B E R M U D A GLOBAL CROSSING: Qwest Wants $500K Administrative Claim Payment B R A Z I L AMBEV: S&P Places Corporate Credit Ratings on CreditWatch Pos. CERJ/LIGHT/TELEMAR: Sign Agreement to Improve Local Services USIMINAS: Net Sales Revenues Grow 31% In 2003 C H I L E AES GENER: Moody's Assigns Ba3 To Proposed $300M Bond Issuance PARMALAT CHILE: Has 90 Days To Skirt Bankruptcy PARMALAT CHILE: Suppliers Demand Payment For Deliveries M E X I C O AHMSA: Authorities Order Arrest of CEO, Chairman GRUPO IUSACELL: INSCI to Provide Content Management Solution V E N E Z U E L A PDVSA: Lacks Political Influence To Launch Another Strike - - - - - - - - ================= A R G E N T I N A ================= ADSUM: Files "Concurso Preventivo" Motion in Court -------------------------------------------------- Adsum S.R.L., based in Buenos Aires, seeks court permission to undergo reorganization. Infobae relates that the Company has submitted its motion for "Concurso Preventivo" at the city's Court No. 3. Clerk No. 5 works with the court on the case. CONTACT: Adsum S.R.L. Malabia 2174 Buenos Aires AIMARETTI VISINTINI: Court Approves Reorganization Petition ----------------------------------------------------------- Court No. 4 of the Civil and Commercial Tribunal of Cordoba in Argentine approved a motion for "Concurso Preventivo" filed by local Aimaretti Visintini S.R.L., reports Infobae. Creditors have until March 15 to present their proofs of claim for verification. CONTACT: Aimeretti Visintini S.R.L. Obispo Salguero 447 Buenos Aires BAIDAL: Receiver to File General Report Today --------------------------------------------- Mr. Mario Rafael Cabrosi, receiver for Baidal S.A., must submit the general report to Buenos Aires Court No. 19 today. The report is a consolidation of the individual reports after these are processed in court. The Company's assets will be liquidated at the end of the process to reimburse its creditors. Those who failed to have their claims validated by the receiver would be disqualified from any payments the Company would make. CONTACT: Baidal S.A. Pedro Goyena 1555 Buenos Aires Mario Rafael Cabrosi Uruguay 390 Buenos Aires BANCO HIPOTECARIO: S&P Upgrades Securities Rating to `CCC' ---------------------------------------------------------- Standard & Poor' s Ratings Services upgraded its rating on the securities issued by Banco Hipotecario S.A. (BH) to 'CCC+' from 'CCC' as a result of the debt exchange completed by the bank last January, including its ?277.3 million long-term notes due 2013, $448.2 million long-term notes due 2013, and $298.7 million guaranteed notes due 2010. At the same time, the new securities were assigned a 'raBBB-' in the Argentine national scale rating. The original securities that were subject to the debt exchange, although reduced to a small 3% of the bank's total liabilities, remain in default, as a result of which BH's counterparty credit rating will be maintained in 'SD' (selective default) until the bank successfully implements a strategy to materially resolve the situation of this unsettled debt. "The upgrade reflects the significant improvement in the institution's financial profile following the completion of its debt restructuring, which allowed BH to reduce its total debt burden and to extend maturities, significantly improving the institution's overall financial profile, with key progress attained in terms of margins and solvency," said Standard & Poor's credit analyst Carina Lopez. Other positive factors include the bank's achievements in cost reductions and its improving asset quality trend, as a result of which BH's private loan portfolio currently shows the lowest nonperforming figures among major banks in Argentina. The rating also indicates that the institution's creditworthiness will be conditioned by the still-uncertain operating environment in Argentina and the bank's exposure to the sovereign's creditworthiness-originated mostly by the government bonds received as compensation for the pesification, as is the case with the rest of the financial system. Prior to the Argentine financial crisis, the bank was the leader in the individual residential mortgage loans segment, with a total portfolio of more than $4 billion, and a market share of around 40%. BH is one of the financial institutions that suffered the most from the measures taken by the Argentine government at the beginning of 2002. The compulsory pesification of the loans in the bank's asset book created havoc on BH's ability to pay down its cross-border, hard currency-denominated debt, which forced the bank to restructure its debt. Despite the significant challenges it implied, the debt exchange was successfully completed last January. ANALYST: Carina Lopez Buenos Aires Phone: (54) 11-4891-2118 CLINICA MODELO: Court Studies Reorganization Motion --------------------------------------------------- Buenos Aires Court NO. 18 is studying a petition for "Concurso Preventivo" filed by local company Clinica Modelo Laferrere S.A. recently. Clerk No. 36 works with the court on the case. The Company will undergo reorganization if the court approves its submitted motion. CONTACT: Clinica Modelo Laferrere S.A. Desaguero 3535 Buenos Aires CONSTRUCTORA MARTE: Credit Verification Process Ends Today ---------------------------------------------------------- The deadline for credit verification for the bankruptcy of Constructora Marte S.A.I.C.I.F. y M. expires today. The Company's receiver, Beatriz Colucci, will prepare the individual reports on orders from Judge Garibotto. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. CONTACT: Constructora Marte S.A.I.C.I.F. y M. Emilio Rvignani 1470 Buenos Aires Beatriz Colucci Eduardo Acevedo 217 Buenos Aires DE LA TORRE: General Report Filing Deadline Today ------------------------------------------------- Buenos Aires Court No. 22 ordered the receiver for bankrupt Argentine company De La Torre S.A. to file the general report today. This report is a consolidation of the individual reports, which contained the results of the credit verification process completed late last year. The receiver, Buenos Aires accountant Ruben Eduardo Calcagno, examined creditors' claims to ascertain the nature and amount of the Company's debts. CONTACT: Ruben Eduardo Calcagno Rodriguez Pena 431 Buenos Aires DISCO: De Narvaez Balks at Bid ------------------------------ Royal Ahold, the Dutch retailer plagued by accounting fraud last year, can't seem to find a buyer for its Argentine supermarket chain Disco. On Thursday, Argentine businessman Francisco de Narvaez said that after long and fruitless negotiations with the Dutch company Ahold, he decided to withdraw his bid to buy the supermarket chain. "We are withdrawing our offer because we have received no concrete response and understand the offer was being used to raise that of a competitor, which does not seem like fair play to us," said Fabian Papini, who was spearheading the operation for De Narvaez. Papini said Ahold had said it was about to close a deal with Chilean retailer Cencosud. Ahold said in January that exclusive talks over Disco's sale to French retailer Casino Guichard Perrachon and De Narvaez had ended. The Dutch group then said it was still in talks with other interested parties, but a spokesman declined to identify them. Analysts said outstanding legal claims related to Disco were likely to have been the main obstacle to reaching a deal at the time. De Narvaez, who ran a supermarket chain in the past, previously estimated Disco to be worth around US$350 million, but details of his offer were not disclosed. ESTABLICIMIENTO SAN IGNACIO: Credit Verification Period Ends ------------------------------------------------------------ The credit verification period for the reorganization of Establicimiento San Ignacio S.A. ends today. The Company's receiver, Mr. Ismael Elbio Ybarra, will prepare the individual reports based on the verification results. The informative assembly, one of the last parts of the reorganization process, will be held on November 23, according to the Troubled Company Reporter - Latin America. CONTACT: Establicimiento San Ignacio S.A. Irigoyen 827 Corrientes Ismael Elbio Ybarra Belgrano 1068 Corrientes ESTADIO: Court Sets Schedule for Bankruptcy Proceedings ------------------------------------------------------- The individual reports for the bankruptcy of Estadio S.R.L. must be submitted to Buenos Aires Court No. 24 on May 24. The court also ordered the receiver to file the general report on July 7. Earlier, the court declared the Company bankrupt and assigned Mr. Isaac Jospe as receiver. Creditors must present their claims for verification before April 12. CONTACT: Isaac Jospe JE Uriburu 1054 Buenos Aires JM PRODUCCCIONES: Court Declares Company Bankrupt ------------------------------------------------- Judge Fernandez of Buenos Aires Court No. 19 declared local catering company JM Producciones S.R.L. bankrupt, according to a report by local newspaper La Nacion. The ruling comes in approval of a petition filed by the Company's creditor, Interplatina S.A., for nonpayment of debt. Argentine accountant Irma Aguilera, the appointed receiver, will examine and authenticate creditors' claims until June 25. The receiver will also prepare the individual and general reports on the bankruptcy proceedings. CONTACT: JM Producciones S.R.L. San Jose de Calazans 1730 Buenos Aires Irma Aguilera Luis Saenz Pena 1690 Buenos Aires LA MODERNA: Enters Bankruptcy on Court Orders --------------------------------------------- Court No. 3 of San Francisco in Cordoba declared local company La Moderna S.R.L. bankrupt. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. The Company's receiver, Mr. Javier de Franceschi, will verify creditors' claims until March 11. The receiver will prepare the individual reports on the verification results and submit these to the court on April 29. The general report is due at court on June 15. CONTACT: La Moderna S.R.L. Urquiza 339 Las Varillas, Cordoba Javier de Franceschi Iturraspe 1945 San Francisco, Cordoba LA PASKANA: Court Approves Creditor's Bankruptcy Petition --------------------------------------------------------- Down Foods International S.R.L. successfully sought the bankruptcy of fellow Argentine-based La Paskana S.R.L. after Buenos Aires Court No. 24 declared the latter "Quiebra". La Nacion relates that Judge Ballerini and Clerk No. 48, Dr. Diaz, handle the Company's case. The Company's receiver, Mr. Eduardo Echaide, will authenticate creditors' claims until April 21. Proofs of claim are examined to determine the nature and amount of the Company's debts. CONTACT: La Paskana S.R.L. Mendez de Andes 769 Buenos Aires Eduardo Echaide Sanchez de Loria 155 Buenos Aires LAKAR: Court Assigns Receiver To Oversee Bankruptcy --------------------------------------------------- Buenos Aires Court No. 6 assigned Mr. Ruben Eduardo Suez as receiver for the bankruptcy of local company Lakar S.A., relates local news portal Infobae. The receiver will examine and authenticate claims until May 3. The court ordered the receiver to file the individual reports based on the verification results on June 17, followed by the general report on August 13. The general report is prepared after the individual reports are processed in court. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. CONTACT: Ruben Eduardo Suez General Cesar Diaz 2324 Buenos Aires METAL CATAN: Enters Bankruptcy on Court Orders ---------------------------------------------- Metal Catan S.A., which was undergoing reorganization, entered bankruptcy on orders from Buenos Aires Court No. 6. Infobae relates that the credit verification process will be conducted "por via incidental". The Company's receiver is Mr. Roberto Boffa, a local accountant. CONTACT: Roberto Boffa Uruguay 390 Buenos Aires NOVOA HERMANOS: Bankruptcy Credit Review Ends --------------------------------------------- The credit verification period for the bankruptcy of Novoa Hermanos S.A. ends today. The receiver will then prepare the individual reports based on the results of verification process, and submit these reports to the court on April 22. After these reports are processed in court, the receiver will prepare the general report and submit it to the court June 30. CONTACT: Maria Cenatiempo Avenida de Mayo 1365 Buenos Aires PROFUNDO: Receiver Closes Credit Check for Bankruptcy ----------------------------------------------------- Mr. Gustavo Scumparin, receiver for Profundo S.A., will close the credit verification process today. Insolvency Judge Ojea Quintana of Buenos Aires Court No. 12 ordered the receiver to prepare the individual reports. Dr. Perea, Clerk No. 23, assists the court on the case. CONTACT: Profundo S.A. Baez 292 Buenos Aires Guztavo Scumparin Ave Cordoba 1412 Buenos Aires PUDELKO: Court Declares Company Bankrupt ---------------------------------------- Buenos Aires Court No. 6 declared local company Pudelko S.R.L. bankrupt, reports Infobae. The Company was undergoing reorganization when the ruling was issued. The receiver, Mr. Luis Rolando Bendedossi, will verify claims "por via incidental", as the court ordered. The receiver will also be responsible for the individual and general reports. CONTACT: Luis Rolando Benedossi Maipu 812 Buenos Aires RESIMAR: Reorganization Credit Review Ends Today ------------------------------------------------ Creditors of Resimar S.R.L. must present their claims to the Company's receiver Mr. Alfredo Fernandez Alvide, as the deadline for verifications expires today. The receiver will prepare the individual reports, to be submitted to the court April 5. After these are processed at court, the receiver will consolidate these reports into a general report due for filing May 17. The informative assembly will be on September 27. CONTACT: Resimar S.R.L. Calle 1004 Esq. 1005 Banquina del Puerto Mar del Plata Alfredo Fernandez Alvide Avenida Luro 3894 Mar del Plata SICOMPRRA: General Report Due in Court Today -------------------------------------------- The general report on the bankruptcy of Buenos Aires' Sicompra S.A. is due for filing today. The city's Court No. 16 ordered the receiver to prepare the report after it processed the individual reports containing the results of the credit verification process. The Company's assets will be liquidated at the end of the bankruptcy process. Proceeds will be used to reimburse its creditors. CONTACT: Elsa Taborcias C Pellegrini 1063 Buenos Aires SUSPENSORES: Bankruptcy Credit Review Ends June 30 --------------------------------------------------- Creditors of Argentine Suspensores S.R.L. must present their claims to the receiver, Mr. Abraham Elias Gutt, before June 30 for verification. The receiver will examine and authenticate claims to ascertain the nature and amount of the Company's debts. Buenos Aires Court No. 21 ordered the receiver to file the individual reports on August 31, and the general report on October 14. The general report is a consolidation of the individual reports, which contain the results of the credit verification process. CONTACT: Abraham Elias Gutt Tucuman 1484 Buenos Aires ============= B E R M U D A ============= GLOBAL CROSSING: Qwest Wants $500K Administrative Claim Payment --------------------------------------------------------------- Qwest Corporation is a provider of telecommunication services to the GX Debtors. According to David J. Mark, Esq., at Holland & Knight LLP, the Global Crossing Debtors have failed to pay certain administrative claims relating to dial-around compensation as mandated by orders of the Federal Communications Commission. Dial-around compensation is intended to provide compensation to the owner or operator of pay telephones whose telephones are used to generate revenue to a third party, such as Global Crossing, by the use of "800" numbers, calling cards and the like, that enable a consumer to use a pay telephone without directly paying for its use. Qwest believes that these amounts are due from the Debtors since the Petition Date: Year Quarter Amounts Due Payment Received Balance ---- ------- ----------- ---------------- ------- 2002 2 $335,986 $239,418 $96,568 2002 3 427,050 305,847 121,203 2002 4 430,589 287,125 143,464 2003 1 348,994 271,024 77,970 2003 2 458,790 333,551 125,239 ----- ----------- ---------------- ------- Total $2,001,410 $1,436,966 $564,444 Mr. Mark explains that the services provided by Qwest constitute administrative expenses by virtue of the utility orders entered by the Court in the Debtors' Chapter 11 cases. On the Petition Date, the Court entered an order pursuant to Sections 105(a) and 356(b) of the Bankruptcy Code authorizing the Debtors to provide adequate assurance to utility companies. The First Day Utility Order specifically includes Qwest as a utility company. On March 15, 2002, the Court entered an order pursuant to Sections 105(a) and 362(b) of the Bankruptcy Code deeming the Utility Companies adequately assured of future performance. The Utility Order also includes Qwest within its scope. Both the First Day Utility Order and the Utility Order compel Qwest to continue providing telecommunication services to the Debtors. In return, the Orders provide that Qwest will have an administrative claim and a priority claim under Sections 503(b) and 507(a)(1) for any unpaid postpetition utility charges. Qwest's services have already been deemed by the Court to constitute actual and necessary expenses of the Debtors' estates and, therefore, constitute administrative priority claims. Thus, Qwest asks the Court to compel the Debtors to immediately pay the amounts due with regard to its administrative expense claims. (Global Crossing Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) =========== B R A Z I L =========== AMBEV: S&P Places Corporate Credit Ratings on CreditWatch Pos. -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' foreign currency and 'BBB-' local currency corporate credit ratings on AmBev-Companhia de Bebidas das Am�ricas (AmBev) on CreditWatch with positive implications. The CreditWatch listing follows Brazil-based AmBev and Belgium-based Interbrew's (not rated) announcement on March 3, 2004, that they reached an agreement to combine their operations to form InterbrewAmBev (InterBev). The 'BBB-' rating on the political risk insured bonds issued by AmBev that are due in 2011 and 2013 are also placed on CreditWatch with positive implications. "The CreditWatch placement reflects the overall benefits AmBev is likely to enjoy as a result of this transaction, which include increased geographic and portfolio diversification, entrance in less volatile markets such as Canada and the U.S., gains stemmed from expected economies of scale and enhanced production efficiency, and cross-licensing of its brands through Interbrew's network, among others," said Standard & Poor's credit analyst Jean-Pierre Cote Gil. The transaction should allow AmBev to be less dependent on the more volatile Brazilian market, which has been one of the major constraints to the ratings on AmBev. On the other hand, AmBev will also face the challenges of integrating the North American operations, collecting synergies, and operating in more mature, lower-margin markets, with a distinct competitive environment. The deal will involve a swap of assets and shares, with no cash disbursement from either company. As the deal is concluded, InterBev will hold 100% of BRACO S.A., the Brazilian entity that controls AmBev through its 53% voting participation in the company. Moreover, Interbrew operations in North America (Labatt) will be transferred to AmBev; therefore, AmBev will be in charge of all InterBev's operations in the Americas (approximately 53% of EBITDA contribution to the whole group according to pro-forma 2003 figures). The incorporation of Labatt by AmBev will bring cash flows (about $600 million EBITDA in 2003), but also an additional $1.5 billion of debt. The CreditWatch is expected to be resolved as soon as Standard & Poor's meets with the new group management team to evaluate the business and financial strategies (in particular AmBev's role in InterBev's overall business plan and the impact of the incorporation of Labatt's debt and cash flow from now on), as well as expectations for future performance and capital structure. ANALYSTS: Jean-Pierre Cote Gil, Sao Paulo (55) 11-5501-8946 Milena Zaniboni, Sao Paulo (55) 11-5501-8945 Diane Audino, New York (1) 212-438-2388 CERJ/LIGHT/TELEMAR: Sign Agreement to Improve Local Services ------------------------------------------------------------ Brazilian telecommunications company Telemar has reached an agreement with Rio de Janeiro power distributors Cerj and Light to coordinate client support, repairs, maintenance and security operations. In a joint statement, Light and Telemar said that the cooperation will allow a reduction of power outages caused by accidents, slash network interference and allow the companies to plan joint repair, maintenance and network upgrading operations. They will also inspect the network together to prevent theft and fraud, the statement said without revealing how much the agreement would save. Telemar provides telephony and internet services in most of Brazil. Cerj, which is controlled by Spain's Endesa, supplies power to 66 cities in Rio de Janeiro state, excluding the city of Rio and some other towns. Light supplies electricity to Rio de Janeiro city and 30 towns. USIMINAS: Net Sales Revenues Grow 31% In 2003 --------------------------------------------- Usinas Siderurgicas de Minas Gerais S/A - USIMINAS (BOVESPA: USIM3, USIM5, USIM6; OTC: USNZY), announced Thursday its fourth quarter and annual results for 2003. The operational and financial information of the Company, except where stated otherwise, are presented based on consolidated figures in reais, in accordance with existing Corporate Law. All comparisons made in this communiqu� take into consideration the same period in 2002, unless otherwise stated. HIGHLIGHTS Sales and Revenues - Steel product sales volume reached 2,1 million tonnes in 4Q03 and totaled 7.7 million tonnes in 2003. Sales volume remained stable in relation to the previous year, with special mention of improvement in the product mix. This increased revenues at Usiminas. Net sales totaled BRL2.4 billion in the quarter and accumulated BRL8.7 billion in the year, 31% above that sold last year. EBITDA - EBITDA reached BRL763 million in 4Q03, with a total of BRL3.1 billion in the year, 26% above that of 2002. Analyzing Q- on-Q, EBITDA margin went from 33% in 3Q03 to 31% in 4Q03, pressured by the cost of the main steelmaking raw materials. Net income - Consolidated net income at Usiminas reached BRL359 million in 4Q03. With this result, the Company concluded the 2003 fiscal year with a consolidated net income of BRL1.3 billion and reverted the net loss of BRL325 million incurred in the previous year, which was directly affected by exchange devaluation of foreign debt. Interest on Capital and Dividends - Usiminas earmarked a total of BRL400 million for payment to its shareholders, including dividends of BRL45 million, announced on March 4, 2004, referring to fiscal year 2003. The dividend payout ratio was 30%. Outlook - The Brazilian Steel Institute (IBS) forecasts 4% growth in raw steel production in Brazil in 2004, totaling 32.3 million tons. The domestic flat steel market could grow approximately 6%, confirming growth of the Brazilian GDP, expected to be in the range of 3%-4%: the agricultural and transportation industries should maintain the good performance verified in 2003, sustained by the level of activity in agribusiness; the auto industry should reach a 2-million vehicle production mark if the export rate is maintained and domestic sales rebound; and the shipbuilding industry and large-diameter tube segment should also benefit from the execution of new projects. In international markets, Chinese demand and the good performance of the US market should continue to benefit price evolution for steel products, the latter which are also being pressured by surges in the main steelmaking raw materials prices and freight rates. Market, Production and Sales Brazilian crude steel production grew 5.2% in 2003 and totaled 31.1 million tonnes. Flat steel production totaled 13.2 million tonnes, an increase of 15.8%, while slab production for sale decreased from 6.9 million tonnes in 2002 to 5.4 million tonnes in 2003, a decline of 22%. According to preliminary IBS statistics, 4th quarter domestic flat products sales grew 5.8% and reached 2.5 million tonnes, thus reinforcing the trend of recovery noted as of August with improvement in economic conditions in Brazil. The reaction observed in the auto industry and capital goods sector, however, has not yet arrived in sectors related to infrastructure, such as civil construction and large-diameter tubes segments. The international markets remained heated, sustained by the growth in Asian demand for steel products. Exports of flat steel product, excluding slabs, totaled one million tonnes in 4Q03 and 3.4 million tonnes in 2003, an increase of 37.5% in relation to last year. The Usiminas System produced 2.1 million tonnes of crude steel in 4Q03. The decline of 6% in relation to 4Q02 was due to the stoppage for programmed maintenance of Usiminas' Blast Furnace n�2 between September and December. The revamping took place strictly on schedule and allowed for the return to its programmed production level. In the year, total production was 8.6 million tonnes, a growth of 2% made possible by the production increase at Cosipa. Production (Crude Steel) Consolidated sales of steel products came to 2.1 million tonnes in the quarter. In the year total sales maintained their level at 7.7 million tonnes, the same achieved in 2002. Total sales product mix in the last quarter of the year showed an increase in the share of slabs to 18% from the 16% share of 4Q02. In the year there was an improvement in the product sales mix: sales of galvanized and cold rolled products grew 20% and 16%, respectively, while the volume of slabs shipped fell 10%. Domestic sales of steel products accounted for 1.4 million tonnes in the quarter and totaled 5.3 million tonnes in 2003, a volume close to that sold in 2002. In the year, the automotive and electrical equipment segments had positive performance, counterbalancing the unfavorable performance of the capital goods and large diameter tube segments. The Usiminas System concluded the year with a 59% domestic market share in the flat steel segment. The fall of three percentage points compared to 2002 was explained by the entry of newcomers to the domestic market and also due to the stoppage of Blast Furnace n� 2 at Usiminas for relining. In the international market, exports, mainly to Asia, of higher value-added products, such as cold rolled and galvanized steel, were once again important factors in 4Q03. Heavy plate shipments also grew, with part of sales destined to the South Korean shipbuilding industry. Over the year, exports grew 2.5% and accumulated 2.4 million tonnes, with significant growth in the share of more highly elaborated products: shipments of galvanized and cold rolled steel increased 58% and 52%, respectively, while sales of slabs declined 13%. Sales Strong demand for steel in China and international price surges in 4Q03 caused the Usiminas System to increase its exports to 36% of total volume sold. In the year, the domestic/export market ratio came to 69/31, very close to that of the previous year and to the planned targets established by the Company. Net Revenues Consolidated net revenues reached BRL2.4 billion in 4Q03 and BRL8.7 billion in the year, growing 31%. The favorable performance was a consequence of the improvement in sales mix and better prices obtained both in the domestic market and exports. Gross Profit In 4Q03 gross profit reached BRL805 million. In the year, the Company grossed BRL3.1 billion, coming to a 32% increase over 2002. Gross margin remained at the 36% level. Cost of products and services rose basically due to two factors: increases in cost as a result of more elaborated products and the impact of the prices of inputs, especially iron ore and electric power. Operating Profit Operating profit before finance expenses (EBIT) was BRL680 million in 4Q03 and BRL2.3 billion in the year, an increase of 33%. EBITDA, on the other hand, reached BRL763 million in 4Q03, totaling BRL3.1 billion in 2003, 26% above that obtained in the previous year, resulting in a margin of 35%. On a quarterly basis, EBITDA margin went from 33% in 3Q03 to 31% in 4Q03, evidencing cost pressure of the main raw materials. Financial Results and Debt Net consolidated financial expenses fell from BRL2.7 billion in 2002 to BRL851 million in 2003. The greatest contributing factor to improved financial result was exchange variation, with an appreciation of 18% of the real against the dollar in 2003. Consolidated gross debt fell 20% in 2003 and totaled BRL7.6 billion at the end of December. Out of the total 39% originated from import-export financing, 20% referred to BNDES, 12% represented capital market operations and the remaining referred to sundry operations. Debt profile improved with the extension of maturities and access to new sources of financing. The ratio of total consolidated debt to EBITDA receeded from 3.9 times in 2002 to 2.5 times in 2003. This was a result of growth in operational cash generation and to the priority given to debt reduction. Net Income Consolidated net income of Usiminas reached BRL359 million in 4Q03. With this result the Company concluded the 2003 fiscal year with a net income of BRL1.3 billion. This reverted the net loss of BRL325 million of the previous year, which was directly affected by the effect of exchange devaluation on foreign debt. The favorable performance of the Usiminas System is the result of a long-term business strategy set out a decade ago. Its main points were heavy investments in modernization and technology updating, focus on supplying of the domestic market and the constant search for synergies among the companies of the group. Interest on Capital and Dividends Usiminas earmarked a total of BRL400 million for payment to its shareholders, including dividends of BRL45 million announced on March 4, 2004, referring to fiscal year 2003. The dividend payout ratio was 30%. Investments Investments totaled BRL215 million in 4Q03 and BRL475 million in the year. At the Intendente Camara mill in Ipatinga, the high points were the revamping of Blast Furnace n� 2 and the conclusion of the project to install a top turbine in Blast Furnace n� 3 (that uses off-gas pressure for the production of electric power). In Cubatao investments were concentrated on the conclusion of the revamping of Coke Oven Battery n� 1, the ramp up of the steel shop degassing unit and the beginning of works on Coke Oven Battery n� 2. For 2004 the investment program will focus on projects related to the improvement of the quality of the finished product mix, in addition to maintenance and small- scale repairs. Outlook The Brazilian economy enters 2004 with some economic indicators pointing to a more favorable scenario: inflationary control, increase in commercial balance of payments and perspective for a fall in interest rates. The Brazilian Steel Institute (IBS) foresees a 4% growth of crude steel production in Brazil, which represents a production of 32.3 million tonnes. Also, IBS forecasts, coming to 16.7 million tonnes. Exports should decrease 5.7%, totaling 12.2 million tonnes in the year. The domestic market for flat steel will grow approximately 6% in 2004, driven by exports of manufactured goods, the resumption of investments in infrastructure and recovery in the large-diameter tube sector. The agricultural and highway machinery segments should also maintain the favorable performance of last year, due to the level of agribusiness activity. The automotive industry will be benefited by exports and by a possible recovery in domestic sales and should produce approximately two million vehicles. The shipbuilding industry should also present favorable performance with the perspective of new projects. International demand should also show positive trend with the maintenance of the rate of Chinese deliveries and the suspension of part of the commercial restrictions in place by Section 201 measures in the United States. However, pressure from raw materials costs and freight may affect sales margins, even with higher final prices for steel products. With respect to its financial objectives, Usiminas will proceed to reduce its consolidated debt. The target for 2004 is to amortize at least US$ 300 million. Usinas Siderurgicas de Minas Gerais S/A - USIMINAS is an integrated steel producer, with net sales of BRL8.7 billion in 2003. The Usiminas System is made up mainly of USIMINAS and Cosipa and has an annual capacity of 9.3 million tonnes of raw steel and occupies a position of leadership in the domestic flat steel market in the automobile industry, autoparts, agricultural and highway machinery sectors, electrical and electronic equipment segments and large-diameter pipe industry. CONTACTS: Breno Julio de Melo Milton E-mail: bmilton@usiminas.com.br Tel: +55 (31) 3499-8710 Paulo Esteves E-mail: paulo.esteves@thomsonir.com.br Tel: +55 (11) 3897-6466/6857 ========= C H I L E ========= AES GENER: Moody's Assigns Ba3 To Proposed $300M Bond Issuance -------------------------------------------------------------- Moody's Investors Service gave AES Gener S.A.'s planned offering of US$300 million of Rule 144A long term Senior Unsecured Notes a Ba3 rating. At the same time, Moody's upgraded the Company's existing 6.5% senior unsecured Yankee Bond issue due 2006 to Ba3 from B2, concluding a review for upgrade. The rating outlook is stable. AES Gener plans to issue US$300 million of 144A Senior Unsecured Notes as an integral part of a restructuring of the Company's balance sheet. In addition to the sale of the Notes the parent company, AES Corporation, through its investment subsidiary Inversiones Cachagua Limitada, paid on February 27, 2004 approximately US $298 million of an intercompany loan with AES Gener. AES Gener will apply the inter-company repayment, the proceeds from the offer of up to US$125 million in new common shares to its shareholders, proceeds from up to US$75 million of new bank debt, and the proceeds from the sale of the current bonds to the repurchase of approximately US$700 million of outstanding debt including the US$200 million Yankee Bonds due January, 2006 (of which approximately US$146 million was funded and paid on March 1, 2004) and US$500 million of Convertible Bonds maturing March, 2005 (issued in Chilean pesos and US dollars). AES Gener also announced the payment of a US$100 million dividend on February 27, 2004. At the end of the restructuring process, AES Gener will have reduced total debt by approximately US$300 million, and AES Corp. will have reduced its percentage ownership of AES Gener after a minority sale of its shares in AES Gener. PARMALAT CHILE: Has 90 Days To Skirt Bankruptcy ----------------------------------------------- Parmalat Chile, which filed for court protection from its creditors Wednesday, has 90 days to find a strategic partner and make plans for paying the US$51 million it owes banks and suppliers, Reuters reports, citing a ruling issued by a Chilean judge. In his ruling, Judge Juan Polanco of Santiago's 18th Civil Court said the Company could not be declared bankrupt or its assets frozen during the 90-day period. The judge, who appointed Thursday an outside administrator to manage Parmalat Chile, said creditors representing more than half of the Company's debt agreed with the plan to seek a partner, as did the Italian parent company. "To reach a complete solution to Parmalat Chile's financial problems, the company and its financial advisors have concluded that the way to respond to all its creditors is to incorporate a strategic partner," the Company said in Wednesday's filing. Parmalat Chile named Bank of America as its biggest creditor, holding US$25.2 million of the Company's debts. The Company is also looking at other possibilities to resolve its problems. Possibilities include a capital increase with resources from Parmalat Italy or a lender, or transferring all of its assets, debts and shares to a third party. PARMALAT CHILE: Suppliers Demand Payment For Deliveries ------------------------------------------------------- Parmalat Chile must pay back by March 10 debts to local dairy farmers that are still supplying milk to the Company for deliveries in December and January. Otherwise, these farmers will further reduce remaining deliveries, Dow Jones reports, citing Carlos Arancibia, Chief Executive of dairy federation Fedeleche. The milk suppliers cut deliveries to 100,000 liters a day from 350,000 as the Company repeatedly delayed payment. They are studying their legal options, Arancibia added. While the local unit filed for protection from creditors this week, "the company can't keep functioning if it doesn't receive milk," Arancibia said. Parmalat Chile owes dairy farmers CLP3.0 billion ($1=CLP598.50) for deliveries made since December. It promised to pay them 70% of the debt for December on March 5, he added. =========== M E X I C O =========== AHMSA: Authorities Order Arrest of CEO, Chairman ------------------------------------------------ Two top executives of Mexican steel maker Altos Hornos de Mexico SA (AHMSA), who are out of the country negotiating debt, are now facing charges of tax evasion. On Wednesday, Mexico's Attorney General, Rafael Macedo de la Concha, said authorities had issued arrest warrants for AHMSA Chairman Xavier Autrey and Chief Executive Alonso Ancira for "supposed tax irregularities." Interpol assistance is being requested, de la Concha added. In a press release Thursday, the Monclova-based AHMSA said it was unaware of any arrest warrants. A company spokesman said on Thursday Autrey and Ancira left Mexico earlier this year to continue negotiations with creditors of one of AHMSA's subsidiaries. He would not comment on the location of the executives. AHMSA, Mexico's No. 1 steelmaker, has US$1.8 billion of debt with creditors, including Banamex and BBVA-Bancomer. In 1999, at the height of a global steel glut and low prices, AHMSA suspended debt payments and has since been unable to agree a full restructuring plan. A year ago, AHMSA reached a deal to restructure US$152 million in debt at its main unit, Minera Carbonifera Rio Escondido (MICARE). GRUPO IUSACELL: INSCI to Provide Content Management Solution ------------------------------------------------------------ INSCI Corp. (OTC Bulletin Board: INCC), a leading provider of enterprise content management (ECM) solutions, announced Thursday that Grupo Iusacell, one of Mexico's largest telecommunications providers, has selected INSCI's content management software to improve the quality of its customer services technology. The software will enable customer service representatives (CSRs) to have immediate access to customer invoices and customer billing statements, provide customers easy access to their bill via the Iusacell website, and improve the overall efficiency of CSR-customer interactions. INSCI was chosen for its swift installation time, ease of integration and support for high- volume use and future growth. The installation is part of an overall call center upgrade in conjunction with Xerox Mexicana, an INSCI strategic partner. Iusacell currently serves a significant number of post-paid customers (close to 350,000 as of the second quarter of 2003), with 350 customer services representatives and more than 120 branches throughout Mexico. "The INSCI solution was chosen after an in-depth search process of possible call center solutions," noted Roberto Vargas Fuentes, commercial systems manager at Iusacell. "We selected the INSCI/Xerox solution because of its open architecture and scalability, which will enable us to easily expand the system as our customer base grows and integrate with our existing system in a short period of time." "Our new installation at Iusacell is further evidence of INSCI's international distribution success and our focus on providing content management solutions for customer service. Our ability to achieve full implementation and operations in days rather than months significantly increases our customers return on investment (ROI)," said Henry F. Nelson, president and CEO of INSCI. "We would also like to express strong appreciation for our partners at Xerox Global Services, who continue to choose INSCI based on our ability to support their efforts and bring added value to their customers." About INSCI Corp. INSCI Corp. (OTC Bulletin Board: INCC) is a leading provider of integrated enterprise content management (ECM) and digital asset management (DAM) solutions. INSCI's technology provides a strong foundation enabling companies to manage the full spectrum of enterprise content, from documents to e-mail, graphics and video. INSCI's ESP+ Solutions Suite enables financial services companies, call centers, health insurance organizations, utilities and government to provide Internet-based access for virtually unlimited users to their banking and financial statements, customer bills and similar content. INSCI's WebWare ActiveMedia DAM products provide a powerful media services platform for integrating rich media into ECMs, marketing and communication portals, web publishing systems, and e-commerce portals. For more information about INSCI, visit www.insci.com . CONTACT: INSCI Corp. Susan Worthy Tel: +1-508-870-4225 E-mail: sworthy@insci.com For Investors: ALLEN & CARON INC. Jill Bertotti Tel: +1-949-474-4300 E-mail: jill@allencaron.com Media: SKIP FERDERBER & ASSOCIATES PR Skip Ferderber Tel: +1-425-315-1724 E-mail: skip@skipf1.com ================= V E N E Z U E L A ================= PDVSA: Lacks Political Influence To Launch Another Strike --------------------------------------------------------- Despite recent civil unrest, Venezuela's state oil company PDVSA is unlikely to go back on strike, Business News Americas says, citing Peter Hill, president and CEO of US oil company Harvest Natural Resources. PDVSA "learn[ed] the lesson of last time and it was too painful," Hill said, referring to the December 2002-February 2003 strike, which crippled the country's oil industry and shut down Harvest's oil production for 37 days. The strike brought down PDVSA's workforce from 38,000 to about 10,000 workers, which is a "mighty reduction," Hill said. Many of the fired workers were involved in the strike and today the Company "is not in a position to have the same influence" as it was a year ago, he said. Civil unrest began more than a week ago following President Hugo Chavez's decision to deny a recall election. But according to Hill, Harvest's production has not been affected by the latest protests as its installations are far away from Caracas, where the main protests have taken place. As for PDVSA, its reduced workforce means the company has had to be "ruthless in choosing where to focus its resources." The company's oil production is under pressure and it will have difficulty maintaining its current levels in 2004. The Company is still in a transition period as it comes to terms with its reduced influence and new role in the oil industry. "It's a very different animal from what it was in the past," Hill said. *********** 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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