/raid1/www/Hosts/bankrupt/TCRLA_Public/040309.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, March 9, 2004, Vol. 5, Issue 48
Headlines
A R G E N T I N A
BANCO SUQUIA: On the Block Once Again
COMPONENTES PARA ACUMULADORES: Court Sets Bankruptcy Timetable
DESIGN COMPANY: Court Introduces New Reorganization Timetable
DISCO: Ahold Strikes Sale Agreement With Cencosud
G.T. ASESORES: Files Petition to Reorganize
KAIROCLIMA: Court Declares Company "Quiebra"
LLENAS Y COMPANIA: Court Rules Company "Quiebra"
METROGAS: Foreign Exchange Effects Reduce Losses in 2003
MOVICOM BELLSOUTH: Telefonica Deal to Help Solve Debt Issues
MULTIMUSICA: Bankruptcy Process Begins on Court's Order
SIDERAR: Posts Higher Income in 2003
B A H A M A S
GULF UNION BANK: Issues Notice of Intention to Declare Dividend
B E R M U D A
FOCUS INSURANCE: Issues Notice of Intention to Pay a Dividend
B R A Z I L
AMBEV: Minority Shareholders Frustrated With Interbrew Deal
AMBEV: Releases Additional Info About Interbrew Transaction
AMBEV: Moody's Affirms Rating; Outlook Developing
CMS ENERGY: Shelves CPEE Stake Sale
EMBRATEL: Telmex May Vie For Control
TELEMAR: Board Approves Capital Increase
C H I L E
ENDESA CHILE: Cedes Water Rights to Avoid Annual Payments
C O L O M B I A
COLOMBIA TELECOMUNICACIONES: Settles Conflict With Nortel
E C U A D O R
PETROECUADOR: Ends Purchase Contracts With 5 Companies
M E X I C O
EMPRESAS ICA: Completes $682.4M Financing For El Cajon Project
GALEY & LORD: Emerges from Bankruptcy; Names New Directors
- - - - - - - -
=================
A R G E N T I N A
=================
BANCO SUQUIA: On the Block Once Again
-------------------------------------
Argentine's federal bank, Banco Nacion, revealed that it will
release bidding rules for the upcoming auction of local bank
Banco Suquia on March 17, reports Business News Americas.
Nacion, which took over Suquia after French bank Credit Agricole
abandoned Argentina during the 2002 financial crisis, tried to
offload the local bank last year. However, the plan was
abandoned as bids were unacceptable.
Nacion will try to offload Suquia again but the federal bank did
not reveal the date of the auction.
It is difficult to know what Suquia's financial situation looks
like but the bank's branch network could be attractive to a bank
looking to expand in Cordoba, Hernan Fardi, partner at Argentine
consultancy Maxinver, told Business News Americas.
Locally-owned banks are the most likely to be interested in
Suquia but some of the local banks that have shown an appetite
for buying after the crisis, are still busy integrating the
banks they acquired and that fact could reduce the number of
potential bidders, he added.
COMPONENTES PARA ACUMULADORES: Court Sets Bankruptcy Timetable
--------------------------------------------------------------
Judge Paez Castaneda of Buenos Aires Court No. 21 set the
deadlines for the submission of the individual and general
reports concerning the bankruptcy process of Componentes para
Acumuladores S.A.
According to Infobae, the Company's receiver, local accountant
Jorge Sahade, will verify creditors' proofs of claim until
August 5, 2004. He will then prepare the individual reports
based on the results of the verification process and submit
these reports to the court on September 25, 2004. Submission of
the general report follows on November 13, 2004.
Clerk No. 42, Dr. Barreiro, assists the court on the case.
CONTACT: COMPONENTES PARA ACUMULADORES S.A.
Palpa 2422
Buenos Aires
JORGE SAHADE, Receiver
Ave de Mayo 1324
Buenos Aires
DESIGN COMPANY: Court Introduces New Reorganization Timetable
-------------------------------------------------------------
Court No. 18 of Buenos Aires, with assistance from Clerk No. 35,
revised the timetable for the debt reorganization of Design
Company S.A., reports local news source Infobae. The court moved
the deadline for the authentication of creditors claims from
April 9, 2004 to April 30, 2004.
Ms. Elba Bengoechea, the receiver assigned to oversee the
Company's bankruptcy process, will then submit the individual
reports to the court on June 14, 2004. This type of report is
prepared based on the results of the claims verification
process.
After submitting the individual reports, the receiver will then
prepare a general report and submit this to the court on August
10, 2004.
The informative assembly, one of the last parts of the
reorganization process, will be held on February 10, 2005.
CONTACT: Elba Bengoechea
Jose Evaristo Uriburu 1010
Buenos Aires
DISCO: Ahold Strikes Sale Agreement With Cencosud
-------------------------------------------------
Ahold announced Friday that it reached an agreement with Chilean
retailer Cencosud S.A. on the terms of sale of its controlling
stake in the Argentine supermarket chain Disco S.A.
The transaction's closure is expected prior to the end of the
year. It is subject to the fulfillment of certain conditions,
including obtaining local anti-trust approval and the absence of
any court regulation prohibiting the sale of the Disco shares to
Cencosud. Certain Argentine and Uruguayan court orders currently
are in effect that may prohibit a sale of part or all of the
Disco shares held by Ahold and, if so, will need to be addressed
prior to closing. The enterprise value related to the
transaction is approximately USD 315 million, which will be
subject to working capital and net debt adjustments through the
closing date.
Cencosud has interests in real estate, do-it-yourself (DIY)
stores and hypermarkets in Chile and Argentina. The company
operates 12 hypermarkets and 23 DIY stores in Argentina. It
acquired Ahold's stake in the Chilean supermarket chain Santa
Isabel in July 2003.
Commenting on the agreements, Theo de Raad, the Ahold Corporate
Executive Board member responsible for Latin America and Asia,
said: 'Ahold is very pleased to have reached agreement with
Cencosud on the terms of the sale of these operations. We are
confident that Cencosud will continue the tradition of
excellence and service for which Disco is known.'
The divestment of Ahold's activities in Argentina is part of
Ahold's strategy to optimize its portfolio and to strengthen its
financial position by reducing debt.
Ahold first entered the Argentine market in 1998. Through a
series of purchases made from 1998 to 2002, Ahold directly and
indirectly increased its ownership of Disco to 99.94%. At year-
end 2003, Disco operated 236 stores in Argentina and had more
than 14,700 associates. Unaudited 2003 net sales for Disco
amounted to approximately ARS 2,355 million (approximately EUR
708 million).
CONTACT: AHOLD CORPORATE COMMUNICATIONS
Tel: +31.75.659.5720
G.T. ASESORES: Files Petition to Reorganize
-------------------------------------------
Buenos Aires company G.T. Asesores de Seguros S.A. is seeking
court permission to undergo reorganization, reports Infobae. The
Company submitted its motion for "Concurso Preventivo" to the
city's Court No. 13. Clerk No. 26 works with the court on the
case.
CONTACT: G.T. Asesores de Seguros S.A.
Bartolome Mitre 363
Buenos Aires
KAIROCLIMA: Court Declares Company "Quiebra"
--------------------------------------------
Buenos Aires Court No. 19 declared local company Kairoclima
S.R.L. "Quiebra," reports Infobae. The court, assisted by Clerk
No. 38, assigned Ms. Beatriz del Carmen Muruaga as receiver, who
will examine and authenticate creditors' claims until March 26,
2004. The deadlines for the submission of the individual and
general reports have been set for May 12, 2004 and June 25,
2004, respectively. The Company's bankruptcy case will close
with the liquidation of its assets to repay creditors.
CONTACT: KAIROCLIMA S.R.L.
Guatemala 5974
Buenos Aires
BEATRIZ DEL CARMEN MURUAGA, Receiver
Aguero 1290
Buenos Aires
LLENAS Y COMPANIA: Court Rules Company "Quiebra"
-----------------------------------------------
Buenos Aires company Llenas y Compania S.A. has been declared
"Quiebra" by Court No. 11, reports Infobae. The court, assisted
by Clerk No. 21, assigned Estudio Waisberg, Knoll as receiver.
Creditors of the Company have until April 5, 2004 to have their
claims verified. Following the credit verification process, the
receiver will then prepare the individual reports and submit
these reports to court on May 17, 2004. Submission of the
general report follows on June 29, 2004.
The Company's bankruptcy case will close with the liquidation of
its assets to repay creditors.
CONTACT: ESTUDIO WAISBERG, KNOLL - Receiver
Av Cordoba 1237
Buenos Aires
METROGAS: Foreign Exchange Effects Reduce Losses in 2003
--------------------------------------------------------
Argentine natural gas distributor Metrogas SA saw its losses
shrink to ARS10.2 million ($1=ARS2.9325) in 2003 from losses of
ARS489.9 million in the previous year.
The Company, Argentina's largest natural gas distribution
company in terms of customers and volume, attributed the drop to
foreign exchange effects.
The Company's foreign-denominated debt shrunk over the year as
the peso strengthened nearly 20% against the dollar, generating
a gain of ARS7.1 million in net financing and holding. This was
a significant improvement from the ARS685.6 million loss in this
area in 2002, when the peso took a 70% plunge against the dollar
and sent foreign debt obligations surging.
Metrogas' operating income totaled ARS30.0 million in 2003, up
from ARS3.1 million in the previous year. Net sales dropped back
for the most recent year, coming in at ARS651.5 million compared
with ARS748.0 million in 2002. The company attributed this
decrease to an Argentine government regulation that required all
results up until Feb. 28, 2003 to be adjusted for inflation.
Results after that date, when the rule was repealed, are
reported in current pesos.
Operating expenses fell 11.9% to ARS506.7 million in 2003 from
ARS575.1 million in the previous year, though Metrogas said gas
costs would actually have risen 13.4% without inflation
adjustments.
For the fourth quarter, Metrogas reported a net loss of ARS40.3
million, compared with net income of ARS45.2 million in the
year-earlier period. The company said this was the result of
foreign exchange effects, as the peso weakened against the euro
and dollar between September and December 2003.
In the same period in 2002, the peso had appreciated against the
U.S. currency. As a result of these currency movements, Metrogas
recorded a net financing and holding loss of ARS62.4 million in
the fourth quarter of 2003, compared with a gain of ARS69.3
million in year-earlier quarter.
U.K. energy company BG Group PLC (BRG) and Spain's Repsol-YPF
(REP) together control a 70% stake in Metrogas through a
consortium called Gas Argentino. Metrogas' employees own 10% of
the company's shares and the rest float on the stock exchange.
In February, BG Chief Financial Officer Ashley Almanza said he
believes the company is unlikely to retain its majority stake in
Metrogas because of the Argentine unit's ongoing debt
restructuring.
Metrogas, which is seeking new repayment terms for $440 million
in debt, launched a debt offer on Nov. 7 but has extended the
deadline four times amid low creditor approval rates. Almanza
said in February that he doesn't expect Metrogas to clean up its
debt before the end of 2004.
MOVICOM BELLSOUTH: Telefonica Deal to Help Solve Debt Issues
------------------------------------------------------------
Spain's telecommunications company Telefonica SA and its mobile
unit Telefonica Moviles SA said Thursday that they are in talks
with U.S. telecom company BellSouth Corp. to buy some of its
mobile telecom assets in Latin America.
The companies said they were not yet able to provide any
information on a definite deal, nor on a price range. They said,
however, that the fair value of those assets ranges between
US$5.5 billion and US$6 billion.
The deal, if it progresses, is expected to face regulatory
challenges in several countries.
In Argentina, where BellSouth operates through Movicom
BellSouth, the government said late Friday that the local
antitrust regulator hasn't yet been formally notified of the
transaction.
In a brief press statement, the National Commission for Defense
of Competition (CNDC) said it will undertake a "detailed
analysis" of the proposed deal once it has received the proper
documentation as required by law.
BellSouth, through Movicom, is the second-largest cellular
service provider in Argentina, while Telefonica's unit Unifon is
the third-largest cellular service provider, when measured by
number of clients. The Spanish company's acquisition of
BellSouth's assets would put Telefonica's customer base at about
3.8 million - a 48% market share. This would give Telefonica a
significant edge over Telecom Argentina, the current leading
provider with 2.6 million mobile clients.
The deal will also help Movicom solve its debt issues. The
company has around US$500 million in defaulted debt, composed as
follows: US$150 million in bonds, US$68 million from a loan that
expired in 2002, US$200 million from another loan that expired
last year, US$39 million owed to suppliers and US$34 million in
outstanding interest payments.
Broadspan Capital is the financial agent in charge of
restructuring Movicom's debt.
The Argentine antitrust regulator has been active in laying down
conditions for major mergers and acquisitions in the past.
Ismael Malis, president of the CNDC, told business daily El
Cronista that although they would have to make a thorough
analysis of the companies and their market shares, the deal
would be highly complex.
MULTIMUSICA: Bankruptcy Process Begins on Court's Order
-------------------------------------------------------
Buenos Aires Court No. 26 declared local company Multimusica
S.A. "Quiebra," reports Infobae. The court, assisted by Clerk
No. 52, assigned Ms. Adriana Torrado as receiver, who will
examine and authenticate creditors' claims until May 17, 2004.
The deadlines for the submission of the individual and general
reports have been set for June 15, 2004 and August 12, 2004,
respectively. The Company's bankruptcy case will close with the
liquidation of its assets to repay creditors.
CONTACT: MULTIMUSICA S.A.
Av Rivadavia 11509
Buenos Aires
ADRIANA TORRADO, Receiver
Ventana 3450
Buenos Aires
SIDERAR: Posts Higher Income in 2003
------------------------------------
A huge increase in domestic shipments pushed Argentine
steelmaker Siderar SAIC's income to ARS422.2 million in 2003
from ARS40.7 million in 2002, reports Dow Jones.
Siderar reported an 8% increase in total shipments last year.
Siderar, just like other Argentine steel producers, relied on
exports to carry it through the country's economic crisis, as
the peso's 75% plunge against the dollar in 2002 made exports
newly competitive.
Now, amid an appreciation in the peso and a reawakening of local
demand, Siderar and its counterparts are once again turning
their focus inward.
Siderar also saw an increase in net sales in 2003 to ARS2.731
billion from the previous year's ARS2.569 billion. The Company
attributed this increase to the recovery in domestic demand and
higher international steel prices.
Gross profit came in at ARS1.079 billion, up from ARS812.3
million in 2002. Operating income was ARS878.2 million, an
increase from ARS560.5 million in 2002.
Siderar reported a financial and holdings loss of ARS193.4
million, smaller than the ARS463.3 million loss recorded in
2002. The 2003 result included a ARS31.0 million net foreign
exchange loss, the Company said.
Siderar also had a loss of ARS57.1 million for other expenses,
including restructuring costs and the depreciation of intangible
assets. This was a wider loss than the ARS49.0 million in 2002.
The company also recorded a loss of ARS251.8 million for tax
provisions in 2003, compared with a gain of ARS5.3 million a
year earlier.
For the fourth quarter of 2003, Siderar posted net income of
ARS137.8 million, up from ARS30.7 million a year earlier. Net
sales were ARS700.8 million, down slightly from ARS719.1 million
in the year-earlier period. Domestic shipments jumped 75% in the
quarter compared with the same period in 2002, while exports
fell 36%.
Siderar said it saw some increases in the cost of raw materials
and freight. As a result, operating income for the quarter was
ARS220.4 million, down from ARS224.3 million in the year-earlier
period.
=============
B A H A M A S
=============
GULF UNION BANK: Issues Notice of Intention to Declare Dividend
---------------------------------------------------------------
COMMONWEALTH OF
THE BAHAMAS 1997
IN THE SUPREME COURT N. 1237
Equity Side.
IN THE MATTER OF GULF UNION BANK
(BAHAMAS) LIMITED
(In Liquidation)
AND
IN THE MATTER OF THE COMPANIES
ACT 1992
NOTICE TO CREDITORS OF INTENTION
TO DECLARE DIVIDEND
TO: ALL CREDITORS WHO HAVE NOT LODGED THEIR CLAIMS NOTICE is
hereby given that on 11th May, 2004 the Joint Official
Liquidators intend to pay a second distribution of 10 cents on
the dollar to all creditors whose claims have been approved by
them. If you consider you have a claim in the liquidation, but
have not yet had your claim agreed, forms may be obtained from
the Official Liquidators of the said Company at Deloitte &
Touche, 2nd Terrace West, Centreville, P.O. Box N-3748, Nassau,
Bahamas.
Dated this 16th day of
February, A.D., 2004
Raymond L. Winder
Graham C. Garner
Joint Official Liquidators
Gulf Union Bank (Bahamas) Limited
(In Liquidation)
Nassau, Bahamas
=============
B E R M U D A
=============
FOCUS INSURANCE: Issues Notice of Intention to Pay a Dividend
-------------------------------------------------------------
IN THE SUPREME COURT OF BERMUDA
COMPANIES (WINDING-UP)
NO. 369 OF 1990
IN THE MATTER OF
FOCUS INSURANCE COMPANY LTD.
IN LIQUIDATION
And IN THE MATTER OF THE COMPANIES ACT
1981 AND IN THE MATTER OF THE INSURANCE
ACT 1978
(Under an Order for Winding-Up the above-named
Company, dated 5 February 1991)
NOTICE OF INTENTION TO PAY A DIVIDEND
A Final Dividend is intended to be declared in the above matter
Creditors whose claims have been approved in accordance with the
Court Order of the Supreme Court of Bermuda made on 18 April
2002, following which a filing deadline of 12 July 2002, was
established.
It is anticipated that the Final Dividend will be paid during
March 2004.
Creditors requiring further information should contact the
Liquidator in writing at the following address:-
Focuse Insurance Company Ltd - in Liquidation,
PricewaterhouseCoopers, PO Box HM 1171,
Hamilton HMEX, Bermuda (Fax: 441-295-1242)
PETER C B MITCHELL, Liquidator
Focus Insurance Company Ltd - in Liquidation
16 February 2004
===========
B R A Z I L
===========
AMBEV: Minority Shareholders Frustrated With Interbrew Deal
-----------------------------------------------------------
In an effort to ease skepticism among its minority shareholders,
executives of Brazilian brewer Companhia da Bebidas das Americas
(AmBev) said that a merger with Belgian beer giant Interbrew SA
is good for the Company.
"We have very different views of this," AmBev Co-chairman Marcel
Telles told equities analysts on a conference call. "Only time
will tell who is wrong here."
Dow Jones reports that minority shareholders are frustrated with
Ambev's decision to forge an alliance that gives Interbrew a
majority stake in AmBev in exchange for its North American
assets.
Many believe that the US$7.3 billion AmBev will pay is too much
for the North American businesses, which are growing more slowly
than AmBev's existing operations in Brazil.
Shareholders are also disgruntled that they won't receive the
premium price that controlling shareholders group Braco is
getting for its majority stake. Braco will gain a stake in the
merged company, Interbev, and also share management control on
the company's board.
"It looks like shareholders are being compromised here," said
one U.S. analyst. "To me it looks like a financial transaction
where the value of the company has been shifted."
But Ambev executives told analysts that expanding across the
Americas is a central objective that is well worth the price.
"Braco gets a premium because of its control, and AmBev is
getting access to North American markets which it would never
get without this transaction, and that's the right way to look
at it," said AmBev CEO Carlos Brito.
AMBEV: Releases Additional Info About Interbrew Transaction
-----------------------------------------------------------
Companhia de Bebidas das Americas ("AmBev") (NYSE:ABV)
(NYSE:ABVc) (Bovespa:AMBV4) (Bovespa:AMBV3) and Interbrew
(Euronext:INTB) announced that at a presentation to investors in
New York yesterday, John Brock, Chief Executive Officer of
Interbrew, and Marcel Herrmann Telles, Co-Chairman of AmBev,
discussed the partnership between the two companies to form
InterbrewAmBev, the world's premier brewer.
During the presentation, further clarification was provided with
respect to the valuation of the Labatt Americas business, which
will be merged into AmBev upon completion of the transaction, as
summarized in the following table:
Transaction Parameters - Labatt, FEMSA Cerveza and Labatt USA
(in millions of US$ unless otherwise stated)
FY 2003
Transaction Value (TV) $7.3 bn
2003 EBITDA Labatt Americas (EUR) EUR386 million
2003 EBITDA Labatt Americas (US$) (1) $437
Adjusted EBITDA Labatt Americas (2) $463 (A)
FEMSA Cerveza EBITDA (30%) $173 (B)
Transaction EBITDA (A + B) $636
TV / EBITDA Multiple 11.4x
(1) Includes 100% of Labatt USA
(2) Adjusted for negative impact of Quebec strike and 30%
minority interest in Labatt USA
The Labatt Americas business is comprised of three operations:
Labatt in Canada, which is wholly owned, a 70% stake in Labatt
USA and a 30% stake in the Mexican FEMSA Cerveza.
In discussing the above table, management described the
reconciliation of the EUR386 million EBITDA reported in the
March 3 press release to that considered in the valuation
methodology. First, the foreign exchange rate of 1.13 dollars
per euro was applied to this figure, resulting in an EBITDA
figure of US$437 million. That figure is then adjusted to
reflect the 70% stake in Labatt USA (the US$437 million figure
incorporates 100% of Labatt USA EBITDA) and the one-off expenses
related to the strike in Labatt's Quebec plant. Including the
30% interest on FEMSA Cerveza's EBITDA, which represents $173
million, produces total EBITDA of $636 million, which reflects
an 11.4x multiple.
Management added that after giving effect to the synergies
expected from the transaction, the 2004 EBITDA multiple would be
10.1x.
The companies today are releasing a revised summary of financial
metrics to reflect this clarification, and also to present the
correct translation of AmBev's figures from Reais into Euros.
Labatt
Americas
Interbrew (pro forma)
AmBev 2003 2003 2003
--------------------------------------
Euro(1) R$ Euro Euro
(Millions (Millions (Millions (Millions
unless unless unless unless
stated stated stated stated
otherwise) otherwise) otherwise) otherwise)
-------------------------------------
Net Turnover 2,495 8,684 7,044 2,172
----------------------------------------------------------
EBITDA 883 3,072 1,498 532 (2)
----------------------------------------------------------
Profit from Operations 663 2,306 839 366
-----------------------------------------------------------
Net profit from Ordinary
Activities 407 1,412 505
-----------------------------------------------------------
Net Profit 407 1,412 505
-----------------------------------------------------------
EPS 10.7 37.23 1.45
(per
thousand
shares)
-----------------------------------------------------------
Dividend per Share 6.7 23.14 0.36
(per
thousand
ordinary
shares)
25.45
(per
thousand
preferred
shares)
-----------------------------------------------------------
ROIC 17.7% 17.7% 10.6%
-----------------------------------------------------------
Net Capex 273 945 595
-----------------------------------------------------------
Cash Flow from
Operations 728 2,528 1,151
-----------------------------------------------------------
Cash Interest Coverage 13.5X 13.5X 7.6X
----------------------------------------------------------
Net Financial Debt 876 3,188 2,434
-----------------------------------------------------------
Debt Equity Ratio 0.74X 0.74X 0.52X
----------------------------------------------------------
(1) Converted from R$ to EUR as per the following:
Income Statement and Cash Flow items converted at the average
exchange rates of R$3.0715/US$ and US$1.1329/EUR.
Balance Sheet items converted at the 31 December, 2003 exchange
rates of R$2.8892/US$ and US$1.2595/EUR.
(2) If one-off costs from Quebec strike are added back, this
figure would be EUR561 million, US$636 million.
In addition, given the corrections in AmBev's figures provided
by the table and the proportional consolidation of FEMSA
Cerveza's results to Labatt Americas pro forma results, AmBev
and Interbrew provide in the following the correct figures for
AmBev's results in 2003 and for combined results of AmBev and
Labatt Americas in 2003, which were exposed in the section
Financial Benefits included in the announcement of the
transaction in March 3, 2004:
-- AmBev's net sales in 2003 of EUR2,495 million (US$2,827
million)
-- AmBev's gross profit in 2003 of EUR1,333 million (US$1,510
million)
-- AmBev's EBITDA in 2003 of EUR883 (US$1,000 million)
-- Combined revenues for AmBev and Labatt Americas in 2003 of
EUR4,667 million (US$5,287 million)
-- Combined EBITDA for AmBev and Labatt Americas in 2003 of
EUR1,415 million (US$1,603 million).
AMBEV: Moody's Affirms Rating; Outlook Developing
-------------------------------------------------
Moody's affirmed Ambev's Baa3 global local currency and B2
foreign currency issuer rating. Affirmation of these ratings
follows an announcement of a wide-ranging transaction with
Interbrew, S.A. of Belgium.
The rating outlook is developing, pending the resolution of a
number of uncertainties that still exist regarding the
transaction.
Moody's affirmed the ratings on belief that the transaction will
result in very little change in debt protection measures at
AmBev, and will add the benefits of greater diversity and more
stable markets in the overall mix of AmBev's businesses, offset
by the greater challenges of managing a more widespread
geographic region.
Moody's rating affirmation assumes that any potential
consequences of this transaction on existing or acquired debt,
will not impact the priority of claim of the existing AmBev debt
holders, and will not diminish in any way the asset values or
cash streams that are currently available to them to support the
AmBev debt.
The developing outlook reflects a number of uncertainties
related to the transaction, some of which could have either
positive or negative impact on AmBev's ratings, Moody's said.
CMS ENERGY: Shelves CPEE Stake Sale
-----------------------------------
US energy company CMS Energy called off plans to sell its
Brazilian assets, Business News Americas reports, citing CMS
Brazil president Sergio Vulijscher.
CMS had wanted to sell its 94% stake in Brazilian power
distribution company CPEE for US$85 million as part of its
previously announced US$900-million international asset
divestment program.
But due to good results and a positive outlook for CPEE's
performance in the country, CMS decided to cancel the sale,
Vulijscher said. Local press reported that the termination of
the planned sale followed insufficient purchase offers for the
94% stake.
Three Brazilian companies and one US investment fund were
reportedly considering CPEE's assets, which are valued at over
US$50 million.
EMBRATEL: Telmex May Vie For Control
------------------------------------
A source from Telmex (TMX.N) (TELMEXL.MX) revealed that Mexico's
leading telephone company will bid for a controlling stake in
Brazil's largest long-distance operator Embratel, relates
Reuters.
"Telmex is going to participate in the process," said the
source, who is close to the bidding process. He did not disclose
any financial details.
Bankrupt U.S. phone carrier WorldCom Inc. (WCOEQ.PK), now known
as MCI, put its 52% voting stake in Embratel Participacoes
(EMT.N) up for sale in November last year.
Many analysts have long seen Telmex as the most likely company
to end up with Embratel control given its deep pockets and
interest in Brazil by its own controlling shareholder,
billionaire tycoon Carlos Slim, the richest man in Latin
America.
CONTACT: Silvia M.R. Pereira, Investor Relations
Tel: (55 21) 2121-9662
Fax: (55 21) 2121-6388
Email: silvia.pereira@embratel.com.br
invest@embratel.com.br
TELEMAR: Board Approves Capital Increase
----------------------------------------
Tele Norte Leste Participacoes S/A (NYSE: TNE; Bovespa:TNLP3 and
TNLP4) announced Thursday in Brazil that, at a meeting held on
that same day, in Rio, its Board of Directors approved a capital
increase in the amount of R$167.6 million. Such capital increase
is in connection with the tax benefit originated from the
goodwill amortization recorded in 2003.
The new capital amount and corresponding share increases are as
follows:
Previous Increase New
Capital
Amount (R$) 4,644,415,487.18 167,605,531.81 4,812,021,018.99
Number of
Shares
Common 130,185,688,782 1,432,770,831 131,618,459,613
Preferred 260,371,376,563 2,865,541,662 263,236,918,225
Total 390,557,065,345 4,298,312,493 394,855,377,838
Treasury 8,780,436,826 N/A 8,780,436,826
Outstanding
Shares 381,776,628,519 N/A 386,074,941,012
The subscription prices in connection with the capital increase
are R$ 33,22 per thousand common shares and R$ 41,88 per
thousand preferred shares.
In accordance with the "Notice to Shareholders" of March 04,
2004, the prices have been set based upon the average prices at
Bovespa from February 19, 2004 to March 03, 2004.
The ratio for the rights of preference are:
- Holders of Common Shares: 1.125871038695% in common shares;
- Holders of Preferred Shares: 1.120459366782% in preferred
shares and 0.005411671913% in common shares.
CONTACT: TNE - INVESTOR RELATIONS
Roberto Terziani
E-mail: terziani@telemar.com.br
Tel: 55 21 3131 1208
Fax: 55 21 3131 1155
Carlos Lacerda
E-mail: carlosl@telemar.com.br
Tel: 55 21 3131 1314
Fax: 55 21 3131 1155
GLOBAL CONSULTING GROUP
Kevin Kirkeby
E-mail: kkirkeby@hfgcg.com
Tel: 1-646-284-9416
Fax: 1-646-284-9416
Mariana Crespo
E-mail: mcrespo@hfgcg.com
Tel: 1-646-284-9416
Fax: 1-646-284-9416
=========
C H I L E
=========
ENDESA CHILE: Cedes Water Rights to Avoid Annual Payments
---------------------------------------------------------
Endesa Chile, a unit of Spain's Endesa SA, relinquished its
right over unused hydro resources, reports El Mercurio.
The move, which means the relinquishing of the right to generate
300MW of electricity, is aimed at avoiding payment of annual
fees, according to Chile's public works sub-secretary Clemente
Perez
The hydroelectric generation utility took the decision following
Wednesday's approval of a new bill allowing the government to
charge private electricity generation companies annual fees for
the hydro resources they own and do not use.
Endesa's move will allow other companies to carry out non-
electricity projects in the area, including aquiculture and
sanitation projects.
Perez explained that the bill is necessary for the development
of the country, as it will encourage a more optimal usage of the
country's water rights.
At the moment, only 13% of those rights are being used.
===============
C O L O M B I A
===============
COLOMBIA TELECOMUNICACIONES: Settles Conflict With Nortel
---------------------------------------------------------
Colombia's state-owned telecommunications firm Colombia
Telecomunicaciones SA, formerly Telecom, agreed to pay Canada's
Nortel Networks Corp. US$80 million to settle decade-old claims
over failed joint-venture contracts.
According to state news agency SNE, Brampton-based Nortel, one
of the world's largest telecom-equipment providers, had sued for
US$250 million over the contract in question.
Nortel is one of a group of foreign companies demanding
compensation from liquidated state-owned Telecom after the
company received less than the stipulated returns for installing
telephone lines under joint-venture contracts signed between
1993 and 1998.
Earlier, Telecom agreed to pay US$56 million to settle a similar
dispute with Sweden's Ericsson.
=============
E C U A D O R
=============
PETROECUADOR: Ends Purchase Contracts With 5 Companies
------------------------------------------------------
Ecuadorian state-owned oil firm lost contracts with five
companies that buy oil from the Company, reports Dow Jones.
The five companies rejected Petroecuador's March selling price,
which was set at a US$5.39-per-barrel discount to the current
market price for West Texas Intermediate crude. The Companies
had sought a discount of US$7.39-a-barrel, which Petroecuador
rejected.
Four of the five companies were buying 24,000 b/d from
Petroecuador, while the fifth was purchasing 12,000 b/d.
Petroecuador was scheduled to auction Friday nine new lots of
12,000 barrels a day each for one year to replace the terminated
contracts, according to sources at Petroecuador.
===========
M E X I C O
===========
EMPRESAS ICA: Completes $682.4M Financing For El Cajon Project
--------------------------------------------------------------
Empresas ICA Sociedad Controladora (NYSE and BMV: ICA), the
largest engineering, procurement and construction company in
Mexico, announced Friday that Constructora Internacional de
Infraestructura, S.A. de C.V. (CIISA), of which ICA owns 61
percent, successfully completed US$682.4 million in structured
long term financing for the El Cajon Hydroelectric Project.
The financing includes two facilities:
- A US$452.4 million syndicated loan due August 31, 2007.
- An issue of US$ 230 million in securities. The securities rank
pari passu with the syndicated loan.
This financing is the largest structured transaction completed
in Mexico for a project of this type, and secures all funds
required to complete the project.
Bernardo Quintana, CEO of ICA commented, "This financing shows
the confidence in the experience of the ICA-led consortium. It
is also a statement of support by the financial markets for
projects under the Pidiregas program in Mexico."
In addition, Jose Luis Guerrero, CFO of ICA, stated, "Receiving
investment grade ratings from Moody's and Standard & Poor's is a
major achievement for such a complex project."
El Cajon will have a capacity of 750 MW and is being built for
the Comisi¢n Federal de Electricidad (CFE). It is being financed
under the Mexican government's Pidiregas (Proyectos de Impacto
Diferido en el Registro del Gasto) program. The financing is
backed by the contract collection rights together with a
structured set of guarantees from CIISA's shareholders.
Located on the Rio Santiago in Nayarit, the El Cajon project,
comprises the execution of civil construction, electro-
mechanical, and ancillary works including procurement,
engineering, manufacturing, transport, assembly, testing, start-
up and commissioning of two 375 MW turbines. Works include the
main dam, spillway, upstream and downstream cofferdams,
powerhouse, turbines and generators, a power substation,
channels and tunnels for water intake and outflow, as well as
the river deviation works. The measurements of the concrete-
faced, rock filled, main dam include a volume of 10.2 million
cubic meters, a height of 186 meters and a length of 550 meters,
making it the second highest dam in Latin America.
As a result of an international tender, CFE awarded the contract
to CIISA in March 2003. ICA is responsible for the project,
supported by its partners. La Peninsular Compania Constructora,
S.A. de C.V. participates in the civil engineering works and
Power Machines - ZTL, LMZ, Electrosila, Energomachexport - in
the supply of electromechanical equipment and works.
Construction began in April 2003, and the plant is scheduled to
be completed and delivered to CFE in August 2007. Currently, the
project is approximately 10 percent complete. CIISA successfully
completed the pre-deviation of the Rio Santiago in December
2003.
The proceeds of the financing will be escrowed to fund
construction costs on a monthly basis, to pay interest, to repay
an outstanding bridge loan and transaction costs.
THE NOTES WILL NOT BE AND HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN
APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS.
GALEY & LORD: Emerges from Bankruptcy; Names New Directors
----------------------------------------------------------
Galey & Lord, Inc. (the "Company") announced Friday that it has
emerged from Chapter 11 and effected its Plan of Reorganization
(which, as previously announced, was confirmed by the U.S.
Bankruptcy Court on February 9, 2004). In accordance with the
Plan of Reorganization, the Company has a $70 million exit
financing facility from General Electric Capital Corporation of
which approximately $22 million was drawn upon emergence. John
J. Heldrich, the newly-promoted President and CEO of Galey &
Lord commented, "We are pleased to emerge from Chapter 11, and I
would like to thank the Company's customers, employees, and
suppliers for their continued support. Their loyalty has made it
possible to reach this point."
Mr. Heldrich will serve on the board of directors of Galey &
Lord, along with Blon Dean Brown, Jr., Managing Director of
Hampshire Advisory Partners; Lawrence F. Himes, President and
CEO of Duro Textiles LLC; John Kourakos, former President of
Warnaco Sportswear Group; Charles W. McQueary, Chairman of the
Board and Managing Partner of Corinthian Health Services, Inc.;
Richard Redden, former Chief Operating Officer of Lee Jeans and
Forstmann Industries; and Michael Rich, Portfolio Manager of
Highland Capital Management. With the Company's successful
emergence from bankruptcy Friday, Peter A. Briggs, a Managing
Director with turnaround consulting firm Alvarez & Marsal, LLC,
has completed his role as Chief Restructuring Officer.
The Company believes it is the market leader in producing
innovative woven sportswear fabrics as a result of its expertise
in sophisticated and diversified finishing. Fabrics are designed
in close partnership with a diversified base of customers to
capture a large share of the middle and high end of the
bottomweight woven market. The Company also believes it is one
of the world's largest producers of differentiated and value-
added denim products. The Company and its foreign subsidiaries
employ approximately 3,300 employees in the United States and
215 employees in its owned foreign operations. The Company and
its joint venture interests operate in the U.S., Canada, Mexico,
Asia, Europe and North Africa.
***********
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
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The TCR Latin America subscription rate is $575 per half-year,
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subscription or balance thereof are $25 each. For subscription
information, contact Christopher Beard at 240/629-3300.
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