/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040416.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 Friday, April 16, 2004, Vol. 5, Issue 75 Headlines A R G E N T I N A ALAVAR: Court Rules In Bankruptcy Proceeding AUTOPISTAS DEL SOL: Bonds Retain Junk Status BANCO PROVINCIA: Seeks Additional Commission Revenue Sources CABLEVISION: S&P Leaves Junk Ratings Unchanged CAPEX: No Change from S&P Ratings on Bonds CINCO HERMANOS: Reorganization Approved, Claims Check Follows CONCENTRACION EMPRESARIA: Declared Bankrupt by Court DISCO: Losing Bidder Asks Antitrust Body To Block Sale ELECTRO TRINO: Court Rules In Favor of Creditor's Request FUNDACION ECOYSUR: Court OKs Involuntary Bankruptcy Motion GENERAL STRAPPING: Court Authorizes Bankruptcy LAMI: Court Outlines Reorganization Timetable LEISURE: Court Schedules Relevant Reports Filing Deadline MARCENARO: Court OKs Creditor's Bankruptcy Motion MOLINOS RIO: Fitch Upgrades Ratings 'B-' from 'CC VEHICULOS ASIATICOS: Initiates Bankruptcy Proceedings WELLMAN: Court Deems Bankruptcy Necessary B E R M U D A FOSTER WHEELER: Shareholder Meeting Delayed Pending Offer FOSTER WHEELER: Elects John T. La Duc Executive VP, CFO B R A Z I L AES CORP.: Announces Redemption of Outstanding Notes AES SUL: Moody's Cuts Ratings on Deteriorating Financial Health CEMIG: Shareholders Meeting, Agenda Announced DIRECTV LA: Regulator Imposes DirecTV/Sky Merger Conditions EMBRATEL: Calais Offers 40% Embratel Stake To BNDES EMBRATEL: Morgan Stanley Lowers Rating on Uncertainties EMBRATEL: General Shareholders' Meeting Announced PETROBRAS ENERGIA: Registers Higher YOY March Production C H I L E TELEFONICA CTC: Chilesat Files Another Rate Challenge C O L O M B I A AVIANCA: Pilot's Union Says Copa-Continental Offer Better AVIANCA: Sinergy Not Raising Bid C O S T A R I C A ICE: To Raise Cariblanco Financing With Debt Issues M E X I C O SATMEX: EximBank Exit Halts Creditor Talks VITRO: Subsidiary Secures $75M Syndicated Bank Facility P A R A G U A Y ANDE: Negotiating Payment Of Itaipu Debt U R U G U A Y ANCAP: Shares Seized at Creditor Banks' Behest - - - - - - - - - - ================= A R G E N T I N A ================= ALAVAR: Court Rules In Bankruptcy Proceeding -------------------------------------------- Alavar S.R.L. entered bankruptcy on orders from Buenos Aires Court No. 28, reveals Infobae. Working with Clerk No. 35, the court assigned Mr. Nestor Agustin Iribe as receiver. He is to verify creditors' claims until May 24, 2004. Creditors who fail to have their claims validated before the deadline will be disqualified from receiving any payments to be made after the Company's assets are liquidated. The individual reports, which are due to be submitted to court on July 6, 2004, are to be prepared upon completion of the verification process. The court also requires the receiver to prepare a general report and file it on September 3, 2004. This report contains a summary of the results in the individual reports. CONTACT: Nestor Agustin Iribe, Receiver Av Corrientes 1250 Buenos Aires AUTOPISTAS DEL SOL: Bonds Retain Junk Status -------------------------------------------- A total of US$380 million worth of corporate bonds issued by Autopistas del Sol S.A maintain an 'raD' rating from Standard & Poor's International Ratings, Ltd. Sucursal Argentina, said the Comision Nacional de Valores (CNV) in its Web site. The bonds that carry the rating are: - US$170 million worth of 'Simple Issue' described as "Obligaciones Negociables simples, autorizadas por AGO de fecha 16.5.97." These bonds will mature on August 2, 2004; and - US$210 million worth of 'Simple Issue' described as "Obligaciones Negociables simples, autorizadas por AGO de fecha 16.5.97." These bonds will mature on August 3, 2009. The rating, which is based on the Company's finances as of the end of December 2003, is assigned to financial obligations that are currently in default. The ratings agency said that the same rating may be issued if interest or principal payments are not made on the due even if the applicable grace period has not expired. BANCO PROVINCIA: Seeks Additional Commission Revenue Sources ------------------------------------------------------------ With the intention of diversifying its revenue stream, a source inside the Buenos Aires province bank Banco Provincia (Bapro) said it plans to concentrate its energies on commission-based banking products and services this year, reports BNamericas. The severe financial and economic crisis that hit Argentina in late 2001 and 2002 forced the country's banks to turn to commission-based banking as the loan market and interest income collapsed. But this year, a better performing economy and political stability are setting the stage for lending to make a comeback in Argentina. Bapro's 2004 commercial strategy, however, will be geared towards boosting commission-based income further, the source said. The source said the bank will push for commission generating products and services such as credit cards, debit cards, checking accounts, and savings accounts and insurance, he said. Bapro is Argentina's second largest bank in terms of overall market share. CABLEVISION: S&P Leaves Junk Ratings Unchanged ---------------------------------------------- Standard & Poor's International Ratings, Ltd. Sucursal Argentina maintains an 'raD' rating on the following corporate bonds issued by Cablevision S.A.: - US$100 million worth of "Series and/or Class" bonds described as "Serie XI por un monto de USD 100 millones dentro del Programa de ON a med. plazo por un monto de USD 1.500 MM." The maturity of these bonds was not disclosed. - US$100 million worth of "Series and/or Class" bonds described as "Serie 9 de ON por USD 100 MM bajo el Programa de USD 1500 MM." The maturity of these bonds was not disclosed. - US$275 million worth of "Series and/or Class" bonds described as "Serie 5 por U$S 275 MM bajo el Prog. de Ons. a Mediano Plazo por U$S1500 MM." These bonds will mature on May 1, 2009. - US$250 million worth of "Series and/or Class" bonds described as "Serie 10 por U$S 250 MM bajo el Prog. de Ons. a Mediano Plazo por U$S1500 MM." These bonds will mature on April 30, 2007. The rating action is based on the Company's financial status as of December 31, 2003. CAPEX: No Change from S&P Ratings on Bonds ------------------------------------------ Standard & Poor's International Ratings, Ltd. Sucursal Argentina maintains an 'raD' rating on US$40 million of "obligaciones negociables simples", due on June 11, 2004, and on US$105 million of bonds due on December 23, 2004. These set of bonds are classified under "simple issue". The CNV, in its Web site, revealed that the rating action was based on the Company's finances as of January 31, 2004. An obligation is rated 'raD' when it is in payment default, or the obligor has filed for bankruptcy, said the ratings agency. This rating is also assigned when interest or principal payments are not made on the due date, even when the applicable grace period has not expired, unless Standard & Poor's has reason to believe that payments will be made during the grace period. Meanwhile, the local S&P maintains an 'raCC' rating on US$150 million worth of "Obligaciones Negociables Simples" that are classified under "simple issue." These bonds mature on January 1, 2005. S&P said that an obligation with this rating is currently highly vulnerable to non-payment. CINCO HERMANOS: Reorganization Approved, Claims Check Follows ------------------------------------------------------------- Buenos Aires Court No. 13 authorized Cinco Hermanos S.A. to start its reorganization process. According to Infobae, the court, which is assisted by Clerk No. 26, granted the Company's "Concurso Preventivo" petition, appointing Maximo Conrado A Piccinelli as receiver. Creditors have until May 12 to submit their proofs of claim to the receiver, who will verify these claims and submit them to court as individual reports on June 25, 2004. After these reports are processed in court, the receiver will prepare the general report and submit it to court on August 9, 2004. The informational meeting, the last stage of a reorganization process, will be held on December 1, 2004. CONTACT: Maximo Conrado A Piccinelli Montevideo 666 Buenos Aires CONCENTRACION EMPRESARIA: Declared Bankrupt by Court ---------------------------------------------------- Concentracion Empresaria del Sud S.A. is now "Quiebra" - meaning bankrupt, says Infobae. Buenos Aires Court No. 23, which is assisted by Clerk No. 46, decreed the bankruptcy. The court is yet to disclose a timetable for the process and name a receiver, who will administer the Company while it is in bankruptcy. DISCO: Losing Bidder Asks Antitrust Body To Block Sale ------------------------------------------------------ The planned sale by Royal Ahold NV of Argentine supermarket chain Disco to Chilean retailer Cencosud has hit another snag. The losing bidder for the supermarket chain has asked local antirust authorities to block the deal, reveals Dow Jones. In his argument released by his representatives in a statement Wednesday, Argentine businessman Francisco de Narvaez stressed to the National Committee of the Defense of Competition that it must block Cencosud's acquisition of Disco because it would reduce the Argentine retail market to a small group of giant players, eliminating competition and driving up prices. Ahold's negotiations with Mr. De Narvaez, who said that Disco's new owner should be local, broke down in January despite the businessman's offer to, on top of US$250 million, assume all financial risks associated with Disco's ongoing legal troubles. The businessman is expected to argue before antitrust regulators that his proposal is effectively much better than Cencosud's winning bid of US$315 million, which had assumed "that no liabilities exist at the moment of purchase." In the event the antitrust body and Leonardo Madcur, the Economy Ministry official who oversees competition and antitrust issues approves the sale, Cencosud will be controlling 22% of Argentina's retail market. A final decision from the antitrust committee could take months. ELECTRO TRINO: Court Rules In Favor of Creditor's Request --------------------------------------------------------- Organizacion de Servicios Directos Empresarios (OSDE) successfully sought for the bankruptcy of Electro Trino SA, says La Nacion. Judge Ottolenghi of Buenos Aires Court No. 8 granted OSDE's petition for bankruptcy, which was filed on Electro Trino's failure to pay US$12,473.27 of debt. Assisted by Clerk No. 8, Dr. Anta, the court appointed Mr. Francisco Cano as receiver, who will verify creditors' claims until June 7, 2004. The bankruptcy case will conclude with the liquidation of its assets to repay creditors. CONTACT: Electro Trino SA Gualeguaychu 1543 Buenos Aires Francisco Cano, Receiver Uruguay 618, 2° "C" Buenos Aires FUNDACION ECOYSUR: Court OKs Involuntary Bankruptcy Motion ---------------------------------------------------------- Judge Di Noto of Buenos Aires Court No. 15 declared Fundacion Ecoysur bankrupt, reports Argentine newspaper La Nacion. The ruling comes in approval of the bankruptcy petition filed by the Company's creditor, Maria Herrera Fresco, for nonpayment of US$89,143.56 in debt. Clerk No. 29, Dr. Tevez, assists the court on the case, the source adds. The Company's receiver, Mr. Jorge Oddi, will examine and authenticate creditors' claims until June 11, 2004. This is done to determine the nature and amount of the Company's debts. Creditors must have their claims authenticated by the receiver by the said date in order to qualify for payments to be made after the Company's assets are liquidated. CONTACT: Fundacion Ecoysur Bartolome Mitre 777, 3° "B" Buenos Aires Jorge Oddi, Receiver Libertad 293, 5° Buenos Aires GENERAL STRAPPING: Court Authorizes Bankruptcy ---------------------------------------------- Buenos Aires Court No. 4 decreed the bankruptcy of General Strapping Systems de Argentina S.A., reports Infobae. The Company will initiate the process with Mr. Mario Leizerow as receiver, who will verify creditors' claims until May 20, 2004. The Company's case will conclude with the liquidation of its assets to repay creditors. Court No. 7 assists the court in handling the proceedings. CONTACT: Mario Leizerow, Recever Av Corrientes 1250 Buenos Aires LAMI: Court Outlines Reorganization Timetable -------------------------------------------- Buenos Aires Court No. 7 revealed the official schedule for the reorganization of Lami S.A. According to Infobae, the court- appointed receiver, Mr. Gabriel Eduardo Bigal, will verify creditors' claims until June 9, 2004. After verifying these claims, he will submit to court the results of the verification process on July 22, 2004 by way of individual reports. After these reports are processed in court, the receiver will submit a general report to court on September 2, 2004. The court, which is assisted by Clerk No. 14, scheduled the informative assembly for February 10, 2005. The Company decided to seek reorganization after piling up liabilities amounting to ARS263,769.42 on the back of ARS202,271.78 in assets. CONTACT: Gabriel Eduardo Bigal, Receiver Reconquista 1011 Buenos Aires LEISURE: Court Schedules Relevant Reports Filing Deadline --------------------------------------------------------- Buenos Aires Court No. 18 has set the timetable for the bankruptcy of textile company Leisure SRL. According to La Nacion, the court-appointed receiver, Ms. Alicia Kurlat, will verify creditors' claims until May 12, 2004. This stage will determine how much each creditors will get after all of the Company's assets have been liquidated at the end of the bankruptcy process. After verifying the claims, the receiver will prepare the individual reports based on the results of the verification process and submit these reports to court on June 24, 2004. After these reports are processed in court, the receiver will submit the general report August 24, 2004. The court, which is aided by Clerk No. 35, declared Leisure SRL "Quiebra" in May, granting approval to a petition filed by the Company's creditor, AFIP DGI for nonpayment of US$157,415.81 in debts. CONTACT: Leisure SRL Zapiola 4732 Buenos Aires Alicia Kurlat, Receiver Carlos Pellegrini 1079, piso 10ø "A" Buenos Aires MARCENARO: Court OKs Creditor's Bankruptcy Motion ------------------------------------------------- Marcenaro SA entered bankruptcy after Judge Fernandez of Buenos Aires Court No. 19 approved a bankruptcy petition filed by Esteban Di Radourian, reports La Nacion. The Company's failure to pay US$40,662.31 in debt prompted the bankruptcy petition. Working with Dr. Johnson, the city's Clerk No. 38, the court assigned Mr. Jorge Arias as receiver for the bankruptcy process. The receiver's duties include the authentication of the Company's debts and the preparation of the individual and general reports. Creditors are required to present their proofs of claim to the receiver before June 30, 2004 in order to qualify for the repayment. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. CONTACT: Marcenaro SA Alsina 440, piso 3° "6" Buenos Aires Jorge Arias, Receiver Rivadavia 1227, 3° "F" Buenos Aires MOLINOS RIO: Fitch Upgrades Ratings 'B-' from 'CC ------------------------------------------------- Fitch Ratings upgraded Molinos Rio de la Plata, S.A. (Molinos) local currency rating to 'B-' from 'CC'. The 'B-' rating on Molino's senior secured export notes (SENs) has been affirmed. The Rating Outlook is Stable. The rating action reflects the company's ability to earn dollar- based revenues through exports of soybean and oilseed derivatives. The ratings also reflect a leading business position in domestic branded-food products. The ratings are constrained by a challenging economic and operating environment in Argentina, weak domestic demand, difficulty in passing cost increases onto consumers and foreign currency exposure resulting from a mostly dollar-denominated debt. The ratings also incorporate the volatility of oilseed crushing margins. Molinos' business strategy is now heavily focused on its growing export-revenue base. The activities of oilseed crushing and commercialization primarily for the export market accounted for 53% of revenues in 2003 compared to 25% in 2002. Export sales in 2003 reached US$522 million up from US$306 million in 2002 and accounted for 62% of total revenues. Molinos enjoys significant competitive advantages in the production of oilseed bottled oil for the export market. Moreover, Molinos' focus on oilseed processing has been supported by a favorable trend in crushing margins in Argentina, strong demand from China and the European Union and higher international soybean prices due to a poor harvest in the U.S. With the consolidation at the end of 2003 of its ownership in Pecom Agra, a processor and exporter of soybean and soybean oil, oilseed crushing and commercialization are expected to reach over 60% of revenues in 2004. Moreover, Molinos is planning to invest US$80 million over a two-year period in the construction of a port and the expansion of its San Lorenzo crushing plant, which will triple capacity at the facility. With this project, Molinos is seeking to strengthen its position as one of the key world players in soybean crushing. Molinos is also investing US$10 million in the expansion of a pasta plant and another US$10 million in a bottled oil plant in Peru. These investments, to be completed by 2005, will be financed with internal cash flows. In the domestic market, consumption remains weak although volumes have begun to recover. Molino's vast portfolio of branded premium and second-tier food products have allowed the company to retain its competitive position. The positive outlook for oilseed processing activities and Molinos' increasing dollar-revenue earning capacity has facilitated access to wider sources of funding at an attractive cost. As a result, interest expenses declined significantly during 2003 and the interest coverage measured as EBITDA to interest expense improved to 3.0 times (x) from 1.9x in 2002. Leverage as measured by Debt to EBITDA increased to 4.1x in 2003 from 2.7x in 2002, primarily due to an important increase in pre-export financing to fund the expanding soybean exporting activity. The company's total debt as of Dec. 31, 2003 was US$238 million, the vast majority of which is dollar- denominated. Total debt was composed of the following: US$35 million outstanding balance on SENs, US$173 million of pre- export financing and US$30 million of loans with local and foreign banks. Liquidity is adequate with US$45 million of cash and marketable securities at Dec. 31, 2003. Molinos is a large processor and exporter of soybean as well as Argentina's largest exporter of bottled oil (soybean and sunflower oil). Molinos is also Argentina's largest branded food products manufacturer. The company produces a wide range of packaged foods for domestic consumption, including bottled oil, margarine, pasta, premixes, packaged flour, yerba mate, rice, cold cuts and frozen foods. The company's controlling shareholder is the Perez Companc Family Group (PCFG) with a 64% stake. The remaining 36% trades publicly. VEHICULOS ASIATICOS: Initiates Bankruptcy Proceedings ----------------------------------------------------- Buenos Aires Court No. 3 declared Vehiculos Asiaticos S.A. "Quiebra," reports Infobae. Clerk No. 6 assists the court on the case, which will close with the liquidation of the Company's assets to repay creditors. Nelida H Grunblat de Nobile, the court-appointed receiver, will verify creditors' claims until May 10, 2004, and then prepare the individual reports based on the results of the verification process. The individual reports will then be submitted to court on June 22, 2004, followed by the general report on August 19, 2004. CONTACT: Vehiculos Asiaticos S.A. Olazabal 5486 Buenos Aires Nelida H Grunblat de Nobile, Receiver Felipe Vallese 1195 Buenos Aires WELLMAN: Court Deems Bankruptcy Necessary ----------------------------------------- Wellman S.A., which was undergoing reorganization, entered bankruptcy on orders from Buenos Aires Court No. 18. Infobae relates that the court, which is assisted by Clerk No. 35, appointed Mr. Osvaldo R. Nicolini, to be the receiver on the case. Mr. Nicolini will conduct the credit verification process pursuant to the court's guidelines. CONTACT: Osvaldo R Nicolini, Receiver Alvarez Thomas 3036 Buenos Aires ============= B E R M U D A ============= FOSTER WHEELER: Shareholder Meeting Delayed Pending Offer --------------------------------------------------------- Foster Wheeler Ltd. (OTCBB: FWLRF) announced Wednesday that its Annual General Meeting of Shareholders, which has traditionally been held in April, will be held later in the year pending consummation of the company's recently announced proposed equity for debt exchange offer. The company will make an announcement regarding the date and location of the Annual General Meeting of Shareholders in the future. Notes to Editor: Foster Wheeler Ltd. is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, oil and gas, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. Web site: www.fwc.com FOSTER WHEELER: Elects John T. La Duc Executive VP, CFO ------------------------------------------------------- Foster Wheeler Ltd. (OTCBB:FWLRF) announced Wednesday that its board of directors has elected John T. La Duc, 61, as executive vice president and chief financial officer. Mr. La Duc was most recently executive vice president and chief financial officer of Kaiser Aluminum Corporation. "Foster Wheeler is very fortunate to be able to attract an individual with the experience, integrity, and expertise that John provides. He is the perfect individual to lead the finance functions for our company as we move toward completion of our restructuring and as we structure Foster Wheeler for long-term success. I am very much looking forward to working with John once again," said Raymond J. Milchovich, chairman, president and chief executive officer. Brian K. Ferraioli, who has served as acting chief financial officer since January 30, 2004, will continue in his position as vice president and controller of Foster Wheeler Ltd. worldwide. "I also want to thank Brian for his excellent work serving as acting CFO these past few months and look forward to his continuing as one of the key members of our finance team as we go forward," added Mr. Milchovich. Mr. La Duc spent nearly thirty-five years with Kaiser Aluminum, serving as executive vice president and chief financial officer from 1990 to 2004. In that capacity he was responsible for all treasury, controller's, tax, credit, insurance and investor relations functions. He led the company's banking arrangements and capital markets activities and more recently had an integral role in Kaiser's ongoing restructuring activities. Mr. La Duc holds a Bachelor of Science Degree in Engineering Sciences from Purdue University and an MBA in Finance from Stanford University. =========== B R A Z I L =========== AES CORP.: Announces Redemption of Outstanding Notes ---------------------------------------------------- The AES Corporation (NYSE:AES) announced Wednesday that it had called for redemption $3,084,000 aggregate principal amount of its outstanding 10% Senior Secured Notes due 2005. The notes will be redeemed on a pro rata basis on May 14, 2004 at a redemption price equal to 100% of the principal amount thereof to be redeemed plus accrued and unpaid interest to the redemption date. The redemption is being made out of "excess asset sale proceeds" and reflects the portion of asset sale proceeds allocable to the notes from an additional $20 million contingent payment received by AES in relation to its March 2003 sale of its equity interests in Mountainview Power Company and Mountainview Power Company LLC. About AES AES is a leading global power company, with 2003 sales of $8.4 billion. AES delivers 45,000 megawatts of electricity to customers in 27 countries through 114 power facilities and 17 distribution companies. Our 30,000 people are committed to operational excellence and meeting the world's growing power needs. More information about AES may be obtained at www.aes.com or by contacting AES investor relations at investing@aes.com. CONTACT: AES Corporation Scott Cunningham, 703-558-4875 AES SUL: Moody's Cuts Ratings on Deteriorating Financial Health --------------------------------------------------------------- AES Sul Distribuidora Gaucha de Energia S.A. (AES Sul), a Rio Grande do Sul-based electric distribution company, had its ratings downgraded by Moody's Investors Service to Ca.br from Caa1.br (Brazil National Scale). The downgrade affected AES Sul's senior secured BRL250 million debentures due 2008. Concurrently, Moody's downgraded the global local currency rating to Ca from Caa1. Outlook on the ratings was revised to stable. The downgrades reflect continued weak financial performance at AES Sul and its ongoing liquidity crisis, specifically as highlighted by management's election to not make the requisite payments on certain of its foreign currency debt obligations and by the Company's repeated rescheduling of payments on the rated debentures in December 2002 and December 2003. The revised ratings are pegged to continued poor financial performance and ultimate anticipated recovery levels for the debenture holders and reflect Moody's expectation of net present value loss severity of 30% or greater under an assumed restructuring of the company's balance sheet that would allow it to continue as a going concern. The stable rating outlook reflects Moody's expectation that the ratings will not need to be lowered further following completion of the assumed restructuring scenario. CEMIG: Shareholders Meeting, Agenda Announced --------------------------------------------- Stockholders are hereby called to attend an Ordinary General Meeting and an Extraordinary General Meeting of Stockholders, to be held jointly on 30 April 2004, at 10:30 a.m., at the company's head office, Avenida Barbacena 1,200, 18th floor, in Belo Horizonte, in the Brazilian state of Minas Gerais, Brazil, to decide on the following matters: 01- Examination, discussion and voting on the Report of Management and Financial Statements for the year ended 31 December 2003, and the respective complementary documents. 02- Allocation of the net profit for the year of 2003, in accordance with Article 192 of Law 6404/76 as amended. 03- Decision on the manner and date of payment of interest on equity, and dividends, in the total amount of R$ 320,494,000. 04- Election of the members and substitute members of the Audit Committee and setting of their remuneration. 05- Setting of the remuneration of the company's management. 06- Inclusion, subject to the pending statement of position by ANEEL, of a sole paragraph in Article 17 of the company's By- laws, to allow delegation to the Executive Board of Directors of the acts described in lines "e", "j" and "l" of that Article. 07- Proposals by the majority stockholder for the bases of a Fourth Amendment to the Contract to Assign Outstanding Balances Receivable on the Results Compensation Account (CRC), in existence between the company and the state of Minas Gerais, and for a new Dividend Policy for the company. Any stockholder who wishes to be represented by proxy in these General Meetings of Stockholders should obey the terms of Article 126 of Law 6406/76, as amended, and the sole paragraph of Article 9 of the company's By-laws, showing at the time of the meeting, or depositing, proofs of ownerships of the shares issued by a depositary financial institution, and a power of attorney with special powers, at the General Secretariat of the company at Av. Barbacena 1,200 - 19th floor, B1 wing, Belo Horizonte, state of Minas Gerais, Brazil by 4 p.m. (GMT -3 hours) on 28 April 2004. DIRECTV LA: Regulator Imposes DirecTV/Sky Merger Conditions ----------------------------------------------------------- To ensure fairness in the market while it studied News Corp. Ltd.'s purchase of U.S. DirecTV, Brazilian antitrust regulator Administrative Council of Economic Defense or CADE said Wednesday it will place some conditions on the sale, according to Reuters. CADE said the companies agreed that News Corp. would not discriminate against rival operators in its program sales. Should it not follow the preliminary temporary ruling, the company could face a daily fine of BRL 150,000 (US$51,939). In the United States, the Federal Communications Commission has already stamped its approval on the deal. In December, News Corp., which owns satellite operators Sky and Fox, completed the purchase of Hughes Electronics Corp., which controls DirecTV. The acquisition created a virtual monopoly of satellite television in Latin America's main markets. DirecTV has 12% of the pay television market in Brazil, while Sky holds 20%. Although the satellite operators have been gaining ground, Net Servicos de Comunicacao holds 37 percent of the market. EMBRATEL: Calais Offers 40% Embratel Stake To BNDES --------------------------------------------------- The president of Brazilian state bank Banco Nacional de Desenvolvimento Economicoe Social (BNDES) said it has received an offer from the Calais consortium keen on acquiring Brazil's Embratel Participacoes SA a 40% stake in Brazil's largest long distance carrier, says AFX, citing a GloboNews report. At a senate hearing on the case, BNDES president Carlos Lessa said that the three fixed-line operators that make up Calais "have already sent us a letter offering the BNDES 40 percent (of Embratel)" BNDES is particularly interested in the fate of Embratel's satellite arm, Star One. The government has already said it is especially interested in keeping some sort of control over Embratel's satellite unit, which the military uses for strategic communications. EMBRATEL: Morgan Stanley Lowers Rating on Uncertainties ------------------------------------------------------- Citing concerns that the Calais consortium might push through with plans to break up Brazilian company Embratel Telecom Participacoes SA if their bid proves successful, investment bank Morgan Stanley has decided to downgrade the stock rating for Brazil's largest long-distance carrier. Morgan Stanley said Wednesday that it had downgraded Embratel's ADRs from "Overweight-V" to "Equalweight-V." "V" is a designation used by the bank for stocks that have "more than a 25% chance of a price move (up or down) of more than 25% in a month." "Recent developments increased the probability that MCI accepts an offer from the entity (Calais Participacoes SA) controlled by Brazilian local wireline incumbents," said the downgrade report issued Wednesday by Morgan Stanley analysts Mario Epelbaum, Nicolai Sebrell and Camilo E. Horvilleur." "If the consortium ... gains control of Embratel, we believe the risk to preferred Embratel shareholders (and thus to ADR shareholders) rises materially," said the report. Morgan Stanley said that the plans of Calais to restructure Embratel appear "difficult at first blush." However, the report continued "just the threat of restructuring and the fact that Brazilian law gives scant protections to preferred shareholders should weigh on Embratel preferred shares, in our view." U.S. telecommunications giant MCI announced last month that it was selling its 51.8% voting stake in Embratel to Telmex for $360 million cash and turned down a $550 million cash bid from Calais, citing concerns that it wouldn't be approved by regulators. Since Dec. 5, the week before Calais and Telmex made their bids, The price of Embratel's American Depositary Receipts trading on the New York Stock Exchange have plunged nearly 19% since Dec. 5, the week before Calais and Telmex made their bids. The ADR was down 1.1% Wednesday. EMBRATEL: General Shareholders' Meeting Announced ------------------------------------------------- The Shareholders of EMBRATEL PARTICIPACOES S/A are hereby invited to attend the Ordinary Shareholders Meeting that will be held at the Company's headquarters, located at Rua Regente Feijó, n° 166, room 1687-B, Downtown, City and State of Rio de Janeiro, on April 20th, 2004, at 10:30, to deliberate on the following Agenda: (i) Verification of the Management's accounts, examination, discussion and approval of the Financial Statements and the Administration Report related to the fiscal year ended on December 31st, 2003; (ii) Deliberate on the destination of the period net profit, as follows: (a) the ratification of the dividend distribution, in the amount of R$86,137,640.88 (eighty-six millions, one hundred and thirty-seven thousand, six hundred and forty reais, and eighty-eight cents), approved by the Board of Directors, in meeting that took place on December 4th, 2004 and re-ratified on January 29th, 2004; and (b) the constitution of investment reserves based on the capital budget proposed by the Administrators of the Company; (iii) Election of the members of the Board of Directors; (iv) Definition of the annual overall compensation of the Company's administrators for the fiscal year of 2004; and (v) Election of the members of the Fiscal Council and definition of their respective compensation. GENERAL INSTRUCTIONS: A) Powers of Attorney should be filed at the Company headquarters within forty-eight hours before the Shareholders Meeting. B) Shareholders participating in Fungible Custody of Nominative Shares of the Stock Exchanges willing to take part at this Meeting shall present a statement, informing their respective shareholding, issued two (02) days before the Meeting thereof. C) Under CVM Regulatory Instruction Number 165 of December 11, 1991 with wording provided by Article One of CVM Instruction Number 282 of June 26, 1998 the percentage for requirement of multiple vote will be five percent (5%) of the voting capital. PETROBRAS ENERGIA: Registers Higher YOY March Production -------------------------------------------------------- As Argentina heads into its worst energy crisis in more than a decade, Argentine energy company Petrobras Energia SA (PECO.BA) said in its monthly output report released Wednesday that it's oil and gas output for March 2004 is higher than its production for the same period last year, Dow Jones reports. For last month, Petrobras Energia said it has produced a total of 171,800 barrels of oil equivalent a day in March, up from 158,600 boe/d in March 2003. The latest figure is also higher than its February 2004 output of 165,100 boe/d. Natural gas production, meanwhile, totaled 47,300 boe/d in March, up from 45,700 boe/d in the year-earlier month. This was also on par with the 47,200 boe/d produced in February. Production from Argentine operations alone in March was 34,700 boe/d, unchanged from a year earlier. Petrobras Energia's oil production in March was 124,500 barrels a day, up from 112,900 b/d in the same month last year and 117,900 b/d in February. The biggest output jump was registered in Venezuela, from 39,700 b/d a year earlier to 50,500 b/d in the latest month. In Argentina, oil production dropped to 55,300 b/d from 57,800 b/d in March 2003. Petrobras Energia is a unit of Petrobras Energia Participaciones (PZE), which is in turn owned by Brazilian energy giant Petroleo Brasileiro SA (PBR), or Petrobras. ========= C H I L E ========= TELEFONICA CTC: Chilesat Files Another Rate Challenge ----------------------------------------------------- For the second time, Chilean long distance operator Chilesat has asked for a modification of the rates decree telecoms regulator Subtel is preparing for dominant fixed line operator Telefónica CTC Chile (NYSE: CTC), BNamericas says, quoting an El Mercurio daily report. A clause which would allow CTC to raise interconnection fees by 9.3% is at the center of Chilesat's objections. The operator claims that the said clause, aside from conflicting with telecoms law in general, does not conform with the technical guidelines previously agreed for calculating a new rates regime. Chilesat also claimed the new interconnection fees would add CLP10 billion pesos (US$16.7mn) to its costs over the five-year period covered by the rates decree. Chilesat contested the rates decrees for mobile operators in February, but its arguments were dismissed by the comptroller general, who took the side of the regulator on the issue. In a statement, Subtel said the mobile rates decrees were scheduled to take effect on Wednesday. The most important aspect of the mobile decrees is a clause cutting the interconnection fees they can charge fixed line operators by 26.5%. Subtel is now studying CTC's response to the proposed decree and is scheduled to publish the definitive draft on May 4. =============== C O L O M B I A =============== AVIANCA: Pilot's Union Says Copa-Continental Offer Better --------------------------------------------------------- The head of Colombia's ACDAC pilots' union said Wednesday that a partnership between Continental Airlines Inc. and Panama's Copa Airlines has submitted a much higher bid than Brazil's Sinergy for the acquisition of bankrupt Colombian airline Avianca, according to Reuters. Alberto Padilla, who belongs to a seven- member creditor committee with which Avianca is trying to renegotiate US$269 million in debt under the supervision of a U.S. bankruptcy court, said, "The money is superior, notably so, in Copa-Continental's offer." He, however, cautioned that there is no deal yet. "What I don't want (people thinking) out there is that there is already a done deal with Copa. No. What we have is a preliminary agreement," Mr. Padilla pointed out. Whether the agreement was exclusively with his union or with the entire creditors' committee, Mr. Padilla didn't make clear. Brazil's Sinergy proposed in March that in exchange for a 75% stake in Avianca, it would infuse US$64 million in capital and assume the airline's US$300 million debt. In fact, the owners of the bankrupt carrier, Valores Bavaria and Colombia's Coffee Federation, have announced that it has already reached an agreement with oil businessman German Efromovich, who controls Sinergy. But when a lawyer for Avianca's creditors' committee said there were other interested bidders, which Avianca said it would consider, a bidding war for the airline suddenly loomed large. Mr. Padilla did not divulge details of the partnership's offer. However, he did disclose that Continental-Copa offered to guarantee the payment of Avianca's pension liabilities, a major issue for pilots which Mr. Efromovich had not guaranteed. "I think that Continental and Copa are two companies that give much more added value to Avianca. The support that one has from the seventh-largest (airline) in the world (Continental) is something that generates value for the company," Mr. Padilla said. "I don't know about the support of Ocean Air," he added, referring to the Brazilian carrier also controlled by Mr. Efromovich. AVIANCA: Sinergy Not Raising Bid -------------------------------- In the face of a reportedly higher bid for Colombia's flagship carrier by a partnership between Continental Airlines Inc. and Panama's Copa Airlines, Brazilian company Sinergy said Wednesday they have no plans of improving on their bid for the bankrupt airline, reports Reuters. German Efromovich, an oil entrepreneur who also controls Sinergy, said, "We are not going to improve our proposal because we do not believe the business to be any more interesting." Last month, Sinergy offered to acquire a 75% stake in Avianca with the injection of US$64 million in capital and the assumption of some US$300 million of the carrier's debt. On Wednesday, one of the airline's creditors leaked that Continental-Copa has submitted a much higher bid. No figures, however, were immediately available. Mr. Efromovich said he understood that the partnership's proposal had already been forwarded to the U.S. court overseeing the Chapter 11 bankruptcy proceedings of the airline, but he added that he does not know the value. "If they win, congratulations. Then they will have to administer Avianca," he said. Avianca is one of the world's oldest airlines and operates an average of 290 flights a day to 18 destinations in Colombia and 17 abroad. It has 36 planes and about 5,000 employees. It has a U.S. subsidiary, which allowed Avianca to seek Chapter 11 proceedings and continue operating while it sought to restructure debt. =================== C O S T A R I C A =================== ICE: To Raise Cariblanco Financing With Debt Issues --------------------------------------------------- Project implementation officer Jose Miguel Mena of Costa Rican state power company ICE told BNamericas Tuesday that the company is planning to issue securities on the local market so it could wholly finance the construction of its US$170 million, 82MW Cariblanco hydro project. In December 2003, ICE issued US$20 million in securities, and on Tuesday issued an additional US$10.5 million in six-year securities priced at US$1,000 each. Interest is paid quarterly at an annual rate of 8.22%. Mr. Mena said Tuesday's issue was more than four times oversubscribed. Some US$20 million more will be issued around the end of June, while similar amounts will be issued every three months or so "until the project is completely financed." The securities are managed through a trust fund administered by local bank Banco Nacional. The mechanism allows ICE to avoid incurring direct debt, and Cariblanco is the second power generation project for which ICE has issued securities. The first was the US$70 million, 37MW Peñas Blancas hydro plant that started operations in March 2003. Mr. Mena said the construction on the Cariblanco plant began in November and is expected to be operational by October 2007. =========== M E X I C O =========== SATMEX: EximBank Exit Halts Creditor Talks ------------------------------------------ The negotiations of Satélites Mexicanos (Satmex) with its creditors have come to a halt after the decision of the Export- Import Bank of the United States (EximBank) to withdraw its financial support of the Mexican company, reports El Universal. Jim Harper, director of corporate research at BCP Securities, said "Yes, the negotiations were affected. They will have to start again from scratch," said Jim Harper, director of corporate research at BCP Securities. Satmex will also have to deal with the stern terms imposed by the company that insured the Satmex 5 satellite, which has suffered some technical flaws in its propulsion system. For one, Satmex will have to give the insurers a report on the technical operations of the satellite for the next quarter. Based on these results, the insurer has the authority to revise the clauses of the policy and or even cancel the contract. Even so, the US$100 million covered is not enough to replace the device. The policy also excludes coverage of the Xenon Ion Propulsion System (XIPS) and any related system. However, the company assures that there have been no service interruptions despite the problems. VITRO: Subsidiary Secures $75M Syndicated Bank Facility ------------------------------------------------------- Vitrocrisa Comercial, S. de R.L. de C.V. announced today that it has secured a credit facility in an aggregate principal amount of US$75 million, refinancing approximately 90% of its debt through the transaction. Vitrocrisa Comercial is a joint venture between Vitro, S.A. de C.V. (NYSE: VTO and BMV: VITROA), which holds a 51% stake and Libbey Inc., which holds the remaining 49%. The syndicated loan comprises two tranches. Tranche A consists of a US$42 million, 5-year term loan and a US$10 million, 3-year committed revolving line of credit. Tranche B consists of a US$23 million, 3-year term loan. Vitrocrisa Comercial used most of the proceeds of the facility to pay down short-term maturities, extending the average life of its debt from 1 year in December 31st, 2003 to 3 years on a pro-forma basis. "Through this transaction, Vitro refinanced close to 40% of its non-revolving bank debt due in 2004, following up on its strategy to proactively seek refinancing alternatives and improve its debt profile." said Alvaro Rodriguez, Vitro´s Chief Financial Officer. The facility was led by Bank of Montreal and Banamex, and included as participants Standard Federal Bank, HSBC Mexico, the Bank of Nova Scotia, and Comerica Bank. HSBC also acted as collateral agent. Vitro, S.A. de C.V. (NYSE: VTO; BMV: VITROA), through its subsidiary companies, is one of the world's leading glass producers. Vitro is a major participant in three principal businesses: flat glass, glass containers and glassware. Its subsidiaries serve multiple product markets, including construction and automotive glass; food and beverage, wine, liquor, cosmetics and pharmaceutical glass containers; glassware for commercial, industrial and retail uses; aluminum containers. Vitro also produces raw materials and equipment and capital goods for industrial use. Founded in 1909 in Monterrey, Mexico- based Vitro has joint ventures with major world-class partners and industry leaders that provide its subsidiaries with access to international markets, distribution channels and state-of- the-art technology. Vitro's subsidiaries have facilities and distribution centers in eight countries, located in North, Central and South America, and Europe, and export to more than 70 countries worldwide. CONTACT: VITRO, S. A. DE C.V. (Media Monterrey): Albert Chico Smith +52 (81) 8863-1335 achico@vitro.com (Media Mexico D.F.): Eduardo Cruz +52 (55) 5089-6904 ecruz@vitro.com (Financial Community): Alejandro Doehner +52 (81) 8863-1210 adoehner@vitro.com BREAKSTONE & RUTH INT. (U.S. Contacts): Alex Fudikidis/Susan Borinelli (646) 536-7012 / 7018 afudukidis@breakstoneruth.com sborinelli@breakstoneruth.com URL: http://www.vitro.com =============== P A R A G U A Y =============== ANDE: Negotiating Payment Of Itaipu Debt ---------------------------------------- With the cooperation of the Paraguayan government, state-owned power distributor Ande is working on the settlement of its US$117 million debt to its hydroelectric power supplier Itaipu, reports Noticias. Originally, the debt in question was renegotiated early this year. It is supposed to be paid over a 20-year period, but the annual interest rate of 12% proved too burdensome for the power company. ============= U R U G U A Y ============= ANCAP: Shares Seized at Creditor Banks' Behest ---------------------------------------------- Petrolera del Conosur, the company through which Uruguay's state-owned oil holding Administracion Nacional de Combustibles, Alcohol y Portland (Ancap), controls Sol Petroleo in Argentina, said Wednesday that it had been informally notified of a seizure of the shares of Ancap and its subsidiary Petrouruguay and that it planned to challenge this decision. The ruling had been requested by Standard Bank London, Bilbao Vizcaya, Discount Bank Latin America and Sudameris de Uruguay, banks that are in conflict with Petrolera del Conosur regarding a debt related to a loan granted in December 2000. The freeze was imposed on Ancap because it was the guarantee for this loan. CONTACT: ANCAP Central Administration Paysando s/n esq. Avenida del Libertador Montevideo, 11100 Uruguay P.O. Box 1090 Phones: +598(2) 902 0608 902 3892 902 4192 Fax +598(2) 902 1136 902 1642 Telex ANCAP UY 23168 E-mail: info@ancap.com.uy Home Page: www.ancap.com.uy Contact: Benito E. Pi eiro, Chief Executive Officer Phone +598(2) 900 2945 +598(2) 902 0608 Ext. 2253 Fax +598(2) 908 9188 *********** 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 and Edem Psamathe P. Alfeche, 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. 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