/raid1/www/Hosts/bankrupt/TCRLA_Public/040519.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
Wednesday, May 19, 2004, Vol. 5, Issue 98
Headlines
A R G E N T I N A
AVICOLA DP: Seeks Court Authorization to Reorganize
CABLEVISION: Major Creditor Claims Debt Deal Misrepresented
ELEVADORES SANSONETTI: Begins Liquidation on Court Order
ERNED: To Start Bankruptcy Proceedings on Court's Order
FERNANDO MOIGUER & ASOCIADOS: Court Postpones Claims Deadline
FUNDICION DE ACEROS: Court Grants Reorganization Plea
GAS TRELEW: Seeks Courts OK to Reorganize Debts
GOLDEN TRADE: Court Orders Liquidation
HIDROELECTRICA PIEDRA: Government Aid Sweetens Debt Deal
IONE: Court Favors Bankruptcy
MANNYA'S MUSICAL: Seeks Court Protection to Reorganize
MARCENARO: Court Advises Liquidation
OROFIX BIJOUTERIE: Liquidating Assets to Pay Debts
RACIONES Y COMIDAS: Court Orders Bankruptcy Process
REPSOL YPF: Fitch Doubts New Regulations Affect Ratings
RIGTON TRUST: Creditor's Bankruptcy Petition Approved
SIDECO AMERICANA: Reports Wider 1Q04 Net Loss
TRANSENER: Commercial Court Rules in Favor of Creditor
* Argentina Econ Minister: Incentive Talk 'Just Politicking'
B E R M U D A
ANNUITY & LIFE: Forecasts New Stability with 1Q04 Results
TYCO INTERNATIONAL: Fitch Ups Ratings to Investment Grade Level
B R A Z I L
ACESITA: No Objections to Arcelor Proposal
AMBEV: Talk Of Femsa-Interbrew Split Heightened by Debt Plan
CESP: Posts Disappointing BRL112m 1Q04 Net Loss
EMBRATEL: SDE Official's Comment Indicates Telmex Deal Approval
SABESP: 1Q04 Net Profit Down 32.8%
C H I L E
TELEFONICA CTC: Telmex Owner Says Rates Hike a Mistake
D O M I N I C A N R E P U B L I C
* Grant Thornton Expresses Concern Over DR's Economic Future
J A M A I C A
KAISER ALUMINUM: 1Q04 Results Hampered by Non-Cash Charge
KAISER ALUMINUM: To Sell Interests in Jamaica, USA
M E X I C O
EMPRESAS ICA: JV Signs Contract to Build 1,180 MW Power Plant
- - - - - - - - - -
=================
A R G E N T I N A
=================
AVICOLA DP: Seeks Court Authorization to Reorganize
---------------------------------------------------
Avicola DP S.R.L. filed a "Concurso Preventivo" motion in Buenos
Aires Court No. 24, reports Infobae. The Company is attempting
to reorganize its finances after failing to pay its debts. Clerk
of Court No. 47 assists the court on this case.
Reorganization allows Argentine companies to prevent a straight
liquidation in cases of default in debt payments.
CONTACT: Avicola DP S.R.L.
Dr Juan Aranguren 2591
Buenos Aires
CABLEVISION: Major Creditor Claims Debt Deal Misrepresented
-----------------------------------------------------------
A Dow Jones report reveals that the managing general partner of
New Jersey investment fund W.R. Huff Asset Management has
alleged that the agreement rate for the US$725 million debt
restructuring of Argentine cable television operator Cablevision
was misrepresented by the company.
According to Bill Huff of W.R. Huff, Cablevision could not have
garnered the two-thirds majority needed to proceed with its out-
of-court debt restructuring proposal, known as an APE in
Spanish, since his firm alone, which is opposed to the deal,
holds more than one-third of Cablevision's debt. Though he did
not say the exact amount his firm owns, he said it's enough to
stop the deal from advancing. "We need 33.3% (to block the APE)
and we have more than that," Mr. Huff said.
Under Argentine bankruptcy law, a company that secures agreement
from two-thirds of its creditors can submit its debt-
restructuring proposal for legal approval, which then makes the
repayment terms binding on all creditors. Cablevision filed its
APE in the courts on Friday with documentation showing that the
company has more than two-thirds creditor approval, a source
close to the company said Monday.
Last month, Cablevision admitted an error in the tabulation of
approval votes for the deal, when it counted the favorable vote
of a "holder of a substantial amount" of its debt twice. The
company, however, said the corrected tabulation still delivered
the majority needed.
In a statement filed with the local stock exchange Monday, the
cable television operator said that Argentine bankruptcy law
enables it to "exclude some debt holders" when it comes to APE
voting rights. The statement also gave details on approval
percentages for the first time since it launched the APE. It
said that after excluding certain debt holders, it had 74.6%
agreement, compared with 55.6% of the total without exclusions.
Under APE laws, creditors can lodge formal objections in court
on two grounds: the company's statement of assets and
liabilities or its calculation of the majorities.
ELEVADORES SANSONETTI: Begins Liquidation on Court Order
--------------------------------------------------------
Buenos Aires Court No. 18 declared the bankruptcy of Elevadores
Sansonetti S.A. after the Company defaulted on its debt
payments, reports Infobae. This pronouncement signals the
Company to start the liquidation process, which will end with
the disposal of its assets to satisfy creditor's claims.
The court appointed Mr. Nestor Agustin Iribe as receiver. He
will supervise the liquidation beginning with the validation of
creditor's claims, a process that will run through June 4, 2004.
The court also requires the receiver to submit individual and
general reports on July 19, 2004 and September 15, 2004,
respectively.
CONTACT: Mr. Nestor Agustin Iribe, Receiver
Avenida Corrientes 1250
Buenos Aires
ERNED: To Start Bankruptcy Proceedings on Court's Order
-------------------------------------------------------
Advantage Ltda. successfully petitioned for pharmaceuticals
company Erned S.R.L.'s bankruptcy, says Argentine news source La
Nacion. Erned, which owes Advantage US$50,267.52, was declared
"Quiebra" by Judge Villanueva of Buenos Aires Court No. 23.
Clerk No. 45, Dr. Robledo, assists the court in handling the
case.
The Company now enters official bankruptcy proceedings with Mr.
Hugo D'Ubaldo as receiver. Creditors have until July 5, 2004 to
verify creditors' proofs of claim. The bankruptcy process will
culminate with the liquidation of all its assets to repay
creditors.
CONTACT: Erned S.R.L.
Bernardo de Irigoyen 534
Buenos Aires
FERNANDO MOIGUER & ASOCIADOS: Court Postpones Claims Deadline
-------------------------------------------------------------
Infobae reports that Buenos Aires Court No. 10 has reset the
verification of claims deadline for the Fernando Moiguer &
Asociados bankruptcy case to September 15, 2004. The individual
and general reports are due for court submission on October 28,
2004 and December 10, 2004 respectively. Mr. Mario Simon
Lipschitz is the court-appointed receiver for the case.
CONTACT: Mr. Mario Simon Lipschitz, Receiver
Avenida Cordoba 1890
Buenos Aires
FUNDICION DE ACEROS: Court Grants Reorganization Plea
-----------------------------------------------------
Fundicion de Aceros S.A. begins the process of reorganization
after Buenos Aires Court Judge No. 8, with the assistance of
Clerk No. 16, approved the Company's petition for "Concurso
Preventivo".
Reorganization is an option available for Argentine companies to
prevent a straight liquidation. Details provided by Infobae
reveal that the reorganization will commence under the
supervision of Estudio Castaneda Cejas, court-appointed
receivers.
The receivers will verify creditor's proofs of claim until June
18, 2004. The verified claims will form the basis for the
individual reports to be presented in court on August 18, 2004.
The receiver will also submit a general report on September 29,
2004.
The informative assembly, the final stage in a reorganization,
is scheduled for April 13, 2005.
CONTACT: Estudio Castaneda Cejas, Receiver
Tucuman 540
Buenos Aires
GAS TRELEW: Seeks Courts OK to Reorganize Debts
-----------------------------------------------
Buenos Aires Court No. 21 is currently reviewing the merits of
the petition for reorganization filed by Gas Trelev S.A.,
Infobae Reports. The petition, if granted by the court, will
place the Company under the supervision of a trustee or
receiver. The reorganization also serves to suspend activity
against the debtor by interested parties to permit the debtor to
resolve certain pending contracts.
CONTACT: Gas Trelew S.A.
Cerrito 146
Buenos Aires
GOLDEN TRADE: Court Orders Liquidation
--------------------------------------
Buenos Aires Court No. 16 ordered the bankruptcy of Golden Trade
S.A., reports Infobae. The Company will begin the process with
Mr. Juan Carlos Sanguinetti as receiver, who will verify
creditors' claims until June 18, 2004. The submission of the
individual report is scheduled for August 18, 2004 and the
general report is expected on September 30, 2004.
The Company's case will conclude with the liquidation of its
assets to repay creditors. Clerk No. 32 assists the court in
handling the proceedings.
CONTACT: Golden Trade S.A.
Salta 167
Buenos Aires
Mr. Juan Carlos Sanguinetti
Lavalle 1569
Buenos Aires
HIDROELECTRICA PIEDRA: Government Aid Sweetens Debt Deal
--------------------------------------------------------
Argentine hydropower generator Hidroelectrica Piedra del Aguila
SA, a unit of France's Total S.A. (TOT), said it had improved an
offering to buy or exchange various outstanding bonds as part of
a debt restructuring plan, relates Dow Jones. In a statement to
the Buenos Aires bourse, Piedra del Aguila said it has extended
the date for subscribing to that plan until Wednesday, May 26.
Previously, the offering was to expire on Friday, May 14.
Improvements to the Company's debt plan were made possible by
the recent government loans intended to resolve a mounting
deficit in a special fund coordinated by the national grid
operator, Cammesa, which meant the agency had been able to repay
a long outstanding debt of ARS37 million to Piedra del Alguila.
That, in turn, has allowed the Company to bring forward to Nov.
30 extraordinary payments of "at least" ARS10 million earmarked
for its main bank creditor, Banco de la Nacion, and for
bondholders who opt for new bonds under the planned debt
offering. The payment had previously been set for Dec. 31,
recalls Dow Jones.
As of Friday, the Company said it received subscriptions to its
out-of-court debt-restructuring proposal, APE, worth a total of
US$245.9 million. That figure is sufficient to say that "the
minimum requirement of offers will be surpassed as of the expiry
date," the Company added.
IONE: Court Favors Bankruptcy
-----------------------------
Ione S.A., operating in Buenos Aires, will initiate the
liquidation process after the city's Court No. 11 declared it
bankrupt, informs Infobae. This declaration will lead to the
eventual disposal of the Company's assets, in accordance with
the provisions of Argentine law, in favor of its creditors.
Mr. Jorge Guillermo Podesta, acting as receiver for this case,
will authenticate creditors' proofs of claim until May 3, 2004.
The court also requires the receiver to submit the individual
reports based on verified claims on August 27, 2004 and the
general report on October 8, 2004. Clerk No. 21 assists the
court in handling the case.
CONTACT: Mr. Jorge Guillermo Podesta, Receiver
Reconquista 336
Buenos Aires
MANNYA'S MUSICAL: Seeks Court Protection to Reorganize
------------------------------------------------------
Mannya´s Musical S.A. filed a motion for reorganization
following cessation of debt payments. Infobae reveals that the
Company's petition is pending before Buenos Aires Court No. 23,
which is aided by Clerk No. 45.
CONTACT: MannyA's Musical S.A.
Tucuman 1538
Benos Aires
MARCENARO: Court Advises Liquidation
------------------------------------
Marcenaro S.A. entered bankruptcy after Court No. 19 ruled that
it is "Quiebra". Infobae reports that the court, assisted by
Clerk No. 37, assigned Mr. Jorge Alberto Arias to oversee the
liquidation process as receiver.
Creditors must submit their proofs of claims to Mr. Arias for
verification not later than June 30, 2004. The receiver is also
required to prepare the individual and general reports on the
bankruptcy process.
CONTACT: Marcenaro S.A.
Alsina 440
Buenos Aires
Mr. Jorge Alberto Arias, Receiver
Avenida Rivadavia 1227
Buenos Aires
OROFIX BIJOUTERIE: Liquidating Assets to Pay Debts
--------------------------------------------------
Orofix Bijouterie S.R.L. entered bankruptcy on orders from
Buenos Aires Court No. 20, reveals Infobae. Working with Clerk
No. 39, the court assigned Ms. Rosa Isabel Santos as receiver.
She is to verify creditors' claims until August 14, 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 on September 15, 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 October 27, 2004. This report contains a summary of
the results in the individual reports.
CONTACT: Ms. Rosa Isabel Santos, Receiver
Av Corrientes 6031
Buenos Aires
RACIONES Y COMIDAS: Court Orders Bankruptcy Process
---------------------------------------------------
Court No. 26 of Buenos Aires declared Raciones y Comidas
Naturales S.A. (Antes Natural Foods Industrial Exportadora S.A.)
"Quiebra," reports Infobae. This pronouncement marks the start
of the bankruptcy process, which will terminate with the
liquidation of its assets.
The court, assisted by Clerk No. 52, appointed Mr. Enrique Luis
Cabello as receiver who will authenticate proofs of claim until
July 13, 2004. Afterwards, the receiver will prepare the
individual reports based on the results of the authentication
and then submit these reports to court on September 8, 2004.
After these results are processed in court, the receiver will
then submit the general report on October 21, 2004.
CONTACT: Raciones y Comidas Naturales S.A.
Thames 153
Buenos Aires
Mr. Enrique Luis Cabello, Receiver
Aguaribay 6736
Buenos Aires
REPSOL YPF: Fitch Doubts New Regulations Affect Ratings
-------------------------------------------------------
Fitch Ratings, the international rating agency, does not foresee
Repsol YPF's ("Repsol") ratings of 'BBB+'/'F2'/'Outlook Stable'
to be affected by the recent negative regulatory developments in
the Argentine energy sector. The current rating level already
reflects substantial uncertainty in Argentina and, based on
information known to the agency to date, the cash flow impact of
the newly announced tax measures is likely to be limited,
according to a comment just published.
Repsol's management has communicated that the financial impact
of the tax increases is estimated at around EUR75 million in
FY04, which is clearly manageable for a group that reported 1Q04
EBITDA of EUR1,552m. Moreover, Repsol has substantially enhanced
its financial profile since the outset of the Argentine crisis,
with annualised 1Q04 net debt/EBITDA at less than 1x compared
with 2.1x at FYE01.
"Despite the limited cash flow impact of the new measures, the
changes underline the Argentine government's readiness to use
its discretion to interfere in the energy sector and to change
the rules of the game," says Erwin van Lumich, Director at
Corporates for Fitch.
"The measures appear to be in response to the worsening gas
crisis, with supply deficits surfacing as demand continues to
accelerate. The proceeds of the tax increases are expected to be
used for the much-needed investment in the energy sector
infrastructure. Nevertheless, they came as a surprise,
especially in the context of earlier tax reform agreements with
the IMF," Mr. van Lumich adds
Given the unpredictable nature of possible future interference,
Fitch will continue to closely monitor the situation in
Argentina. In its analysis of Repsol, the focus will be on the
development of the group's credit matrix and operating
performance as the energy crisis further unfolds. In particular,
potential further increases in taxes, restrictions on exports or
changes in existing regulation could lead to rating pressure,
although the group's current credit profile fits well into the
'BBB+' rating category, as reflected by the Stable Outlook.
Repsol is the leading integrated oil and gas group in Spain and
Argentina. One of the pillars of its strategy includes
Exploration & Production diversification outside of Argentina,
which accounted for around 50% of 1Q04's EUR1 billion operating
income.
The comment, titled "Fitch: Argentine Energy Sector Remains
Exposed, Ratings Remain Unchanged" highlights, among other
aspects, the government's decision to raise export taxes on
crude oil to 25% from 20% and on liquefied petroleum gas (LPG)
to 20%, and to introduce a 5% export tax rate on gasoline.
CONTACT: Erwin van Lumich
Tel: +34 93 323 8403
Graeme Marks
Tel: +44 (0) 207 862 4086
RIGTON TRUST: Creditor's Bankruptcy Petition Approved
-----------------------------------------------------
Rigton Trust S.A. will undergo bankruptcy proceedings following
a ruling by Judge Ferrario of Buenos Aires Court No. 6 declaring
the company "Quiebra." The declaration, according to Argentine
online daily La Nacion, grants approval to a petition filed by
Reuters Ltd. on unpaid debts amounting to US$42,459.95.
The court, assisted by Dr. Mendez Sarmiento, Clerk No. 12,
appointed Mr. Franciso Guerreno as receiver who will verify
creditors' proofs of claim until July 12, 2004. The Company's
bankruptcy case will conclude with the liquidation of its assets
to repay creditors.
CONTACT: Rigton Trust SA
Reconquista 656
Buenos Aires
SIDECO AMERICANA: Reports Wider 1Q04 Net Loss
---------------------------------------------
In a statement to Argentinean securities regulator CNV,
Argentine public services and infrastructure holding company
Sideco Americana reported a consolidated net loss of ARS12.3
million (US$4.26mn) in the first quarter. The figure is greater
than the ARS10.9 million net loss it registered in the same
period last year, BNamericas relates. Sideco's first quarter
operating profit also fell 56.6% to ARS6.76 million, while net
sales fell 4.97% to ARS160 million.
Earlier this month, credit rating agency Fitch maintained its D
(arg) rating on Sideco's US$200 million debentures program,
which reflects the holding's inability to honor its debentures.
The holding is waiting on an out-of-court settlement with
creditors to establish a new debenture payment timetable.
Sideco's interests include engineering and construction firm
Iecsa, which operates in Argentina, Brazil and Chile;
environmental services (waste management) through Qualix in
Brazil; and highway concessions in Argentina (Autopistas del
Sol, Servicios Viales and Puentes de Litoral) and Brazil
(Rodovias das Colonias and Rodovia das Cataratas).
TRANSENER: Commercial Court Rules in Favor of Creditor
------------------------------------------------------
Argentine high-voltage power transporter Compania de Transporte
de Energia Electrica de Alta Tension Transener SA (TRAN.BA) will
have to use its own resources to cover one month's operating
costs, Dow Jones reports, citing a Transener statement to the
Buenos Aires Stock Exchange.
The statement revealed that a commercial court ruled in favor of
Financiera Ludicor SA, a Transener creditor, to block some
US$11.5 million in payments due from the national grid operator
Cammesa.
Two separate Cammesa payments of ARS10.487 million and ARS1.015
million will be blocked as part of the ruling, Transener said,
adding that the payments relate to approximately one month's
worth of billings by Transener to Cammesa for wholesale power
delivery.
Funding channeled to Argentina's cash-strapped grid operator is
part of a broad plan to confront the country's looming energy
crisis.
CONTACT: Paseo Colon 728 6th Floor
(1063) Buenos Aires
Republica Argentina
Tel: (54-11) 4342-6925
Fax: (54-11) 4342-7147
Email: info-trans@transx.com.ar
Web site: http://www.transener.com.ar
* Argentina Econ Minister: Incentive Talk 'Just Politicking'
------------------------------------------------------------
In an interview with local newspaper Clarin, Argentinean economy
minister Roberto Lavagna dismissed rumors that he has been
pushing for a smaller haircut to make Argentina's offer to
restructure its defaulted debt more attractive to bondholders as
nothing more than "political maneuvers", Dow Jones says.
The economy minister's comments, which come days before he is
expected to present the outline of his team's planned debt
restructuring offer to Argentine President Nestor Kirchner, all
but dispels recent speculation over plans for various sweeteners
to the offer, which had been roundly rejected by bondholders
since its announcement during the annual meetings of the
International Monetary Fund in Dubai in September.
The September proposal calculates the 75% haircut based on the
defaulted debt's US$82 billion nominal value and states that any
accumulated past-due interest, which recent estimates put at
around US$18 billion, will not be honored.
Mr. Lavagna's statements also suggest that rather than
sweetening the offer with higher fixed payments, the government
is still of the belief the deal-breaker will be its own plan for
a bond whose future payments will vary according to changes in
gross domestic product. This bond, he argued, means bondholders
are getting a good deal.
"If the economy grows, with its significant potential, and if we
break from this permanent cycle of negotiation in which we have
fallen, (the bond) will have an economic value of recovery and
value creation. (The payout) is not 25%. It is 25% plus the
coupon," he said.
=============
B E R M U D A
=============
ANNUITY & LIFE: Forecasts New Stability with 1Q04 Results
---------------------------------------------------------
Annuity and Life Re (Holdings), Ltd. (NYSE: ANR) reported Monday
financial results for the three month period ended March 31,
2004. The Company reported net income of $834,394 or $0.03 per
fully diluted share for the three month period ended March 31,
2004, as compared to a net loss of $(52,474,816) or $(2.03) per
fully diluted share for the three month period ended March 31,
2003. Net income for three months ended March 31, 2004 includes
a charge of $(365,960) or $(0.01) per fully diluted share for
the cumulative effect of adopting the AICPA Statement of
Position (SOP) 03-1 effective January 1, 2004.
Net realized investment gains for the three month period ended
March 31, 2004 were $678,925 or $0.03 per fully diluted share,
as compared with net realized investment gains of $1,663,868 or
$0.06 per fully diluted share for the three month period ended
March 31, 2003.
Unrealized gains on the Company's investments improved slightly
to $2,550,555 as of March 31, 2004 from $1,840,849 at December
31, 2003. The Company's investment portfolio currently maintains
an average credit quality of AA. Cash used by operations for the
three months ended March 31, 2004 was $37,115,802, as compared
to cash used by operations of $8,435,060 for the three month
period ended March 31, 2003. The increase in cash used by
operations is the result of payments made in connection with the
settlement of the Met Life recapture and a previously disclosed
payment made to Transamerica under an annuity reinsurance
agreement.
Book value per share at March 31, 2004 was $5.18, as compared to
$5.11 at December 31, 2003. As a result of the Company's
adoption of SOP 03-1, it was required to increase its
liabilities by approximately $36.6 million and increase its
deferred acquisition costs by approximately $36.2 million. As a
result, the Company's tangible book value, which is GAAP book
value less deferred acquisition costs, declined from $2.50 per
share at December 31, 2003 to $1.12 as of January 1, 2004.
Tangible book value per share then increased to $1.36 at March
31, 2004.
Life Segment Results
Life segment income for the three month period ended March 31,
2004 was $174,580, as compared with a segment loss of
$(45,146,168) for the three month period ended March 31, 2003.
Annuity Segment Results
Annuity segment income for the three month period ended March
31, 2004 was $967,653, as compared with a segment loss of
$(7,870,476) for the three month period ended March 31, 2003.
Annuity segment income for three months ended March 31, 2004
includes a charge of $(365,960) or $(0.01) per fully diluted
share for the cumulative effect of adopting SOP 03-1 effective
January 1, 2004.
Jay Burke, Chief Executive Officer of the Company, commented,
"We are very pleased with our results for the first quarter. For
this quarter, claim activity on our remaining life agreements
stabilized and the annuity segment made money. During the first
quarter of 2004, the total return on the assets supporting our
annuity reinsurance agreement with Transamerica exceeded the
assumptions we previously made in connection with writing off
and amortizing the deferred acquisition costs associated with
that agreement. In addition, actual lapse rates on the policies
underlying the agreement were better than our previous
assumptions."
"On January 1, 2004 we adopted SOP 03-1. This new standard
affects our Transamerica and CIGNA contracts. While the net
charge of adopting the SOP on January 1, 2004 was only $365,960
and does not change our view of the profitability of the
affected contracts over the long term, we do expect that the SOP
will cause volatility in quarterly results. The SOP requires
that our liabilities be increased if the invested assets
underlying these obligations increase in value, however we are
not permitted to reflect the increase in underlying asset values
on the asset side of our balance sheet. This disconnect will add
volatility to our reported quarterly net income."
"In addition to the increased volatility the new SOP will cause,
it also adversely impacts our tangible book value computation.
The adoption of the SOP required us to increase our deferred
acquisition costs by approximately $36.2 million and our
liabilities by approximately $36.6 million. While the net impact
on our GAAP book value is minor, our tangible book value was
reduced by $1.38 as of January 1, 2004, primarily because the
increase in our deferred acquisition costs is excluded from the
tangible book value computation, while the increase in our
liabilities is not. If the SOP were applied as of December 31,
2003 our tangible book value would have been $1.12. The movement
from $1.12 at December 31, 2003 to $1.36 at March 31, 2004
reflects the continuing improvement in the Company's financial
condition."
"We are very pleased to have Marcum & Kliegman LLP as our new
auditors. They were able to mobilize the resources needed to
clear our Form 10-Q filing with a minimal delay."
"Overall this has been a relatively quiet quarter and reflects
further progress toward stabilizing our company."
Annuity and Life Re (Holdings), Ltd. provides annuity and life
reinsurance to insurers through its wholly owned subsidiaries,
Annuity and Life Reassurance, Ltd. and Annuity and Life
Reassurance America, Inc.
To see financial statements:
http://bankrupt.com/misc/Annuity_and_Life.txt
CONTACT: John Lockwood
ANNUITY & LIFE RE (HOLDINGS), LTD.
Cumberland House
1 Victoria Street
Hamilton HM 11
P.O. Box HM 98
Hamilton HM AX
Bermuda
Tel: (441) 296-7667
Fax: (441) 296-7665
TYCO INTERNATIONAL: Fitch Ups Ratings to Investment Grade Level
---------------------------------------------------------------
Fitch Ratings has upgraded the senior unsecured debt of Tyco
International Ltd. (Tyco), as well as the unconditionally
guaranteed debt of its wholly owned direct subsidiary Tyco
International Group S.A., to 'BBB-' from 'BB+'. The rating on
the company's commercial paper has been upgraded to 'F3' from
'B'. The Rating Outlook is Positive. Approximately $17 billion
of debt is affected by the ratings.
The rating upgrades reflect an improving outlook for strong,
sustained free cash flow, the company's commitment to further
debt reduction, positive margin trends resulting from ongoing
efforts to streamline and refocus certain businesses, and
evidence of strengthening end markets. Since the end of fiscal
2002, Tyco has made substantial progress toward resolving
concerns about corporate governance, accounting policies,
financial reporting, acquisition spending, and overall
credibility of the management team. These legacy issues have not
yet been completely put to rest, as evidenced by ongoing
investigations by, among others, the SEC and the Department of
Labor, as well as class-action shareholder lawsuits. However,
these issues have not diverted the company's efforts to align
its operations more effectively, improve its liability
structure, and redirect its financial strategy toward more
stable and conservative policies.
The ratings are constrained by potential litigation liabilities,
primarily shareholder lawsuits that would have a negative impact
on the company's leverage and liquidity. The rating also
incorporates, however, Tyco's capacity to absorb a sizeable
settlement that would simply delay, rather than prevent, Tyco's
return to a stronger credit profile. As Tyco makes further
progress in reducing debt and demonstrates results from its
operating initiatives, Fitch anticipates further reviews of the
ratings for possible upgrades.
The trend in Tyco's financial measures continues to improve,
with net debt/EBITDA declining to 2.0 times (x) at March 31,
2004 from 2.7x at the end of fiscal 2003. Net debt has declined
from approximately $20 billion at the end of fiscal 2001 (and as
much as $24 billion in early fiscal 2002), standing at $14.6
billion as of March 31, 2004 (total debt was $17.7 billion).
Significant acquisitions or share repurchases are not
anticipated in the near future before Tyco reaches its net debt
target of $10-$12 billion by the end of fiscal 2005. Cash flow
has been supported by disciplined spending on capital projects
and dealer accounts even while R&D spending, important to the
company's internal revenue growth and operating margins, has
been sufficiently funded.
Fiscal second quarter results disclosed stronger demand in many
of Tyco's markets that is combining with ongoing Six Sigma and
sourcing programs to produce improving operating margins. In
addition, Tyco's increase in its projected free cash flow for
2004 to $4.0 billion reflects the benefits from its focus on
operating efficiency and working capital management. Challenges
remain in a number of businesses, however, notably in Fire, Flow
Control and Plastics. Operating improvements initiated by Tyco
will require a lengthy period of time in some cases to be fully
effective, but Tyco can be expected to realize better results as
it further reduces its cost structure and integrates various
operations. Once the company has achieved its debt and leverage
targets, it can be expected to apply a disciplined approach to
acquisitions and any future strategic repositioning that might
occur.
With previous concerns about near-term debt maturities well
behind it, Tyco has ample liquidity, including unrestricted cash
balances of $3.1 billion and nearly $2.4 billion of availability
under the company's bank facilities as of March 31, 2004.
Liquidity could be modestly affected by any future pension
contributions, but strong operating cash flow gives Tyco the
capacity to maintain modest debt levels over the long term even
after normal acquisition activity is resumed.
CONTACTS: Fitch Ratings
Eric Ause, 312-606-2302
Mark Oline, 312-368-2073
or
(Media Relations)
James Jockle, 212-908-0547, New York
===========
B R A Z I L
===========
ACESITA: No Objections to Arcelor Proposal
------------------------------------------
The chief financial officer of Brazilian stainless steel maker
Acesita S.A. said the company has nothing against the proposal
by executives of European steel giant Arcelor to combine their
various Brazilian assets into a holding to be traded on the Sao
Paulo bourse, reports BNamericas, citing local news source
Jornal do Commercio.
Acesita CFO Gilberto Audelino Correa said the proposal in March
by Arcelor, which holds 27.7% of Acesita's total capital, would
not really necessitate changes in the steel maker's operations,
but would have a bigger impact on shareholders.
Acesita, with its head office in Belo Horizonte and plant in
Timoteo in the Vale do Aco region of Minas Gerais State has an
annual production capacity of 900,000 tons of molten steel. It
is the only integrated producer of flat stainless and silicon
steel in Latin America.
CONTACT: ACESITA SA
Fabio Abreu Schettino
Financial Operations and Investor Relations Manager
Tel: (31) 3235-4241
Adriana Lucia Fernandes
Investor Relations Co-ordinator
Tel: (31) 3235-4270
Flavia Bozzolla Vieira
Analyst
Tel: (31) 3235-4235
Mario Roberto Mariante
Consultant
Tel: +55 11 3897-6467
E-mail: mario.mariante@thomsonir.com.br
Web site: http://www.acesita.com.br
AMBEV: Talk Of Femsa-Interbrew Split Heightened by Debt Plan
------------------------------------------------------------
Speculation that the beer partnership between Mexican beverage
concern Fomento Economico Mexicano SA (FMX) or Femsa and Belgian
brewing giant Interbrew SA (INTB.BT) is coming to an end have
been heightened with Femsa's declaration of plans to place up to
MXN5 billion ($1=MXN11.5180) in debt, says Dow Jones.
Femsa said in a prospectus for the local debt offering posted
Friday on the Mexican Stock Exchange website that it could use
the funds to pay down existing debt, for working capital or for
"any other purpose." The company said it could issue the debt
all at once, or in various tranches over the next four years.
Analysts speculate that Femsa, with the funds from the debt
offering, will buy back its 30% stake from Interbrew. But they
also said the Mexican brewer would need something close to a
billion dollars to recoup the Interbrew stake and to exit Labatt
USA.
The troubled Femsa-Interbrew partnership, which is plagued with
disagreement over marketing support in the U.S. for Femsa's
Tecate and Dos Equis beer brands, took a turn for the worse when
Interbrew announced its US$11 billion planned merger with
Brazilian beverage group Companhia de Bebidas das Americas SA
(ABV), or AmBev. Among the terms of the merger is the transfer
of Interbrew stakes in Femsa and Labatt USA to AmBev. Femsa,
which claimed Wisdom, its US subsidiary and owner of a 30% stake
in Labatt USA, was not consulted on the Interbrew decision,
promptly sued the Belgian brewer in a New York court.
The US District judge handling the case recently gave both
parties until May 21 to resolve their dispute after the
companies' lawyers said in a court filing that the companies
"have made sufficient progress in ongoing discussion to expect
that this matter can be settled relatively promptly by the
parties."
CESP: Posts Disappointing BRL112m 1Q04 Net Loss
-----------------------------------------------
The performance of Brazilian state-owned power generator
Companhia Energetica de Sao Paulo (CESP4.BR) or Cesp in the
first quarter is worse than expected, as the company reported
Friday a disappointing net loss of BRL112.2 million ($1=BRL3.1)
from a year-ago net profit of BRL310 million, according to Dow
Jones.
Market estimates have expected Cesp to report a net profit of
around BRL5 million, but heavy financial expenses weighed on the
utility's bottom line. In a statement Monday, Cesp said monetary
and foreign exchange variations also had a negative impact on
Cesp's dollar-denominated debt in the quarter. The real that
depreciated 0.13% in the first quarter of 2004 caused net losses
of BRL113.6 million, while the real that strengthened 5.3% in
the same period last year resulted to a gain of BRL339.3
million. The utility has about BRL7.2 billion in foreign
currency-denominated debt, which accounts for 72% of the
company's total debt.
Due mainly to 25% tariff increases on average in contracts which
started between March 2003 and March 2004, revenue for the
period totaled BRL444.2 million, from BRL345.3 million in the
same period last year. The tariff hikes also helped raise its
earnings before interest, tax, depreciation and amortization
(EBITDA) to BRL335.9 million compared with BRL265 million in the
first quarter of 2003.
With Cesp's dismal performance, its shares slumped 6.9% to
BRL8.0 on Monday while the broader market shed 3.1%.
EMBRATEL: SDE Official's Comment Indicates Telmex Deal Approval
---------------------------------------------------------------
In what could be taken as a sign of support for Mexican telecoms
operator Telmex's plan to buy 19% of Embratel from MCI, Daniel
Goldberg, head of Brazil's justice ministry's antitrust
department, SDE, said the deal will not lead to any more market
concentration. The US$400-million deal, which the US bankruptcy
court authorized in March, merely implies a change of ownership,
from US-based MCI to Telmex, Mr. Goldberg was quoted by local
daily AE-Setorial as saying.
"Brazilian law says that any operation can be undone by
[antitrust authority] Cade, if it comes to the conclusion that
this operation can harm competition," Mr. Goldberg said. "But I
am not saying that the Embratel operation will be undone by
Cade. On the contrary, the Cade analysis of this operation
should be fast and without any major pitfalls."
CONTACT: Silvia M.R. Pereira, Investor Relations
Tel: (55 21) 2121-9662
Fax: (55 21) 2121-6388
E-mail: silvia.pereira@embratel.com.br
invest@embratel.com.br
SABESP: 1Q04 Net Profit Down 32.8%
----------------------------------
BNamericas reveals that due to expenses, the net profit of Sao
Paulo state water utility Sabesp dropped 32.8% in the first
quarter to BRL116 million (US$37mln). The utility also reported
a 42.5% fall in its operating profit for the period to BRL179
million.
Sabesp's revenues may have increased 9.51% to BRL1.14 billion
partly because of a rates adjustment in August, but the revenue
gain was offset by selling, general and administrative expenses,
along with net interest income.
Sabesp is the largest water and sewage utility company in the
Americas and, in terms of number of customers, the third-largest
in the world. Around 25 million residents rely on water provided
by the company through a 54,000-kilometer network. Sabesp also
offers sewerage service to 16.8 million residents through a
network stretching 34,000 kilometers.
CONTACT: Helmut Bossert
Tel.: 5511 3388-8664
E-mail: hbossert@sabesp.com.br
Marisa Guimaraes
Tel.: 5511 3388-9135
E-mail: marisag@sabesp.com.br
Web site: http://www.sabesp.com.br
=========
C H I L E
=========
TELEFONICA CTC: Telmex Owner Says Rates Hike a Mistake
------------------------------------------------------
During a visit to Chile last week, Mexican billionaire Carlos
Slim dubbed as "a mistake" Chilean regulator Subtel's decision
to raise interconnection rates payable to dominant fixed line
operator Telefónica CTC Chile (NYSE: CTC), BNamericas reports.
Slim, who also controls Mexican telephone company Telmex (NYSE:
TMX), said the Subtel decree of a 40% increase in
interconnection rates for CTC was not in keeping with
international trends and would hinder the development of
competition. However, Slim said he has no doubts about the
government's overall intent to stimulate competition.
Slim was in Chile on Friday to take stock of recent purchases,
namely local telco Chilesat and the local division of AT&T Latin
America. Chilesat has filed an appeal with the comptroller
general against the rates decree.
===================================
D O M I N I C A N R E P U B L I C
===================================
* Grant Thornton Expresses Concern Over DR's Economic Future
------------------------------------------------------------
With factors such as high interest rates in the internal market,
a volatile exchange market, the increase in the Consumer Price
Index, and the strong upward tendency of oil prices keeping the
economy of the Dominican Republic down, the economic consulting
firm of Grant Thornton has expressed concerns about the economic
future of the South American country in its report, DR1 Daily
News relates, citing local news sources Listin Diario and El
Caribe.
The Grant Thornton report also indicates that the country's
sovereign debt is also feeding the apprehensions of risk
management firms, as the government, concerned about the
country's credit image, has insinuated that no restructuring of
its debt is in the works at present. A poor credit image,
according to the state, would limit the Dominican Republic's
access to capital markets.
The recently-concluded elections which saw former leader Leonel
Fernandez regain the presidency also worried the Grant Thornton
team, as the polarization of political factions gave rise to the
possibility of worsening political turmoil.
=============
J A M A I C A
=============
KAISER ALUMINUM: 1Q04 Results Hampered by Non-Cash Charge
---------------------------------------------------------
Kaiser Aluminum reported on May 17, 2004 a net loss of $64.0
million, or $.80 per share, for the first quarter of 2004,
compared to a net loss of $65.1 million, or $.81 per share, for
the same period of 2003. Results for the first quarter of 2004
include a non-cash pre-tax charge of $33.0 million to reduce the
carrying value of the company's 90% interest in the Valco
smelter in Ghana, based on the terms of a May 2004 amendment to
the previously disclosed Memorandum of Understanding.
Net sales in the first quarter of 2004 were $367.6 million,
compared to $339.4 million in the year-ago period.
Commenting on the company's first-quarter performance, Kaiser
President and Chief Executive Officer Jack A. Hockema said,
"Although Kaiser's operating loss in the first quarter of 2004
was essentially the same as that of the prior year period --
primarily due to the Valco-related charge -- the company's
underlying operating results improved markedly in relation to
the year-ago period. That improvement was mainly attributable to
increases in realized prices for alumina and primary aluminum,
lower depreciation in the alumina business unit, and the fact
that the year-ago results for primary aluminum included certain
costs associated with potline curtailments at the Valco
smelter."
The company CEO continued, "Our fabricating business -- the core
around which the company is reorganizing -- reported improved
cost performance and sharply higher shipments and revenues as we
witnessed continued recovery in demand. While volumes are still
not at what we would consider to be the long-term run rate --
and certain markets, including certain aerospace products, have
still not recovered -- we believe the trend is promising. On the
other hand, the increased volumes have not yet translated into
improved sales margins, many of which remain under pressure. As
such, there remains plenty of room for improvement in results
and cash flow."
"We are encouraged by the fact that substantially all of the
cash used by operations in the first quarter of 2004 was related
to an increase in working capital that is in large part
associated with improved demand and higher primary aluminum
prices -- and that the company was otherwise essentially cash-
flow neutral in the quarter."
Mr. Hockema said, "Despite these positive developments, Kaiser
still reported an operating loss in the quarter due in part to
ongoing 'legacy related' expenses or accruals for retiree
medical benefits and hourly pensions, the majority of which are
expected to be reduced or eliminated as part of the company's
restructuring."
"We are pleased by the increasing pace of our Chapter 11 case,"
Mr. Hockema added, "as evidenced by the agreements on retiree
medical with the USWA, certain other unions, and the committee
representing salaried retirees; the transactions for Alpart and
Mead; and the pending or contemplated transactions for other
commodity assets. We intend to maintain this pace so that we can
emerge as early as late in the third quarter of this year."
KAISER ALUMINUM: To Sell Interests in Jamaica, USA
---------------------------------------------------
Kaiser Aluminum announced Monday that, pending certain
conditions outlined below, it has signed an agreement to sell
its Gramercy, Louisiana, alumina refinery and its related 49%
interest in the Kaiser Jamaica Bauxite Mining operation (KJBC)
to a newly formed joint venture between Century Aluminum Company
and Noranda Inc. Under the terms of the agreement, the
Government of Jamaica will retain its 51% interest in KJBC.
Prior to any sale of its interests in Gramercy and KJBC, Kaiser
may conduct an auction for the assets, under direction of the
U.S. Bankruptcy Court for the District of Delaware. The company
has requested the Court to rule on bidding procedures for any
such auction at the regularly scheduled monthly hearing on June
21, 2004. If such procedures are approved and, subsequently, if
any qualified bids are received, an auction would be conducted,
and the Court would be expected to rule on the winning bid at
the regular monthly hearing on July 19, 2004.
KJBC mines bauxite, approximately two-thirds of which is used by
Gramercy to produce alumina, with the balance sold to a third
party. Approximately 75-80% of Gramercy's output is, in turn,
supplied under long-term contracts to aluminum smelters owned by
Century and Noranda.
Under the terms of the transaction, Kaiser would receive cash
proceeds of approximately $23 million, a substantial portion of
which may be used to satisfy transaction-related costs and
obligations.
"We believe this transaction benefits the interests of all
concerned parties," said Jack A. Hockema, president and chief
executive officer of Kaiser Aluminum. "For Kaiser, it represents
another significant step forward in our restructuring process as
we continue to shift our focus to the company's fabricated
products operations. For the buyers, it represents a strategic
move to control the long-term supply of a critical feedstock.
For employees, civic, and governmental organizations in
Louisiana and Jamaica, it provides assurance of continued
operation of assets that generate significant economic value."
Mr. Hockema added, "We extend our profound gratitude to the
employees and government officials in Louisiana and Jamaica who
have contributed so much for so many years to Kaiser's efforts
at these facilities."
The transaction is subject to various approvals, as more fully
discussed in Kaiser's Form 10-K for 2003. In particular, Kaiser
is working with the lenders under its Post-Petition Credit
Agreement to obtain an amendment to the Credit Agreement that,
among other things, would permit the sale of the company's
interests in and related to Gramercy and KJBC.
The Gramercy refinery began producing alumina in 1959; it has
approximately 500 employees and an annual rated capacity of 1.25
million metric tonnes. Kaiser began its involvement in bauxite
mining in Jamaica in 1950; today, KJBC has approximately 600
employees and an annual production capacity of approximately 4.5
million metric tonnes of bauxite.
Century Aluminum Company (NASDAQ: CENX) owns 615,000 metric tons
of annual primary aluminum capacity. The company owns and
operates plants at Hawesville, KY, Ravenswood, WV and
Grundartangi, Iceland. It also owns a 49.67-percent interest in
a plant at Mt. Holly, SC. Century's corporate offices are
located in Monterey, CA.
Noranda Inc. (NYSE: NRD) is one of the world's largest producers
of zinc and nickel and a significant producer of copper, primary
and fabricated aluminum, lead, silver, gold, sulphuric acid, and
cobalt. Noranda is also a major recycler of secondary copper,
nickel and precious metals.
Kaiser Aluminum (OTCBB:KLUCQ) is a leading producer of
fabricated aluminum products, alumina, and primary aluminum.
Web site: www.Kaiseral.com
===========
M E X I C O
===========
EMPRESAS ICA: JV Signs Contract to Build 1,180 MW Power Plant
-------------------------------------------------------------
ICA Fluor, the industrial engineering company jointly owned by
Fluor Corporation (NYSE: FLR) and Empresas ICA Sociedad
Controladora (NYSE: ICA), announced Monday the signing of a
contract for the construction of a combined-cycle power plant in
Altamira, Tamaulipas, Mexico. The contract was awarded by
Iberdrola Energia S.A., a subsidiary of Spain's Grupo Iberdrola.
The total investment in the project will be approximately $570
million including the land, financing costs, generation
equipment, and engineering, procurement and construction
(EPC). The ICA Fluor contract includes only the EPC portion of
the project.
The "Altamira V" generation plant will have a capacity of 1,180
megawatts and will provide electricity to the booming northern
industrial zone of Mexico, as well as stabilizing the electrical
grid in the area. Power generated will be sold to the Federal
Electricity Commission under its program to develop independent
power producers.
The contract is a 36-month, lump-sum, turnkey project that
involves engineering, procurement, construction and start-up
services. The project is scheduled for completion in November
2006. The plant will be a clean, combined-cycle, gas-fired plant
designed to have minimal environmental impact.
"This project is the third power plant awarded by Iberdrola to
ICA Fluor. This new contract demonstrates Iberdrola's confidence
in ICA Fluor's performance and confirms the good understanding
between both companies to work in Mexico," said Jorge Borja, ICA
Fluor's general director.
Grupo Iberdrola is one of the leading electricity companies in
Europe. It has more than $13 billion in assets and has more
than 13 million customers in Spain and Latin America. Grupo
Iberdrola also operates in the industrial and real estate
sectors.
ICA Fluor is the leading industrial engineering company in
Mexico, dedicated to the engineering, procurement, and
construction of telecommunication installations and chemical,
petrochemical, automotive, refinery and electricity generation
plants.
Founded in 1947, ICA has completed construction and engineering
projects in 21 countries. ICA's principal business units include
Civil Construction and Industrial Construction. Through its
subsidiaries, ICA also manages airports and operates tunnels,
highways, and municipal services under government concession
contracts and/or partial sale of long-term contract rights.
Fluor Corporation (NYSE: FLR) provides services on a global
basis in the fields of engineering, procurement, construction,
operations, maintenance and project management. Headquartered
in Aliso Viejo, Calif., Fluor is a FORTUNE 500 company with
revenues of nearly $9 billion in 2003.
CONTACT: FLUOR CORPORATION
Media Relations
Jerry Holloway
Tel: +1-949-349-7411
or
Lisa Boyette
Tel: +1-949-349-3652
Investor Relations
Lila Churney
Tel: +1-949-349-3909
Fax: +1-949-349-5375
***********
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
Lucilo Junior M. Pinili, 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. Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are $25 each. For subscription
information, contact Christopher Beard at 240/629-3300.
* * * End of Transmission * * *