/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040610.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 Thursday, June 10, 2004, Vol. 5, Issue 114 Headlines A R G E N T I N A AUTOPISTAS DEL SOL: Moody's Maintains `D' Rating on $380M Bonds CASSINI HNOS: Enters Bankruptcy on Court Orders COVIASA S.A.: Defaults on Debts, Will Undergo Bankruptcy EBEN EZER: Court Favors Creditor's Liquidation Plea EDENOR: Installing Prepaid Power Meters FABRIL ONCE: Liquidating Assets to Pay Debts FIDEICOMISO FINANCIERO: Moody's Rates Financial Trusts FINCA EL MOLINO: Proceeds With Liquidation on Court Orders FUNDACION PARA EL DESARROLLO: Reports Submission Set HOSANTEL S.A.: Liquidates Assets to Pay Debts INDUSTRIAS METALURGICAS: Court Declares Company Bankrupt INVENTIA S.A.: Court Declares Company Bankrupt LINEAS LEON: Judge Approves Reorganization Plea METALURGICA VIALE: Court Issues Bankruptcy Ruling PAPELERA WILDE: Prepares for Reorganization PECRUMO S.A.: Court Grants Reorganization Plea PETROBRAS ENERGIA: Awaits Offshore Oil Sites' Study Approval RADIO RIVADAVIA: Bankruptcy Process Begins By Court Order TELECOM ARGENTINA: Debt Deal Gains Favorable Response * Disgruntled Argentine Bondholders Skip Scheduled Meeting B R A Z I L AHOLD: CBD Halts Acquisition Bid BRASKEM: Mulling Issuance of BRL300 Million in Debentures TELEMAR: Joins Hispasat to Create August Satellite Launch TERPHANE HOLDING: S&P Assigns `CCC+' Corporate Credit Rating C H I L E TELEFONICA CTC: Shareholders to Decide on Mobile Sale This Week C O L O M B I A TELESANTAMARTA: Colombia Orders Liquidation J A M A I C A KAISER ALUMINUM: RUSAL Balks At Plans to Take 65% Stake M E X I C O COPAMEX: Moody's Withdraws Ratings After Full Repayment of Notes * Fitch Ratings Issues Comment on Mexico P E R U * S&P Ups Peru's Long-term Foreign Currency Credit Rating U R U G U A Y PARMALAT URUGUAY: Conaprole Submits Two Bids V E N E Z U E L A PDVSA: Sends Test-Shipment of Ethanol-Ready Fuel PDVSA: Drills New Wells to Up Oil Output - - - - - - - - ================= A R G E N T I N A ================= AUTOPISTAS DEL SOL: Moody's Maintains `D' Rating on $380M Bonds --------------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. maintains a `D" rating on corporate bonds issued by Argentine company Autopistas del Sol S.A. (Ausol), says the Comision Nacional de Valores (CNV). The action, which was taken based on the Company's finances as of March 31, 2004, affects these bonds that were issued under `Simple Issue:' - US$210 million worth of "Obligacion Negociable - Serie B" maturing on August 1, 2009 - US$170 million worth of "Obligacion Negociable - Serie A" maturing on August 1, 2004. A `D' rating is assigned to financial commitments that are in payment default. Autopistas del Sol is controlled by a private consortium headed by Sideco Americana S.A. (SDA.YY). CASSINI HNOS: Enters Bankruptcy on Court Orders ----------------------------------------------- Cassini Hnos S.R.L. is set to wind-up its operations after Buenos Aires Court No. 24, with the assistance of Clerk No. 48, ordered the Company's liquidation. The bankruptcy order effectively transfers control of the Company's assets to the court-appointed trustee who will supervise the liquidation proceedings. Infobae reports that the court selected Mr. Eduardo Miguel Echaide as trustee. He will be verifying creditors' proofs of claim until the end of the verification phase on June 18, 2004. Argentine bankruptcy law requires the trustee to provide the court with individual reports on the forwarded claims and a general report containing an audit of the Company's accounting and business records. The individual reports will be submitted on August 23, 2004 followed by the general report, which is due on October 10, 2004. CONTACT: Mr. Eduardo Miguel Echaide, Trustee Sanchez de Loria 155 Buenos Aires COVIASA S.A.: Defaults on Debts, Will Undergo Bankruptcy -------------------------------------------------------- Court No. 18 of Buenos Aires declared Coviasa S.A. bankrupt, says La Nacion. The ruling comes in approval of the bankruptcy petition filed by the Company's creditor, Mr. Roberto Stanco, because of a US$16,400 debt default. Clerk No. 36, Dr. Vivono, assists the court on the case, which will conclude with the liquidation of the Company's assets. The court's trustee, Mr. Lea Aljanati, will examine and authenticate creditors' claims until July 12, 2004. This is done to determine the nature and amount of the Company's debts. Creditors must have their claims authenticated by the trustee by the said date in order to qualify for the payments that will be made after the Company's assets are liquidated. CONTACT: Coviasa S.A. Avenida Castanares 1591 Buenos Aires Ms. Lea Aljanati, Trustee H. Yrigoyen 1576 Buenos Aires EBEN EZER: Court Favors Creditor's Liquidation Plea --------------------------------------------------- Judge Villar of Buenos Aires Court No. 13 declared Eben Ezer S.A. bankrupt, relates local daily La Nacion. The court approved the bankruptcy petition filed by La Caja Aseguradora de Riesgo de Trabajo ART SA, to whom the Company failed to pay debts amounting to US$2,660.45. The delivery company will undergo the bankruptcy process with Mr. Oscar Epstein as its trustee. Creditors are required to present their proofs of claim to the trustee for verification before August 9, 2004. Dr. Guerri, Clerk No. 25, assists the court on this case. CONTACT: Eben Ezer S.A. Cochabamba 3140 Buenos Aires Mr. Oscar Epstein, Trustee Avenida Corrientes 2565 Buenos Aires EDENOR: Installing Prepaid Power Meters --------------------------------------- In an effort to curb power theft and late bills payment, Argentine power distributor Edenor began installing prepaid power meters for residential clients in two districts of its northern Buenos Aires concession area Citing local newspapers, Business News Americas reports that customers can buy prepay cards for the Cashpower meters at vending machines. One peso (about US$0.34) buys 10.5kWh. France's EDF controls Edenor. CONTACT: EDENOR S.A. Azopardo Building Azopardo 1025 (1107) Capital Federal Phone: (54-11) 4346-5000 Fax: (54-11) 4346-5300 E-mai: to ofitel@edenor.com.ar Home Page: http://www.edenor.com.ar FABRIL ONCE: Liquidating Assets to Pay Debts -------------------------------------------- Buenos Aires-based textile company Fabril Once S.A. will begin liquidating its assets following the pronouncement of the city's Court No. 3 that the Company is bankrupt, Infobae reports. The bankruptcy ruling places the Company under the supervision of court-appointed trustee, Mr. Ernesto Hilman. The trustee will verify creditors' proofs of claim until June 25, 2004, after which, the validated claims will be presented in court as individual reports on August 31, 2004. Mr. Hilman will also submit a general report, containing a summary of the Company's financial status as well as relevant events pertaining to the bankruptcy, on October 13, 2004. The bankruptcy process will end with the disposal of company assets in favor of its creditors. CONTACT: Fabril Once S.A. Lavalle 2435 Buenos Aires Mr. Ernesto Hilman, Trustee Viamonte 1446 Buenos Aires FIDEICOMISO FINANCIERO: Moody's Rates Financial Trusts ------------------------------------------------------ Moody's Latin America Calificadora de Riesgo S.A. assigned a `D' rating to Fideicomiso Financiero Fidens II financial trusts, the CNV reveals on its Web site. Affected securities are: - US$1,335,333 worth of `Participation Certificates' described as "Certificado de Participacion - Serie II - Clase B." These financial trusts will mature on Jan. 31, 2014; and - US$2,057,523 worth of `Participation Certificates' described as "Certificacado de Participacion - Serie II - Clase A. " These financial trusts will mature on July 31, 2014. At the same time, Moody's assigned a `C' rating to Fideicomiso Financiero Fidens II financial trusts worth US$10,973,400. These financial trusts were classified as `Debt Security' and described as "Titulo de Deuda - Serie II." These securities will mature on July 31, 2014. Meanwhile, Moody's assigned a `D' rating to Fideicomiso Financiero Fidens I financial trusts. Affected bonds include: - US$1,742,958 worth of `Participation Certificates' described as "Certificado de Participacion - Serie I - Clase B." These financial trusts will mature on Feb. 28, 2014; and - US$2,136,559 worth of `Participation Certificates' described as "Certificado de Participacion - Serie I - Clase A." These financial trusts will mature on Feb. 28, 2014. Furthermore, Moody's assigned a `C' rating to Fideicomiso Financiero Fidens I financial trusts worth US$11,394,900. These financial trusts were classified as `Debt Security' and described as "Titulo de Deuda - Serie I." These securities will mature on December 31, 2013. FINCA EL MOLINO: Proceeds With Liquidation on Court Orders ---------------------------------------------------------- Finca el Molino S.A. of Buenos Aires will begin liquidating its assets after Court No. 2 declared the Company bankrupt. Infobae reveals that the bankruptcy process will commence under the supervision of court-appointed trustee, Mr. Juan Ignacio Estevez. The trustee will review claims forwarded by the Company's creditors until July 14, 2004. After claims verification, Mr. Estevez will submit the individual reports for court approval on September 09, 2004. The presentation of the general report will follow on October 22, 2004. Clerk No. 3 assists the court on this case. CONTACT: Mr. Juan Ignacio Estevez, Trustee Uruguay 750 Buenos Aires FUNDACION PARA EL DESARROLLO: Reports Submission Set --------------------------------------------------- The trustee supervising the liquidation of Fundacion Para el Desarrollo y la Transformacion Productiva y Social Argentina (Fundesa), will submit on June 10,2004 the case's validated individual claims for court approval. These reports explain the basis for the accepted and rejected claims. A general report will also be presented in court on August 25, 2004 Infobae reports that Cordoba Court No. 6 has jurisdiction over this bankruptcy case. CONTACT: Fundacion Para el Desarrollo y la Transformacion Productiva y Social Argentina (Fundesa) Alvear 542 Cordoba HOSANTEL S.A.: Liquidates Assets to Pay Debts --------------------------------------------- Hosantel S.A. will begin liquidating its assets following the city Court No. 25's ruling that the Company is bankrupt, Infobae reports. The bankruptcy ruling places the Company under the supervision of court-appointed trustee, Mr. Carlos F. Pisa Barros Garcia. The trustee will verify creditors' proofs of claim until August 6, 2004. The validated claims will be presented in court as individual reports on September 20, 2004. Mr. Garcia will also submit a general report, containing a summary of the company's financial status as well as relevant events pertaining to the bankruptcy, on November 11, 2004. CONTACT: Mr. Carlos F Pisa Barros Garcia, Trustee Avda Corrientes 3150 Buenos Aires INDUSTRIAS METALURGICAS: Court Declares Company Bankrupt -------------------------------------------------------- Industrias Metalurgicas Guido S.A. entered bankruptcy on orders from Court No. 24, reveals Infobae. Working with Clerk No. 47, the court assigned Ms. Haydee M. Kravetz as trustee. She is to verify creditors' claims until July 16, 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 August 31, 2004, are to be prepared upon completion of the verification process. The court also requires the trustee to prepare a general report and file it on September 30, 2004. This report contains a summary of the results in the individual reports. CONTACT: Ms. Haydee M. Kravetz, Trustee Avda Leandro N Alem 651 Buenos Aires INVENTIA S.A.: Court Declares Company Bankrupt ---------------------------------------------- Judge Ferrario of Buenos Aires Court No. 6 declared local company Inventia S.A. Bankrupt, relates local daily La Nacion. Court records show that Iggam S.A., which has claims totaling US$6,337.37 against the clothing company, filed the bankruptcy motion. Inventia will undergo the bankruptcy process with Ms. Sandra Dallo as its trustee. Creditors are required to present their proofs of claim to the trustee for verification before August 27, 2004. Creditors who fail to have their claims authenticated by the said date will be disqualified from the payments that will be made after the Company's assets are liquidated at the end of the bankruptcy process. Dr. Mendez Sarmiento, Clerk No. 12, assists the court on the case. CONTACT: Inventia S.A. Florida 833 Buenos Aires Ms. Sandra Dallo, Trustee Tucuman 1711 Buenos Aires LINEAS LEON: Judge Approves Reorganization Plea ----------------------------------------------- Lineas Leon S.A., an electronic communications equipment supplier, will proceed with reorganization after Judge Di Noto of Buenos Aires Court No.15 endorsed the Company's insolvency petition. Argentine daily La Nacion reports that the Company has assets valued at US$165,299.36 and liabilities totaling US$204,816.62 The court assigned Ms. Eva Gorsd to supervise the liquidation process as trustee. She will validate creditors' proofs of claims until August 3, 2004. CONTACT: Lineas Leon S.A. Avenida Corrientes 2565 Buenos Aires Ms. Eva Gorsd, Trustee Paraguay 1225 Buenos Aires METALURGICA VIALE: Court Issues Bankruptcy Ruling ------------------------------------------------- Metalurgica Viale S.R.L. will start liquidation proceedings after Beunos Aires Court No. 5 declared it bankrupt, says Argentine news source Infobae. With assistance from Clerk No. 9, the court named Mr. Juan Carlos Pitrelli as trustee. He will verify creditors' claims until August 5, 2004. Following claims verification, the trustee will submit the individual reports, which were prepared based on the verification results, to the court on September 17, 2004. The general report is due for submission on November 1, 2004. The Company's bankruptcy case will close with the liquidation of its assets to pay its creditors. CONTACT: Mr. Juan Carlos Pitrelli, Trustee Avda de Mayo 1343 Buenos Aires PAPELERA WILDE: Prepares for Reorganization ------------------------------------------- Buenos Aires Judge No. 13, with assistance from Clerk No. 26, issued a resolution opening the reorganization of Papelera Wilde S.R.L., reports Infobae. This pronouncement authorizes the Company to begin drafting a settlement proposal with its creditors in order to prevent the liquidation of the company. The reorganization also allows the Company to retain control of its assets subject to certain conditions imposed by Argentine law and the oversight of the court appointed trustee. Mr. Norberto Isidro Sapir will serve as trustee during the course of the reorganization. He will be validating creditors' proofs of claims until August 10, 2004. The results of the verification will be presented in court as individual reports on September 22, 2004. The trustee is also obligated to give the court a general report of the case on November 11, 2004. This report summarizes events relevant to the reorganization and provides an audit of the company's accounting and business records. Papelera Wilde will present the completed settlement proposal to its creditors during the informative assembly scheduled on March 29 next year. CONTACT: Mr. Norberto Isidro Sapir, Trustee Jose E Uriburu 1010 Capital Federal PECRUMO S.A.: Court Grants Reorganization Plea ---------------------------------------------- Pecrumo S.A., a company operating in Buenos Aires, begins reorganization proceedings after the city's Court No. 1, with assistance from Clerk No. 2, granted its petition for "concurso preventivo". During the reorganization, the Company will be able to negotiate a settlement proposal for its creditors so as to avoid a straight liquidation. According to Argentine news source Infobae, the reorganization will be conducted under the direction of Mr. Otto Reinaldo Munch, the court-appointed trustee. Creditors with claims against the Company must present proofs of the Company's indebtedness to Mr. Munch before August 5, 2004. The informative assembly, the final stage of the reorganization, is scheduled on April 25, 2005. CONTACT: Mr. Otto Reinaldo Munch, Trustee Maipu 509 Buenos Aires PETROBRAS ENERGIA: Awaits Offshore Oil Sites' Study Approval ------------------------------------------------------------ As part of its plans to develop offshore oil exploration projects, Argentine oil and gas company Petrobras Energia sought permission from the Energy Secretariat to conduct seismic and geological studies on potential offshore oil sites, Dow Jones Newswires reports, citing Alberto Da Fonseca Guimaraes, Petrobras Energia's general executive director and country manager. "This deals with the most expensive and risky initiatives, but to develop new frontiers in the ocean will be without a doubt one of the biggest challenges for Argentina," Da Fonseca Guimaraes said. The two blocks under consideration are located 150 kilometers off the Argentine coast between the Buenos Aires province cities of Mar del Plata and Bahia Blanca. Each block measures 10,000 square kilometers in area and 3,000 meters in depth. The investment required for the preliminary studies has not been disclosed but according to Petrobras Energia's press office, the investment is separate from the six-year, US$53.6 billion plan that Petrobras Energia's parent, state-owned Brazilian oil group Petroleo Brasileiro (Petrobras), unveiled in May. CONTACTS: Daniel E. Rennis E-mail: drennis@petrobrasenergia.com Alberto Jankowski E-mail: ajankows@petrobrasenergia.com Tel: (5411) 4344-6655 RADIO RIVADAVIA: Bankruptcy Process Begins By Court Order --------------------------------------------------------- Buenos Aires Court No. 24 declared Radio Rivadavia S.A. bankrupt, reports Infobae. The declaration signals the Company to proceed with the liquidation process, which will close with the liquidation of its assets. The court, assisted by Clerk No. 48, appointed Ms. Graciela Elena Lissarrague, as trustee who will authenticate proofs of claim until August 3, 2004. Next, the trustee will prepare the individual reports based on the results of the authentication and submit these reports to court on September 15, 2004. After these results are processed in court, the trustee will then present the general report on October 28, 2004. CONTACT: Ms. Graciela Elena Lissarrague, Trustee Presidente Peron 1509 Buenos Aires TELECOM ARGENTINA: Debt Deal Gains Favorable Response ----------------------------------------------------- Telecom Argentina's sweetened debt restructuring offer gained unanimous approval from the creditor's committee representing about 16.55% of the telephone carriers massive US$3.2 billion debt, reports Dow Jones. Mr. David Martinez, managing director of London-based fund Fintech Advisory Ltd., stated; "We believe this proposal fully addresses the primary objectives of creditors." He adds that that revisions made on the settlement offer will contribute to greater creditor backing. Along with the ad hoc creditor's committee endorsement, the plan has also generated support from Mr. Nicola Stock, head of Task Force Argentina, who expressed his approval of the debt offer last week. TFA, a major Italian bondholder group, claims 25% of Telecom Argentina's liability. However, the extra-judicial debt restructuring must first be ratified by two-thirds of the company's creditors before it can be submitted for legal clearance to make the repayment terms binding on all claimants. The 30-day voting period for the settlement proposal is expected to begin this month after securities regulators in Italy and Argentina authorize the plan. Analysts say that the revised settlement proposal, released in early May, promises a 94% to 95% recovery rate from the original liability. Options available under the new plan include a step- up 2014 bond; a step-up 2011 bond worth 94.5% of the original holding; and a cash payment between 70% and 80% determined through a competitive Dutch auction. CONTACT: TELECOM ARGENTINA S.A. Alicia Moreau de Justo 50, 10th Floor Capital Federal (1107) Republica Argentina Phone: +54 11 4968 4000 Home Page: http://www.telecom.com.ar Contacts: Alberto J. Ricciardi, Chief Financial Officer Elvira Lazzati, Finance Director Pedro Insussarry, Investor Relations Manager Phone: (5411) 4968-3626/3627 Fax: (5411) 4313-5842/3109 E-mail: inversores@intersrv.telecom.com.ar * Disgruntled Argentine Bondholders Skip Scheduled Meeting ---------------------------------------------------------- None of Argentina's major bondholder groups showed up at the meeting scheduled in Buenos Aires Tuesday, indicating the government's failure to revive negotiations with those creditors holding about US$100 billion of defaulted debt, Bloomberg News suggests. Bondholders said they did not believe the government was acting in good faith, as it promised in a loan accord with the International Monetary Fund, because it failed to hold discussions with creditors before announcing its offer. "There is no point in meeting to listen to their done deal," said Horacio Vazquez, treasurer of the Argentina Bondholders' Association, which represents 7,000 individual investors who hold Argentine bonds. "The government hasn't answered our queries for clarification of a proposal that was in itself, confusing," Vazquez's group said in a statement. The Global Committee of Argentina Bondholders, the largest international creditor group with about one third of the bonds, also refused to meet with the government this week, saying it agreed with the domestic investors' complaint that Argentina is not negotiating in good faith. "We share their frustration over this process," Hans Humes, co- chairman of the Global Committee of Argentina, said. =========== B R A Z I L =========== AHOLD: CBD Halts Acquisition Bid -------------------------------- The president of Brazil's largest grocery chain, Companhia Brasileira de Distribuicao S.A. (CBD), announced that the company has withdrawn its plans to take over the 32-store G. Barbosa Supermarket chain from ailing Dutch retailer Ahold Holding N.V. CBD's president, Mr., Abilio Diniz, was quoted as saying that, "We're out. The price (Ahold) wants is very high. They think G. Barbosa is worth a fortune." Dow Jones Business News states that G. Barbosa formed the bulk of Ahold's properties in Brazil along with the 120-store Bompreco outlets before the latter was sold for US$300 million in March to Wal-Mart Stores Inc. With the retail giant now firmly entrenched in Northeastern Brazil, Ahold could find more trouble finding takers for G. Barbosa. BRASKEM: Mulling Issuance of BRL300 Million in Debentures --------------------------------------------------------- BRASKEM S.A., a leader in the thermoplastic resins segment in Latin America and among the five largest Brazilian privately owned industrial companies, disclosed on May 28, 2004 that its Board of Directors met on May 27, 2004 and approved the convening of an Extraordinary Shareholders Meeting to examine and consider a proposal for the issuance of non-convertible, partially secured debentures maturing and payable in a lump sum in five years and bearing interest at a rate of 117% of the CDI rate, which interest will be paid semi-annually following the issue date. Mr. Paul Altit, Braskem's Vice President of Finance and Investor Relations, stated: "This transaction continues the implementation of our strategy to provide more financial and operational flexibility to Braskem, contributing to the repayment of short-term debt, increasing our liquidity and reducing our exchange rate risk and overall financing cost. It is important to note that the 5-year maturity of this transaction strongly contributes to extending Braskem's debt maturity profile and to matching its debt maturities to its net cash generation." Following the approval by the Extraordinary Shareholders Meeting and the execution of the relevant documentation, the issue of debentures will be submitted to the Brazilian Securities Commission for review. The debentures have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws, and the debentures may not be offered or sold in the United States or to a U.S. person except pursuant to an effective registration statement or pursuant to transactions exempt from, or not subject to, registration under the Securities Act. Braskem, a world-class Brazilian petrochemical company, is a leader in the thermoplastic resins segment in Latin America, and is among the five largest Brazilian privately owned industrial companies. The Company operates 13 manufacturing plants located throughout Brazil, and it has a yearly production capacity of 5.0 million of tons of petrochemical products. CONTACTS: Vasco Barcellos Investor Relations - Manager Phone: (55 11) 3443 9178 vasco.barcellos@braskem.com.br Web Site: www.braskem.com.br TELEMAR: Joins Hispasat to Create August Satellite Launch --------------------------------------------------------- Hispamar, a joint venture between Brazil's Tele Norte Leste Participacoes SA (Telemar) and Spain's Hispasat, is close to launching a new satellite known as Amazonas. Citing Hispamar President, Luiz Francisco Perrone, Dow Jones Newswires reports that the Amazonas, which cost about US$350 million, would become the first to provide total coverage for the Latin American region. The new satellite can handle nearly 250,000 phone calls at the same time, and will provide services such as digital TV, wireless and Internet. Amazonas will be launched in Kazakstan and provide services in August when 20% of its capacity is employed by Telemar, currently dependant on Star One, the satellite owned by long- distance Brazilian carrier Embratel Participacoes SA, and provide long-distance services. Mr. Perrone didn't say by how much Telemar would reduce its costs by moving from Star One to Amazonas, and declined to provide forecasts on revenues. CONTACT: TNE - INVESTOR RELATIONS GLOBAL CONSULTING GROUP Roberto Terziani (terziani@telemar.com.br) 55 21 3131 1208 Kevin Kirkeby (kkirkeby@hfgcg.com) Carlos Lacerda (carlosl@telemar.com.br) 55 21 3131 1314 Fax: 55 21 3131 1155 1 646 284 9494 Tel: 1-646-284-9416; Website: www.telemar.com.br/ir TERPHANE HOLDING: S&P Assigns `CCC+' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'CCC+' corporate credit rating to Bloomfield, N.Y.-based Terphane Holding Corp. At the same time, Standard & Poor's assigned its 'CCC+' rating to the company's $53 million senior secured notes due June 2009. The notes, which are secured by a pledge of the stock of subsidiaries and certain property, plant and equipment located in Brazil and the U.S., are rated the same as the corporate credit rating. Standard & Poor's ratings are based on the understanding that Terphane will completely repay an export credit facility secured by receivables with a portion of the proceeds of the notes, and that a guarantee will be issued by Terphane Ltda., the company's main operating subsidiary in Brazil, in favor of the noteholders. The outlook is stable. Pro forma for the transaction, total debt will be about $51 million, but will increase to approximately $73 million once the company draws on its new equipment leasing facility. The proceeds from the proposed notes transaction will be used primarily to fund a $30 million dividend to shareholders and repay existing subsidiary debt. "The ratings on Terphane reflect an extremely limited scope of operations as the sole domestic manufacturer in the niche South American thin polyester film industry, significant reliance on one manufacturing facility, and a very restricted liquidity position, characterized solely by a cash balance of less than $7 million following the notes offering," said Standard & Poor's credit analyst Franco DiMartino. However, the company's narrow business focus is partially offset by favorable industry growth prospects; regional import tariffs that protect the company's primary market; a low cost, integrated manufacturing structure; well-diversified customer relationships; and stable operating margins. With annual revenues of slightly more than $60 million, Terphane is the only domestic manufacturer in the South American market for thin polyester film. The company augments this position with sales to the North American market, which accounts for approximately 30% of total revenues. The company's products are primarily used in flexible packaging applications, including packaging for pasta, processed meats and cheeses, juices, mayonnaise, and lidding for yogurt trays, butter, cream, and other products. Industrial applications, about 10% of sales, include wrapping for electrical cable, thermal ribbons for printers and faxes, and insulation. The primary end markets for Terphane's thin polyester film are expected to grow between 7% and 11% annually over the next five years based on strong demand from the flexible packaging industry. Flexible packaging applications continue to replace rigid packaging, such as paperboard boxes, glass jars, and metal cans, due to lower cost and weight, and enhanced performance characteristics for some applications. In addition, the superior performance of plastic films should support its growth at the expense of other flexible packaging alternatives, notably paper and aluminum foil. The company produces about 80% of its total manufacturing output at its plant in Cabo, Brazil. This heavy reliance on the Cabo plant, which will only intensify once a planned expansion is completed, poses some credit risk. However, the strategic location of this plant is the source of Terphane's leading position in the South American region, with approximately 70% share of the total market. ========= C H I L E ========= TELEFONICA CTC: Shareholders to Decide on Mobile Sale This Week --------------------------------------------------------------- The shareholders of Telefonica CTC Chile are expected to vote on the sale of the Company's mobile division Telefonica Movil in an extraordinary general shareholders' meeting to be held this week, says Business News Americas. In May, Spain's Telefonica SA, through Telefonica Moviles S.A., announced plans to acquire Telefonica Movil for US$1 billion. The CTC board has already recommended that shareholders accept the offer but some minority shareholders believe Telefonica has used its 43% share in CTC to ensure a price, which is to its advantage. Last week, local investment firm Moneda Asset Management joined four minority shareholders - Cuprum, Consorcio, Celfin and The Chile Fund - who have vowed to vote against the sale. The four shareholders represent just over 5% of CTC and will require considerable support from other minority shareholders to prevent a vote in favor of the sale from reaching the 66.7% minimum. CONTACT: TELEFONICA CTC CHILE Sofia Chellew E-mail: schelle@ctc.cl Tel.:56-2-691 3867 Veronica Gaete E-mail: vgaete@ctc.cl Tel.:56-2-691 3867 M.Jose Rodriguez E-mail: mjrodri@ctc.cl Tel.:56-2-691 3867 Florencia Acosta E-mail: macosta@ctc.cl Tel.:56-2-691 3867 =============== C O L O M B I A =============== TELESANTAMARTA: Colombia Orders Liquidation ------------------------------------------- Colombian telco Telesantamarta, which was intervened by the country's public services regulator Superservicios in 2002, when it reported a loss of COP789 million, has been ordered to liquidate, reports Business News Americas. The government, which ordered the Santa Marta-based telco's liquidation, also ruled that Telesantamarta's service management be transferred to state-run telco Colombia Telecomunicaciones (Telecom). Telecom will designate a workforce of 60 direct and indirect employees for its Santa Marta division. The government will set aside COP3.2 billion (US$1.18 million) as severance pay for Telesantamarta's 107 former employees. Furthermore, Telecom may take on former Telesantamarta employees if they organize themselves into cooperatives and bid for contracts to run aspects of the company on an outsourcing basis. ============= J A M A I C A ============= KAISER ALUMINUM: RUSAL Balks At Plans to Take 65% Stake ------------------------------------------------------- Russia's RUSAL, one of the world's leading aluminium producers, cancelled its plans to buy Houston-based Kaiser Aluminum's 65% stake in Jamaica's Alpart alumina refinery, reports Business News Americas. RUSAL, which offered to pay US$316 million for the shares at end-May, will not challenge a ruling issued last week by the U.S. Bankruptcy Court for the District of Delaware that Kaiser should proceed with the sale of its interests in Alpart to Norway's Hydro Aluminium. Hydro announced May 25 it had exercised its right of first refusal to buy 65% of the 500,000t/y Alpart alumina operation from Kaiser and agreed to sell it to Swiss-based metals trader Glencore. Hydro will retain its own 35% interest in Alpart. The sale of Alpart is part of Kaiser's corporate strategy to emerge from Chapter 11 bankruptcy. =========== M E X I C O =========== COPAMEX: Moody's Withdraws Ratings After Full Repayment of Notes ---------------------------------------------------------------- Moody's Investors Service said it has withdrawn its ratings for Copamex S.A. de C.V., one of Mexico's leading producers of paper-based consumer products and value-added industrial paper products, including packaging and printing and writing products. The action follows the maturity and full repayment of the company's 11.375% senior notes. * Fitch Ratings Issues Comment on Mexico ---------------------------------------- Fitch Ratings, the international rating agency, said Tuesday that Mexico needs to implement economic reforms in order to sustain the economic recovery currently underway. Mexico's short-term economic indictors point to an economic rebound after three years of sluggish growth. In a report titled 'United Mexican States: Sustaining the Economic Recovery', Fitch says that in the absence of reforms, Mexico's economy remains heavily reliant on the U.S. for economic growth. The report cautions that notwithstanding the recent economic recovery -- underpinned by higher industrial production and stronger export growth -- competitive pressures facing Mexico continue to mount. Mexico appears to have lost its advantage in labor-intensive maquila products to countries in Central America and China in particular. In Fitch's view, the recovery in the maquila and the overall manufacturing sector needs to be closely monitored to assess the extent of damage from intense competition. The report commends the authorities for adept macroeconomic management during the past three years of regional turmoil and slow domestic growth. During this period, fiscal targets have been met and the central bank has remained committed to achieving its inflation target. However, Fitch believes that Mexico needs to make progress on structural reforms in order to consolidate its current economic recovery, boost its competitiveness and improve its attractiveness to foreign investors. Reforms in the labor market and electricity sectors, and further improvements in the regulatory and business environment should help Mexico regain some share of its export markets. At the same time, fiscal reform aimed at improving the tax-to-GDP ratio needs to be pursued. Greater resources could be used to reduce reliance on oil revenues and increase spending on infrastructure and social sectors. Fitch remains concerned about the lack of political consensus on structural reforms and believes that political wrangling will increase in the coming year ahead of presidential and congressional elections in 2006, making cooperation on reforms rather difficult. Fitch notes that in the absence of substantive reforms, the credit Outlook of Mexico may only improve if there is a sharp decline in the public sector external debt burden. In contrast, inertia in pursuing reforms may adversely affect international confidence and prevent the economy from growing at a faster pace. Policy slippage, especially fiscal related would be viewed negatively. ======= P E R U ======= * S&P Ups Peru's Long-term Foreign Currency Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term foreign currency sovereign credit rating on the Republic of Peru to 'BB' from 'BB-'. Standard & Poor's also affirmed its 'BB+' long-term local currency and its 'B' short-term sovereign credit ratings on the republic. The outlook on the ratings is stable. According to Standard & Poor's Ratings Services sovereign analyst Sebastian Briozzo, the upgrade was based upon the recent strengthening of Peru's economic fundamentals and the expectation that these economic policies will be sustained in the future, despite the continuing problems in Peru's political environment. "Implementation of a fiscal consolidation strategy has gradually stabilized Peru's debt burden," Mr. Briozzo said. "The country's successful fiscal strategy is essential in providing flexibility to an economy that is still severely constrained by a high external indebtedness, an only limited margin for implementing monetary policy due to dollarization, and significant social needs," he added. Mr. Briozzo explained that the combination of decreasing financing needs derived from lower fiscal deficits, rapidly growing exports, and increasing issuance of debt denominated in local currency have mitigated Peru's still-high external vulnerability. A high level of international reserves also reduces the country's economic vulnerability to external shocks. Standard & Poor's said that Peru's creditworthiness will continue to be limited by a weak political environment consistent with a 'BB' rating. Relatively high economic growth rates since 2002, averaging 4.4% (including the expected 4% growth for 2004), have not improved the political and social climate in Peru. "Despite relatively strong growth prospects over the medium term, the need to make this growth pattern sustainable and job- creating will continue to challenge Peruvian governments," noted Mr. Briozzo. "Recent signs of increasing social tension will even further limit the ability of the already-weak administration of President Alejandro Toledo to pursue its agenda. However, a growing consensus among the different political constituencies on the basic orientation of economic policy limits the risk of policy reversal," he concluded. ANALYSTS: Sebastian Briozzo, New York 212-438-7342 Jane Eddy, New York (1) 212-438-7996 ============= U R U G U A Y ============= PARMALAT URUGUAY: Conaprole Submits Two Bids -------------------------------------------- Conaprole, Uruguay's number one dairy producer and exporter, has submitted two bids for the local subsidiary of troubled Parmalat S.p.A., one of them on its own and another one in alliance with Irish Glanbia, El Pais newspaper reported. Although some milk farmers fear the monopolization of the market, Wilson Cabrera, the head of the local Milk Producers Association, explained "there will be no monopoly, because there are other companies that have been in business for several years." The Troubled Company Reporter - Latin America earlier indicated that taking over Parmalat would open a 20% share in the milk market for Conaprole. Parmalat Uruguay reports assets of US$18 million, annual sales of US$45 million and debts of US$30 million. ================= V E N E Z U E L A ================= PDVSA: Sends Test-Shipment of Ethanol-Ready Fuel ------------------------------------------------ Petroleos de Venezuela S.A. (PVZ.YY) dispatched A 250,000-barrel test shipment of summer-grade ethanol-ready gasoline for sale in New York and Connecticut on Saturday. The shipment, the first of four cargoes scheduled for delivery this month, could determine if PdVSA can comply with stricter U.S. specifications for ethanol-containing fuel. According to Dow Jones Newswires, PdVSA will rely on CITGO, its fully owned subsidiary, to mix the zero-MTBE gasoline base - called RBOB, or reformulated gasoline for oxygenate blending - with ethanol at its terminals on the U.S. East Coast, so it can meet the new fuel guidelines. A three-month strike that began on December 2002 at PdVSA's refining plants has weakened its operations, leading to speculations that the company would not be able to produce gasoline under the tougher standards set by New York and Connecticut. PDVSA: Drills New Wells to Up Oil Output ---------------------------------------- Four new wells will be added at Petroleos de Venezuela's (PVZ.YY) Tomoporo oil field in Lake Maracaibo region in order to take advantage of recent oil price hikes as well as meet Venezuela's adjusted OPEC production quota of 2.93 million barrels a day. Tomoporo along with La Franquera will be the focus of PdVSA's US$26 billion oil exploration and production plan for the next five years. In that period, the Venezuelan oil giant expects to complete drill 3,800 new wells, perform workovers on 5,500 wells, and maintain an average of 111 rigs in operation. Industry analysts say the company has to invest in production facilities to increase output and they caution that it will be difficult for PdVSA to meet this year's projected US$5 billion investment because of government spending projects. The Venezuelan government recently set up a $2 billion spending fund that will be directly financed with oil revenue. *********** 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 * * *