/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040702.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, July 2, 2004, Vol. 5, Issue 130 Headlines A R G E N T I N A AGENCIA MARITIMA: Verification Deadline Approaches ANTONIO TARAZI: Court Reschedules Report Submission BANCO DE GALICIA: Local S&P Assigns Ratings to Various Bonds BANCO MERIDIAN: Local Moody's Assigns `B' to $10M in Bonds CENTRAL COSTANERA: Signs Preliminary Debt Deal With Creditors CLISA: Fitch Leaves Debenture Ratings Unchanged EDEERSA: Government Announces Tender for 51% Stake in Utility ESPRESSO BAR: Court Declares Company Bankrupt INVESTIGACIONES DUQUE: Court Favors Creditor's Bankruptcy Call MERCEDES CONFECCIONES: Verification Deadline Set NAZZARENO MUSSONI: Liquidates on Court Decree PALAGI HNOS: Proceeds With Reorganization TUBA: Judge Approves Bankruptcy Petition * Argentina Secures $700M Loan From World Bank B E R M U D A FOSTER WHEELER: Amends Exchange Offer FOSTER WHEELER: JV Wins Contract for Spanish LNG Terminal Proj. NORTHERN OFFSHORE: Considers Liquidation B R A Z I L BRASKEM: Nalco Wins Contract to Provide Water Services Treatment CEMIG: Debt Restructuring Delays Filing of Annual Report EMBRATEL: Blocked From Offering Local Calls on Prepaid Cards NET SERVICOS: Globopar-Telmex Deal Update TELEMAR: Mobile Interconnection Rates Deal Will Reduce Tariffs TELEMAR: To Adjust Local, Long Distance Rates C O L O M B I A * Colombia IMF Approves $284M Colombian Disbursement * IDB OKs $10M Loan to Colombia for Administrative Reforms C O S T A R I C A ELCA: Regulator Imposes 90-Day Loan Portfolio Freeze E C U A D O R PETROECUADOR: Sees Increase in Oil Exports January to May J A M A I C A JAMAICA GRANDE: Hendrickson Family Bids on Finsac's Stake M E X I C O AEROMEXICO: Boeing Delivers Eighth Next-Generation 737 AXTEL: Will Expand Into Ciudad Juarez by Year's End CEMIG: Auctions 72,000MWh Power Supply CORPORACION GEO: Closes First Phase of JV With PREI EMPRESAS ICA: Unit Served With Subpoena From DOT HYLSAMEX: Debt Plan Gains Positive Market Response LUZ Y FUERZA: Losing Almost $521M Yearly on Theft, Fraud SATMEX: Constellation Eyes Control for $1 VITRO: Will Sell US$150 Mln in Secured Notes VITRO: S&P Assigns `B+' Long-Term Rating to VENA VITRO: Moody's Assigns Ratings to Subsidiary's Debt V E N E Z U E L A PDVSA: Misses Deadline for Submission of Annual Reports to SEC - - - - - - - - - - ================= A R G E N T I N A ================= AGENCIA MARITIMA: Verification Deadline Approaches -------------------------------------------------- The verification of claims for the Agencia Maritima Sudamericana S.A. bankruptcy will end on September 2, 2004 according to Infobae. Creditors with claims against the bankrupt company must present proof of the liabilities to Ms. Mabel Lopez, the court-appointed trustee, before the deadline. The bankruptcy will conclude with the liquidation of the company's assets to pay its creditors. CONTACT: Ms. Mabel Lopez, Trustee Murguiondo 3607 Buenos Aires ANTONIO TARAZI: Court Reschedules Report Submission --------------------------------------------------- The San Luis civil and commercial tribunal handling the ongoing reorganization of Antonio Tarazi e Hijo S.A. has moved the submission of the general report on September 15, 2004, says Infobae. Likewise, the informative assembly has been rescheduled on August 5 next year. CONTACT: Antonio Tarazi e Hijo S.A. San Luis BANCO DE GALICIA: Local S&P Assigns Ratings to Various Bonds ------------------------------------------------------------ Standard & Poor's International Ratings, Ltd. Sucursal Argentina assigned ratings to various bonds issued by Banco de Galicia y Buenos Aires. The Comision Nacional de Valores enumerated the affected bonds with their corresponding ratings as follows: - `raD' rating to US$9 million worth of "Obligaciones Negociables emitidas 11-6-01 bajo el Programa de USD 1000 millones, monto original USD 12 millones" coming due on 20 Dec 2005; - `raD' rating to US$5 million worth of "Obligaciones Negociables simples 7-8-97, monto original USD 150 millones" with undisclosed maturity date; - `raD' rating to US$21.4 million worth of "Obligaciones Negociables simples 8-11-93, monto original USD 200 millones" coming due on 01 Nov 2004; - `raBB+' rating to US$2 billion worth of "Programa de Obligaciones Negociables a Mediano Plazo" coming due on 29 Dec 2018; - `raBBB-' rating to US$2 billion worth of Programa de Obligaciones Negociables a Mediano Plazo" coming due on 29 Dec 2018; - `raBBB-' rating to US$43 million worth of "Clase 7 de Obligaciones Negociables emitidas 19-7-02 bajo el Programa de USD 1000 millones" coming due on 28 Jun 2004; - `raBBB-' rating to US$73 million worth of "Clase 6 de Obligaciones Negociables emitidas 19-7-02 bajo el Programa de USD 1000 millones" coming due on 03 Aug 2007; The rating actions reflect the bank's financial status as of March 31, 2004. Banco de Galicia y Buenos Aires SA (GALI.BA), the main unit of Argentine financial services company Grupo Galicia Financiero (GGAL), registered a loss of ARS100.92 million in the first quarter of 2004. CONTACT: BANCO DE GALICIA Y BUENOS AIRES Tte Gral Juan D Peron 407 Buenos Aires Argentina C1038AAI Phone: +54 11 6329 0000 Fax: +54 11 6329 6100 Home Page: http://www.bancogalicia.com.ar Contact: Juan Martin Etchegoyhen, Chairman Antonio R. Garces, Vice Chairman BANCO MERIDIAN: Local Moody's Assigns `B' to $10M in Bonds ----------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. assigned a `B' rating to US$10 million in bonds issued by Banco Meridian S.A. (formerly Providian Bank), according to Argentina's securities regulator, the Comision Nacional de Valores (CNV). The affected bonds are described as "Obligaciones Negociables Subordinadas" and will come due on September 29, 2007. The rating given indicates that the future of these bonds cannot be considered well assured. Moody's took the action based on the bank's financial status as of March 31, 2004. CENTRAL COSTANERA: Signs Preliminary Debt Deal With Creditors ------------------------------------------------------------- Argentine thermoelectric generator Central Costanera revealed Wednesday it has signed a preliminary accord with a group of banks to restructure a US$95 million syndicated loan, relates Dow Jones Newswires. In a statement to the local bourse, the Company said that under the new agreement, the restructured amount will be US$47.7 million and maturities will be extended. The debt will be paid off in quarterly installments, starting September 2004 and ending in June 2006. A final debt restructuring accord will be in place no later than Sept. 25, 2004. The banks involved in the deal are Banco Bilbao Vizcaya Argentaria (BBV), BankBoston, Bank of America (BAC), HSBC (HBC), Banco Latinoamericano de Exportaciones, ABN AMRO Bank (ABN) and J.P. Morgan Chase (JPM). Central Costanera is 63% owned by Spanish utility Endesa. CLISA: Fitch Leaves Debenture Ratings Unchanged ----------------------------------------------- The Argentine arm of ratings agency Fitch Ratings reaffirmed its CCC(arg) rating on debentures of up to US$120 million and its D(arg) rating on debentures for US$100 million issued by infrastructure and public services holding CLISA, reports Business News Americas. In a statement, Fitch said that the rating action reflects the uncertainty over CLISA's capacity to meet its financial obligations, given the weak performance of the business areas it participates in. CLISA has four operating divisions: mass transportation management (Metrovias); waste management (environmental engineering); construction (Benito Roggio e Hijos); and toll-road management. In the nine-month period ended March 31, 2004, the Company reported a ARS1.17-million (US$396,000) net loss as opposed to the ARS208-million profit in the same year-ago period. Financial losses and increased sales and administrative costs drove the Company into the red. EDEERSA: Government Announces Tender for 51% Stake in Utility ------------------------------------------------------------- Argentina's Entre Rios province is set to announce today the bidding rules pertaining to the auction of its 51 percent interest in Argentine power distributor Edeersa, says Mr. Carlos Molina, the Company's president, in a Business News Americas report. The Argentine government took control of the Edeersa stocks last year after the provincial power regulator, Epre, ruled on a transfer of ownership from a trust fund benefiting Edeersa employees and shareholder, which had previously held all of the Company's shares. The move was intended to assure the continuity of power supplies and keep jobs in the province. US Utility PSEG, the original owner of Edeersa, created the trust fund after abandoning the Company in the midst of the Argentine economic crises in 2003. However, the government rejected the transfer because it did not give control of the Company to workers as PSEG had claimed. The rejection left the utility with a US$86 million non-convertible debt. Natural gas distributor Gas Nea has shown interest in acquiring Edeersa. However the Gas Nea's CEO Roberto Tamagno said that the workers union, which retained 49% of Edeersa through the trust fund, might try to make the tender fail. ESPRESSO BAR: Court Declares Company Bankrupt --------------------------------------------- Judge Gonzales of Buenos Aires Court No. 8 declared local Company Espresso Bar S.A. bankrupt, relates La Nacion. The court approved the bankruptcy petition filed by Moises Rosemblit S.R.L., to whom the Company failed to pay debts amounting to US$3,625.44. The Company will undergo the bankruptcy process with Mr. Daniel Alfredo Erdosia as its trustee. Creditors are required to present their proofs of claims to the trustee for verification before September 9, 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. Lezaeta, Clerk No. 15 assists the court on the case. CONTACTS: Espresso Bar S.A. Viamonte 1454 Buenos Aires Mr. Daniel Alfredo Erdosia, Trustee Paraguay 610 Buenos Aires INVESTIGACIONES DUQUE: Court Favors Creditor's Bankruptcy Call -------------------------------------------------------------- Mr. Roberto Alejandro Mazza successfully sought for the bankruptcy of Investigaciones Duque S.A. after Judge Vassallo of Buenos Aires Court No. 5 declared the Company "Quiebra," reports La Nacion. As such, the security and surveillance company will now start the bankruptcy process with Mr. Julio Torres as trustee. Creditors of the Company must submit their proofs of claim to the trustee before September 13, 2004 for authentication. Failure to do so will mean a disqualification from the payments that will be made after the Company's assets are liquidated. The creditor sought for the Company's bankruptcy after the latter failed to pay debts amounting to US$7,423.67 Dr. Perez Casado, Clerk No. 9, assists the court on the case, which will culminate in the liquidation of all of its assets. CONTACT: Investigaciones Duque S.A. Urquiza 340 Buenos Aires Mr. Julio Torres, Trustee Avenida Corrientes 922 Buenos Aires MERCEDES CONFECCIONES: Verification Deadline Set ------------------------------------------------ Mr. Roberto Zapata, the court-appointed trustee supervising the reorganization of Mercedes Confecciones S.A. will verify creditors' proof of claims until August 30, 2004. Argentine news source Infobae announces that creditors with verified claims will be able to participate in the informative assembly scheduled on August 19 next year. CONTACT: Mercedes Confecciones S.A. Ruta 7 Km. 791 Aerea Indust Parque Norte San Luis Mr. Roberto Zapata, Trustee San Martin 1387 San Luis NAZZARENO MUSSONI: Liquidates on Court Decree --------------------------------------------- Nazzareno Mussoni e Hijos S.A. entered bankruptcy after Judge Garibotto of Buenos Aires Court No. 2 approved a bankruptcy motion filed by Iggam S.A., reports La Nacion. The Company's failure to pay US$11,496.11 in debt prompted the creditor to file the petition. Working with Dr. Vasallo, the city's Clerk No. 3, the Company assigned Mr. Fernando Aquilino as trustee for the bankruptcy process. The trustee's duties include the authentication of the Company's debts and the preparation of the individual and general reports. Creditors are required to present their proofs of claims to the trustee before August 13, 2004. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. Payments will be based on the results of the verification process. CONTACT: Nazzareno Mussoni e Hijos S.A. Blanco Encalada 4792 Buenos Aires Mr. Fernando Aquilino, Trustee Lavalle 1459 Buenos Aires PALAGI HNOS: Proceeds With Reorganization ----------------------------------------- The Buenos Aires civil and commercial tribunal issued a resolution opening the reorganization of Palagi Hnos S.A.C.I.F.E.I. This pronouncement authorizes the Company to begin drafting a settlement proposal with its creditors in order to avoid liquidation. In addition, the reorganization allows Palagi Hnos to retain control of its assets subject to certain conditions imposed by Argentine law and the oversight of the court appointed trustee. Mr. Luis Kuklis will serve as trustee during the course of the reorganization. He will be validating creditors' proofs of claims until September 13, 2004. The results of the verification will be presented in court as individual reports on October 26, 2004. The trustee is also obligated to give the court a general report of the case on December 7, 2004. The general report summarizes events relevant to the reorganization and provides an audit of the Company's accounting and business records. The Company will present the completed settlement proposal to its creditors during the informative assembly scheduled on June 9 next year. CONTACT: Palagi Hnos S.A.C.I.F.E.I. Lavalle 1672 Buenos Aires Mr. Luis Kuklis, Trustee Lavalle 1619 Buenos Aires TUBA: Judge Approves Bankruptcy Petition ---------------------------------------- Tuba S.A. was declared bankrupt after Judge Paez Castaneda of Buenos Aires Court No. 21 endorsed the petition of Cerro Bayo S.A. for the company's liquidation. Argentine daily La Nacion reports that Cerro Bayo has claims totaling US$11,014.50 against the Company. The court assigned Mr. Abraham Gutt to supervise the liquidation process as trustee. He will validate creditors' proofs of claims until October 25, 2004. CONTACT: Tuba S.A. Sarmiento 1967 Buenos Aires Mr. Abraham Gutt, Trustee Tucuman 1484 Buenos Aires * Argentina Secures $700M Loan From World Bank ---------------------------------------------- The World Bank approved Tuesday two new loans totaling US$700 million for Argentina to support economic recovery and national highways management. The Board of Executive Directors also discussed the latest economic developments in Argentina and the status of the dialogue with the Government on the economic and social policy agenda under the Country Assistance Strategy endorsed in April. The Economic Recovery Support Structural Adjustment Loan (ERSAL) for US$500 million supports Argentina's efforts to sustain the current economic recovery and establish the structural foundation for medium-term growth, increased employment and greater social equity. Sustainable economic growth hinges on structural changes to promote investment and exports, underpin improvements in investor and consumer confidence, and preserve Argentina's social capital. Specifically, the ERSAL supports restructuring of the financial and utilities sectors, as well as actions to improve the investment climate. "The Bank is supporting Argentina's efforts to implement structural reforms, as well as policy actions to help improve the investment climate in order to generate sustainable employment," said Axel van Trotsenburg, World Bank Country Director for Argentina, Chile, Paraguay and Uruguay."The ERSAL provides the framework to renew our financial sector dialogue with the Government and better structure our engagement in the area of public services and infrastructure." Under the ERSAL, the Government has made firm commitments to complete compensation payments to the banks for asymmetric pesification. Several Executive Directors noted that the over- riding goal of the compensation should be to eliminate uncertainty regarding these claims while providing banks a foundation to build effective business strategies. Other actions under the program aimed at improving the functioning of the banking sector include progress in strengthening prudential regulation and preparation of medium-term business plans by the banks. Regarding public utilities, the program supports actions to resolve disputes in public/private contracts including establishment of institutional mechanisms for contract renegotiation, completing renegotiation of concession agreements (including electricity and gas), and progress in ensuring a viable regulatory framework. The Board of Executive Directors welcomed the Government's commitments with regard to the public utilities and emphasized the need to reach long-term, comprehensive integral agreements with concessionaires. Executive Directors emphasized key criteria for evaluating progress in strengthening the regulatory framework. Numerous Directors stressed that regulatory framework should: (i) be fair, transparent and predictable; (ii) support private sector investment and development of productive capacity by taking into consideration the cost of capital and rates of return on investment and enabling the private sector to retain decision- making over investment; (iii) support competition in each sector; and (iv) set clear and predictable rules on how tariff setting is to be determined. Executive Directors noted that tariff setting should be compatible with the goals of attracting private investment and also reflect the social objective of protecting low-income consumers. "We will continue to engage with the authorities to ensure a successful outcome in the public utilities sector in accordance with principles compatible with global experience and the specific conditions in Argentina," said van Trotsenburg. The ERSAL incorporates measures in the energy sector in response to the supply shortages including the energy conservation plan recently announced by the authorities and planned steps to re- establish normal functioning of the wholesale energy stabilization fund. Executive Directors stressed the importance of improved functioning of the energy sector to sustaining growth. The ERSAL program also supports measures to improve government transparency and to strengthen firm-level competitiveness by facilitating exports, reducing exchange controls and increasing public/private coordination on trade support programs. Actions to promote development of small and medium enterprises include the establishment of programs to facilitate exports and access to credit; as well as measures to foster linkages between large and small enterprises to accelerate learning and quality improvements. The Board of Executive Directors commended the Government on the continued strong economic recovery and good macroeconomic performance. They noted that the third review of the Standby arrangement with the IMF is underway and that discussions are on-going toward defining policies that will achieve the essential objectives set by the authorities. The Executive Directors emphasized the role of the overall economic policy environment in supporting the ERSAL program objectives given the special circumstances prevailing in Argentina, and in this context they stressed the importance of timely completion of the third program review in order to ensure the macroeconomic framework remains adequate prior to effectiveness of the ERSAL. "We will continue to review the macroeconomic framework-taking into account all relevant factors including completion of the third program review--before declaring the loan effective and evaluate subsequent macroeconomic developments during supervision," said van Trotsenburg. Several Executive Directors also noted the need for re- engagement with creditors on mutually acceptable terms and emphasized that fair and transparent restructuring of the debt is essential to private sector development and improvements in the investment climate. The Executive Directors requested a detailed status report from Bank staff on the public utilities and further periodic progress reports on implementation of the program supported by the ERSAL prior to second tranche release. The single currency, U.S.- dollar, fixed-spread loan is repayable in 15 years, with 3 years of grace. The National Highway Asset Management Project The Board also approved a National Highway Asset Management Project for US$200 million that will be implemented over the next four years and will accompany the governments promotion of infrastructure investments as a mean to address potential bottlenecks to sustained economic recovery, fostering productivity and competitiveness, and promoting regional growth convergence and reduced inequality. "Argentina's transport sector is at a crossroad in its process of modernization. There is a vital need to improve transport efficiencies in order to gain economic competitiveness in a country in which 80% of total freight goes through roads. The program will break a vicious cycle of postponing investments in maintenance and rehabilitation in particular in the poorer less developed areas of the country." said Axel van Trotsenburg. "At present Argentina has one of the highest cost of logistics in the region with about 27% of every dollar exported consumed by logistic costs including transport. " Given the nature of the economic activity of Argentina based in the agriculture, there is a structural need to integrate key transport networks among different jurisdictions to effectively connect ports and the main production and consumption centers. The proposed investments have a broad geographic coverage and will support the Government's initiative to develop and implement a Territorial Development Strategy highlighting the links of infrastructure with growth and reduction of inequality. The National Highway Asset Management Project Loan will therefore support the following areas: Institutional renewal - Support the renewal and strengthening of the National Roads Directorate ("Direccion Nacional de Vialidad") through focused efforts to improve technical and institutional capacity, consolidate its transformation into a results-oriented organization, within a new role as a strategic planner of the road network. Performance-based road rehabilitation and maintenance - The expansion of performance-based rehabilitation and maintenance contracts (CREMA contracts) to almost the entire paved non- concessioned road network, covering 20,000 km of national roads. Bridge Management and Rehabilitation - Works in 5 bridges and the implementation of a national bridge management system Road safety - The design of a result-focused road safety initiative setting out the institutional arrangements required for its implementation. "Argentina has a rate of road crash fatality that is three times greater than the current rate of best practice countries, with an average rate of 20 deaths per day, and the role of prevention-based enforcement and education campaigns in improving road safety standards has been overlooked, therefore we are aiming to support an integrated road safety initiative to improve road safety in the country" said Maria Marcela Silva, World Bank Task Manager of the project. The project builds on a very successful experience of performance-based contracts for road rehabilitation and maintenance which have improved the efficiency of road management and will allow the country to further expand the coverage of modern road asset management. An improved national road network is considered a key to remove logistic constraints. The single currency, U.S.-dollar, fixed-spread Adaptable Program Loan (APL) will be executed over a period of 4 years. The loan is repayable in 14 years, with six years of grace. CONTACTS: Ms. Yanina Budkin (54-11) 4316-9724 E-mail: ybudkin@worldbank.org Ms. Alejandra Viveros (202) 473-4306 E-mail: aviveros@worldbank.org Web Site: www.worldbank.org ============= B E R M U D A ============= FOSTER WHEELER: Amends Exchange Offer ------------------------------------- Foster Wheeler Ltd. (OTCBB: FWLRF) announced Wednesday that it intends to amend certain terms and conditions of its previously commenced equity for debt exchange offer. Institutional investors holding 50.1% of the 6.75% senior notes due 2005, 83.7% of the 6.50% convertible subordinated notes due 2007, 91.5% of certain of the Robbins bonds due 2009 and 19.6% of the 9% trust preferred securities have executed agreements not to transfer their securities. While Foster Wheeler has not yet requested these institutional investors to tender their securities in the offer, Foster Wheeler believes they will do so when requested. The amended exchange offer is subject to review by the Securities and Exchange Commission and other regulatory agencies, and revised offering materials will be distributed as soon as practicable. The amended exchange offer modifies certain terms and conditions for the proposed exchange of (i) senior notes due 2005 for a combination of equity and new senior secured notes due 2011; (ii) convertible subordinated notes and Robbins bonds for equity; and (iii) trust preferred securities for equity. The completion of the amended exchange offer is subject to, among other things, attaining certain minimum participation thresholds. As previously announced, Foster Wheeler has obtained a commitment from a group of institutional holders of its debt securities to purchase $120 million of new senior secured notes due 2011, contingent on the closing of the exchange offer. The proceeds will be used to repay the term loan and revolving debt outstanding under Foster Wheeler's existing senior secured credit agreement. After the closing of the exchange offer, the Company intends to seek a new multi-year revolving credit agreement and letter of credit facility. Assuming the amended exchange offer is completed as proposed, and at the minimum required participation levels, it would reduce Foster Wheeler's existing debt by approximately $410 million, extend the maturities on $135 million of debt to 2011, reduce interest expense by approximately $22 million per year, and, when combined with the sale of new notes to retire funded bank debt, eliminate substantially all material scheduled corporate debt maturities prior to 2011. Based upon the same assumptions, and prior to accounting for the warrants described below, Foster Wheeler's currently outstanding common stock would constitute approximately 5.1% of the voting equity securities of the Company. In addition, the holders of the following securities would hold the following approximate percentages of the Company's voting equity securities: (i) holders of the senior notes, 13.8%; (ii) holders of the 2009 Series C Robbins bonds, 3.5%; (iii) holders of the 2024 Series C Robbins bonds, 4.1%, (iv) holders of the Series D Robbins bonds, 7.1%; (v) holders of the convertible notes, 50.4%; and (vi) holders of the trust preferred securities, 11%. Finally, approximately 4.9% of the Company's voting equity securities would be reserved for grants to management of restricted stock. The exchange offer also contemplates the issuance of warrants. The holders of the trust preferred securities would be issued five-year warrants to purchase additional voting equity securities representing, at the minimum required participation level, approximately 15% of the Company's fully diluted equity, and the holders of common stock outstanding prior to the closing of the proposed exchange offer would receive a dividend in the form of three-year warrants to purchase additional voting equity securities representing approximately 5% of the Company's fully diluted equity. The warrants would be in addition to the previously described voting equity securities. In addition, there will be reserved for grants to the Company's management three-year stock options representing approximately 5% of the Company's fully diluted equity. Foster Wheeler will pay a soliciting brokers' fee to registered broker/dealers for soliciting qualifying tenders of trust preferred securities pursuant to this exchange offer. This fee will be equal to 50 cents per trust preferred security (liquidation amount $25) which the registered broker/dealers tender on behalf of their customers and which Foster Wheeler accepts for exchange. The foregoing reference to the proposed registered exchange offer and any other related transactions shall not constitute an offer to buy or exchange securities or constitute the solicitation of an offer to sell or exchange any securities in Foster Wheeler Ltd. or any of its subsidiaries. Investors and security holders are urged to read the following documents filed with the SEC, as amended from time to time, relating to the proposed exchange offer because they contain important information: (1) the registration statement on Form S- 4 (File No. 333-107054) and (2) the Schedule TO (File No. 005- 79124). These and any other documents relating to the proposed exchange offer, when they are filed with the SEC, may be obtained free at the SEC's Web site at www.sec.gov. You may also obtain these documents for free (when available) from Foster Wheeler by directing your request to: John A. Doyle; email john_doyle@fwc.com; telephone 908-730-4270; and address Foster Wheeler Inc., Perryville Corporate Park, Clinton, NJ 08809-4000. Foster Wheeler Ltd. is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, oil and gas, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. CONTACTS Media Contact: Ms. Maureen Bingert 908-730-4444 Investor Contact Mr. John Doyle 908-730-4270 Other Inquiries 908-730-4000 Web Site: www.corporate-ir.net/ir FOSTER WHEELER: JV Wins Contract for Spanish LNG Terminal Proj. --------------------------------------------------------------- Foster Wheeler Ltd. (OTCBB:FWLRF) announced Wednesday that its subsidiary Foster Wheeler Iberia, S.A., in a joint venture with Soluziona Ingenieria, S.A., has been awarded a contract by Regasificacion del Noroeste, S.A. (Reganosa) for project management consultancy at the new liquid natural gas (LNG) terminal project located at Mugardos-Ferrol, Spain. The terms of the contract were not disclosed. "We are very pleased that Reganosa has awarded Foster Wheeler /Soluziona Ingenieria this significant LNG project in Spain," stated Jesus Cadenas, chief executive officer of Foster Wheeler Iberia. "The natural gas market is one of the most active energy segments in the world and increasingly important in Spain, where demand is expected to double by 2010. Our work with Reganosa and other gas companies solidifies Foster Wheeler Iberia's position as one of the leading Spanish engineering contractors in the natural gas sector. This project also adds to the work Foster Wheeler is doing globally leveraging our deep experience in the important and growing LNG market." The LNG terminal project includes two 150,000 cubic-meter tanks, regasification facilities and pipelines. The project is scheduled to be completed during the fourth quarter of 2006. This will be the sixth LNG terminal to be constructed in Spain and will receive LNG from various sources. The booking was included in the first-quarter. NORTHERN OFFSHORE: Considers Liquidation ---------------------------------------- Northern Offshore Ltd. announced Wednesday that it is preparing for liquidation in light of an impasse between the Company and its creditors. The Company indicated that although an unofficial committee of unsecured creditors had formed to consider the Company's restructuring proposal, the committee had sent a letter and term sheet to the Company stating that it would not engage in negotiations with the Company without the Company's immediate payment of US$7.2 million of interest due on May 15, 2004 in connection with the 10.0% senior notes due 2005 and further on July 6, 2004 pay interest which is due on that date on the outstanding NOK bonds. However, at this stage and in light of the Company's current financial position, the Board of Directors does not believe it is appropriate to pay funds to any stakeholder without agreement on a comprehensive restructuring. "The preference of the Board of Directors is to engage with the bondholders in a consensual restructuring," said Tor Olav Troim, the Company's chief executive officer. "To that end, the Company has taken the necessary steps to prepare for restructuring negotiations, including agreeing to pay for creditor advisors, preparing a detailed due diligence package for the committee, and providing the committee with a detailed term sheet. Despite these initiatives, the committee does not want to engage in further discussions without the interest payment being made." Joseph Swanson, a director at Houlihan Lokey Howard & Zukin, which was retained by the Company to assist in implementing the restructuring, added further, "In these circumstances, where a company is endeavouring to restructure its financial obligations as the only alternative to an insolvent liquidation, it is standard practice for the company to preserve its cash and other assets for the benefit of the general body of creditors until there is certainty as to the company's future. Ultimately, such cash and other assets would be distributed either in accordance with the definitive restructuring or, if no agreement can be reached and the restructuring consequently fails, in the company's liquidation." As previously announced on June 15, 2004, the Company did not pay the interest due on its 10% senior notes, which constituted an event of default under the indenture governing the senior notes. On June 1, 2004, the Company proposed a transaction whereby the Company's senior notes together with its Norwegian krone-denominated floating rate notes due 2004 would be exchanged for newly issued shares of common stock representing 85% of the Company's fully diluted share capital, with the remaining 15% to be retained by current shareholders. If approved, the transaction would be consummated under Bermuda law through a scheme of arrangement and an increase in share capital approved by Northern Offshore's shareholders. The Company considers that the implementation of a restructuring represents the only means by which the Company can avoid insolvent liquidation. The Company believes it is in the best interests of all stakeholders to implement a restructuring as quickly as possible. It is the Company's opinion that the implementation is critical to the continued operation of the Company. Unless the committee engages the Company in negotiations, the Board of Directors of Northern Offshore considers that it will have no alternative but to take steps in relation to the appointment of a Bermuda-based liquidator responsible for the liquidation of the Company's assets for the benefit of its creditors. CONTACT: Company Tor Olav Troim Tel: 44 77 34 97 65 75 Jon-Aksel Torgersen Tel: 47 22 93 60 00 Houlihan Lokey Howard & Zukin Joseph Swanson, Director Tel: 44 20 7747 2727 Peter Marshall, Director Tel: 44 20 7747 2724 Joseph Cleverdon, Associate Tel: 44 20 7747 2735 =========== B R A Z I L =========== BRASKEM: Nalco Wins Contract to Provide Water Services Treatment ---------------------------------------------------------------- Brazilian petrochemical company Braskem awarded Nalco Brasil, a subsidiary of Illinois state-based chemical water treatment and industrial processes Nalco, a BRL15-million (US$4.82 million), four-year contract. According to a Business News Americas report, the deal will see Nalco Brasil supplying products and services for Braskem's water treatment, vapor and condensing system at the Camacari petrochemical complex in Bahia state. CEMIG: Debt Restructuring Delays Filing of Annual Report -------------------------------------------------------- Although the management of Companhia Energetica de Minas Gerais (CEMIG) has been working diligently to complete all the required information for its annual report on Form 20-F for the fiscal year ended December 31, 2003 (the "Form 20-F"), and a substantial part of such information has been completed as of this date, management does not believe the Form 20-F can be completed on or before the June 30, 2004 prescribed due date. The Company is currently restructuring the terms of its indebtedness and restructuring and reorganizing its operations to comply with recent Brazilian regulatory requirements and management has had many internal matters on which to focus such that it will not be possible for management to complete the Form 20-F by the June 30, 2004 prescribed due date without unreasonable effort or expense. Management anticipates filing the Form 20-F on or before July 15, 2004. EMBRATEL: Blocked From Offering Local Calls on Prepaid Cards ------------------------------------------------------------ Brazilian telco Telemar lauded telecom regulator Anatel's decision to bar rival telco operator Embratel from using its prepaid long-distance cards to offer local services, Business News Americas indicates. The service, which has been offered by Embratel for 30 days, allows customers to use Telemar's network to make local calls using its prepaid cards, Telemar said, describing the service as "non-authorized reselling" and illegal. "Anatel's decision protects consumers and the market from behavior which damages competition," Telemar said. NET SERVICOS: Globopar-Telmex Deal Update ----------------------------------------- Net Servicos de Comunicacao S.A. (the "Company" or "NET"), a publicly held company, with headquarters located in the city and state of Sao Paulo, at Rua Verbo Divino, 1.356, 1 andar, Chacara Santo Antonio, Corporate Taxpayers' Identification (CNPJ/MF) 00.108.768/00001- 6.5, publicly announces, in compliance with CVM Instruction No. 358/02, that in connection with the preparation of its 20-F Form (as requested by the US regulations regarding the company's ADRs) filed with the Securities Exchange Commission on the date hereof, it has received additional information from its controlling shareholder, Globo Comunicacoes e Participacoes S.A. ("Globopar"), that complements and clarifies the previous relevant notice of June 27,2004, as follows: Upon and subject to the consummation of the transactions contemplated in the purchase agreement or, alternatively, the option agreement entered into by Globopar and Telefonos de Mexico, S.A. de C.V. ("Telmex") on June 27, 2004, the parties (together with the special purpose company that will hold a part of their investments in Net Servicos, the "SPC") will enter into certain shareholders' agreements containing provisions relating to transfer of shares, rights of first refusal, governance and other matters typical of such arrangements. For a period of two years from the date of the shareholders agreement, Globopar and Telmex, subject to their respective fiduciary duties, upon Telmex's request, may approve future issuances of preferred shares in public offerings with pricing to be established through a bookbuilding process, and Telmex would agree to provide a standby underwriting commitment to purchase such preferred shares at a price of not less than R$0.70 (escalated by an inflation index after the first year). Proceeds from any such issuance would be applied to prepay the Company's existing debt in accordance with the definitive restructuring agreements. In the event that there were a change in Brazilian law that would allow Telmex to own a controlling interest in Net Servicos, Telmex would have the right to acquire from Globopar, and Globopar would have the right to cause Telmex to purchase from Globopar, an additional interest in the SPC representing approximately 2% of the voting capital of that entity. This would give Telmex, through the SPC, control over 51% of Net's voting shares. The price of this additional interest would be equivalent to the price per share at which Telmex acquires Net's shares from Globopar pursuant to the purchase agreement or, if the put option has been exercised, as described in Net's previous announcement, the price per share under the put option. Additionally, Globopar and Telmex have agreed to use its commercially reasonable efforts to reach an agreement on a proposal to Net Servicos concerning the terms of a networking agreement with Telmex relating to the provision of voice, data, and Internet services through, and the use of the last mile of, Net's network facilities. Net believes that any such final networking agreement will be on arms-length terms and will require approval of the Company's board. The purchase agreement entered into between Telmex and Globopar contemplates that the shares to be issued in connection with the restructuring of Net's debt obligations would be issued in the same proportion as the current outstanding shares. CONTACTS: Publicom Assessoria de Comunicacao Ms. Adriana Duarte tel. 5186-2799 mail.aduarte@publicom.com.br Web Site: www.nettv.globo.com TELEMAR: Mobile Interconnection Rates Deal Will Reduce Tariffs -------------------------------------------------------------- Telemar Norte Leste (Bovespa: TMAR3;TMAR 5 and TMAR6) and TNL PCS ("Oi") have closed the first freely negotiated deal in Brazil for mobile interconnection rates, leading to reduced tariffs for consumers. Starting on July 1, 2004, Telemar will grant a discount of approximately 30% on fixed-to-mobile local calls made to Oi numbers in Minas Gerais, during regular business hours. The agreement complies with the telecom regulation, which determines that mobile interconnection rates are to be mutually agreed upon by telecom operators throughout Brazil as of July 1, 2004. " By reaching an agreement for reductions in interconnection rates, Telemar and Oi are leading the way toward a new fixed-to- mobile structure that clearly benefits consumers, " commented Marcelo Pereira, Wholesale Officer with Telemar Norte Leste. Mr. Pereira continued, "This is an unprecedented effort made possible by the negotiation process for interconnection rates prescribed by the applicable law. Telemar will now seek to identify further benefits for consumers to take advantage of the same type of promotions, plans and discounts that are currently being offered in connection with fixed-to-fixed and mobile-tomobile calls." This 30-day promotion period in Minas Gerais may be extended, depending on customer acceptance. The current fixed-to-mobile rate, net of taxes, during regular hours, is R$0.46 per minute. Under the promotion, the rate net of taxes will be reduced to R$0.32 per minute, down approximately 30%. The state of Minas Gerais was selected for two reasons: (i) it accounts for the Company's largest market share; (ii) among the sixteen states served by the Company, Minas Gerais was the first one where Oi reached second place in terms of the number of subscribers. "Oi is expected to benefit from both the enhanced traffic and increased number of new customers. Calls from a fixed line to other mobile operators in Minas will be up to 53% more expensive than calls to an Oi line", states Alberto Blanco, Oi's Retail Marketing Officer. CONTACTS: TNE - INVESTOR RELATIONS Email: invest@telemar.com.br Mr. Roberto Terziani 55 (21) 3131-1208 Carlos Lacerda 55 (21) 3131-1314 Fax: 55 (21) 3131-1155 Web Site: www.telemar.com.br TELEMAR: To Adjust Local, Long Distance Rates --------------------------------------------- TELE NORTE LESTE PARTICIPACOES S.A. (NYSE: TNE), the holding company of telecommunication services providers in Brazil, informs that, as defined in the Concession Agreements and authorized by Anatel, its fixed-line subsidiary Telemar Norte Leste will increase rates for its Local and Long Distance services, based on the IGP-DI index accumulated for the 12-month period ended May 31, 2004, as follows: - Monthly Fee/Local Pulse/Public Phone Card Unit = 7.43% - Long Distance Basket = 3.20% - Installation Fee = - 19.00% The long distance interconnection rate will be increased by 3.20% (TU-RIU) and the local interconnection rate will decrease by 10.47% (TU-RL). The rate increases will become effective July 02, 2004. CONTACTS: TNE - INVESTOR RELATIONS Email: invest@telemar.com.br Mr. Roberto Terziani 55 (21) 3131-1208 Mr. Carlos Lacerda 55 (21) 3131-1314 Fax: 55 (21) 3131-1155 =============== C O L O M B I A =============== * Colombia IMF Approves $284M Colombian Disbursement ---------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) completed Wednesday the third review of Colombia's performance under a two-year, SDR 1.5 billion (about US$2.3 billion) Stand- By Arrangement approved on January 15, 2003. Completion of the review enables the release of SDR 193.5 million (about US$284 million), which would bring the total amount available under the arrangement to SDR 1.16 billion (about US$1.70 billion). In completing the review, the Executive Board approved Colombia's request for a waiver of non-observance of a performance criterion. Following the Executive Board's discussion of Colombia's economic performance, Agust�n Carstens, Deputy Managing Director and Acting Chair, said: "Colombia's strong policy track record is bolstering confidence and contributing to the economic recovery. In 2004, real GDP growth is projected to rise strongly, inflation to continue to decline, and the external sector to remain strong. Colombia is well placed to adjust to a gradual rise in interest rates in the United States, provided that economic policies continue to be strong. The main policy challenge for 2004 is to take advantage of the cyclical upturn in activity to press ahead with reforms that are crucial to sustain the economic recovery. "Demand policies are set to remain prudent. The authorities are strongly committed to keeping fiscal policy on a path to reduce public debt over the medium term. The combined public sector deficit is targeted to decline in 2004, with some room to accommodate additional investment financed by nondebt-creating flows. The government intends to submit to Congress a budget for 2005 that provides for a combined public sector deficit of 2.4 percent of GDP. Monetary policy will remain directed at reducing inflation further, in the context of the inflation-targeting framework and a flexible exchange rate policy, while efforts will continue to strengthen the financial system, and improve supervision. "Structural reforms are also set to advance further. The government intends to secure congressional approval of the revised budget code during 2004, which would allow the 2006 budget to be prepared under the new code. Tax administration is to be strengthened further, and a constitutional amendment on pension reform is to be submitted to Congress in July 2004. By September 2004, the economic policy cabinet will develop a plan to strengthen the current system of fiscal decentralization. Colombia has accepted the obligations of Article VIII, and the authorities plan to phase out the few remaining exchange restrictions in the next few years. "These reforms, together with prudent macroeconomic policies, should lay a solid foundation for sustained growth and financial stability over the medium term, while also reducing poverty and improving social indicators," Mr. Carstens said. CONTACTS: IMF EXTERNAL RELATIONS DEPARTMENT Public Affairs Telephone: 202-623-7300 Fax: 202-623-6278 Media Relations Telephone: 202-623-7100 Fax: 202-623-6772 * IDB OKs $10M Loan to Colombia for Administrative Reforms ---------------------------------------------------------- The Inter-American Development Bank announced Wednesday the approval of a $10,346,000 loan to Colombia to improve national public administration through the use of modern and effective organizational tools, personnel management and information systems. The project will promote continued fiscal sustainability and transparent and efficient public management. The central government ministries will be supported in their efforts to emphasize greater productivity, a higher level of policy coordination and improved service delivery. Public employment management will be upgraded through the use of modern, integrated technological tools, and the workforce will be enhanced through training in new skills. A greater degree of citizens' participation in government will be encouraged through a higher degree of transparency in government operations. Greater use of e-government and e- procurement will be employed to achieve higher levels of efficiency and fairness. Horizontal systems for both legal and asset management will be improved through better integration, quality and efficiency. A new asset management system will be designed and introduced to encourage a new management culture that produces greater efficiency and effectiveness in the acquisition, maintenance and disposal of assets. A legal management strategy will be established to strengthen the legal framework of national public administration through greater professionalism and modernization. The project will be carried out by the National Planning Department, the Ministry of Interior and Justice, the Department of Public Service Administration and the Ministry of Communications under the coordination of the Steering Committee and the supervision of the Technical Secretariat. During the process of designing the lending program, the IDB provided substantial technical assistance, using lessons learned from previous experiences and promoting consensus building for the main concepts of the reform. The project reflects the IDB strategy of promoting modernization of the state by assisting Colombia in strengthening its policy- making capacity, professionalizing its civil service, modernizing management of public services and improving its information technology potential. The loan is for a 20-year term, with a four-year grace period, at a variable interest rate. Local counterpart funds total $8,465,00. CONTACT: Mr. Daniel Drosdoff danieldr@iadb.org (202) 623-2407 =================== C O S T A R I C A =================== ELCA: Regulator Imposes 90-Day Loan Portfolio Freeze ---------------------------------------------------- Costa Rican banking regulator Sugef began on Tuesday a 90-day freeze affecting 80.8 percent of Elca's loan portfolio. The intervention is aimed at easing the financial group's money troubles, reports Business News Americas. Conassif, a government body that regulates and supervises Costa Rica's financial institutions, has stated that the bank had insufficient plans to rectify limited levels of liquidity and investments as well as a significant deterioration in the loan portfolio. However, a source cited in the report cautioned that the Elca intervention is an isolated case and should not be construed as symptomatic of problems in the country's financial system as a whole. ============= E C U A D O R ============= PETROECUADOR: Sees Increase in Oil Exports January to May --------------------------------------------------------- Ecuadorean state oil firm Petroecuador saw a 96% increase in oil export revenues in May to US$145.67 million from US$74.39 million registered in the same month a year ago, reports Dow Jones Business News. In terms of volume, Ecuador exported 4.25 million barrels of crude oil in May, up 36% from 3.12 million barrels registered in May of 2003. In the first five months of the year, Petroecuador exported 18.29 million barrels of crude oil, up 13% from 16.17 million barrels registered in the same period of 2003. Oil export revenues between January and May also increased 26% to US$552.2 million from $439.4 million registered in the same period of last year. ============= J A M A I C A ============= JAMAICA GRANDE: Hendrickson Family Bids on Finsac's Stake --------------------------------------------------------- The Karl Hendrickson Family has submitted an offer to acquire Finsac's 49.44 percent stake in Jamaica's largest hotel, the Jamaica Grande in Ocho Rios. Purchase of the ailing hotel would further broaden the Hendrickson's investments in the hotel industry. The family is known for the successful turnaround of once flagging properties like the Marcus Garvey Building in New Kingston and the Suites and Seawind in Montego Bay. Observer Business Reporter says that investors have been unwilling to place their money on the hotel because of its ownership structure and complicated management contract. Finsac, the largest shareholder, has no controlling interest in the hotel. In addition, Marriott and Fred Kassner's Go-Go Tours, the other major shareholders, hold deals that ensure compensation up to 2020 for future earnings in the event of a majority take over. The Marriott owns 22.57 percent of the hotel while Go-Go Tours controls 28.09 percent. Sources cited by the report however say that the poor state of the hotel's facilities may eventually cause the two companies to dispose their holdings in the hotel, a development that could mean well for Fisac and the Hendrickson's. =========== M E X I C O =========== AEROMEXICO: Boeing Delivers Eighth Next-Generation 737 ------------------------------------------------------- Boeing (NYSE: BA) delivered Tuesday Aeromexico's eighth Next- Generation 737 as part of the airline's continuing fleet- modernization program. Mexico's largest airline will receive seven more 737-700s by November as part of a 15-plane order placed last year. "This aircraft allows Aeromexico to continue offering passengers more comfortable flights," said Aeromexico Chief Executive Officer Fernando Flores. "The 737's operating efficiencies also provide significant savings for our company on both short- and long-haul flights." In addition to short- and long-range flight flexibility that provides access to 90 percent of the airline's destinations, the 737-700 also replaces older aircraft to comply with the International Civil Aviation Organization's Stage 3 noise level requirements. Aeromexico's planes have 112 economy-class seats to maximize passenger space and comfort, and 12 Clase Premier seats. The overhead storage bins are the largest available, allowing passengers to stow standard carry-on bags vertically and providing more usable space. The airplane has Blended Winglets -- 8-foot-long wingtip extensions that reduce fuel consumption by approximately 3.5 percent and increase the aircraft's range up to 450 nautical miles. The winglets improve the airplane's performance at hot, high altitude airports like Mexico City, and help reduce engine maintenance costs by reducing engine wear. They also contribute to the airplane's excellent noise performance by lowering the engine thrust required at takeoff. Aeromexico is Mexico's largest airline and a leader for on-time performance and baggage handling worldwide. It operates Boeing 767, 757 and 737 airplanes, and MD-80 and DC-9 jets. From its hub at the Mexico City International Airport it makes more than 300 daily flights to 30 cities within Mexico, 15 in the United States, two in Europe and three in South America. It's a founding member of SkyTeam, the global airline alliance that also includes Air France, Alitalia, CSA Czech Airlines, Delta Air Lines and Korean Air. The Boeing Next-Generation 737s are the most technologically advanced single-aisle airplanes built today. They fly higher, faster, farther, and more quietly than previous 737s or competing airplanes while offering greater fuel efficiency. Overall, the 737 is the world's best-selling commercial airplane family. More than 5,400 have been ordered by 220 customers since its introduction. AXTEL: Will Expand Into Ciudad Juarez by Year's End --------------------------------------------------- Axtel, the Mexican telephone company, will venture into Telmex territory when it introduces local telephone service in Ciudad Juarez by year's end. Business News Americas reveals that the Company will charge a minimum connection fee of MXN800 for the residential service and MXN200 for every additional line installed. The proposed monthly service charge of MXN156 will cover 100 calls and additional cost per minute of MXN1.47 Axtel is also drawing up plans to expand its coverage into six other Mexican cities. It intends to invest US$145 million to fund its growth strategy for 2004. CEMIG: Auctions 72,000MWh Power Supply -------------------------------------- Cemig, the state-controlled power company operating in the state of Minas Gerais, auctioned off 72,000MWh of one-month power supplies on Thursday. The sale will cover distributor's power needs related to its June contracts. Business News Americas says that the bidding started at 19 percent over the average wholesale market MAE price for the southeastern region. MAE price is currently quoted at BRL18.59 (US$6.00) per MWh. The power-rationing scheme enforced by the Brazilian government in 2001-2002 has resulted in a surplus of power in the country. Demand presently peaks at 54,0000MW, way below the country's capacity of 85,0000MW. Because of the glut, Brazilian power companies have regularly held power auctions to distribute their excess capacity. CORPORACION GEO: Closes First Phase of JV With PREI --------------------------------------------------- Corporacion Geo, S.A. de C.V. (BMV: GEOB; CORPGEO MX; ADR Level I CUSIP: 21986V204) and PREI announced Wednesday that they had closed the first phase of their joint venture to develop affordable, middle and residential housing throughout Mexico. Geo is Mexico's leading homebuilder and the largest developer of affordable, middle and residential housing in the Americas, by number of units sold. PREI is the real estate investment advisory business of Prudential Financial Inc. (NYSE: PRU). Luis Orvananos, President of the Board of Directors at Corporacion Geo, mentioned: "We at Geo feel very proud for winning another recognition for our communication practices and commitment to create value for our shareholders, fact that reflects the confidence in the company's management". In announcing the completion of phase one, Miguel Gomez Mont, Chief Executive Officer of Geo, cited, "At a time when several Mexican homebuilders are tapping the equity markets to raise capital to buy land and pay down debt, Geo has been able to structure a landmark investment program with PREI that guarantees Geo will have sufficient land to meet its growth objectives in the years to come, without diluting existing shareholders, and to significantly lower Geo's need to resort to debt to buy land. The completion of phase one delivers on our promise to stay one step ahead, as the market leader in Mexico." Roberto Ordorica, Head of PREI's Latin American operations, added, "Our confidence in Mexico, the growth of Mexico's residential market and Geo's proven ability to capitalize on that growth is a very attractive proposition for us." "While we originally planed the first phase to be US$100 million, we increased the size of the first phase to US$175 million, so Geo can secure land in markets it deems strategic." Victor Segura, Chief Financial Officer of Geo, observed, "We are on track to reduce our debt levels and improve our management of working capital. Our association with PREI strengthens Geo's balance sheet overall, and our ability to compete more effectively in the market." Francisco Andragnes, Vice President for Investment of PREI Latin America, added "Geo's national platform sets Geo apart from its competitors. To date we have approved approximately US$97 million of investments to secure land on behalf of the joint venture and we expect to invest the totality of phase one, before year end." Luis Abdeljalek, Geo's Director in charge of the joint venture with PREI commented, "We expect the capital of the first phase will help us create barriers to entry in some of our most dynamic markets, by allowing us to control larger tracks of land, where previously Geo didn't have the financial muscle to do so". PREI provides global real estate investment management services in the U.S., Europe, Asia and Latin America. PREI managed total assets of $22.3 billion on behalf of more than 400 clients as of March 31, 2004; net assets under management (i.e., after deduction of associated debt and liabilities) were $15.2 billion. For information, visit www.prei.com. Prudential Financial companies, with approximately $454 billion in total assets under management as of March 31, 2004, serve individual and institutional customers worldwide and include The Prudential Insurance Company of America, one of the largest life insurance companies in the United States. These companies offer a variety of products and services, including life insurance, mutual funds, annuities, pension and retirement related services and administration, asset management, securities brokerage, banking and trust services, real estate brokerage franchises and relocation services. For more information, visit www.prudential.com. Corporacion Geo is the leading housing developer in Mexico and the largest builder of affordable, middle and residential housing in the Americas, in terms of homes sold. Through its subsidiaries positioned in the most dynamic cities and regions of the country, Geo is involved in all aspects of housing development, from design and construction to marketing and sales of affordable, middle and residential houses in Mexico. Geo is also the most geographically diverse housing company in Mexico, operating in 33 cities in 19 states, covering more than 76% of the population of the country. In the past 30 years, Geo has sold and produced over 200,000 homes in which live more than 1,000,000 people, more than double its nearest competitor. Geo is dedicated to generating value for its shareholders through a Solid Strategy of Sustainable Growth, which provides Superior Quality of Life for all of its customers. CONTACTS: Jorge Perez Investor Relations Officer Corporacion Geo Ph. +(52) 55-5480-5071 Fax +(52) 55-5554-6064 E-mail: jperezr@casasgeo.com Ricardo Maiselson / Kenia Vargas Investor Relations Corporacion Geo Tel. +(52) 55 5480 5078 Fax +(52) 55 5554 6064 E-mail: geo_ir@casasgeo.com Web site: http://www.casasgeo.com EMPRESAS ICA: Unit Served With Subpoena From DOT ------------------------------------------------ ICA Miramar Metro San Juan Corp., a subsidiary of Mexican construction company Empresas ICA SA (ICA), received a subpoena as part of a U.S. Department of Transportation probe of Puerto Rico's light rail system. In a filing with the Securities and Exchange Commission, Empresas ICA said that the unit is a contractor for a segment of the Puerto Rico light rail system. The Company revealed that the DOT inspector general opened a probe of Puerto Rico's light rail system this year and issued the subpoena March 8. ICA said it is cooperating with the U.S. agency's investigation. Earlier this year, the unit was also notified by the Puerto Rico Highway and Transportation Authority that it had defaulted on its performance on the light rail project. ICA said it is in talks with the transportation agency to resolve the dispute. The Company said no legal proceedings are pending regarding the Puerto Rican agency's claims. CONTACT: Empresas ICA Sociedad Controladora S.A. de CV Mineria No. 145, Edificio Central 11800 Mexico, D.F., Phone: (212) 688-6840 Email: jose.guerrero@ica.com.mx inversionistas@ica.com.mx Web Site: www.ica.com.mx www.fluor.com HYLSAMEX: Debt Plan Gains Positive Market Response -------------------------------------------------- Rising steel prices as well as recent moves to reduce debt boosted Hylsamex's shares in the market on Wednesday. According to Business News Americas, the steel maker's CPO shares gained 4.6 percent to close at MXN16.90 while its B Shares rose 4.6 percent to close at MXN16.95. Hylsamex intends to prepay its US$962 million debt through the issuance of 180 million new L shares. The company is preparing for the shares issue after it received approval from shareholders to proceed with the plan last week. The L shares will have limited voting rights but holders can opt to convert it to normal B shares, with full voting rights, after a one-year listing in the exchange. The planned capital infusion will affect majority shareholder Alfa's 51 percent stake in Hylsamex. Analysts say that Alfa could end up with 40 percent ownership once the shares issue dilutes its holdings. LUZ Y FUERZA: Losing Almost $521M Yearly on Theft, Fraud -------------------------------------------------------- Mexico City's power distributor Luz y Fuerza del Centro (LFC) is posting nearly MXN6 billion (US$521mn) in annual losses, a problem that is driving the Company to the edge of bankruptcy, reports Business News Americas. According to LFC director Luis de Pablo Serna, the Company's lack of concern to large customers who do not pay their bills, billing adjustments that are unaccounted for, and erroneous meter readings are the main reasons behind the losses. An internal investigation showed that two thirds of the problem are due to so-called "administrative errors." These errors, which account for MXN4 billion, are traced to incorrect meter readings and managers who allow unrecoverable charges to be made. The remaining MXN2 billion annual losses are due to theft and fraud which includes tampering with meters, illegal hook-ups and altered billing, Serna said. SATMEX: Constellation Eyes Control for $1 ----------------------------------------- Constellation Group has launched an unsolicited bid to take over control of the cash-strapped Mexican satellite operator Satelites Mexicanos SA (SatMex) for US$1, reports Dow Jones Newswires. The bid is based on the assumption of Satmex's debt and has attracted attention because it offers creditors the possibility of a needed infusion of cash into the Company at a time when SatMex is struggling to restructure US$700 million in debts and lacks the financing options to begin new revenue-producing projects. Hispasat, the Spanish satellite firm, has committed to operating SatMex's three satellites if a deal with Constellation comes through. Constellation, which is looking to buy 71% of SatMex from Loral Space and Communications Ltd. (LRLSQ) and Mexico's Autrey family, is now in talks with creditors and bondholders of SatMex, asking their support by pressuring the owners to give up ownership in exchange for US$1. SatMex spokeswoman Laura Alamillo declined to comment on the Constellation bid but said SatMex is still in debt-restructuring talks with creditors. The Company is reportedly asking creditors for as much as US$35 million in new financing to launch Satellite 6 as part of a restructuring plan. Mr. Robert Rauch, who helps manage an undisclosed amount of SatMex's 10.125 percent bonds for Gramercy Advisors LLC in Greenwich, Connecticut, said an agreement is near. "The discussions are well advanced," Rauch said. Creditors have concluded the Company won't be able to pay its debts without putting the new communications satellite into service. "It's pretty clear to everybody what the issue are," Rauch said. A plan to restructure debt will have to be approved by the Mexican government, which owns 24% of Satmex and has a US$188 million loan to the Company guaranteed by shares of one its two holding companies, according to SatMex CEO Lauro Gonzalez. Gonzalez said the Company was going to miss a principal payment on US$205 million of notes maturing Wednesday after already missing two interest payments since August on $320 million of 10.125 percent bonds that mature in November. VITRO: Will Sell US$150 Mln in Secured Notes -------------------------------------------- Vitro, S.A. de C.V. announced Wednesday that its subsidiary Vitro Envases Norteamerica S.A. de C.V. ("VENA"), Vitro's glass containers division, seeks to sell, subject to market and other conditions, approximately US$150 million of its senior secured guaranteed notes due 2014 (the "Notes") in a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). VENA intends to use the proceeds of the issuance to repay indebtedness. The Notes will be issued by VENA and guaranteed by VENA's principal Mexican subsidiaries and Vitro Packaging, VENA's trading company in the United States. The Notes will be secured by first priority liens on most of VENA's and its subsidiaries' assets. The collateral may be shared with other creditors of VENA and its subsidiaries. The Notes have not been, and will not be, registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. CONTACTS: Media Mexico D.F.: Eduardo Cruz Vitro, S. A. de C.V. +52 (55) 5089-6904 ecruz@vitro.com Web Site: www.vitro.com VITRO: S&P Assigns `B+' Long-Term Rating to VENA ------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' long-term corporate credit rating to Vitro Envases Norteamerica S.A. de C.V. (Vena) as well as to its proposed $150 million senior notes due 2014. The terms and conditions of these notes allow for no structural subordination. The outlook is negative. The ratings on Vena are equalized with those of its parent company, Vitro S.A. de C.V., reflecting the latter's ability and incentive to take assets and/or burden the company with liabilities thanks to its 100% equity interest in Vena, which contributes approximately 50% of Vitro's consolidated EBITDA. "Crossed acceleration clauses between Vena and Vitro's Yankee bonds, provide an additional incentive to the whole economic entity to honor Vena's debt," said Standard & Poor's credit analyst Jose Coballasi. The ratings on Monterrey, Mexico-based Vitro are constrained by its high financial leverage and the negative trend in profitability because of increased competition in the domestic market and the strength of the Mexican peso across Vitro's business lines. The ratings are supported by the company's leading position in flat glass, glass containers, and glassware business in Mexico; and by Vitro's export activities and international operations (particularly in the U.S.), which combined accounted for 50% of total sales. The negative outlook reflects the challenging operating and economic environment faced by Vitro's business, which could lead to continued weakness in the company's operating performance and key financial measures. A recovery in the company's operating and financial performance and the success of its refinancing plans could lead to a stable outlook. CONTACT: Jose Coballasi, Mexico City (52) 55-5081-4414 Federico Mora, Mexico City (52) 55-5081-4436 VITRO: Moody's Assigns Ratings to Subsidiary's Debt --------------------------------------------------- Moody's Investors Service assigned ratings for the first time to the debt of Vitro Envases Norteamerica, S.A. de C.V. (VENA), a wholly-owned subsidiary of Vitro, S.A. de C.V.. Moody's assigned the following ratings: - B2 for the proposed $150 million senior secured guaranteed note, due 2014 - B2 senior implied rating - Caa1 senior unsecured issuer rating (non-guaranteed exposure) The ratings outlook is stable. The ratings, according to Moody's, are subject to the review of executed documentation. Moody's said the ratings reflect VENA's weak financial position, on a stand-alone basis, and its vulnerabilities to foreign exchange fluctuations, conversion of products away from glass, seasonality, and rising natural gas costs. Free cash flow is modest and is likely to remain pressured given the sizable capital investment required to maintain its business. Moody's believes that the run-rate free cash flow is insufficient to retire the Company's pro-forma debt in 10 years. VENA's significant historical reliance on financing from Vitro (pro-forma intercompany debt approaches $350 million) further constrains the rating. The ratings also acknowledge VENA's leadership in Mexico and Central America and its successful niche strategy of short-run, value-added production. The ratings outlook is stable, however there is little tolerance for negative variance under expected performance before the outlook could be moved to negative. VENA is the leading manufacturer of glass containers in Mexico and Central America and a leading global provider of glass containers used in the food, beverage, pharmaceutical, and cosmetics industries. ================= V E N E Z U E L A ================= PDVSA: Misses Deadline for Submission of Annual Reports to SEC -------------------------------------------------------------- Petroleos de Venezuela SA missed Wednesday's deadline for filing annual financial results with the U.S. Securities and Exchange Commission. Chief Financial Officer Jose Rojas blamed the delay to the December 2002-January 2003 oil strike that disrupted its finance department. PDVSA lacked accounting systems until June 2003, Rojas said, adding: "We have been doing all the accounting by hand." The Company fired 18,000 employees last year to break the strike, which was aimed at pushing President Hugo Chavez from office. Among those fired were many employees in the company's financial department. Rojas gave no new date for turning in the results, but said the Company is further along in completing the report than it was at the same time last year. Last year, PDVSA asked for two extensions before filing its 2002 financial results, which it finally turned in last October. Extensions from the SEC are not uncommon. PDVSA is required to file to the SEC because several wholly owned units operate in the U.S. *********** 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 * * *