/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040712.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 Monday, July 12, 2004, Vol. 5, Issue 136 Headlines A R G E N T I N A AGENCIA DE INVESTIGACIONES: Individual Reports Due Tomorrow ASOCACION MEDICA: Verification Deadline Approaches ASTILLEROS RIO BRAVO: Court Orders Liquidation BODEGAS MARGUS: Debt Payments Halted, Set To Reorganize ECYM S.A.: Judge Approves Bankruptcy EDEMSA: French Parent Confirms Plans to Sell Stake EG 12: Credit Verification Ends ESTUDIO MARITIMO: Court OKs Creditor's Bankruptcy Call GLASSIER: Individual Reports Due Tomorrow IANSON S.A.: Seeks Reorganization Approval LLOYDS ARGENTINA: Bids Goodbye to Argentina SAMPIERI TRADING: Trustee Readies Reports for Submission * Argentina Overcomes Important Hurdle to $13B Loan From IMF B A R B A D O S RR DONNELLEY BARBADOS: To Shut Down Next Month B E R M U D A GLOBAL CROSSING: NASDAQ Approves Request to Continue Trading OVERSEAS PARTNERS: Sells US Reinsurance Subsidiary for $43M B R A Z I L ABRIL: Sells Minority Stake as Part of Efforts To Cut Debt BANCO VOTORANTIM: S&P Rates $50 MM MTNs 'B+' BOMBRIL: Files Suit Against Former Owner to Recoup Unpaid Debts CEMIG: Reorganization Gets Go-Ahead From State Government CFLCL: SR Rating Upgrades Credit Rating COPEL: Details Recent Extraordinary Meeting Minutes EMBRATEL: Issues Extraordinary General Meeting Notice EMBRATEL/TELEMAR: STJ OKs Rates Hike Implementation LIGHT SERVICOS: Owed BRL700 Mln in Unpaid Service Bills MRS LOGISTICA: CVRD to Negotiate Ownership NET SERVICOS: Globopar, Bradesplan Enter Shares Exchange Accord * Brazil Sells $750M, 10-year Global Bonds C H I L E ENERSIS: Appeals Court Sustains $55M Fine Vs Board M E X I C O AXTEL: Expands to San Luis Potosi P E R U AEROCONTINENTE: 15 Years in the Pen for Founder - Prosecutors * Peru Working With IFC to Improve Business Environment T R I N I D A D & T O B A G O BWIA: Likely to Spend More Than $2.4M to Repair Damaged Planes CDC: Unionist Calls for Dialogue, Law Reforms in Strike NWRHA: Asked to Pay $24M Debt V E N E Z U E L A EDC: Receives $50M Loan From ABN AMRO - - - - - - - - ================= A R G E N T I N A ================= AGENCIA DE INVESTIGACIONES: Individual Reports Due Tomorrow ----------------------------------------------------------- Mr. Mario Isaac Bekierman, the trustee assigned in the Agencia de Investigaciones y Seguridad Marcama S.R.L. bankruptcy, is scheduled to submit individual reports from the submitted creditors' claims tomorrow, July 13, 2004. Following the submission of the individual reports, the trustee is also obliged by the court to prepare a general report and submit it on September 7, 2004. The Company's bankruptcy case is under the jurisdiction of Court No. 5 of the San Isidro Civil and Commercial Tribunal. CONTACT: Agencia de Investigaciones y Seguridad Marcama S.R.L. Nelly y Obes 2746 Talar de Pacheco San Isidro Mario Isaac Bekierman Av Callao 420 Buenos Aires ASOCACION MEDICA: Verification Deadline Approaches -------------------------------------------------- Creditors with claims against troubled San Isidro medical group Asocacion Medica del Norte must present proofs of the Company's indebtedness to Mr. Leonardo Martin Zoroza before July 13, 2004. Failure to submit the claims within the prescribed verification period will mean disqualification from the settlement plan being prepared by the Company. San Isidro Court No. 19, assisted by Clerk No. 3, has jurisdiction over this case. CONTACT: Asociacion Medica del Norte Av Cazon 349 Tigre San Isidro Mr. Leonardo Martin Zoroza, Trustee Martin y Omar 129 San Isidro ASTILLEROS RIO BRAVO: Court Orders Liquidation ---------------------------------------------- Mr. Claudio Juarez successfully sought for the bankruptcy of Astilleros Rio Bravo S.A. after Judge Herrera of Buenos Aires Court No. 3 declared the Company "Quiebra," reports La Nacion. As such, the Company will now start the bankruptcy process with Mr. Santiago Quiben as trustee. Creditors of the Company must submit their proofs of claim to the trustee before September 23, 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 the Company's bankruptcy after the latter failed to pay debts amounting to US$28,690.51. Clerk No. 6, Dr. Gutierrez Huertas assists the court on the case, which will end in the liquidation of all Company assets. CONTACT: Astilleros Rio Bravo Congreso 2056 Buenos Aires Mr. Santiago Quiben, Trustee Esmeralda 783 Buenos Aires BODEGAS MARGUS: Debt Payments Halted, Set To Reorganize ------------------------------------------------------- Judge Garibotto of Buenos Aires Court No. 2 is currently reviewing the merits of the reorganization petition filed by Bodegas Margus S.R.L. La Nacion recalls that the company filed the petition following cessation of debt payments. Reorganization will allow the Company to avoid bankruptcy by negotiating a settlement with its creditors. Bodegas Margus, a wine distributor in Buenos Aires, has stated assets of US$2,100,398.54 with liabilities of US$851,494 Clerk No. 4, Dr. Romero, assists the court on the Company's case. CONTACT: Bodega Margus S.R.L. Lavalle 2628 Buenos Aires ECYM S.A.: Judge Approves Bankruptcy ------------------------------------ Ecym S.A. was declared bankrupt after Judge Dieuzeide of Court No. 1 endorsed the petition filed by Cisilotto Hermanos Sacifi for the company's liquidation. Argentine daily La Nacion reports that the credior has claims totaling US$5,098.02 against the Company. The court assigned Mr. Ricardo Bataller to supervise the liquidation process as trustee. He will validate creditors' proofs of claims until September 7, 2004. CONTACT: Ecym S.A. Lo-yola 527 Buenos Aires Mr. Ricardo Bataller, Trustee Junin 684 Buenos Aires EDEMSA: French Parent Confirms Plans to Sell Stake -------------------------------------------------- French state power company EDF confirmed in a press release that its international unit EDFI is selling a controlling stake in the Argentine power distribution company Edemsa to the local Iadesa consortium, Business News Americas relates. The Iadesa consortium is composed of Argentine businessmen Jose Angulo, Juan Carlos Angulo, Omar Alvarez and Jacques Matas. They currently own a 12% stake in Sodemsa consortium that owns 51% of Edemsa. EDFI is selling an 88% stake in the Sodemsa consortium, meaning, if the purchase goes through, Iadesa will have a 100% stake in Sodemsa and therefore 51% control of Edemsa. The transaction is expected to close in about three months once the French government, EDF's controller, approves it. During these next three months, EDF and the new owners will jointly manage Edemsa. The sale is subject to various administrative conditions, including the renegotiation of Edemsa's US$115 million debt, which will be assumed by Iadesa, according to the local press. EDF didn't reveal the size of the amount involved in the transaction but earlier reports say Iadesa will pay US$50 million cash for the stake. EDF, through the Sodemsa consortium, purchased Edemsa for US$237 million in a 1998 privatization. Edemsa has over 1,000km of high voltage transmission lines, over 12,000km of distribution lines, and an 110,000-square-kilometer concession area. Edemsa has been buffeted by the country's rates freeze in recent months. The pesofication of these rates as well as the end of dollarization has also affected the company's bottom line. Of the Company's total US$115 million debt, US$80 million is with the banks Regional de Cuyo, Galicia, European bank for Latin America BEAL, and French banks Societe Generale, Credit Agricole and Credit Lyonnais. EG 12: Credit Verification Ends ------------------------------- Creditors of bankrupt Argentine company EG 12 S.A. will have until July 13, 2004 to submit their claims for verification. Failure to comply with the verification deadline will mean disqualification from the payments to be made once the Company's assets are liquidated. CONTACT: Mr. Mario Suez, Trustee Rodriguez Pena 454 Buenos Aires ESTUDIO MARITIMO: Court OKs Creditor's Bankruptcy Call ------------------------------------------------------ Estudio Maritimo Internacional S.A. entered bankruptcy after Judge Dieuzeide of Buenos Aires Court No. 1 approved a bankruptcy motion filed by Banco Frances S.A., reports La Nacion. The Company's failure to pay US$5,684 in debt prompted the liquidation petition. Working with Dr. Galli, the city's Clerk No. 2, the Company assigned Mr. Jorge Mencia 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 September 15, 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: Estudio Maritimo Internacional S.A. Avenida Cordoba 950 Buenos Aires Mr. Jorge Mencia, Trustee Uruguay 328 Buenos Aires GLASSIER: Individual Reports Due Tomorrow ----------------------------------------- Glassier s Shop S.R.L. crossed an important part in its liquidation with the closing of the verification period on June 1, 2004. Following claims verification, Mr. Ricardo Felix Fernandez, the trustee, will prepare the individual reports for court review on July 13, 2004. Results from this review will determine the payment ratios to be implemented after the assets of the Company are liquidated. CONTACT: Glassier s Shop S.R.L. Grito de Asencio 3448 Buenos Aires Ricardo Felix Fernandez Tucuman 1567 Buenos Aires IANSON S.A.: Seeks Reorganization Approval ------------------------------------------ Ianson S.A., a sports apparel retailer operating in Buenos Aires, has requested reorganization after defaulting on its debt payments. The reorganization petition, once approved by the court, will allow the company to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending before Judge Uzal of Court No. 26. Dr. Moron, Clerk of Court No. 52, assists on this case. CONTACT: Ianson S.A. Migueletes 1050 Buenos Aires LLOYDS ARGENTINA: Bids Goodbye to Argentina ------------------------------------------- Lloyds Bank ends its 140-year affair with Argentina as it closes shop in the wake of the country's banking crisis. The decision will affect 34 branches in the country with combined deposits of US$742 million. Prior to the closure, Lloyds Bank Argentina received a large capitalization loan from its London headquarters as part of a restructuring package. The Economist says that Lloyds Argentina is the second subsidiary to close since October 2003 when Lloyds TSB sold its Brazilian operations, involving US$815 million, to Hong Kong Shanghai Bank Corporation (HSBC). The recent divestments indicate that Lloyds TSB is re-evaluating its emerging market activities in Latin America. However, the bank has confirmed that it will continue to operate in Uruguay. Banex, Patagonia-Sudameris and Comafi have reportedly shown interest in taking over Lloyds Argentina. SAMPIERI TRADING: Trustee Readies Reports for Submission -------------------------------------------------------- The individual reports culled from creditors' claims submitted during the verification phase of the Sampieri Trading S.R.L. bankruptcy is due for court presentation on July 13, 2004. Mr. Guillermo Hector Fernandez, the court-appointed trustee preparing these documents, will also provide the court with a general report on the Company's bankruptcy on September 8, 2004. CONTACT: Guillermo Hector Fernandez, Trustee Cerrito 520 Buenos Aires * Argentina Overcomes Important Hurdle to $13B Loan From IMF ------------------------------------------------------------ The Argentine Senate finally approved late Wednesday the controversial fiscal responsibility bill aimed at regulating spending by the country's different provincial governments, according to a report release by United Press International. The bill is one of the main demands set forth by the International Monetary Fund (IMF) to grant Argentina a three- year, US$13-billion assistance loan. The IMF is presently conducting its third review of the loan agreement it signed last year with Argentina. The bill's main provision calls for debt servicing not to exceed 15% of a province's income. Provincial indebtedness and debt issuance were pivotal for precipitating Argentina's bond default in early 2002. Although Argentina has far exceeded market expectations in its economic recovery, it is still lacking in other pledges to the IMF such as restructuring public banks and implementing new tax- evasion regulations. =============== B A R B A D O S =============== RR DONNELLEY BARBADOS: To Shut Down Next Month ---------------------------------------------- RR Donnelley, Barbados, which prepares financial documents for international companies and legal firms, is closing its doors next month, costing 100 people their jobs. Confirming the plan to the Daily Nation, Judy Poole, director of communications with RR Donnelley, New York, said that the closure was part of the company's "strategy alignment" to cut cost following a downturn in the world economy in 2001 and 2002. The closure of the Wildey, St Michael facility will be undertaken in phases, Poole said. Some staff had already been sent home, while others will go at the end of this month and the final group of employees to be displaced by the end of August. ============= B E R M U D A ============= GLOBAL CROSSING: NASDAQ Approves Request to Continue Trading ------------------------------------------------------------ Global Crossing (Nasdaq: GLBCE) announced Tuesday, July 6, 2004 that a NASDAQ Listings Qualifications Panel has granted the company's request that its common stock continue to be traded on the NASDAQ National Market until July 30, 2004, giving the company until that date to return to full compliance with exchange listing requirements. To return to compliance, the company will need to provide additional information to NASDAQ regarding the company's response to the cost of access issue and to re-file with the SEC audited 2002 and 2003 financial statements and unaudited first quarter 2004 financial statements, and related periodic reports. The company is working toward meeting the July 30, 2004 deadline and reported making progress toward that goal. The panel also conditioned the company's ongoing listing on timely filing of all periodic reports with the SEC for the next year. "We've made significant progress on both internal and independent reviews of cost of access issues, including the completion of Deloitte and Touche's investigation which did not reveal any management integrity issues," said John Legere, Global Crossing's chief executive officer. "We're grateful for the panel's decision today, which gives us time to finalize our financials and return to compliance." Grant Thornton LLP is in the process of conducting audit procedures with respect to the company's cost of access liabilities and cost of access expenses and evaluating the appropriate accounting treatment for any potential understatement to determine whether it can reissue its previously withdrawn audit reports. Once Grant Thornton completes its audit work, the company hopes to make the appropriate filings with the SEC to regain compliance with SEC requirements. ABOUT GLOBAL CROSSING Global Crossing (Nasdaq: GLBCE) provides telecommunications solutions over the world's first integrated global IP-based network. Its core network connects more than 300 cities and 30 countries worldwide, and delivers services to more than 500 major cities, 50 countries and 6 continents around the globe. The company's global sales and support model matches the network footprint and, like the network, delivers a consistent customer experience worldwide. Global Crossing IP services are global in scale, linking the world's enterprises, governments and carriers with customers, employees and partners worldwide in a secure environment that is ideally suited for IP-based business applications, allowing e- commerce to thrive. The company offers a full range of managed data and voice products including Global Crossing IP VPN Service, Global Crossing Managed Services and Global Crossing VoIP services, to more than 40 percent of the Fortune 500, as well as 700 carriers, mobile operators and ISPs. CONTACT GLOBAL CROSSING: Press Contacts Becky Yeamans + 1 973-937-0155 PR@globalcrossing.com Tisha Kresler + 1973-937-0146 PR@globalcrossing.com Fernanda Marques Latin America + 1 305-808-5912 LatAmPR@globalcrossing.com Mish Desmidt Europe + 44 (0) 7771-668438 EuropePR@globalcrossing.com Analysts/Investors Contact Mitch Burd + 1 800-836-0342 glbc@globalcrossing.com Web site: http://www.globalcrossing.com OVERSEAS PARTNERS: Sells US Reinsurance Subsidiary for $43M ----------------------------------------------------------- Bermuda-based Overseas Partners Limited (OPL) sold its US reinsurance arm Opus Re to Odyssey Re Holdings Corp. (ORH) for US$43 million, the Royal Gazette reports. OPL, which went into run off in early 2002, had hoped to sell Opus Re as a going concern. But it revealed earlier this year that Opus was now also in run off after incurring losses that were expected to exceed premium earned. OPL said the casualty and long tail business that Opus Re wrote previously was behind a net underwriting loss of US$8.5 million posted by OPL during the first quarter of 2003. Now Odyssey Re has bought up Opus Re as a run off company. Prior to its previously announced exit from the U.S. reinsurance business, Opus Re had underwritten business primarily in 2001 and 2002. At March 31, 2004, Opus Re had total assets of approximately US$248 million and loss reserves of US$161 million. Standard & Poor's Ratings Services said Wednesday that its ratings on Odyssey Re (BBB-/Stable/--) and related subsidiaries will not be affected by the recent announcement of ORH's proposed acquisition of Opus Re. S&P expects the US$43 million purchase price to be paid in cash, with no material change in the group's financial leverage. The completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approvals. ORH expects the closing of the transaction will occur on or about September 30, 2004. ORH had stockholders' equity of $1.4 billion and total assets of $6.6 billion as of March 31, 2004. The group's operating performance remained strong through the first three months of the year, with a GAAP combined ratio of 95% and ROR of 9.3%. =========== B R A Z I L =========== ABRIL: Sells Minority Stake as Part of Efforts To Cut Debt ---------------------------------------------------------- Abril, publisher of Brazil's biggest weekly magazine, Veja, and owner of cable television TVA, said it sold a 14% stake to private equity funds managed by a unit of Los Angeles-based Capital Group Cos. for BRL150 million (US$49 million), relates Bloomberg. Citing a statement from the Sao Paulo-based company, Bloomberg reports that the Civita family will continue to control the media company, The sale of a stake "is a result of all our efforts to solve our debt problem in the last years," said Roberto Civita, president of Abril, in a statement. "It will also give us better conditions to continue to grow." Last year, Abril sold stakes in Internet company UOL Inc. and software unit Lab One Systems SA in a bid to reduce debt. It also discontinued publication of certain unprofitable magazine titles. Founded in 1950 by the late Victor Civita, who was born in New York and raised in his parents' native Italy, Abril started out as a small publishing house whose first title was the Brazilian edition of Walt Disney Co.'s Donald Duck. Mr. Civita's son Roberto is now chairman of the board. BANCO VOTORANTIM: S&P Rates $50 MM MTNs 'B+' -------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' foreign- currency long-term credit rating to Banco Votorantim S.A.'s (Banco Votorantim) $125 million fixed-rate notes (under its Euro medium-term notes program), to be launched on July 19, 2004 with a coupon of 5% (annual), maturing on July 19, 2006. The repayment of these notes will be in full at maturity. The local- currency credit ratings on the bank are BB/Stable/B and the foreign-currency credit ratings are B+/Positive/B. The ratings on Banco Votorantim S.A. consider the potential risks associated with the bank's treasury business, its exposure to sovereign risk through its securities portfolio, a common issue for Brazilian banks, and the risks associated with the economic environment in Brazil. The ratings also benefit from the implicit support of the Votorantim Group (foreign currency, B+/Positive/--; local currency, BBB-/Stable/--); the group's strong brand name recognition; and the bank's good profitability, experienced management team, and efficient decision-making processes. "The Votorantim Group is one of the largest and most influential industrial conglomerates in Brazil. Its brand name recognition has helped the bank to leverage on its business, and the images of both organizations are closely linked," said Standard & Poor's credit analyst Daniel Araujo. The conglomerate supervises the bank's activities and operations, and its conservatism permeates the bank's activities. Banco Votorantim's management is made up of professionals with vast experience in the financial markets and the Group's companies. Banco Votorantim has taken advantage of its competitive business profile to grow its business. In 2003, for instance, market share related to the auto finance business reached approximately 10% as compared to 7% in 2002, reflecting a well-based strategy aimed at organic growth and higher penetration in some regions of the country. The stable outlook on Banco Votorantim's local-currency credit rating incorporates the economic risks of the Brazilian banking industry and the balance between its good business profile, good management, high profitability, and the potential risks related to the quality of its growing private loan portfolio, especially its consumer loans segment and its government securities. In the event of a downgrade or negative change for the local- currency sovereign credit rating and/or outlook on Brazil, the local-currency credit rating and/or outlook on Banco Votorantim would move in tandem. If, on the other hand, the sovereign local credit rating has positive changes or upgrades, Banco Votorantim would be assessed on a case-by-case basis. The main negative item that could generate downward pressure on the ratings on Banco Votorantim is asset quality-related. On the upward side, the rating would benefit from maintaining asset quality under control and qualitative improvements in profitability and capitalization. BOMBRIL: Files Suit Against Former Owner to Recoup Unpaid Debts --------------------------------------------------------------- Bombril SA, a Brazilian maker of cleaning products, is suing its former owner, the insolvent Italian food group Cirio, as part of an attempt to recoup unpaid debts, reports Reuters. The suit, which was filed Wednesday in Rome, named other defendants including Bombril Cirio International SA, Capitalia SpA, Banca di Roma SpA, Cragnotti & Partners Capital Investment NV, C&P Overseas Ltd. and Cirio's former boss Sergio Cragnotti. Cirio is seeking to recover unpaid money, which is related to the 1998 sale of 100% of Cirio Holding SA SpA to Bombril International SA, says Reuters. Bombril did not say how much money it was looking to recover, but earlier this year Bombril took provisions worth BRL3 billion (US$988 million) as a result of the unpaid debts. Bombril was placed under the control of a court-appointed administrator in July 2003 while its former Brazilian owner battles for control of the firm with Cirio. In the latest legal update, the court favored the former owner, Ronaldo Sampaio Ferreira. The justice system however, will have the final say on the matter. CEMIG: Reorganization Gets Go-Ahead From State Government --------------------------------------------------------- Brazil's Minas Gerais state-owned integrated power company Cemig obtained a green light from the state government to implement its planned reorganization, Business News Americas reports. The reorganization will involve dividing the business into generation, transmission and distribution units, and putting these units under the Cemig holding company. The move is part of sweeping reforms to Brazil's power sector, which call for state-owned companies to abandon their vertical structure and divide their generation, transmission and distribution activities into separate companies. The reforms have been approved in Brazil's Congress this year and are starting to be implemented. CONTACTS: CEMIG Av.Barbacena, 1200 - Santo Agostinho - CEP 30190-131 Belo Horizonte - MG - Brasil Fax (0XX31)299-4691 Tel.: (0XX31)349 CFLCL: SR Rating Upgrades Credit Rating --------------------------------------- The Rating agency SR Rating upgraded the credit rating attributed to the company Companhia Forca e Luz Cataguazes- Leopoldina (CFLCL) to "BBSR" on the global scale and "brA-" on the "br" equivalence scale, which denote a low credit risk. This upgrade was basically based on the successful restructuring of Cataguazes-Leopoldina's debt, which reduced the overall proportion of the consolidated short-term debt (from 45% of total indebtedness in 2002 to 29% in 2003) and the better revenue and results figures posted by the company (revenue up by 25% on previous year and net income of R$16.9 million in 2003) and its subsidiaries - CENF, CELB, Energipe and Saelpa - which also recorded profits in 2003. This rating was also awarded to the 6th issue of simple debentures by CFLCL - performed in two series and amassing R$130 million - on account of the additional risk-lowering guarantees included under the issue. Subsidiary Cat Cat-Leo Energia wins tender to build Ombreiras SHP Subsidiary Cat-Leo Energia S/A, the company in charge of all the power station construction projects executed by the Sistema Cataguazes-leopoldina Cataguazes-Leopoldina, is contracting out its experience and providing services to third parties. It has been contracted by the company Arapucel Ombreiras S/A, which belongs to the Brennand Group, to execute the civil construction work on the Ombreiras SHP (26 MW) which is located in the municipality of Araputanga in Mato Grosso State. The construction work was initiated on June 01 and shall run for 16 months. Consolidated revenue of Cataguazes Cataguazes-Leopoldina is R$648 million in 5 months The gross operating revenue of the Sistema Cataguazes-Leopoldina in the first five months of 2004 rose by 34% as compared to the same period in 2003, reaching a total of R$648 million. Physical energy sales amounted to 2,720 GWh, rising by 5.0% as compared to the same period last year. This performance was mainly due to sales to the MAE - Wholesale Energy Market, given that sales to retail markets at the companies comprising the Sistema Cataguazes-Leopoldina has decreased by 2.6% (4,6% at parent company) during the same period. Such reduction was caused mainly due to loss of three free consumers in the concession area of the Sistema Cataguazes- Leopoldina, one of which was lost by CFLCL and two by subsidiary Energipe, which reflected a 10.7% drop in consolidated physical sales to the industrial sector. On the other hand, the distributions are billing these clients the usage of the distribution system, which cushioned the financial impacts resulting from this reduction. CONTACT: (In Cataguases) Phone: +55 32 3429-6000 Fax: +55 32 3429-6480 / 3429-6317 (In Rio de Janeiro) Phone: +55 21 2122-6900 Fax: +55 21 2122-6931 Web site: http://www.cataguazes.com.br E-mail: stockinfo@cataguazes.com.br COPEL: Details Recent Extraordinary Meeting Minutes --------------------------------------------------- 1. PLACE: Rua Coronel Dulcidio n� 800, Curitiba - state of Parana. 2. DATE AND TIME: July 6, 2004 at 9.00 a.m. 3. BOARD OF THE MEETING: Joao Bonifacio Cabral Junior - Chairman, Paulo Cruz Pimentel - Executive Secretary. 4. DELIBERATIONS: In order to reach a decision about the First Amendment to the Commitment for Disposing the Shares pertaining to the Capital Stock of the Company named Centrais Eletricas do Rio Jordao S.A. - Elejor, referring to the increase of stock interests held by Copel in that Venture, the Board of Directors resolved to await the approval of the issue by both CADE (Administrative Council for Economic Defense) and Aneel (Brazilian Electricity Regulatory Agency). Regarding the sixth installment of the loan agreement tied to the original agreement, the Board of Directors decided to wait for the conclusion of auditing works in process at Elejor scheduled to occur within 10 days to settle the payment. 5. SIGNATURES: JOAO BONIFACIO CABRAL JUNIOR - Chairman; ACIR PEPES MEZZADRI; AMERICO ANTONIO GAION; LINDSLEY DA SILVA RASCA RODRIGUES; SERGIO BOTTO DE LACERDA; LAURITA COSTA ROSA; PAULO CRUZ PIMENTEL - Executive Secretary. CONTACT: Cia Paranaense de Energia Rua Colonel Dulcidio, 800 Batel 80420-170 Curitibia - PR Brazil Phone: +55 41 322-3535 Fax +55 41 224-4312 Home Page: http://www.copel.com EMBRATEL: Issues Extraordinary General Meeting Notice ----------------------------------------------------- The stockholders of EMBRATEL PARTICIPACOES S/A are hereby invited to the Extraordinary General Meeting that will be held in the Company's registered offices, located in the Capital of the State of Rio de Janeiro, at Rua Regente Feijo, No. 166, suite 1687-B, in the downtown (Centro) district, City and State of Rio de Janeiro (RJ), Federal Republic of Brazil, at 5 PM Friday, July 23, 2004, to decide on the following Agenda: (i) Election of the members of the Board of Directors. GENERAL INSTRUCTIONS: (a) The power-of-attorney (proxy) instruments are to be deposited at the Company's registered offices forty-eight (48) hours prior to the date set for the Meeting to be held. (b) The stockholders participating in the Fungible Custody of Registered Shares of Stock Markets wishing to take part in this Meeting are to submit a statement issued by the appropriate body containing their respective equity stake at least two (2) days before the Meeting is held. (c) In the manner provided by CVM Normative Instruction No. 165 of December 11, 1991, as worded by Article 1 of CVM Instruction No. 282 of June 26, 1998, the percentage required for requesting multiple voting will be five per cent (5%) of the voting capital stock. CONTACTS: Ms. Silvia M.R. Pereira Investor Relations tel: (55 21) 2121-9662 fax: (55 21) 2121-6388 email: silvia.pereira@embratel.com.br invest@embratel.com.br Web site: www.embratel.net.br EMBRATEL/TELEMAR: STJ OKs Rates Hike Implementation --------------------------------------------------- Brazilian telecoms operators Embratel and Telemar can now implement the average hike of 7.43% in local and long-distance fixed line telephony authorized by telecoms regulator Anatel on June 29, reports Business News Americas. This, after Mr. Edson Vidigal, president of federal appeals court STJ, canceled an injunction preventing the companies from applying such adjustments. However, the STJ decision does not deal with the merits of the case brought by a Rio de Janeiro consumer defense organization, Afcont, which must still be examined by the 9th federal district court in Rio de Janeiro. Afcont claimed that the use of the IGP- DI inflation index unfairly hurts consumers because it disproportionately reflects volatility in the exchange rate against the US dollar. LIGHT SERVICOS: Owed BRL700 Mln in Unpaid Service Bills ------------------------------------------------------- Brazilian power distributor Light Servicos de Eletricidade, owned by France's Electricite de France (EDF), is owed about BRL700 million (US$1=BRL3.08) in unpaid bills, the Company said Friday. Light is the distributor that suffers the most losses in Brazil with power theft and illegal connections. Out of the BRL700 million in payments Light has yet to receive, about 40% relates to state-owned companies and the state and city government. Rio de Janeiro's water company Cedae, for example, owes BRL100 million to Light, the Company said. The utility provides electricity to 3.4 million clients in the state of Rio de Janeiro. CONTACT: LIGHT SERVICOS DE ELETRICIDADE S.A. Avenida Marechal Floriano, 168 20080-002 Rio de Janeiro, Brazil Phone: +55-21-2211-2794 Fax: +55-21-2211-2993 Home Page: http://www.lightrio.com.br Contact: Bo Gosta Kallstrand, Chairman Michel Gaillard, President and CEO Joel Nicolas, Executive Director, Operation Paulo Roberto Ribeiro Pinto, Executive Director, Investor Relations and CFO MRS LOGISTICA: CVRD to Negotiate Ownership ------------------------------------------ The Brazilian mining company CVRD has until today, Monday, to present a proposal to the national agency ANTT (Agencia Nacional de Transporte Terrestre) regarding its ownership in the railroad manager MRS Logistica. According to the ANTT, no shareholder can own more than a 20% stake in MRS Logistica's voting capital, meaning, CVRD has got to rid of some of its 35.9% stake in the Company. In 2001, Vale held 18.8% common stocks and in 2003, it added 17.6% more with the acquisition of Caemi. In order to keep its 17.6% stake, market sources suggested Vale would be negotiating the distribution of the 18.3% stake among other shareholders - CSN (Companhia Siderurgica Nacional), Usiminas, Gerdau and MBR. As a result of this plan, CSN and MBR, which jointly own a 32% stake, would hold 27% each, while Usiminas would have 20% and Gerdau, more 2.2%. MRS Logistica reported a net debt of BRL623.6 million in the 1Q04, 5.5% lower than the BRL659.5 million recorded in December 2003 and 33% less than at 1Q03, as a result of the strong cash generation during the period. MRS is a railway that provides freight transportation of iron ore, steel and other industrial products in Brazil. Three principal rail lines of 1,700 kilometers serve as key transportation links connecting Rio de Janeiro, Belo Horizonte, Sao Paulo and the region's main ports. CONTACT: MRS LOGISTICA S.A. Praia de Botafogo, 228/1201-E 22250-906 - Rio de Janeiro - RJ Brasil Contacts: Eduardo Cassinelli - Treasurer Marco Andre Guimaraes - Financial Manager Maria Lucia Silveira - Financial Analyst Tel.: 55-21-2559-4600 Fax: 55-21-2552-2635 E-mail: daf@mrs.com.br Home-Page: www.mrs.com.br NET SERVICOS: Globopar, Bradesplan Enter Shares Exchange Accord --------------------------------------------------------------- Net Servicos de Comunicacao S.A. (the "Company" or "Net"), a publicly-held company, with address in the City and State of Sao Paulo, at Rua Verbo Divino, 1.356 - 1� andar, Chacara Santo Antonio, enrolled with the CNPJ/MF under number 00.108.786/0001- 65, under the terms of CVM Rule nr. 358/02, hereby reports the information received July 8, 2004 from its shareholders Globo Comunicacoes e Participacoes S.A. ("Globopar"), Distel Holding S.A. ("Distel"), Roma Participacoes Ltda. ("Roma") (Globopar, Distel and Roma are jointly referred to as "Globopar") and Bradesplan Participacoes S.A. ("Bradesplan"). On July 7, 2004, Globopar and Bradesplan entered into an exchange of shares agreement, by means of which Globopar will transfer to Bradesplan one hundred and thirty million, five hundred eleven thousand, and ten (130,511,010) preferred shares issued by Net, representing 6.4% of the Company's total capital stock, and Bradesplan will transfer to Globopar an equal number of common voting shares issued by the Company, representing 6.4% of the Company's total capital stock. In addition, Globopar will pay to Bradesplan, as a condition precedent to the effectiveness of the exchange, the amount of R$ 0.119368117 per exchanged common voting share. The common voting shares owned by Bradesplan will be offered to the other parties to the Net Shareholders' Agreement currently in force and, in the event such other parties exercise their right of first refusal, the exchange will be contracted by and among Bradesplan, Globopar and such other parties, in the proportion of the exercised preemptive right, under the exact terms of the exchange agreement entered into by and between Globopar and Bradesplan. The exchange will be concluded no later than October 7, 2004. Once concluded, the rights of Bradesplan and Bradespar S.A., respectively as a party and an intervening party to the Net Shareholders' Agreement currently in force, will be terminated for all intents and purposes. The appropriate governmental authorities will be notified of the exchange agreement. CONTACT: NET SERVICOS DE COMUNICACAO S.A. Marcio Minoru or Rodrigo Alves, 55 11 5186-2811 E-mail: ri@netservicos.com.br * Brazil Sells $750M, 10-year Global Bonds ------------------------------------------ Brazil sold Wednesday US$750 million in 10-year global bonds, seizing the opportunity presented by the interest increase implemented by the U.S. Federal Reserve. According to Dow Jones Newswires, the deal, via Deutsche Bank and Morgan Stanley, carried a 10.80% yield, in line with initial indications. The notes were priced at 98.192 and pay a 10.50% coupon, according to a person involved with the transaction. Offers for the bonds totaled US$1.6 billion, proving that Brazilian debt is still an attractive investment. The bonds are rated single-B-plus by Fitch Ratings and are expected to receive a B2 rating by Moody's Investors Service and single-B-plus by Standard & Poor's. ========= C H I L E ========= ENERSIS: Appeals Court Sustains $55M Fine Vs Board -------------------------------------------------- Six former Enersis stockholders accused of manipulating the Chilean Company's sale to Endesa move closer to paying a US$55 million fine imposed seven years ago by the country's securities regulator. Mr. Jose Yuraszeck, the CEO at the time of the sale, along with Mr. Luis Fernando Mackenna, Mr. Marcelo Brito, Mr. Arsenio Molina, Mr. Marcos Zylberberg and Mr. Eduardo Gardella lost their case in Santiago after the appeals court ruled that the executives took advantage of their position to cash in on the sale while concealing vital information from other board members. The court ruling quoted by EFE says that the group obtained inordinate compensation for their shares as "a clear reward for the benefits, cooperation pledges and loyalty they gave purchaser Endesa Espa�a." Mr. Yuraszeck's group took in US$500 million, almost half of the purchase price, although they collectively control only 0.05 percent of Enersis. The counsel representing Yuraszeck, Attorney Pablo Rodriguez Grez, will appeal the ruling. =========== M E X I C O =========== AXTEL: Expands to San Luis Potosi --------------------------------- Mexican startup telco Axtel commenced operations Wednesday in San Luis Potosi, where it plans to spend US$25 million over the next five years, reports local paper Reforma. The expansion is part of this year's US$145-million plan to expand services in six cities. During the first phase of the expansion in San Luis Potosi, the Company will be offering its local telephony, Internet and data services for 80% of the population. According to a Business News Americas report, Axtel recently started operations in Queretaro, also accompanied by a US$25 million investment. One of the packages Axtel is offering is a two-line contract that would prevent a home's Internet users having a connection interrupted by telephone calls. Axtel's executive director for the northwest region Samuel Lee revealed that the Company is targeting cities where the only competition is Telmex or others who are focused mostly on long- distance services. The Company has 370,000 subscribers, 62% of which are residential and the rest business ======= P E R U ======= AEROCONTINENTE: 15 Years in the Pen for Founder - Prosecutors ------------------------------------------------------------- Peru's airline mogul could face a steep jail term if prosecutors in his drug trafficking and money laundering trial would have their way. Accusations of involvement in a cocaine smuggling operation in the mid 90's has once again landed Mr. Fernando Zevallos, Aero Continente's founder, in the midst of a legal battle that could place him behind bars for 15 years. This time, testimony from the prosecution's star witness, convicted drug lord Jorge Lopez, might prove key to the outcome of the case. Mr. Lopez has claimed that he used AeroContinente to ferry cocaine. While numerous probes have hounded Mr. Zevallos in the past years, his involvement in the drugs business has never been established and he continues to deny the charges. Dow Jones Business News reports that the court has barred Mr. Zevallos from leaving the country during the run of the trial, which prosecutors say could take several months. * Peru Working With IFC to Improve Business Environment ------------------------------------------------------- The International Finance Corporation's Latin America and Caribbean Small and Medium Enterprise Facility (LAC SME Facility, a regional technical assistance program headquartered in Lima) and the Foreign Investment Advisory Service (FIAS, a joint service of the World Bank and IFC) are working with the Metropolitan Municipality of Lima to improve the local business environment through simplifying municipal business regulations. The project launched yesterday by the LAC SME Facility, FIAS, and the Metropolitan Municipality of Lima aims to reduce informality through simplifying municipal business regulations, as municipal regulations account for the bulk of obstacles to formalization. The project will focus initially on simplifying procedures for obtaining Operating Licenses, municipal permits for business activity, and, where possible, urban development regulations. "This project builds on both FIAS' comprehensive analysis of municipal investment barriers and the LAC SME Facility's success in simplifying municipal business regulations in other countries, deepening the impact of both FIAS' and the Facility's work in the region," noted Michael Klein, Vice President of Private Sector Development and Chief Economist. "The LAC SME Facility's work with FIAS on this project underscores IFC's strategy of making technical assistance an integral, viable part of our work program. This kind of work which improves the business environment contributes to attracting more private investment into countries," affirmed Atul Mehta, Director for Latin America and the Caribbean. According to the World Bank's Doing Business 2004 report that provides objective measures of business regulations and their enforcement, administrative barriers for business in Peru are among the highest in the region. For example, opening a business requires, on average, 100 days, over 60% longer than in neighboring Colombia. Consequently, the percent of businesses operating informally in Peru is over 50%, considerably higher than in other countries in the region. Such informality is detrimental to both the municipality and the businesses themselves. For businesses, it limits access to key resources and support and, thus, potential for growth. For municipal governments, high informality prevents the collection of accurate, precise information about local economic activity, which can be used to develop more effective support programs. Moreover, informal enterprises do not contribute to the municipal resources (through taxes, licensing fees, etc.), further constraining the government's ability to support them. In a separate study, "Municipal Administrative Barriers to Investment," FIAS confirmed the Doing Business findings and noted that complicated municipal regulations, particularly related to Urban Development, actually work as a disincentive to new investment. ABOUT IFC The mission of IFC (www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications. ABOUT IFC LAC SME FACILITY IFC's Latin America and Caribbean Small and Medium Enterprise Facility, headquartered in Lima, Peru, promotes private sector development by supporting small and medium enterprises, thus contributing to job creation and poverty reduction in the region. It is a multidonor initiative backed by a $10 million commitment from IFC and an expected $20 million in donor contributions. Its areas of focus are strengthening SME competitiveness; making it easier for SMEs to do business by simplifying business regulations; broadening access to finance; and fostering indigenous and socially responsible enterprises. ABOUT FIAS The Foreign Investment Advisory Service (FIAS) was founded in 1985 as a joint service of the International Finance Corporation and the World Bank. As part of the Investment Climate Unit of the Private Sector Development Department, FIAS provides a wider perspective on how to assess and respond to investment constraints in the business environment. FIAS offers much more than one-way advice and written reports: through interactive workshops and roundtable meetings that often include business executives and other stakeholders, FIAS helps governments chart technically and politically practical paths to change. Creating a stable, neutral, and efficient environment for business can bring in new investment and improve the productivity of existing investment(s). Higher levels of investment and productivity are key to stimulating growth in developing countries and raising living standards. CONTACT: In Washington, D.C. Paul Melton Communications Officer IFC LAC SME Facility Phone: +1.202.473.7349 E-mail: pmelton@ifc.org ================================= T R I N I D A D & T O B A G O ================================= BWIA: Likely to Spend More Than $2.4M to Repair Damaged Planes -------------------------------------------------------------- Cash-strapped Trinidad carrier BWIA expects to lose another US$1.2 million or more after a ServisAir vehicle crashed into its Airbus A340 aircraft Wednesday night. It is the second time a ServisAir truck has crashed into a BWIA aircraft at Piarco International Airport. The first BWIA aircraft, a Boeing 737, was damaged last month by another ServisAir truck, costing the airline US$1.2 million in physical losses and additional losses are still being calculated. The aircraft was out of service for a month. "A preliminary assessment of the A340 suggests it could be out of service for a similar period and costs may exceed US$1.2 million," BWIA said in a statement. With two aircraft out of service, BWIA is seeking new lease arrangements to maintain its schedule during the peak summer season. According to BWIA's new corporate communications manager Dionne Ligoure, the airline has been communicating with aircraft lessors to acquire an aircraft to replace the A340. "I can't say when we will finalise it. We are looking for any aircraft that would suitably facilitate the operations. The focus is on finding solutions to rectify this problem," Ligoure said. CONTACT: BRITISH WEST INDIES AIRWAYS Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, CFO (Trinidad) CDC: Unionist Calls for Dialogue, Law Reforms in Strike ------------------------------------------------------- Labor Leader Owen Hinds urged a dialogue and proposed a retooling of Trinidad and Tobago's Industrial Relations Act, when asked to comment on the lingering strike at Caribbean Development Company (CDC). According to the Trinidad Guardian, the vice president of umbrella union NATUC said that a solution to the strike would only be reached if CDC workers and the management return to the bargaining table. Mr. Hinds also criticized the bias of Trinidad's labor law against employees. He cited a current legislation allowing companies to continue operations despite a worker lockout, a situation similar to what has happened in CDC. He suggested that the law should prevent companies from operating when a lockout is in effect in order to promote "A level playing field [that} will most surely accommodate healthier, meaningful and responsible industrial relations in the future." NWRHA: Asked to Pay $24M Debt ----------------------------- It's tough times ahead for Trinidad & Tobago's North West Regional Health Authority (NWRHA) as government agencies close in on unpaid debts and allegations of fiscal and management deficiencies. Trinidad Express reports that NWRHA has until the end of this month to settle more than US$24 million in unpaid electric bills before the Trinidad and Tobago Electricity Commission (T&TEC) "[would] be forced to look at other alternatives to collect it." Mr. Carl Nurse, acting CEO for NWRHA, is scheduled to meet T&TEC officials next week to reconcile the account. NWRHA has not paid its electricity charges since April 2001, a large portion of which comes from The Eric Williams Medical Sciences Complex at Mt. Hope, despite the US$10,830,550 million allowance given by the Ministry of Health in November. Apart from its T&TEC liability, NWRHA also failed to regularly remit PAYE deductions to the Board of Inland Revenue (BIR). A special audit made by the Auditor General's department in 2001 revealed significant non-compliance with the Income Tax Act referring to the non-payment of Health Surcharge and PAYE. The audit also stated that some NWRHA executives received allowances in excess of the terms and conditions stipulated in their contract and were made without approval of the Minister and the Board. Meanwhile, Prime Minister Patrick Manning recently created a Commission of Enquiry to look into the qualifications of management, professional and non-professional staff working for the country's health care facilities. ================= V E N E Z U E L A ================= EDC: Receives $50M Loan From ABN AMRO ------------------------------------- Private energy generator Electricidad de Caracas (EDC) obtained a three-year, US$50-million loan from Dutch bank ABN Amro to fund investment projects, Business News Americas reports, citing Reuters. The recently obtained loan follows a three-year, US$104-million syndicated loan with local banks Banco de Venezuela, Banesco and Banco Mercantil for investment in the maintenance and expansion of its power network. EDC, a unit of US power firm AES Corp. (NYSE: AES), reported a net loss of US$41.3 million in the first quarter of 2004 due to devaluation in the local bolivar currency and an increase in fuel costs. The Company reduced its debt in the quarter by 12.4% to US$651 million. *********** 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. 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