/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/041005.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 Tuesday, October 5, 2004, Vol. 5, Issue 197 Headlines A R G E N T I N A APSA: Acquires Additional Stake in Perez Cuesta APSA: October 22 Shareholders Meeting Announced CAMISUR S.A.: Debt Payments Halted, Set To Reorganize CLINICA PRIVADA ALBERTI: Liquidation Initiated CORTINAS HERMANOS: Creditor's Bankruptcy Petition Approved DISCO: Cencosud Head Condemns Federal Court Rulings EARA S.A.: Files Petition to Reorganize EDESUR: Issues ARS120 Million Worth of Bonds FRIGORIFICO ALCARAZ: Bankruptcy Initiated After Court Ruling MERAK S.A.: Court Moves Informative Assembly NII HOLDINGS: Terminates Previously Announced Sale PAPELERA MOSCON: Liquidates Assets to Pay Debts PLAN MEDICO: Court Declares Company Bankrupt TERAPIA INTEGRAL: Gets Court Approval to Reorganize TGS: Launches $1.02B Debt Restructuring Offer WINE CONSULTING: Report Submission Schedule Set VALI S.A.: Court Grants Motion to Reorganize * ARGENTINA: Citibank Announces Interest on Bonds * ARGENTINA: Deutsche Bank Economist Deems Debt Offer "Sound" B E R M U D A FOSTER WHEELER: Elects New Directors FOSTER WHEELER: S&P Affirms Chilean Unit's Rating GLOBAL REINSURANCE: Appoints Robin Mayor as Liquidator B R A Z I L BRASKEM: Board of Directors Results Released SINGER: Closes Sale of Sewing Business SINGER: Reports 2Q04 Results After Unit Sale UNIBANCO: Reports Improved Liquidity C O L O M B I A PAZ DEL RIO: Danieli Secures Rationalization Contract D O M I N I C A N R E P U B L I C * Details Dominican Republic Bondholders' Committee Formation J A M A I C A JPSCo: Month's Suspension Allowed to Comply With Standards M E X I C O GRUPO DESC: Proposes to Delist From NYSE P E R U * PERU: IMF Concludes First Review of SDR287Mln SBA V E N E Z U E L A EDC: JP Morgan Pegs Interest for 2006 Floating Rate Bonds PDVSA: Denies Talks to Buy Shell's Argentine Unit - - - - - - - - - - ================= A R G E N T I N A ================= APSA: Acquires Additional Stake in Perez Cuesta ----------------------------------------------- Alto Palermo SA (APSA), the shopping center unit of Argentine real estate developer IRSA-Inversiones y Representaciones SA (IRS), said it has executed an agreement for the acquisition of 49.9% of the shares of Perez Cuesta S.A.C. e I. With the acquisition, the Company will increase its holding in Perez Cuesta from 18.9% to 68.8%. No price was given for the transaction, which still needs approval from Argentina's antitrust authorities. Perez Cuesta operates the shopping center Mendoza Plaza Shopping, a mall in the provincial capital of Mendoza. APSA said the increased stake allows the company to expand its reach into the western province, a region that draws heavy domestic and foreign tourist traffic because of its mountains, wineries and proximity to Chile. CONTACT: Alto Palermo S.A. (APSA) 2/F 476 Hipolito Yrigoyen Buenos Aires Argentina Phone: +54 11 4344 4600 Home Page: http://www.altopalermo.com.ar Contacts: Eduardo Sergio Elsztain, Chairman Marcos Marcelo Mindlin , Vice Chairman Aaron Gabriel Juejati, Vice Chairman APSA: October 22 Shareholders Meeting Announced ----------------------------------------------- The Board of Directors of Alto Palermo S.A. (APSA) called for an ordinary and extraordinary shareholders meeting to be held next October 22, 2004 at 9:00 am hours, outside it headquarters, in Bolivar 108 1ø floor, Buenos Aires city, Argentina. The shareholders meeting will consider, among other items which are usual in an ordinary shareholders meeting, the action taken by the Company as substitute responsible, in relation to the shareholders personal property tax, a report over the action taken by the Company in relation to the mergers proceedings, the execution of an agreement for the exchange of corporate services with Irsa Inversiones y Representaciones Sociedad Anonima and Cresud S.A.C.I.F y A, and the implementation of the Audit Committee. CAMISUR S.A.: Debt Payments Halted, Set To Reorganize ----------------------------------------------------- Judge Carrega, serving under court no. 4 of Buenos Aires' civil and commercial tribunal, is now analyzing whether to grant Camisur S.A. approval for its petition to reorganize. Local daily La Nacion reports that the textile company operates in the province of Tierra del Fuego in Rio Grande and in Antartida e Islas del Atlantico. Dr. Anta, clerk no. 8, assists the court on this case. CONTACT: Camisur S.A. Avenida Corrientes 2621 Buenos Aires CLINICA PRIVADA ALBERTI: Liquidation Initiated ---------------------------------------------- Clinica Privada Alberti S.A. of Mar del Plata will begin liquidating its assets after court no. 3 of Buenos Aires' civil and commercial tribunal declared the company bankrupt. Infobae reveals that the bankruptcy process will commence under the supervision of court-appointed trustee Maria del Carmen Alfano. CONTACT: Clinica Privada Alberti S.A. Rawson 1415 Mar del Plata Ms. Maria del Carmen Alfano, Trustee Alberti 3065 Mar del Plata CORTINAS HERMANOS: Creditor's Bankruptcy Petition Approved ---------------------------------------------------------- Mr. Ignacio Sosa successfully sought a bankruptcy judgement against Cortinas Hermanos y Cia S.R.L. after Judge Gonzalez of Buenos Aires' civil and commercial tribunal court no. 8 declared the Company "Quiebra," reports La Nacion. As such, the electronics shop will now start the bankruptcy process with Ms. Sara Maria Rey de Lavolpe as trustee. Creditors of the Company must submit their proofs of claim to the trustee before December 22, 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. Mr. Sosa sought for the Company's bankruptcy after the latter failed to pay debts amounting to US$41,505.44. Dr. Lezaeta, clerk no. 15, assists the court on the case, which will close with the liquidation of all the Company's assets. CONTACT: Cortinas Hermanos y Cia S.R.L. Avenida Entre Rios 472 Buenos Aires Ms. Sara Maria Rey de Lavolpe, Trustee Avenida Independencia 2251 Buenos Aires DISCO: Cencosud Head Condemns Federal Court Rulings --------------------------------------------------- Mr. Horst Paulmann, Chief Executive Officer of Chilean retail chain Cencosud, slammed provincial Argentine courts for causing delays in Cencosud's purchase of Argentine supermarket chain Disco SA from Dutch Royal Ahold N.V., reports Dow Jones Newswires. Two federal judges in separate cities in the province of Mendoza have issued rulings blocking Cencosud's acquisition of Disco, and these rulings have prevented Argentina's National Commission for Defense of Competition from reviewing the acquisition. "It is absurd, and we hope that the courts lift the measure and let the government fulfill the law," said Paulmann in comments made Thursday at a business seminar. Mr. Ismael Malis, who heads the Commission, said his office has appealed the Mendoza court decisions. Cencosud said in early March that it was buying Disco from Ahold for US$315 million. Consumer groups and some lawmakers are opposed to the deal, as it will lead to over-concentration in Argentina's retail sector. A required stage of the antitrust process that invites interested parties to present their views on the transaction hasn't yet taken place because of the court rulings. CONTACT: DISCO S.A. Larrea 847, Piso 1 1117 Buenos Aires, Argentina Phone: +54-11-4964-8000 Fax: +54-11-4964-8076 Home Page: http://www.disco.com.ar EARA S.A.: Files Petition to Reorganize --------------------------------------- Agricultural equipment distributor Emporio Argentino de Repuestos Agr¡colas S.A.(EARA)filed a "Concurso Preventivo" motion, reports La Nacion. The Company is seeking to reorganize its finances following cessation of debt payments since May this year. In its filing, the Company indicated assets valued at US$2,632,400.11 and liabilities totaling US$882,787.48. The Company's case is pending before court no. 11 of Buenos Aires' civil and commercial tribunal, under Judge Bargallo. Dr. Marino, clerk no. 22, assists the court with the proceedings. CONTACT: Emporio Argentino de Repuestos Agricolas S.A. Joaqu¡n V. Gonzalez 2250 Buenos Aires EDESUR: Issues ARS120 Million Worth of Bonds -------------------------------------------- Argentine power distributor Edesur (DSUR.BA) revealed late Thursday that it has placed two corporate bond issues worth ARS120 million ($1=ARS2.9825) under a US$450 million program, reports Dow Jones Newswires. The bonds were issued in two tranches: one was ARS40 million for 18 months with 10.45% annual interest and the other was ARS80 million for three years at a variable interest rate. Both tranches received offers above the amount placed, Edesur said, adding that it will use the proceeds from the bond sale to pay off debts. "With this current issuance, Edesur returns to the capital markets, making it the first company to issue (debt) in pesos at a maturity of three years, even when the company hasn't finished reversing the effects generated by one of the most significant crises experienced in Argentina, highlighting the confidence demonstrated by investors ... in the future of Edesur," the company said in a statement. The banks that worked on the issue were ABN Amro, Comafi and Macro Bansud. Edesur reported net losses of US$2.3 million for the first half of 2004 and Net Equity of ARS2.1 billion as of June 30, 2004. Like the rest of the country's utility sector, the company is battling uncertainty over future rate increases and contract renegotiations. Talks with the government have been slow-going and the Planning Ministry is expected to extend its deadline for reworking concessions from the end of 2004 into next year. Edesur holds an exclusive license to provide electricity distribution services in the central and southern areas of Buenos Aires as well as the southeastern portion of the Greater Buenos Aires area. It serves a population of over 6 million people making it the largest electric distribution outfit in Argentina in terms of volume distributed. CONTACT: Edesur S.A. San Jos, 140 Buenos Aires Tel: 4383-0200 4381-1313 FRIGORIFICO ALCARAZ: Bankruptcy Initiated After Court Ruling ------------------------------------------------------------ Frigorifico Alcaraz S.A. enters bankruptcy protection after court no. 10 of Lomas de Zamora's civil and commercial tribunal ordered the company's liquidation. The order effectively transfers control of the company's assets to the court-appointed trustee who will supervise the liquidation proceedings. Infobae reports that the court selected Mr. Carlos Horacio Machiavello as trustee. He will be verifying creditors' proofs of claims until the end of the verification phase on October 22, 2004. Argentine bankruptcy law requires the trustee to provide the court with individual reports on the forwarded claims and a general report containing an audit of the company's accounting and business records. The individual reports will be submitted on December 10, 2004 followed by the general report, which is due on February 25, 2005. CONTACT: Frigorifico Alcaraz S.A. Humberto Primo 2848 Lanus Mr. Carlos Horacio Machiavello, Trustee Loria 92 Lomas de Zamora MERAK S.A.: Court Moves Informative Assembly -------------------------------------------- Court no. 7 of Buenos Aires' civil and commercial tribunal moved the scheduled informative assembly for the Merak S.A. reorganization case to August 31, next year. The company's creditors will vote to ratify the completed settlement plan during the assembly. Clerk no. 13 assists the court on this case. CONTACT: Merak s.a. Merlo 366 Moreno Phone: (54)-(237) 4630009 NII HOLDINGS: Terminates Previously Announced Sale -------------------------------------------------- NII Holdings, Inc. (Nasdaq: NIHD) announced Friday, after consultation with Bear, Stearns & Co. Inc., the termination of the previously announced sale by Nextel Communications, Inc. of 6,200,000 shares of NII Holdings common stock in a secondary underwritten public offering. Nextel Communications owns approximately 18% of NII Holdings Common Stock. The termination of the sale has occurred following the identification by NII Holdings that certain liability accounts at its Nextel Mexico subsidiary do not have the proper reconciliation with the books and records of the subsidiary. The company does not believe that this matter has any impact on its revenues or cash accounts. This identification occurred as part of NII Holdings' ongoing review of all of its internal accounts and records in order to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. At the present time, NII Holdings expects that this matter reflects a cumulative net understatement of the income of Nextel Mexico and a corresponding net overstatement of its liabilities for the fiscal years ended December 31, 2002 and December 31, 2003 and the first eight months of 2004. NII Holdings estimates that the maximum cumulative effect of the understatement of income is $9.0 million over this period. NII Holdings will continue to investigate this matter in order to reach a final determination on the exact impact of this matter on the company's financial statements. NII Holdings is evaluating the effect on particular quarters, but believes that there may be understatements of income for certain quarters and overstatements of income for other quarters. Management believes that the fundamental operations of the business are sound. About NII Holdings, Inc. NII Holdings, Inc., a publicly held company based in Reston, Va., is a leading provider of mobile communications for business customers in Latin America. NII Holdings, Inc. has operations in Argentina, Brazil, Mexico and Peru, offering a fully integrated wireless communications tool with digital cellular service, text/numeric paging, wireless Internet access and International Direct Connect(SM), an extension of Direct Connect(SM), a radio feature that allows Nextel subscribers to communicate instantly and across national borders. NII Holdings, Inc. trades on the Nasdaq market under the symbol NIHD. Visit the Company's website at http://www.nii.com. Nextel, the Nextel logo, Nextel Online, Nextel Business Networks and Nextel Direct Connect are trademarks and/or service marks of Nextel Communications, Inc. PAPELERA MOSCON: Liquidates Assets to Pay Debts ----------------------------------------------- Buenos Aires-based Papelera Moscon S.A.I.C. will begin liquidating its assets following the bankruptcy pronouncement issued by court no. 11 of Buenos Aires' civil and commercial tribunal, says Infobae. The bankruptcy ruling places the company under the supervision of court-appointed trustee Orlando Omar Vegega. Mr. Vegega will verify creditors' proofs of claims until November 16, 2004. Afterwards, the validated claims will be presented in court as individual reports on February 2, 2005. The trustee will also submit a general report, containing a summary of the company's financial status as well as relevant events pertaining to the bankruptcy, on March 17, 2005. The bankruptcy process will end with the disposal company assets in favor of its creditors. CONTACT: Mr. Orlando Omar Vegega, Trustee Aguirre 666 Buenos Aires PLAN MEDICO: Court Declares Company Bankrupt -------------------------------------------- Judge Gonzalez, serving under court no. 8 of Buenos Aires' civil and commercial tribunal, declared local company Plan Medico San Martin de Porres S.A. "Quiebra", relates La Nacion. The court approved the bankruptcy petition filed by Imagen Test S.A. for unpaid debt amounting to US$579.79. The Company will undergo the bankruptcy process with Mr. Pedro Mazzola as its trustee. Creditors are required to present their proofs of claims to the trustee for verification before December 1, 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. Saravia, clerk no. 16, assists the court on the case. CONTACT: Plan Medico San Martin de Porres S.A. Malabia 342 Buenos Aires Mr. Pedro Mazzola, Trustee Cramer 1859 Buenos Aires TERAPIA INTEGRAL: Gets Court Approval to Reorganize --------------------------------------------------- Terapia Integral S.A.C. will begin reorganization following the approval of its petition by court no. 10 of Buenos Aires' civil and commercial tribunal. The opening of the reorganization will allow the company to negotiate a settlement with its creditors in order to avoid a straight liquidation. Accounting firm "Estudio Kullahian, Diaz y Asociados" will oversee the reorganization proceedings as the court-appointed trustee. The firm will verify creditors' claims until November 17, 2004. The validated claims will be presented in court as individual reports on February 1, 2005. The trustee is also required by the court to submit a general report essentially auditing the company's accounting and business records as well as summarizing important events pertaining to the reorganization. This report will be presented in court on March 15, 2005. The Informative Assembly, the final stage of a reorganization where the settlement proposal is presented to the company's creditors for approval, is scheduled on September 7, 2005. CONTACT: "Estudio Kullahian, Diaz y Asociados" Trustee Uruguay 750 Buenos Aires TGS: Launches $1.02B Debt Restructuring Offer --------------------------------------------- Transportadora de Gas del Sur (TGS), an Argentine natural gas pipeline operator, launched late Friday a proposal to restructure US$1.02 billion in debt, reports Dow Jones Newswires. A filing with the local stock exchange revealed that TGS is offering a combination of a cash payment and two new bonds for four old tranches worth US$600 million, short-term debt worth $92.6 million and a $326 million loan from the Inter-American Development Bank. The offer expires on Nov. 5 and needs 96% creditor participation - about $98 billion - to be successful. If the agreement rate comes in below 96%, TGS will seek an out-of-court restructuring deal known in Spanish as an APE, though the repayment terms would see some modifications under an APE. The gas transporter is offering a cash payment worth 11% of the nominal value of the debt, as well as two bonds. The first is a six-year note with an interest rate that begins at 5.3% and goes up to 7.5%. Capital payments start in the first year at 9% and climb to 27% by the sixth installment. The second note has a nine-year maturity with an interest rate ascending from 7% to 10%, with capital payments beginning in the seventh year at 41% and coming down to 15% by the third payment. Dow Jones adds that TGS is also offering to pay past-due interest. The company said it will pay the amount accrued on the old obligations to Dec. 31, 2003, as well as a rate of 6.18% on the debt between Jan. 1, 2004 and the date of the exchange. If the agreement rate is more than 85% but below the desired 96%, the proposed terms stay the same. If acceptance falls short of 85%, the cash component of the deal will be split up into two installments - one after the initial court approval and another after the final legal clearance. If the agreement rate is below 75%, TGS will not make any cash payment until the final court approval. CONTACT: Don Bosco 3672, 6th Fl. C1206ABD Buenos Aires, Argentina Phone: +54-11-4865-9050 Fax: +54-11-4865-7154 E-mail: eduardo_pawluszek@tgs.com.ar Web Site: http://www.tgs.com.ar/ WINE CONSULTING: Report Submission Schedule Set ----------------------------------------------- Ms. Liliana Mabel Oliveros Peralta, the trustee assigned to supervise the reorganization of Wine Consulting S.R.L., will submit the validated individual claims for court approval on December 14, 2004. These reports explain the basis for the accepted and rejected claims. She will also submit a general report on February 23, 2005. Infobae reports that court no. 2 of Buenos Aires' civil and commercial tribunal has jurisdiction over this bankruptcy case. Clerk no. 4 assists the court with the proceedings. CONTACT: Ms. Liliana Mabel Oliveros Peralta, Trustee Viamonte 1337 Buenos Aires VALI S.A.: Court Grants Motion to Reorganize -------------------------------------------- Vali S.A. successfully petitioned for reorganization after court no. 7 of Buenos Aires' civil and commercial tribunal issued a resolution opening the company's insolvency proceedings. During insolvency, the company will continue to manage its assets subject to certain conditions imposed by Argentine law and the oversight of a court-appointed trustee. Infobae relates that Mr. Jorge Stanislavsky will serve as trustee during the course of the reorganization. The firm will be accepting creditors' proofs of claims for verification until November 12, 2004. After the verification deadline, the trustee will prepare the individual reports and submit it in court on December 27, 2004. The firm will also present a general report for court review on March 8, 2005. The company will endorse the settlement proposal, drafted from the submitted claims, for approval by the creditors during the informative assembly scheduled on August 31, 2005. CONTACT: Mr. Jorge Stanislavsky, Trustee Talcahuano 768 Buenos Aires * ARGENTINA: Citibank Announces Interest on Bonds ------------------------------------------------- THE REPUBLIC OF ARGENTINA Floating Rate Bond Due 2005 In accordance with the provisions of the Fiscal Agency Agreement, notice is hereby given that for the six-month interest period from September 30, 2004 to March 29, 2005 the Bonds will carry an Interest Rate of 3.0% p.a. and the Coupon Amount per US$1,000 originally issued face amount of the Notes will be US$1.20 CONTACT: Citibank Agency & Trust Ms. Karen Montbach Citibank 111 Wall St., 14th Floor New York, NY 10043 USA Phone: 212.657.4696 * ARGENTINA: Deutsche Bank Economist Deems Debt Offer "Sound" ------------------------------------------------------------- Argentina's plan to restructure its US$100-billion debt "sound" and therefore "acceptable" to creditors, Agence France-Presse cited Deutsche Bank's chief economist for Latin America as saying. "The interest rate is much lower (now), that is why I believe this helps make the offer, which is sound, acceptable to bondholders," the German bank's economist for Latin America, Gustavo Canonero, told Argentina's DyN news agency. Canonero's comments came shortly after the US Securities and Exchange Commission approved Argentina's proposed debt restructuring plan. Argentina has offered to pay creditors 25 cents per dollar of defaulted debt, as measured by the discounted present value of the bonds' payments. ============= B E R M U D A ============= FOSTER WHEELER: Elects New Directors ------------------------------------ Foster Wheeler Ltd. (OTCBB: FWLRF) announced Friday that Diane C. Creel, Roger L. Heffernan, Harry P. Rekas, and David M. Sloan have been elected to its board of directors. On the same date, John Clancey, Martha Clark Goss, and John Stuart have resigned from the board, bringing the total number of current directors to eight. "We are very excited about being able to access the depth of experience and expertise the new directors bring to our board as we continue to move forward to complete our balance sheet restructuring and re-energize our business," said Raymond J. Milchovich, chairman, president and CEO. "We also extend our sincere appreciation to John, Martha, and John for their many contributions to Foster Wheeler during their years of service." Ms. Diane C. Creel Diane Creel is the chairman, chief executive officer and president of Ecovation, Inc., a waste stream technology company. Ms. Creel's previous experience includes service as chief executive officer and president of Earth Tech, where she was the first woman to hold the chief executive position of a publicly held engineering firm in the United States. Ms. Creel currently serves on the board of directors of Allegheny Technologies Inc., Teledyne Technologies, Inc., the American Funds of Capital Research Management, and Goodrich Corporation. She holds BA and MA degrees in journalism from the University of South Carolina, and she has done post-graduate work at the University of Pennsylvania's Wharton School and at Harvard University. Mr. Roger L. Heffernan Roger Heffernan has garnered almost 40 years of operations experience at a number of private equity firms and Fortune 500 companies. He co-founded CRM Partners following several years as an executive with a private equity firm. Prior to that, Mr. Heffernan served as vice president of manufacturing at General Instrument Corporation, and as a manufacturing executive at IBM Corporation and ITT Corporation. He has particularly strong experience in turnaround and restructuring activities, management process redesign, diverse manufacturing operations, and lean manufacturing disciplines. Mr. Heffernan holds a BBA in Accounting from Manhattan College, an MBA in Management from Pace University, and he has completed the Executive Manufacturing Program at the Harvard Graduate School of Business. Mr. Harry P. Rekas Harry Rekas has successfully managed a variety of equity portfolios ranging in size from a few million dollars to in excess of one billion dollars. Over the past 20 years he has been associated with Bessemer Trust, AIG Global Investment, Citibank Global Asset Management, and Oppenheimer Capital Corp., among others. Prior to his investment management work, Mr. Rekas was an officer with Computer Sciences Corporation and Fidelity Bank. Mr. Rekas served as a Captain in the U.S. Air Force. He holds a BS in Economics from the University of Pennsylvania's Wharton School, and an MBA from Pepperdine University. Mr. David M. Sloan David Sloan is an international business consultant who has been deeply involved in multinational financial and commercial matters for almost 30 years. He currently serves as president of Corporate Strategies International, Inc. and is a senior consultant to The Scowcroft Group. Previously, he was an executive vice president with Charles Percy & Associates and held a number of positions of increasing responsibility in the U.S. State Department. Mr. Sloan is currently a member of the board of directors of Counterpart International. He holds a Master of Arts in Law and Diplomacy from The Fletcher School of Law & Diplomacy, Tufts University, and he graduated cum laude with a BA in Political Science from Tufts University. 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, upstream oil and gas, LNG and gas-to-liquids, 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. CONTACT: Foster Wheeler Ltd. Media Contact: Ms. Maureen Bingert Phone: 908-730-4444 or Other Inquiries: Phone: 908-730-4000 Web Site: www.fwc.com FOSTER WHEELER: S&P Affirms Chilean Unit's Rating ------------------------------------------------- Standard & Poor's Rating Services affirmed its 'BBB/Stable' rating on the senior secured debt of Chilean delayed coker, hydrotreater, and net 59-MW cogeneration facility, Petropower Energia Ltda. (Petropower), after its 85% owner Foster Wheeler Ltd. (FWC) went through an equity-for-debt exchange which Standard & Poor's considers tantamount to a default. Standard & Poor's placed FWC on Selective Default on Sept. 22, 2004. Petropower financing documents include events of default related to the credit quality of FWC, particularly the case of FWC defaulting in any of its financial obligations. Although according Standard & Poor's criteria, FWC's equity-for-debt exchange offer was tantamount to a default, the transaction does not constitute a legal default and therefore does not trigger any event of default at Petropower's level. Petropower's financing structure also incorporates extensive participation from FWC in the form of different guarantees, particularly performance guarantees. Should FWC not fulfill those guarantees in a timely manner, a situation rendered more likely by the current challenging situation of the sponsor, bondholders would have the opportunity to accelerate the notes. Given the strong operational performance of the project, however, Standard & Poor's expects that there are sufficient economic incentives for the noteholders to elect not to accelerate Petropower's debt or to waive an automatic acceleration, if triggered. The rating on Petropower reflects the risks that the project must maintain high operating standards in order to receive full revenue payments; the project must rely on one large contract with the host refinery; and the increasing likelihood of FWC not being able to provide certain project shortfall guaranties. Strengths underlying the rating include, among other things, the project's strategic importance to its offtaker and its consistently strong operating and financial record. Petrox, Petropower's host refinery and offtaker, and Petrox parent company Empresa Nacional del Petr¢leo (ENAP; A/Stable/--) formed Petropower as a special-purpose entity to develop, design, construct, and operate the project, which is located about 500 kilometers south of Santiago, Chile. Petropower allows Petrox to optimize its refinery assets to take advantage of less expensive, heavier crude oil feedstocks to serve the growing and more environmentally sensitive Chilean market. Petropower services its debt largely with revenues from its Petrox contract, which provides fixed fees for refinery processing services, electricity, and attendant steam production. The project structure has demonstrated resilience to a variety of adverse conditions, including some degree of inflation in Chile, currency devaluation, and reduced availability, while ensuring sufficient cash flow to provide adequate debt service coverage. ANALYSTS: Pablo Lutereau, Buenos Aires (54) 114-891-2125 Marta Castelli, Buenos Aires (54) 114-891-2128 Luciano Gremone, Buenos Aires (54) 11-4891-2143 GLOBAL REINSURANCE: Appoints Robin Mayor as Liquidator ------------------------------------------------------ IN THE MATTER OF: The Companies Act 1981 and IN THE MATTER OF: Global Reinsurance Capital Ltd. The Member of Global Reinsurance Capital Ltd., acting by written consent without a meeting on September 30, 2004 passed the following resolutions: 1) THAT the Company be wound up voluntarily, pursuant to the provisions of the Companies Act 1981; and 2) THAT Robin J. Mayor be and is hereby appointed Liquidator for the purposes of such winding-up. Mr. Robin J. Mayor, in his capacity as Liquidator, informs that: - Creditors of Global Reinsurance Capital Ltd., which is being voluntarily wound up, are required, on or before October 15, 2004 to send their full Christian and Surnames, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their lawyers (if any) to: Mr. Robin J Mayor, Liquidator Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda If so required by notice in writing from the said Liquidator, and personally or by their lawyers, creditors are asked to come in and prove their debts or claims at such time and place as shall be specified in such notice, or in default thereof they will be excluded from the benefit of any distribution made before such debts are proved. - A final general meeting of the Member of Global Reinsurance Capital Ltd. will be held at the offices of Messrs. Conyers Dill & Pearman, Clarendon House, Church Street, Hamilton, Bermuda on November 2, 2004 at 9:30 a.m., for the purposes of: 1) receiving an account laid before them showing the manner in which the winding-up of the Company has been conducted and its property disposed of and of hearing any explanation that may be given by the Liquidator; 2) by resolution determining the manner in which the books, accounts and documents of the Company and of the Liquidator shall be disposed of; and 3) by resolution dissolving the Company. =========== B R A Z I L =========== BRASKEM: Board of Directors Results Released -------------------------------------------- On September 27, 2004, at 2:00 p.m., at the Company's headquarters located at Avenida das Nacoes Unidas, No. 4,777, in the City of Sao Paulo, State of Sao Paulo, 05477-000, the Board of Directors of BRASKEM S.A. held its 493rd (four hundred and ninety-third) meeting. The undersigned Board Members were present: The Director, Carlos Alberto de Meira Fontes, was absent, who was replaced by his alternate, Mr. Edmundo Jose Correia Aires. Executive Officer Mauricio Roberto de Carvalho Ferro, Ms. Marta Pinto Lima Pacheco and the Secretary of the Board, Mr. Nelson Raso, were also present. The Chairman of the Board, Pedro Augusto Ribeiro Novis, chaired the meeting, and Ms. Marta Pinto Lima Pacheco acted as Secretary. AGENDA: I) Deliberation Proposals: upon review of the respective subjects, the Company's Board of Directors unanimously decided: 1) Conversion of Shares - pursuant to article 6, paragraph 2, of the Company's By-laws, and pursuant to the deliberations taken in the Extraordinary General Shareholders' Meeting held on September 17, 2004, at 10:00 a.m., to approve the homologation of the conversion of 390,000,000 (three hundred and ninety million) class "A" preferred shares in the same number of common shares issued by the Company, in such a manner as to ensure the issue of class "A" preferred shares in the form of American Depositary Shares, due to the exercise in full of the over-allotment option granted by the Company to Credit Suisse First Boston LLC in the public offering of primary distribution of class "A" preferred shares (the "Global Offering"), as approved by the 492nd Meeting of the Board of Directors, held on September 22, 2004, at 8:00 p.m., within the limit of shares without voting rights, or with restricted voting rights, pursuant to article 4, paragraph 1, of the Company's By-laws. The Annex to this resolution contains a list of those shareholders whose conversion requests were granted, and the number of class "A" preferred shares effectively converted into common shares. Banco Itau S.A., as the custodian for the shares issued by the Company, is hereby authorized to take all actions necessary to perform the conversion of shares approved herein; 2) Issue of Shares - to approve, within the limit of the authorized capital of the Company, excluding the right of first refusal of the current shareholders pursuant to Article 166, Item II, Article 168 and Article 172 of Law No. 6,404/76, and pursuant to the sole paragraph of Article 7 of the Company's By-laws, the issuance of 1,170,000,000 (one billion, one hundred and seventy million) class "A" preferred Shares, at the price of R$90.00 (ninety reais) per lot of one thousand class A preferred shares, amounting to a total of R$105,300,000.00 (one hundred and five million, three hundred thousand reais), to be distributed in the Global Offering, according to the characteristics and procedures already approved by the Board of Directors in the 492nd Meeting referred to above; 3) Increase of Share Capital - pursuant to Article 4, paragraph 1, of the Company's By-laws, and in accordance with the deliberations set forth above, to approve the increase of the share capital of the Company, within the limit of the authorized capital, in the amount of R$105,300,000.00 (one hundred and five million, three hundred thousand reais), thus increasing the capital from R$3,297,668,293.84 (three billion, two hundred and ninety seven million, six hundred and sixty-eight thousand, two hundred and ninety three reais and eighty four centavos) to R$3,402,968,293.84 (three billion, four hundred and two million, nine hundred and sixty-eight thousand, two hundred and ninety-three reais and eighty-four centavos), through the issuance of 1,170,000,000 (one billion, one hundred and seventy million) class "A" preferred shares, without par value, at the price of R$90.00 (ninety reais) per lot of one thousand class A preferred shares. The class A preferred shares hereby issued will be entitled to dividends and all other rights inherent in the ownership of the shares that have been declared by the Company as of the date of their issuance. Due to the increase hereby approved, the share capital of the Company is now represented by 90,645,074,544 (ninety billion six hundred and forty-five million seventy-four thousand five hundred and forty-four) shares without par value, of which 30,215,024,848 (thirty billion two hundred and fifteen million twenty-four thousand eight hundred and forty-eight) are common shares, 60,200,894,896 are class "A" preferred Shares (sixty billion two hundred million eight hundred and ninety-four thousand eight hundred and ninety- six) and 229,154,800 (two hundred and twenty-nine million one hundred and fifty-four thousand eight hundred) are class "B" preferred shares; and 4) Other Authorizations - to authorize the Board of Directors to enter into and execute all documents necessary to the primary public distribution of additional shares in the International Offering, as well as to take all actions necessary to effect the conversion of class "A" preferred shares into common shares and the issuance of the Additional Shares of the International Offering in the Global Offering; II) Matters for Acknowledgement: None to be recorded; III) Matters of Company Interest: None to be recorded; IV) Closing: Having no further items on the agenda, this resolution was drafted, read, discussed and signed by all of those members of the Board of Directors present, by the Chairman of the Board and the Secretary of the Meeting. Sao Paulo/SP, September 27, 2004. (Signed by: Pedro Augusto Ribeiro Novis, Chairman of the Board; Marta Pinto Lima Pacheco, Secretary; Alvaro Fernandes da Cunha Filho, Vice- Chairman; Alvaro Pereira Novis; Andre Tapajos Cunha; Edmundo Jose Correia Aires; Fernando de Castro Sa; Francisco Teixeira de Sa; Jose de Freitas Mascarenhas; Luiz Fernando Cirne Lima; Margareth Feijo Brunnet; Newton Sergio de Souza). SINGER: Closes Sale of Sewing Business -------------------------------------- Singer N.V. (Symbol: SNGR) -- Singer N.V. ("Singer" the "Company") announced Friday that it had completed the sale of the Singer worldwide Sewing business and of the ownership of the SINGER(R) trademark to KSIN Holdings, Ltd. ("KSIN"), an affiliate of funds managed by Kohlberg & Co., LLC. The total consideration received by Singer was approximately $134.6 million, consisting of approximately $65.1 million of cash, $22.5 million in unsecured subordinated promissory notes and the pay-off or assumption by KSIN of approximately $47.0 million of Sewing-related debt, subject to post-closing price adjustments. The Company will retain certain continuing rights in the trademark and for the distribution of sewing machines in connection with its Retail businesses although it is obligated to change its corporate name to a name not including the word "Singer" on or prior to September 29, 2005. Singer will continue to own 56.8% of the equity of Singer Asia Limited and 100% of the equity of Singer Jamaica Limited, the Company's subsidiaries which operate the Retail businesses in Asia and Jamaica. Singer Asia Limited presently operates in Bangladesh, India, Indonesia, Pakistan, the Philippines, Sri Lanka, Thailand and Vietnam, with operating rights in an additional 14 Asian markets. The Company will continue to have the right to use the SINGER(R) trademark and to be the exclusive distributor for SINGER(R) branded sewing machines and sewing related products in connection with its Retail businesses. All existing license and distribution agreements in these markets will remain outstanding and unchanged. The Retail operations accounted for approximately 49% of Singer's 2003 revenues, and 43% of its operating earnings before corporate expenses and eliminations. Of the approximately $65.1 million in cash received by the Company, $26.3 million has been used to repay in full the Bank of Nova Scotia debt, the only corporate-level debt remaining from the Company's successful Chapter 11 reorganization in September 2000. A balance of approximately $36.9 million cash from the sale remains uncommitted after payment of expenses related to the sale. Plans for utilization of these funds have not been finalized, but possible uses may include investing in the Company's Retail businesses in Asia and Jamaica, a partial buy-back of the shares of Singer N.V.'s Common Stock, cash dividends on the shares of the Common Stock and investing in one or more new businesses. The $22.5 million in unsecured subordinated promissory notes have a final maturity of seven years and an interest rate of 10% per annum, of which amount 70% is required to be paid in cash and 30% may be either capitalized by increasing the outstanding principal amount or paid in cash at the option of KSIN. Payment of the principal and interest on the unsecured subordinated notes is subject to various risks, including the future performance of the business under its new ownership and the prior payment of senior indebtedness incurred in connection with the purchase. The notes are also subject to set- off with respect to amounts which could become payable by the Company under certain indemnification obligations undertaken in connection with the transaction. The Sewing business that is being sold includes Company-owned marketing operations in the United States, Brazil, Canada, China, The Czech Republic and Hungary, Denmark and Sweden, Italy, Mexico, the Middle East and Africa, South America and the Caribbean, and Turkey, as well as a network of independent distributors and dealers in over one hundred additional markets. The business also includes manufacturing facilities in Brazil and China. The Sewing marketing and manufacturing operations accounted for about 51% of Singer's 2003 revenue, and 57% of its 2003 operating earnings before corporate expenses and eliminations. Singer expects to realize an accounting loss of approximately $34.5 million on the sale, reflecting the difference between the book value of the assets being sold (primarily goodwill associated with the trademark) and the aggregate of the liabilities being transferred and the consideration received. Chairman's Comments In commenting on the closing of the transaction, Stephen H. Goodman, Singer's Chairman, President and CEO noted, "Management has consistently believed that the Company would achieve it's potential and that this realization would ultimately be reflected in the Company's market value. I believe that the successful completion of this sale will accelerate this process. The cash received from the sale will enable Singer to pay-off all of the corporate-level debt remaining from the Company's Chapter 11 reorganization and to be in an improved liquidity position to help fund the growth of the Asian and Jamaican Retail businesses. We will also be better able to focus management resources in these areas to realize their significant growth potential. "Singer will be considering over the next several months alternative uses for the funds that have been generated. Among other alternatives, we will consider returning cash to the shareholders through a share buy-back program and/or through cash dividends. The Company also will be evaluating alternative legal and administrative structures and arrangements that may better reflect the Company's enhanced liquidity, more concentrated business and smaller aggregate size." About Singer N.V. Singer N.V. was incorporated under the laws of the Netherlands Antilles on December 21, 1999. Effective September 2000, as a result of a successful Chapter 11 reorganization, Singer became the parent company of several Operating Companies formerly owned by The Singer Company N.V. The Singer Retail business, the only operating business remaining following the completion of the KSIN sale, consists primarily of the distribution, through Company-owned retail stores and direct selling, of a wide variety of consumer durable products for the home in selected emerging markets in Asia and Jamaica. Retail sales activities in these markets are strengthened by the offer of consumer credit services provided by the Company to its customers. In some markets where it operates, Singer is recognized as a leading retailer of products for the home. SINGER: Reports 2Q04 Results After Unit Sale -------------------------------------------- Singer N.V. (Symbol: SNGR) -- Singer N.V. ("Singer" or "the Company") announced Friday its results for the second quarter of 2004 and for the first six months ended June 30, 2004. 2004 Second Quarter Results The Company's results of operations, as presented, are impacted significantly by the Company's sale of the worldwide Sewing business and ownership of the SINGER(R) trademark. On June 11, 2004, Singer announced that it had entered into a definitive agreement pursuant to which KSIN Holdings, Ltd. ("KSIN"), an affiliate of funds managed by Kohlberg & Co., LLC, would acquire the Singer worldwide Sewing business and the ownership of the SINGER(R) trademark for a total consideration of approximately $134.6 million (the "KSIN Transaction"). The KSIN Transaction was completed on September 30, 2004. The total consideration consists of approximately $65.1 million of cash, $22.5 million in unsecured subordinated promissory notes and the pay-off or assumption by KSIN of approximately $47.0 million of sewing- related debt, subject to post-closing price adjustments. Accordingly: * The results of operations for the Sewing segment are reported separately as discontinued operations, shifting $6.1 million and $10.5 million in net income for the second quarter ended June 30, 2004 and for the six months ended June 30, 2004, respectively, from continuing operations to discontinued operations. * An impairment charge of $34.5 million is recorded to reflect the difference between the book value of the assets being sold - primarily goodwill associated with the trademark -- and the aggregate of liabilities being transferred and consideration received. The completion of the KSIN Transaction on September 30, 2004 also has had a significant impact on the Company's liquidity position. Of the approximately $65.1 million cash received by the Company, $26.3 million has been used by the Company to repay in full the Nova Scotia Financing Agreement. A balance of approximately $36.9 million remains uncommitted after payment of expenses related to the KSIN Transaction. For the second quarter ended June 30, 2004, the Company reported consolidated revenues (excluding the worldwide Sewing segment and revenue derived from certain licensing of the SINGER(R) trademark) of $69.6 million as compared to $39.7 million for the second quarter of 2003, an increase of $29.9 million or 75.3%. The increase in revenues was primarily due to the inclusion of Thailand's results, totaling $25.4 million, in the Company's consolidated results for the 2004 second quarter. This was coupled with a strong retail sales performance in Sri Lanka. This sales increase was partially offset by weaker retail sales in India and the Philippines. The Company's revenues for the second quarter of 2004 included $10.6 million of finance charges on consumer credit sales compared to $3.6 million in the second quarter of 2003. The increase in finance charges is primarily due to the inclusion of Thailand's finance charges for the 2004 second quarter along with increased finance charges in Sri Lanka due to strong retail sales. Gross profit for the three months ended June 30, 2004 was $25.3 million, representing a gross margin of 36.3%, as compared to $12.9 million and a gross margin of 32.5% for the same period in 2003. The improvement in the gross margin is due to the inclusion of Thailand's gross margin for the 2004 second quarter as Thailand's gross margin is higher than the average of the other Retail operating units. Also impacting the gross margin percentage were lower gross margins, as compared to the prior period, in India and the Philippines and a higher gross margin in Sri Lanka. Selling and administrative expenses for the three months ended June 30, 2004 were $23.8 million, representing 34.3% of revenues, as compared to $11.6 million and 29.1% of revenues for the same period in 2003. The increase in selling and administrative expenses as a percent of revenue is due to the inclusion of Thailand's selling and administrative expenses for the second quarter of the year as Thailand's selling and administrative expenses as a percentage of revenue are higher than the average of the other Retail operating units. Also contributing to the increase was higher selling and administrative expenses as a percentage of revenue, in India and the Philippines due to their decline in revenue without a corresponding decrease in their fixed selling and0administrative expenses. Operating income for the 2004 and 2003 quarters was $1.4 million and $1.3 million, respectively, while EBITDA (net income before interest expense, taxes, depreciation and amortization) from continuing operations was $1.2 million and $7.5 million, respectively. The increase in operating income that was due to the inclusion in the 2004 second quarter results of Thailand's operating income was largely offset by a decline in operating income in India and the Philippines. The $6.3 million decrease in EBITDA from continuing operations reflects the drop in total other income (expense) in the second quarter of 2004 as compared to the second quarter of 2003. Interest expense for the three-month period ended June 30, 2004 was $1.8 million, as compared to $1.7 million for the three- month period ended June 30, 2003. Equity in loss from Operating Affiliates totaled $0.5 million during the three-month period ended June 30, 2004 as compared to income of $1.7 million for the same period in 2003. The $2.2 million decrease was primarily due to lower profitability at an operating affiliate in Sri Lanka. Also contributing to the decrease was the fact that Singer Thailand was accounted for as an equity investment in the second quarter of 2003 while in the 2004 second quarter Thailand was included in the Company's consolidated results. Royalty expense for the three months ended June 30, 2004 was $0.6 million compared to nil for the same period in 2003. The royalty expense is for the use of the SINGER(R) trademark by the Retail Operating Companies in Asia and became effective July 31, 2003. Miscellaneous other income was $0.6 million for the three-month period ended June 30, 2004 as compared to other income of $4.5 million for the same period in 2003. The $0.6 million of other income in the 2004 second quarter was primarily due to gains on sale of property, plant and equipment. The corresponding income in the second quarter of 2003 was primarily due to an increase in the estimated recovery on receivables from a former subsidiary that is in liquidation. Provision for income taxes amounted to $0.8 million against a pre-tax, pre-minority interest loss of $0.9 million in the three-month period ended June 30, 2004, as compared to a $0.9 million tax provision for the same period in 2003. The much higher tax provision in 2004 relative to pre-tax income is primarily due to the losses incurred in India and the Philippines with no corresponding tax benefit, and the equity loss from operating affiliates which is net of tax. Minority interest share in income was $0.5 million for both the 2004 and 2003 second quarter. The increase due to the sale of a 43.2% minority equity interest in the Company's Asia Retail operations effective July 2003 and to Singer Thailand being included in the Company's consolidated results rather than being accounted for as an equity investment as in the first half of 2003, was offset by higher losses from Singer India and lower profits in Sri Lanka as compared to the 2003 second quarter. The Company's loss from continuing operations for the three months ended June 30, 2004 was $2.2 million as compared to $4.5 million income for the same period in 2003. The income decrease of $6.7 million is largely due to a $2.2 million decline in equity earnings from operating affiliates, the $0.6 million of royalty expense and the $3.9 million decline in other income. The Company's net loss for the 2004 second quarter, including income from the discontinued operations of the Sewing segment and trademark, and the impairment charge, net of tax benefit, was $30.6 million as compared to a net income of $1.4 million for the same period in 2003. The $32.0 million additional loss from prior year was primarily due to the $6.5 million decrease in the Company's income from continuing operations and the $25.3 million higher loss from discontinued operations including the impairment charge. Dividends on the Preferred A Shares amounted to nil for the three-month period ended June 30, 2004 and $0.2 million for the three-month period ended June 30, 2003. This dividend was cumulative and was accrued but not paid. An additional amount of nil and $0.1 million for the 2004 and 2003 three-month periods, respectively, was accrued representing the accretion in the value of the Preferred A Shares. On January 9, 2003, a subsidiary of the Company entered into an agreement with the Pension Benefit Guaranty Corporation to purchase all 40 issued and outstanding Preferred A Shares of the Company for $3.8 million. The terms of the purchase agreement required the Company to pay $0.4 million or 10% upon execution of the agreement with the balance of $3.4 million being settled through a promissory note bearing interest at 12.5% per annum. As of December 31, 2003 the promissory note was paid in full and the Preferred A Shares have been classified as Preferred Treasury Shares. The net loss available to Common Shares was $30.6 million for the three months ended June 30, 2004 as compared to the net income available to Common Shares of $1.1 million for the same period in 2003. This is equivalent to basic loss per Common Share of $3.86 and basic income per Common Share of $0.14, respectively. 2004 Six Months' Results For the first six months ended June 30, 2004, the Company reported consolidated revenues (excluding the worldwide Sewing segment and revenue derived from certain licensing of the SINGER(R) trademark) of $141.6 million as compared to $80.3 million for the first half of 2003, an increase of $61.3 million or 76.3%. The increase in revenues was primarily due to the inclusion of Thailand's results, totaling $53.5 million, in the Company's consolidated results for the 2004 first half. This was coupled with a strong retail sales performance in Sri Lanka. This sales increase was partially offset by weaker retail sales in India and the Philippines. The Company's revenues for the first half of 2004 included $20.8 million of finance charges on consumer credit sales compared to $7.2 million in the first half of 2003. The increase in finance charges is primarily due to the inclusion of Thailand's finance charges for the first half of the year along with increased finance charges in Sri Lanka due to strong retail sales. Gross profit for the six months ended June 30, 2004 was $51.9 million, representing a gross margin of 36.7%, as compared to $26.7 million and a gross margin of 33.2% for the same period in 2003. The improvement in the gross margins is due to the inclusion of Thailand's gross margin for the first half of the year as Thailand's gross margins are higher than the average of the other retail operating units. Partially offsetting this improvement were lower gross margins, as compared to the prior period, in India and the Philippines. Selling and administrative expenses for the six months ended June 30, 2004 were $46.1 million, representing 32.6% of revenues, as compared to $23.3 million and 29.1% of revenues for the same period in 2003. The increase in selling and administrative expenses as a percent of revenue is due to the inclusion of Thailand's selling and administrative expenses for the first half of the year as Thailand's selling and administrative expenses as a percentage of revenue are higher than the average of the other Retail operating units. Also contributing to the increase was higher selling and administrative expenses as a percentage of revenue, in India and the Philippines due to their decline in revenue without a corresponding decrease in their fixed selling and administrative expenses. Operating income for the 2004 and 2003 first half was $5.8 million and $3.4 million, respectively, while EBITDA from continuing operations was $4.3 million and $10.4 million, respectively. The increase in operating income was due to the inclusion in the 2004 first half results of Thailand's operating income of $4.1 million. Partially offsetting this was a decline in operating income in India and the Philippines in the first half of the year. The $6.1 million decrease in EBITDA from continuing operations reflects the decrease in total other income (expense), and the increase in minority interest share in income. These were partially offset by the increase in operating income. Interest expense for both the six-month periods ended June 30, 2004 and 2003 was $3.4 million. Equity in loss from Operating Affiliates totaled $0.8 million during the six-month period ended June 30, 2004 as compared to income of $2.6 million for the same period in 2003. The $3.4 million decrease was primarily due to lower profitability at an operating affiliate in Sri Lanka. Also contributing to the decrease was the fact that Singer Thailand was accounted for as an equity investment in the first half of 2003 while in the 2004 first half Thailand was included in the Company's consolidated results. Royalty expense for the six months ended June 30, 2004 was $1.3 million compared to nil for the same period in 2003. The royalty expense is for the use of the SINGER(R) trademark by the Retail Operating Companies in Asia and became effective July 31, 2003. Miscellaneous other income was $1.4 million for the six-month period ended June 30, 2004 as compared to other income of $4.5 million for the same period in 2003. The $1.4 million of other income in the 2004 first half was primarily due to gains on sale of property, plant and equipment and a write- off of old accounts payable which were determined to be no longer valid liabilities. The other income in the first half of 2003 was primarily due to an increase in the estimated recovery on receivables from a former subsidiary that is in liquidation. Provision for income taxes amounted to $2.6 million in the six- month period ended June 30, 2004, as compared to a $1.6 million tax provision for the same period in 2003. The much higher tax provision in 2004 is primarily due to the losses incurred in India and the Philippines with no corresponding tax benefit, and the equity loss from operating affiliates which is net of tax. Minority interest share in income was $2.3 million for the 2004 first half compared to $0.9 million for the same period in 2003. This increase reflects the 43.2% minority equity interest in the Company's Asia Retail operations effective July 2003 and that Singer Thailand was included in the Company's consolidated results rather than being accounted for as an equity investment as was the case in the first half of 2003. The Company's loss from continuing operations for the first half of 2004 was $3.2 million as compared to a $4.5 million income for the same period in 2003. The income decrease of $7.7 million is due to a $3.4 million decline in equity earnings from operating affiliates, the $1.3 million of royalty expense, the $3.1 million decline in other income, the $1.0 million increase in income taxes and the $1.4 million increase in minority interest share in income. These were partially offset by the $2.5 million increase in operating income. The Company's net loss for the first half of 2004 was $27.3 million including income from the discontinued operations of the Sewing segment and trademark, and the impairment charge, net of tax benefit, as compared to a net loss of $12.6 million for the same period in 2003. The $14.7 million additional loss from prior year was primarily due to the $7.7 million decrease in the Company's income from continuing operations and the $6.9 million higher loss from discontinued operations including the impairment charge. Dividends on the Preferred A Shares amounted to nil for the six- month period ended June 30, 2004 and $0.4 million for the six- month period ended June 30, 2003. This dividend was cumulative and was accrued but not paid. An additional amount of nil and $0.2 million for the 2004 and 2003 six-month periods, respectively, was accrued representing the accretion in the value of the Preferred A Shares. As of December 31, 2003 the promissory note was paid in full and the Preferred A Shares have been classified as Preferred Treasury Shares. The net loss available to Common Shares was $27.2 million for the six months ended June 30, 2004 as compared to the net loss available to Common Shares of $13.1 million for the same period in 2003. This is equivalent to basic loss per Common Share of $3.46 and basic loss per Common Share of $1.64, respectively. Chairman's Comments In commenting on the second quarter and first half results, Stephen H. Goodman, Singer's Chairman, President & CEO noted, "The Company reported a loss from continuing operations for the three months and six months ended June 30, 2004. This loss largely reflects three factors: * Weakness in the Company's Retail operations in selected Asian markets, primarily India and the Philippines. * Reduction in equity earnings from operating affiliates, primarily First Capital, the Company's affiliate in Sri Lanka. * A level of corporate overhead and expense intended to support a larger business, including the worldwide Sewing operations sold in the KSIN transaction." "To restore the Company's continuing operations to profitability," he continued, "Singer's management intends to aggressively address these issues over the next several months. A very significant corporate cost reduction program is being implemented that will reduce the level of corporate expense to better reflect the Company's reduced size and scope. Additional management attention will be directed at restructuring the Singer's Retail businesses, particularly in India and the Philippines, and at providing additional support to the Company's operating affiliates. Going forward, Singer will also benefit from a shift from interest as an expense to interest earnings, reflecting the Company's now significant cash holdings and the interest on the KSIN unsecured subordinated promissory notes. As a consequence of these activities and developments, I would expect to see the Company achieve near break-even performance for the second half of the year, and we are expecting the Company to be profitable again for the year 2005." About Singer N.V. Singer N.V. was incorporated under the laws of the Netherlands Antilles on December 21, 1999. Effective September 2000, as a result of a successful Chapter 11 reorganization, Singer became the parent company of several Operating Companies formerly owned by The Singer Company N.V. To see financial statements: http://bankrupt.com/misc/SINGER.htm UNIBANCO: Reports Improved Liquidity ------------------------------------ Greater Liquidity: At the beginning of September, the Unit (UBBR11), which represents one preferred Unibanco share and one preferred Unibanco Holdings share, joined IBrX-50, the Sao Paulo Stock Exchange (Bovespa) index based on the 50 securities with the highest negotiability in the market. In September 2004, the number of daily Unit trades increased by 158.3% vs. the September 2003 figure, and by 3.4% vs. the 2004 average, whereas Bovespa posted growth of 9.2% and a drop of 2.8% in the daily number of trades for these periods, respectively. Furthermore, the daily financial volume of Unit trading increased by 6.1% when compared to September, 2003. Acquisition of Banco BNL do Brasil S.A.: On September 29, the Central Bank of Brazil authorized the acquisition of the controlling stake of Banco BNL do Brasil S.A. through a swap of Banco BNL shares representing 99.98% of its capital for 10,000,000 Units (ten million Units), which will be delivered to Banca Nazionale Del Lavoro S.p.A. on October 1, 2004. CONTACT: Investor Relations Area Unibanco - Uniao de Bancos Brasileiros S.A. Ave. Eusebio Matoso, 891 - 15th floor Sao Paulo, SP 05423-901 Brazil Tel.: (55 11) 3097-1313 Fax: (55 11) 3097-6182 E-mail: investor.relations@unibanco.com.br Web Site: www.ir.unibanco.com =============== C O L O M B I A =============== PAZ DEL RIO: Danieli Secures Rationalization Contract ----------------------------------------------------- Italian equipment maker Danieli won a contract to carry out the majority of the rationalization plan of Colombian iron and steel company Acerias Paz del R¡o (APR), says Business News Americas. Contract signing will take place this month, according to an APR official. "Manufacturing the equipment will take 18 months," the official added. This will not be a turnkey project, the official said. Danieli will only supply the equipment and APR will call for bidding on assembly and project start-up, which could be done by local companies. The US$35-million industrial rationalization project is designed to allow APR to reduce production costs by US$32/t and increase steel production capacity from the current 260,000t/y to 500,000t/y in 10 years. The company's sales are expected to exceed US$157 million this year, while profits by the end of September is projected to reach US$31.5 million. =================================== D O M I N I C A N R E P U B L I C =================================== * Details Dominican Republic Bondholders' Committee Formation ------------------------------------------------------------- A group of holders of the US Dollar-denominated bonds issued by the Dominican Republic have formed a committee to organize and to coordinate bondholders' efforts in light of recent developments. The Committee's membership includes Grantham Mayo, Fiduciary Trust International Limited and other significant institutional holders of the bonds. The Committee has engaged Bingham McCutchen LLP as its legal counsel. Interested holders of US Dollar-denominated bonds (of any issue) issued by the Dominican Republic are encouraged to contact the Committee through counsel. Counsel contact details are as follows: Timothy B. DeSieno Bingham McCutchen LLP 399 Park Avenue New York NY 10022 Tel: +1 212 705 7426 Fax: +1 212 508 1458 Email: tim.desieno@bingham.com or William F. Govier Bingham McCutchen LLP One State Street Hartford, CT 06103 Tel: +1 860 240 2777 Fax: +1 860 240 2800 Email: william.govier@bingham.com CONTACT: HANK SHAFRAN 617.951.8193 hank.shafran@bingham.com ============= J A M A I C A ============= JPSCo: Month's Suspension Allowed to Comply With Standards ---------------------------------------------------------- Jamaica Public Service Company (JPSCo) obtained a month's reprieve from the Office of the Utilities Regulation (OUR) to comply with the standards for service delivery to its customers, reports The Jamaica Observer. This means that JPSCo is allowed a more relaxed stance on billing and service response until October 31. "They have been freed from complying with all standards," says OUR deputy director general with responsibility for the electricity sector Raymond Silvera. "We know that the company will have a cash flow problem and ask consumers to be patient," he added. But while the utility has been allowed some degree of freedom, it is still required to place before the OUR by early this week, new time frames for service delivery within the period of suspension, said Silvera. The power utility sought for the suspension of the 'Guaranteed Service Standards 2004-2009' and 'Overall Standards 2004-2009' so that it could concentrate its people and other resources on its hurricane recovery efforts. So far, it has brought approximately 90% of the system back on line. =========== M E X I C O =========== GRUPO DESC: Proposes to Delist From NYSE ---------------------------------------- Pursuant to articles 183, 187 and 195 of the General Corporations Law, clauses Fourteen, Fifteen and Sixteen of the Corporate By-laws and to the resolution of the Board of Directors of the Company, the Series "B" shareholders of DESC, S.A. de C.V. are hereby called to the SPECIAL SHAREHOLDERS MEETING, to be held at 12:00 p.m. on October 19, 2004, in the Auditorium located in the Ground Floor of the Arco Torre I building, at the Arcos Bosques Corporativo business center, situated at Paseo de Tamarindos No. 400-B, Col. Bosques de las Lomas, Mexico, D.F. 05120, to consider these items: 1. Presentation and approval, if appropriate, of 1) a) a proposal to voluntarily delist from the New York stock exchange the American Depositary Shares ("ADSS") issued by DESC, A.A. de C.V.; b) terminate the registration of the ADSS and the series "b" shares under the securities and exchange act of 1934; and c) terminate the amended and restated deposit agreement dated as of June 29, 1994, as amended, among the company, Citibank, N.A. and the holders of American Depositary Receipts evidencing the ADSS; and d) cancel the registration of the series "b" shares in the special section of the Mexican securities market registry. 2) the resolutions to carry out the foregoing. 2. Designation of delegates to formalize the resolutions adopted at the meeting. 3. Reading and approval of the minutes of this meeting. The shareholders are reminded that in order to attend the Meeting, they must deposit in the Secretariat of the Corporation, located at Paseo de los Tamarindos, No. 400-B, 30th. floor, Col. Bosques de las Lomas, Mexico, D.F. 05120, at least one day prior the date set for the Meeting, their stock certificates or a certificate issued by a credit institution or a brokerage house, evidencing deposit of their stock certificates. The admission cards shall be delivered against the delivery of said stock or deposit certificates. The shareholders may attend personally or be represented by an attorney-in-fact, appointed by a simple letter proxy. The letter proxy forms will be available in such Secretariat of the Corporation from October 1st 2004 to the day before the date of the Meeting. CONTACT: Unibanco - Uniao de Bancos Brasileiros S.A. Unibanco Holdings Phone: 55-3789-8000 Avenida Eusebio Matoso 891 Sao Paulo, 05423-901 Brazil Web Site: http://www.unibanco.com.br/ ======= P E R U ======= * PERU: IMF Concludes First Review of SDR287Mln SBA --------------------------------------------------- A mission of the International Monetary Fund (IMF) visited Lima during the last two weeks for discussions in the context of the first review under Peru's 26-month Stand-By Arrangement (SBA). The SDR 287 million SBA, which the authorities are treating as precautionary, was approved by the Executive Board of the IMF on June 9, 2004. The mission welcomed the favorable performance of the Peruvian economy in 2004. With continued implementation of the authorities' macroeconomic program, output growth has picked up led by exports, private investment, and a greater dynamism of employment and consumption. Notwithstanding recent increases in some prices owing to supply problems, the monetary authorities reiterated their commitment to keep the annual rate of inflation in December 2004 within the target range of one percent above and below 2.5 percent. The mission commended the authorities for their continued commitment to fiscal consolidation. Also, it stressed the importance of implementing the programmed structural and institutional reforms to boost sustainable output and employment growth over the medium term. In this context, the mission supported the authorities' intention to lower the fiscal deficit to 1 percent of GDP in 2005, with the aim of reducing the economy's vulnerabilities. The mission and the authorities agreed on the importance of implementing in the remainder of 2004 and 2005 the growth enhancing structural reforms included in the program. The mission has returned to IMF headquarters in Washington and is working toward the conclusion of the review. To view the staff report to the Executive Board requesting the SBA: www.imf.org/external/pubs/ft/scr/2004/cr04226.pdf CONTACT: International Monetary Fund 700 19th Street, NW Washington, D.C. 20431 USA Public Affairs Phone: 202-623-7300 Fax: 202-623-6278 Media Relations Phone: 202-623-7100 Fax: 202-623-6772 ================= V E N E Z U E L A ================= EDC: JP Morgan Pegs Interest for 2006 Floating Rate Bonds --------------------------------------------------------- C.A. La Electricidad de Caracas SAICA-SACA US$39,836,000 Collateralized Floating Rate Bonds Due 2006 In accordance with the provisions of the Bonds, notice is hereby given that for the Interest period from September 30, 2004 to December 31, 2004 the Bonds will carry an Interest Rate of 2.0% per annum. The Interest payable on the relevant interest payment date, December 31, 2004 will be US$5.11 per US$1,0000 principal amount. CONTACT: JP Morgan Chase Bank London, Agent Bank 270 Park Ave New York, NY 10017 Phone: 212-270-6000 USA Web Site: http://www.jpmorganchase.com/ PDVSA: Denies Talks to Buy Shell's Argentine Unit ------------------------------------------------- There's no truth to the rumors that Venezuela's state oil company PDVSA is negotiating to buy British-Dutch company Royal Shell's Argentine affiliate, valued at US$1 billion, Europe Intelligence Wire reports, citing a PDVSA executive. "We have had no contact, as often occurs, the rumors do not coincide with reality," PDVSA chief Ali Rodriguez said in a press conference after inaugurating his company's offices in Argentina. "If there is an offer (from Shell) and it is interesting, attractive, we could reach at an agreement," he added. Mr. Rodriguez, who met with Argentine President Nestor Kirchner Thursday night, said PDVSA's main goal in Argentina is to do business with Enarsa, the state-owned energy company that Kirchner plans to start up in the next few months. The PDVSA-Enarsa "alliance" is part of a plan by the Argentine and Venezuelan governments to create "Petrosur," a state-owned regional oil company that Brazil's Petrobras and Bolivia's Yacimientos Petroliferos de Bolivia (YPFB) have been invited to join. The creation of Enarsa, 65% of which will be owned by Argentina, was approved by the Senate in late August and is now being studied by the Chamber of Deputies. Business News Americas reported last month that PDVSA director Victor Alvarez confirmed PDVSA is keen on acquiring Shell's Argentine unit. *********** 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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