/raid1/www/Hosts/bankrupt/TCRLA_Public/041125.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, November 25, 2004, Vol. 5, Issue 234
Headlines
A R G E N T I N A
CARAUATA S.R.L.: Court Order Makes Bankruptcy Official
CIA ARGENTINA: Liquidating Assets to Pay Debts
COEUR D'ALENE: Issues Comments on Polimet Investigation
KRISTEL FOODS S.A.: Court Rules for Liquidation
LINEA VANGUARD: Enters Bankruptcy on Court Orders
MERION S.A.: Claims Verification Period Ends Monday
O.I.P. S.A.: Trustee to Wrap-Up Claims Review
PERSA DE CAPITALIZACION: Claim Validation Cut-Off Nears
RAMUL S.R.L.: Court Approves Bankruptcy Motion
ROYAL SHELL: Sells Argentine Stake at a Loss
SAENZ Y ARANEO: Court Converts Liquidation to Reorganization
B R A Z I L
BANCO SANTOS: Fitch Comments on System After Intervention
VARIG: Presents New Debt Offer to Renegotiate Infraero Debts
C H I L E
ENAMI: To Hold Technology Transfer Competition
C O L O M B I A
BANCAFE: Expert Advises Against Conversion
C O S T A R I C A
RICA FOODS: Appoints New Director, Audit Committee Member
D O M I N I C A N R E P U B L I C
TRICOM: Economic Improvement Helps Bolster 3Q Results
E C U A D O R
PACIFICTEL: Forecasts Increased Profits by Year End
E L S A L V A D O R
BANCO DE COMERCIO: Scotiabank Offers to Purchase All Shares
G R E N A D A
* GRENADA: IMF Presents Macroeconomic Outlook
H O N D U R A S
* HONDURAS: IMF Lauds Govt's Economic Programs
M E X I C O
LUZ y FUERZA: Government to Allocate $2.4B in Subsidies
MINERA AUTLAN: Publicly Held Shares to Trade Again This Week
TV AZTECA: To Prepay $300M Worth of Guaranteed Senior Notes
V E N E Z U E L A
PDVSA: Appointment of New Head Gets Mixed Reactions
PDVSA: To Transfer $3.5B to Social Fund Next Year
- - - - - - - - - - -
=================
A R G E N T I N A
=================
CARAUATA S.R.L.: Court Order Makes Bankruptcy Official
------------------------------------------------------
Carauata S.R.L. enters bankruptcy protection after Court No. 12
of Buenos Aires' civil and commercial tribunal, with the
assistance of Clerk No. 24, ordered the company's liquidation.
The order effectively transfers control of the company's assets
to a court-appointed trustee who will supervise the liquidation
proceedings.
Infobae reports that the court selected Mr. Hugo Daniel Pantaleo
as trustee. He will be verifying creditors' proofs of claims
until the end of the verification phase on February 8, 2005.
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 March 22, 2005 followed by the general report that is due on
May 5, 2005.
CONTACT: Mr. Hugo Daniel Pantaleo, Trustee
Avda Corrientes 1450
Buenos Aires
CIA ARGENTINA: Liquidating Assets to Pay Debts
----------------------------------------------
Buenos Aires-based Cia Argentina de Construcciones (Com. Ar.Co.)
S.A.I.C.F.e.I. will begin liquidating its assets following the
bankruptcy pronouncement issued by Court No. 17 of the city's
civil and commercial tribunal.
Local news source Infobae reports that the bankruptcy ruling
places the company under the supervision of court-appointed
trustee Mario Jasatzky. The trustee will verify creditors'
proofs of claims until December 20. The validated claims will be
presented in court as individual reports on March 10, 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 May 9, 2005.
CONTACT: Mr. Mario Jasatzky, Trustee
Cerrito 228
Buenos Aires
COEUR D'ALENE: Issues Comments on Polimet Investigation
-------------------------------------------------------
Coeur d'Alene Mines Corporation (the "Company") learned on
November 19, 2004 that its wholly owned subsidiary, Compania
Minera Polimet S.A. ("Polimet"), the owner of the Martha mine,
is being investigated by Argentine governmental agencies. Based
on discussions between the Company's counsel and governmental
authorities, the Company currently believes that the
investigation relates to operations carried out by the
predecessor owner of Polimet. In particular, the Company
understands that the investigation may focus on shipments of ore
from the Martha mine made by the predecessor owner of Polimet in
2001 and early 2002, and whether such shipments complied with
applicable export control laws. The Company purchased the stock
of Polimet in April 2002.
At this point, neither the Company, Polimet nor any officer or
director has been served with any complaint or subpoena, given
any official written notice or formally charged with any
offense. Consequently, the Company cannot state with certainty
or specificity any allegations that may ultimately be brought
against the Company, Polimet or their individual directors or
officers, or what remedies may ultimately be sought or obtained
against the Company. If the Company suffers any losses or
damages related to operation of the Martha mine prior to the
Company's ownership, the Company will pursue indemnification
against the predecessor owner of Polimet.
The Company believes it has fully complied with Argentine law
since it acquired the Martha mine. If the Company or Polimet is
formally charged or notified of a pending action, the Company
will cooperate fully with the Argentine government authorities
to resolve the matter.
CONTACT: Coeur D'Alene Mines Corp.
400 Coeur d'Alene Mines Bldg.
505 Front Ave.
P.O. Box I
Coeur d'Alene, ID 83816-0316
USA
KRISTEL FOODS S.A.: Court Rules for Liquidation
-----------------------------------------------
Court no. 11 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Kristel Foods S.A. after the company
defaulted on its debt obligations, Infobae reveals. The
pronouncement effectively places the company's business affairs,
as well as its assets, under the control of Mr. Hugo Adrian
Zaragoza, the court-appointed trustee.
Mr. Zaragoza will verify creditors' proofs of claims until
February 2, 2005. The verified claims will serve as basis for
the individual reports to be submitted in court on March 16,
2005. The submission of the general report follows on April 29,
2005.
The city's Clerk No. 21 assists the court on this case that will
end with the disposal of the company's assets to repay its
debts.
CONTACT: Mr. Hugo Adrian Zaragoza, Trustee
25 de Mayo 596
Buenos Aires
LINEA VANGUARD: Enters Bankruptcy on Court Orders
-------------------------------------------------
Court No. 19 of Buenos Aires' civil and commercial tribunal
declared Linea Vanguard S.A. bankrupt. The bankruptcy order
effectively places the company's affairs as well as its assets
under the control of court-appointed trustee Carlos Daniel
Brzezinski.
As trustee, Mr. Brzezinski is tasked with verifying the
authenticity of claims presented by the company's creditors. The
verification phase is ongoing until March 2, 2005.
Following claims verification, the trustee will submit the
individual reports based on the forwarded claims for final
approval by the court on April 15, 2005. A general report will
also be submitted on May 20, 2005.
Infobae reports that Clerk No. 37 assists the court on this case
that will end with the disposal of the company's assets in favor
of its creditors.
CONTACT: Mr. Carlos Daniel Brzezinski, Trustee
Lambare 1140
Buenos Aires
MERION S.A.: Claims Verification Period Ends Monday
---------------------------------------------------
Accounting firm "Estudio Carocuccioletta-Fernandez" will
authenticate proofs of claim submitted in connection with the
Merion S.A. bankruptcy until Monday, November 29, 2004.
Failure to comply with the verification deadline will mean
disqualification from the post-liquidation distributions that
will be made.
Court no. 5 of La Plata's civil and commercial tribunal handles
this case.
CONTACT: "Estudio Carocuccioletta - Fernandez"
Trustee
Calle 12 Nro. 1419
La Plata
O.I.P. S.A.: Trustee to Wrap-Up Claims Review
---------------------------------------------
The verification period for the O.I.P. S.A. liquidation case
will end on Monday, November 29, 2004. Creditors with
outstanding claims against the Company must submit proof of the
debts to trustee Juana Bilenca by the said date in order to
qualify for any post liquidation distributions.
Court no. 24 of Buenos Aires' civil and commercial tribunal has
jurisdiction over this bankruptcy case.
CONTACT: Ms. Juana Bilenca, Trustee
Lavalle 1675
Buenos Aires
PERSA DE CAPITALIZACION: Claim Validation Cut-Off Nears
-------------------------------------------------------
Mr. Daniel Alberto Zukerman, the trustee supervising the
liquidation of Persa de Capitalizacion y Ahorro S.A., will close
the verification of creditor's claims on Monday, November 29,
2004. All required documents must be presented to the trustee by
the said date to qualify for any post liquidation distributions.
Court No. 4 of Bahia Blanca's civil and commercial tribunal has
jurisdiction over this case. The city's Clerk No. 8 assists the
court with the proceedings.
CONTACT: Persa de Capitalizacion y Ahorro S.A.
Moreno 9
Bahia Blanca
Mr. Daniel Alberto Zukerman, Trustee
Rodriguez 118
Bahia Blanca
RAMUL S.R.L.: Court Approves Bankruptcy Motion
----------------------------------------------
Court No. 19 of Buenos Aires' civil and commercial tribunal
declared Ramul S.R.L. bankrupt, says La Nacion. The ruling comes
in approval of the bankruptcy petition filed by the Company's
creditor, Ogden Rural S.A., for nonpayment of US$19,800.00 in
debt. The city's Clerk No. 38 assists the court on the case that
will conclude with the liquidation of the Company's assets.
CONTACT: Ramul S.R.L.
Santa Fe 3313
Buenos Aires
ROYAL SHELL: Sells Argentine Stake at a Loss
--------------------------------------------
Royal Dutch/Shell has sold its sole interest in a natural gas
field in Argentina to domestic oil firm CGC as part of its plan
to exit the Latin American market. The deal, according to El
Cronista newspaper, was finalized last year but was not
disclosed until now. The paper suggested that Shell sold at a
loss its 51.25% stake in northern Argentina's Valle Morado
field.
Under the terms of the deal, Shell will receive US$750,000 for
the stake, which it purchased from CGC in 1998 for US$111
million, along with a commitment to invest an additional US$75
million in operations.
According to the latest financial statements, released in March,
CGC took over ownership of Valle Morado and paid Shell
US$100,000 in cash. The balance will be due 181 days after the
start of production at any of the wells of Valle Morado, located
in the northern Argentine province of Salta, near Bolivia.
SAENZ Y ARANEO: Court Converts Liquidation to Reorganization
------------------------------------------------------------
Saenz y Araneo S.A. will proceed with reorganization after Court
No. 10 of Mar del Plata's civil and commercial tribunal
converted the Company's ongoing bankruptcy case into a "concurso
preventivo", states Infobae.
Under insolvency protection, the Company will be able to draft a
proposal designed to settle its debts with creditors. The
reorganization also prevents an outright liquidation.
Ms. Dina Pierina Sacchet, the court-appointed trustee, will
supervise the reorganization proceedings.
CONTACT: Saenz y Araneo S.A.
Malvinas 2127
Mar del Plata
===========
B R A Z I L
===========
BANCO SANTOS: Fitch Comments on System After Intervention
---------------------------------------------------------
On the night of Nov. 12, 2004, the Brazilian Central Bank
intervened at Banco Santos S.A. (Santos) and one of its
subsidiaries, Santos Corretora de Valores Mobiliarios S.A. Fitch
Ratings believes that the points that the Brazilian Central Bank
mentioned as causing them to intervene in Santos, as mentioned
in the following paragraphs, are unique to that bank, and as a
result, Fitch believes that the regulator will continue to
monitor and track the financial soundness of the system.
On Nov. 16, the Securities and Exchange Commission (CVM)
determined that withdrawals from the funds managed by Santos
Asset Management (SAM), a wholly owned asset management
subsidiary, would be suspended for up to 30 days to prevent
shareholders who continued to have investments in these funds
from suffering losses at the hands of those who effected
redemptions in days following the bank's intervention.
Since the intervention in Santos, Fitch has been monitoring the
risk of a potential systemic contamination, driven by investor
sentiment. In times of uncertainty, investors tend to reduce
their tolerance for risk and may re-allocate deposits,
channeling these resources to institutions that are considered
to have a stronger credit profile, as well as to banks that
benefit from the implicit support from the federal government or
from strong shareholders. This risk is particularly accentuated
among small and mid-sized banks, which normally present
important liability concentrations, making them more vulnerable
to so-called 'flight to quality.' Fitch has observed this effect
in this segment but at a level still considered manageable,
although quite tight in a few isolated cases. Part of the
deposit movements seen to date stem from investors that, with
their liquidity frozen in the intervened bank, effect
withdrawals at other institutions to be able to honor their
commitments.
A review of the small and mid-sized banks that have ratings
assigned by Fitch indicates that a number of them had for some
time already been maintaining higher liquidity than usual to be
able to face expected or unexpected turbulence. Fitch's
monitoring of these institutions has demonstrated that they have
maintained a liquidity cushion of between 13% and 110% of their
equity, or the equivalent of 4% to 70%, respectively, of their
time deposits. In addition, most small and mid-sized banks have
been more stringent in approving new loans, which, together with
their shorter maturities, is more favorable to their cash
positions. Among the factors that have helped to mitigate the
market effects of the Santos intervention, Fitch cites the
overall liquidity situation in the Brazilian market and the
perception by the regulatory authority of a potential liquidity
shortage among small and mid-sized banks. To forestall this
eventuality, the Brazilian Central Bank, on Nov. 19, changed the
regulations on reserve requirements against deposits, releasing
up to BRL300 million of the funds each banking institution has
on deposit with it.
In Fitch's opinion, a concern that has not been mentioned nor
adequately perceived by the market is the fact that the
companies that had credit limits with Santos will have to
quickly obtain new lines from other banks. Fitch understands
that in a bank intervention, the authorities will require that
valid contracts be honored, i.e. that lines be paid at maturity,
as they will not be able to roll over these lines of credit.
This is, in fact, more delicate, since in Santos' business
niche, it is common for borrowers to also be depositors either
in the financial institutions that concede them lines or in
their affiliates or to other group companies. Since Brazilian
legislation in the case of intervention of a financial
institution does not explicitly provide for the offsetting of a
company's debts against any deposits/assets it holds at the
banking institution (netting), these companies not only need to
obtain new resources from other banks but they also cannot fall
back on their liquidity cushion applications in the bank under
intervention. Fitch is analyzing the potential impact of these
factors on all of its public ratings.
With respect to Santos, deposits are covered by a federal
guarantee (Credit Guarantee Fund [FGC]) for up to BRL20,000 per
customer. The funds managed by SAM, in the amount of BRL2.5
billion, based on October 2004 data of the National Association
of Investment Banks (Anbid), do not enjoy such a guarantee. By
law, such funds can invest up to 20% of their net assets in the
bank's CD's, which was probably utilized. Few financial
institutions maintained deposits in Santos and/or the investment
funds of its asset manager. Investors in SAM's mutual funds are
said to be mainly pension funds, other institutional investors,
and municipalities.
Foreign trade lines may receive different treatment. Provided
the export financing line (ACC/ACE) has been recorded in the
exchange contract, as provided for in Law 9450, any amount
received by the bank under intervention in payment of this
exchange contract, whether from an underlying foreign collection
or from a judicial or amicable collection received from the
exporter, the proceeds will be obligatorily destined to pay the
bank that financed the operation. Fitch points out that
institutions providing such financing could, then, face two
risks: a multiplicity of financing in the event the assets and
liabilities relative to export financing operations were not
perfectly matched at the institution under intervention and the
fact that the market in general has made little use of this
facility. Nevertheless, should one of these situations occur,
the Brazilian authorities, as on previous occasions, could
effect the payments, perhaps with some delay, to maintain
confidence in trade financing. Import financing lines can be
paid with greater agility, since the Brazilian Central Bank
considers that the financial institution merely acts as an
intermediary transferring the resources in such financing. This
being the case, provided the Brazilian importer effects payment,
the interventor will arrange payment to the financing bank
overseas.
External securities issuances (bonds) will be included in
general obligations of the bankrupt estate, as will demand,
savings, and time deposits. Not only is the bankruptcy process
generally drawn out, but it is also difficult to assess the
degree of expected recovery, given the little data available
currently. However, information provided by the Brazilian
Central Bank that the bank allegedly had a negative net worth of
BRL100 million, initially indicates that the percentage of
losses to be divided among the creditors would be low should all
Santos' assets be honored by its debtors. Nevertheless, Fitch
believes that with intervention, the potential for additional
loan losses will be substantially larger and, as a result, the
negative net worth will increase, since, as mentioned before,
creditors are likely to present problems.
Another concern relates to the very high amount of lines made
available to Santos by BNDES, the Brazilian national development
bank, (approximately BRL1 billion) that represent Banco Santos
risk. Nevertheless, in its financing, BNDES enjoys a subrogation
of rights, i.e. in the event of the bankruptcy of the BNDES on-
lending agent, the flows resulting from the financing using such
funding do not enter the bankrupt estate but are repaid to BNDES
in accordance with Law 9365, which clearly leaves BNDES in the
role of a senior creditor. On Nov. 18, 2004, BNDES informed the
market that all payments relative to past due installments as of
Nov. 12, 2004 related to BNDES on-lending or Finame lines made
available by Santos to its clients must be paid directly to
BNDES through an account opened at Banco do Brasil. In a similar
case that occurred in the second half of 2003 (Banco Royal,
BRL300 million in BNDES lines), BNDES has informed us that it
has experienced no problems receiving repayments, which have
been made in accordance with the contracts. However, in this
case as well, Fitch believes that Santos' debtors can be
expected to experience varying degrees of difficulty in making
the payments owed, which could occasion losses for BNDES. Fitch
will continue to monitor the performance of BNDES' lines and the
potential impact on its credit profile.
Following contact with the market after the intervention, Fitch
believes that the recent event should not set off a chain of
more perverse systemic effects. The financial system currently
has liquidity and some small and mid-sized banks, which are more
likely to be suspect in the eyes of institutional investors,
anticipated the action of Central Bank, strengthening their
liquidity reserves. Fitch is also comfortable that the regulator
will continue to be vigilant and willing to provide liquidity to
the market if necessary. Fitch believes there are undoubtedly
isolated cases of liquidity pressure, and Fitch will continue to
be on guard, adjusting ratings whenever necessary.
In Fitch's view, the points that the Brazilian Central Bank
mentioned as causing them to intervene in Santos are unique to
that bank, and Fitch believes that the regulator will continue
to monitor and track the financial soundness of the system. In
other institutions analyzed by Fitch, risk factors and rating
limitations - reflected in the ratings assigned - do exist, but
they have not all been observed at the same time in the same
entity at any of the banks analyzed. In Fitch's opinion, the
easing of regulation on compulsory deposits on Nov. 19 was a
crucial measure and has relieved liquidity pressures for the
small and medium-sized financial institutions. Nevertheless,
given the tension, volatility and stress experienced by the
Brazilian financial market in the past week, market sentiment
and investor behavior could overcome credit fundamentals.
CONTACT: Rafael Guedes +55-11-4504-2600, Sao Paulo
Peter Shaw +1-212-908-0553, New York
Maria Rita Gonçalves, Rio de Janeiro +55-21-4503-2600
MEDIA RELATIONS: Jaqueline Carvalho +55-21-4503-2623, Rio de
Janeiro
Kenneth Reed +1-212-908-0540, New York
VARIG: Presents New Debt Offer to Renegotiate Infraero Debts
------------------------------------------------------------
Heavily indebted Brazilian air transportation company Varig
outlined a new and improved proposal for the renegotiation of
its BRL148-million debt with the state-run airport authority
Infraero.
Under the new offer, Varig proposes the immediate payment of at
least 15% - 20% of the debt accumulated this year. The new
proposal will be submitted to the Infraero's board of directors.
Infraero has threatened to lodge legal action against Varig due
to non-payment of airport fees.
The Brazilian Congress has issued a warning that Varig is edging
toward bankruptcy as a result of its increasingly complex
financial crisis. Varig, Brazil's largest domestic carrier, has
negative equity of BRL7 billion (close to $2.5 billion),
according to its creditors.
The lawmakers have stated their intention to present the
Brazilian government with a new strategy to rescue the troubled
carrier.
Meanwhile, the Brazilian administration led by president (Luiz
Inacio Lula da Silva has also promised to present its own
restructuring plan for the Company but warned it would not
contribute funds in vain and would ask Varig's largest
shareholder, the Ruben Berta Foundation, to hand over control of
the carrier.
The foundation is employee-controlled.
CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.)
Rua 18 de Novembro No. 800, Sao Joao
90240-040 Porto Alegre,
Rio Grande do Sul, Brazil
Phone: (51) 358-7039/7040
(51) 358-7010/7042
Fax: +55-51-358-7001
Home Page: www.varig.com.br/english/
Contacts:
Dorival Ramos Schultz, EVP Finance and CFO
E-mail: dorival.schultz@varig.com.br
Investor Relations:
Av. Almirante Silvio de Noronha,
n 365-Bloco "B" - s/458 / Centro
Rio de Janeiro, Brazil
=========
C H I L E
=========
ENAMI: To Hold Technology Transfer Competition
----------------------------------------------
Enami, Chile's national mining company, is inviting small mining
companies to participate in a competition to propose technology
transfer projects in metallic and non-metallic mines and plants
to be developed in 2005, reports Business News Americas.
Those eligible to compete are small mining companies whose
production does not exceed 10,000t/m. Enami said entry forms are
available at the company's offices throughout the country.
Interested companies can also join by contacting Enami through
the mineria@enami.cl
Entries will be accepted until December 27, 2004.
===============
C O L O M B I A
===============
BANCAFE: Expert Advises Against Conversion
------------------------------------------
Banco Mundial de la Mujer president Nancy Barry said that state-
controlled Bancafe may not be equipped to function as a federal
bank specializing in SME financing, reports Business News
Americas. Ms. Barry adds that Colombia's financial system
already serves the SME segment efficiently, a feat that a state-
run bank may not be able to duplicate.
The comment comes after Colombian President Alvaro Uribe
announced plant to merge the bank with Granahorrar. Bancafe's
assets worth US$2.7 billion as of August 2004 places it as the
third largest bank in the country's financial system.
===================
C O S T A R I C A
===================
RICA FOODS: Appoints New Director, Audit Committee Member
---------------------------------------------------------
Rica Foods, Inc. (Amex: RCF) (the "Company") has announced that,
on November 23, 2004, the Board of Directors, upon the
recommendation of the Governance and Nominating Committee,
appointed Silvana I. Carmelino to the Company's Board of
Directors and Audit Committee to fill the vacancy created by the
resignation of Federico Vargas. There are no arrangements or
understandings pursuant to which Ms. Carmelino was selected as a
director.
The Company has previously reported that it received a warning
letter from the staff of the American Stock Exchange (the
"AMEX") advising the Company that, due to the resignation of Mr.
Vargas, the Company was not in compliance with the continued
listing standard described in Section 121(B)(2)(a) of the AMEX
Company Guide, which requires that an Audit Committee have three
members. The Company believes that, in light of the appointment
of Ms. Carmelino to the Audit Committee, the Company has
regained compliance with Section 121(B)(2)(a) of the AMEX
Company Guide.
About Rica Foods Incorporated
The Group's principal activities are to produce and sell fresh
and frozen poultry, processed chicken products, commercial eggs
and concentrate for livestock and domestic animals production
and distribution of animal feeds. The operations of the Group
are principally conducted through two wholly owned companies,
Corporacion Pipasa SA and Corporacion As de Oros SA. The Group
operates 27 fried chicken quick service restaurants in Costa
Rica called Restaurantes As and Don Amado. The Group's main
brand names for broiler chicken, chicken parts, mixed cuts and
chicken breasts are Pipasa and As de Oros. Chicken by-products
include sausages, bologna, chicken nuggets, chicken patties,
frankfurters and pate. The Group also distributes commercial
eggs, fertile eggs and recycling material. Broiler accounted for
52% of fiscal 2002 revenues; Animal feed, 20%; By-products, 11%;
Quick service, 4%; Exports, 6% & Other, 7%.
CONTACT: Rica Foods, Inc.
1840 Coral Way
Suite 115
Miami, FLORIDA 33145
+1 305 858-9480
+1 305 365-9399
E-mail: mmarenco@ricafoods.com
URL: http://www.ricafoods.com
===================================
D O M I N I C A N R E P U B L I C
===================================
TRICOM: Economic Improvement Helps Bolster 3Q Results
-----------------------------------------------------
Tricom, S.A. (OTC Pink Sheets: TRICY) announced Tuesday
consolidated unaudited financial results for the third quarter
and first nine months of 2004. The Company's third quarter
financial results reflect increased subscriber growth in its
core domestic businesses, as well as improved macroeconomic
activity, including the positive impact of the appreciation of
the value of the Dominican peso with respect to the U.S. dollar.
At September 30, 2004, the value of the Peso with respect to the
Dollar appreciated by close to 30 percent versus its value at
June 30, 2004. Notwithstanding recent improvements in the value
of the Dominican Peso, financial results for the first nine
months of the year were adversely impacted by currency
devaluation, affecting the translation of Dominican peso-
generated revenues into U.S. dollars.
"We are pleased to report the first year-over-year quarterly
revenue growth the Company has experienced in two years," said
Carl Carlson, Chief Executive Officer. "During the third
quarter, we experienced some improvement in the Dominican
economy, which positively impacted our results. The real
accomplishments, though, are evident in our operational results,
as we experienced strong line sales and mobile subscriber
additions, improved customer retention and decreased churn,
continued capital expenditure optimization and improved
liquidity," added Carlson.
Operating revenues increased by 5.3 percent to $49.2 million for
the 2004 third quarter, primarily driven by domestic telephony
and mobile services and offset by lower long-distance revenues.
For the first nine months of 2004, operating revenues from
continuing operations totaled $133.5 million, an 11.6 percent
decrease from the same period in 2003.
Long-distance revenues decreased by 22.4 percent to $17.3
million during the 2004 third quarter, and by 19.8 percent to
$54.7 million during the first nine months of the year,
primarily due to lower international long-distance traffic
derived from the Company's U.S.-based wholesale and retail
operations, coupled with lower average termination rates to the
Dominican Republic. Long-distance revenue growth was also
adversely impacted by the effects of currency devaluation on
outbound international and domestic long-distance revenues
generated by the Company's retail call centers and prepaid
cards, offset in part by higher prepaid cards sales in the
Dominican Republic.
Domestic telephony revenues totaled $18.2 million in the 2004
third quarter, a 34.9 percent increase from the 2003 third
quarter, primarily as a result of increased sales and better
pricing, together with the positive impact of the appreciation
of the average value of the Dominican peso during the third
quarter. For the first nine months, domestic telephony revenues
decreased 5.4 percent to $43.8 million, principally due to
currency devaluation, impacting the conversion of peso-
denominated domestic telephony revenues. At September 30, 2004,
the Company had approximately 153,000 lines in service, a 14.6
percent decrease from lines in service at September 30, 2003.
The reduction of lines in service reflects a program to reduce
low-use customers, implemented during the fourth quarter of
2003. New line sales totaled approximately 34,000 during the
first nine months of 2004 compared to 25,000 during the first
nine months of 2003. Net line additions totaled approximately
11,000 during the first nine months of 2004, compared to a net
decline in lines of approximately 15,000 lines during the same
period in 2003.
Mobile revenues increased by 33.2 percent to $8.8 million in the
2004 third quarter from revenues for the 2003 third quarter,
primarily driven by higher airtime minutes, despite a lower
average mobile subscriber base, coupled with the positive impact
of the appreciation of the average value of the Dominican peso
during the 2004 third quarter. For the first nine months of the
year, mobile revenues decreased by 1.1 percent to $22.3 million
from mobile revenues in 2003, mainly due to the devaluation of
the Dominican peso.
Mobile subscribers at September 30, 2004, decreased by 18.9
percent, totaling approximately 333,000. The decrease in mobile
subscribers is primarily due to Company-driven disconnections of
approximately 200,000 "incoming-call"-only subscribers during
the 2004 first quarter. During the first nine months of the
year, the Company has added approximately 219,000 gross mobile
subscribers, and approximately 99,000 net mobile subscribers,
excluding the Company-driven disconnections.
Cable revenues increased by 11.6 percent to $3.4 million for the
2004 third quarter and decreased by 14.4 percent to $9.1 million
for the first nine months of the year from the 2003 periods. The
increase in cable revenues during the 2004 third quarter is
primarily attributed to higher monthly cable service fees,
together with the positive impact of the appreciation of the
average value of the Dominican peso. The decline in cable
revenues during the first nine months of the year is mainly due
to currency devaluation, coupled with a lower average cable
subscriber base. At September 30, 2004, cable subscribers
totaled approximately 59,000, a 17.6 percent decrease from cable
subscribers at September 30, 2003. The decline in cable
subscribers is primarily attributable to a weak economic
environment. In an effort to reduce churn and increase customer
satisfaction, the Company instituted a number of customer care
and retention programs during the first nine months of the year.
As a result, the Company's average monthly churn rate for cable
television services declined to 1.7 percent during the 2004
third quarter, compared to 4.0 percent during the 2003 third
quarter. During the first nine months, the Company's average
monthly churn rate for cable television services declined to
1.8 percent from 4.2 during the same period in 2003.
Data and Internet revenues increased by 24.9 percent to $1.4
million for the 2004 third quarter, and by 5.6 percent to $3.6
million for the first nine months of the year, compared to the
same periods during 2003. The increase in data and Internet
revenues is mainly due to the growth of the Company's data and
Internet subscriber base. At September 30, 2004, data and
Internet access accounts totaled approximately 15,000,
representing a 43.5 percent increase from data and Internet
subscribers at September 30, 2003. Broadband Internet service
subscribers, excluding cable modem service subscribers, grew by
approximately 126 percent year-over-year.
Consolidated operating costs and expenses increased by 20.1
percent to $62.5 million in the 2004 third quarter, and
increased by 3.6 percent to $168.8 million during the first nine
months of 2004, compared to the same periods during 2003. The
increase in consolidated operating costs and expenses primarily
resulted from higher cost of sales and services, increased non-
cash depreciation and amortization charges, and, during the
third quarter, increased selling, general and administrative
(SG&A) expenses. Consolidated operating costs and expenses for
the first nine months of 2004 also reflect legal and advisory
expenses related to the Company's financial restructuring
efforts.
Cost of sales and services increased by 24.6 percent to $24.2
million during the 2004 third quarter, and by 5.0 percent to
$67.3 million during the first nine months of the year,
primarily due to higher transport and access charges despite
lower volumes of international long-distance traffic as a result
of higher domestic interconnection rates, offset by lower cable
programming fees. Interconnection rates in the Dominican
Republic are established in Dominican peso but subject to change
semiannually based on the U.S. dollar exchange rate variation.
SG&A expenses increased by 6.1 percent to $15.2 million in the
2004 third quarter, due to higher building occupancy costs,
primarily from public utilities and maintenance expenses, and
severance payments. SG&A expenses decreased 13.5 percent from
the first nine months of 2003 to $37.8 million during the first
nine months of 2004. The decrease in SG&A expenses in the first
nine months of 2004 resulted primarily from expense reduction
efforts, as well as lower Dominican peso-denominated expenses
resulting from currency devaluation. Depreciation and
amortization expenses increased by 15.1 percent to $20.9 million
during the 2004 third quarter, and by 3.4 percent to $57.1
million during the first nine months of the year. The increase
in non-cash depreciation and amortization charges is due to a
shorter estimated life of the Company's depreciable asset base
following its 2003 year-end asset impairment analysis.
Interest expense totaled approximately $15.0 million during the
2004 third quarter and $44.4 million during the first nine
months, compared to $15.2 million and $46.9 million respectively
in the 2003 periods. The Company suspended principal and
interest payments on its unsecured debt obligations and
principal payments on its secured indebtedness beginning in
October 2003. The Company recorded $4.0 million in foreign
currency exchange losses during the 2004 third quarter
attributed to the impact of the appreciation of the average
value of the Dominican peso on the Company's peso-denominated
liabilities. Foreign currency exchange losses during the first
nine months of the year totaled $2.1 million.
In 2003, the Company recognized losses from discontinued
operations in Central America totaling $2.0 million for the
third quarter and $5.9 million during the first nine months.
Net loss totaled $27.4 million, or $0.42 per share for the 2004
third quarter, compared to a net loss of $21.3 million, or $0.33
per share during 2003 third quarter. Net loss for the first nine
months of 2004 totaled $77.0 million, or $1.19 per share,
compared to a net loss of $62.8 million, or $0.97 per share
during the year-ago period.
Total debt, including capital leases and commercial paper,
amounted to $452.7 million at September 30, 2004, compared to
$449.3 million at December 31, 2003. Total debt included $200
million in principal amount of 11-3/8 percent Senior Notes due
in September 2004, approximately $35.8 million of secured debt
and approximately $216.9 million of unsecured bank and other
debt.
At September 30, 2004, the Company had approximately $17.9
million of cash on hand. For the nine months ended September 30,
2004, the Company's net cash provided by operating activities
totaled approximately $16.2 million, compared to net cash
provided by operating activities of $9.9 million for the year-
ago period.
Capital expenditures decreased by 71.8 percent to $3.6 million
during the 2004 third quarter from $12.8 million during the 2003
third quarter and decreased by 49.7 percent to $5.9 million
during the first nine months from $11.8 million during the first
nine months of 2003.
In light of its current market conditions, its ongoing funding
needs, and inability to service its debt, the Company has taken
steps to conserve cash and focus its efforts and resources on
its core businesses, including the aforementioned moratorium of
capital and interest payments to lenders, the appointment of
Chief Restructuring Officer in December 2003, the reduction
capital expenditures, as well as the divestment of its non-
strategic Central American trunking assets.
As previously announced, due to the failure to pay interest on
its indebtedness, the Company has defaulted with respect to
outstanding indebtedness of approximately $400 million in
principal amount as of September 30, 2004. The Company has
engaged in discussions with the holders of its indebtedness,
which includes an ad hoc committee of holders of its 11-3/8
percent Senior Notes due 2004, regarding an agreement on a
consensual financial restructuring of its balance sheet.
Although there is no assurance that such an agreement will
occur, the Company is optimistic that these negotiations will
lead to a consensual agreement in the near term. The Company's
future results and its ability to continue operations will
depend on the successful conclusion of the restructuring of its
indebtedness.
Since these negotiations are ongoing, the treatment of the
Company's existing secured and unsecured lenders, as well as the
interest of its existing shareholders, are uncertain at this
time. Accordingly, investors in the Company's debt and equity
securities may be substantially diluted or lose all or
substantially all of their investment in the Company's
securities.
KPMG Dominican Republic, Tricom's independent auditor, advised
the Board of Directors on October 28, 2004, that KPMG LLP
(United States) has decided to hold their consent for the filing
of Tricom's Form 20-F for the year ended December 31, 2003,
pending further clarification of the purchase, in December 2002,
of 21,212,121 shares of Tricom's Class A common stock by a group
of investors for an aggregate purchase price of approximately
US$70 million, with funds loaned to the investors by a bank
formerly affiliated with GFN Corp., Tricom's largest
shareholder, and related transactions. Tricom's Board of
Directors has authorized an independent review and evaluation of
the above-mentioned transaction. There cannot be any assurance
as to the findings of the investigation or the effects of these
findings on the Company's financial results reported for
previous periods.
About TRICOM
Tricom, S.A. is a full-service communications services provider
in the Dominican Republic. We offer local, long-distance,
mobile, cable television and broadband data transmission and
Internet services. Through Tricom USA, we are one of the few
Latin American-based long-distance carriers that is licensed by
the U.S. Federal Communications Commission to own and operate
switching facilities in the United States. Through our
subsidiary, TCN Dominicana, S.A., we are the largest cable
television operator in the Dominican Republic, based on our
number of subscribers and homes passed.
To view financial statements:
http://bankrupt.com/misc/TRICOM.htm
CONTACT: Miguel Guerrero, Investor Relations
Ph (809) 476-4044 / 4012
E-mail: investor.relations@Tricom.net
URL: http://www.tricom.net
=============
E C U A D O R
=============
PACIFICTEL: Forecasts Increased Profits by Year End
---------------------------------------------------
Following an intense restructuring of its business in 2004,
Ecuadorian state-run fixed line operator Pacifictel anticipates
a US$30-million profit at the end of the year, says Business
News Americas. Pacifictel chairman Pablo Chambers said the
profit will go towards paying off debt, which totals nearly
US$100 million, according to company estimates.
"In order to get out of this financial problem, we must undergo
a process that will take 2-3 years," Mr. Chambers said.
In the meantime, the company plans to launch a prepaid fixed
line service in Guayaquil next February, selling cards worth
US$10-US$30.
"For us, it is very important that users can control their
budgets. This way, we are also helping them not to lose their
lines through failure to pay bills on time," said Mr. Chambers.
=====================
E L S A L V A D O R
=====================
BANCO DE COMERCIO: Scotiabank Offers to Purchase All Shares
-----------------------------------------------------------
Scotiabank announced Tuesday its US$180 million cash offer to
purchase all shares of Banco de Comercio (BanCo) via public
offer. The US$27.75-per-share offer is open for acceptance for
seven days. The transaction announced includes the merger of
Scotiabank El Salvador and BanCo, and would see Scotiabank
significantly increase its presence in El Salvador. The merger
transaction is expected to close before March 31, 2005 and is
subject to regulatory and shareholder approvals.
"Scotiabank has deep roots and a long history in the Caribbean
and Central America, and we are proud to grow our operations in
this region, where we have been embraced as the leading bank,"
said Rick Waugh, Scotiabank President and Chief Executive
Officer. "This region is an integral part of Scotiabank's
international strategy and we have built a strong franchise by
delivering superior service and by providing financial
stability."
Scotiabank El Salvador is the fifth largest bank in the country,
with 430 employees, 20 branches and 21 automated banking
machines (ABMs) across the country.
"All of us at Scotiabank El Salvador welcome BanCo's customers
and employees into the Scotiabank family," said Luis Ivandic,
Scotiabank El Salvador President and CEO. "We are deeply
committed to providing employees with a great place to work, and
to delivering the highest level of expertise and service to our
customers."
"The Bank is known throughout the region for our stability, our
strong customer focus, and, in particular, our dedication to the
communities we serve," added Ivandic.
With the merger of Scotiabank El Salvador and BanCo, Scotiabank
will become the majority shareholder of the country's fourth-
largest bank, with a consolidated market share of more than 17
per cent. The merger will create a bank with nearly US$1.6
billion in assets.
BanCo has 1,600 employees, as well as 47 branches and 83 ABMs.
BanCo offers products and services in the personal, commercial
and corporate banking areas. BanCo is also active in the
remittance business, with 12 branches in the U.S. Through
affiliates, the bank also has a presence in the Salvadorian
insurance, factoring and leasing markets.
"BanCo's board of directors have endorsed the Scotiabank offer,
believing it is fair to BanCo's shareholders, and is in the best
interest of the company's employees and customers," said Tim
Hayward, Executive Vice President and Chief Administrative
Officer, International Banking, Scotiabank.
Scotiabank is one of North America's premier financial
institutions and Canada's most international bank. With
approximately 48,000 employees, Scotiabank Group and its
affiliates serve about 10 million customers in some 50 countries
around the world. Scotiabank offers a diverse range of products
and services including personal, commercial, corporate and
investment banking. With US$216 billion in assets (as at July
31, 2004), Scotiabank trades on the Toronto (BNS) and New York
(BNS) Stock Exchanges.
=============
G R E N A D A
=============
* GRENADA: IMF Presents Macroeconomic Outlook
---------------------------------------------
Ratna Sahay, Assistant Director-Western Hemisphere Department of
the International Monetary Fund, presented this statement
concerning Grenada's Macroeconomic Outlook during the country's
Donors' Conference:
1. Prime Minister Mitchell, distinguished guests from the donor
community, ladies and gentlemen: it is a pleasure to be back in
St. George's and to see the country getting back on its feet
after the devastation inflicted by Hurricane Ivan that we saw
during our trip in September. We are particularly impressed by
the determination of the government and the people of Grenada to
restore normalcy to their lives-schools have been reopened, a
massive clean-up of the debris has taken place, and electricity
is being restored.
2. In the past two months, the IMF team has been working closely
with the Grenadian government, and we are here to update the
macroeconomic outlook we had presented in Washington D.C. at the
first donor conference on October 4. We would also like to
reflect on the medium-term challenges facing Grenada.
3. Prior to Hurricane Ivan, the government was making progress
to restore fiscal sustainability and spur growth. The primary
fiscal balance registered a surplus in 2003-for the first time
in nearly a decade-and was projected to remain in surplus in
2004. The government had conducted a comprehensive review of tax
policy and administration, and had taken steps to curtail
exemptions. Preparations had begun to re-introduce a value-added
tax (VAT) by January 2006. A medium-term fiscal strategy to
bring debt down to more manageable levels had been approved by
the Cabinet. Real GDP was projected to grow by over 4 percent in
2004.
4. These commendable efforts were set back by Hurricane Ivan.
Real GDP is now projected to decline by 3 percent in 2004. The
overall fiscal deficit in 2004, as a share of GDP, was projected
at less than 5 percent before the hurricane struck-it is now
expected to exceed 9 percent. The loss of foreign exchange
earnings from tourism and agricultural products is also
anticipated to be high, about 6 percent of GDP.
5. The government has responded swiftly to these challenges.
Nonessential budgetary expenditures have been streamlined and
US$15 million (nearly 3 percent of GDP) of capital expenditures
have been reoriented from existing projects to more pressing
reconstruction and rehabilitation needs. The Customs' collection
system, including physical infrastructure which was heavily
damaged, is being restored. Efforts are also being made to
ensure that insurance claims are processed efficiently.
6. In anticipation of the donor flows and the large
reconstruction needs, the authorities have set up the Agency for
Reconstruction and Development, headed by Sir Alister McIntyre.
A Reconstruction Fund will be established by an Act of
Parliament and will be subject to independent audits. These two
steps will go a long way in providing reassurance to the donor
community that inflows will be channeled efficiently and
transparently. We strongly encourage the government to reflect
the financial operations of the Agency transparently in the
government's budget.
7. It is encouraging to note that the government has already
received significant support from regional, bilateral, and
multilateral donors. In this context, we are pleased to report
that on November 15 the IMF approved US$4.4 million for Grenada
under the IMF's emergency assistance policy for natural
disasters. The money approved is available immediately to help
meet the country's needs. Total budgetary support from donors so
far, combined with the government's other actions that I
described earlier, has closed the budgetary gap for 2004. This
is good news.
8. Focusing on 2005, even though a small recovery is
anticipated, the outlook remains difficult. Most tourism
facilities will miss the current high season. As we all know,
nutmeg, cocoa and other crops have been largely destroyed and it
will take time to either restore their production or redirect
agriculture to alternate crops. It is no surprise therefore that
the tax base will recover only gradually. At the same time,
expenditure needs have risen as the regular functions of
government will have to be supplemented by rehabilitation and
reconstruction expenses and increased outlays for protection of
vulnerable groups. At the last donors' meeting on October 4, the
financing gap for 2005 had been estimated at 10 percent of GDP.
Since then there have been further donor pledges, and if these
are fully disbursed, the gap will narrow to about 2 percent of
GDP.
9. Looking now to the medium-term, ensuring sustainability would
require a well-designed and comprehensive macroeconomic
framework. The authorities have expressed their intention to
work closely with the IMF in developing this framework, which
would include growth-enhancing structural reforms, fiscal
consolidation, and a debt strategy. Fiscal consolidation would
include both strengthening revenues and further streamlining
expenditures. They have indicated areas for mobilizing revenues,
and stated their intention to reduce government guarantees and
cut costs in the public sector. In addition, they intend to
rationalize the tax incentive regime, which should help create a
level playing field for private sector activities.
10. Nevertheless, financing gaps for 2006 and 2007 remain large-
in excess of 6 percent of GDP-even after assuming strong policy
efforts. Closing these gaps would require further support from
the international community. The authorities have recognized
that the high level of public debt, at nearly 120 percent of
GDP, is unsustainable under the current circumstances. They
issued a press release on October 1 seeking the cooperation of
creditors as a critical element of their debt strategy which is
aimed at returning the country to a position of economic
stabilization and debt sustainability. They have started the
process of contacting official bilateral creditors and will
approach their private creditors for a cooperative solution to
their debt problems after they have secured the services of
professional legal and financial advisors.
11. There is a long road ahead in rebuilding Grenada and helping
it realize its growth potential. The steps taken by the
government and the support from the international community are
a promising start. But three aspects are needed to complete this
task: first, that the government implements strong policies;
second, that the reconstruction effort is carried out
transparently and efficiently; and third, that donors and
creditors continue to provide the requisite support. Thank you.
To view accompanying tables:
http://bankrupt.com/misc/Grenada.htm
CONTACT: IMF External Relations Department
Public Affairs:
Phone: 202-623-7300
Fax: 202-623-6278
Media Relations:
Phone: 202-623-7100
Fax: 202-623-6772
===============
H O N D U R A S
===============
* HONDURAS: IMF Lauds Govt's Economic Programs
----------------------------------------------
This statement was issued Tuesday in Tegucigalpa by an
International Monetary Fund (IMF) staff mission:
"The IMF technical mission that visited Honduras during the past
two weeks found that the government's economic program is on
track. The growth objective of 4 percent projected for this year
is likely to be achieved, inflation has moderated, and the
external position remains strong despite high oil prices.
Budgetary developments are in line with the program, including a
significant increase in anti-poverty spending, and all
quantitative program targets for end-September were met.
"The government has made significant progress toward its goal of
reaching the HIPC completion point in the first quarter of next
year. An IMF mission plans to return in early 2005 for the
second review of the PRGF program, and at that time also expects
to assess the attainment of the completion point."
CONTACTS: International Monetary Fund
External Relations Department
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
===========
M E X I C O
===========
LUZ y FUERZA: Government to Allocate $2.4B in Subsidies
-------------------------------------------------------
The Mexican government has earmarked close to US$2.4 billion for
Luz y Fuerza del Centro (LyFC) in 2005. Energy secretary
Fernando Elizondo told local paper El Economista that the amount
is intended to subsidize electricity costs.
However, state-owned oil producer Petroleos Mexicanos (Pemex)
will not get a similar break after the Institutional Revolution
Party (PRI) and Democratic Revolution Party (PRD) blocked a tax
reform package aimed at strengthening the Company's finances.
Mr. Elizondo stressed the new tax scheme's importance saying
that a refusal to make the changes could set the country
backwards. He says that Pemex will continue to improve its
operations but that without the reforms, the Company's bottom
line will be affected.
MINERA AUTLAN: Publicly Held Shares to Trade Again This Week
------------------------------------------------------------
Mexican miner Autlan plans to re-float its publicly held shares
this week, reports Reuters. Stock regulators suspended the
shares in February 2001 after Autlan failed to make a US$7-
million eurobond payment to its creditors at a time when the
Company and the general industry was experiencing difficulties.
But Autlan claims it has since overcome these difficulties and
improved its finances. For the first nine months of 2004, the
Company posted net profits of MXN138 million (US$12mn) compared
to net losses of MXN76 million in the same period last year.
Meanwhile, company chairman Jose Antonio Rivero said Autlan
expects to see a 23% increase in sales next year amid strong
steel prices.
"We are expecting sales this year of $150 million and EBITDA
(earnings before interest, taxes, depreciation and amortization)
of $40 million," said Mr. Rivero.
"Next year we expect sales of $185 million and EBITDA of $50
million," the chairman forecast.
Sales last year stood at US$83 million.
TV AZTECA: To Prepay $300M Worth of Guaranteed Senior Notes
-----------------------------------------------------------
TV Azteca, S.A. de C.V. (NYSE: TZA; BMV: TVAZTCA; Latibex:
XTZA), one of the two largest producers of Spanish language
television programming in the world, announced Tuesday that it
has submitted formal notification of the prepayment on December
23, of all its US$300 million 10 1/2% Series B Guaranteed Senior
Notes due February 15, 2007. The notification, submitted to
bondholders, is based on the terms of the indenture governing
the notes. The notes are callable at a price of 101.75 up to
February 15, 2005.
As previously announced, the resources for the prepayment of the
notes will come from the execution of a committed secured credit
line denominated in pesos with Banco Inbursa, S.A., from the
issuance of Structured Securities Certificates in the Mexican
debt markets, or from a combination of both.
"The new sources of financing represent extended maturities with
gradual payment schedules, further enhancing our progressive
debt reduction efforts," said Carlos Hesles, Chief Financial
Officer of TV Azteca. "Additionally, the peso denominated
facilities and an anticipated improvement in financial cost
conditions, support solid and more predictable bottom line
results going forward."
Company Profile
TV Azteca is one of the two largest producers of Spanish
language television programming in the world, operating two
national television networks in Mexico, Azteca 13 and Azteca 7,
through more than 300 owned and operated stations across the
country. TV Azteca affiliates include Azteca America Network, a
broadcast television network focused on the rapidly growing US
Hispanic market; and Todito.com, an Internet portal for North
American Spanish speakers.
CONTACTS: Investor Relations:
Mr. Bruno Rangel
Phone: 5255 1720 9167
e-mail: jrangelk@tvazteca.com.mx
Mr. Omar Avila
Phone: 5255 1720 004
e-mail: 1oavila@tvazteca.com.mx
Media Relations:
Mr. Tristan Canales
Phone: 5255 1720 5786
e-mail: tcanales@tvazteca.com.mx
Mr. Daniel McCosh
Phone: 5255 1720 0059
e-mail: dmccosh@tvazteca.com.mx
=================
V E N E Z U E L A
=================
PDVSA: Appointment of New Head Gets Mixed Reactions
---------------------------------------------------
President Hugo Chavez's move to appoint his oil minister to also
be president of state-owned oil company Petroleos de Venezuela
S.A. (PDVSA) spurred criticisms, reports Dow Jones Newswires.
Critics say the appointment of oil minister Rafael Ramirez as
the new PDVSA chief is the latest move by the leftist leader to
gain an authoritarian-style grip on the country.
"The oil minister is now the regulator of PDVSA and at the same
time is the one being regulated," said Humberto Calderon, a
former top oil official for previous administrations.
Meanwhile, supporters of the president applauded the decision,
saying the government now has a united policy on oil, which
benefits all Venezuelans.
Ricardo Sanguino, a lawmaker, said the move creates "just one
policy, one national policy that is geared toward financing the
country's social programs with what is obtained from the export
of well-priced oil."
PDVSA: To Transfer $3.5B to Social Fund Next Year
-------------------------------------------------
A Venezuelan official revealed Monday that PDVSA will transfer
as much as US$3.5 billion to a social development fund in 2005,
relates Dow Jones Newswires. Nelson Merentes, head of
Venezuela's development bank, Bandes, said the money will fund
infrastructure projects and a number of development initiatives.
PDVSA recently transferred the equivalent of US$1.6 billion to a
series of government infrastructure and development agency
projects from a special fund set up to collect US$2 billion in
windfall oil revenue.
President Hugo Chavez Frias had emphasized that the projects are
not related to the oil industry but, rather, seek to
redistribute oil wealth to improve conditions for Venezuela's
majority poor.
***********
S U B S C R I P T I O N I N F O R M A T I O N
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co-published by Bankruptcy Creditors' Service, Inc., Fairless
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Copyright 2004. All rights reserved. ISSN 1529-2746.
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