/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/041209.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, December 9, 2004, Vol. 5, Issue 244 Headlines A R G E N T I N A BEM TAMIM SRL: Court Favors Creditor's Bankruptcy Request BOTTI MERTNOFF: Court Orders Company to Liquidate Assets CENTRIFIN S.A.: Files Petition to Reorganize CLAXSON INTERACTIVE: Signs Agreement to Sell Chilevision DIRECTV LA: Names Additional Independent Board Member DISCO: Ahold Appeals Local Court Order Reversing Transfer DULCES DEL PLATA: Seeks Court Intervention to Reorganize ELECTRONICA VAQUER: Debt Payments Halted, Set To Reorganize MODESTO ALVAREZ: Creditor's Liquidation Request Approved SZWARCBERG HERMANOS: Seeks to Restructure Debt B E R M U D A GLOBAL CROSSING: SEC Nears Settlement With Former Executives B R A Z I L CEMIG: Withdraws Legal Actions Vs. ANEEL CFLCL: 10-Month Revenue Up Over 25% to BRL1.33Bln CFLCL: Ivan Botelho III Secures Operating License CFLCL: SCL Signs Insurance Contract With Aurea CFLCL: Expands Operations to Belo Horizonte DRESDNER BANK: To Reorganize Latin American Unit EMBRATEL: Stock Price Drops on Share Offer Plan GERDAU: Obtains $240M Loan From ABN Amro, Japan Lenders C O L O M B I A AVIANCA: Shareholders Name New Board of Directors M E X I C O BALLY TOTAL: Completes Debt Consent Solicitations PEMEX: On the Verge of Technical Bankruptcy P E R U * PERU: Plans Improved Social Services With $200M Loan V E N E Z U E L A CANTV: Shareholders Approve Bs.120 Per Share Dividend Payment PDVSA: Fedepetrol Warns of Possible Protests - - - - - - - - - - ================= A R G E N T I N A ================= BEM TAMIM SRL: Court Favors Creditor's Bankruptcy Request --------------------------------------------------------- Bem Tamim S.R.L. entered bankruptcy after Judge Cirulli of Buenos Aires' civil and commercial Court No.6 approved a motion filed by Mr. Luis Guzik, reports La Nacion. The Company's failure to pay US$2,470 in debt prompted the creditor to file the petition. Working with Dr. Davila, the city's Clerk No. 12, the Company assigned Mr. Francisco Guerreno as trustee for the bankruptcy process. The trustee's duties include the authentication of the Company's debts and the preparation of the individual and general reports. Creditors are required to present their proofs of claims to the trustee before March 8, 2005. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. Payments will be based on the results of the verification process. CONTACT: Bem Tamim S.R.L. Lavalle 730 Flat 2 C Mr. Francisco Guerreno, Trustee Rodriguez Rock 794 Buenos Aires BOTTI MERTNOFF: Court Orders Company to Liquidate Assets -------------------------------------------------------- Judge Carrega, serving for Court No. 4 of Buenos Aires' civil and commercial tribunal, declared local company Botti Mertnoff and Hip. S.R.L. "Quiebra", reports La Nacion. The court approved the bankruptcy petition filed by Mr. Isidro Gabay, to whom the Company owes US$156,367.68. The Company will undergo the bankruptcy process with Mr. Pablo Aguilar as its trustees. Creditors are required to present their proofs of claims to the trustee for verification before February 15, 2005. Creditors who fail to have their claims authenticated by the said date will be disqualified from the payments to be made after the Company's assets are liquidated at the end of the bankruptcy process. Clerk No. 8, Dr. Anta, assists the court on the case. CONTACT: Botti Mertnoff and Hip. SRL Viamonte 1328 Buenos Aires Mr. Pablo Aguilar, Trustee Hipolito Yrigoyen 1516 Buenos Aires CENTRIFIN S.A.: Files Petition to Reorganize -------------------------------------------- Centrifin S.A. filed a "Concurso Preventivo" motion, reports La Nacion. The Company is seeking to reorganize its finances after defaulting on its debt payments. The Company's case is pending before Buenos Aires' civil and commercial Court No. 2, under Judge Garibotto, who is assisted by Clerk No. 4, Dr.Romero. CONTACT: Centrifin Ltd. Rivadavia 684 Buenos Aires CLAXSON INTERACTIVE: Signs Agreement to Sell Chilevision -------------------------------------------------------- Claxson Interactive Group Inc. announced Tuesday it has signed an exclusivity agreement with Bancard, S.A., a company related to Chilean businessman Sebastian Pinera, to sell its Chilean TV network, Red de Television Chilevision S.A. Consummation of the sale is conditioned upon, among other things, satisfactory completion of diligence by the proposed buyer, negotiation of a definitive purchase and sale agreement, and receipt of regulatory approval. The exclusivity agreement contains confidentiality provisions that prohibit disclosure of the proposed terms of the transaction. DIRECTV LA: Names Additional Independent Board Member ----------------------------------------------------- The DIRECTV Group, Inc. (NYSE:DTV) announced Tuesday that Haim Saban, chairman and CEO of Saban Capital Group, Inc., has been elected to the Company's Board of Directors. Mr. Saban's appointment is effective immediately. The election of Mr. Saban increases the company's board to 11, a majority of whom are independent directors. "Haim is a highly respected international businessman and his breadth of experience in building and overseeing successful media and entertainment companies will serve our Board and The DIRECTV Group shareholders well," said Rupert Murdoch, chairman of The DIRECTV Group. Commenting on his election to The DIRECTV Group Board, Saban said, "DIRECTV is a great success story. As the leading brand in pay television, DIRECTV has changed the way people watch TV, and in just over 10 years has become a market leader in quality, service and technological advances. I am excited and honored to join the Board of this dynamic organization, and I look forward to sharing my experience and contributing to the future success of the company." Mr. Saban, 60, has served as chairman and CEO of Saban Capital Group since 2001. He also currently serves as chairman of the Supervisory Board of the German broadcaster ProSiebenSat.1 Media AG and is a member of the Board of Directors of the French broadcaster Television Francaise 1. He previously served as chairman and CEO of Fox Family Worldwide from 1997 to 2001. The DIRECTV Group, Inc. is a world-leading provider of digital multichannel television entertainment, broadband satellite networks and services. The DIRECTV Group, Inc. is 34 percent owned by Fox Entertainment Group, which is approximately 82 percent owned by News Corporation. CONTACT: The DIRECTV Group, Inc. Mr. Bob Marsocci Phone: 310-726-4656 Web Site: www.directv.com DISCO: Ahold Appeals Local Court Order Reversing Transfer --------------------------------------------------------- Ahold announced Wednesday that its subsidiary Disco Ahold International Holdings N.V. ("DAIH") has appealed an Argentine judicial order rendered by a federal court in San Rafael, Province of Mendoza, Argentina, of which DAIH was notified on December 3, 2004. The order relates to the transfer of approximately 85% of the shares of Disco S.A. to Cencosud S.A., which was communicated on November 1, 2004. If ultimately enforced the order could lead the parties to reverse the transfer, at least temporarily. Cencosud and the Argentine government were also notified of the order. Cencosud has also filed an appeal. Both Ahold and Cencosud remain fully committed to completing the transaction as anticipated and intend to vigorously fight the order. The order was rendered without the Argentine government, DAIH or Cencosud having notice of application for the order, and therefore without providing them the opportunity to contest the request, which was made by a single plaintiff in the case which is entitled Belmonte, Manuel y Associacion Ruralista de General Alvear ("Belmonte case"), referred to below. The order was rendered on the basis of the allegation made by the plaintiff that DAIH and Cencosud have infringed Argentine antitrust laws by partially completing the transaction prior to obtaining antitrust approval. Ahold and Cencosud believe that no such infringement occurred. The Argentine government confirmed in a previous appeal in this case that antitrust approval can also be obtained after completion of the transaction and consequently, that no such infringement occurred. The order was rendered by the same court that earlier rendered an order in the Belmonte case preventing the Argentine antitrust authorities from continuing their required review of the Disco transaction, as announced in Ahold's press release of November 1, 2004. Ahold and Cencosud believe that their appeals of the order have for now suspended the potential effects of the order. Ahold announced the transfer of the controlling interest in Disco on November 1, 2004, following an earlier announcement of the transaction on March 5, 2004. Ahold believes that the transfer of the Disco shares as effected is in the best interests of Disco's customers and associates, which Ahold believes were being adversely affected by the delay in the antitrust approval process and the closing of the transaction. CONTACT: Royal Ahold N.V. P.O. Box 3050 1500 HB Zaandam Netherlands Phone: +31 (0)75 659 57 20 Fax: +31 (0)75 659 83 02 Ahold Corporate Communications Phone +31.75.659.5720 Web Site: http://www.ahold.com DULCES DEL PLATA: Seeks Court Intervention to Reorganize -------------------------------------------------------- Dulces del Plata S.A. filed a "Concurso Preventivo" motion, reports La Nacion. The Company is seeking to reorganize its finances following cessation of debt payments since August 31, 2003. The Company's case is pending before Court No. 4 of Buenos Aires' civil and commercial tribunal, under Judge Carrega. The city's Clerk No. 7, Dr. Gomez Diez, assists the court on this case. CONTACT: Dulces del Plata S.A. Avenido Cabildo 1493 Buenos Aires ELECTRONICA VAQUER: Debt Payments Halted, Set To Reorganize ----------------------------------------------------------- Court No. 22 of Buenos Aires' civil and commercial tribunal is currently reviewing the merits of the reorganization petition filed by Electronica Vaquer SAC e I, reports La Nacion. If granted, reorganization will allow the Company to avoid bankruptcy by negotiating a settlement with its creditors. The city's Clerk No. 44 assists the court on this case. CONTACT: Electronica Vaquer SAC e I. General Hornos 1300 Buenos Aires MODESTO ALVAREZ: Creditor's Liquidation Request Approved -------------------------------------------------------- Judge Braga of Buenos Aires' civil and commercial Court No.22 declared Modesto Alvarez S.R.L. bankrupt, says La Nacion. The ruling comes in approval of the petition filed by the Company's creditor, Chandon Ltd., for nonpayment of US$13,660.43 in debt. Clerk No. 43, Dr. Mata, assists the court on the case, which will conclude with the liquidation of the Company's assets. The Company's trustee, Ms. Ana Calzada Percivale, will examine and authenticate creditors' claims until February 11, 2005. This is done to determine the nature and amount of the Company's debts. Creditors must have their claims authenticated by the trustee by the said date in order to qualify for the payments that will be made after the Company's assets are liquidated. CONTACTS: Modesto Alvarez S.R.L. Salas 481 Buenos Aires Ms. Ana Calzada Percivale, Trustee Avenida San Martin 2805 Buenos Aires SZWARCBERG HERMANOS: Seeks to Restructure Debt ---------------------------------------------- Szwarcberg Hermanos S.A., a finance company operating in the city of Buenos Aires, requested for reorganization after defaulting on its debt payments. The reorganization petition, once approved by the court, will allow the company to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending before Court No. 5 of the city's civil and commercial tribunal. The city's Clerk No. 10 assists the court on this case. CONTACT: Szwarcberg Hermanos S.A. Esmeralda 740 Buenos Aires ============= B E R M U D A ============= GLOBAL CROSSING: SEC Nears Settlement With Former Executives ------------------------------------------------------------ The U.S. Securities and Exchange Commission is expected to announce this week it has reached a settlement with former executives of Global Crossing Ltd. The Wall Street Journal reported that the SEC is likely to fine the company's founder Mr. Gary Winnick, former Chief Financial Officer Mr. Dan Cohrs and Mr. Joe Perrone - the former executive vice president for finance - for alleged accounting fraud. According to people familiar with the situation, Global Crossing itself will probably avoid a fine and fraud accusations. Global Crossing, whose corporate offices are in Florham Park, N.J., is registered in Bermuda and is best known for one of the most spectacular collapses of the recent telecom boom and bust. Founded by Mr. Winnick in 1997 as the demand for Internet traffic seemed limitless, the company built a 100,000-mile fiber-optic network just before demand for the equipment began to dry up. In January 2002, the company was forced into bankruptcy protection. Mr. Winnick came under fire for having sold US$734 million in stock before the company plummeted into bankruptcy protection, leaving employee retirement accounts and shareholders with stock that became worthless. Global Crossing emerged from bankruptcy after ST Telemedia bought a 61.5% stake for US$450 million. Mexican billionaire Carlos Slim and Texas investor Richard Rainwater also hold large stakes in the company. =========== B R A Z I L =========== CEMIG: Withdraws Legal Actions Vs. ANEEL ---------------------------------------- Resolution 91 of the GCE, of 21 December 2001 and Law 10438 of 26 April 2002 established the procedures for implementation of the General Agreement for the Electricity Sector, coming into effect on 27 December 2001, which established reimbursement of losses incurred during the period of electricity rationing in 2001-2002. The amounts to be reimbursed were published by ANEEL and became part of the assets of the companies, and are amortized through "extraordinary revenue" ("RTE") resulting from a specially granted tariff adjustment. Due to its condition as an integrated company, CEMIG was considered by ANEEL, for the purposes of determination of the amounts to be reimbursed and those to be passed on to other generating companies, to be a holder of a distribution concession that has its own generating capacity. This interpretation differed from that of the Company. The interpretation resulted in amounts higher than those estimated by CEMIG. As a means of defending its rights, CEMIG took the initiative of obtaining legal support for its interpretation, through legal actions questioning the criteria adopted by ANEEL. As a consequence of these actions, ANEEL initially ruled a block on the passthrough of revenues retained by the distributors (the RTE), relating to the CEMIG's un-contracted capacity sold through spot market during the 2001-2002 rationing. Today this blocked amount totals approximately R$ 140 million. Taking into account also the parts of the RTE due to CEMIG for its Distribution function, the total amount involved is of the order of R$ 1.68 billion - which represents a loss much greater than the benefit to be gained from winning the legal actions. Consequently, CEMIG has decided to withdraw the legal actions and sign a settlement with various companies of the sector, which forms part of a consensus also involving the CCEE, the electric energy market clearing house (which has played a decisive role in making the settlement possible), to pay the difference which was the subject of the Court challenge. This provides a solution for several issues that were blocked, including the following: - Lifting of the block on the pass-through by the distributors to CEMIG of the accumulated RTE relating to free energy, the value of which is approximately R$ 140 million in historic values, and the monthly pass-through, currently around R$ 7 million. - Payment of debits of the order of R$ 150 million, in historic values, relating to the difference mentioned. The exact amounts have yet to be calculated by the CCEE, and CEMIG has provisioned the amount of R$ 142,560,000 for these debits in its balance sheet. The financial impact of the settlement agreed with the other companies was minimized by the following points of agreement: - The inflation adjustment of the historic values, for credits and for debits, will be made based on the variation of the IGP-M inflation index up to the date of beginning of payment. - The blocked amounts of RTE will be received in two installments. - The payment of the debits will be paid in up to fifty installments, depending on the amount owed to each creditor. - The inflation adjustment of the portions referring to the credits or debits will be made along the same lines as the monetary adjustment applied to the regulatory assets (the Selic rate + 1% p.a.). CONTACT: CEMIG-Companhia Energetica AV. Barbacenda 1200 Bello Horizonte MG Brazil Phone: 30161-970 CFLCL: 10-Month Revenue Up Over 25% to BRL1.33Bln ------------------------------------------------- The consolidated gross operating revenue posted by Brazilian power distributor Cataguazes-Leopoldina (CFLCL) reached BRL1.33 billion during the first ten months of 2004, which represents an increase of 26% on the same period in 2003. Consolidated sales stood at 5,426 GWh, rising by 6.4%. However, if only the retail market is considered, total sales reveal a fall of 2.8% (2.5% in the area of parent company CFLCL) for the same period, due to the loss of free consumers, which are being billed for using the distribution system, considerably cushioning the financial losses resulting from lower energy sales. It should be noted that if the energy demanded in the retail market by the aforesaid free consumers was considered in CFLCL's energy balance sheet, the consolidated energy consumption in the concession areas of the companies comprising the Sistema Cataguazes-Leopoldina would reveal a 4.0% rise in the first ten months of 2004 as compared to the same period in 2003. CONTACT: In Cataguases Phone: +55 32 3429-6000 Fax: +55 32 3429-6317 3429-6480 In Rio de Janeiro Phone: +55 21 2122-6900 Fax: (021) 2122-6931 2122-6980 e-mail: stockinfo@cataguazes.com.br Web Site: http://www.cataguazes.com.br CFLCL: Ivan Botelho III Secures Operating License ------------------------------------------------- The last of the five SHPs, Ivan Botelho III (24.4 MW), received an operating license on November 26 and has begun filling its reservoir with water. Construction work on the aforementioned five SHPs began simultaneously in 2002, which are part of the Sistema Cataguases-Leopoldina's program to increase its electrical energy generation capacity. This SHP is projected to come into commercial operation at the end of December. CONTACT: In Cataguases Phone: +55 32 3429-6000 Fax: +55 32 3429-6317 3429-6480 In Rio de Janeiro Phone: +55 21 2122-6900 Fax: (021) 2122-6931 2122-6980 e-mail: stockinfo@cataguazes.com.br Web Site: http://www.cataguazes.com.br CFLCL: SCL Signs Insurance Contract With Aurea ---------------------------------------------- In an unprecedented move, the Sistema Cataguazes-Leopoldina (SCL) has signed a completion guarantee insurance with insurance company Aurea, to raise BRL 65 million from Eletrobras for its subsidiaries located in the northeast of Brazil Energipe (Sergipe state), CELB (Paraiba state) and Saelpa (Paraiba state) as guarantee for the funds, which the Federal Government will provide, for the `Energy for All' program (`Luz Para Todos'). The same operation will also be performed to raise funds for the `Energy for All' program for SCL's other two energy distributors CFLCL (Minas Gerais state) and CENF (Rio de Janeiro state). Through the program the Sistema Cataguazes-Leopoldina predicts it will serve more than 90 thousand new consumer units, increasing its current number of consumers (1.8 million) by 5%. CFLCL: Expands Operations to Belo Horizonte ------------------------------------------- A generation subsidiary of the Sisteama Cataguazes-Leopoldina, Cat-Leo Energia has opened offices in the Belo Horizonte (capital of Minas Gerais state) with the aim of exploring new opportunities. Among the action plan, includes not only a greater participation in the Minas SHP program - the target is to participate in the program which will entail around R$ 1 billion at the first stage - but also to execute direct contracts with the business sector. The services which Cat-Leo could provide include power station maintenance and operation, retrofitting of generating units, construction management and provision of electric, mechanical and hydro mechanical equipment, civil construction work and engineering services. CONTACT: In Cataguases Phone: +55 32 3429-6000 Fax: +55 32 3429-6317 3429-6480 In Rio de Janeiro Phone: +55 21 2122-6900 Fax: (021) 2122-6931 2122-6980 e-mail: stockinfo@cataguazes.com.br Web Site: http://www.cataguazes.com.br DRESDNER BANK: To Reorganize Latin American Unit ------------------------------------------------ Dresdner Bank plans to restructure its operations in Latin America, Die Welt says. The bank intends to absorb Dresdner Bank Lateinamerika's (DBLA) corporate banking activities and investment banking division and sell off its private banking division. Several offers have been made for DBLA's private banking unit though the group has yet to select a buyer. DBLA's restructuring came as Dresdner Bank for a while has erased the unit from its list of strategic businesses. Job losses are expected to come along with the restructuring, though its extent has yet to be released. CONTACT: DRESDNER BANK AG Jurgen-Ponto-Platz 1 60301 Frankfurt, Germany Phone: +49-692--630 Fax: +49-692-63-4831 Web site: http://www.dresdner-bank.de DRESDNER BANK LATEINAMERIKA AG Neuer Jungfernstieg 16 20354 Hamburg, Germany Phone: (+49 40) 3595-0 Fax: (+49 40) 3595 3314 Telex: 41524-140 dr d E-Mail: public-relations@dbla.com Web site: http://www.dbla.com EMBRATEL: Stock Price Drops on Share Offer Plan ----------------------------------------------- Embratel Participacoes SA's shares fell more than 8% Tuesday after the company announced it will issue new shares worth about BRL1.9 billion (US$703 million) to help meet debt commitments and fund acquisitions. Analysts fear its controller, Mexican telecommunications giant Telmex, could use Embratel as a vehicle to finance its pending acquisition of Brazil's Net Servicos de Comunicacao, the debt-laden struggling cable television company, or AT&T Latin America, which Telmex bought in February. "It looks like Telmex wants to concentrate ownership of its Brazilian holdings under Embratel," said a stock market analyst. The analyst added that such a movement could prove expensive, with Embratel postponing profits while it reorganizes. According to a brief analysis of the Embratel announcement by Fator, a Brazilian brokerage, the news "is good for Embratel's prospects in the medium-and long-term but could prove bearish in the short term because of the lack of details, especially for minority shareholders." Embratel's shares fell 8.66% to BRL5.79 while Net's shares rose 1.67% to BRL0.61. CONTACT: Embratel Participacoes S.A. Rua Regenta Feijo 166 sala 1687-B Centro Rio de Janeiro, 20060-060 Brazil Phone: 5521-519-6474 Web Site: http://www.embratel.net.br GERDAU: Obtains $240M Loan From ABN Amro, Japan Lenders ------------------------------------------------------- Gerdau SA (GGB), Latin America's biggest long steel maker, was granted a 7-year, US$240-million loan by ABN Amro, the Bank of Tokyo-Mitsubishi and UFJ Bank Ltd. Gerdau will pay six-month Libor rates plus 2.48% on the loan. Japan's government-linked credit agency, Nippon Export and Investment Insurance, provided risk insurance for the deal. Gerdau said it will use the money to finance the expansion of its Ouro Branco steel mill in the Brazilian state of Minas Gerais. The company is expanding the plant's steel output capacity to six million tons per year from three million tons at present. CONTACT: Gerdau S.A. Avenida Farrapos 1811 Porto Alerge, RS 90220-005 Brazil Phone: +55 3323 2000 Web Site: http://www.gerdau.com.br =============== C O L O M B I A =============== AVIANCA: Shareholders Name New Board of Directors ------------------------------------------------- Shareholders of Colombia's troubled flagship airline Avianca SA (ANC.YY) have appointed a new board of directors that will take over in 2006, reports Dow Jones Newswires. To preside over the airline's new board is Mr. German Efromovich, who owns Avianca's new controller Brazil's Grupo Synergy. Mr. Gabriel Silva, the president of Colombian coffee growers federation Fedecafe, which holds a large stake in the airline, will be the number two on the board. Avianca's press officer, Janeth Benitez, said Tuesday that organizational changes will be made once the company emerges from Chapter 11 proceedings. Avianca filed for Chapter 11 bankruptcy protection in March of 2003 and delivered its reorganization plan to a U.S. court in July of this year. The court recently gave its final approval to Avianca's restructuring plan, under which Synergy will acquire a 75% stake in the airline, while the remainder will stay in the hands of Fedecafe. =========== M E X I C O =========== BALLY TOTAL: Completes Debt Consent Solicitations ------------------------------------------------- Bally Total Fitness Holding Corporation (NYSE: BFT) announced Tuesday that it has received and accepted consents from the holders of a majority of its 10-1/2% Senior Notes due 2011 and 9-7/8% Senior Subordinated Notes due 2007 to a limited waiver, which may extend until July 31, 2005, of any default or event of default arising from a failure by the Company to file with the Securities and Exchange Commission, and furnish to the holders of notes and the trustee under the indentures governing the notes, reports required to be filed pursuant to the Securities Exchange Act of 1934. As previously announced, the lenders under the Company's new $275 million secured credit facility dated October 14, 2004, have foregone any requirement for receipt from the Company of financial statements filed with the Securities and Exchange Commission. Deutsche Bank Securities Inc. acted as the solicitation agent for the consent solicitation. MacKenzie Partners, Inc. acted as the information and tabulation agent for the consent solicitation. Information regarding the consent solicitation may be obtained by contacting Deutsche Bank Securities Inc., 60 Wall Street, 2nd Floor, New York, New York 10005, Attention: Christopher White. The solicitation agent may be reached by telephone at (212) 250-6008. About Bally Total Fitness Bally Total Fitness is the largest and only nationwide commercial operator of fitness centers, with approximately four million members and 440 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness- conscious adult consumers. CONTACT: Bally Total Fitness Mr. Jon Harris Phone: 773-864-6850 or MWW Group Ms. Carreen Winters Phone: 201-507-9500 e-mail: cwinters@mww.com Web Site: www.BallyFitness.com PEMEX: On the Verge of Technical Bankruptcy ------------------------------------------- State oil company Petroleos Mexicanos (Pemex) is on the brink of technical bankruptcy, and the new tax regime designed for the company and being discussed in Congress is not that extensive to rebuild its finances. According to a study on the financial situation of the firm carried out by former Pemex director general Francisco Rojas, Pemex's debts will surpass US$50 billion in 2005 and the losses accumulated between 1998 and 2003 total MXN117 billion (US$10.5 billion). If fresh capital is not injected into the company, equity will be lost, said Pemex CEO Luis Ramirez. ======= P E R U ======= * PERU: Plans Improved Social Services With $200M Loan ------------------------------------------------------ The World Bank's Board of Directors approved Tuesday two loans for a total of $200 million for Peru to improve access of the poor to critical social programs, assist with the government decentralization process and enhance competitiveness. In addition, the Board discussed a progress report on the Country Assistance Strategy for Peru, which was approved by the Bank in September 2002. "The loans approved [Tues]day will support the government of Peru's commitment to the reduction of poverty and inequality by improving the provision of social services and making the government more responsive to citizens," said Marcelo Giugale, World Bank director for Bolivia, Ecuador, Peru and Venezuela. FOURTH PROGRAMMATIC SOCIAL REFORM LOAN The first loan approved is the US$100 million Fourth Programmatic Social Reform Loan (PSRL IV). It is the fourth and final stage of a four-year program to support reforms aimed at increasing access, transparency, and efficiency in social service provision. The program seeks to improve the antipoverty focus of public expenditures, increase access of the poor to quality health and education services, and enhance the transparency of social programs, while empowering their beneficiaries in their design and implementation. The loan will support efforts to complete and consolidate reforms in five areas: - Improve management of priority social programs expenditures in the context of overall fiscal restrictions. - Support redesign, targeting, and administration of social protection programs to develop a more accessible and equitable pension system. - Continue expansion in the coverage of basic health care within the framework of a more decentralized system. - Improve access and efficiency in education by integrating changes in the administration of human resources to improve assignment of resources and transparency. - Promote transparency and accountability in the social sectors by incorporating important changes in the procurement system, and implementing a monitoring and evaluation system with participation of civil society. "Better access to quality basic services will foster human capital accumulation and improve the living conditions of the poor by expanding their social and economic opportunities," said Rafael Rofman, World Bank task manager for the project. The previous three loans that make up the program total $350 million and were approved by the World Bank between June 2001 and November 2003. The $100 million fixed-spread loan for PSRL IV has a repayment period of 14 years, including eight years of grace. SECOND PROGRAMMATIC DECENTRALIZATION AND COMPETITIVENESS STRUCTURAL ADJUSTMENT LOAN The second loan approved is the $100 million Second Programmatic Decentralization and Competitiveness Structural Adjustment Loan (DECSAL II). This operation will assist the government of Peru in the decentralization of public functions and resources while supporting its competitive enhancement program. The program seeks to protect fiscal sustainability during Peru's transition to a more decentralized state, improve budget accounting and reporting at all levels of government, and enhance the efficiency and effectiveness of key government institutions. The loan will facilitate the following key outcomes: 1. Improve the quality of products and production practices, and strengthen the overall portfolio and value of Peruvian products capable of competing in export markets. 2. Reduce currently burdensome logistical cost for firms through an improved policy framework for the provision of infrastructure services that will facilitate increased investments, better management of road and port networks, and enhanced quality of logistics services. 3. Support increased domestic and foreign private investment by improving the overall investment climate, reducing administrative barriers, and enabling transparent contract enforcement. 4. Increase exports by improving trade facilitation and export promotion services. "The program will promote Peru's economic growth and regional competitiveness and free additional resources for social sector investment," said Jose Luis Guasch, World Bank task manager for the project. "As a result, the government will have greater capacity to design and deliver public services that effectively target the poor and vulnerable." The first DECSAL loan for $150 million, approved by the World Bank Board of Directors in December 2003, stressed fiscal sustainability by establishing a new fiscal decentralization framework and ensuring a hard budget constraint alongside a series of related competitiveness measures. The $100 million fixed-spread loan for DECSAL II has a repayment period of 14 years, including eight years of grace. PROGRESS REPORT ON THE COUNTRY ASSISTANCE STRATEGY FOR PERU In addition to the two loans, the World Bank's Board of Directors discussed the Progress Report on the Country Assistance Strategy (CAS) for Peru, which was approved by the Bank in September 2002, and provides for $230-$400 million a year in financing through June 2006. The report notes that this is the first time in the last 40 years that Peru has a combination of relatively high growth with a manageable fiscal deficit and favorable external balance, and that these developments set the basis for poverty reduction if the current economic performance continues. CONTACTS: Ms. Alejandra Viveros Phone: (202) 473-4306 e-mail: Aviveros@worldbank.org Ms. Lee Morrison Phone: (202) 458-8741 e-mail: Lmorrison1@wordbank.org Web Site: www.worldbank.org/pe ================= V E N E Z U E L A ================= CANTV: Shareholders Approve Bs.120 Per Share Dividend Payment ------------------------------------------------------------- Compania Anonima Nacional Telefonos de Venezuela (CANTV) (NYSE: VNT) announced Tuesday that at its Extraordinary Shareholders Meeting, its shareholders approved the payment of a dividend of Bs. 120.00 per share representing Bs.840 per ADS. This dividend will be paid on December 22, 2004, to shareholders of record on December 15, 2004. Cantv will support the process of conversion into US$, through CADIVI (Committee for the Administration of Foreign Currency), of the dividends to be paid to ADS holders and other foreign investors. The Company CANTV, a Venezuelan corporation, is the leading Venezuelan telecommunications services provider with approximately 2.9 million access lines in service, 2.7 million cellular subscribers and 325 thousand Internet subscribers as of September 30, 2004. The Company's principal strategic shareholder is a wholly owned subsidiary of Verizon Communications Inc. with 28.5% of the capital stock. Other major shareholders include the Venezuelan Government with 6.6% of the capital stock (Class B Shares), and employees, retirees and employee trusts which own 7.4% (Class C Shares) and Telefonica de Espana, S.A. with 6.9%. Public shareholders hold the remaining 50.6 % of the capital stock. CONTACT: Gregorio Tomassi, CFA CANTV Investor Relations 011-58-212-500-1831 FAX: 011-58-212-500-1828 E-Mail: invest@cantv.com.ve Lauren Puffer The Global Consulting Group 646-284-9426 E-Mail: lpuffer@hfgcg.com PDVSA: Fedepetrol Warns of Possible Protests -------------------------------------------- Frustrated with the delays in the renegotiation of the collective labor agreement, Venezuela's oil workers union Fedepetrol warned it would take action against state oil firm PDVSA, reports Business News Americas. The 2004-2006 collective labor agreement is supposed to be signed on December 15. But due to the "delaying tactics" used by PDVSA to put off the approval of key clauses, such as salaries and pensions, the signing could take a while, said Fedepetrol director Gregorio Rodriguez. Already, Fedepetrol has sent PDVSA's president and energy minister, Rafael Ramirez, a letter expressing the union's frustrations and setting a December 7 deadline to get the discussions back on track. If PDVSA fails to make any progress, Fedepetrol will "begin pressure," starting with protests and escalating to "stronger measures" because "we will not accept more unjustified delays by PDVSA at the negotiating table," Mr. Rodriguez said. Fedeptrol is asking for higher wages and improved benefits for workers. *********** 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. 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