/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/041210.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, December 10, 2004, Vol. 5, Issue 245 Headlines A R G E N T I N A CURTIDURIA ALSINA S.A.: Claims Validation Deadline Approaches FACHADAS INTEGRALES: Claims Review Nears End MEILS S.A.: Claims Filings Due by Monday PESQUERA RIO: Proof of Claims Period Ends Monday B E R M U D A LOM HOLDINGS: Moves to Replace Independent Auditors P&O LIMITED: Jennifer Kelly to Supervise Wind-Up P&O SHIP MANAGEMENT: Winding-Up Process Initiated STOCKTON ENTERPRISES: Names Robin Mayor as Liquidator UTAR: Liquidator Seeks Release From Wind-Up Proceedings B R A Z I L VARIG: Tam, Gol Declines Offer to Buy Stake C H I L E ENERSIS/ENDESA-CHILE: Demand Leads to Review for Moody's Upgrade C O L O M B I A PAZ DEL RIO: Pres. Uribe Asks Employees to Retain Shares G U A T E M A L A EMPRESA ELECTRICA: Moody's Assigns Ba2 Ratings to $100M Notes M E X I C O COPAMEX: SCA Buys Remaining Stake of Local Hygiene Operations CYDSA: Reminds Note Holders to Submit Proxies by Deadline EMPRESAS ICA: Bear Stearns Initiates Coverage at Peer Perform GRUPO POSADAS: S&P Issues Report, Details on Debt Ratings SATMEX: Govt. Increases Participation in Administration P E R U INTERBANK: Fitch Upgrades Support Rating After Sovereign Action T R I N I D A D & T O B A G O MISSISSIPPI CHEMICAL: U.S. Court Confirms Reorganization Plan * TRINIDAD & TOBAGO: IMF Review Finds Favorable Conditions V E N E Z U E L A CITGO: Excellent Results Yield $400M Dividend - - - - - - - - - - ================= A R G E N T I N A ================= CURTIDURIA ALSINA S.A.: Claims Validation Deadline Approaches ------------------------------------------------------------- Trustee Luis Maria Guastavino will close the verification of creditors' claims for the Curtiduria Alsina S.A. bankruptcy case on Monday, December 13, 2004. The Company's creditors must submit proof of their claims to the trustee by the specified date to qualify for the payments that will be made once the Company's assets are liquidated. Court No. 18 of Buenos Aires' civil and commercial tribunal has jurisdiction over this case. The city's Clerk No. 35 assists the court with the proceedings. CONTACT: Curtiduria Alsina S.A. Avenida Pedro Goyena 1104 Buenos Aires Mr. Luis Maria Guastavino, Trustee Nicolas Repetto 1115 Buenos Aires FACHADAS INTEGRALES: Claims Review Nears End -------------------------------------------- Fachadas Integrales S.R.L. moves closer to the end of its liquidation with the closing of the verification of creditors' claims on Monday, December 13, 2004. Proof of claims must be submitted to trustee Alfredo Donatti by the said date to qualify under the Company's distribution plan. Local news source La Nacion had previously reported that Astilleros Neptuno S.C.A requested the company's liquidation. Court No. 19 of Buenos Aires' civil and commercial tribunal has jurisdiction over this case. CONTACT: Fachadas Integrales S.R.L. Sarmiento 1469 Buenos Aires Mr. Alfredo Donatti, Trustee Montevideo 31 Buenos Aires MEILS S.A.: Claims Filings Due by Monday ---------------------------------------- Buenos Aires-based Meils S.A. is set to complete an important part in its liquidation with the closing of the claims verifications period on Monday, December 13, 2004. Creditors with outstanding claims against the Company must submit the required proofs of debt to trustee Santos Ernesto Luparelli by the said date to qualify for the post-liquidation distributions that will be made. Judge Gonzalez, serving for court no. 8 of Buenos Aires' civil and commercial tribunal, handles the case with the assistance of the city's Clerk No. 15, Dr. Lezaeta. CONTACT: Meils S.A. San Martin 987 Buenos Aires Mr. Santos Ernesto Luparelli, Trustee Paraguay 2067 Buenos Aires PESQUERA RIO: Proof of Claims Period Ends Monday ------------------------------------------------ Creditors of bankrupt company Pesquera Rio Parana S.A. have until Monday, December 13, 2004, to submit proof of their claims to trustee Jorge Luis Blazquez. Failure to submit the required documents within the specified deadline will mean disqualification from the post-liquidation distributions to be made. Court no. 11 of Buenos Aires' civil and commercial tribunal handles this case with help from the city's Clerk No. 22. CONTACT: Mr. Jorge Luis Blazquez, Trustee Fray Justo Santa Maria de Oro 2381 Buenos Aires ============= B E R M U D A ============= LOM HOLDINGS: Moves to Replace Independent Auditors --------------------------------------------------- Bermuda-based LOM Holdings Limited has formally informed stockholders of its intention to hire Marcum & Kleigman LLP as the Company's auditors for the ensuing year. The Royal Gazette reports that the decision to hire the Melville, New York based auditing firm comes after the Company's former auditor, PricewaterhouseCoopers, was unable to form an opinion on the Company's financial figures for 2003 due to the Company's alleged involvement in securities fraud. The report quotes PWC as saying that: " The Company's [LOM's] legal counsel has advised that full access by us to all information would constitute a waiver of attorney/client privilege and such a waiver is not in the Company's best interests. Because of this we have been unable to obtain sufficient appropriate audit evidence to form an opinion with respect to the possible impact of any such matters on the consolidated financial statements. "In view of the possible material effects of the matters to the financial statements, and our inability to form an opinion with respect to their effect thereon, we are unable to express an opinion whether these financial statements present fairly the financial position of the Company as at December 31, 2003 and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in Bermuda and Canada." LOM is currently under investigation by the US Securities and Exchange Commission for possible involvement in securities fraud. The investigation also includes Sedona Software Solutions Inc., SHEP Technologies Inc and HiEnergy Technologies Inc. P&O LIMITED: Jennifer Kelly to Supervise Wind-Up ------------------------------------------------ IN THE MATTER OF THE COMPANIES ACT 1981 and IN THE MATTER OF P&O (Bermuda) Limited The sole Member of P&O (Bermuda) Limited, acting by Written Consent without a meeting on December 2, 2004, passed the following resolutions: (1) THAT the Company be wound up voluntarily, pursuant to the provisions of the Companies Act 1981, and (2) THAT Jennifer M. Kelly be appointed Liquidator for the purpose of such winding-up, such appointment to be effective forthwith. The Liquidator informs that: - Creditors of P&O (Bermuda) Limited, which is being voluntary wound up, are required, on or before December 29 2004, to send their full Christian and Surnames, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their solicitors (if any) to the Liquidator at 3rd Floor, Par La Ville Place, 14 Par La Ville Road, Hamilton, Bermuda, and if so required by notice in writing from the said Liquidator, and personally or by their solicitors, to come in and prove their debts or claims at such time and place as shall be specified in such notice, or in default thereof they will be excluded from the benefit of any distribution made before such debts are proved. - A Final General Meeting of the Member of P&O (Bermuda) Limited will be held at 9:00 a.m. at 3rd Floor, Par La Ville Place, 14 Par La Ville Road, Hamilton, Bermuda on January 21, 2005 for the purpose of having an account laid before him, showing the manner in which the winding-up has been conducted, and the property of the Company disposed of, and of hearing any explanation that may be given by the Liquidator, and also of determining by Resolution the manner in which the books, accounts and documents of the Company and of the Liquidator thereof, shall be disposed of. CONTACT: Ms. Jennifer M. Kelly, Liquidator 3rd Floor, Par-La-Ville Place 14 Par-La-Ville Road Hamilton, Bermuda, P&O SHIP MANAGEMENT: Winding-Up Process Initiated ------------------------------------------------- IN THE MATTER OF THE COMPANIES ACT 1981 and IN THE MATTER OF P&O Ship Management (Bermuda) Limited The sole Member of P&O Ship Management (Bermuda) Limited, acting by Written Consent without a meeting on December 2, 2004, passed the following resolutions: (1) THAT the Company be wound up voluntarily, pursuant to the provisions of the Companies Act 1981, and (2) THAT Jennifer M. Kelly be appointed Liquidator for the purpose of such winding-up, such appointment to be effective forthwith. The Liquidator informs that: - Creditors of P&O Ship Management (Bermuda) Limited, which is being voluntary wound up, are required, on or before December 29, 2004, to send their full Christian and Surnames, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their solicitors (if any) to the Liquidator at 3rd Floor, Par La Ville Place, 14 Par La Ville Road, Hamilton, Bermuda, and if so required by notice in writing from the said Liquidator, and personally or by their solicitors, to come in and prove their debts or claims at such time and place as shall be specified in such notice, or in default thereof they will be excluded from the benefit of any distribution made before such debts are proved. - A Final General Meeting of the Member of P&O Ship Management (Bermuda) Limited will be held at 9:30 a.m. at 3rd Floor, Par La Ville Place, 14 Par La Ville Road, Hamilton, Bermuda on January 21, 2005 for the purpose of having an account laid before him, showing the manner in which the winding-up has been conducted, and the property of the Company disposed of, and of hearing any explanation that may be given by the Liquidator, and also of determining by Resolution the manner in which the books, accounts and documents of the Company and of the Liquidator thereof, shall be disposed of. CONTACT: Ms. Jennifer M. Kelly, Liquidator 3rd Floor, Par-La-Ville Place 14 Par-La-Ville Road Hamilton, Bermuda STOCKTON ENTERPRISES: Names Robin Mayor as Liquidator ------------------------------------------------------ IN THE MATTER OF THE COMPANIES ACT 1981 and IN THE MATTER OF Stockton Enterprises Limited The Sole Member of Stockton Enterprises Limited, acting by written consent without a meeting on 7th December 2004 passed the following resolutions: (1) THAT the Company be wound up voluntarily, pursuant to the provisions of the Companies Act 1981; (2) THAT Robin J. Mayor be and is hereby appointed Liquidator for the purposes of such winding-up, such appointment to be effective forthwith. The Liquidator informs that: - Creditors of Stockton Enterprises Limited, which is being voluntarily wound up, are required, on or before December 22, 2004 to send their full Christian and Surnames, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their lawyers (if any) to Robin J. Mayor at Messrs. Conyers Dill & Pearman, Clarendon House, Church Street, Hamilton, HM DX, Bermuda, the Liquidator of the said Company, and if so required by notice in writing from the said Liquidator, and personally or by their lawyers, to come in and prove their debts or claims at such time and place as shall be specified in such notice, or in default thereof they will be excluded from the benefit of any distribution made before such debts are proved. - A final general meeting of the Sole Member of Stockton Enterprises Limited will be held at the offices of Messrs. Conyers Dill & Pearman, Clarendon House, Church Street, Hamilton, Bermuda on January 12, 2005 at 9:30 a.m., or as soon as possible thereafter, for the purposes of: (1) receiving an account laid before them showing the manner in which the winding-up of the Company has been conducted and its property disposed of and of hearing any explanation that may be given by the Liquidator; and (2) by resolution determining the manner in which the books, accounts and documents of the Company and of the Liquidator shall be disposed of; and (3) by resolution dissolving the Company. CONTACT: Mr. Robin J. Mayor, Liquidator Clarendon House Church Street Hamilton, Bermuda UTAR: Liquidator Seeks Release From Wind-Up Proceedings ------------------------------------------------------- IN THE SUPREME COURT OF BERMUDA COMPANIES (WINDING UP) IN THE MATTER OF THE COMPANIES ACT 1981 and IN THE MATTER OF: Utar (Holdings) Limited - In Liquidation Notice To Creditors And Contributories Of Liquidator's Intention To Apply For Release Notice is hereby given that the Liquidator of Utar (Holdings) Limited - In Liquidation, Mr. Peter C.B. Mitchell, intends to apply to the Court for his release, and further take notice that any objection you may have to the granting of the release must be notified to the Court within twenty-one days of the date hereof. =========== B R A Z I L =========== VARIG: Tam, Gol Declines Offer to Buy Stake ------------------------------------------- Brazilian airlines Tam and Gol snubbed the government's offer to buy into troubled flag carrier Varig, says the Associated Press. The report reveals that the airlines are unwilling to assume any of Varig's US$2.4 billion debt despite the government's promise to provide up to US$1 billion (euro740 million) credit through the Brazilian Development Bank to qualified companies willing to invest in the airline. Tam Airlines follows Varig as the top air carrier in the country. Gol, coming in third, rounds-up the top three largest airlines in Brazil. ========= C H I L E ========= ENERSIS/ENDESA-CHILE: Demand Leads to Review for Moody's Upgrade ---------------------------------------------------------------- Moody's Investors Service placed the debt ratings of Enersis S.A. and Endesa Chile S.A under review for possible upgrade, citing an improvement in the companies' financial performance and expectations that additional improvements will occur in 2005. As the largest distribution and generation companies in Chile, Enersis and Endesa Chile benefit from stronger growth in electricity demand that is related to the strong growth of the Chilean economy, said Moody's. The review also reflects the enactment this year of the "Ley Corta", or Short Law, which partially amends Chile's Electricity Law of 1982. The Short Law is viewed as further strengthening the country's regulatory framework. The expected benefits for Enersis and Endesa Chile include reduction of transmission costs, a narrowing of pricing between regulated and unregulated markets which should mitigate pricing volatility, and greater clarity with respect to the definition and treatment of unregulated or "free market" customers and ancillary services. Debt of Enersis S.A. that is impacted by Moody's rating action includes the following Ba2 rated senior unsecured obligations: - US $300 million 7.375% senior global notes due 2014 - US $150 million 6.6% senior global notes due 2026 - US $300 million 6.9% senior notes due 2006 - US $350 million 7.4% senior notes due 2016 Debt of Endesa Chile S.A. impacted by Moody's rating action includes the following Ba2 rated senior unsecured obligations: - US $400 million 8.35% global notes de 2013 - US $200 million 8.625% global notes due 2015 - US $200 million 8.125% bonds due 2097 - US $220 million 7.325% bonds due 2037 - US $230 million 7.875% bonds due 2027 - US $400 million 7.75% notes due 2008 - US $400 million 8.5% global bonds due 2009 Based in Santiago, Chile, Enersis S.A. is owned 60% by Endesa Spain, one of the largest integrated Spanish utilities in the world. Endesa Chile S.A., the largest electric generation company in Chile, is owned 60% by Enersis S.A. =============== C O L O M B I A =============== PAZ DEL RIO: Pres. Uribe Asks Employees to Retain Shares -------------------------------------------------------- Colombia's President Alvaro Uribe is calling on employees of iron and steel company Acerias Paz del Rio to keep their shares in the firm, reports Business News Americas. "He who wants to invest money [in the company], should invest it in outsourcing machinery or expanding the company," President Uribe said. The leader's plea comes amidst controversy surrounding the company since Acerias Paz del Rio's president said several days ago that the company was seeking a strategic partner in Venezuela, Brazil, or Argentina to help complement its business in other markets of the region. Employees of Acerias Paz del Rio own a 43% controlling stake in the company, which is currently enjoying the best financial and operating results of its history. Acerias Paz del Rio, which was restructured in July 2003, posted profits of US$41 million in the first 11 months of the year, an increase of 254% compared to the same period 2003. CONTACT: Acerias Paz Del Rio S.a. CARRERA 8A, N 13-31, PISOS 7-11 4260 - Bogota Colombia Phone: +57 1 3411570 +57 1 2823480 ================= G U A T E M A L A ================= EMPRESA ELECTRICA: Moody's Assigns Ba2 Ratings to $100M Notes ------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Empresa Electrica de Guatemala S.A.'s (EEGSA) US$100 million senior unsecured notes. The notes, which are being sold pursuant to Rule 144A, will have a bullet maturity of either 7 or 10 years, depending upon market demand. Simultaneously, Moody's assigned a Ba2 Senior Implied rating and a Ba3 Issuer Rating. The outlook is stable. Comercializadora Electrica de Guatemala S.A. (COMEGSA) will provide a guaranty for EEGSA's obligations. EEGSA has a 50-year Authorization Agreement with the Government of Guatemala to provide electric distribution services to the Departments of Guatemala, Escuintla and Sacatepequez. The Ba2 Senior Implied rating reflects the company's prime service area, relatively low risk business profile, potential for revenue growth in line with improvements in the national economy, and its experienced management. The rating also recognizes recent developments impacting the regulatory framework that underscore the still evolving nature of Guatemala's electricity regulatory model. The Ba2 rating of the senior unsecured notes also considers the structural protections under the indenture and the subsidiary guarantee. The Ba3 Issuer Rating reflects Moody's opinion of EEGSA's unsupported ability to meet senior unsecured obligations. As of September 30, 2004, EEGSA's debt totals about US$215 million. The current debt repayment profile includes US$28 million due in 2005 and US$32 million in 2006. Scheduled debt maturities spike sharply to US$110 million in 2007 due to the ABN Amro syndicated loan. The amount of scheduled repayment in 2007 will be reduced to about US$32 million in quetzal denominated debt as a result of the current capital markets issue. After the current financing is completed, the company will have about US$100 million in cross-border capital markets debt, about US$64 million of local currency bank and US$12 million in other local currency non-bank debt as well as about US$10 million in working capital unused credit lines. All debt will be senior unsecured. The ratio of debt to total capitalization was 33.7% at year-end 2003. EEGSA does not anticipate the need for additional debt in the near term. Based in Guatemala City, Guatemala, EEGSA is an electric distribution company owned 81% by Distribucion Electrica Centroamericana (DECA II) which in turn is owned by Iberdrola S.A. (49%), TECO Energy (30%), and Electricidade de Portugal (21%), 14% by the government of Guatemala, 3.18% by various individuals and the remaining 1.9% by employees of EEGSA. =========== M E X I C O =========== COPAMEX: SCA Buys Remaining Stake of Local Hygiene Operations ------------------------------------------------------------- SCA and the Mexican company Copamex S.A. de C.V. (Copamex) currently own 50% each of the hygiene products company Copamex Productus al Consumidor S.A. de C.V. (CPG). To achieve an efficient coordination with SCA's other operations, primarily in North and South America, and to attain full control over the company's future management and development in the rapidly growing markets in Mexico and Central America, SCA has acquired the remaining shares in CPG. In late spring 2004, SCA acquired half of Copamex's tissue operations. Thereafter, this business has been legally and operationally integrated with Sancela S.A. de C.V. (Mexico), the parties' joint company for production and sales of feminine hygiene and incontinence products. Accordingly, with annual sales amounting to SEK 2.3 billion, CPG is the leading Mexican supplier of incontinence products, the next largest company within tissue and one of the three leading producers of feminine hygiene products. The major portion of operations is based in Mexico, but the company has production plants in Costa Rica and Nicaragua. With a population base of slightly more than 100 million and a low per capita consumption, it is projected that the Mexican market will continue to show favorable growth. However, during 2004 the markets for tissue and feminine hygiene products have been characterized by intense competition. Combined with increases in raw material prices, this has weakened the profitability of the hygiene products operations. In response to this situation, SCA and CPG initiated a cost-reducing action program. The purchase price for Copamex's 50% interest in the share capital of CPG corresponds to SEK 820 M. It is projected that the acquisition will have a neutral effect on the SCA Group's net earnings in 2005 and thereafter will provide a successively rising contribution to SCA's earnings per share. In other respects, the acquisition also fulfills SCA's profitability criteria. The total purchase price for the shares purchased in CPG in the spring and the current purchase corresponds to SEK 1,300 M, while at the same time the net debt in CPG currently amounts to approximately SEK 1,580 M. The necessary approvals have been received from the competition authorities involved and it is assessed that the acquisition will be concluded in the next few days. CYDSA: Reminds Note Holders to Submit Proxies by Deadline --------------------------------------------------------- Cydsa, S.A. de C.V. ("Cydsa") urges holders of its U.S.$158,997,000 9.375% Notes due 2009 (the "Existing Notes") to submit original duly executed proxies in Cydsa's pending proxy solicitation by the deadline, which is scheduled for Monday, December 13, 2004, 10:00 a.m., New York City time (3:00 p.m., London time). On November 16, 2004, Cydsa launched a proxy solicitation in favor of an extraordinary resolution (the "Extraordinary Resolution") to exchange (the "Exchange") each U.S.$1,000 principal amount outstanding of its Existing Notes plus accrued and unpaid interest for 172.12117 shares of its Series A Common Stock, 860.60585 shares of its Series C Stock and U.S.$160.38038 principal amount of its newly issued Convertible Debentures. The Exchange will be effected on the terms and the conditions set forth in Cydsa's Proxy Solicitation and Offering Circular, dated November 16, 2004 (the "Statement"), and related offering documents. Holders of the Existing Notes should carefully read the entire Statement and the other documents to which it refers, including the proxy, to understand fully the terms of the proxy solicitation. Holders who held Existing Notes as of the close of business, New York City time, on Monday, November 29, 2004 ("holders of record") are entitled to vote on the Extraordinary Resolution. Cydsa urges all holders of its Existing Notes to deliver their originally executed proxies in respect of the Extraordinary Resolution to the proxy and exchange agent as soon as possible. The meeting of the holders of record to consider the Extraordinary Resolution is scheduled for Wednesday, December 15, 2004, at 3:00 p.m. London time (10:00 a.m. New York City time). The passing of the Extraordinary Resolution requires votes cast, in person or by proxy, in favor of the Extraordinary Resolution amounting to at least 75% of the votes cast at a meeting at which a quorum of at least 75% in aggregate principal amount of the outstanding Existing Notes, other than Existing Notes held by Cydsa, its subsidiaries or its nominees, is represented in person or by proxy. Subject to certain conditions, Fintech Advisory, Inc., the sole member of a committee of holders of Existing Notes, has agreed to support the Exchange. "This exchange represents a culmination of significant efforts involving the operational and financial restructuring of the Company, as well as a significant recapitalization of it by immediately giving bondholders the majority of the Company's equity, with the potential to receive more if the Company does not comply with its obligations under the new Debentures. Fintech supports the exchange, and encourages other bondholders to support it as well," said David Martinez of Fintech Advisory, Ltd. in London. Global Bondholder Services Corporation has been selected as information agent. Requests for assistance or documents should be directed to Harvey Eng of Global Bondholder Services Corporation, in New York, at (212) 430-3774. The proxy and exchange agent is Citibank, N.A., in London (attention: Stuart N. Hoare at +44.207.500.5309) and New York (attention: Sebastian Andrieszyn at 212.657.9055). This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Cydsa is a major Mexican industrial company with leading market share in some of its lines of business and with long-standing relationships with major Mexican and international companies. Cydsa is engaged in manufacturing and marketing products and services in the following industries: petrochemicals and specialty chemicals; synthetic fibers and yarns; packaging film and folding carton. Cydsa's operations are organized and managed through the following business segments: Chemicals and Plastics; Fibers and Yarns and Packaging Film and Folding Carton. EMPRESAS ICA: Bear Stearns Initiates Coverage at Peer Perform ------------------------------------------------------------- Investment bank Bear Stearns initiated coverage of Mexican construction company Empresas ICA SA (ICA) with a "peer perform" rating, reports Dow Jones Newswires. The rating reflects an increase of construction projects won by ICA. ICA was recently part of a consortium that won a US$690-million refinery project for state oil monopoly Petroleos Mexicanos. Moreover, the company is also working on the US$750 million El Cajon hydroelectricity contract that it won from the state power company, the Federal Electricity Commission. High oil prices, the electoral cycle, and economic growth make for bullish construction spending, Bear Stearns said. Bear Stearns described 2004 as a turnaround year for ICA, which began to report profits and improve margins while continuing to divest non-core assets. CONTACTS: Ing. Alonso Quintana Phone: (5255) 5272-9991 x3468 e-mail: alonso.quintana@ica.com.mx Lic. Paloma Grediaga Phone: (5255) 5272-9991 x3664 e-mail: paloma.grediaga @ica.com.mx In the United States: Zemi Communications Mr. Daniel Wilson Phone: (212) 689-9560 E-mail: d.b.m.wilson@zemi.com GRUPO POSADAS: S&P Issues Report, Details on Debt Ratings --------------------------------------------------------- Issuer Corporate Credit Rating: BB-/Stable/-- Affirmed Rating: Senior Unsecured debt (Foreign currency) BB- Rationale The rating on Posadas reflects its somewhat high financial leverage, cyclicality of the hotel industry, and geographic concentration within Mexico. These factors are offset by the company's being the largest hotel operator in Mexico, a diversified hotel portfolio with well-recognized brands, and the development of competitive advantage through technology. Posadas operated 83 hotels with a total of 15,799 rooms as of June 2004. The company's operations are concentrated in Mexico, where it runs 65 hotels (80% of rooms, generating 85% of the EBITDA). It also operates 11 hotels in Brazil, six in the U.S., and one in Argentina. Although maintaining the same base of directly owned hotels, Posadas is gradually changing its mix so that its growth primarily derives from managed and leased hotels, which generate a greater return on investment. Nevertheless, its owned hotels still contribute the highest portion of the company's revenues (55% of the total revenues as of June 2004, from 58% a year before). Posadas has developed two technological platforms, "Revenew" and "Conectum," to increase the efficiency and agility of its operations, and so reduce operating and administrative expenses, as well as to cope with pricing pressures from intermediaries (reservations and distribution channels). As a result, as of the second quarter, the company was able to reduce its administrative costs by 8% compared with second-quarter 2003. In the past couple of years, Posadas' occupancy rates have been negatively influenced by the terrorist attacks of Sept. 11, 2001, by Hurricane Juliette on the Pacific Coast in the same month, and by the Iraq War in first-quarter 2003. The outlook for 2005, however, is more positive in light of the economic recovery in Mexico and the U.S., as evidenced by the upward trend in occupancy levels of 4% (percentage points) since the end of 2003. As of June 30, 2004, the total debt of the company was $338 million, representing a total debt-to-capitalization ratio of 49%, which in the next few years, should gradually decrease toward 40%. EBITDA interest coverage for the preceding 12 months (LTM) was 3.4x, compared to 2.9x for the 12 months ended June 2003. Standard & Poor's Ratings Services expects that this ratio to increase to 4.0x. The EBITDA margin, meanwhile, remained at 25.2% in the 12 months ended June 30, 2004, due to Posadas' efforts in reducing costs and expenditures. Margins are expected to improve in the medium term as a result of the company's potential to operate hotels with minimum capital investment and the efficiencies obtained by applying the technology that has already helped the company reduce costs and improve distribution. Liquidity At June 30, 2004, Posadas had about $21 million in cash and approximately $59 million available in uncommitted credit lines, while its free operating cash flow is expected to be between $25 million and $43 million for the next two years. In turn, Posadas' short-term financial obligations amount to $61.0 million. Outlook The stable outlook reflects our perception that the company will continue improving its operating performance gradually, and that it will be able to generate stable cash flows, even under adverse economic conditions. Business Description Grupo Posadas is the largest hotel operator in Mexico, with 83 hotels and a total of 15,799 rooms as of June 2004, while its next competitor operates around 5,502 rooms. Posadas' operations are concentrated in Mexico, where it operates 80% of its rooms through 65 hotels. It also operates 11 hotels in Brazil, six in the U.S., and one in Argentina. Posadas originated in 1967. The company is 52% owned by the Azcarraga family, and the balance is publicly traded (its shares have been traded in the Mexican Stock Exchange since 1992). Business Risk The tourism industry in Mexico has continued to grow (11% as of June 2004 compared with the same period of 2003) as a result of the growth in the Mexican economy. The tourism GDP contributes 8% of the total GDP. Among all the business segments, the business travel segment has been the one growing at a higher pace. We expect that the lodging industry will have a gradual recovery throughout 2004 and will likely continue throughout 2005. The company operates its hotels mainly through the Fiesta Americana (FA) and Fiesta Inn (FI) brands. FA hotels offer services in the main coastal and urban destinations within Mexico, focusing on high-end business and leisure travelers; there are nine units located in beaches and 12 in cities, with 2,760 and 2,951 rooms, respectively. A typical FA unit consists of 150-600 rooms, with an average construction cost of $100-$130 per room. FI hotels are smaller ( between 120-150 rooms), with lower prices, mainly targeting the business traveler. While FI hotels are typically located in urban locations, a scaled-down FI version is being built to target Mexico's second-tier smaller cities. A typical FI room cost of construction ranges between $45-$70 ($45 for FI's smaller versions). The FI brand has proven to be a successful format, generating around 28% of total revenues in 2003, from 13% in 1996. Since the Caesar Park acquisition in 1998, Posadas has been growing in the tourism and business segments in South America. As of June 30, 2004, the company operated 11 hotels in Brazil with 2,128 rooms (13.5% of the total company's rooms) in Brazil and a 170-room hotel in Argentina. Posadas believes that there is still significant growth potential in those countries (focus on Brazil) and it plans to open five hotels in the next 18-24 months in the region. In addition, Posadas currently operates three top-luxury hotels under its Fiesta Americana Grand brand format: Los Cabos, Canc�n, and Mexico City-Chapultepec. Another one is opening its doors later this year (Cancun). To increase customer loyalty, in 1996 the company relaunched its "Fiesta Rewards" program, which, as of today, has around 1,200,000 members (20% increase compared with June 2003) and contributed 24% of FA's and 39% of FI hotels' occupancy in 2003. Also, to reduce cyclicality in coastal properties, Posadas established Fiesta Americana Vacation Club (FAVC), giving members the right to use Posadas' properties for 40 years. As of December 2003, FAVC had 9,475 members, an increase of 62% compared to 2002, and contributed 16% of Posadas' revenues and 12% of its EBITDA. The company conducts its operations through three different schemes: owned hotels, leased hotels (the company pays the higher of a fixed rent or a variable rent, depending on results), and third-party hotels (receiving, among others, a fee based on the revenues of the hotels and an incentive fee based on operating income). The typical length of a management contract is 10 years. As of June 30, 2004, of the 83 hotels, the company has a majority stake in 33 (55% of total revenues), manages 34 hotels (around 16% of total revenues), leases 14 hotels (12% of total), and has two FAVCs (around 18% of the total revenues). Around 60% of the total revenues comes from urban hotels, and the rest is from the coastal beach hotels. Nevertheless, the company intends to increase the revenues generated from the operation of third-party hotels, which are more profitable and require less direct investment by the company. These hotels usually are developed through alliances with local investors, who construct the hotels, and are afterwards operated by Posadas, contributing to increased operating margins and higher returns on investment. During 2003, the company continued its expansion by adding 10 new hotels to its portfolio (one FA, six FI, and three Caesar Business). As of the first half of 2004, Posadas opened six hotels and has about 28 hotels in development, to be opened in the next two years. Posadas has been investing in technology for the past five years, developing two projects that were launched in the last quarter of 2003, namely the Conectum and Revenew platforms. Conectum is a central inventory that manages the accounting of all Posadas' hotels. With this program, Posadas has been able to reduce operating and administrative costs by 15% as of first- quarter 2004, has obtained purchase discounts between 15%-25%, and has better observance of accounting policies. As of June 2004, all its own Mexican hotels were fully functioning under Conectum; the remaining hotels will be integrated into the system in the second half of 2004. In terms of Revenew process, it helps to more accurately predict customer demand and determine pricing, which helps the company to determine the types of reservations that will maximize profits during a particular period, particularly reducing price cannibalization derived from some e-distributors. Financial Policy: Aggressive The company's financial policy has been aggressive, as evidenced by past acquisitions and somewhat high leverage. The company's financial targets are an interest coverage ratio in the 3.5x-4.0x range, and total debt-to-EBITDA of around 3.0x. Financial Profile Profitability and cash flow Posadas' revenues and EBITDA during 2003 reached $348 million and $85 million, respectively. The company's operating income in 2003 was affected by an increase of 10% of operating expenses due to the changes in the recognition of the intangible assets; however, its EBITDA margin has remained in the 23%-24% range, and it is expected to gradually increase as a result of higher revenues derived from the opening of new hotels and from the full implementation of two platforms. Hotel rates have been decreasing; nevertheless, we expect a recover of the industry followed by the recovery of rates. Due to the events in 2003, rate decreases have led to a revenue per available room (RevPAR) decrease of 2% as of December 2003 compared with 2002. Nevertheless, in 2005, it is expected to increase back toward $60 RevPAR. In terms of occupancy, while the urban hotels are showing an increasing tendency, the coastal hotels are expected to have an occupancy of around 60% the next two years, which is in accordance with past occupancy rates of Posadas. As of December 2003, Posadas had occupancy rates of 60.5%, which is comparable with Posadas' past occupancy rates. EBITDA interest coverage for the past 12 months was 3.4x, compared with 3.2x as of December 2003. Free operating cash flow is expected to remain positive at around $38 million for the next three years, equivalent to 12% of debt. Annual capital expenditures are expected to be in the $40 million neighborhood in the next few years, with almost 60% of them aimed for maintenance. Capital structure and financial flexibility Around 67% of the company's debt is dollar denominated; however, around 45% of the company's revenues are dollar denominated, partially reducing the exchange exposure of its debt. The company has issued debt in the local markets, providing for additional financial flexibility source. Primary Credit Analyst: Fabiola Ortiz, Mexico City (52) 55-5081- 4449; fabiola_ortiz@standardandpoors.com Secondary Credit Analyst: Manuel Guerena, Mexico City (52) 55- 5081-4411; manuel_guerena@standardandpoors.com SATMEX: Govt. Increases Participation in Administration ------------------------------------------------------- As a shareholder of Satelites Mexicanos (Satmex), Mexico's federal government has finally decided to get involved in the administration of the satellite company by appointing its own representative as a member of the firm's board. According to an El Universal report, the Transportation and Communications Secretariat (SCT) designated Mr. Francisco Ramirez Vazquez, the assistant director of supervision and analysis of the Unit of Support for Structural Change at the SCT, as a member of the Satmex board. Ramirez's new position will give him the right to declare opinions and influence the decisions of Satmex. At the same time, the government has also joined the negotiation tables with the company's creditors. The government holds 23.57% of the stock of Satmex and is also one of the main creditors of Servicios Corporativos Satelitales, which is the firm owning 75% of Satmex shares. It owes the government approximately US$190 million. ======= P E R U ======= INTERBANK: Fitch Upgrades Support Rating After Sovereign Action --------------------------------------------------------------- Fitch Ratings has upgraded the support rating of Peruvian bank Interbank to '3' from '4' and affirmed the bank's remaining ratings as follows: --Long-term foreign currency 'BB-'; --Short-term foreign currency 'B'; --Rating Outlook Stable; --Long-term local currency 'BB-'; --Short-term local currency 'B'; --Individual 'D'. The improved support ratings follow the upgrade of Peru's foreign currency rating to 'BB' from 'BB-'. In Fitch's view, considering the stronger creditworthiness of the sovereign, there is improved capacity to support the bank. Therefore, Fitch believes there is a moderate probability of support, were it ever needed. The Peruvian authorities have a vested interest in supporting Interbank, given its importance to the system. CONTACT: Ricardo Chaves +1-212-908-0606 Peter Shaw +1-212-908-0553, New York ================================= T R I N I D A D & T O B A G O ================================= MISSISSIPPI CHEMICAL: U.S. Court Confirms Reorganization Plan ------------------------------------------------------------- Mississippi Chemical Corporation (OTC Bulletin Board: MSPIQ.OB) announced Wednesday its second amended plan of reorganization has been confirmed by the U.S. Bankruptcy Court for the Southern District of Mississippi. The Company expects to implement the plan of reorganization by the end of the calendar year by consummating the sale of the company's shares to Terra Industries Inc. after the spin off of the company's phosphate business to certain creditors. Mississippi Chemical Corporation is a leading North American producer of nitrogen and phosphorus products used as crop nutrients and in industrial applications. Production facilities are located in Mississippi, Louisiana, and through Point Lisas Nitrogen Limited, in The Republic of Trinidad and Tobago. On May 15, 2003, Mississippi Chemical Corporation, together with its domestic subsidiaries, filed voluntary petitions seeking reorganization under Chapter 11 of the U.S. Bankruptcy Code. * TRINIDAD & TOBAGO: IMF Review Finds Favorable Conditions ---------------------------------------------------------- On October 22, 2004, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Trinidad and Tobago. BACKGROUND Trinidad and Tobago's economy, which is endowed with large energy reserves, is experiencing a strong energy sector-based expansion due to increased output and high international prices. The energy sector already accounts for about 40 percent of GDP, 83 percent of domestic goods exports, and slightly more than 40 percent of government revenue. Large increases in oil and gas output expected over the next decade will reinforce its central role. As in other energy-rich countries, while energy exports greatly reduce domestic and external resource constraints, they pose their own macroeconomic and governance-related challenges- in particular, for employment creation, poverty reduction, and fiscal transparency. Real GDP growth picked up sharply in 2003, driven mainly by an expansion in the energy sector, in the context of persistent high unemployment and continued low inflation. Real GDP grew by 13 percent, led by a 30 percent expansion in the energy sector. This was due to a surge in liquid natural gas production as the third LNG plant started operations in April 2003, as well as to increases in the output of crude oil and petrochemicals. The performance of non-energy sectors was mixed: while there was a strong expansion in manufacturing, construction, and financial services, the agricultural sector declined by some 14 percent. The unemployment rate continued to decline and stands at about 10� percent. However, unemployment has been kept high by a number of structural factors, which have led to a low labor intensity of growth. These factors include the high capital intensity of the energy sector, skill mismatches, labor market rigidities which reduce wage flexibility, and the impact of energy-related inflows on the real exchange rate. It should be noted, however, that using the standard International Labor Organization definition, the unemployment rate would stand at 7� percent. While average consumer price inflation has been close to 4 percent, core inflation (which excludes food price increases) has been about 2 percent. The overall balance of the consolidated nonfinancial public sector (NFPS) improved sharply in FY 2002/03, although deficits remain in some entities. The NFPS shifted from a deficit of about 4 percent of GDP in FY 2001/02 to a surplus of 2 percent of GDP in FY 2002/03. The turnaround reflected the marked improvement in the finances of the state-owned energy companies due to strong product prices and, in the case of gas, increased output. While most of the energy-related companies, and the telecommunication company, had operating surpluses, a number of enterprises continued to record deficits-in particular, the fuel distribution company and the water utility, whose tariffs have not kept pace with costs, and the sugar company, which incurred large severance payments related to its restructuring. Public sector debt declined by about 4 percentage points of GDP, to 56 percent of GDP as of end-September 2003. The Central Bank of Trinidad and Tobago (CBTT) continued to maintain a stable exchange rate against the U.S. dollar, which- given the large energy-related inflows-was consistent with a reduction in the policy interest rate and some further build up in international reserves. The exchange rate has remained within a narrow band around TT$6.3 per U.S. dollar-a virtually unchanged level since late 1997-and international reserves have accumulated moderately over the last two years. The CBTT lowered the benchmark repo rate by 25 basis points in September 2003, to 5 percent, which was intended to stimulate growth in the non- energy sector. To improve financial intermediation and level the playing field between banks and non-banks, the CBTT lowered the reserve requirement, from 18 percent to 14 percent, in October 2003. These measures have contributed to a significant reduction in commercial bank lending rates, and an increase in credit to the private sector. The balance of payments recorded an increased surplus in 2003, despite large capital outflows, reflecting the strong performance of the energy sector. The external current account recorded an unprecedented surplus of 13 per cent of GDP, compared to approximate balance in 2002. The sharp increase in gas output, combined with an upswing in international oil and gas prices, resulted in a boom in total export earnings, which rose by 13 percentage points of GDP, despite a decline in manufacturing exports. The capital account recorded a deficit equivalent to 10 percent of GDP in the context of sizable bond issues by regional governments and corporations, and outward foreign direct investments. Direct investment inflows rose in the context of major energy-related investment projects. At the end of the year, gross official reserves stood at US$2.3 billion, equivalent to 5 months of imports. Public sector external debt declined by 3 percentage points of GDP, to about 15 percent of GDP at end 2003, most of which long-term and from commercial creditors. Since August 2002, the Trinidad and Tobago dollar has depreciated by 9 percent in real effective terms. This movement reflected mainly the fall in the value of the U.S. dollar, to which the currency has been effectively pegged, against the currencies of Trinidad and Tobago's major trading partners, and in particular the euro. Nonetheless, the Real Effective Exchange Rate remains some 15 percent above its 1997 level. EXECUTIVE BOARD ASSESSMENT Executive Directors noted that strong expansion in energy output and high international prices have boosted Trinidad and Tobago's growth, exports, and fiscal revenues, giving rise to substantial fiscal and external current account surpluses, while inflation has remained low. These favorable developments have greatly reduced domestic and external resource constraints. However, Directors observed that significant macroeconomic challenges remain, notably to boost non-energy investment and growth in order to reduce the persistent high unemployment rate and the dependence of the budget on energy-based revenues. This will require determined implementation of a sound policy framework that promotes external competitiveness and economic diversification. Directors emphasized that a key element of such a growth- oriented policy framework would be prudent fiscal management, which should also provide for sustainable consumption of energy resources. They welcomed the budget surplus achieved in FY 2003/04 and anticipated that-given the strength of projected energy-based revenues-the government is in a position to maintain substantial surpluses over the medium term. To this end, expenditure should continue to be managed prudently, based on a comprehensive public expenditure review. Directors advised the authorities to continue to contain the growth of the wage bill and transfers to households. This would allow capital expenditure to grow more rapidly than in recent years in order to better address the country's infrastructure and social sector needs. However, it will be important to ensure that public investment projects are of high quality and, more generally, to improve the effectiveness of government spending. Over the long term, the envisaged move to output budgeting and a fully-funded pension scheme for government employees will help maintain fiscal discipline. Directors observed that, notwithstanding the strong energy revenue outlook, it is important to move ahead with long- standing plans for tax reform and strengthening tax administration. They were encouraged that the authorities are at an advanced stage of preparation of a new energy tax regime, aimed at better capturing the rents from natural gas, and supported the authorities' request for Fund technical assistance for a reform of non-energy taxes, revenue from which has been eroded by exemptions and weak compliance. While plans to strengthen the revenue stabilization fund to cover the natural gas sector are welcome, Directors noted that a more comprehensive approach is needed, not only to smooth out the budgetary use of energy resources, but also to ensure that such use is sustainable over an appropriately long period. This would address inter-generational equity considerations and allow time for economic diversification efforts to take hold. In this context, the authorities should consider the scope for institutionalizing fiscal procedures that would help ensure a continued budget surplus position over the medium term. Directors considered that the defacto peg of the exchange rate has facilitated low inflation and helped shield the non-energy sector from pressures towards exchange rate appreciation from energy-related inflows. They concurred that competitiveness issues are best addressed through prudent macroeconomic policies and structural reforms. However, they welcomed the commitment by the authorities not to resist depreciation pressures, and to allow greater exchange rate flexibility if needed to protect the international reserve position and increase the economy's ability to cope with external shocks. Directors felt that the central bank has generally struck an appropriate mix in its liquidity management between sales of foreign exchange and open market operations. They noted that the recent expansion in the auction system for government securities should enhance the role of open market operations in managing liquidity, as well as promote development of the capital market. They also supported the reduction of reserve requirements to lower bank intermediation costs. Directors stressed that persistent high unemployment, the decline in non-energy exports in 2003, and the underlying pressures toward real appreciation reinforced the importance of targeted structural reforms to enhance external competitiveness in the non-energy sector and support medium-term growth. They, therefore, welcomed the authorities' broad reform agenda, and encouraged its full specification and steadfast implementation. Regarding public sector reform, Directors commended the restructuring of the state-owned sugar company in conjunction with a significant safety net for the large work force affected. Looking ahead, Directors attached importance to the planned restructuring of the port operations, efforts toward greater efficiency in the public utilities, and initiatives to improve transparency and accountability in the public entities. It will also be critically important to address the unemployment problem in a determined manner, including by tackling labor market rigidities, and fostering the right mix of labor skills through appropriate education and training. Directors welcomed other ongoing supply-side reforms, notably liberalization of the telecommunications sector. Directors stressed the importance of the ongoing program to modernize and upgrade financial regulation and supervision, noting Trinidad and Tobago's increasing exposure in the regional financial market. In this context, Directors welcomed the recent expansion of the central bank's supervisory responsibilities to cover the insurance and pension sectors, and encouraged the authorities to vigorously pursue their broad legislative agenda for the financial system. They also encouraged the government to move ahead with its plans for reforming the National Insurance Scheme and the regulatory environment for private pension schemes. Directors welcomed the authorities' request to participate in the Financial Sector Assessment Program in 2005. Directors noted that Trinidad and Tobago provides core statistics to the Fund that are broadly adequate for surveillance. Nevertheless, they encouraged further strengthening of the statistical system, especially in the areas of public enterprise account, and the capital account of the balance of payments. Directors welcomed the authorities' decision to participate in the General Data Dissemination System. To view Economic Indicators: http://bankrupt.com/misc/TrinidadandTobago.htm CONTACT: IMF - 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 ================= V E N E Z U E L A ================= CITGO: Excellent Results Yield $400M Dividend --------------------------------------------- CITGO Petroleum Corporation, an indirect wholly owned subsidiary of Petroleos de Venezuela, S.A. (PDVSA), declared Wednesday a dividend of $400 million payable to its parent. "Our results this year have been outstanding," stated CITGO President and CEO Luis Mar�n, "allowing us to pay this dividend. Clearly, CITGO is a solid investment for PDVSA." CITGO, based in Houston, is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals, refined waxes, asphalt and other industrial products. The company is owned by PDV America, Inc., an indirect wholly owned subsidiary of Petroleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and Lucilo Junior M. Pinili, Editors. Copyright 2004. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *