/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050328.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, March 28, 2005, Vol. 6, Issue 60 Headlines A R G E N T I N A ALPI ASOCIACION: Seeks Court Approval for Reorganization ANABEA S.R.L.: Court Concludes Reorganization AZEGAL S.R.L.: Enters Bankruptcy on Court Orders BUENOS AIRES EXIMPORT: Reorganization Request Approved CELRED S.R.L.: Verification Period Extended CONSTRUCTORA SOLER: Files Petition to Reorganize CRISOMAR S.R.L.: Court Converts Bankruptcy to Reorganization CRM: Moody's Leaves Default Ratings on Bonds Unchanged GABIKAR S.R.L.: Awaiting Reorganization Ruling HECTOR GUTIERREZ S.A.: Court Commutes Liquidation IMAGEN SATELITAL: Bonds Still In Default IMPRESIONES ARCO IRIS: Liquidates Assets to Pay Debts MASTELLONE HERMANOS: Moody's Maintains Default Ratings on Bonds NEWMAX S.R.L.: Court OKs Creditor's Bankruptcy Motion NETESPACIO S.A.: Proceeds to Liquidate Assets PETROBRAS ENERGIA: Prepays Corporate Notes STYX S.R.L.: Enters Bankruptcy on Court Orders TOM DISTRIBUIDORA S.R.L.: Court Resets Liquidation Schedule TRANSENER: Postpones Debt Restructuring Deadline to April 6 VINTAGE PETROLEUM: Outlines Performance Bonus Program B E R M U D A FOSTER WHEELER: Inks $53M Power Plant Contract With SembCorp B R A Z I L BANCO VOTORTANTIM: S&P Affirms Ratings NET SERVICOS: Net Loss More Than Doubles in 2004 * BRAZIL: IMF Board Completes Review of Stand-By Arrangement C H I L E AES GENER: Rating Reflects Relatively High Generation Cost MANQUEHUE NET: Bets on Broadband to Boost Profits This Year C O L O M B I A * COLOMBIA: Secures $170M Financing From World Bank E L S A L V A D O R INVERSIONES FINANCIERAS: Fitch Affirms `BB' Nat'l Scale Rating J A M A I C A AIR JAMAICA: Provides More Info on Flights' Suspension M E X I C O BALLY TOTAL: Katherine Abbott Joins Bally as VP and Treasurer PEMEX: Evaluates Hydrocarbon Reserves as of Jan. 2005 XERIUM TECHNOLOGIES: Moody's Assigns B1 Rating; Outlook Stable P U E R T O R I C O DORAL FINANCIAL: Explores Alternatives Regarding Sale of IOs V E N E Z U E L A CADAFE: To Meet Face-to-Face With Union on March 29 PDVSA: Inks $202M Accord to Develop Railroads PDVSA: Enel Requests Arbitration to Recoup $200M - - - - - - - - ================= A R G E N T I N A ================= ALPI ASOCIACION: Seeks Court Approval for Reorganization -------------------------------------------------------- ALPI Asociacion Civil, a physical therapy center in Buenos Aires, has requested for reorganization after failing to pay its liabilities since the first semester of 2001, reports La Nacion. 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. 18 of the city's civil and commercial tribunal. Clerk No. 36 assists on this case. CONTACT: ALPI Asociacion Civil Soler 3945 Buenos Aires ANABEA S.R.L.: Court Concludes Reorganization --------------------------------------------- The reorganization of Anabea S.R.L. reaches its conclusion after Court No. 7 of Buenos Aires' civil and commercial tribunal homologated the debt agreement signed between the Company and its creditors. The city's Clerk No. 13 assists the court on this case. CONTACT: Anabea S.R.L. Ruiz De Los Llanos 645 Buenos Aires Phone: (011) 4642-2563/4641-4062 Fax: (011) 4642-2563 AZEGAL S.R.L.: Enters Bankruptcy on Court Orders ------------------------------------------------ Court No. 19 of Buenos Aires' civil and commercial tribunal declared Azegal S.R.L. bankrupt after the Company defaulted on its debt payments. The order effectively places the Company's affairs as well as its assets under the control of court- appointed trustee Irma Susana Aguilera. As the trustee, Ms. Aguilera is tasked with verifying the authenticity of claims presented by the Company's creditors. The verification phase is ongoing until April 15. Following claims verification, the trustee will submit the individual reports based on the forwarded claims for final approval by the court on May 30. A general report of the case will also be submitted on July 11. Infobae reports that Clerk No. 37 assists the court on this case. Proceeds from the sale of the Company's assets will be used to repay its debts. CONTACT: Ms. Irma Susana Aguilera, Trustee Luis Saenz Pena 1690 Buenos Aires BUENOS AIRES EXIMPORT: Reorganization Request Approved ------------------------------------------------------ Court No. 21 of Buenos Aires' civil and commercial tribunal approved the "Concurso Preventivo" petition filed by Buenos Aires Eximport SACFI, reports local news source La Nacion. The Company will undergo the reorganization process with Ms. Maria Barbieri as trustee. She will verify creditors' proofs of claim until August 4. Verifications are done to ascertain the nature and amount of the Company's debts. The Company will also hold an informative assembly on March 9, 2006 to present a completed settlement proposal to its creditors. Clerk No. 41 assists the court on this case. CONTACT: Buenos Aires Eximport SACFI Teniente General Juan Domingo Peron 315 Buenos Aires Plantation: Irineo Portela, Baradero Provincia de Buenos Aires Ms. Maria Barbieri, Trustee Avenida Cabildo 2040 Buenos Aires CELRED S.R.L.: Verification Period Extended ------------------------------------------- The verification of creditors claims for the Celred S.R.L. has been extended until June 1, says Infobae. Creditors with claims against the Company must submit proof of the debts to trustee Miryam Lewenbaum by the said deadline to qualify under the Company's settlement plan. Court No. 6 of Buenos Aires' civil and commercial tribunal has jurisdiction over this case. The city's Clerk No. 12 assists the court with the proceedings. CONTACT: Ms. Miryam Lewenbaum, Trustee Montevideo 666 Buenos Aires CONSTRUCTORA SOLER: Files Petition to Reorganize ------------------------------------------------ Local construction company Constructora Soler S.A. has filed a "Concurso Preventivo" motion, reports La Nacion. The Company is seeking to reorganize its finances following cessation of debt payments since June 19 last year. The Company's case is pending before Court No. 24 of Buenos Aires' civil and commercial tribunal. Clerk No. 48 assists the court on this case. CONTACT: Constructora Soler S.A. Scalabrini Ortiz 2368 Buenos Aires CRISOMAR S.R.L.: Court Converts Bankruptcy to Reorganization ------------------------------------------------------------ Crisomar S.R.L. proceeds with reorganization after Court No. 9 of Buenos Aires' civil and commercial tribunal converted the Company's ongoing bankruptcy case into a "concurso preventivo," states Infobae. Under insolvency protection, the Company will be able to draft a proposal designed to settle its debts with creditors. The reorganization also prevents an outright liquidation. A court-appointed trustee will submit individual reports from the case on March 18 followed by a general report on May 3. CRM: Moody's Leaves Default Ratings on Bonds Unchanged ------------------------------------------------------ Moody's Latin America Calificadora de Riesgo S.A., maintains a 'D' rating on a total of US$350 million worth of corporate bonds issued by Compania de Radiocomunicaciones Moviles S.A.(CRM), the CNV says on its Web site. The Company's financial health as of December 31, 2004 determined the rating, which denotes a payment default. The CNV described the affected bonds as "Programa Global de Ons simpleas, autorizado por AGE de fecha 26.6.97 y 23.9.97". These bonds, which are classified under "Program", matured in March 2003. GABIKAR S.R.L.: Awaiting Reorganization Ruling ---------------------------------------------- Court No. 12 of Buenos Aires' civil and commercial tribunal is now analyzing whether to grant Gabikar S.R.L. approval for its petition to reorganize. La Nacion recalls that the Company filed a "Concurso Preventivo" petition following cessation of debt payments on April 25, 2005. The city's Clerk No. 23 assists the court on the Company's case. CONTACT: Gabikar S.R.L. Avenida de los Constituyentes 5918 Buenos Aires HECTOR GUTIERREZ S.A.: Court Commutes Liquidation ------------------------------------------------- Rio Negro-based Hector Gutierrez S.A., which was undergoing reorganization, entered bankruptcy on orders from Court No. 5 of the city's civil and commercial tribunal. Infobae relates that the court appointed Mr. Carlos Barreda to serve as trustee on the case. Mr. Barrreda will conduct the credit verification process "por via incidental." CONTACT: Hector Gutierrez S.A. Barrio Matadero Villa Regina (Rio Negro) Mr. Carlos Barreda, Trustee Mitre 810 General Roca (Rio Negro) IMAGEN SATELITAL: Bonds Still In Default ---------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. maintains a 'D' rating on US$80 million worth of corporate bonds issued by Argentine Company Imagen Satelital S.A., the CNV relates. The rating issued applies to bonds called "obligaciones negociables" That will expire on May 2, 2005. The Company's financial health as of December 31, 2004 determined the action taken by Moody's. IMPRESIONES ARCO IRIS: Liquidates Assets to Pay Debts ----------------------------------------------------- Buenos Aires-based Impresiones Arco Iris Cordoba S.A. (antes Arco Iris Impresiones S.A.) will begin liquidating its assets following the bankruptcy pronouncement issued by Court No. 22 of the city's civil and commercial tribunal. The ruling places the Company under the supervision of court- appointed trustee Carlos Daniel Brezinski. The trustee will verify creditors' proofs of claims until May 23. The validated claims will be presented in court as individual reports on July 6. Infobae reports that the trustee will also submit a general report, containing a summary of the Company's financial status as well as relevant events pertaining to the bankruptcy, on September 2. The bankruptcy process will end with the disposal of the Company's assets. CONTACT: Mr. Carlos Daniel Brezinski, Trustee Lambare 1140 Buenos Aires MASTELLONE HERMANOS: Moody's Maintains Default Ratings on Bonds --------------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. maintains a 'D' rating on $225 million worth of bonds issued by Argentine Company Mastellone Hermanos S.A., relates the Comision Nacional de Valores (CNV), Argentina's securities regulator. The rating, based on the Company's finances as of December 31, 2004, is assigned to bonds that are in payment default, according to the ratings agency. The affected bonds are described as "Obligaciones Negociables, autorizadas por AGE de fecha 28.8.97." due on April 1, 2008. NEWMAX S.R.L.: Court OKs Creditor's Bankruptcy Motion ----------------------------------------------------- Court No. 5 of Buenos Aires' civil and commercial tribunal declared Newmax S.R.L. bankrupt, says La Nacion. The ruling comes in approval of the bankruptcy petition filed by the Company's creditor, Cooperativa de Vivienda Dielmar Ltda. Court-appointed trustee Monica Beatriz Cascioli will examine and authenticate creditors' claims until May 20. This is done to determine the nature and amount of the Company's debts. The city's Clerk No. 10 assists the court on the case that will close with the liquidation of the Company's assets. CONTACT: Newmax S.R.L. Avenida Triunvirato 4135 Buenos Aires Ms. Monica Beatriz Cascioli, Trustee Parana 723 Buenos Aires NETESPACIO S.A.: Proceeds to Liquidate Assets --------------------------------------------- Netespacio S.A. entered bankruptcy protection after Court No. 21 of Buenos Aires' civil and commercial tribunal approved a bankruptcy motion filed by Adeco Argentina S.A., reports La Nacion. The Company's failure to pay US$3,756.99 in debt prompted the creditor to file the petition. Working with the city's Clerk No. 41, the court assigned Mr. Leon Fucks as trustee for the bankruptcy process. The trustee's duties include the authentication of the Company's debts and the preparation of the individual and general reports. Creditors are required to present proofs of their claims to the trustee before May 27. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. Payments will be based on the results of the verification process. CONTACT: Netespacio S.A. Marcelo Torcuato de Alvear 777 Buenos Aires Mr. Leon Fucks, Trustee Bouchard 644 Buenos Aires PETROBRAS ENERGIA: Prepays Corporate Notes ------------------------------------------ Argentine energy Company Petrobras Energia (NYSE: PZE) announced that on March 22 it prepaid the aggregate remaining principal plus interest accrued as of the date of payment, of Class K notes with a nominal value of US$ 286,262,000 due 2007 ("Class K") and Class M notes with a nominal value of US$ 181,824,000 due 2007 ("Class M"), both issued under the US$2.5 billion Medium-Term Notes Program. The repaid principal amounted to US$113,805,330.00 for Class K notes and US$72,285,160.00 for Class M notes. These payments, in addition to those already made in February 2005 in the amount of US$90,872,000 for Class K and US$57,719,000 for Class M, total US$334,681,490. In all cases, the amount of principal repaid is related to the nominal value of debt issued. Both Classes included a series of covenants, which were fully complied with during the effective period. The notes in question were issued in October 2002 under the global process involving restructuring of the Company's financial obligations carried out during said year. The notes mentioned above were partially repaid with the Company's own resources and with new financing operations, with improved terms: a reduced cost and a significant extension of the term with respect to that of the notes already repaid, allowing for better alignment of financial maturities with cash provided by our operations. CONTACT: Petrobras Energia Participaciones SA Avenida de Mayo 701, Piso 16 Buenos Aires, Phone: (212) 657-5100 Fax: (212) 825-5674 Web Site: http://www.petrobrasenergia.com STYX S.R.L.: Enters Bankruptcy on Court Orders ---------------------------------------------- Styx S.R.L. entered bankruptcy protection after Court No. 26 of Buenos Aires' civil and commercial tribunal, with the assistance of Clerk No. 52, ordered the Company's liquidation. The order effectively transfers control of the Company's assets to a court-appointed trustee who will supervise the liquidation proceedings. Infobae reports that the court selected Mr. Julio Pedro Salaberry as trustee. He will be verifying creditors' proofs of claims until the end of the verification phase on May 20. Argentine bankruptcy law requires the trustee to provide the court with individual reports on the forwarded claims and a general report containing an audit of the Company's accounting and business records. The individual reports will be submitted on July 5 followed by the general report that is due on August 31. CONTACT: Styx S.R.L. Avda Rivadavia 969 Buenos Aires Mr. Julio Pedro Salaberry, Trustee Chile 1485 Buenos Aires TOM DISTRIBUIDORA S.R.L.: Court Resets Liquidation Schedule ----------------------------------------------------------- Key events in the Tom Distribuidora S.R.L. liquidation case have been moved to the following dates: 1. Claims Verification Deadline: May 19, 2005 2. Individual Reports Submission: July 4, 2005 3. General Report: August 30, 2005 5. Informative assembly March 9, 2006 All proof of claims must be submitted to local accountant Sara Maria Rey De Lavolpe for authentication by the said deadline. Court No. 8 of civil and commercial tribunal has jurisdiction over this case. The city's Clerk No. 15 assists the court with the proceedings. CONTACT: Ms. Sara Maria Rey De Lavolpe, Trustee Avda Cerrito 1136 Buenos Aires TRANSENER: Postpones Debt Restructuring Deadline to April 6 ----------------------------------------------------------- Argentine power transporter Transener (TRAN.BA) has extended the deadline for its US$465 million debt-restructuring offer to give participating creditors more time to file the necessary paperwork, Dow Jones Newswires reports In a filing with the stock exchange Wednesday, the Company said it will close the offer on April 6 and doesn't expect to postpone the offer beyond that. The offer, which was launched Feb. 22, had been originally scheduled to close March 23. Transener estimates that creditors representing US$401.8 million, or 86.4% of the total eligible debt, have agreed to the restructuring deal. At the time Transener announced its debt offer, it had already signed a support agreement with a group of "principal financial creditors" holding about 66.71% of the Company's obligations. The Company, which defaulted on its obligations in 2002 amid Argentina's economic crisis, is aiming for a 97% acceptance rate because that will allow it to bypass the legal-approval process and move ahead swiftly with its debt swap. Transener is offering three options. The first is a par bond that matures in 2016. The second alternative is a cash payment worth 55% of the original face value of the notes. The last choice is a combination of Class B shares and a 2015 discount bond that carries a 18% reduction in principal. Argentine oil and gas producer Petrobras Energia (PECO.BA) and local investment group Dolphin Fund Management hold equal stakes in Citelec, Transener's holding Company. Petrobras Energia is owned by state Brazilian oil Company Petroleo Brasileiro, or Petrobras (PBR), which promised Argentine regulators it will sell its stake in the power transporter. Petrobras is expected to move ahead with that commitment once Transener has completed its debt workout. CONTACT: Paseo Colon 728 6th Floor (1063) Buenos Aires Republica Argentina Tel: (54-11) 4342-6925 Fax: (54-11) 4342-7147 Email: info-trans@transx.com.ar Web site: http://www.transener.com.ar VINTAGE PETROLEUM: Outlines Performance Bonus Program ----------------------------------------------------- In 1999, the Board of Directors of Vintage Petroleum, Inc. (the "Company") established the Vintage Petroleum, Inc. Discretionary Performance Bonus Program (as amended, the "Program"). The purpose of the Program is to enhance stockholder value by providing eligible employees of the Company, including executive officers, with an added incentive to achieve specific annual targets and goals. The Program also allows the Company to remain competitive with its peers in attracting and retaining qualified personnel. The targets and goals are approved by the Board of Directors. In 2005, the Company's executive officers and all other U.S. employees are eligible for cash incentive awards under the Program. Each executive officer of the Company is eligible to earn an individual award expressed as a percentage of base salary paid during the Program year. Executive officer cash incentive award opportunities vary by level of responsibility. There is no minimum incentive award. The maximum percentage of base salary payable as a cash incentive award is 75%, 105% or 150%, depending on the executive officer's position. Awards may be granted if specified Company financial and operating performance targets and individual performance levels are achieved and the Board of Directors determines to grant such bonuses. On March 16, 2005, the Board of Directors established the targets and goals for 2005 under the Program. During 2005, Company financial and operating performance targets are based on the Company's production, production replacement, lease operating costs, and reserve additions through acquisitions. The individual performance levels are based on the Company's performance evaluation system. The weighting between the Company targets and the individual performance levels vary depending on the executive officer's position. CONTACT: Mr. Robert E. Phaneuf Vice President - Corporate Development Vintage Petroleum, Inc. 110 W. 7th St. Tulsa, OK 74119 USA Phone: (918) 592-0101 Web site: http://www.vintagepetroleum.com ============= B E R M U D A ============= FOSTER WHEELER: Inks $53M Power Plant Contract With SembCorp ------------------------------------------------------------ Foster Wheeler Ltd. (OTCBB: FWHLF) announced Wednesday that its subsidiary Foster Wheeler Energy Limited has been awarded a $53 million contract by SembCorp Utilities UK Limited. SembCorp is creating a new stand-alone biomass-fueled power station at its Wilton International site on Teesside, northeast England. The project, known as "Wilton 10," has a total investment cost of $114 million, and is one of the UK's largest biomass renewable energy projects. The contract will be included in Foster Wheeler's first-quarter 2005 bookings. "Foster Wheeler is pleased to be involved in this important biomass-to-energy project," said Steve Davies, chairman and chief executive officer, Foster Wheeler Energy Limited. "We are bringing together key strengths from within the Company's global organization. Our project execution strategy combines the experience of our Engineering and Construction Group's Teesside office, which has an impressive project execution track record, with Foster Wheeler Global Power Group's proven bubbling fluidized-bed biomass combustion technology to deliver a total service to SembCorp to meet their business requirements." Foster Wheeler, as the main boiler contractor, will design, engineer, construct and commission the complete boiler island, including the flue gas treatment system. The plant will burn green and recycled wood and will be required to meet the emission limits of the EU's Large Combustion Plant Directive and Waste Incineration Directive. It will also be subject to a Best Available Techniques assessment subject to review by the Environment Agency of the UK. The power plant will burn around 300,000 tonnes of wood a year. This will come from a variety of sources, including specially grown energy crops, forestry logs, sawmill chips and recycled timber. The Wilton 10 project is in response to a government call, following the 1997 Kyoto Agreement, for more energy throughout the UK to be generated from renewable sources. Commercial operation of the plant is expected in the second quarter of 2007. The boiler will be designed to achieve maximum efficiency using high steam conditions and the new plant will supply 30 MWe of electricity, enough to power around 30,000 homes. This will be in addition to the 197 MWe of electricity being supplied from the existing main power station. "We were impressed with Foster Wheeler's track record in fluidized-bed biomass combustion. By utilizing their local office in Teesside, Foster Wheeler will be able to manage the execution of the project in close collaboration with SembCorp," commented Tony Lewis, project director, SembCorp Utilities UK Limited. "The conversion of biomass to energy for heat and power is a long tradition in the Scandinavian pulp and paper industry. Since the 1970s, Foster Wheeler has supplied this industry with fluidized-bed boilers, gathering an immense experience base of different biomass fuels and demanding industrial requirements for reliability. We are pleased to be able to take advantage of this experience with the Foster Wheeler Finnish boiler delivery," continued Mr. Lewis. About Foster Wheeler Foster Wheeler Ltd. is a global Company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. CONTACT: Foster Wheeler Ltd. Media Ms. Maureen Bingert Phone: 908-730-4444 Ms. Anne Chong Phone: +44-(0)118-913-2106 or Other Inquiries Phone: 908-730-4000 Web site: http://www.fwc.com =========== B R A Z I L =========== BANCO VOTORTANTIM: S&P Affirms Ratings -------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-/B' foreign currency and 'BB/B' local currency credit ratings on Banco Votorantim S.A. The outlook remains stable. "The ratings on Banco Votorantim incorporate the potential risks associated with the bank's treasury business; its exposure to sovereign risk through its government securities portfolio, a common issue for Brazilian banks; and the risks associated with the volatile economic environment in Brazil that might cause asset quality deterioration," said Standard & Poor's credit analyst Daniel Araujo. The ratings benefit from the implicit support of the Votorantim Group (FC: BB-/Stable/--; LC: BBB-/Stable/--); the group's strong brand name; and the bank's good profitability. The ratings also factor in the bank's experienced management team and efficient decision-making processes. Banco Votorantim's treasury is very active in providing hedge instruments to its clients. For this reason, the bank usually carries exposure to Brazil's sovereign risk through its government securities portfolio and open-market operations. These were equivalent to approximately 5.4x its equity (based on consolidated figures) as of December 2004. The stable outlook on Banco Votorantim's local currency rating reflects a balance between its negative ratings factors, namely the economic risks of the Brazilian banking industry, and the potential risks related to asset quality, especially its car financing segment and its holdings of government securities and its positives, including its implicit support from the Votorantim Group, its good business profile, and its consistently high profitability. The stable outlook on the foreign currency credit rating on Banco Votorantim reflects the outlook on the sovereign credit rating on the Federative Republic of Brazil. At current levels, a change in the foreign currency sovereign credit rating would lead to a similar action on the foreign currency rating on Banco Votorantim. NET SERVICOS: Net Loss More Than Doubles in 2004 ------------------------------------------------ Net Servicos de Comunicacao S.A. (Nasdaq: NETC; Bovespa: PLIM4 & PLIM3; Latibex: XNET), the largest Pay-TV multi-service operator in Latin America, and an important provider of bi-directional broadband Internet access (Virtua), announced Wednesday its 2004 earnings results. The following financial and operating information, except where otherwise stated, is presented in U.S. GAAP on a consolidated basis. a) Net Revenues reached US$ 124.9 million in the quarter, a 12.2% increase in comparison to the US$ 111.3 million recorded in 4Q03. In 2004, net revenues grew by 19.1%, reaching US$ 467.2 million in 2004 versus US$ 392.3 million in 2003. b) The 4Q04 consolidated EBITDA reached US$ 35.6 million, a 26.6% increase in comparison to the same period of the previous year of US$ 28.1 million. In the year, consolidated EBITDA was US$ 127.5 million, 29.4% higher than the US$ 98.5 million recorded in 2003. c) Operating income (EBIT) ended 4Q04 at US$ 20.0 million, a 58.9% increase versus the US$ 12.6 million recorded in 4Q03. In 2004, EBIT was US$ 70.3 million, 112.9%higher than the 2003 EBIT. d) The Company recorded a Net Loss of US$ 50.0 million in the last quarter of 2004, versus a net loss of US$ 28.7 million in the same period of the previous year. In the year, the Company recorded a net loss of US$ 95.8 million, 111% higher than the 2003's loss of US$ 45.4 million. CONTACT: Net Servicos - Investor Relations Mr. Marcio Minoru Phone: (5511) 5186-2811 E-mail: minoru@netservicos.com.br Mr. Rodrigo Alves Phone: (5511) 5186-2637 E-mail: rodrigo.alves@netservicos.com.br Web site: http://www.ir.netservicos.com.br * BRAZIL: IMF Board Completes Review of Stand-By Arrangement ------------------------------------------------------------ The Executive Board of the International Monetary Fund (IMF) has completed the 10th and final review of Brazil's performance under an SDR 27.4 billion (about US$41.75 billion) Stand-By Arrangement that was approved in September 2002 and later augmented and extended in December 2003 (see Press Releases No. 02/40 and No. 03/217). Total drawings under the Stand-By Arrangement have amounted to SDR 17.2 billion (about US$26.23 billion). Completion of the 10th review makes available an amount equivalent to SDR 910 million (about US$1.39 billion) in addition to the SDR 9.3 billion (about US$14.13 billion) that was previously made available under the arrangement but was not drawn. Brazil has not drawn under the arrangement since September 2003, and the authorities have indicated that they will not make any drawings before the arrangement expires on March 31, 2005. Following the Executive Board's discussion of Brazil's economic performance, on March 21, 2005, Ms. Anne O. Krueger, First Deputy Managing Director and Acting Chair, said: "Brazil's performance under the Stand-By Arrangement has continued to be strong, and all performance criteria for the tenth and final review have been met. The impressive track record of program implementation, together with the continued pursuit of sound macroeconomic policies and steady progress with structural reforms are clearly paying off. GDP growth reached 5.2 percent in 2004-the highest in ten years. Domestic demand rebounded during 2004, helped by the strengthening labor market and reforms to facilitate access to credit. With capacity utilization close to peak levels and rising business confidence, private investment has surged by around 11 percent over the past year. The recovery has also been aided by a very strong export performance, which has led to a record current account surplus of almost 2 percent of GDP. "Monetary policy has continued to be appropriately cautious. In light of the supply-side shocks faced by Brazil over the past year, the reduction of inflation to within the target band in 2004 was a substantial achievement. The central bank's steady tightening of monetary policy in recent months has been prudent in the face of sticky inflation expectations and persistently high core inflation, and should ensure that inflation stays on a downward path, while keeping the recovery on course. "Sustained high primary surpluses have allowed the government to steadily reduce its debt burden. Continued strong revenue performance and containment of nonpriority current spending in 2005 would provide room for further debt reduction and increased spending on high-quality infrastructure projects. The progress being made under the pilot project to strengthen mechanisms for selecting, implementing and monitoring public investment is encouraging. "Brazil's vulnerabilities have continued to decline as a result of these strong policies. The structure of public debt has steadily improved, with the share of exchange-rate linked debt falling considerably. Brazil's banking system has strengthened substantially in recent years and the system coped well with the failure of a mid-sized bank in late 2004. Reflecting recent developments, financial market sentiment is very positive: sovereign spreads have fallen to record lows, the real has appreciated in recent months, and strong capital flows have allowed the central bank to rebuild international reserves. Moreover, the government has already funded about three quarters of its US$6 billion external issuance requirements for 2005. "Looking forward, continued progress on the structural reform agenda will be key to further enhancing Brazil's growth potential and reducing poverty and inequality. Substantial structural advances in recent months include the enactment of bankruptcy, private partnership and judicial reform laws and a streamlining of foreign exchange regulations. The government's agenda for 2005 includes important tax reforms and further measures to strengthen the business environment. The current context provides a favorable opportunity to advance other priority reforms, including measures to further promote financial intermediation, increase budget flexibility, address remaining imbalances in the pensions system, and reduce labor market informality and administrative barriers to doing business," Ms. Krueger stated. Brazil is an original member of the IMF; its quota is SDR 3.04 billion (about US$4.63 billion), and its outstanding use of IMF credit currently totals SDR 16.1 billion (about US$24.58 billion) 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 ========= C H I L E ========= AES GENER: Rating Reflects Relatively High Generation Cost ---------------------------------------------------------- Corporate Credit Rating: BB+/Stable/-- Financial policy: Moderate Debt maturities: 2005 US$45.1 mil 2006 US$100.3 mil 2007 US$46.4 mil 2008 US$49.0 mil 2009 US$49.4 mil 2010 US$16.7 mil Thereafter US$615 mil Total debt US$921.9 mil (not including accrued interest) Bank lines/Liquid assets: AES Gener had US$124.2 million in consolidated cash reserves that represented 190% of its short- term consolidated debt as of December 2004. Outstanding Rating(s) AES Gener S.A. Sr unsecd debt Foreign currency: BB+ Sr secd debt Foreign currency: BB+ AES Corp. (The) Corporate Credit Rating: B+/Positive/-- Sr unsecd debt: B- Sr secd debt Local currency: BB Sub debt Local currency: B- Pfd stk Local currency: CCC+ Chivor S.A. E.S.P. Corporate Credit Rating B/Positive/-- Sr secd debt Foreign currency: B Major Rating Factors Strengths: - Long-term power sale contracts with Chilectra S.A., Chilquinta Energia S.A. and Minera Escondida, which provide certain cash flow stability, - Reliable supply source during periods of drought, although AES Gener is a relatively high-cost generator because of its thermal profile within a largely hydro system, - Most of AES Gener's cash flow is generated in Chile, - Strong demand for power and higher electricity prices in Chile, and - Good financial profile. Weaknesses: - Relatively high-cost generator in Chile, - High natural gas supply risk in Chile, and - High concentration of sale contracts offset by its customers' strong credit profile. Rationale The 'BB+' rating on AES Gener S.A., the second-largest power generator in Chile, reflects its relatively high generation cost deriving from its thermal profile in a largely hydroelectric sector and the increasing natural gas-supply risk in Chile, which already affected the availability of its natural gas-fired installed capacity since the first half of 2004. This risk is offset by AES Gener's large long-term power sales contracts with solid offtakers like Chilectra S.A. and Chilquinta Energia S.A. in the Central Interconnected System (SIC) and with a large copper mining Company in Chile's Northern Interconnected System (SING), and by its good financial profile. AES Gener's profit margin and cash flow generation are highly dependent on the evolution of the node price, which represents about 35% to 40% of total consolidated revenues, and also to the spot price in the SIC because, under normal weather conditions, the Company generally meets its large power sale contracts with Chilectra and Chilquinta with a high level of power purchases at low prices in the spot market. When spot prices are below AES Gener's generation cost, the Company buys lower-cost energy from the spot market to fulfill its power sales contracts, and thus its margins improve. When spot prices are higher, margins fall as AES Gener either buys more expensive energy in the spot market or generates at its own higher cost. In this context, adverse hydrology and the shortages in natural gas supply from Argentina (caused by restrictions imposed by the Argentine government on natural gas exports to Chile) increase the cost of buying and generating power given the need to burn higher-cost fuels and significantly influence AES Gener's margins. Standard & Poor's expects AES Gener to weather the effects of the natural gas restrictions without a significant deterioration of its financial profile due to the higher node prices in the SIC and because it considers unlikely that Argentine natural gas exports to Chile will be fully interrupted at least in the period 2005 to 2007. Standard & Poor's expects the Chilean government to maintain node prices to remain above US$40 per megawatt-hour (MWh) in the SIC in coming years to promote new investments in power generation. In this context, AES Gener's high level of sales at the node price in the SIC should allow it to offset the higher cost of purchases in the spot market and also part of the increased cost of generating with higher-cost fuels to replace natural gas. However, if Argentine natural gas exports to Chile were highly restricted at the same time that there is poor hydrology in the SIC, the Company's cost of sales would increase significantly above the current projected levels and would trigger a ratings change. AES Gener's financial profile significantly improved after it completed its debt-restructuring plan in June 2004, which included a US$328 million debt reduction (26% of the total consolidated debt held by the Company as of December 2003) and significant extension of debt maturities to levels more in accordance with the Company's cash generation capacity. As a result, AES Gener's leverage decreased to a moderate 38.7% as of Dec. 31 2004, if measured by total debt to total capital, and funds from operations (FFO) interest coverage and FFO to total average debt slightly improved to 3.0x and 19.9% in fiscal 2004 compared with 3.1x and 15.7%, respectively, in fiscal 2003. However, these ratios would have reached good levels 3.7x and 21.8%, respectively, in fiscal 2004 excluding the one time prepayment cost of Termoandes' financial debt. Although Standard & Poor's expects coverage measures to remain volatile, reflecting changes in hydrology in the SIC and volatile natural gas shortages, current ratings reflect the assumption that FFO interest coverage and FFO to total average debt will remain above 3x and 15%, respectively, from 2005 to 2008. AES Gener is the second-largest generator in the Chilean electricity market, accounting for about 20% of Chile's total generating capacity, with an installed capacity of 2,428 MW. The Company is 98.79% indirectly owned by U.S.-based AES Corp. (B+/Positive/--). The corporate credit rating on AES Gener is significantly higher than that on AES Corp. In most circumstances, Standard & Poor's will not rate the debt of a wholly owned subsidiary higher than the debt of the parent. However, it makes exceptions on the basis of the cumulative value provided by enhancements, such as structural protections, covenants, and an independent shareholder or director. The enhancements in place for AES Gener, together with certain legal insulation provided by Chilean bankruptcy law, provide Standard & Poor's with sufficient comfort to allow for the current three- notch separation. Liquidity AES Gener's liquidity is good and has significantly improved after the Company implemented its debt-restructuring plan. This is evidenced by cash reserves of US$83.1 million and US$124.2 million on an individual and consolidated basis as of Dec. 31, 2004, compared with US$30.9 million and US$65.4 million in short-term debt maturities, respectively. Standard & Poor's expects AES Gener to maintain a good liquidity position given its long-term debt profile and assuming a dividend payout ratio of about 50%, relatively low capital expenditures, normal hydrology, and manageable natural gas supply shortages in the SIC. Outlook The stable outlook incorporates Standard & Poor's expectation that the projected relatively high node prices in the SIC will allow AES Gener to offset higher operating costs deriving from higher spot prices and variable generation costs and to maintain a good financial performance. Standard & Poor's expects the Company's FFO interest coverage and FFO to total average debt to remain above 3x and 15%, respectively, in the period 2005-2008. AES Gener's ratings could be upgraded if the Company can weather the different uncertainties in the Chilean power sector and consolidates the improvement in its financial profile. On the other hand, ratings could be downgraded if a power supply crisis affects the SIC and results in a strong deterioration of financial performance. Primary Credit Analyst: Sergio Fuentes, Buenos Aires (54) 114-891-2131; sergio_fuentes@standardandpoors.com MANQUEHUE NET: Bets on Broadband to Boost Profits This Year ----------------------------------------------------------- In an effort to return to profits this year, telephony and broadband provider Manquehue Net said it will focus on providing broadband service and serving the corporate segment, relates Business News Americas. "We're betting we'll be in the black. We have systematically decreased our loss level each year," Manquehue Net general manager Jorge Troncoso was quoted as saying. The Company reported a net loss of CLP3.17 billion (US$5.42mn) in 2004, cutting by half the previous year's net loss of CLP6.17 billion. For the first time however, the Company recorded an operating profit in 2004, registering CLP1.31 billion, compared to an operating loss of COP286 million in 2003 following a reduction in operating expenses and administrative costs. CEO Jorge Troncoso has said earlier that the Company is poised to become profitable this year. =============== C O L O M B I A =============== * COLOMBIA: Secures $170M Financing From World Bank --------------------------------------------------- The World Bank approved Tuesday two loans for a total of $170 million to continue a public sector fiscal reform program, and improve access to water supply and sanitation services throughout Colombia. "These loans support the Government of Colombia's development plan through social investment and increased transparency and efficiency of the State," said Isabel Guerrero, World Bank country director for Colombia and Mexico. "Maintaining fiscal balance and investing in basic services for the poor are essential to achieve poverty reduction and faster sustainable growth." The $100 million Third Programmatic Fiscal and Institutional Structural Adjustment Loan seeks to promote fiscal reforms necessary to attain sustainable economic stability while improving efficiency and accountability of public expenditure. The new loan is part three of a financing plan that began in March 2003 with a $300 million commitment, followed by a $150 million loan in November 2003. The program will focus on the following activities: Modernize the tax administration system by accelerating the phase-out of tax exemptions for profits of certain firms and increase revenues by al least 0.3% of GDP; Improve the sustainability of public finances through the submission of a new budget law to Congress that complements the 2003 Fiscal Responsibility Law; Strengthen public sector revenue and expenditure control by establishing oversight bodies for procurement and asset management; and Improve monitoring system for the public sector reform process. "Sustainable fiscal and financial management is key to improve the targeting and quality of public expenditure, especially to secure the implementation of pro-poor social programs," said Mario Francisco Sangines, World Bank task manager for the project. The $100 million, fixed-spread loan is repayable in 13.5 years, including 8.5 years of grace. Water and Sanitation Sector Support Project The $70 million Water and Sanitation Sector Support Project will improve the supply of efficient and sustainable municipal water, sewerage, and wastewater treatment in Colombia by providing capital investment subsidies in connection with coverage expansion and service quality improvement in poor areas. The project will support the following objectives: Support service-improvement related investment through targeted capital grants in small- and medium-size cities, and in some high poverty peri-urban areas of large cities served by public utilities; Scale-up the involvement of the private sector in medium-size cities through the introduction of performance-based management arrangements with specialized operators; Deliver appropriate water supply and sanitation investments in Colombia's underserved rural areas by financing the rehabilitation and construction of basic water and sanitation systems, including investments in water sourcing through wells and septic and latrine disposal; and Improve financial viability and accountability of the participating municipalities while strengthening their implementation capacity. "About 1.2 million Colombians - mostly poor- will benefit from improved access to water and sanitation services," said David N. Sislen, World Bank senior economist and task manager for the project. "The project will also improve the institutional and operational profile of nearly 60 public water companies and bring private sector management to almost a dozen utilities." The $70 million, fixed spread loan is repayable in 15.5 years and includes a grace period of 7.5 years. The Water and Sanitation Sector Support Project is the first of a three-phase program. The second phase is expected to broaden and deepen the program's approach while putting a specific emphasis on investments and policy reforms in Colombia's rural areas, and the third phase is expected to focus primarily on investments in wastewater treatment and disposal. ===================== E L S A L V A D O R ===================== INVERSIONES FINANCIERAS: Fitch Affirms `BB' Nat'l Scale Rating -------------------------------------------------------------- Fitch Ratings has affirmed the `BB' national scale credit rating of El Salvadorian financial holding Inversiones Financieras Promerica, reports Business News Americas. The outlook on the rating is positive. The rating is influenced by the performance of Banco Promerica, the Company's only subsidiary that has long-term and short-term ratings of BB/N4. The unit's rating reflects improving asset quality, its ability to maintain a wide spread on its loans, and recent improvements in capitalization. Factors weighing on the ratings are the bank's small size and a concentrated deposit base. As of Dec. 2004, Banco Promerica registered US$192 million in assets and US$164 million in deposits. ============= J A M A I C A ============= AIR JAMAICA: Provides More Info on Flights' Suspension ------------------------------------------------------ Air Jamaica has temporarily suspended its flights to the Eastern Caribbean (EC) due to a shortage of available aircraft caused by the carrier's Quality Assurance Check Program. Air Jamaica flights from New York (JFK) and Montego Bay to three EC destinations - Barbados, St. Lucia, and Grenada - have been suspended for a period of four weeks. The full schedule will resume on April 16, 2005. During the four-week suspension of EC service, Air Jamaica will continue to operate flights to its nine remaining Caribbean destinations - Jamaica (Kingston and Montego Bay), Bonaire, Curacao, the Cayman Islands, Haiti, Nassau, Turks & Caicos, and the Dominican Republic - as well as its 13 gateways in North America and Europe. Air Jamaica customer relations and reservations staff are being proactive in contacting affected passengers to re-accommodate them on other carriers in line with IATA guidelines. Cancellation penalties for travel to/from the EC through April 15, 2005 have also been waived. Air Jamaica's Quality Assurance Check Program was initiated in early February when the JCAA mandated that the airline immediately shorten the maintenance cycle on its aircraft from 18 to 15 months following a December 2004 instruction from the U.S. Federal Aviation Authority (FAA). This has resulted in the temporary removal of several aircraft from the Air Jamaica fleet. About Air Jamaica Air Jamaica is a service-oriented passenger airline offering travelers a level of comfort, convenience and amenities not commonly found in air travel today. All Air Jamaica flights feature hot meals and complimentary champagne, wine and beer. Even Air Jamaica's flight schedules are developed with the customer in mind - arrival times are set early enough and departure times late enough to ensure travelers maximize precious vacation time. The Air Jamaica fleet is comprised of new Airbus A320, A321 and A340 aircraft. Air Jamaica operates 300+ weekly flights connecting 13 cities in the U.S., Canada and the UK with 12 Caribbean destinations. CONTACT: Air Jamaica 8300 N.W. 33rd Street Suite 440 Miami Fl. 33122 Phone: (305) 670 3222 Fax: (305) 669 6631 =========== M E X I C O =========== BALLY TOTAL: Katherine Abbott Joins Bally as VP and Treasurer ------------------------------------------------------------- Bally Total Fitness Holding Corporation (NYSE:BFT) announces the appointment of Katherine L. Abbott to the position of Vice President and Treasurer, effective immediately. "Kathy's financial and operational expertise, and previous treasury experience make her a great asset to Bally's revamped Finance Department," said Paul Toback, Chief Executive Officer of Bally. "We are pleased to have Kathy as Treasurer and look forward to her playing a significant role in the Company's continued turnaround efforts." In her new position, Ms. Abbott will report to Chief Financial Officer Carl Landeck and have direct responsibility for Bally Total Fitness's treasury operations. She will also oversee the Company's investor relations. Prior to joining Bally Total Fitness, Ms. Abbott was a Vice President of the Restructuring Group for J.P. Morgan Securities, Inc. She previously served as Vice President and Treasurer for Budget Group Inc., a global car and truck rental Company with revenues of over $2 billion. Ms. Abbott has also served in key positions at Credit Agricole Indosuez and the Container Corporation of America, where she served as the Company's assistant treasurer. She holds a B.S. degree in Business from Indiana University and an M.B.A. from the University of Chicago. 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 Chicago Mr. Jon Harris Phone: 773-864-6850 Web site: http://www.BallyFitness.com PEMEX: Evaluates Hydrocarbon Reserves as of Jan. 2005 ----------------------------------------------------- PEMEX announced Tuesday that additions to Mexico's oil and gas reserves attributable to exploratory activity as of January 1, 2005, were 916.2 million barrels of crude oil equivalent. As a result of the above, PEMEX replaced 57% of its production considering proved, probable and possible reserves (3P), 29% considering proved and probable reserves (2P) and 15% considering proved reserves (1P). These new reserves are comprised by reservoirs of non-associated gas and crude oil. It is important to highlight that, taking into account the aforementioned addition to reserves, developments and existing field revisions, the reserve replacement of proved reserves reached 23%. Correspondingly, PEMEX maintained the upward trend of this indicator, which illustrates the amount of new reserves relative to annual production. In 2004, annual production reached 1,610.8 million barrels of crude oil equivalent. Non-associated gas discoveries were noteworthy and were mainly located in the North Region, while, crude oil discoveries were mostly found in the South and Marine Regions. Total hydrocarbon reserves, or the accumulation of proved, probable and possible reserves, as of January 1, 2005 were 46,914.1 million barrels of crude oil equivalent. Of this amount, 17,649.8 million barrels were proved reserves, 15,836.1 million were probable and 13,428.2 million are possible. Within the 3P reserves category, 71% is crude oil, 2% are condensates, 7% represents liquids from plants and 20% is dry gas. Considering 2004 annual production, the reserves-production ratio in crude oil equivalent is 29 years for 3P reserves, 21 years for 2P reserves and 11 years for proved reserves. PEMEX estimates proved reserves in compliance with the definition of proved reserves established by the Securities and Exchange Commission (SEC). The evaluation of probable and possible reserves is in line with the definitions determined by the Society of Petroleum Engineers (SPE), the World Petroleum Congresses (WPC) and the American Association of Petroleum Geologist (AAPG). The US Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a Company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this document, such as total reserves, probable reserves and possible reserves, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in Form 20-F, File No. 0-99, available from us at: Marina Nacional 329 Floor 38 Col. Huasteca, Mexico City 11311 Phone: (52 55) 1944 9700 Web site: http://www.pemex.com You can also obtain this Form from the SEC by calling 1-800-SEC-0330. CONTACT: Petroleos Mexicanos Ave. Marina Nacional 329 Mexico City, 11311 Phone: 52-55-5722-2500 Web site: http://www.pemex.com. XERIUM TECHNOLOGIES: Moody's Assigns B1 Rating; Outlook Stable -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Xerium Technologies, Inc.'s (Xerium) $650 million guaranteed senior secured term loan B and $100 million guaranteed senior secured revolving credit facility. Moody's also assigned a B1 senior implied rating, B3 issuer rating, and SGL-3 speculative grade liquidity rating to the Company. The rating outlook is stable. Concurrent with the new bank facility the Company will be executing an initial public offering of common equity that is expected to generate proceeds to the Company of approximately $212 million from a primary offering of shares. The IPO and bank facility are contingent financings with the proceeds being used to repay approximately $808 million of Xerium's outstanding debt. Xerium is a leading manufacturer and supplier of consumable roll cover and clothing products, predominantly to the paper manufacturing industry, and estimates its market share for roll products at least 33% and clothing at approximately 15% of global demand. From 1976 to 1999, Xerium grew in part through several acquisitions and was acquired by Apax Partners (Apax), a manager of private equity funds, in December 1999. Since its acquisition by Apax, Xerium acquired three additional companies and executed two recapitalizations. The B1 senior implied rating reflects the Company's relatively good operating performance, stable market position, geographic diversity, and adequate liquidity. In addition, the meaningful equity contribution will de-lever its balance sheet and lower interest costs. However, the ratings also incorporate the limited scope and modest size of the Company's operations, its acquisitive nature, high customer concentration, and competitive pressures, in addition to high debt levels and potential dividend requirements. Xerium has performed reasonably well despite a weak operating environment in the paper manufacturing industry as a number of paper machines have been either shut down or idled. Over the past four years, the Company has generated positive free cash flow and maintained relatively good credit metrics despite high debt levels and ongoing restructuring actions. Going forward, performance should improve as current cost initiatives take hold and the operating environment within the paper industry remains somewhat favorable. Nevertheless, the paper industry is highly cyclical and Xerium competes against companies that are larger and possess greater financial flexibility, such as Voith AG (Baa1, stable), Metso Corporation (Ba1, stable), and Albany International (not rated). Xerium stated in its most recent S-1 filing that, in 2004, pricing pressures from competitors required the Company to reduce the size of a proposed price increase in North America. The contemplated transaction will have a meaningful impact on credit metrics by reducing Xerium's debt levels by approximately $143 million, to $665 million from $808 million, and gross interest costs by about $25 million (cash interest costs by about $13 million) to $42 million from $67 million. This will result in pro forma leverage on a gross debt to adjusted EBITDA (excluding one-time restructuring costs) basis declining to just over 4.0x from 4.9x, and pro forma EBITDA coverage of gross interest improving to approximately 4.0x from 2.5x for 2004. Liquidity should also remain adequate with full availability under its $50 million six and a half year revolving credit facility and the expectation that the Company should remain cash flow positive. Despite the benefits from lower debt levels, a proposed dividend will negatively impact cash flow and corresponding credit metrics. Xerium is planning to pay an annual dividend of at least $40 million, which more than offsets the benefits of lower cash interest costs and could result in cash flow credits metrics that are weaker post this transaction. Xerium's balance sheet is also relatively weak with intangibles representing 34% of total assets, which has a significant impact on asset coverage of the bank facility. When looking at the guarantor group of companies, the net tangible book value of assets would be less than the anticipated $665 million of outstanding debt. Even after incorporating the non-guarantor subsidiaries, the consolidated book value of net tangible assets was approximately $667 million as of December 31, 2004. Xerium is also relatively small in size with average historical revenues of approximately $500 million, generated from two primary products, clothing and rolls, that are predominantly sold to a single industry, paper manufacturing. The Company's sales to the steel, leather, and textile industries represent about 10% of total sales and 12% of sales are generated by roll cover refurbishment services and mechanical services operations in the roll segment. Xerium has been very acquisitive in the past and, while it is Moody's understanding that no acquisitions are currently being contemplated, the ratings allow for moderately-sized acquisitions as long as the acquisitions are sized commensurate with cash flow and maintain the Company's current risk characteristics. Xerium is also undertaking a legal entity reorganization of its Brazilian operations, which is expected to take less than six months and involves the aggregation of three separate businesses under a single corporate structure. As part of the current refinancing, the Company will have a $50 million 364-day revolving credit facility for the sole purpose of facilitating the reorganization. The 364-day revolver will not be available after the reorganization in Brazil and will not be used for anything outside the Brazilian reorganization. The B1 rating on the senior secured bank credit facility reflects the benefit derived from a secured interest in substantially all of the assets of US subsidiaries and 65% of the stock of first-tier non-domestic subsidiaries. Certain assets of non-US subsidiaries will also secure the obligations of non-US borrowers. The bank facility is also guaranteed by all US subsidiaries, while certain non-US subsidiaries will guarantee non-US borrowers. The bank credit facility will be the only debt in the capital structure, although the credit facility allows for the addition of up to $150 million in subordinated debt for acquisitions. The issuer of the bank credit facility will be Xerium, with direct co-borrowers being Xerium Italia SpA, Stowe Woodward / Mount Hope, Inc., Weavexx Corporation, and Huyck Austria GmbH. The stable outlook reflects Moody's expectation that operating performance will improve as current restructurings and cost initiatives are realized and that management will prudently manage its dividend policy, all of which should help reduce debt to more moderate levels and strengthen liquidity. The outlook assumes any acquisitions will not negatively impact Xerium's credit metrics. We also expect a successful completion of the Brazilian management reorganization without any impact to credit metrics. Factors that could negatively impact the ratings and or outlook would be a decline in credit metrics or liquidity due in part to increased competition, deterioration in paper industry fundamentals resulting in a decline in paper production, or a larger-than-anticipated debt financed acquisition. However, a sustained improvement in operating performance resulting in more moderate debt levels, improved credit metrics, and stronger liquidity would likely improve the ratings or outlook. The SGL-3 speculative liquidity rating reflects Moody's view that over the next twelve months Xerium will be able to fund all cash requirements from internal sources, except for extraordinary capex, but considers the Company's $50 million revolver as modest and the cushion under its financial covenants as relatively tight. Moody's also believes cash on the balance sheet will remain modest over the next twelve months, due in part to the expected dividend payout, and the Company does not currently own any assets, outside of what is secured, that can be monetized in the near term to satisfy liquidity needs. Xerium Technologies, Inc., headquartered in Westborough MA, is a manufacturer and supplier of consumable products used primarily in the production of paper. ===================== P U E R T O R I C O ===================== DORAL FINANCIAL: Explores Alternatives Regarding Sale of IOs ------------------------------------------------------------ Doral Financial Corporation (NYSE: DRL), a diversified financial services Company, announced Wednesday that it was evaluating various alternatives with respect to a possible sale of a portion of its portfolio of interest-only strips. The Company noted that it was engaged in preliminary discussions with a major financial institution regarding a possible sale of a portion of Doral Financial's IOs. The discussions are preliminary in nature and are subject to completion of due diligence and the negotiation of an acceptable sale agreement. No assurance can be given that the sale will in fact be effected or on the terms thereof. About Doral Financial The Company, a financial holding Company, is the largest residential mortgage lender in Puerto Rico, and the parent Company of Doral Bank, Puerto Rico's fastest growing commercial bank, Doral Securities, a Puerto Rico based investment banking firm, Doral Insurance Agency, Inc. and Doral Bank, FSB, a federal savings bank based in New York City. CONTACT: Doral Financial Corporation Mr. Mario S. Levis Phone: 787-474-6709 ================= V E N E Z U E L A ================= CADAFE: To Meet Face-to-Face With Union on March 29 --------------------------------------------------- Management and workers at state-owned power utility Cadafe have agreed to meet face-to-face on March 29 to address the dispute that has strained the relations between both parties. "All of our complaints will hopefully be redressed" that day, Angel Nava, president of the Fetralec federation that groups the unions representing Cadafe's 13,000-plus workers, was quoted by Business News Americas as saying. "It will be a very important meeting," Nava said. The dispute centers on workers' safety and health-care grievances that union officials say could result in partial stoppages at Cadafe, the largest transmission and distribution Company in Venezuela. Labor ministry negotiators managed to persuade Nava to promise that "minimum services" would be maintained even if a strike is called. PDVSA: Inks $202M Accord to Develop Railroads --------------------------------------------- State oil Company Petroleos de Venezuela (PdVSA), through subsidiary CVP, signed a VEB432 (US$202 million) billion agreement with the Autonomous Railroad Institute to develop Venezuela's railway infrastructure. Specifically, VEB262 billion will be used to finalize a rail tract stretching from Caracas to Tuy Medio, the Infrastructure Ministry said Wednesday, adding, almost VEB169 billion will serve to complete another rail system in Western Venezuela. The CVP manages joint venture and third-party operating contracts for PDVSA. The projects fall under Venezuela's national rail plan that calls for spending almost US$5 billion to complete some 4,000km over the next 20 years to improve inter-regional transport plus cargo and passenger movement to boost development. President Hugo Chavez has vowed to revamp the nation's rail network as part of a campaign to improve transportation in various parts of the country. Chavez's government has enjoyed windfall oil gains during the past year and has used the proceeds to fund a number of projects, particularly social spending programs popular with the poor. Critics of his government claim Chavez has invested little in PdVSA itself and has distracted the Company from focusing on its core business, oil exploration and production. PDVSA: Enel Requests Arbitration to Recoup $200M ------------------------------------------------ PDVSA is now facing arbitration proceedings brought by Italian energy firm Enel in the international court, reports Business News Americas. A top PDVSA executive suggests that Enel requested the arbitrage in the hopes of recovering US$200 million following PDVSA's decision to stop supplying Enel with orimulsion shortly after a supply agreement expired on December 31, 2003. After the contract expired, Enel sought to renew it, but PDVSA declined. "PDVSA has only sent them two spot shipments of orimulsion but it won't be able to send anymore because production of orimulsion has been completely halted", the source said. *********** 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 2005. 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. 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