/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050406.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 Wednesday, April 6, 2005, Vol. 6, Issue 67 Headlines A R G E N T I N A APSA: Bids for Control Over Mendoza Plaza Shopping ASKING EDITORES: Court Orders Liquidation CASA SIMON: Court Sets Report Submission Dates CERRO BAYO: Court Declares Company Bankrupt ENTERTAINMENT DEPOT: Approved Plan Concludes Reorganization FUNDICIONES AGENA: Court Designates Trustee for Liquidation IMPRESIONES INTEGRALES: Proceeds With Liquidation LA ROUE S.A.: Court Approves Concurso Motion METROGAS: Extends Time for Debt Offer Approval to May 2 MULTICANAL: Judge's Ruling Postponed Pending SEC Decision MUTUAL QUIMICOS: General Report Due April 22 PRECISION MEDICA: Court OKs Creditor's Bankruptcy Motion PROAFE S.A.: Bankruptcy Proceeding Initiated TGS: Assigns 'raBB' Rating on Bonds TRANSPORTES OMNIBUS: Plan Gets Court Approval B E R M U D A INTELSAT: Genesis Uses Intelsat for North American Distribution B R A Z I L BRASKEM: Shareholders Approve Stock Split, Dividend Distribution CSN: Special, General Shareholder Meetings Combined; Agenda Set NET SERVICOS: Bradespar Disposes of Entire Equity Stake USIMINAS: S&P Raises Outlook on LC Rating to Positive C H I L E COCA COLA EMBONOR: S&P Details Liquidity, Outlook Ratings C O L O M B I A TERMOEMCALI FUNDING: `D' Rating Follows Missed September Payment * COLOMBIA: Prepays $1.25B Loan to IDB E C U A D O R PETROECUADOR: Suffers $3M Loss From Strike, Sabotage G U A T E M A L A BANCO INDUSTRIAL: S&P Assigns 'BB-/B' Ratings; Outlook Stable J A M A I C A C&W JAMAICA: Court Affirms Right to Provide Service C&W JAMAICA: Gary Barrow Leaves C&W V E N E Z U E L A PDVSA: 37 Companies Keen on Rafael Urdaneta Gas License Bid * VENEZUELA: To Sell U.S. Dollar-Denominated Bonds Worth $1B - - - - - - - - - - ================= A R G E N T I N A ================= APSA: Bids for Control Over Mendoza Plaza Shopping -------------------------------------------------- Real estate investment and development company Alto Palermo S.A. (APSA) hopes to secure its control over Mendoza Plaza Shopping by moving to acquire the 31.2 percent stake held by Chilean department stores chain Falabella. El Cronista reports that the US$3 million deal, if successful, will give APSA full control over the shopping center. Last October, the company increased its holdings in Mendoza Plaza to 68.8 percent by purchasing the 31.2 percent stake held by the Perez Cuesta Family for US$5.3 million. APSA, 60.1 percent owned by IRSA, is a major player in Argentina's retail industry. As of June last year, the company operated and owned a majority equity interest in seven shopping centers in the country plus a minority stake in one shopping center property. Earning from its leases and services segment jumped 51 percent in 2004 ending with ARP103.62 million in revenues. ASKING EDITORES: Court Orders Liquidation ----------------------------------------- Asking Editores S.A. prepares to wind-up its operations following the bankruptcy pronouncement issued by Court No. 23 of Buenos Aires' civil and commercial tribunal. The declaration effectively prohibits the company from continuing to administer its own assets, control of which will be transferred to a court- appointed trustee. Infobae reports that the court appointed Mr. Emilio Reboiras as trustee. Mr. Reboiras will be reviewing creditors' proofs of claims until May 16. The verified claims will serve as basis for the individual reports to be presented for court approval on June 29. The trustee will also submit a general report of the case on August 25. Clerk No. 45 assists the court on this case that will end with the sale of the company's assets. Proceeds from the sale will be used to repay the Company's debts. CONTACT: Mr. Emilio Reboiras, Trustee Avda La Plata 326 Buenos Aires CASA SIMON: Court Sets Report Submission Dates ---------------------------------------------- Mr. Eduardo Hugo Caggiano, the trustee assigned to supervise the liquidation of Casa Simon S.R.L., will submit the validated individual claims for court approval on June 21. These reports explain the basis for the accepted and rejected claims. The trustee will also submit a general report of the case on August 18. Infobae reports that Court No. 23 of Buenos Aires' civil and commercial tribunal has jurisdiction over this bankruptcy case. The city's Clerk No. 46 assists the court with the proceedings. CONTACT: Mr. Eduardo Hugo Caggiano, Trustee Avda Corrientes 745 Buenos Aires CERRO BAYO: Court Declares Company Bankrupt ------------------------------------------- Court No. 9 of Buenos Aires' civil and commercial tribunal declared local company Cerro Bayo S.R.L. "Quiebra", relates La Nacion. The court approved the bankruptcy petition filed by Mr. Juan Panete, whom the Company has debts amounting to US$13,481.37. The Company will undergo the bankruptcy process with Mr. Gustavo Pagliere as trustee. Creditors are required to present proof of their claims to Mr. Pagliere for verification before May 5. Creditors who fail to submit the required documents by the said date will not qualify for any post-liquidation distributions. Clerk No. 18 assists the court on the case. CONTACT: Cerro Bayo S.R.L. Valentin Virasoro 1638 Buenos Aires Mr. Gustavo Pagliere, Trustee Tucuman 1424 Buenos Aires ENTERTAINMENT DEPOT: Approved Plan Concludes Reorganization ----------------------------------------------------------- The settlement plan proposed by Entertainment Depot S.A. for its creditors acquired the number of votes necessary for confirmation. As such, the plan has been endorsed by Court No. 4 of Buenos Aires' civil and commercial tribunal and will now be implemented by the company. FUNDICIONES AGENA: Court Designates Trustee for Liquidation ----------------------------------------------------------- Buenos Aires accountant Nora Mabel Pszemiarower was assigned trustee for the liquidation of local company Fundiciones Agena S.A., relates Infobae. Ms. Pszemiarower will verify creditors' claims until May 26, the source adds. After that, he will prepare the individual reports, which are to be submitted in court on July 7. The submission of the general report should follow on September 5. The city's Court No. 14 holds jurisdiction over the Company's case. Clerk No. 27 assists with the wind-up proceedings. CONTACT: Ms. Nora Mabel Pszemiarower, Trustee Corrientes 1257 Buenos Aires IMPRESIONES INTEGRALES: Proceeds With Liquidation ------------------------------------------------- Contec S.A. successfully sought a bankruptcy from Court No. 5 of Buenos Aires' civil and commercial tribunal. The Court declared Impresiones Integrales "Quiebra," reports La Nacion. Consequently, the graphic arts firm will now start the process with Mr. Marcelo Carlos Rodriguez as trustee. Creditors must submit proofs of their claim to the trustee by May 24 for authentication. Failure to comply with this requirement will mean disqualification from the payments that will be made after the Company's assets are liquidated. The creditor petitioned the Court to liquidate the Company after it failed to pay debts amounting to US$39,401.89. The city's Clerk No. 9 assists the court on the case that will close with the sale of all of its assets. CONTACT: Impresiones Integrales S.R.L. Marcelo Torcuato de Alvear 1371 Buenos Aires Mr. Marcelo Carlos Rodriguez, Trustee Cerrito 146 Buenos Aires LA ROUE S.A.: Court Approves Concurso Motion -------------------------------------------- Court No. 12 of Buenos Aires' civil and commercial tribunal approved a petition for reorganization filed by La Roue S.A., according to a report from Argentine daily La Nacion. The Company, a dealer of motor vehicles, applied to undergo a "concurso preventivo" proceeding after defaulting on its debt payments on November 8, 2004. It reported assets worth US$592,586.24 and debts totaling US$1,990,332. CONTACT: La Roue S.A. Ventura Bosch 7058 Buenos Aires METROGAS: Extends Time for Debt Offer Approval to May 2 ------------------------------------------------------- Natural gas distributor Metrogas (NYSE: MGS) has again permitted additional time for approval of its debt offer with new repayment terms in the form of an out-of-court settlement known in Spanish as APE, reports Business News Americas. In a filing with the Buenos Aires bourse, the utility said the new deadline is May 2, 2005 unless further extended by the Company. Metrogas initially invited subscription to the APE in November 2003. As of April 1, the Company said it has lined up deals for US$85.3 million of the debt's principal. Metrogas reported a full year 2004 net loss of ARS122.98 million and net assets of ARS652.7 million as of Dec. 31, 2004. U.K. energy company BG Group PLC (BRG) and Spain's Repsol-YPF (REP) together control a 70% stake in Metrogas through a consortium called Gas Argentino. Metrogas' employees own 10% of the company's shares and the rest float on the stock exchange. CONTACT: MetroGAS S.A. Gregorio Araoz de Lamadrid 1360 C 1267 AAB Buenos Aires, Argentina Phone: 5411-4309-1000 MULTICANAL: Judge's Ruling Postponed Pending SEC Decision --------------------------------------------------------- A judge in the Federal District Court of New York said he will reserve his final ruling on Argentine cable operator Multicanal's bankruptcy case until U.S. regulators decide on the Company's proposal to fix discrimination against U.S. retail bondholders. Dow Jones Newswires reveals that, at a March 30 hearing in New York, federal judge Alvin Hellerstein gave Multicanal 60 days to get a no-action letter from the Securities and Exchange Commission on the said proposal. "I affirm Judge [Allan] Gropper's thorough and reasoned decisions," Judge Hellerstein said in reference to the previous U.S. bankruptcy court decisions in August 2004 and January 2005 that granted the Argentine company protection from its creditors. "I reserve, however, final judgment until when I learn about what the SEC does." Following the January ruling, bondholder group Argentinian Recovery Co., an entity formed to consolidate investment fund W.R. Huff Asset Management's holdings in Multicanal, appealed the case to the federal district court. ARC argued the Company's debt offer violated U.S. retail bondholder rights since those creditors were offered only the cash component of the debt restructuring proposal. Other noteholders also had the option of tendering their Multicanal bonds for new paper and equity. Dow Jones Newswires recalls that in August, the courts had asked Multicanal to fix the different treatment of bondholder groups. ARC, however, opposed the Company's plan to open the other alternatives to U.S. retail creditors, saying it was unfair to implement such a system without holding a fresh bondholder vote. In addition, ARC had wanted Multicanal to register the securities to be delivered under the restructuring with the SEC. The cable company will now have to get a no-action letter from U.S. regulators for its plan to offer U.S. retail bondholders the non-cash options. Meanwhile, Judge Hellerstein also asked Multicanal to get a ruling that would address the issue of shareholder dilution, since U.S. retail bondholders' opting for the equity alternative of the debt work-out could water down what other creditors would expect to receive. CONTACT: MULTICANAL S.A. Avalos 2057 (1431) Buenos Aires, Argentina MUTUAL QUIMICOS: General Report Due April 22 -------------------------------------------- Court No. 12 of San Lorenzo's civil and commercial tribunal expects to receive a general report on the Mutual Quimicos Papeleros de Capitan Bermudez liquidation case on April 22. The report provides the court with an audit of the Company's accounting and business records. CONTACT: Mutual Quimicos Papeleros de Capitan Bermudez Florida 152 Capitan Bermudez(Santa Fe) PRECISION MEDICA: Court OKs Creditor's Bankruptcy Motion -------------------------------------------------------- Precision Medica Complementaria S.A. entered bankruptcy after Court No. 8 of Buenos Aires' civil and commercial tribunal approved a bankruptcy petition filed by ABN Amro Bank N.V., reports La Nacion. The Company's failure to pay US$167,489.13 in debt prompted the creditor to file the proceeding. Working with the city's Clerk No. 16, the court assigned Mr. Arturo Calleja as trustee for the bankruptcy process. The trustee's duties include the authentication of the Company's debts and the preparation of the individual and general reports. Creditors are required to present their proofs of claims to the trustee before July 6. 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: Precision Medica Complementaria S.A. Uruguay 978 Buenos Aires Mr. Arturo Calleja, Trustee Lambare 1140 Buenos Aires PROAFE S.A.: Bankruptcy Proceeding Initiated -------------------------------------------- Court No. 3 of Buenos Aires' civil and commercial tribunal declared Proafe S.A. bankrupt, says La Nacion. The Company reported assets valued at US$10,811.91 and debts totaling US$518,425.13 in its court filing. Trustee Analia Chelala will examine and authenticate creditors' claims until June 15. This is done to determine the nature and amount of the Company's debts. Creditors must have their claims authenticated by the trustee by the said date in order to qualify for the payments that will be made after the Company's assets are liquidated. Clerk No. 6 assists the court on the case that will conclude with the sale of the Company's assets. CONTACT: Proafe S.A. Fitz Roy 2277 Buenos Aires Ms. Analia Chelala, Trustee Avenida Corrientes 2335 Buenos Aires TGS: Assigns 'raBB' Rating on Bonds ----------------------------------- Standard & Poor's International Ratings, Ltd. Sucursal Argentina assigned an 'raBBB' rating on corporate bonds issued by Transportadora de Gas del Sur S.A. (TGS), says the CNV. The bonds affected are: - US$276,600,000 worth of bonds described as "Clase A bajo el Programa por hasta U$S 800 millones monto emitido" maturing on December 31, 2010. - US$42,900,000 worth of bonds described as "Clase A-P bajo el Programa por hasta U$S 800 millones monto emitido" maturing on December 31, 2010. - US$233,600,000 worth of bonds described as "Clase B-A bajo el Programa por hasta U$S 800 millones monto emitido" maturing on December 31, 2013. - US$36,200,000 worth of bonds described as "Clase B-A-P bajo el Programa por hasta U$S 800 millones monto emitido" maturing on December 31, 2013. - US$21,700,000 worth of bonds described as "Clase B-B bajo el Programa por hasta U$S 800 millones monto emitido" maturing on December 31, 2013. - US$3,300,000 worth of bonds described as "Clase B-B-P bajo el Programa por hasta U$S 800 millones monto emitido" maturing on December 31, 2013 The rating action is based on the Company's financial status as of December 31, 2004. TGS's operates the largest gas pipeline system in Latin America capable of transporting 2.2 billion cubic feet per day ("bcf/d"). Its system connects the main gas fields in the south and west areas of Argentina with the gas distributors in the city of Buenos Aires and other areas. CONTACT: Transportadora de Gas del Sur S.A. Don Bosco 3672, 5th Floor 1206 Capital Federal Buenos Aires, Phone: (212) 688-5144 Fax: (212) 688-5213 E-mail: eduardo_pawluszek@tgs.com.ar Web site: http://www.tgs.com.ar/ TRANSPORTES OMNIBUS: Plan Gets Court Approval --------------------------------------------- The settlement plan proposed by Transportes Omnibus General Pueyrredon S.R.L. for its creditors acquired the number of votes necessary for confirmation. As such, the plan has been endorsed by Court No. 9 of Mar del Plata`s civil and commercial tribunal and will now be implemented by the company. CONTACT: Transportes Omnibus General Pueyrredon S.R.L. Calle Arturo Alio 3.655 Mar del Plata ============= B E R M U D A ============= INTELSAT: Genesis Uses Intelsat for North American Distribution --------------------------------------------------------------- The Intelsat Americas(TM)-7 (IA-7) and Intelsat Americas(TM)-13 (IA-13) satellites have been selected to provide expanded North American distribution of niche foreign language cable programming for Genesis Networks, an emerging provider of next- generation global video transmission services to major broadcasters. Genesis Networks will utilize the Intelsat Americas fleet, as part of its hybrid network, to provide end- to-end solutions in the video transmission market. Genesis Networks is greatly increasing its capacity on IA-13 and purchasing a significant amount of new capacity on IA-7, giving it access to over 3,000 digital cable headends, with the potential to expand distribution of its customers' programming within North America by accessing Intelsat prime cable arc locations and distribution neighborhoods. Genesis provides distribution services for North American cable systems for a growing number of ethnic broadcasters from Latin America, consisting of multiple channels from Argentina, Peru and Mexico. In addition, Genesis has contracted with channels from India. "IA-7 and IA-13 provide our ethnic programmers access to thousands of cable headends in North America, giving them critical program delivery capability upon which we build value added services," said Paul Dujardin, President, Genesis Networks Inc. "Intelsat's flexible support at a time of rapid growth in our business has helped us provide our customers with a high level of success in distributing their programming. It allows our cable programming customers to focus on successfully establishing and growing their own businesses by leaving the origination and distribution in the hands of Genesis and Intelsat." Ramu Potarazu, COO, Intelsat Ltd., added that, "Intelsat's prime cable distribution neighborhoods, in combination with our expertise in distributing ethnic programming to thousands of people in the United States makes us well-poised to meet the exact needs of cable programmers, post-production houses or major media companies, and sets us apart from other operators in this market. We are committed to helping customers maximize their market advantage." About Intelsat As a global communications leader with 40 years of experience, Intelsat helps service providers, broadcasters, corporations and governments deliver information and entertainment anywhere in the world, instantly, securely and reliably. Intelsat's global reach and expanding solutions portfolio enable customers to enhance their communications networks, venture into new markets and grow their businesses with confidence. CONTACT: Intelsat Ms. Jodi Katz Phone: 202-944-8223 E-mail: Jodi.katz@intelsat.com Web site: www.intelsat.com =========== B R A Z I L =========== BRASKEM: Shareholders Approve Stock Split, Dividend Distribution ---------------------------------------------------------------- Petrochemicals firm Braskem SA's proposal to reorganize its shares received authorization from the Company's shareholders at a March 31 meeting. Dow Jones Newswires reports that Braskem is proposing a reverse stock split of its preferred shares, exchanging one new share for every 250 existing shares. "As a consequence, the trading value of Braskem shares will be divided by four," the Company said in the statement. The reorganization would lower the price per share and increase liquidity, allowing it to tap a larger pool of investors, including individuals. Additionally, the move would lower the minimum number of shares required per trade to 100, from the current 100,000. Shareholders also approved Braskem's proposal to split its ADRs, exchanging one new ADR for every two existing ADRs, to bring the price per ADR in line with other Brazilian issuers. As a consequence, each ADR will represent two new preferred shares. Each ADR currently represents 1,000 preferred shares. Shareholders' approval also extends to the Company's proposal to disburse BRL204 million ($1=BRL2.66) dividend and interest payments relative to 2004 results. Braskem revealed it is preparing to list on Level 2 of Sao Paulo's Bovespa stock exchange, which has stricter corporate governance requirements than the current Level 1. The new trading level will provide tag-along rights to all shareholders, regardless of the class of share, in the event of a takeover, Braskem said. CONTACT: Braskem S.A. Av. Nacoes Unidas 4777 Cep San Paulo, 05477-000 Brazil Phone: 55-11-3443-9999 Web site: http://www.braskem.com.br CSN: Special, General Shareholder Meetings Combined; Agenda Set --------------------------------------------------------------- The Shareholders of Companhia Siderurgica Nacional are hereby called to the Special General Meeting to be held on April 29, 2005, at 11:00 a.m., in the head office of the Company, that shall be held at the same time of the Annual General Meeting, originally scheduled on April 4, 2005, which is hereby recalled to be held at the same day, April 29, 2005, at 10:00 a.m., located at Rua Sao Jose 20, Grupo 1602, Centro, Rio de Janeiro - RJ, to deliberate the following Agenda: Extraordinary General Meeting 1. Change the Company By-Laws in order to create the Audit Committee. Annual General Meeting: 1. examination, discussion and approval of the accounts rendered by the Company's officers, the management report and the financial statements, referred to the fiscal year ended on December 31, 2004; 2. ratification of the distribution of intermediary dividends in the amount of R$35,000,000.00 approved by the Board of Directors on June 14, 2004; 3. deliberation on the management proposal regarding the allocation of the net profit of the fiscal year of 2004, in the amount of R$2,144,996,655.09, and of the appraisal surplus in the amount of R$244,846,352.46, as follows: R$86,798,191.36 of the fiscal year net profit, to complement the legal reserve balance, pursuant article193 of Law No. 6,404/76; distribution of R$239,391,000.00 as interest over capital ( juros sobre o capital pr>prio ), corresponding to the gross amount of R$0.86456 per share, and R$2,028,653,816.19 as dividends, corresponding to the amount of R$7.32649 per share; 4. election of the members of the board of directors; 5. Approval of the global remuneration to the management in the amount of up to R$ 30,000,000,00. According to the provisions of Instrucao CVM No. 165, dated December 11, 1991, as amended by Instrucao CVM No. 282, dated June 26, 1998, it is necessary at least 5% of the voting capital of the Company to require the implementation of multiple voting. The Shareholders whose shares are under custody must present the documents described in item II of article 126 of Law No. 6,404/76. The Shareholders who will be represented by an attorney-in-fact must comply with the provisions of paragraph 1 of article 126 of Law No. 6,404/76, and must file the respective powers of attorney with special powers of representation in the general meetings mentioned above at the Company's head office at least three days before the date scheduled for such meetings. CONTACT: Companhia Siderurgica Nacional-CSN Av. Presidente Juscelino Kubitschek 1830 Torre 1 13 andar, Itaim Bibi Sao Paulo, SP 04543-900 Brazil Web site: http://www.csn.com.br NET SERVICOS: Bradespar Disposes of Entire Equity Stake ------------------------------------------------------- Holding company Bradesco Participacoes (Bradespar) has completely divested its stake in pay television firm Net Servicos de Comunicacao SA, reports Dow Jones Newswires. Bradespar, through its Bradesplan Participacoes SA subsidiary, sold its 4.75% stake in Net's preferred shares in various transactions between January and March for an undisclosed value. Net Servicos recently completed a BRL1.45-billion debt restructuring. As part of the process, Mexico's Telefonos de Mexico SA has bought into Net Servicios' share capital. The Company will be controlled by the GB Participacoes holding company, which is still 51% controlled by Brazilian media giant Organizacoes Globo. Telmex owns 49% of GB, which in turn owns 51% of Net Servicios's voting shares. Net Servicos de Comunicacao S.A. is the largest pay television service provider in Brazil with approximately 1.4 million subscribers. The Company maintains its headquarters in Sao Paulo, Brazil. 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 USIMINAS: S&P Raises Outlook on LC Rating to Positive ----------------------------------------------------- Standard & Poor's Ratings Services affirmed Monday its 'BB' local-currency and 'BB-' foreign-currency corporate credit ratings on Usinas Siderurgicas de Minas Gerais S.A. - Usiminas. The outlook on the local-currency rating was revised to positive from stable. The outlook on the foreign-currency rating remains stable. "The outlook revision reflects the improvement in Usiminas' capital structure through the end of 2004, which we believe will prevail even under less favorable market conditions due to the company's conservative financial profile," said Standard & Poor's credit analyst Reginaldo Takara. Usiminas currently has a total consolidated debt balance that is about US$900 million lower than the average of the previous five years, as the company used its strong cash flow in 2003 and extraordinary cash windfall in 2004 to reduce debt (while keeping a prudent dividend policy and low capital expenditures). We believe Usiminas will continue to report very strong cash generation in 2005, which, combined with the already light amortization schedule for the next several years, leaves the company in a comfortable position to manage stress scenarios and larger growth projects (such as the possible expansion of its Ipatinga plant) without jeopardizing its conservative financial posture or raising liquidity risks. In addition, we expect still further debt reduction in 2005, as capital commitments this year are not high compared with cash flows, allowing for strengthening liquidity for eventual higher expenditures starting in 2006. We believe that Usiminas remains in a favorable position to pass cost increases on and still remain competitive in the domestic market and in a much more favored position than its international peers in export markets. On the domestic front, while some cooling is not ruled out with very high base interest rates in Brazil, and some challenges may be ahead with a less favorable global and local economic environment (with potential turbulence in the domestic market with elections next year), we still expect reasonably strong domestic demand for steel in the medium term, allowing Usiminas to manage price increases so that they are aligned with international prices. The positive outlook on the local-currency corporate credit rating reflects the potential for a rating increase if some current uncertainties are solved in the medium term. We believe that Usiminas' ratings could be raised if the company continues to report strong profitability in the next couple of quarters, confirming its ability to absorb cost effects, either through price increases or by administering the mix of raw materials purchased. We also see the company's definition about its cherished expansion project at Ipatinga as a key medium- to long-term credit factor because, if approved by the company's board of directors, it will demand adequate financing in cost and particularly in tenor that has not yet been secured. While we already believe Usiminas is well positioned to manage Brazil's country risks, a potential upgrade would also depend on a scrutinized analysis of the company's exposure and vulnerabilities to such risks in a stress scenario. The stable outlook on the foreign-currency corporate credit rating reflects the outlook on the foreign-currency sovereign rating on the Federative Republic of Brazil. ========= C H I L E ========= COCA COLA EMBONOR: S&P Details Liquidity, Outlook Ratings ---------------------------------------------------------- Rationale The ratings on Coca Cola Embonor S.A. (Embonor) reflect the moderately high leverage for the rating, the challenge of improving its financial performance in the highly competitive carbonated soft drink market, and a low degree of diversification. These factors are partially offset by the leading position of this Chilean Coca-Cola bottler within its franchised territories in Chile and Bolivia, Coca-Cola Co.'s (KO) 45.5% ownership level (and inclusion of the Coca-Cola name in the bottler's name), and corresponding ongoing credit enhancement derived from some degree of implied support by KO. During fiscal 2004, both Embonor's sales and EBITDA generation declined by about 23% and 10%, respectively, as a result of the sale of the Peruvian operations in early 2004. Nevertheless, excluding the Peruvian operations, EBITDA increased by about 7.3% compared to 2003, as a result of volume increases in the served areas of about 8.1% and the higher dollar realized prices in Chile, due to the domestic currency appreciation (that helped offset the exchange rate volatility and lower margins in Bolivia). Overall, profitability is expected to improve moderately over the medium term based on positive long-term soft drink consumption growth fundamentals in the region, particularly in Chile. Given relatively stable current price levels, the EBITDA margin is expected to move in the 21%-23% range during the next two years (versus 19.2% in 2004), making the bottler more comparable to its industry peers in the region. Nevertheless, this will depend on the resolution of the political instability in Bolivia. In addition, lower debt and interest levels, moderate investment plans, and modestly improving cash generation projected for the next two years are expected to translate into more adequate coverage measures of EBITDA interest coverage of 5x or funds from operations-to-debt ratio of nearly 20% by 2006. Given that the Bolivian operation is relatively small in terms of contribution to the consolidated entity, Standard & Poor's Ratings Services does not factor Bolivian sovereign risks into our rating on Embonor. This approach would be reassessed if growth in more volatile territories is much greater in the future (which seems unlikely at this point), or cash flow from Chilean operations covers less than 1x consolidated interest. Furthermore, excluding EBITDA from Bolivia, we estimate EBITDA from Chile alone would provide interest coverage under severe stress of approximately 4x by 2006, in the event that unfavorable volatility temporarily limited cash generation in its Bolivian franchise, and in light of the current political instability in this country. Embonor is the second-largest Coca-Cola bottler in Chile, where it generated about 82% of its cash flow in fiscal 2004 (measured as a percentage over consolidated EBITDA), and the largest Coca- Cola bottler in Bolivia, where it has a leading market share of 54.7%. Liquidity We consider Embonor's liquidity position to be somewhat weak. Cash reserves as of December 2004 were only $7.4 million, as the proceeds from the sale of the Peruvian subsidiary were mostly used for the repayment of debt. Nevertheless, this is mitigated by the low short-term debt of $5.1 million as of December 2004. In addition, because of its adequate position within the Chilean market and its unique relationship with KO, Embonor enjoys very good access to the domestic and global financial markets. In this sense, in December 2004, Embonor obtained a syndicated credit facility for up to $180 million (to be drawn through March 2006) to pay, prepay, and/or refinance most of its existing debt. This new facility will result in significant interest savings from 2006 (as the interest rate is based on 6m LIBOR plus a spread of about 100 basis points [bps; with a pricing grid down to 70 bps] compared to the 9.875% rate for the existing bonds), which should help Embonor to gradually strengthen free cash flow generation, and would improve the debt maturity profile. In addition, Embonor benefits from access to additional noncommitted credit lines totaling approximately $29.5 million with banks in Chile. After the repayment of a substantial portion of the debt denominated in local currency (with the proceeds of the sale of the Peruvian operations in early 2004), Embonor's exposure to foreign-denominated debt climbed to 95% of its total debt, increasing currency mismatch risks. Nevertheless, these risks are almost fully mitigated by hedges applied by the company (for about 98% of total consolidated debt considering hedges taken through March 2005). Outlook The stable outlook on Embonor reflects our view that, while challenged by intense competition, Embonor is well positioned to progressively strengthen its positioning within its franchised territories. Rating stability still relies on continued implied operational support by KO, and incorporates expectations for improved financial performance through the strengthening of its internal cash-flow generation during the next two fiscal years. Rating stability also assumes that Embonor will be able to maintain positive free operating cash and a conservative investment plan and dividend policy during that period. The ratings could benefit from a significant improvement in cash generation and additional debt reductions that translated into ratios of fund from operations and free operating cash flow to debt of around 40% and 25%, respectively, and debt to EBITDA of less than 2x. Primary Credit Analyst: Ivana Recalde, Buenos Aires (54) 114- 891-2127; ivana_recalde@standardandpoors.com Secondary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114- 891-2125; pablo_lutereau@standardandpoors.com =============== C O L O M B I A =============== TERMOEMCALI FUNDING: `D' Rating Follows Missed September Payment ---------------------------------------------------------------- Rationale The 'D' rating on TermoEmcali Funding Corp.'s US$165 million senior secured notes reflect the Colombian company's failure to make its Sept. 15, 2004 debt-service payment of about $5.4 million on its 10.125% senior notes due 2014. In addition, the project-financed entity failed to make further debt-service payments due Dec. 15, 2004 and March 15, 2005. TermoEmcali operates a 234 MW combined-cycle, natural-gas-fired power generation facility, selling capacity and energy to Emcali, a Colombian municipal utility that provides diversified services to two million inhabitants in and around Santiago de Cali. TermoEmcali entered a 20-year purchased-power agreement (PPA) with Emcali to provide capacity and energy and eventually transfer the facility to Emcali at no cost. However, after Emcali defaulted on March 6, 2003, the PPA has not been honored. Emcali stopped making its payments from March to December 2003 for an outstanding amount of US$44 million. In November 2003, TermoEmcali and Empresas Municipales de Cali (Emcali), the project's offtaker, signed a memorandum of understanding (MOU), while pursuing an orderly restructuring of the obligations under the PPA. The MOU expired June 30, 2004, and although the parties have discussed extending it, Emcali has indicated it would not continue payments under the MOU until an energy-purchase agreement (EPA), replacing the former PPA, is signed. In light of Emcali's suspension of payments under the PPA and the MOU, TermoEmcali did not have adequate liquidity to make the entire debt service payment scheduled for Sept. 15, 2004. Despite the expiration of the MOU and Emcali's failure to perform its obligations under the PPA, Emcali and TermoEmcali continued to negotiate a restructuring of the PPA. In parallel with those negotiations, TermoEmcali and a committee of restricted bondholders and other lenders have held discussions about restructuring the financing documents on a basis consistent with cash flows anticipated under a restructured PPA. In December 2004, TermoEmcali submitted to Emcali the general restructuring agreement (GRA). Although it is TermoEmcali's understanding that the GRA reflected the agreement reached with Emcali, certain matters have continued to be negotiated. Primary Credit Analyst: Federico Mora, Mexico City (52) 55-5081- 4436; federico_mora@standardandpoors.com Secondary Credit Analyst: Fabiola Ortiz, Mexico City (52) 55- 5081-4449; fabiola_ortiz@standardandpoors.com * COLOMBIA: Prepays $1.25B Loan to IDB -------------------------------------- President Alvaro Uribe announced that his government paid off on Friday a US$1.25-billion loan to the Inter-American Development Bank ahead of schedule, allowing it to save at least US$115 million in high interest costs between 2005 and 2008, relates the Associated Press. In an interview with the local RCN Radio, Mr. Uribe said the government is taking advantage of a strengthening peso against the U.S. dollar to pay off the loan. "By prepaying it, this gives us a very good reputation in the banks, in the international markets and allows us to begin to obtain 20- or 30-year credits," Mr. Uribe said. The dollar has devalued against the Colombian peso by 13% over the past year. Uribe said the devaluation also propelled the government to convert US$3 billion public debts in dollars to pesos in order to save money. ============= E C U A D O R ============= PETROECUADOR: Suffers $3M Loss From Strike, Sabotage ---------------------------------------------------- State oil company Petroecuador lost US$2.94 million in oil revenues over a three-day period last week following a strike by workers and a sabotage in Ecuador's Amazon region, reports Business News Americas. >From March 31 to April 2, nearly 300 workers from security company Vargas Cedeno, whose contracts with Petroproduccion had expired, blocked entrance roads to the Auca field in Orellana province, forcing the unit to cut oil production by a total 58,645 barrels. Contributing to the loss is the theft of electricity cables from the Libertador field in Sucumbios province. This incident resulted in an additional 2,300-barrel loss as operations on the Atacapi 14, Secoya and Pichincha wells were halted. ================= G U A T E M A L A ================= BANCO INDUSTRIAL: S&P Assigns 'BB-/B' Ratings; Outlook Stable ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-/B' counterparty credit and CD ratings to Banco Industrial S.A. The outlook is stable. At the same time, Standard & Poor's assigned its 'BBB-' bank survivability assessment. "The ratings assigned to Banco Industrial S.A. consider its leading market position and adequate financial profile," said Standard & Poor's credit analyst Francisco Suarez. The bank's modest efficiency levels, a vulnerable regulatory framework for the Guatemalan financial system, and the slow economic environment in which the bank operates limit the rating level. The 'BBB-' bank survivability assessment takes into consideration Banco Industrial's relevance to Guatemala's banking system, and its good liquidity levels. Standard & Poor's bank survivability assessment is a current opinion on the likelihood that over the medium-tem, a bank will continue to operate either directly or through a successor organization regardless of whether it is solvent or insolvent or is paying all of its obligations on a timely basis or not. The survivability assessment, however, does not itself comment on which particular functions the bank might continue to perform and which it may cease in a stress situation. As the largest bank in Guatemala, Banco Industrial benefits from a large and stable deposit base, strong brand-name recognition, and the largest branch network with 186 full-service branches, 84 kiosks, and 245 ATMs of its own network located throughout Guatemala. It had a market share of 20% in terms of assets and 19% in terms of deposits. Concentration in the Guatemalan banking industry is high, as the seven largest banks concentrate 71% of total assets. The importance of Banco Industrial to Guatemala's payment system is high, as 24% of total transactions are done through its network. In spite of challenges derived from the competitive environment and the limited structure of the Guatemalan economy, it is expected that Banco Industrial's financial profile and strong market presence will be maintained. As investments on expanding its branch and technological networks are assimilated, efficiency should show modest improvements. As growth trends are expected to remain strong, the bank has the challenge to maintain capital and asset quality levels similar to the ones reported historically. Primary Credit Analyst(s): Jaime Carreno, Mexico City (52) 55- 5081-4417; jaime_carreno@standardandpoors.com Francisco Suarez, Mexico City (52) 55-5081-4474; francisco_suarez@standardandpoors.com ============= J A M A I C A ============= C&W JAMAICA: Court Affirms Right to Provide Service --------------------------------------------------- Jamaica's Supreme Court passed a landmark judgment in February when it ruled that Cable and Wireless Jamaica had a legal right to provide service to costumers even if they are squatters on the property, says the Jamaica Observer. The ruling countered the generally held belief that squatters have no right to services on captured land. The court decision surprised Robert and Marjorie Evans, legal owners of the property, because his case hinged on the fact that C&WJ's clients were illegal occupants of their property. The Evans' will be appealing the ruling. Apart from stating that C&WJ did not trespass when it ran telephone wires on the property at the request of the squatters, the ruling also emphasized the phone company's obligation to provide service that customers contract, creating a relationship that begins when the customer applies for service. C&W JAMAICA: Gary Barrow Leaves C&W ------------------------------------ Gary Barrow ends his 15-year service under the Cable & Wireless organization with the announcement of his resignation, five months after his transfer to the Company's London office. The Jamaica Gleaner reported Saturday that Mr. Barrow is leaving the Company after the completion of his review of the Company's liberalization and post-liberalization strategy in the Caribbean telecom market. The report quotes Cable and Wireless Jamaica and CEO for the Caribbean Len de Barros as saying that Mr. Barrow's study "will help ensure the successful transition of our other businesses to achieve high performance in liberalized markets and maintain and strengthen customer service and customer confidence." Cable & Wireless Jamaica is the domestic and international franchise carrier in Jamaica of Cable & Wireless and has been fully digital since 1991. Cable & Wireless Jamaica is also the leading mobile operator with a totally digital mobile network. The company also offers a wide range of IP and Data Services and is the leading Internet Services Provider on the island. CONTACT: Cable & Wireless Jamaica 47 Halfway Tree Road PO Box 21 Kingston 5 JAMAICA Web site: http://home.cwjamaica.com ================= V E N E Z U E L A ================= PDVSA: 37 Companies Keen on Rafael Urdaneta Gas License Bid ----------------------------------------------------------- A total of 37 oil companies from various parts of the world confirmed their attendance to the event organized by the Ministry of Energy and Oil to present the first phase of the Rafael Urdaneta Project, in which 5 blocks will be offered for bid in the area offshore the Gulf of Venezuela and one as development block in La Vela Sur, State of Falcon. Companies from the United States, England, Russia, China, Japan, France, Brazil, Argentina, Spain, Netherlands, Norway, Algeria, Iran, Italy, Canada and Venezuela, among others, have shown interest in participating in this selection process to bid for free gas licenses. A minimum exploratory program should be undertaken in these blocks, including seismic study and drilling one well within a 24 months term. The Rafael Urdaneta Project encompasses 29 areas in all, where it is expected to find 26 TCF (trillion cubic feet) of gas. The official act will be held at the Villa Caribe Hotel located in Los Taques, State of Falcon. The Minister of Energy and Oil, Rafael Ramirez and other regional government officials will be there, together with national and international companies' representatives interested in bidding for these licences. Similarly, national and regional representatives interested in participating in the endogenous development issues related to the activities linked to those licences will be present. Among the companies that confirmed their attendance are: Amerada Hess, Anadarko, Billington, Bp, British Gas, ChevronTexaco, CNPC, ConocoPhillps, El Paso Corp., Eni, ExxonMobil, Gazprom, Inelectra, Lukoil, Marubeni, Mitsubishi, Mitsui, Nimir, Occidental, ONGC, Perenco, Petrobras, Petrocanada, Petropars, Pluspetrol, Repsol, Samsung, Shell, Sonatrach Petroleum, Statoil, Suelopetrol, Tecnoconsult, Tecpetrol, Teikoku Dil, Total, Vincler Oil and West Falcon Samson. During the event, general aspects of the Rafael Urdaneta Project, that is part of the National Gas Plan, will be explained. Under this Plan, several licences have already been granted to explore for, and produce gas onshore and in the Paltaforma Deltana region. Similarly, bid information packages with information about the areas will be available for companies interested in bidding for these licences to explore for, and produce free gaseous hydrocarbons offshore the Gulf of Venezuela and the Northeast of the State of Falcon . These areas have low exploratory risks and geologic characteristics that make them potentially prolific in gaseous hydrocarbons. With the Rafael Urdaneta Project, the Ministry of Energy and Oil wants to promote the development of the country's gas potential, in order to improve the quality of life of Venezuelans and leverage industrial park development, pursuant to the Law on Gaseous Hydrocarbons, the National Development Plan, and the National Gas Plan. * VENEZUELA: To Sell U.S. Dollar-Denominated Bonds Worth $1B ------------------------------------------------------------ Venezuela, the world's fifth-largest supplier of oil, will issue bonds for US$1 billion on domestic markets, reports Bloomberg. The Finance Ministry announced the government will sell bonds denominated in U.S. dollars to investors who will pay bolivars at an exchange rate of 2,150 per dollar, about equal to the government's fixed exchange rate. The bonds will expire in 2025 and Citigroup and JP Morgan will be in charge of the transactions. According to the ministry's statistics, Venezuela owes US$26.4 billion in foreign debt, and US$12.97 billion to local investors. The oil producing country expects to finance its debt this year through various overseas and local debt issues. *********** 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. 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