/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050426.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 Tuesday, April 26, 2005, Vol. 6, Issue 81 Headlines A N T I G U A & B A R B U D A LIAT: Negotiates for Caribbean to Cuba Direct Flight Routes A R G E N T I N A ACINDAR: Budgets $200M for Production Improvements AHOLD: Chilean Firm Threatens Lawsuit Over Argentine Payments ARPECO S.A.: Bankruptcy Initiated by Court Order BANCO DE SAN JUAN: Evaluadora Maintains 'BB+' Rating on Bonds BASTIANELLI S.R.L.: Court Rules Liquidation Necessary BERGIL S.A.: Court to Oversee Bankruptcy Process COMUNICACIONES TURISTICAS: Proceeds With Liquidation CONDHER S.R.L.: Court Authorizes Creditor's Bankruptcy Motion CONEMAR S.R.L.: Court Declares Company Bankrupt COSMETICA AMOR: Court Sets Claims Submission Deadline GRAFICA Y PUBLICIDAD: Claims Verification Deadline Approaches JUAN MINETTI: Fitch Confirms Category 1 Rating on Shares METROGAS: Declines Initial Government Contract Offer PLASTITREBOL S.R.L.: Court Declares Company Bankrupt PREVISION MEDICA: Liquidation Process Initiated TRENES DE BUENOS AIRES: Seeks Court Approval to Reorganize B E R M U D A CRP: S&P Affirms Ratings, Withdraws at Group's Request B R A Z I L CEMIG: Seeking Additional Stakes in Transmission Companies GLOBOPAR: Successfully Restructures All Outstanding Bonds PARANAPANEMA: Schedules General Meeting for May 6 VERKAUFER: Out of Business After 15 Years of Operation C H I L E AES GENER: Board Appoints New President E C U A D O R PETROECUADOR: Operations Normal Despite Political Turmoil J A M A I C A AIR JAMAICA: Resumes Direct Flight to U.S. From Grenada M E X I C O GRUPO IUSACELL: 1Q05 Revenues Jump 21.6% YoY GRUPO IUSACELL: Analysts Skeptical About Prospects GRUPO MEXICO: Higher Prices Yield 77.4% Sales Jump YoY in 1Q05 TFM: Announces Payment for Early Tenders From Noteholders V E N E Z U E L A PDVSA: Paulsboro, Savannah Refineries Set to Go Under the Hammer PDVSA: Executive Clarifies Tax Rate Cap - - - - - - - - - - ================================= A N T I G U A & B A R B U D A ================================= LIAT: Negotiates for Caribbean to Cuba Direct Flight Routes ----------------------------------------------------------- LIAT could soon offer flights to Cuba from Antigua and Barbuda if negotiations for a direct air route between the two nations end well. Caribbean Net News revealed that the Cuban government has shown interest in a proposal presented by Prime Minister Baldwin Spencer that would see LIAT offering direct flights to the country. The airline plans to purchase new jets to service this route. LIAT's foray into Cuba comes after Caribbean airlines such as BWIA and Air Jamaica have cut-off direct air links from the islands to Cuba. Scarcer flights have affected thousands of Caribbean students who study in Cuba. Jose Jaoquin Alvarez Portela, Cuban Ambassador to Antigua and Barbuda, and Roberto Lepez, senior advisor to the Cuban Vice President Carlos Lage, will meet with LIAT executives this week to begin official discussions on the proposal. CONTACTS: ANTIGUA (ANU) City Ticket Office Woods Center, St. John's BARBADOS (BGI) Oliver Haywood E-mail: haywoodo@liatairline.com Tel.: 246 428 8888 246-436-9753 246-426-7140 ST.LUCIA (SLU) Josse Mesmin E-mail: mesminj@liatairline.com Tel: 758 452 3051/2 ST.VINCENT (SVD) Dominique Patterson E-mail: pattersond@liatairline.com Tel: 784 457 1821 ================= A R G E N T I N A ================= ACINDAR: Budgets $200M for Production Improvements -------------------------------------------------- Argentine steelmaker Acindar plans to spend US$200 million over the next three years to upgrade its facilities in order to boost production capacity. Arturo Acevedo, President and CEO of Acindar, said that the capital outlay would enable the company to increase production to about 1.7 million tonnes. The higher output will be routed to domestic and international markets in anticipation of a 4 to 5 percent growth in the industry. Headquartered in Buenos Aires, Acindar manufactures non-flat steel products, such as billets, beams, cold drawn and hot- rolled bars, welded meshes and wire rod. The company has an annual capacity of about 1.2 metric tons. CONTACT: ACINDAR Industria Argentina de Aceros S.A. 2739 Estanislao Zeballos Beccar Buenos Aires Argentina B1643AGY Phone: +54 11 4719 8500 Fax: +54 11 4719 8501 Web Site: http://www.acindar.ar.com AHOLD: Chilean Firm Threatens Lawsuit Over Argentine Payments -------------------------------------------------------------- Chilean food retailer Distribucion y Servicio (D&S) plans to file a lawsuit against Dutch Royal Ahold in a dispute over payments for an Argentine unit it sold to the latter in 1999, Dow Jones Newswires indicates. D&S and Royal Ahold are locked in a US$45-million debt dispute, stemming from the purchase of Ekono by Ahold's Disco unit for US$150 million, of which US$60 million was paid at the time. Of the remaining US$90 million, only half was later paid after the Argentine peso dropped in value. D&S claims the debt was owed in dollars and is claiming that another $45 million remains to be paid. ARPECO S.A.: Bankruptcy Initiated by Court Order ------------------------------------------------ Court No. 10 of La Plata's civil and commercial tribunal declared Arpeco S.A. 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 Roberto Guillermo Coliqueo. As trustee, Mr. Coliqueo is tasked with verifying the authenticity of claims presented by the company's creditors. The verification phase is ongoing until May 16. Following claims verification, the trustee will submit the individual reports based on the forwarded claims for final approval by the court on June 30. A general report will also be submitted on August 29. CONTACT: Arpeco S.A. Calle 50 Nro. 913 La Plata Mr. Roberto Guillermo Coliqueo, Trustee Avda 53 Nro. 755 La Plata BANCO DE SAN JUAN: Evaluadora Maintains 'BB+' Rating on Bonds ------------------------------------------------------------- Evaluadora Latinoamericana S.A. Calificadora de Riesgo affirms the 'BB+' rating assigned to corporate bonds issued by Banco de San Juan S.A., relates the Comision Nacional de Valores, Argentina's securities regulator. The rating, based on the Company's finances as of December 31, 2004, denotes that the bonds possess some risk of nonpayment. The rating affects US$1 million worth of bonds, which the CNV described as "Serie 2 - Obligaciones Negociables Clase B - subordinadas". The bonds were classified under "Series and/or Class", with undisclosed maturity date. BASTIANELLI S.R.L.: Court Rules Liquidation Necessary ----------------------------------------------------- Court No. 24 of Buenos Aires' civil and commercial tribunal ordered the liquidation of Bastianelli S.R.L. after the company defaulted on its debt obligations, Infobae reveals. The liquidation pronouncement will effectively place the company's affairs as well as its assets under the control of Ms. Aida Israelson, the court-appointed trustee. Ms. Israelson will verify creditors' proofs of claims until July 1. The verified claims will serve as basis for the individual reports to be submitted in court on August 26. The submission of the general report follows on September 30. Clerk No. 47 assists the court on this case that will end with the disposal of the company's assets in favor of its creditors. CONTACT: Ms. Aida Israelson, Trustee Lavalle 1672 Buenos Aires BERGIL S.A.: Court to Oversee Bankruptcy Process ------------------------------------------------ Bergil S.A. enters 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 Ms. Marta Susana Polistina as trustee. Ms. Polistina will be verifying creditors' proofs of claims until the end of the verification phase on June 15. 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 August 11 followed by the general report that is due on September 23. CONTACT: Ms. Marta Susana Polistina, Trustee Avda Corrientes 745 Buenos Aires COMUNICACIONES TURISTICAS: Proceeds With Liquidation ---------------------------------------------------- N.S.S. S.A. successfully sought the bankruptcy of Comunicaciones Turisticas S.R.L. after Court No. 2 of Buenos Aires' civil and commercial tribunal declared the Company "Quiebra," reports Clarin. The creditor sought the ruling from the court after the company failed to pay debts amounting to US$5,000.67. The city's Clerk No. 4 assists the court on the case that will close with the sale of all of its assets. CONTACT: Comunicaciones Turisticas S.R.L. Suipacha 207 Buenos Aires CONDHER S.R.L.: Court Authorizes Creditor's Bankruptcy Motion ------------------------------------------------------------- Condher S.R.L. entered bankruptcy after Court No. 2 of Buenos Aires' civil and commercial tribunal approved a bankruptcy petition filed by PVC Tecnocom S.A., reports Clarin. The Company's failure to pay US$6,680.00 in debt prompted the creditor to file the petition. The Company's assets will be sold at the end of the bankruptcy process to repay creditors. Payments will be based on the results of the verification process. CONTACT: Condher S.R.L. Migueletes 1950 Buenos Aires CONEMAR S.R.L.: Court Declares Company Bankrupt ----------------------------------------------- Court No. 20 of Buenos Aires' civil and commercial tribunal declared local company Conemar S.R.L. "Quiebra", relates Clarin. The court approved the bankruptcy petition filed by the Company's creditor, Ms. Matilde Motriz. The city's Clerk No. 39 assists the court on the case. CONTACT: Conemar S.R.L. Av. San Pedrito 3849 Buenos Aires COSMETICA AMOR: Court Sets Claims Submission Deadline ----------------------------------------------------- Ms. Cecilia Beatriz Montelvetti, the trustee overseeing the liquidation of Cosmetica Amor S.A., will accept proof of claims from the company's creditors until June 14, says Infobae. Failure to comply with this requirement will mean disqualification from the bankruptcy proceedings. Court No. 15 of Buenos Aires' civil and commercial tribunal has jurisdiction over this case. Clerk No. 29 assists the court with the proceedings. CONTACT: Ms. Cecilia Beatriz Montelvetti, Trustee General Urquiza 2134 Buenos Aires GRAFICA Y PUBLICIDAD: Claims Verification Deadline Approaches ------------------------------------------------------------- The verification of claims for the Grafica y Publicidad S.A. bankruptcy case will end on June 16 according to Infobae. Creditors with claims against the bankrupt company must present proof of the liabilities to Mr. Julio Alberto Grisolia, the court-appointed trustee, before the deadline. Court No. 15 of Buenos Aires' civil and commercial tribunal handles the company's case with the assistance of Clerk No. 15. The bankruptcy will conclude with the liquidation of the company's assets to pay its creditors. CONTACT: Mr. Julio Alberto Grisolia, Trustee Jeronimo Salguero 2355 Buenos Aires JUAN MINETTI: Fitch Confirms Category 1 Rating on Shares -------------------------------------------------------- Fitch Ratings has confirmed its Category 1 rating on ordinary shares of Juan Minetti, the country's second largest cement company. According to Business News Americas, the affirmation reflects Juan Minetti's adequate economic-financial performance due to increased sales and a drop in its financial debts with the conclusion of its restructuring process in 2003. Juan Minetti posted a consolidated net profit of ARS60.9 million (US$21mn) in 2004, down 49.6% from the previous year. The Company, which is controlled by Swiss cement giant Holcim, foresees a "favorable panorama" in the construction sector this year due to the economy's performance last year. CONTACT: Juan Minetti SA 87 Ituzaingo Cordoba Argentina 5000 Phone: +54 51 26 7529 Fax: +54 51 24 4709 Home Page: http://www.juanminetti.com.ar Contacts: Dr. Manuel Augusto J. Baltazar Ferrer, Chairman Atty. Carlos Buhler, Executive Vice Chairman & General Manager METROGAS: Declines Initial Government Contract Offer ---------------------------------------------------- Natural gas distributor Metrogas (MGS) turned down the utility contract offered by the Argentine government during a public hearing Friday, reports Dow Jones Newswires. "We hope to continue to contribute to the nation's development," Metrogas said in a statement. However, the Company warned that the government, by sticking to its offer, could dash those hopes. Metrogas observes that "the minimum conditions to assure the long-term sustainability of the company are not clearly defined" in the contract. And, among "basic requirements for a sustainable accord," the Company called for a higher rate increase, especially for residents who can afford to pay more. Metrogas warned that the current situation could lead to a repeat of service cuts seen last year for industrial users. The Company added that the lack of a contract solution jeopardizes the flow of gas to electricity generators and keeps the Company from expanding service to new homes and businesses. Speaking with Dow Jones Newswires after the hearing, a Metrogas representative said that the Company's position "is not a rejection in the sense that we don't want (a contract). We are opening doors to continue negotiations; we are asking for more clarification." 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 PLASTITREBOL S.R.L.: Court Declares Company Bankrupt ---------------------------------------------------- Court No. 23 of Buenos Aires' civil and commercial tribunal declared local company Plastitrebol S.R.L. "Quiebra", relates Clarin. The order comes in approval of the bankruptcy petition filed by Union de Obreros y Empleados Plasticos, whom the Company has debts amounting to US$24,564. Clerk No. 46 assists the court on the case. CONTACT: Plastitrebol S.R.L. Estomba 3932 Buenos Aires PREVISION MEDICA: Liquidation Process Initiated ------------------------------------------------ Prevision Medica Complementaria S.A. of Buenos Aires will begin liquidating its assets after Court No. 8 of Buenos Aires' civil and commercial tribunal declared the company bankrupt. Infobae reveals that the bankruptcy process will commence under the supervision of court-appointed trustee Walter Arturo Calleja. Mr. Calleja will review claims forwarded by the company's creditors until May 20. After claims verification, the trustee will submit the individual reports for court approval on July 6. The general report will follow on September 13. The city's Clerk No. 16 assists the court on this case. CONTACT: Mr. Walter Arturo Calleja, Trustee Lambare 1140 Buenos Aires TRENES DE BUENOS AIRES: Seeks Court Approval to Reorganize ---------------------------------------------------------- Court No. 9 of Buenos Aires' civil and commercial tribunal is currently studying the request for reorganization submitted by local company Trenes de Buenos Aires S.A., says Infobae. The report adds that that the company filed a "Concurso Preventivo" petition following cessation of debt payments on April 20. The city's Clerk No. 17 assists the court on this case. CONTACT: Trenes de Buenos Aires S.A Avda. Ramos Mejia 1358 Buenos Aires ============= B E R M U D A ============= CRP: S&P Affirms Ratings, Withdraws at Group's Request ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its "BBB+" insurer financial strength ratings on two subsidiaries of French reinsurer SCOR: Bermuda-based Commercial Risk Reinsurance Co. Ltd. and Vermont-domiciled Commercial Risk Re-Insurance Co., together known as Commercial Risk Partners (CRP). S&P then withdrew the ratings at the group's request. "The insurer financial strength ratings on the CRP companies, which have been in runoff since 2002, remain based on full and unconditional payment obligation guarantees issued to their policyholders by SCOR (foreign currency, BBB+/Positive/--; local currency, BBB+/Positive/A-2)," S&P noted. "The guarantees remain in place and are unaffected by the ratings withdrawal. As runoff entities, the most likely scenario that would result in either guarantee terminating, according to the guarantee language, would be the transfer of a CRP subsidiary to a third party group and the subsequent qualification of the subsidiary in question for a rating at least equal to that on SCOR." The rating agency indicated it "will continue to review CRP as part of its ongoing surveillance of the SCOR group." =========== B R A Z I L =========== CEMIG: Seeking Additional Stakes in Transmission Companies ---------------------------------------------------------- The Board of Directors of Companhia Energetica de Minas Gerais Approved on April 20, 2005 the indicative and non-binding proposal for acquisition of holdings in transmission companies. Companhia Energetica de Minas Gerais is a partly state-owned company controlled by the government of the State of Minas Gerais. The Company's principal business activities are the construction and operation of systems used in the generation, transmission, distribution and sale of electric energy. As a concessionaire of electric utility services, the Company is subject to regulations set by the Agencia Nacional de Energia Eletrica (the Brazilian National Electric Energy Agency or "ANEEL"). CONTACT: Companhia Energetica de Minas Gerais (CEMIG) Av.Barbacena, 1200 Santo Agostinho - CEP 30190-131 Belo Horizonte - MG - Brasil Fax (0XX31)299-4691 Phone: (0XX31)3299-4524 GLOBOPAR: Successfully Restructures All Outstanding Bonds --------------------------------------------------------- Globo Comunicacoes e Participacoes S.A. ("Globopar"), announced Thursday the approval of its debt restructuring in all outstanding bond series. Globopar received noteholder approval of its debt-restructuring proposal in the remaining four of its six outstanding bond series: a) the US$250 million 10.500% Series B Guaranteed Notes due 2006; b) the US$500 million 10.625% Notes due 2008; c) the Eur100 million 9.750% Notes due 2004; and d) the US$100 million 10.625% Notes due 2004. Globopar announced on March 17, 2005 that it received noteholder approval of the debt restructuring proposal in two of its six outstanding bond series: a) the US$80 million 9.875% Notes due 2004 issued by Globopar Overseas Ltd.; and b) the US$100 million 9.875% Series A Guaranteed Notes due 2004 issued by Globopar. Approximately US$822.5 million, representing approximately 84% of the outstanding bonds, voted at the six noteholder meetings. Approximately US$ 665.4 million, representing approximately 81% of those who voted, voted to approve the debt restructuring proposal. Roberto Irineu Marinho, President of Organizacoes Globo, said "We are extremely pleased with the overwhelming support that we have received from our bondholders. We would especially like to thank the members of our creditors steering committees and other key noteholders for working with Globopar to reach this milestone. We look forward to completing the restructuring process with the continued support of our creditors." In the next few weeks: (1) all holders of outstanding bonds will be receiving notices with respect to the commencement of the Dutch Auction and instructions for the submitting of Dutch Auction Bid Letters through a secure weblink at www.bondcom.com/globo; and (2) eligible holders of outstanding bonds will be receiving notices with respect to the commencement of the period for submitting Notices of Election through a secure weblink at www.bondcom.com/globo. In addition to the upcoming notices, holders of outstanding bonds issued by Globopar or Globopar Overseas Ltda. may be entitled to receive further information materials relating to Globopar's financial restructuring and the means by which they can participate in this restructuring. These information materials will only be provided to bondholders who have provided the relevant certifications regarding their eligibility under applicable securities laws to receive such materials. Bondholders should contact Gail Philips of Bondholder Communications Group at +44 207 236 9788 to obtain copies of the certificates of eligibility and information materials. CONTACT: Investor Contact: Mr. Stefan Alexander or Ms. Marta Meirelles Globo Comunicacoes e Participacoes S.A. Phone: +55 21 2540 4444 E-mail: IR@Globopar.com.br International Media Contact: Mr. Simon Maule/Mr. Robert Mead Gavin Anderson & Company Phone: +44 207 554 1421 E-mail: rmead@gavinanderson.com Brazilian Media Contact: Ms. Jo Ristow Companhia de Noticias Phone: +55 11 3643 2713 E-mail: jo@cdn.com.br PARANAPANEMA: Schedules General Meeting for May 6 ------------------------------------------------- Sao Paulo-based mining and metals holding company Paranapanema informed the local bourse that it will hold its annual general meeting on May 6, 2005. According to a Business News Americas report, shareholders will review the Company's 2004 financial results at the meeting. The Company registered a net profit of BRL123 million (US$46mn) in 2004, reversing the previous year's loss of BRL451 million. Also during the meeting, shareholders will be asked to vote on a proposal to bundle together shares in lots of 2000. Paranapanema has four main divisions: tin and industrial company Mamore, fertilizer unit Cibrafertil, copper smelter Caraiba Metais and copper tube and fixture maker Eluma. VERKAUFER: Out of Business After 15 Years of Operation ------------------------------------------------------ Rio Grande do Sul-based footwear maker has been declared bankrupt after 15 years of operations, reports just-style.com. About 250 workers are expected to lose their jobs following the Company's demise. Verkaufer has estimated liabilities of BRL4.5 million. ========= C H I L E ========= AES GENER: Board Appoints New President --------------------------------------- Mr. John Ruggirello became generator AES Gener's new president following an appointment by the Company's board at a meeting held April 19. Business News Americas reveals that Mr. Ruggirello is executive VP, COO for generation and acting COO for integrated utilities at AES Gener's US parent AES (NYSE: AES). 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 AES Corp.. CONTACT: AES Gener Mariano Sanchez Fontecilla 310 Piso 3 Santiago de Chile Phone: 562-6868900 Fax: 562-6868991 ============= E C U A D O R ============= PETROECUADOR: Operations Normal Despite Political Turmoil --------------------------------------------------------- Operations at state-run oil company Petroecuador remain stable despite demonstrations that forced President Lucio Gutierrez to flee the country, according to a company source. In a telephone interview with Bloomberg, Petroecuador spokeman Fausto Mejia said production, refining and transportation activities weren't affected by protests against Gutierrez. "The political situation didn't affect our operations at all," Mr. Mejia said. Congress ousted Gutierrez amid allegations that he stacked the country's Supreme Court and helped clear a former president of corruption charges. Mr. Alfredo Palacio has been picked to serve out the balance of Gutierrez's four-year term, which expires in January 2007. Palacio is likely to name a new president for Petroecuador, replacing Hugo Bonilla who was named by Gutierrez in December, Mr. Mejia said. Petroecuador pumps about 40% percent of the country's daily output of 530,000 barrels. Foreign companies that operate fields for Petroecuador account for about half of the company's production. ============= J A M A I C A ============= AIR JAMAICA: Resumes Direct Flight to U.S. From Grenada ------------------------------------------------------- Grenada's tourism industry welcomed Air Jamaica to the Point Saline International Airport last week where the carrier returned after a month-long interruption of its direct service to the United States. Tourism Minister Brenda Hood said in a report from CubaXP that a longer pause on the airline's service could have crippled the country's tourism industry. Air Jamaica has assured the tourism ministry that it will maintain that U.S. direct service has become popular with Grenadians. Air Jamaica suspended a fraction of its Caribbean routes in March due to a shortage of available aircraft caused by the carrier's Quality Assurance Check Program. 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). 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 =========== GRUPO IUSACELL: 1Q05 Revenues Jump 21.6% YoY -------------------------------------------- Grupo Iusacell, S.A. de C.V. (NYSE: CEL) (BMV: CEL) (Iusacell or the Company) announced Friday unaudited financial results for the first quarter 2005. Grupo Iusacell showed a 21.6% increase in revenues, from Ps. 1,096 million in the first quarter of 2004 to Ps. 1,333 million in the first quarter of 2005. During the same period, operating income before depreciation and amortization increased 92.9%, to Ps. 267 million, in comparison with the Ps. 138 million recorded in the same period the year before. Grupo Iusacell closed the first quarter of 2005 with 1.55 million subscribers. Highlights: In Million of Pesos, except percentages 1Q 1Q Change 2004 2005 % Revenue (net of commissions) 1,096 1,333 21.6% Total Cost 711 659 -7.3% Total Operating Expenses 247 407 64.9% Operating Income before Depreciation and amortization 138 267 92.9% Net Loss (361) (365) 1.0% The 21.6% increase in revenues was primarily due to: (1) an increase in postpaid revenues as a result of an increase in minutes of use per subscriber, (2) an increase in revenues from airtime and value-added services, (3) a net increase of approximately 255,000 subscribers as compared to the first quarter of 2004, and (4) revenues derived from exchange of capacity services provided to Unefon. Total costs for the first quarter of 2005 decreased by 7.3% to Ps. 659 million compared to the Ps. 711 million recorded for the same period in the prior year. This decrease was primarily due to a reduction in the cost of handset subsidies resulting from a change in accounting policy regarding the recognition of postpaid subsidies, as more fully explained below. Operating expenses during the first quarter of 2005 were Ps. 407 million, an increase of 64.9% as compared to the first quarter of 2004. This increase was mainly due to: (1) an increase in personnel expenses due to the establishment of regional sales and customer service structures in line with our strategy of providing the best service to our clients, (2) an increase in advertising costs due to the launching of new products and special promotions, (3) an increase in external personnel expenses related to the opening of new distribution channels, and (4) an increase in doubtful receivables reserves. Iusacell recorded an operating income before depreciation and amortization in the first quarter of 2005 of Ps. 267 million, a 92.9% increase as compared to the Ps. 138 million recorded in the first quarter of 2004. This increase was primarily due to the increase in revenues and decrease in costs described above. The net loss of Ps. 365 million recorded in the first quarter of 2005 represented a slight increase when compared to the net loss of Ps. 361 million recorded in the same period the year before. This increase was primarily due to a Ps. 179 million increase in comprehensive financing cost due to a reduction in net monetary gain and a foreign exchange loss, offset by an increase in the operating incomer before depreciation and amortization and a reduction in the depreciation and amortization. During the first quarter of 2005, the Company made investments of approximately US$15 million, used primarily to expand the coverage and capacity of its 3-G network. Recent Events Changes in Accounting Policies Beginning with the first quarter of 2005, the Company has made the following changes to its accounting policies: 1. Sales commissions not directly related to the activation of handsets are reclassified, and are now presented as a deduction in gross revenues instead of being recorded as sales expenses as was previously done. The purpose of this change is to match revenues directly with the costs that give rise to such revenues. 2. Income from the sale of fixed assets is reclassified and is now presented after operating income before depreciation and amortization. We consider that this item should not affect operating income as it is derived from an activity that is not part of the Company's core business. 3. The net cost of the handset subsidy (which is sales price, less cost of sale, commissions related to the activation and other costs) is presented as a single item, with the following alternatives: i. The subsidy for postpaid handsets is deferred at the time of activation and is amortized on a straight- line based on the life of the contract with the client. In the past, the subsidy was recognized in the income statement at the time the handset was delivered to the client. ii. The policy related to the subsidy for prepay handsets has not changed, it continues being recognized in the income statement at the time the handset is delivered to the client. Iusacell received from the Mexican Federal Telecommunications Commission (COFETEL) the results of the auction of PCS frequencies Grupo Iusacell, through its subsidiary Iusacell PCS de Mexico, was allocated by the COFETEL 10 MHZ in the PCS regions 2, 3, 5, 6, 7, 8 and 9. Debt restructuring The Company continues negotiations with several of its creditors, seeking to obtain a comprehensive restructuring agreement as soon as possible. About Iusacell Grupo Iusacell, S.A. de C.V. (Iusacell, NYSE and BMV: CEL) is a wireless cellular and PCS service provider in Mexico encompassing a total of approximately 92 million POPs, representing approximately 90% of the country's total population. Independent of the negotiations towards the restructuring of its debt, Iusacell reinforces its commitment with customers, employees and suppliers and guarantees the highest quality standards in its daily operations offering more and better voice communication and data services through state-of-the-art technology, such as its new 3G network, throughout all of the regions in which it operate. To view financial statements: http://bankrupt.com/misc/Iusacell.htm CONTACT: Grupo Iusacell S.A de C.V. Prolongacion Paseo de la Reforma 1236 Colonia Santa Fe Delegacion Cuajimalpa Mexico, D.F. 05348 Mexico Phone: 011-525-109-5754 Web site: http://www.iusacell.com.mx GRUPO IUSACELL: Analysts Skeptical About Prospects -------------------------------------------------- Analysts remain in doubt about mobile operator Iusacell's future despite the Company's success at acquiring valuable PCS spectrum bandwidth earlier this month. Business News Americas reveals that telecoms regulator, Cofetel awarded Iusacell 10Mhz licenses in seven regions, finally giving it full coverage of Mexico's nine operating regions. The new spectrum requires a US$5.2 million outlay, plus yearly maintenance fees, and the capital expenditure budget will not stretch to maintenance and expansion of its 3G network. Capex in 2004 was US$40 million and, according to data provided by the Mexican stock market BMV, the Company has less than MXN4 million (US$362,630) in cash left. Analysts are skeptical, to say the least, that Iusacell would be able to obtain more credit, even at high interest rates. "Security creditors are not pleased. It sends the wrong signals for a company to be in default and engaging not only in maintenance capital expenditure but growth capital expenditure and then buying frequencies," James Harper, director of corporate research at US investment firm BCP Securities, told Business News Americas. Iusacell is currently in negotiations to restructure its burgeoning debt profile, which totals US$800 million. It has already defaulted on US$150 million to pay off senior notes due in 2004 and has US$350 million due 2006 plus a US$266 million secured syndicated loan. Meanwhile, Mr. Sergio Rodriguez, an analyst with Fitch Ratings, believes that the Company has obtained credits or made advances in its debt restructuring negotiations. "Something must be happening, because how could they be negotiating with their creditors and at the same time be committing money to a new license?" Mr. Rodriguez said. Mr. Rodriguez also suspects that Iuscells' purchase of PCS spectrum is part of a technological strategy by businessman Ricardo Salinas Pliego to share CDMA coverage between Iusacell and sister company Unefon, while the competition Telcel and Movistar are both migrating to GSM. "They (Iusacell and Unefon) both have CDMA. Telcel has TDMA and is migrating to GSM. Telef�nica has some CDMA and is migrating to GSM ... it seems to be a logical strategy from the technological point of view," Mr. Rodriguez said. CONTACT: Grupo Iusacell S.A de C.V. Prolongacion Paseo de la Reforma 1236 Colonia Santa Fe Delegacion Cuajimalpa Mexico, D.F. 05348 Mexico Phone: 011-525-109-5754 Web site: http://www.iusacell.com.mx GRUPO MEXICO: Higher Prices Yield 77.4% Sales Jump YoY in 1Q05 -------------------------------------------------------------- Southern Peru Copper Corporation (SPCC) (NYSE and LSE PCU) reported Thursday net earnings of $187.6 million, or diluted earnings per share of $2.34, for the first quarter of 2005 compared with net earnings of $86.8 million, or diluted earnings per share of $1.09, for the first quarter of 2004, an increase of 116.1% over the 2004 period. Sales of products were $486.2 million in the first quarter of 2005, compared with $274.1 million in the first quarter of 2004, an increase of 77.4% over the 2004 period. The average price for copper on the London Metal Exchange in the first quarter of 2005 was $1.48 per pound, compared with $1.24 per pound in the 2004 first quarter. The average price for copper on the New York Commodity Exchange (COMEX) in the first quarter of 2005 was $1.47 per pound, compared with $1.23 per pound in the first quarter of 2004. The average price for molybdenum, one of SPCC's principal by-products, was $31.31 per pound in the first quarter of 2005, compared to $ 8.27 per pound in the first quarter of 2004. The price of silver, on the COMEX was higher at $6.99 per ounce in the first quarter of 2005, compared to $6.71 per ounce during the first quarter of 2004. Mine copper production decreased 14.6% to 178.5 million pounds in the first quarter of 2005 compared with the first quarter of last year. This decrease of 30.5 million pounds included 7.4 million pounds from the Toquepala mine, 20.0 million pounds from the Cuajone mine and 3.1 million pounds in solvent extraction/electrowinning (SX/EW) production. The decrease in Toquepala production was a result of a lower volume of material milled and lower ore grade and the decrease in Cuajone production was a result of lower ore grade in the 2005 period. The main reason for the 3.1 million pound decrease in SX/EW production was lower grade of PLS (pregnant leaching solution). All the above noted production quantities are in line with amounts forecasted in our 2005 budget. Commenting on the Company's economic results, for the first quarter of 2005, Mr. German Larrea, Chairman of SPCC said, "The improvement in Company earnings for the first quarter of 2005 is principally due to increase in sales volume of copper and molybdenum and significant increase in sales price for copper and molybdenum. SPCC's sale of copper was reduced in the first quarter of 2004 due to the build-up of inventory needed to establish the copper rod program." Reporting on the Company's modernization program, Mr. Oscar Gonzalez Rocha, President and CEO of SPCC, said "The Ilo smelter modernization project is moving ahead on schedule with detailed engineering and preliminary construction work in process in order to finish by the end of 2006. Additionally the Company's leaching dump, crushing and conveying project at the Toquepala mine is also progressing on schedule. The leaching dumps project investment through March 2005 is $56.1 million. This project is scheduled for completion in mid-2005 with projected annual operating cost saving of $25 million." On April 1, 2005, SPCC completed its acquisition of Minera Mexico, S.A. de C.V. (MM) pursuant to the Agreement and Plan of Merger (Agreement), dated as of October 21, 2004. SPCC acquired a 99.1463% interest in MM in exchange for the issuance of 67,207,640 shares of common stock. Grupo Mexico's interest in SPCC, through subsidiaries, increased from 54.2% to 75.1%. In addition, in compliance with the Agreement, SPCC paid in the first quarter of 2005 a $100 million transaction dividend and MM reduced its outstanding net debt to less than $1.0 billion. The first quarter 2005 financial statements included in this report reflect the results of SPCC at March 31, 2005, prior to the acquisition of MM on April 1, 2005. Summary pro-forma information of the combined company is as follows: First Quarter 2005 SPCC alone SPCC & MM (dollars in millions) Sales $486.2 $945.0 Net earnings $187.6 $324.2 Total assets $2,696.6 $5,373.9 Production: Copper (000s lbs.) 178,500 356,595 Molybdenum (000s lbs.) 6,550 8,864 Silver (000s ozs.) 1,038 2,770 Zinc (000s lbs.) - 76,494 On April 4, 2005, SPCC entered into a Registration Rights Agreement with its Class A shareholders, which contemplates that SPCC will file as promptly as practicable a shelf registration statement on Form S-3 with the Securities and Exchange Commission, as per the disclosure made on April 8, 2005. The 2005 shareholders meeting called for April 28, 2005 has been postponed to May 16, 2005 in order to ensure a major participation of shareholders. Southern Peru Copper Corporation is one of Peru's largest companies and one of the ten largest copper producers worldwide. The ownership of SPCC's shares, either directly or through subsidiaries as of April 1st, 2005, is as follows: Grupo Mexico (75.1%), Cerro Trading Company (7.7%), Phelps Dodge (7.6%) and other shareholders (9.6%). CONTACT: GRUPO MEXICO Av. Baja California No. 200 Colonia Roma Sur 06760 Mexico, D.F. Phone: 52 (55) 5080-0050 TFM: Announces Payment for Early Tenders From Noteholders --------------------------------------------------------- TFM, S.A. de C.V., a subsidiary of Kansas City Southern ("KCS") (NYSE:KSU), announced that on April 20, 2005, it accepted for purchase tenders equal to approximately $386.0 million principal amount of its 11.75% Senior Discount Debentures due 2009 of its majority owned subsidiary, TFM, S.A. de C.V. ("TFM") (CUSIP Numbers: 872402AB8 and 872402AD4, ISIN Number: USP91415AB81) (the "Notes"). The Notes accepted for payment were tendered on or prior to the Consent Deadline of 5:00 p.m. NYC time, April 14, 2005, pursuant to the previously announced consent solicitation and tender offer for the Notes, and TFM made payments to Holders of the Notes of the Total Consideration plus Accrued Interest. As part of its pending tender offer for the Notes, TFM was soliciting consents to eliminate substantially all of the restrictive covenants included in the indenture under which the Notes were issued and to reduce the minimum prior notice period with respect to a redemption date for outstanding Notes from 30 to three days. The supplemental indenture relating to the Notes containing the proposed changes was executed by TFM and the Trustee under the indenture, and it became operative on April 20, 2005. CONTACT: TFM, S.A. DE C.V. Investors: William H. Galligan Tel: 816-983-1551 E-mail: william.h.galligan@kcsr.com or U.S. Media: C. Doniele Kane Tel: 816-983-1372 E-mail: doniele.c.kane@kcsr.com or Mexico Media: Gabriel Guerra Tel: 011-525-55-208-0860 E-mail: gguerra@gcya.net ================= V E N E Z U E L A ================= PDVSA: Paulsboro, Savannah Refineries Set to Go Under the Hammer ---------------------------------------------------------------- The two Citgo Petroleum Corp. refineries that parent company Petroleos de Venezuela (PDVSA) is putting on the block are the Paulsboro, New Jersey and Savannah, Georgia asphalt refineries, reports Business News Americas. According to a Houston oil industry source, the two refineries are Citgo's smallest refineries in terms of capacity. Paulsboro has capacity of 84,000 barrels of oil a day (b/d) and Savannah has 32,000 b/d. Both are the least likely to affect PDVSA's gasoline business in the US if sold, since both facilities are devoted to asphalt making. In addition, both are 100%-Citgo owned, so the consent of a third party to sell them is not needed. Mr. Rafael Ramirez, the president of PDVSA and energy and mines minister, said earlier that PDVSA is looking to get rid of some of its US based refineries on the grounds they are losing money. But according to Mr. Cesar Rincones, a lawmaker, Mr. Ramirez will have to answer before a panel of lawmakers for the sale. "The refineries are making profits and are beneficial for the country. What's happening is that they don't process Venezuelan oil but rather [oil] from Mexico and Canada, but it must be understood that the profit is not just in refining national [Venezuelan] oil but in Citgo's final product," Union Radio network quoted Mr. Rincones as saying. Mr. Rincones said PDVSA is not producing the 3 million barrels of oil a day (Mb/d) it says it is. "It's not that Citgo isn't profitable, but that Venezuela is not supplying it with the crude necessary to take the refineries to their maximum capacity," he said. CONTACT: Petroleos de Venezuela S.A. Edificio Petroleos de Venezuela Avenida Libertador, La Campina, Apartado 169 Caracas, 1010-A, Venezuela Phone: +58-212-708-4111 Fax: +58-212-708-4661 Web site: http://www.pdvsa.com.ve PDVSA: Executive Clarifies Tax Rate Cap --------------------------------------- A top PDVSA executive refuted reports that the tax rate for the four extra heavy-crude upgrading projects in the Orinoco belt will increase to 50%, reports Business News Americas. Speaking to reporters in Caracas on Friday, PDVSA internal director Eulogio del Pino said the tax rate will remain at 34%. PDVSA president and energy and oil minister Rafael Ramirez "has clarified that these associations were based on the 1943 hydrocarbons law and their taxes will remain at 34%," Mr. del Pino said. "We want to be very clear in this respect. There has been a misunderstanding," he added. Orinoco projects, which churn out about 600,000 barrels a day of synthetic crude, have already seen their royalty rates increase dramatically this year from 1% to 16%, which is the maximum allowed under their contracts. *********** 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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