/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050614.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, June 14, 2005, Vol. 6, Issue 116 Headlines A R G E N T I N A AGROVEN S.A.: Court OKs Creditor's Bankruptcy Call AGUAS PROVINCIALES: Banco de Galicia Clings to 22.5% Stake ELEMAR CARGAS: Reorganization Concluded FRIGORIFICO: Debt Payments Halted, Set To Reorganize FULGORES S.A.: Initiates Bankruptcy Process on Court Order ONRAK S.A.: Files Petition to Reorganize RUDVIG S.A.: Court Rules Bankruptcy SERFA S.A.: Declared Bankrupt by Court SHIPTRADE S.A.: Court Orders Liquidation TELECOM ARGENTINA: Court Approval of APE Becomes Final TELECOM ARGENTINA: No New Debt Issuance in the Offing TRANSTRAM S.R.L.: Debt Payments Halted, Moves to Reorganize B E R M U D A FOSTER WHEELER: Awarded EPCm Contract With Woodside Energy B R A Z I L BANCO ITAU: La Caixa Intends to Sell Stock Participation ELETROPAULO METROPOLITANA: Ordered to Bury Cables NEWFIELD EXPLORATION: Fitch Assigns `BB+' to Sr. Unsec. Rating NII HOLDINGS: Enters Into Agreement to Convert Notes Into Shares USIMINAS: Integration of Cosipa Ups Operating Profit C H I L E MANQUEHUE NET: GTD Sheds Light on Acquisition Reports M E X I C O LFC: Opens Tender for Fourteen 32MW Gas-Fired Projects SATMEX: May Seek More Time to Respond to Bankruptcy Petition P U E R T O R I C O DORAL FINANCIAL: Moody's Downgrades Senior Debt Rating to Baa3 U R U G U A Y ANCAP: PDVSA to Supply 1Mb Crude in August - - - - - - - - ================= A R G E N T I N A ================= AGROVEN S.A.: Court OKs Creditor's Bankruptcy Call -------------------------------------------------- Agroven S.A. entered bankruptcy after Court No. 12 of Buenos Aires' civil and commercial tribunal approved a bankruptcy motion filed by Mr. Alejandro Patilis, reports La Nacion. The Company's failure to pay its debt prompted the creditor to file the petition. Working with the city's Clerk No. 23, the court assigned Mr. Ricardo Randrup 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 claim to the trustee before Aug. 1, 2005. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. Payments will be based on the results of the verification process. CONTACT: Agroven S.A. Macias 675 Buenos Aires Mr. Ricardo Randrup, Trustee Avenida Cordoba 1351 Buenos Aires AGUAS PROVINCIALES: Banco de Galicia Clings to 22.5% Stake ---------------------------------------------------------- Argentine bank Banco de Galicia will not let go of its 22.5% stake in Aguas Provinciales de Santa Fe, reports Business News Americas. Banco de Galicia affirmed its commitment to the utility a few days after local water utility Latin Aguas announced it has signed a letter of intent to buy a controlling 66% share from French Suez Environment. Latin Aguas is aiming to take over services within two months and plans to invest some ARS100 million (US$34.5mn) within three years. Since Suez's announcement in May that it has decided to pull out of its Santa Fe concession, several companies have come out, expressing their interest in buying a stake in Aguas Provinciales. Among those interested are Uruguayan firms CSI Ingenier｛ and Ciemsa; Saur and South Wather, which operate Mendoza city's water services; Italian Company Impregilo; and 5 de Septiembre, a consortium made up of former employees from Aguas Argentinas and Obras Sanitarias. All of the companies interested in a piece of Aguas Provinciales want to keep Banco de Galicia as a shareholder because of the importance of having a financial partner in the equation. ELEMAR CARGAS: Reorganization Concluded --------------------------------------- The settlement plan proposed by Elemar Cargas S.A. for its creditors acquired the number of votes necessary for confirmation. As such, the reorganization plan has been endorsed by Court No. 14 of Buenos Aires' civil and commercial tribunal and will now be implemented by the Company. CONTACT: Elemar Cragas S.A. Buenos Aires FRIGORIFICO: Debt Payments Halted, Set To Reorganize ---------------------------------------------------- Court No. 2 of Buenos Aires' civil and commercial tribunal is now analyzing whether to grant Frigorifico La Colorada S.A. approval for its petition to reorganize. La Nacion recalls that the Company filed a "Concurso Preventivo" petition following cessation of debt payments on May 12, 2005. Clerk No. 3 is assisting the court on the Company's case. CONTACT: Frigorifico La Colorada S.A. Avenida Belgrano 535 Buenos Aires FULGORES S.A.: Initiates Bankruptcy Process on Court Order ---------------------------------------------------------- Fulgores S.A., which is domiciled in Buenos Aires, entered bankruptcy as the city's civil and commercial Court No.13 ruled that it is "Quiebra." Infobae reveals that the city's Clerk No. 25 aids the court on the process. The court appointed Mr. Mario Gabriel Sogari as the Company's receiver. Creditors must submit their proofs of claim to the receiver for verification before Aug. 10, 2005. The receiver is also required to prepare the individual and general reports on the bankruptcy process. CONTACT: Mr. Mario Gabriel Sogari, Trustee Montevideo 708 Buenos Aires ONRAK S.A.: Files Petition to Reorganize ---------------------------------------- Onrak S.A. filed a "Concurso Preventivo" motion, reports La Nacion. The Company is seeking to reorganize its finances following cessation of debt payments early this month. The Company's case is pending before Court No. 2, assisted by Clerk No. 3. CONTACT: Onrak S.A. Bruselas 567 Buenos Aires RUDVIG S.A.: Court Rules Bankruptcy ----------------------------------- Buenos Aires' civil and commercial Court No. 13 decreed the bankruptcy of Rudvig S.A., reports Infobae. The Company will kick off the process with Mr. Carlos Alberto Yacovino as receiver, who will verify creditors' claims until Aug. 2, 2005. The Company's case will conclude with the liquidation of its assets to repay creditors. Clerk No. 25 assists the court in handling the proceedings. CONTACT: Mr. Carlos Alberto Yacovino, Trustee Jean Jaures 933 Buenos Aires SERFA S.A.: Declared Bankrupt by Court -------------------------------------- Serfa S.A. is now "Quiebra" or bankrupt, says Infobae. Buenos Aires' civil and commercial Court No. 13 decreed the Company's bankruptcy and appointed Elsa Ester Andrade, as receiver for the Company. Ms. Elsa Ester Andrade will be reviewing creditors' claims until Aug. 1, 2005. Analyzing these claims is important because the outcome of the process will determine the amount each creditor will get after all the assets of the Company are liquidated. The court, which is aided by Clerk No. 25, will conclude the bankruptcy process by liquidating its assets to repay creditors. CONTACT: Ms. Elsa Ester Andrade, Trustee Avda Callao 449 Buenos Aires SHIPTRADE S.A.: Court Orders Liquidation ---------------------------------------- Shiptrade S.A. prepares to wind-up its operations following the bankruptcy pronouncement issued by Court No. 9 of Buenos Aires' civil and commercial tribunal. The declaration effectively prohibits the Company from administering its assets, control of which will be transferred to a court-appointed trustee. Infobae reports that the court appointed Ms. Griselda Isabel Eidelstein as trustee. Ms. Eidelstein will be reviewing creditors' proofs of claim until Aug. 9, 2005. The verified claims will serve as basis for the individual reports to be presented for court approval on Sep. 20, 2005. The trustee will also submit a general report of the case on Nov. 1, 2005. Clerk No. 18 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: Shiptrade S.A. San Martin 551 Buenos Aires Ms. Griselda Isabel Eidelstein, Trustee Lambare 1140 Buenos Aires TELECOM ARGENTINA: Court Approval of APE Becomes Final ------------------------------------------------------ Telecom Argentina S.A. (NYSE: TEO) (BASE: TECO2) ("Telecom Argentina") announced that, as of Friday, the court approval of its Acuerdo Preventivo Extrajudicial ("APE") has become final. As informed on May 30, 2005, the Argentine court approved on May 26, 2005, the APE that was entered into by Telecom Argentina and its financial creditors. Telecom Argentina will soon initiate, as ordered by the Argentine court, the publication of notices in widely circulated national and foreign newspapers informing non-consenting creditors of the court's decision to permit them to select among any of the options offered by Telecom Argentina in its APE, within ten (10) court days following the last publication of notices. The Argentine court has provided that non-consenting creditors that do not submit an election before the Argentine court within such timeframe shall be allocated to Option A. For additional information, contact: Telecom Argentina S.A. Pedro Insussarry +011-54-11-4968-3743 Moira Colombo +011-54-11-4968-3628 Gaston Urbina +011-54-11-4968-3627 Morgan Stanley & Co. Incorporated Carlos Medina +1-212-761-6520 MBA Banco de Inversiones S.A. Diego Steverlynck +011-54-11-4319-5865 Telecom Argentina is a Company incorporated under the laws of Argentina with its registered office at Alicia Moreau de Justo 50, Piso 10, C1107AAB, Buenos Aires, Argentina. Telecom Argentina is one of Argentina's largest telecommunications operators. It provides local and long-distance telephony, mobile communications (through its subsidiary Telecom Personal), data and Internet access services in Argentina. It also operates a mobile license in Paraguay through one of its subsidiaries. Telecom Argentina common stock is listed on the Buenos Aires Stock Exchange under the ticker "TECO2" and Telecom Argentina ADSs are listed on the New York Stock Exchange under the ticker "TEO". TELECOM ARGENTINA: No New Debt Issuance in the Offing ----------------------------------------------------- The conclusion of fixed-line provider Telecom Argentina's debt restructuring would give the Company access to capital markets once again, says Dow Jones Newswires. But according to analysts, the telecom outfit is unlikely to take on new debt anytime soon, as its cash position and revenue streams from cellular and Internet operations should sufficiently cover its capital expenditures in the near term. "They're very solid and they have their market share secured, so I don't see any complications," said Freddy Vieytes, an analyst at local brokerage Puente Hermanos. "Because of that, they won't need to look for outside financing." Telecom Argentina may issue new peso debt to replace foreign- denominated obligations at the end of the year or early next, according to the Company's Manager of Institutional Relations, Pedro Insussary. "The first objective is to close the restructuring; the second is to reduce the level of indebtedness," Insussary said. "And on this base, we'll see where we are and what alternatives the Company has to replace (existing) debt." Insussary said the Company designed its restructuring to ensure it wouldn't need new debt for its investment needs. Analysts also say there's no rush for Telecom Argentina to issue new debt to finance capital expenditures while the Company's strong revenue from its mobile telephony and Internet businesses is still buoying the Company, as it did during the three years since the country's financial crisis. However, analysts warned that Telecom Argentina can't initiate overly aggressive investment plans just yet, since the debt restructuring agreement imposes certain limits on capital expenditures. This hampers the telecom's ability to respond to a fiercely competitive and fast-changing cellular phone market. TRANSTRAM S.R.L.: Debt Payments Halted, Moves to Reorganize ----------------------------------------------------------- Court No. 26 of Buenos Aires' civil and commercial tribunal is studying the request for reorganization submitted by local Company Transtram S.R.L., says La Nacion. The report adds that that the Company filed a "Concurso Preventivo" petition following cessation of debt payments on June 22, 2001. The city's Clerk No. 52 assists the court on this case. CONTACT: Transtram S.R.L. Avenida Rivadavia 2462 Buenos Aires ============= B E R M U D A ============= FOSTER WHEELER: Awarded EPCm Contract With Woodside Energy ---------------------------------------------------------- Foster Wheeler Ltd. (Nasdaq: FWLT) announced Friday that its Australian subsidiary Foster Wheeler (WA) Pty Ltd. has been awarded an engineering, procurement and construction management (EPCm) contract with Woodside Energy Ltd. (Operator) on behalf of the North West Shelf Venture following final investment approval by its six joint-venture participants to invest A$2 billion on a Phase V LNG expansion project to be built at Karratha, Western Australia. Foster Wheeler is leading a joint venture with WorleyParsons Services Pty Ltd. to execute this project, which involves the addition of a fifth liquefied natural gas (LNG) processing train with a production capacity of 4.2 million metric tonnes a year to the existing 11.7 mtpa LNG complex. The contract value was not disclosed. The project will be included in the Company's second-quarter bookings. "This latest award reinforces our position in LNG, which is a core business for Foster Wheeler, and demonstrates Woodside's and its five international partners' confidence in our ability to meet their business objectives. We are delighted that the North West Shelf Venture has secured final investment approval for this project to proceed and for the full EPCm contract to be awarded," said Steve Davies, chairman and chief executive officer of Foster Wheeler Energy Limited. "We have been working with Woodside (NWSV Operator) for a number of months, finalizing the project definition and achieving an early start on engineering. This will allow us to maintain the scheduled start- up date of the fourth quarter of 2008. "Foster Wheeler has proven experience in the project management, engineering and construction of complex, world-scale projects, including the construction of LNG liquefaction facilities and offsite pre-assembly. That, combined with our partner's local knowledge, creates a high-performing team, fully focused on delivering the North West Shelf Venture's objectives: a safe, successful, and high-quality facility." Woodside's Director of North West Shelf Ventures, Jack Hamilton, said the expansion would bring significant economic and social benefits to the remote Pilbara region of Western Australia where its gas processing facilities are located, as well as Western Australia and Australia. "Our plant will be one of the largest single LNG complexes in the Asia-Pacific region following expansion," Dr. Hamilton said. "The Venture's latest investment follows last year's commissioning of a fourth LNG processing train and second trunkline and, combined, these major projects will have enabled the Venture to effectively double its LNG capacity in approximately four years." The expansion project also includes an additional fractionation unit, acid gas recovery unit, boil-off gas compressor, two new gas turbine power generation units, a second loading berth and a new fuel gas system compressor. For additional information on the Phase V Expansion, please refer to Item 5 under Notes to Editors below. Foster Wheeler Ltd. is a global Company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemicals, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. CONTACT: Foster Wheeler Ltd. Media Contact: Maureen Bingert Phone: 908-730-4444 Investor Contact: John Doyle Phone: 908-730-4270 Other Inquiries: Phone: 908-730-4000 Web site: http://www.fwc.com =========== B R A Z I L =========== BANCO ITAU: La Caixa Intends to Sell Stock Participation -------------------------------------------------------- Investimentos Itau S.A ("Itausa"), Banco Itau holding Financeira S.A. ("Itau") and Caja De Ahorros Y Pensiones De Barcelona ("La Caixa") informed the market that La Caixa has announced its intention of gradually selling its preferred stock participation in Itau via the Sao Paulo Stock Exchange (Bovespa). This decision is the result of changes in La Caixa's investment policy contained in its strategic plan following the adoption of the new IFRS - International Financial Reporting Standards / IAS - International Accounting Standards, which came into effect in the European Union as from January 1 2005. These standards require an investment stake of at least 20% before results can be consolidated. Should this not be the case, such investments are booked at cost and recognized as income from dividends and/or as interest on equity capital. It has therefore been decided in accordance with the highest principles governing the strategic mutual interests between the parties concerned, that the current Stockholders' Agreement is to be terminated. In so doing, Itau S.A. relinquishes its preemptive rights to the acquisition of the shares (3.12% of Itau S.A.'s total capital stock), and consequently La Caixa shall no longer be eligible to appoint a member to the Board of Directors, a member to sit on the International Advisory Board, and a Managing Director as permitted under the above-mentioned Agreement. Itau intends to buy back these shares to be held as treasury stock at a time when prevailing market conditions are conducive. Management believes the eventual share buy-back creates stockholder value by increasing earnings per share (EPS), neither affecting Itau's operations, nor significantly changing its capital adequacy ratios and limits. The expected consequence for Itau in terms of adjustments to its equity pick-up, bearing in mind that the shares in question shall be entirely acquired by Itau (based on the average share price for June 3 2005) translates into a reduction of approximately R$ 520 million in its result. However, this does not represent any disbursement, at the same time contributing to an increased stake in ITAU's total capital stock from 46.8% to 48.3%. The partnership with La Caixa will continue through the investment held in Banco BPI S.A. and the close cooperation involving capital flows between Brazil and the Iberian Peninsula. CONTACT: Banco Itau Holding Financeira S.A. Investor Relations Mr. Geraldo Soares Investor Relations Superintendency Praca Alfredo Egydio de Souza Aranha 100 Torre Conceicao - 11 04344-902 Sao Paulo Phone: +5511 5019-1549 Fax: +5511 5019-1133 URL: http://www.e-potecario.com.ar/home.aspx ELETROPAULO METROPOLITANA: Ordered to Bury Cables ------------------------------------------------- Power distributor Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. (Bovespa: ELPL3 and ELPL4) will have to bury all existing cables in the metropolis in five years, according to a bill approved by the Sao Paulo city council, reports Business News Americas. According to market estimates, the costs of burying cables could reach BRL60 billion (US$24 billion). The new law, which still has to be sanctioned by the city's mayor, also forces Eletropaulo to replace its 700,000 power poles in the city with trees. In addition, the new law bars Eletropaulo from laying overhead cables in new network extensions. Eletropaulo distributes power to some 4 million clients in the city through a distribution and transmission network 23,000km long. Eletropaulo operates over 70,000 overhead transformers on the city poles. CONTACT: Eletropaulo Metropolitana Eletricidade de Sao Paulo S/A Investor Relations Manager Ms. Clarice Silva Assis E-mail: clarice.assis@aes.com Phone:(55 11) 2195-2229 Fax:(55 11) 2195-2503 NEWFIELD EXPLORATION: Fitch Assigns `BB+' to Sr. Unsec. Rating -------------------------------------------------------------- Fitch Ratings has initiated coverage of Newfield Exploration Company (Newfield) and assigned a rating of 'BB+' to the Company's senior unsecured debt and $600 million unsecured credit facility, and a rating of 'BB-' to the Company's senior subordinated notes. The Rating Outlook is Stable. The ratings are supported by the Company's conservative management team and growth strategy (including the Company's hedging program), modest production costs and debt levels relative to the Company's peer group, the high percentage of assets operated by the Company, and the significant diversification of its asset base in recent years. Offsetting factors include higher finding and development costs and a lower reserve-to-production ratio (reserve life) relative to the Company's peer group, as well as concerns over the potential for additional debt to finance future acquisitions. The Company, however, also has a history of reducing debt following transactions, reflected by the repayment of $135 million of revolver borrowings since Sept. 30, 2004, reducing total balance sheet debt to $933 million at March 31, 2005. Like other independent upstream oil companies, Newfield is generating significant cash from operations and is reinvesting the bulk of the cash back into growing its reserve base. Cash flow from operations for the last 12 months ending March 31, 2005 totaled $1.04 billion with capital expenditures of $958 million. Credit protection metrics remain very strong as the Company generated EBITDA of $1.16 billion over the 12-month period, which provided interest coverage of 19.6 times (x) and leverage, as measured by debt-to-EBITDA, of only 0.8x. Leverage, as measured by debt to barrel of oil equivalent (boe) of proven reserves were reasonable at year-end 2004 at $3.34/boe, and debt to proven developed producing reserves (PDPs) at $4.45/boe. Liquidity remains strong with only $63 million of cash borrowings and $25 million of letters of credit (LOCs) under its credit facility and $31 million of cash on hand. Newfield's focus has historically been on high production, shortlived reserves to maximize the value of the Company's investments. This has been the strategy since Newfield was founded in the late 1980s, when the Company began acquiring assets in the high decline, shallow water Gulf of Mexico. Under this approach, the Company also benefits from having no lingering proven undeveloped reserves (PUDs) on its books. The strategy, however, also drives the key negative metrics in the analysis of Newfield -- higher finding and development costs and lower reserve life -- which are discussed further below. Newfield now has the size and flexibility to diversify its exploration portfolio, including its deep water and international efforts. The Company's 2005 capital budget of $950 million includes $285 million targeted for exploration. Newfield's portfolio of exploration projects reflects a balance of low-risk, low-cost opportunities as well as higher risk, higher return opportunities such as the high-profile Treasure Island prospect being drilled by Newfield's partner, ExxonMobil. Another core strength of Newfield is the high percentage of properties the Company operates as well as its mitigation of risk on its non-operated properties, such as Treasure Island, where Newfield's partners often pick up the bulk of the upfront exploration costs for the opportunity to participate in the play. The Company supplements its organic efforts (100% reserve replacement three-year average from 2002 to 2004) with opportunistic acquisitions, including the purchase of Inland Resources Inc. (Inland) in August 2004. Newfield's proven reserves have nearly doubled over the last three years to nearly 300 million barrels of oil equivalent (mmboe) at the end of 2004 from 156 mmboe at the end of 2001. Total reserve replacement has averaged 236% annually over the period. Newfield's approach to booking estimated reserves can be viewed as 'middle of the road,' as the Company has avoided the pitfalls of being too conservative or too aggressive in its estimates. As a result, reserve reports reflect only minimal revisions each year, a key strength of the Company. Although Newfield often pays what Fitch has historically viewed as full price for acquisitions, the Company also locks in the economics of the transactions through hedging a significant percentage of its production. Newfield currently has more than 70% of its oil and gas production hedged through early 2006, primarily through swaps and collars, as well as significant hedges on its oil production through 2010. Newfield also manages its capital budget within its cash from operations and has been free cash flow positive since 2001. Given the location and quality of the Company's core reserves, the bulk of its production has historically been priced at prevailing Henry Hub and West Texas Intermediate crude prices, which is reflected in the Company's robust price realizations (average of $33.34/boe in 2004). Through the major acquisitions completed in recent years, Newfield now has a foothold in four major basins in the U.S. as well as modest offshore international operations in Malaysia, the North Sea, China, and Brazil. The Company has yet to report any significant results from its international efforts, with only 2.5% of 2004 production and less than 2% of reserves at year-end coming from overseas. With development work ongoing with both the Grove discovery in the North Sea and the Abu Cluster offshore Malaysia as well as continued progress on the plan of development for the Bohai Bay project offshore China, Fitch expects increasing reserve bookings from international operations in 2005 and beyond. Despite industrywide cost inflation in recent quarters, Newfield remains very competitive with its production costs relative to its peers, averaging $6.85/boe of total operating costs in 2004. Costs have also remained under control despite the significant diversification in the Company's asset base in recent years. The lower costs have also helped to offset the Company's higher finding, development and acquisition costs (FD&A of $13.16/boe average from 2002 to 2004), giving the Company a significant free cash flow per boe of production ($11.50/boe) relative to its peer group. Newfield's high finding costs relative to its peer group ($13.16/boe three-year average FD&A) is a key concern for Fitch. The primary drivers for the higher costs have been the nature of the Company's core asset base in Gulf of Mexico, the efforts in recent years to grow and diversify its reserve base, and the desire to capitalize on the current high price environment. While this metric may improve in coming years due to the Company's larger and more diversified asset base as well as through success from its exploration efforts, Fitch expects the Company to continue to manage its investments by maximizing the economics of its drilling efforts and future acquisitions. The second core concern with Newfield is its low reserve life relative to its peer group. As noted, this stems from the Company's historical focus on high-value, high-decline properties. Due to the Company's diversification efforts in recent years, the proven-reserves-to-production ratio has improved significantly from 5.3 years at the end of 2001 to 7.3 years at the end of 2004. Further improvement, however, would require major changes to the Company's strategy and, ultimately, its asset base, which Fitch currently views as unlikely. Despite Newfield's portfolio of drilling opportunities, Fitch views the likelihood of further sizable acquisitions to be fairly high. The rising costs to buy companies and properties, however, have placed increasing pressure on the leverage statistics of Newfield and other upstream companies relative to the low debt/boe metrics seen in recent years. The August 2004 acquisition of Inland Resources for $575 million added 54 million boe of proven reserves at a price of $10.58/boe. Newfield funded the transaction conservatively with $325 million of 6-5/8% 10-year notes and $323 million of common stock. A point of note, however, is that given rising acquisition prices, at 50% debt the Inland transaction was leveraging to Newfield with $5.29/boe of the funding coming in the form of debt, significantly higher than the Company's year-end 2003 debt/boe of $2.92. Fitch believes, however, that management is not willing to grow for growth's sake and, as a result, the risk of the Company making a bad acquisition or overleveraging appears limited. The Company also has a history of reducing debt following transactions, as seen since the Inland transaction. The inherent risks of future acquisitions are also mitigated by the Company's hedging strategy, its in-house analyses of potential purchases, and the flexibility afforded by the Company's larger asset base. While Newfield continues to perform very well under the current commodity environment, the higher finding and development costs and low reserve life limit positive rating momentum at this point in time. Negative rating action would likely be considered under a highly leveraging acquisition. Newfield is a mid-sized oil and gas exploration and production Company headquartered in Houston. The Company has operations in several major regions of the United States (shallow and deep water Gulf of Mexico, Mid-Continent, South Texas, and Rocky Mountains), as well as international offshore operations in the North Sea off of the United Kingdom, Malaysia, China, and Brazil. At year-end 2004, the Company's reserves had grown to nearly 300 mmboe, of which 75% was proven developed and 70% natural gas. NII HOLDINGS: Enters Into Agreement to Convert Notes Into Shares ---------------------------------------------------------------- NII Holdings, Inc. (Nasdaq: NIHD) (the "Company") entered on June 8, 2005, into an agreement with a holder of US$40.0 million in principal amount of the Company's 3.5% Convertible Notes due 2033 to convert such Notes into 1,500,000 shares of the Company's common stock, par value $0.001 per share, pursuant to the terms of the Indenture dated as of September 16, 2003 between the Company and Wilmington Trust Company. As have previously reported, the Notes, which the Company issued initially in 2003 and which were not convertible at that time, are currently convertible pursuant to the terms of the Indenture. In consideration for such conversion, the Company made a cash payment of approximately $4.4 million to the holder. The Company's issuance of the shares of common stock in this transaction was made pursuant to the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended. The conversion occurred on June 10, 2005. NII Holdings, Inc., a publicly held Company based in Reston, Va., is a leading provider of mobile communications for business customers in Latin America. NII Holdings, Inc. has operations in Argentina, Brazil, Mexico and Peru, offering a fully integrated wireless communications tool with digital cellular service, text/numeric paging, wireless Internet access and International Direct Connect(SM), an extension of Direct Connect(R), a radio feature that allows Nextel subscribers to communicate instantly and across national borders. CONTACT: NII Holdings Investor Relations: Tim Perrott Phone:(703) 390-5113 Email: tim.perrott@nii.com Media Relations: Claudia E. Restrepo Phone:(786) 251-7020 Email: claudia.restrepo@nii.com URL: http://www.nii.com USIMINAS: Integration of Cosipa Ups Operating Profit ---------------------------------------------------- Steelmaker Usiminas sees a 3.9% growth in its operating profit in the 2Q05 thanks to continued synergies from its consolidation of flat steel subsidiary Cosipa, reports Business News Americas. "For the rest of [2Q05], results will approach expectations, with an outlook for growth in operating profit of 3.9%," the Company said a filing to securities regulators (CVM). "The tendency for operating results points to a good second half as well, nearing expectations." The Company has generated annual savings of US$170 million since the consolidation of Sao Paulo-based Cosipa. However, the Company had to establish new timetables for some of its projects due to delays related to environmental licensing and bidding processes, Usiminas said. Meanwhile, the Usiminas board gave its go-ahead signal for the Company to begin negotiations to participate in Planaris, a holding Company for the Amazonia consortium (which controls Venezuelan steelmaker Sidor), Mexican steelmaker Hylsamex and Argentina's Siderar, both Techint companies. The board restricted Usiminas investment in Planaris to US$100 million. The Company will have a minimum 10% stake in the new holding Company. CONTACT: Usinas Siderurgicas Minas Gerais SA Mr. Bruno Seno Phone: +55 (31) 3499-8710 E-mail: brunofusaro@usiminas.com.br ========= C H I L E ========= MANQUEHUE NET: GTD Sheds Light on Acquisition Reports ----------------------------------------------------- Corporate services provider GTD Teleductos stressed to stock market regulator SVS that it has not yet signed any agreement to acquire 100% of Manquehue Net, relates Business News Americas. Reports surfaced last week that GTD has agreed to buy 100% of Manquehue Net for US$117 million. GTD will pay US$32 million for Manquehue's assets as well as pay off Manquehue's debt totaling US$85 million, according to reports. Margarita Andrade, of Chilean credit ratings agency Humphreys, had said that GTD's acquisition would lead to a favorable result. "Manquehue net has gone through several changes in the last few years and is just now starting a period with positive financial results. So obviously a change in controllers is positive because it should lead the Company to a more stable path," Andrade said. Manquehue, which has been in the red since it was launched in 2000, expects to report profits this year, saying it will focus on providing broadband service, the only business area that has recorded positive growth with a client base of 15,000 connections. "Closing this year in the black is independent of the change in ownership, because it has more to do with management, which has certainly performed well," Andrade added. Manquehue offers fixed line telephony services and Internet access to the corporate and residential segments in Chile's metropolitan region, with 100,000 clients and a 2.7% market share. The Company is currently owned by gas distribution firm Metrogas (25.54%), US telecoms holding Company Williams International Telecom (23.52%), Capital Trust (19.14%), Chile's Rabat family (19.13%) and Xycom Devel Chile (12.67%). =========== M E X I C O =========== LFC: Opens Tender for Fourteen 32MW Gas-Fired Projects ------------------------------------------------------ State-owned power distributor Luz y Fuerza del Centro (LFC) has launched the tender to build fourteen 32MW natural gas-fired projects in the DF and Edomex, Business News Americas reports. An LFC source revealed that interested bidders can purchase bidding rules until July 7. Technical bids and economic bids will be opened on July 13 and August 10, respectively. LFC will award the 14 contracts in August. Construction of all 14 plants will begin immediately after the contracts are awarded, with operations set for end-2006 or early 2007. According to the source, state oil company Pemex will supply the projects with natural gas. Over the last few years, LFC has struggled to develop much- needed generation projects to avoid the system from collapsing in high-demand areas in coming years due to lack of resources. SATMEX: May Seek More Time to Respond to Bankruptcy Petition ------------------------------------------------------------ Embattled satellite operator Satmex has until June 15 to respond to an involuntary bankruptcy petition filed last month in the U.S. Bankruptcy Court for the Southern District of New York by bondholders of at least US$379 million owed by Satmex. But according to a Business News Americas report, the bondholders and Satmex's majority shareholder Sergio Autrey are likely to seek extension of at least two weeks from the court to resolve their differences over a debt restructuring plan. Reports have it that Autrey may file for bankruptcy under Mexican law, a so-called concurso mercantil, for fear that a US$188-million note held by the government may not be considered as Satmex debt under US law and would be lost in a debt restructuring deal. The loan was issued to Firmamento, a holding Company controlled by Autrey. ===================== P U E R T O R I C O ===================== DORAL FINANCIAL: Moody's Downgrades Senior Debt Rating to Baa3 -------------------------------------------------------------- Moody's Investors Service downgraded the senior debt rating of Doral Financial Corporation (Doral) to Baa3 from Baa2. The ratings remain on review for further possible downgrade. The rating action reflects Doral's pending restatement of past financial statements to adjust for the value of its interest- only (IO) strips. The Company also plans to change its current business model by reducing loans sales that create IOs, thus lowering its profitability. The ratings were placed on review for possible downgrade on April 21, 2005. Doral has estimated an impairment charge of approximately $600 million on its IO strips. The Company is determining how to allocate the charge among the affected restatement periods between years 2000 and 2004. The rating downgrade reflects weak internal controls at Doral. In the meantime, the Company has engaged the services of First Manhattan Consulting Group to help develop a better model for evaluating their IOs and to enhance its risk management practices. According to Moody's, there remains considerable uncertainty regarding the outcome of its business model change as well as litigation risks and regulatory scrutiny. Additionally, Moody's noted that there could be weak internal controls elsewhere in the organization and also cited corporate governance issues. Finally, a prolonged delay in the filing of its financial reports could result in liquidity pressures. Thus, the ratings remain under review for possible further downgrade. However, Moody's expects that the Company will file its financial statements in a timely manner, in order to avoid such adverse funding consequences. Moody's expects to conclude the review after the Company files its financial statements. The following is a partial list of ratings that were downgraded and at the same time, are on review for possible downgrade: Doral Financial Corporation -- Senior debt to Baa3 from Baa2. Doral Financial, headquartered in San Juan, Puerto Rico, had total assets of $15 billion at December 31, 2004. New York Gregory W. Bauer Managing Director Financial Institutions Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 New York Rosemarie Conforte Senior Vice President Financial Institutions Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 ============= U R U G U A Y ============= ANCAP: PDVSA to Supply 1Mb Crude in August ------------------------------------------ State oil company Ancap awarded Venezuelan state oil company Petroleos de Venezuela (PDVSA) on Thursday a contract to supply 1 million barrels (Mb) of crude in early August. With the deal, Ancap expects to save US$2 a barrel on the international price depending on the type of crude shipped, according to Ancap president Daniel Martinez. The deal is the first step under an energy cooperation agreement signed between the two countries in March. Under the agreement with Venezuela, Ancap can pay 25% of the bill in 15 years with 2% annual interest with a two-year grace period. The rest must be paid within three months. Part of this can be settled with goods such as agricultural products, software or cement. Ancap buys 1Mb of crude every month in online tenders. PDVSA is expected to bid on the next tender in July. *********** 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 Sheryl Joy P. Olano, 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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