/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050810.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, August 10, 2005, Vol. 6, Issue 157 Headlines A R G E N T I N A A.A. ABASTECIMIENTOS: Begins Liquidation ACINDAR: Local S&P Assigns `raD' to $100M Bonds AGRICOLA INDUSTRIAL: Court Grants Reorganization Plea AIRDAL GASTRONOMICA: Bankruptcy Petition Awaits Court Approval AMELUX S.A.: Verification Phase to End Sep. 21 AUTO STYLING: Court Approves Creditor's Bankruptcy Motion BANCO GALICIA: Bondholders File Suit to Recoup Investments CENTRO LIVING: Court Appoints Trustee for Reorganization DALBIA S.A.: Initiates Bankruptcy Proceedings ESTABLECIMIENTO LAS MELLIZAS: Enters Bankruptcy on Court Orders GALVASA S.A.: Concludes Reorganization CAMPO ENTRERRIANO: Individual Reports Due Sep. 16 INPRI S.R.L.: Court Orders Liquidation NET AGROPECUARIA: Liquidates Assets to Pay Debts NIDERRA S.R.L.: Seeks Court Approval to Reorganize PETROBRAS ENERGIA: Reports 2Q05 Net Profit of ARS264 Mln TRANSENER: Debt Restructuring Boosts 1H05 Bottom Line B E R M U D A SEA CONTAINERS: Losses Grow in 2Q05 B R A Z I L BANCO BRADESCO: Posts $2.621B Net Income in 1H05 BANCO ITAU: Secures $100M From IDB Unit, 2 Commercial Banks COPEL: Power Market at Concession Area Grows 3.9% in 1H05 EMBRATEL: Merrill Lynch Deems Primesys Deal Slightly Expensive VARIG: To Hire UBS as Restructuring Advisor VARIG: Recovers Domestic Market Share in July C O L O M B I A CHIVOR: Rating Reflects Weak Financial Profile E C U A D O R PETROECUADOR: Pareja's Exit Linked to Corruption Claims M E X I C O AOL LATIN AMERICA: Court OKs Bankruptcy Services as Claims Agent AOL LATIN AMERICA: Files Schedules of Assets & Liabilities P U E R T O R I C O DORAL FINANCIAL: Unit Signs 3-Yr Agreement With MRU Holdings - - - - - - - - ================= A R G E N T I N A ================= A.A. ABASTECIMIENTOS: Begins Liquidation ---------------------------------------- A.A. Abastecimientos Hospitalarios S.R.L. of Buenos Aires will begin liquidating its assets after Court No. 21 of the city's civil and commercial tribunal declared the Company bankrupt. Infobae reveals that the bankruptcy process will commence under the supervision of court-appointed trustee, Maria Alejandra Barbieri. The trustee will review claims forwarded by the Company's creditors until Sep. 26, 2005. After claims verification, Ms. Barbieri will submit the individual reports for court approval on Nov. 8, 2005. The general report will follow on Dec. 21, 2005. Clerk No. 41 assists the court on this case. CONTACT: A.A. Abastecimientos Hospitalarios S.R.L. Caracas 1558 Buenos Aires Maria Alejandra Barbieri, Trustee Avda Cabildo 2040 Buenos Aires ACINDAR: Local S&P Assigns `raD' to $100M Bonds ----------------------------------------------- Standard & Poor's International Ratings, Ltd. Sucursal Argentina assigned an `raD' rating to US$100 million worth of bonds issued by Acindar Industria Argentina de Aceros, securities regulator, Comision Nacional Valores, revealed in its Web site. The bonds, classified under `Simple Issue' and described as `Obligaciones Negociables simples, no convertibles en acciones, autorizadas por AGOyE de fecha 5.8.96,' matured on Feb. 16, 2004. S&P gives an `raD' rating to financial obligations that are currently in default. The ratings agency said that the same rating may be issued if interest or principal payments are not made on the due even if the applicable grace period has not expired. The ratings given were based on Acindar's finances as of June 30, 2005. 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 AGRICOLA INDUSTRIAL: Court Grants Reorganization Plea ----------------------------------------------------- Agricola Industrial Don Francisco S.A., a company operating in San Fernando del Valle de Catamarca, begins reorganization proceedings after the city's civil and commercial Court No. 2, with assistance from Clerk No. 1, granted its petition for "concurso preventivo". During the reorganization, the Company will be able to negotiate a settlement proposal for its creditors so as to avoid a straight liquidation. According to Argentine news source Infobae, the reorganization will be conducted under the direction of Luis Francisco Florimonte and Maria Elena Romero de Vega, the court-appointed trustee. Creditors with claims against Agricola Industrial Don Francisco S.A. must present proofs of the Company's indebtedness to Mr. Florimonte and Ms. de Vega before Sep. 2, 2005. These claims will constitute the individual reports. The court also requires the trustee to present an audit of the Company's accounting and business records through a general report. Deadlines for both reports are yet to be determined. An informative assembly is set on Oct. 14, 2006. CONTACT: Agricola Industrial Don Francisco S.A. Peru 338 San Fernando del Valle de Catamarca Catamarca Mr. Luis Francisco Florimonte Ms. Maria Elena Romero de Vega, Trustees Vicario Segura 782 San Fernando del Valle de Catamarca Catamarca AIRDAL GASTRONOMICA: Bankruptcy Petition Awaits Court Approval -------------------------------------------------------------- Airdal Gastronomica S.A. filed for bankruptcy at Court No. 2 of Buenos Aires' civil and commercial tribunal, reports Argentine daily La Nacion. The court, which is assisted by Clerk No. 4, is still studying whether to approve the motion. AMELUX S.A.: Verification Phase to End Sep. 21 ---------------------------------------------- Jorge Ernesto del Hoyo, the trustee assigned to supervise the liquidation of Amelux S.A., will stop accepting creditors' claims on Sep. 21, 2005. Mr. Hoyo will prepare individual reports out of the validated claims and submit it to court for approval on Nov. 3, 2005. The trustee will also submit a general report of the case on Dec. 15, 2005. Infobae reports that Court No. 18 of Buenos Aires' civil and commercial tribunal handles the Company's case. The city's Clerk No. 35 assists the court in the proceedings. CONTACT: Mr. Jorge Ernesto del Hoyo, Trustee Cerrito 484 Buenos Aires AUTO STYLING: Court Approves Creditor's Bankruptcy Motion --------------------------------------------------------- Court No. 6 of Buenos Aires' civil and commercial tribunal declared Auto Styling S.A. bankrupt, says La Nacion. The ruling comes in approval of the petition filed by the Company's creditor, Francisco Alegre, for nonpayment of $13,092.01 in debt. Trustee Juan Roque Treppo will examine and authenticate creditors' claims until Oct. 18, 2005. 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. 11 assists the court on the case, which will conclude with the liquidation of the Company's assets. CONTACT: Auto Styling S.A San Martin 655 Buenos Aires Mr. Juan Roque Treppo, Trustee Sarmiento 1183 Buenos Aires BANCO GALICIA: Bondholders File Suit to Recoup Investments ---------------------------------------------------------- A group of Argentine bondholders has filed a class-action lawsuit against Banco de Galicia y Buenos Aires SA and several other Argentine banks for allegedly selling them Argentine government bonds in 2000 and 2001 that later went into default. Dow Jones Newswires reports that the group, known as Financial Victims 2002, is seeking to recover the full nominal value of their investments. Mr. Anibal Gutierrez, the president of the group, announced that for investors who participated in the government's US$103 billion global debt restructuring in February, they would seek compensation for the difference between the estimated value of that deal and the nominal value, while holdout bondholders would get the full nominal amount returned to them. La Nacion newspaper has estimated that the total value of the claim is a massive US$25 billion, given that the lawsuit aims to incorporate all bondholders of Argentine nationality. The group is being represented by the law firm Luchinisky, Prato, Rossjanksi y Asociados. CONTACT: Banco De Galicia Y Buenos Aires Tte Gral Juan D Peron 407 Buenos Aires Argentina C1038AAI Phone: 11 6329 0000 Fax: 11 6329 6100 CENTRO LIVING: Court Appoints Trustee for Reorganization -------------------------------------------------------- Centro Living S.R.L., a company operating in San Fernando del Valle de Catamarca, is ready to start its reorganization after Court No. 2 appointed Luis Francisco Florimonte and Maria Elena Romero de Vega to supervise the proceedings as trustee. Clerk No. 1 assists the court on this case. An Infobae report states that Mr. Florimonte and Ms. de Vega will verify creditors claims until Sep. 2, 2005. Afterwards, they will present these claims as individual reports for final review by the court. They will also provide the court with a general report pertaining to the reorganization. Dates for the submission for the said reports are yet to be disclosed. The court has scheduled the informative assembly on Oct. 14, 2006. CONTACT: Centro Living S.R.L. Republica 902 San Fernando del Valle de Catamarca Catamarca Mr. Luis Francisco Florimonte Ms. Maria Elena Romero de Vega, Trustees Vicario Segura 782 San Fernando del Valle de Catamarca Catamarca DALBIA S.A.: Initiates Bankruptcy Proceedings --------------------------------------------- Buenos Aires Court No. 4 has approved the bankruptcy petition filed by Cooperativa Milenio Limitada, who has claims totaling US$60,000 against Dalbia S.A. Mr. Oscar Chapiro, who has been appointed as trustee, will verify creditors' claims until Sep. 30, 2005. Clerk No. 8 assists the court on the case, which will close with the liquidation of the Company's assets to repay creditors. CONTACT: Dalbia S.A. Avenida Cabildo 4315 Buenos Aires ESTABLECIMIENTO LAS MELLIZAS: Enters Bankruptcy on Court Orders --------------------------------------------------------------- Establecimiento Las Mellizas S.A. enters bankruptcy protection after Court No. 15 of Rosario's civil and commercial tribunal 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 a trustee to verify creditors' proofs of claim and submit the individual and general reports. CONTACT: Establecimiento Las Mellizas S.A. Bv. Orono 894 Rosario (Santa Fe) GALVASA S.A.: Concludes Reorganization -------------------------------------- The reorganization of Buenos Aires-based Galvasa S.A. has ended. Data revealed by Infobae on its Web site indicated that the process was concluded after Buenos Aires' civil and commercial Court No. 10, with assistance from Clerk No. 20, homologated the debt agreement signed between the Company and its creditors. CAMPO ENTRERRIANO: Individual Reports Due Sep. 16 ------------------------------------------------- The individual reports on the claims of creditors against Campo Entrerriano S.R.L. will be submitted on Sep. 16, 2005. Infobae relates the Mr. Lucio Cherkasky, the trustee selected by the court for the Company's bankruptcy case, stopped accepting claims on Aug. 4, 2005. Mr. Cherkasky will also submit a general report, containing a summary of the Company's financiall status as well as relevant events pertaining to the bankruptcy on Oct. 31, 2005. Campo Entrerriano S.R.L. began liquidating its assets following the "Quiebra" pronouncement of Gualeguay's civil and commercial Court No. 1. The bankruptcy process will end with the disposal of the Company's assets in favor of its creditors. CONTACT: Campo Entrerriano S.R.L. Maipu 34 Gualeguay (Entre Rios) Mr. Lucio Cherkasky, Trustee Gregorio Moran 157 Gualeguay (Entre Rios) INPRI S.R.L.: Court Orders Liquidation -------------------------------------- Inpri S.R.L. prepares to wind-up its operations following the bankruptcy pronouncement issued by Court No. 18 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. Maria Elsa Chiama as trustee. Ms. Chiama will be reviewing creditors' proofs of claim until Sep. 12, 2005. The verified claims will serve as basis for the individual reports to be presented for court approval on Oct. 25, 2005. The trustee will also submit a general report of the case on Dec. 6, 2005. Clerk No. 35 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: Ms. Maria Elsa Chiama, Trustee Tinogasta 4127 Buenos Aires NET AGROPECUARIA: Liquidates Assets to Pay Debts ------------------------------------------------ Rosario-based Net Agropecuaria S.R.L. will begin liquidating its assets following the pronouncement of the city's civil and commercial Court No. 9 that the Company is bankrupt, reports Infobae. The bankruptcy ruling places the Company under the supervision of court-appointed trustee, Norberto Ricardo Victtore. The trustee will verify creditors' proofs of claim until Oct. 17, 2005. The validated claims will be presented in court as individual reports on Nov. 28, 2005. Mr. Victtore will also submit a general report, containing a summary of the Company's financial status as well as relevant events pertaining to the bankruptcy, May 8, 2006. The bankruptcy process will end with the disposal of the Company's assets in favor of its creditors. CONTACT: Net Agropecuaria S.R.L. Avda Pellegrini 74 Rosario (Santa Fe) Mr. Norberto Ricardo Victtore, Trustee Italia 1905 Rosario (Santa Fe) NIDERRA S.R.L.: Seeks Court Approval to Reorganize -------------------------------------------------- Niderra S.R.L., a company operating in Buenos Aires, has requested permission to reorganize. It has failed to pay its liabilities since April 15, 2005. The reorganization petition, once approved by the court, will allow the Company to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending before Court No. 26. Clerk No. 52, assists on this case. CONTACT: Niderra S.R.L. Monroe 2630 Buenos Aires PETROBRAS ENERGIA: Reports 2Q05 Net Profit of ARS264 Mln -------------------------------------------------------- Oil and gas company Petrobras Energia Participaciones reported a net profit of ARS264 million for the second quarter of 2005, a significant improvement from a loss of ARS77 million in the comparable year-ago period. Higher world oil prices boosted the Company's operating profit to ARS871 million in the recent quarter from ARS694 million in the second quarter of 2004. Sales in the second quarter of 2005 totaled ARS2.535 billion, 20.3% higher from a year earlier. Petrobras Energia said some of its strongest growth was in oil and gas exploration and production, where sales jumped to ARS1.1 billion from ARS894 million a year earlier, and refining, where sales rose to ARS942 million from ARS845 million. As of June 30, 2005, Petrobras Energia's net assets stood at ARS5.897 billion, up from ARS5.511 billion at the end of last year. CONTACT: Petrobras Energia Participaciones S.A. Edificio Perez Companc Maipu 1 Buenos Aires, C 1084 ABA Argentina Phone: 54-11-4344-6000 Website: http://www.petrobrasenergia.com TRANSENER: Debt Restructuring Boosts 1H05 Bottom Line ----------------------------------------------------- The restructuring of Transener's US$465 million debt, which was completed in May, helped the high-voltage electricity transporter restore its financial health. Dow Jones Newswires reports that Transener returned to black in the first half of the year with a net profit of ARS580.9 million from a loss of ARS53.3 million in the same year-ago period. In a filing with the local stock exchange, Transener stated that the restructuring "allowed (the company) to partially absorb the negative results generated by the devaluation on the Argentine peso on Jan. 6, 2002, and reasonably regain the company's financial ratios." In February, Transener and its Buenos Aires subsidiary, Transba, signed a letter of intent with the government. A month later, the state held a public hearing on the proposed contract. The new contract is now subject to review by a bicameral congressional committee and final approval by the executive branch, Transener said. "Meanwhile, the company will use its own resources to continue their operations," the company said. During the first half of the year, Transener said it saw higher sales revenue from non-regulated operations, which would include activity not restricted by a 3 1/2-year freeze on utility rates. The Company also saw higher operating and administrative costs. Transener said government-decreed salary increases and higher costs of materials for ongoing construction projects were the primary factors behind the higher costs. Transener is controlled by Citelec, a holding company equally owned by local investment fund Grupo Dolphin and Petrobras Energia, a subsidiary of Brazil's Petrobras. Petrobras Energia acquired its stake in Transener when it took over Argentine energy concern Perez Companc in 2003. Argentine antitrust regulators obligated Petrobras to divest its stake in Transener, addressing government concerns that the country's biggest power transporter would be in foreign hands. On Friday, Argentine regulators ordered Petrobras Energia to provide the state with a divestment plan outlying the eventual sale of its stake in Transener. CONTACT: TRANSENER S.A. Paseo Colon 728 6th Floor (1063) Buenos Aires Republica Argentina Tel: (54-11) 4342-6925 Fax: (54-11) 4342-7147 Email: info-trans@transx.com.ar Web site: http://www.transener.com.ar ============= B E R M U D A ============= SEA CONTAINERS: Losses Grow in 2Q05 ----------------------------------- Sea Containers Ltd. (NYSE: SCRA and SCRB, www.seacontainers.com), passenger and freight transport operator, marine container lessor and manufacturer, and leisure industry investor, announced Monday its results for the second quarter and six months ended June 30, 2005. The net loss for the second quarter was $17.7 million (loss of $0.64 per common share) on revenue of $458.0 million, compared with a net profit of $6.8 million ($0.30 per common share) on revenue of $432.4 million in the second quarter of 2004. For the six months ended June 30, 2005 the net loss was $24.6 million (loss of $0.91 per common share) on revenue of $839.6 million, compared with a net loss of $10.1 million (loss of $0.44 per common share) on revenue of $805.7 million in the prior year period. The company incurred $19 million of non-recurring expense in the first six months of 2005 of which $4.5 million was incurred in the second quarter, while no non-recurring expense was incurred in the comparable periods of 2004. This non-recurring expense for the six months was equal to a charge of $0.70 per common share. The $4.5 million non-recurring expense in the second quarter of 2005 was comprised of a final payment of $3 million to the Strategic Rail Authority in connection with GNER's first franchise which expired at the end of April, 2005 and $1.5 million of legal expense incurred in connection with the dispute with GE Capital over the costs of GE SeaCo, the marine container leasing joint venture between Sea Containers and GE Capital. Mr. James B. Sherwood, President, said that despite running fewer ferry services in the first half of 2005 compared with the first half of 2004, fuel costs were $7.1 million higher and it had not been possible to recover more than a small amount of the increase through higher tariffs. Mr. Sherwood reviewed results by activity as follows: (Amounts in tables are in thousands of dollars.) 1. Silja, the Baltic ferry operator. Three months ended Six months ended June 30, June 30, 2005 2004 2005 2004 $000 $000 $000 $000 Revenue 160,952 161,179 280,733 299,070 Operating and SG&A expenses (150,275) (137,221) (276,853) (270,043) EBITDA 10,677 23,958 3,880 29,027 Depreciation and amortization (11,949) (11,259) (24,230) (22,038) Operating (loss) / income before non-recurring charges (1,272) 12,699 (20,350) 6,989 Silja's fuel bill was $3.5 million higher in the quarter and $5.6 million higher in the six months than in the prior year. The effect of the m.v. Finnjet being in layup compared with operating in the prior year was a reduction in earnings of $2 million in the quarter and $6 million in the six months. Lower passenger volumes on the Helsinki and Turku routes reduced earnings by $7.7 million in the second quarter and $8.6 million in the six months compared to the prior year periods. These reductions were largely due to excess capacity introduced in the Swedish market compared with the prior year. 2. Other ferry operations. Three months ended Six months ended June 30, June 30, 2005 2004 2005 2004 $000 $000 $000 $000 Revenue 18,443 30,588 24,001 34,771 Operating and SG&A expenses (28,911) (37,088) (46,845) (47,371) EBITDA (10,468) (6,500) (22,844) (12,600) Depreciation and Amortization (2,384) (2,579) (4,880) (4,957) Operating loss before non- recurring charges (12,852) (9,079) (27,724) (17,557) Higher fuel costs accounted for an extra $1.1 million in the quarter and $1.5 million in the six months. Losses on the Dover- Calais route increased by $1.8 million in the quarter and $3.5 million in the six months due to a rate war which has broken out on the route. Annual refit costs were $1.7 million higher in the quarter and $4 million higher in the six months compared with the prior year periods. 3. GNER, the intercity high speed rail service connecting London with Leeds, Newcastle and Scotland. Three months ended Six months ended June 30, June 30, 2005 2004 2005 2004 $000 $000 $000 $000 Revenue 235,055 208,261 449,759 408,466 Operating and SG&A expenses (215,634) (192,234) (410,890) (377,041) EBITDA 19,421 16,027 38,869 31,425 Depreciation and amortization (3,813) (3,577) (9,097) (7,992) Operating income before non- recurring charges 15,608 12,450 29,772 23,433 Rail revenue increased by $26.8 million in the second quarter and $41.3 million in the first six months compared with the prior year periods. The London bombings and attempted bombings will certainly have an impact on revenue in the third quarter but it is too early to quantify this. Until then, revenue was ahead of the franchise plan. The bid submitted on July 30th by GNER and MTR of Hong Kong to take over South East Trains, currently operated by the British government, is complex in that it involves the introduction of new high speed train services later in the franchise to a station in London, St. Pancras, not presently served by South East Trains. South East Trains move 400,000 passengers per working day on its routes from Kent into London and it is vital that the trains be punctual. The GNER (70%)/MTR (30%) consortium has identified many areas of improvement to the services which can be accomplished within the context of a diminishing subsidy requirement. The consortium believes it has submitted a robust bid but the outcome will not be known for several months. 4. GE SeaCo, the 50% owned joint venture with GE Capital, engaged in the ownership and leasing out of marine cargo containers. Three months ended Six months ended June 30, June 30, GE SeaCo Owned Fleet (100%) 2005 2004 2005 2004 $000 $000 $000 $000 Revenue 47,069 36,352 91,757 68,701 Operating and SG&A expenses (9,495) (6,204) (18,062) (12,145) EBITDA 37,574 30,148 73,695 56,556 Depreciation and amortization (15,320) (9,723) (29,230) (18,707) Operating income 22,254 20,425 44,465 37,849 Finance costs (9,174) (3,861) (16,725) (7,603) Earnings before tax 13,080 16,564 27,740 30,246 SCL's 50% share 6,540 8,282 13,870 15,123 Higher interest rates on the company's floating rate debt caused Sea Containers' share of interest costs to increase by $1.9 million in the quarter compared to the year earlier period, although $1.2 million of this was offset by earnings from new containers. GE Capital under protest by Sea Containers has increased the depreciation on the first lease of recently acquired new containers, causing a $1.1 million decline in Sea Containers' share of GE SeaCo earnings in the quarter and a $1.9 million decline for the first six months. This now means that Sea Containers' own fleet and most of the GE SeaCo owned fleet is being depreciated on a different basis than recent additions to the GE SeaCo fleet. An arbitrator has been appointed in connection with the dispute with GE Capital over the Services Agreement whereby Sea Containers provides certain executive, financial, computer, office, accounting, legal and public relations services to GE SeaCo. GE Capital is seeking to terminate the Services Agreement in order to reduce the costs of GE SeaCo, replacing many of the services provided by Sea Containers with services provided by others. Basically, GE Capital wants to change the original deal negotiated back in 1997 which has resulted in GE SeaCo becoming the most profitable independent leasing company in the industry. Sea Containers has offered to make many of the changes requested by GE Capital provided GE SeaCo pays the costs of implementation, but GE Capital has refused to agree to this. Under the circumstances, Sea Containers has no alternative but to arbitrate the matters in dispute, most of which it believes have nothing to do with the Services Agreement and to the extent they do, the complaints are not valid or have been cured. This process will be costly and consume management time which should be devoted to running the business. The container leasing business is having a softer year in 2005 than in 2004. In 2004 GE SeaCo acquired $300 million of new containers while in 2005 this amount is likely to be only $150 million. A lot of new containership capacity has been introduced into the market but cargo volumes have yet to increase to fill it and hence the need for new containers has not yet matched the new capacity. World trade continues to grow and more containers will be needed. New container prices have now started to decline in step with declining steel prices. Demand for specialized containers such as refrigerated, tank, swap bodies and flat racks, remains strong. At June 30, 2005 GE SeaCo had taken delivery of $92 million of new containers. Utilization of GE SeaCo's owned fleet was 98% at that date, while utilization of the "pooled" fleets which are managed by GE SeaCo for Sea Containers and GE Capital was 89%. 5. Other container activities, including factories, depots, logistics and service facilities. Three months ended Six months ended June 30, June 30, 2005 2004 2005 2004 $000 $000 $000 $000 Revenue 36,571 26,436 73,164 52,294 Operating and SG&A expenses (21,305) (12,575) (44,985) (24,595) EBITDA 15,266 13,861 28,179 27,699 Depreciation and amortization (11,288) (11,148) (22,528) (22,332) Operating income before non-recurring charges 3,978 2,713 5,651 5,367 Results from these activities increased to $4 million in the second quarter from $2.7 million in the prior year period, and to $5.7 million from $5.4 million for the six months. Earnings from the company's "pool fleet" managed by GE SeaCo largely account for the improvement. Sea Containers operates independently of the joint venture a fleet of 43,000 containers leased to customers which GE Capital does not wish to lease to, land intermodal containers, lease- purchase units and gas tanks. Utilization of this fleet was 95% at June 30, 2005. Sea Containers' factories, depots, tank cleaning facilities, refrigerated container service stations and its logistics operations in Australasia, east and west Africa and elsewhere continue to increase their profitability. The company plans to expand its involvement in these businesses. 6. Property, Plantations and Publishing. Three months ended Six months ended June 30, June 30, 2005 2004 2005 2004 $000 $000 $000 $000 Revenue 6,964 5,925 11,940 11,066 Operating and SG&A expenses (6,995) (5,556) (12,955) (11,423) EBITDA (31) 369 (1,015) (357) Depreciation and amortization (295) (328) (598) (620) Operating (loss) / income before non-recurring charges (326) 41 (1,613) (977) Improvements in banana plantation profits were offset by large increases in labor costs at the Corinth Canal dictated by Greek government contracts with trade unions. Canal tolls have been increased to recover the increased costs. Applications have been made for construction of a marina and tourist village at the Canal and approvals are expected before year end. 7. Leisure investment. Orient-Express Hotels Ltd. in which the company has a 25% shareholding (9.9 million common shares) increased its net income in the second quarter by 43% to $18.5 million ($0.47 per common share). For the six months its net earnings were up 104% to $16.9 million ($0.46 per common share). The Orient-Express Hotels common share price has recently been about $32, valuing Sea Containers' investment in the company at around $320 million. Sea Containers intends to exit this investment in stages over time. The investment is equity accounted and Sea Containers' share of Orient-Express Hotels earnings for the second quarter was $4.7 million and for the six months $3.7 million. Mr. Sherwood observed, "The results of the company's ferry operations are obviously unsatisfactory and major changes are required to bring them back into profitability. We are in the midst of the peak season (the third quarter) and as soon as the season's results are known we will be making announcements as to the steps that will be taken. A great deal of work is going on behind the scenes to set the stage for these announcements. Non- recurring charges can be expected as part of the process. Higher fuel costs are being incurred in markets which are suffering from over-capacity, causing a situation where prices cannot be raised to recover the extra cost and at the same time passenger volumes are declining. "An essential element of the company's ferry strategy is to move its car carrying fast ferries into joint ventures in markets which have good potential. The SNAV-Hoverspeed joint venture with Mediterranean Shipping in the Adriatic now employs three car carrying fast ferries, including one of ours, and is solidly profitable. The Aegean Speedlines joint venture in Greece employing a company-owned SeaCat was successfully launched in May. The present plan is to add one or more Sea Containers' owned vessels to these joint ventures in 2006. "Seastreak in New York City has temporarily gone into loss because of fuel prices. Passenger fares are being increased to recover over time this extra cost. Mr. Sherwood closed by saying that management and the board are not complacent about the poor results of the ferries business and are determined to eliminate the losses. To see financial statements: http://bankrupt.com/misc/Sea_Containers.htm CONTACT: SEA CONTAINERS SERVICES LTD William W. Galvin, +1-203-618-9800 =========== B R A Z I L =========== BANCO BRADESCO: Posts $2.621B Net Income in 1H05 ------------------------------------------------ Banco Bradesco, Brazil's largest private Bank, posted a Net Income of R$ 2.621 billion in 1H05 (equivalent to EPS of R$5.34), compared to a Net Income of R$1.250 billion in 1H04 (equivalent to EPS of R$2.63), i.e., up by 109.7%. The annualized return on average equity was 34.9% in 1H05 (19.4% in 1H04). The Net Income in 2Q05 amounted to R$1.416 billion, which represents a 38.1% annualized ROAE for the quarter (34.7% in 1Q05). In 1H05, 68.5% of Bradesco's Net Income was originated from Banking activities, 30.4% from Insurance, Private Pension Plans and Savings Bonds and 1.1% from other activities. On May 28, Bradesco issued the first Brazilian perpetual subordinated bond, in the amount of US$ 300 million, evidencing the Bank's good perception with the international investment community. Financial margins reached R$8.354 billion, increasing by 30.3% in the last 12 months, and by 8.9% in the q-o-q comparison (2Q05 to 1Q05). Fee income grew by R$727 million between June 04' and 05', totaling R$3.421 billion. In the q-o-q comparison, fees evolved R$99 million. Bradesco's Efficiency Ratio for the accumulated 12 months continues to present a consistent improvement, totaling 60.1% in June 2004, 52.7% in March 2005 and, finally, 48.1% in June 2005. As an acknowledgment of Bradesco's quality in asset management, BRAM - Bradesco's Asset Management company was granted the most relevant awards of the industry, such as Exame/FGV, Invest Tracker/Estadao, Invest Tracker/Thomson Financial and Valor Investe/Standard & Poor's. In line with the policy of adding value to stockholders, Bradesco paid or accrued R$925.1 million in Interest on Own Capital in 1H05 (compared to R$651.4 million in 1H04). On March 1, 2005, Bradesco raised by 21.12% the monthly amount of Interest on Own Capital declared per stock, paid as from April 2005. Bradesco's Market Capitalization surpassed the R$39 billion mark, evolving by 94.1% between June 2004 and June 2005 and by 11.4% in the 2nd quarter, indexes significantly higher than Ibovespa's, which during the same periods evolved by 18.5% and (5.9)%, respectively. Assets Total Assets surpassed R$194.5 billion, a 10.4% y-o-y and 1.7% q-o-q. In the 1H05 and 1H04 comparative analysis, the Securities Portfolio grew by R$8.2 billion and the Loan Portfolio increased by R$11.4 billion, mainly in the Individuals and Small and Medium-Sized Companies (SME) segments. When compared to 1Q05, Total Assets increased by R$3.2 billion in 2Q05, pointing out that the Loan Portfolio was up by R$3.8 billion in the period. Loan Portfolio The Loan Portfolio, including sureties and guarantees, reached the relevant R$78.3 billion mark, up by 20.2% y-o-y and by 4.4% when compared to the previous quarter. The Loan Portfolio, not including sureties and guarantees, reached R$69.8 billion, increasing by 19.5% when comparing 1H05 to 1H04, and 5.8% q-o-q. The Loan Portfolio increment of R$11.4 billion in the last 12 months and R$ 3.8 billion in the quarter mainly stems from a higher demand by Individuals, in view of the maintenance of the Brazilian economy activity levels, the rise of real wages, as well as the unemployment rate decrease. In 2Q05, we observed raises in the lines of Direct Lending and Vehicles finances. In the Corporate segment, the annual loan portfolio growth was driven by Working Capital, Overdraft and Vehicle financing credit lines, in line with expected sales growth related to the economic recovery. When compared to the previous quarter, the largest increases in credit lines occurred in Overdraft, Working Capital operations and BNDES on lendings. SMEs have been gradually increasing their demand for loans, recording a 23.8% increase in the Loan Portfolio between June 5 and June 4 and 5.8% in the quarter. Referring to large corporations, a decrease in the Loan Portfolio was recorded, of 6.2% in the last 12 months and of 1.8% in the quarter, mainly due the appreciation of the Real (BRL), besides the fact that large corporations are more capitalized, opting for raising funds through capital markets. AA-C rated operations accounted for 92.6% of the Loan Portfolio, compared to 92.5% in March 2005 (91.4% in June 2004), evidencing a continuous improvement in asset quality. Balance of allowance of loan losses (PDD) reached R$4.450 billion, 6.4% of the Loan Portfolio, of which R$3.504 billion were required provisions and R$946 million were additional provisions. The R$122 million increase in the volume of allowance of loan loss expenses y-o-y includes the preventive down rating of a utility company in the amount of R$166 million (event recorded in the first quarter of 2005). The coverage ratio, which compares the total balance of loan losses to the loan portfolio balance overdue for more than 60 days, which do not bear interest, stood at 198% (193% in March 2005 and 180% in June 2004). Deposits and Liabilities Total Deposits reached R$ 71.7 billion, increasing by 11.7% in the last twelve months, demonstrating the strength of Bradesco to capture deposits. Over the last 12 months, Demand Deposits raised by 10%, Savings Deposits by 9.2% and Time Deposits by 14.1%. In the quarterly analysis, Total Deposits remained steady. The Loan-to-Deposits ratio stood at 97.4%. Reflecting the Grupo Bradesco de Seguros e Previd�ncia (Insurance Group) leadership in issuance of premiums, in addition to its conservative provisioning criteria, deserve highlight the amount of R$36.5 billion in Technical Reserves for Insurance, Private Pension Plans and Savings Bonds, which increased by 23.9% y-o-y and by 3.4% q-o-q. Capital Bradesco's Stockholders' Equity at the end of the first half of the year totaled R$17.5 billion, while Reference Stockholders' Equity amounted to R$23.6 billion, causing the Basel Capital Adequacy Ratio (BIS) to reach 15.8%. Considering that the minimum requirement in Brazil is 11%, Bradesco has a potential to expand its loan portfolio by R$65 billion. Asset Management Total assets under management reached R$108.5 billion, comprising Investment Funds, Managed Portfolios and Third-Party Funds, up 22.3% when compared to June 2004 and 3.6% when compared to March 2005. Financial Margin The Financial Margin, under the terms of Brazilian Central Bank's regulation in the periods compared includes the income earned in the sale of our stake in Belgo Mineira in 1Q05, as well as the partial results of derivatives used for hedging the investments abroad, which, in terms of Net Income, simply annulled the fiscal effect (PIS/COFINS/IR/CS) of such hedge strategy. This fiscal effect is triggered by the fact that exchange variation is not deductible when losses are verified and is not taxable when gains are recognized. On the other hand, the earnings from derivative instruments are taxable when gains occur and deductible when losses occur. Therefore, in the Net Interest Income is included under the line "income on derivative financial instruments" the gross income from the hedge, and its respective taxes are reflected under the lines "tax expenses" and "income tax and social contribution". The adjusted financial margin improvement of R$1.198 billion in 1H05 compared to 1H04 is due to (i) a R$924 million increase in interest income, caused by higher volumes and (ii) a R$274 million increase in non-interest income mainly as a result of higher Securities Portfolio and Treasury gains. When compared to the previous quarter, the variation is due to: (i) a R$300 million increase in interest income operations, basically composed of higher business volumes and (ii) a drop of R$17 million in non-interest income. Fee Income Fee Income continued evolving due to the increase in the volume of operations, as well as to the growth in the customer base and improvement in the relationship through the customer segmentation process. In the y-o-y comparative analysis, fee income evolved R$727 million; especially fees originated from (i) loan operations - R$245 million; (ii) checking account - R$167 million; (iii) cards - R$110 million; (iv) asset management - R$82 million; and (v) consortium - R$28 million. The R$99 million variation in the quarter is basically due to (i) loan operations, which evolved R$37 million; (ii) cards - R$14 million; (iii) collection and tax payment fees - R$21 million; and (iv) checking accounts - R$8 million. Fee Income in 2Q05 covered 70.8% of total expenses (personnel and other administrative expenses), against an index of 68.8% in the last quarter. In the semi-annual period analysis, those indexes stood at 55.7% in 1H04 and 69.8% in 1H05. Personnel Expenses In the comparative analysis of semi-annual periods, the R$56.3 million variation is mainly due to: (i) payroll increase resulted from the collective bargaining agreement of 8.5% in September 4 - R$228 million; (ii) higher employee profit sharing expenses - R$58 million; which was offset by (iii) lower severance and labor provision expenses of R$66 million and (iv) by a reduction in personnel expenses, related to the synergies obtained in administrative processes, in the amount of R$165 million. Increased personnel expenses of R$25 million in the quarterly analysis is basically due to: (i) the concentration of vacations in 1Q05 - R$45 million; (ii) higher employee profit sharing expenses - R$12 million; and (v) higher training investments - R$8 million, offset by (iv) lower volume of provisions for labor claims - R$21 million; and (v) lower severance expenses - R$14 million. Excluding these effects, a "structural" reduction in the amount of R$6 million in expenses is verified in the quarter. Other Administrative Expenses The nominal variation of other administrative expenses in the y- o-y comparison was of R$8 million only. In the quarterly analysis, other administrative expenses increased R$48 million, due to (a) an increase in third-party services expenses - R$26 million, in view of the business volumes growth, as well as investments in the improvement and optimization of the IT platform, and (ii) higher advertising and marketing expenses - R$ 17 million, related to the launching of the new "Bradescompleto" campaign. Bradesco is still focused on continuously improving its operating efficiency. The accumulated Efficiency Ratio in the 12-month period was able to improve from 52.7% in 1Q05 to 48.1% in 2Q05. Insurance, Private Pension Plans and Savings Bonds This segment reported Net Income of R$796 million in 1H05 (R$374 million over the same period of 2004). Net Income totaled R$369 million in 2Q05 compared to R$427 million in the previous quarter. In the Vehicle Segment, premiums increased 7.2% q-o-q, attesting the success of the acceptance policy and of the implementation of a pricing policy in line with each customer characteristics (named Profile). Bradesco's Vehicle Insurance market share increased to 17.8%, thus maintaining the leadership in the segment. With a priority focus on Mass Insurance, particularly Home Insurance, which presents low claims ratio, the contribution of Basic Lines reached higher than 600,000 homes insured. In the Life segment, in which Bradesco also maintains leadership with a 16.2% market share, we emphasize low-ticket products, targeting the low-income individuals segment, especially with the products "Vida Maxima Mulher Bradesco" (Life Insurance for Women) and "Vida Segura Bradesco" (Bradesco Safe Life). Considering Private Pension Plans, Bradesco still focuses the strategy of increasing PGBL and VGBL products sales. Market share reached 34.5%, thus maintaining the leadership in the segment. In the Savings Bonds segment, the Portfolio profile was maintained, despite the evolvement of monthly payment bonds. Bradesco Sa�de (Health Insurance) presented in 1H05 a loss of R$213 million, compared to R$15 million in 1H04, in view of extraordinary provision in the amount of R$324 million. The Company continues prioritizing sales of Corporate Plans, which has been accounting for nearly 75% of the total insured portfolio. The growth in the number of insured customers in this segment reflects the Company's high level of specialization, which is the greatest differential in the current Brazilian Supplementary Health market. Approximately 12 thousand companies in Brazil chose Bradesco Saude, and 31 out of the 100 largest Brazilian companies are customers in the Health/Dental insurance line. Premiums in Insurance, Private Pension Plans and Savings Bonds summed up R$7.4 billion in 1H05, against R$6.9 billion in the same period of 2004, accounting a 7.4% growth. Technical Reserves for Insurance, Private Pension Plans and Savings Bonds reached the amount of R$36.5 billion, a 40% market share. Other Highlights Within the strategy of increasing exposure in consumer finance, we point out the following events: Bradesco acquired through its subsidiary Finasa the 33 branch network of Grupo Morada, which has strong concentration in the state of Rio de Janeiro and operates in the financial market for more than 36 years. As a result of this deal, Bradesco adds its presence in 3,600 affiliated points of sale. In July, Bradesco entered into a partnership with Uniao de Lojas Leader, a retailer mainly operating in the states of Rio de Janeiro and Espirito Santo, for the management of Leadercard, one of the five largest Private Label credit card companies in Brazil. This partnership also involves the start-up of a financing company, subject to the Brazilian Central Bank's approval and will have the Leadercard client portfolio as its core business. In August, a Memorandum of Intent was signed with Lojas Colombo, the third largest home appliances and furniture retailer in the country, for the start-up of a Financing Company, which will have Colombo's clients portfolio as its focus. The implementation of this partnership is subject on the signing of the final agreements and on the approval by the Brazilian Central Bank. Bradesco and Colombo will have equal equity participation in the operation which, also, foresees the distribution of other banking and insurance products offered by Bradesco such as insurance, private pension plans, savings bonds, direct lending and others. To see table on Assets Under Management and Asset Distribution: http://bankrupt.com/misc/BANCO_BRADESCO.htm CONTACT: Banco Bradesco S.A. Investor Relations Jean Philippe Leroy Phone: 55 11 3684.9229 Luiz Osorio Leao Filho Phone: 55 11 3684.9302 URL: www.bradesco.com.br/ir BANCO ITAU: Secures $100M From IDB Unit, 2 Commercial Banks ----------------------------------------------------------- Banco Itau (NYSE: ITU) obtained from a unit of the Inter- American Development Bank (IDB) and commercial banks five-year bullet loans totaling US$100 million, reports Dow Jones Newswires. In a statement, Itau said that the IDB's Inter-American Investment Corporation (IIC) provided US$30 million, while commercial banks HVB and WestLB co-arranged a further US$70 million. The loans, which will pay 5.565% interest per year, will be used to provide medium- and long-term financing to small- and mid- sized Brazilian enterprises that meet social and environmental requirements. 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 COPEL: Power Market at Concession Area Grows 3.9% in 1H05 --------------------------------------------------------- Power consumption market at Copel's concession area (including unregulated "free" customers in the State of Parana) grew 3.9% between January and June 2005 in comparison to the same period of the previous year. Including unregulated "free" customers outside the State of Parana, the power market dropped 0.4% in the period. The conclusion of agreements with Carbocloro and Volkswagen by the end of 2004 explains this drop. Residential, commercial and rural consumption grew by 4.4%, 8.0% and 6.3%, respectively. The good performance of the commercial segment in the first six months of the year maintained 2004 levels, mainly due to the modernization of the sector and to the increase in the number of connections, which recorded the highest number in the last five years. Rural segment growth is mainly due to risen exports of agriculture and agribusiness products, increasing producer's income which resulted in the acquisition of electric products. The result from the residential segment is due to the 3.0% increase in the number of customers, as well as to the increase in the average consumption level in the period (1.3% higher than the average recorded in the same period of the previous year). Industrial consumption, including only Copel Distribuicao market, dropped 5.2% due to the transfer of some unregulated "free" customers to Copel Geracao. However, total industrial consumption, including unregulated "free" customers served by Copel Geracao in the State of Parana, grew 1.6%. To see table: http://bankrupt.com/misc/COPEL.htm CONTACT: COMPANHIA PARANAENSE DE ENERGIA- COPEL Rua Coronel Dulcidio 800 Curitiba Parana, 80420-170 Brazil Investor Relations team: E-mail: ri@copel.com Phone:(55 41) 3222-2027 EMBRATEL: Merrill Lynch Deems Primesys Deal Slightly Expensive -------------------------------------------------------------- Embratel Participacoes S.A. (Embrapar) confirmed that on August 5, the management of its subsidiary Empresa Brasileira de Telecomunicacoes S.A. (Embratel) executed a share purchase agreement with Portugal Telecom do Brasil S.A.. Under the agreement, PT Brasil will transfer to Embratel the total amount of shares that represent 100% of the capital of Primesys Solucoes Empresariais S.A., and all the rights resulting from and pertaining to those shares, from its ownership upon the receipt of the payment by Embratel to PT Brasil the agreed fair price of BRL231,250,000.00. Embratel agreed to pay the full amount to PT Brasil upon the fulfillment of precedent conditions, monetarily adjusted by the accumulated variation of the average rate of the Interbank Deposits - DI, as calculated and disclosed by CETIP - Interbank Rate (CETIP-Taxa DI), realized up to the date of the closing of the transaction, as defined by the Share Purchase Agreement. The Primesys share purchase transaction is subject to the implementation of precedent conditions, among which the approval by Agencia Nacional de Telecomunicacoes - ANATEL. Embrapar said it remains committed with the future of Embratel and is confident of the results envisaged with this acquisition. Meanwhile, investment bank Merrill Lynch considers the price tag as slightly expensive, and said that although Primesys complements Embratel's business, it will have little impact. Primesys "should complement Embratel's product range, and help to improve, if only slightly, its competitive position versus the local telcos," Merrill Lynch said in a research note. The bank, which recommends selling shares in Embratel, said it remains "bearish on Embratel's business in the long run." CONTACT: Embratel Participacoes S.A. Rua Regenta Feijo 166 Sala 1687-B Centro Rio de Janeiro, 20060-060 Brazil Phone: 5521-519-6474 URL: http://www.embratel.net.br VARIG: To Hire UBS as Restructuring Advisor ------------------------------------------- According to Valor Economico newspaper, VARIG, S.A., will employ UBS AG to advise the company on its reorganization plan. UBS will help the airline renegotiate its debt with creditors, sell some assets and raise money with investors. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) VARIG: Recovers Domestic Market Share in July --------------------------------------------- Ailing flagship carrier, Viacao Aerea Riograndense SA (Varig) recovered some of its share of the domestic market in July and regained second place, Dow Jones Newswires reports, citing figures from Brazil's civil aviation department (DAC). Varig's share of the domestic market moved up to 26.5% in July from 26% in June but was still down from last year's 29.5%, DAC figures revealed. In the international market, Varig continued to lose ground against its Brazilian rivals. Its share of the international market fell to 76.9%, down from 82% a year ago, while TAM SA's share rose to 20.9%, up from 17.5% a year ago. =============== C O L O M B I A =============== CHIVOR: Rating Reflects Weak Financial Profile ---------------------------------------------- Rationale The rating on Chivor S.A. E.S.P. mainly reflects its weak financial profile partly evidenced by the projected weak debt service coverage for 2005 and 2006 in the context of volatile cash generation related to the largely hydro-based Colombian electricity system. The ratings also incorporate a limited degree of financial flexibility deriving from restrictive terms and conditions defined by the company's outstanding debt. These weaknesses are partly offset by the company's portfolio of power sales contracts mainly with local electric distribution companies at a fixed price in Colombian pesos and indexed by local inflation. In addition, Chivor is a low-cost generator in Colombia's electric system and benefits from a relatively large dam and a favorable hydrology within its region. However, it faces significant competition from other large hydro generators. Chivor's 1,000 MW plant is projected to generate an average of about 4,000 gigawatt-hours (GWh) per year, from which about 2,500 GWh are projected to be sold through short-and medium-term sales contracts (of up to three years) and the remaining 1,500 GWh marketed in the volatile spot market. Chivor's main revenue and cash flow sources are power sales under contracts, spot market sales, capacity revenues, and, to a lesser extent, revenues from ancillary services such as frequency control. In November 2004, Chivor successfully refinanced a US$260 million bank loan that originated from a restructuring process in 2002, with proceeds from a US$170 million, 10-year bullet secured 9.75% fixed-rate bond and a Colombian peso 210 billion (about US$90 million) seven-year amortizing syndicated bank loan. As a result, Chivor significantly extended its debt maturity schedule and lowered its relatively high foreign exchange risk. However, as the new debt reflects market rates and the cost of the previous financing debt was the product of a compulsory restructuring, Standard & Poor's expects Chivor's funds from operations (FFO) interest coverage and FFO to total average debt, which reached 3.9x and 18.1%, respectively, in 2004, to weaken to about 2x-3x and about 10%-20%, respectively, in 2005 and 2006. Liquidity Standard & Poor's considers Chivor's liquidity and financial flexibility as important credit concerns, mainly because of the company's weak financial profile and restrictive terms and conditions defined by the new debt, which restricts additional debt, and also certain financial covenants regarding interest coverage and debt ratios. However, Chivor's relatively good financial performance in the last quarter of 2004 and also in the first quarter of 2005, in spite of the lower power generation, allowed it to accumulate sizable liquidity reserves that reached almost US$20 million as of March 31 2005. Chivor's cash generation is mostly devoted to debt service as capital-expenditure needs are very low at about $1 million to $3 million per year, which represent only 0.2% to 0.5% of total capital. Dividend payments are limited by a restricted payment covenant incorporated in the bond indenture and are subject to debt targets. Chivor is a relatively large hydro generator in Colombia, representing about 8% of the country's total installed capacity. Chivor was privatized and acquired by Chile's largest thermal generator, AES Gener S.A. (BB+/Stable/--) in December 1996. The AES Corp. (B+/Positive/--) acquired AES Gener in January 2001. Outlook The positive outlook reflects the expectations that Chivor's weak financial flexibility and projected financial ratios mainly for 2005 will gradually improve as a result of the projected higher power sale prices and lower interest payments resulting from debt amortization. The ratings could be raised if the company's debt service coverage ratios improve over above- mentioned levels combined with a better financial flexibility. Primary Credit Analyst: Sergio Fuentes, Buenos Aires (54) 114-891-2131; sergio_fuentes@standardandpoors.com Secondary Credit Analyst: Federico Mora, Mexico City (52) 55-5081-4436; federico_mora@standardandpoors.com ============= E C U A D O R ============= PETROECUADOR: Pareja's Exit Linked to Corruption Claims ------------------------------------------------------- Contrary to previous reports, Mr. Carlos Pareja wasn't asked to resign from his post as president of state oil company Petroecuador because of contract issues with US oil company Occidental, says Business News Americas. Press reports had linked Pareja's abrupt exit from the post to his stance over a dispute between the government and Occidental over block 15. But according to a spokesperson at Ecuador's energy and mines ministry, the government called for Pareja to resign after the country's anti-corruption commission (CCCC) found out that he owes the state US$34,000 related to a guarantee on a contract for naphtha purchasing awarded in March 2002. Pareja, who will be replaced by Luis Roman, a 58-year-old oil engineer who has twice headed Petroecuador previously, denies the CCCC claims. =========== M E X I C O =========== AOL LATIN AMERICA: Court OKs Bankruptcy Services as Claims Agent ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave America Online Latin America, Inc., and its debtor-affiliates permission to employ Bankruptcy Services LLC as their claims, noticing and balloting agent. Bankruptcy Services will: 1) assist the Debtors with all required notices in their chapter 11 cases, including notice of the initial meeting of creditors under Section 341(a) of the Bankruptcy Code, notice of objections to claims and notices of any hearings on a proposed Disclosure Statement and the solicitation of votes and confirmation of a chapter 11 Plan, and other miscellaneous notices necessary in the Debtors' chapter 11 cases; 2) receive, examine and maintain copies of all proofs of claim and proofs of interest filed in the Debtors' chapter 11 cases; 3) maintain official claims registers in each of the Debtors' cases by docketing all proofs of claim and proofs of interest un the applicable claims database that includes: a) the name and address of the claimant or interest holder and the date the proof of claim or proof of interest was received by Bankruptcy Services and the Bankruptcy Court, and b) the claim number assigned to the proof of claim or proof of interest the applicable debtor-affiliate against which the claims or interest is asserted; 4) implement necessary security measures to ensure the completeness and integrity of the claims registers and transmit to the Bankruptcy Clerk's Office a cope of the claims register on a weekly basis; 5) maintain an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and provide access to the public without charge for the examination of copies of the proofs of claim or proofs of interest; 6) record all transfers of claims pursuant to Bankruptcy Rule 3001(c) and provide notice of transfers as required by Bankruptcy Rule 3001(e); 7) oversee the distribution of applicable soliciting materials to holders of claims or interests against the Debtors and respond to material and technical distribution and solicitation inquiries; 8) receive, review and tabulate the ballots cast, make determinations with respect to the timeliness of each ballot and certify the results of balloting to the Court; and 9) perform all other claims processing, noticing and balloting services to the Debtors that are necessary in their chapter 11 cases. Kathy Gerber, a Senior Vice-President at Bankruptcy Services, disclosed that her Firm received a $5,000 retainer. Ms. Gerber reports Bankruptcy Services' professionals bill: Designation Hourly Rate ----------- ----------- Senior Managers $225 & On-Site Consultants Senior Consultants $185 Programmers $130 - $180 Associates $135 Schedule Preparation Staff $225 Data Entry & Clerical Staff $40 - $60 Bankruptcy Services assures the Court that it does not represent any interest materially adverse to the Debtors or their estates. Headquartered in Fort Lauderdale, Florida, America Online Latin America, Inc., -- http://www.aola.com/-- offers AOL-branded Internet service in Argentina, Brazil, Mexico, and Puerto Rico, as well as localized content and online shopping over its proprietary network. Principal shareholders in AOLA are Cisneros Group, one of Latin America's largest media firms, Brazil's Banco Itau, and Time Warner, through America Online. The Company and its debtor-affiliates filed for chapter 11 protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778). Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at Shearman & Sterling LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $28,500,000 and total debts of $181,774,000. (Troubled Company Reporter - Tuesday, August 9, 2005, Vol. 9, No. 187) AOL LATIN AMERICA: Files Schedules of Assets & Liabilities ---------------------------------------------------------- America Online Latin America, Inc., and its debtor-affiliates delivered their Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the District of Delaware, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $706,376,454 C. Property Claimed as Exempt D. Creditors Holding $190,590 Secured Claims E. Creditors Holding Unsecured Priority Claims F. Creditors Holding $164,050,411 Unsecured Nonpriority Claims ------------ ------------ Total $706,376,454 $164,241,001 Headquartered in Fort Lauderdale, Florida, America Online Latin America, Inc., -- http://www.aola.com/-- offers AOL-branded Internet service in Argentina, Brazil, Mexico, and Puerto Rico, as well as localized content and online shopping over its proprietary network. Principal shareholders in AOLA are Cisneros Group, one of Latin America's largest media firms, Brazil's Banco Itau, and Time Warner, through America Online. The Company and its debtor-affiliates filed for chapter 11 protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778). Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at Shearman & Sterling LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $28,500,000 and total debts of $181,774,000. (Troubled Company Reporter - Tuesday, August 9, 2005, Vol. 9, No. 187) ===================== P U E R T O R I C O ===================== DORAL FINANCIAL: Unit Signs 3-Yr Agreement With MRU Holdings ------------------------------------------------------------ MRU Holdings Inc. (OTC Bulletin Board: MHOI.OB), a specialty finance company that provides private loans to college students, and Doral Bank, FSB, New York (Doral Bank), a wholly owned subsidiary of Doral Financial Corp. (NYSE: DRL) announced today a partnership agreement whereby MRU Holdings, Inc. (MRU) will provide a line of student private loans for Doral Bank, further enhancing the products Doral Bank offers its customers. Under the 3-year agreement, MRU Holdings will offer a customized private student loan product line to Doral's undergraduate and graduate customers. "This partnership affords MRU an opportunity to broaden our marketing efforts to include banks and other financial institutions that are interested in expanding their private loan product offering for their customers," said Vishal Garg, MRU's Chief Financial Officer and Co-founder. "We recognize this as an important but underserved niche in the New York market and believe that together we can add value to Doral Bank's current product portfolio." Doral strives to provide its clients with full service banking services and will now include education financing as one of its product offerings. "Like MRU, we believe each student regardless of their financial situation, can subsequently attain their educational aspirations. We are proud to be able to offer our customers an innovative private loan product, which will round out our portfolio of products, as well as further this vision," said Paul Mak, President of Doral Bank. Doral Bank is a federal savings bank with eight branches in the New York metropolitan area and eight more planned by the end of 2006. Doral Bank, FSB is a subsidiary of Doral Financial Corp., a financial holding company which is the largest residential mortgage lender in Puerto Rico and the parent company of Doral Bank, a Puerto Rico commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm and Doral Insurance Agency Inc. *********** 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. 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