/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050907.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, September 7, 2005, Vol. 6, Issue 177 Headlines A R G E N T I N A 2000 GUADALUPE: Reorganization Finalized AIRETTE S.A.C.I.I.F.: General Report Due September 8 CASAMEN S.A.: Informative Meeting Set to Present Proposal CLUB TRAFICO'S: Trustee's Next Report Expected in Court CRM: S&P Ups Rating on $150M of Bonds ETINO: Individual Reports Due September 8 LEES S.A.C.I.A.I.F.: Court Grants Reorganization Plea MIR S.A.: General Report Deadline Approaches TELECOM ARGENTINA: Expects to Book ARS1.584B Gain From Debt Swap TELECOM ARGENTINA: S&P Ups CCR to 'B-' From 'D' B O L I V I A AGUAS DEL ILLIMANI: Agrees to Audit Conditions B R A Z I L ELETROPAULO METROPOLITANA: Moves to Ensure Payment GERDAU: Moody's Assigns Ba1 Foreign Currency Rating to Bonds NET SERVICOS: Prior Debenture Terms, Details Approved PARMALAT BRASIL: Presents Reorganization Plan to Court UNIBANCO: Strong Demand Bumps Up BRL2.4-Bln Debenture Issue C H I L E LE MANS DESARROLLO: SVS Initiates Annuity Marketing Efforts C O L O M B I A EMCALI: Agrees to Pay for Reconstructing Utility Networks TELECOM: Telefonica Continues to Explore Possible Bid H O N D U R A S HONDUTEL: Privatization May Mean $50M-80M Loss to State M E X I C O AOL LATIN AMERICA: Court Sets October 28 Claims Bar Date AOL LATIN AMERICA: Seeks Court Approval for Lease Amendment ASARCO: Meeting of Creditors Slated for September 14 SICARTSA: Talks with Villacero Flop, Labor Ministry Blamed UNITED RENTALS: Moody's Junks Senior Sub. Debt, Preferred Shares U R U G U A Y ANCAP: Budgets $4M for Pilot Alcohol Fuel Plant ROYAL SHELL: Official Confirms Company Considering Exit V E N E Z U E L A CANTV: Inks Two-Year Wage Accord With Workers HEINZ PLANT: Monagas Governor Orders Plant Seizure - - - - - - - - - - ================= A R G E N T I N A ================= 2000 GUADALUPE: Reorganization Finalized ---------------------------------------- The reorganization of Santa Fe-based 2000 Guadalupe Supermercado S.R.L. has ended. Data revealed by Infobae on its Web site indicated that the process was concluded after the city's civil and commercial Court No. 1 homologated the debt agreement signed between the Company and its creditors. AIRETTE S.A.C.I.I.F.: General Report Due September 8 ---------------------------------------------------- Mr. Jorge David Jalfin, the trustee selected by the court for Airette S.A.C.I.I.F. y A. liquidation, will present the general report tomorrow, Sep. 8, 2005. The presentation of the said report followed the submission of the individual claims of creditors on July 8, 2005. The claims were verified until May 23, 2005. Buenos Aires' civil and commercial Court No. 24 handles the Company's case. CONTACT: Mr. Jorge David Jalfin, Trustee Sarmiento 1452 Buenos Aires CASAMEN S.A.: Informative Meeting Set to Present Proposal --------------------------------------------------------- Casamen S.A., a company under reorganization, will present a settlement plan to its creditors in an informative assembly scheduled for March 16 next year, Infobae reports. Buenos Aires' civil and commercial Court No. 5, with assistance from Clerk No. 9, earlier issued a resolution opening the Company's reorganization. This pronouncement authorized the Company to begin drafting a settlement proposal with its creditors in order to avoid liquidation. The reorganization allows Casamen S.A. to retain control of its assets subject to certain conditions imposed by Argentine law and the oversight of the court appointed trustee. CONTACT: Casamen S.A. Buenos Aires CLUB TRAFICO'S: Trustee's Next Report Expected in Court ------------------------------------------------------- Mr. Federico D. Bonello, the trustee overseeing the reorganization proceedings of Club Trafico's Old Boys, will submit the general report tomorrow, Sep. 8, 2005. The report will contain the Company's audited accounting and business records as well as a summary of important events pertaining to the reorganization. On July 27, 2005, the validated individual claims of the Company's creditors were presented in court for approval. The court-appointed trustee stopped accepting claims on May 31, 2005. An informative assembly, the final stage of reorganization where the settlement proposal is presented to the Company's creditors for approval, is scheduled on March 8 next year. Club Trafico's Old Boys began reorganization following the approval of its bankruptcy petition by Court No. 2 of Pergamino's civil and commercial tribunal. Dr. Bernardo Louise, clerk of court, assists the court on this case. CONTACT: Club Trafico's Old Boys Calle Velez Sarsfield 368 Pergamino Mr. Federico D. Bonello, Trustee Av. J. A. Roca 814 Pergamino CRM: S&P Ups Rating on $150M of Bonds ------------------------------------- Standard & Poor's International Ratings, Ltd. Sucursal Argentina upgraded its rating on US$150 million of bonds issued by Compania de Radiocomunicaciones Moviles S.A. CRM) from `raD' to `raB,' according to data released by the CNV on its Web site. The bonds, described as "Serie emitida bajo el Programa de Ons por hasta U$S 350 millones, vencido el 9-02-03" and classified under "Series and/or Class," will mature on May 31, 2008. The upgrade was based on CRM's finances as of June 30, 2005. S&P said that an obligation rated 'raB' denotes weak protection parameters relative to other Argentine obligations. The obligor currently has the capacity to meet its financial commitments on the obligation. But adverse business, financial, or economic conditions would likely impair capacity or willingness of the obligor to meet its financial commitments on the obligations. ETINO: Individual Reports Due September 8 ----------------------------------------- The individual claims of the creditors of Etino S.R.L. will be submitted tomorrow, Sep. 8, 2005. The claims were reviewed by Mr. Fernando Miguel Altare, the court-appointed trustee, until July 27, 2005. The submission of the general report will follow on Oct. 20, 2005. Etino S.R.L. was declared bankrupt by Court No. 14 of Buenos Aires' civil and commercial tribunal. Clerk No. 28 assists the court on this case that will end with the sale of the company's assets. Proceeds from the sale will be used to repay the Company's debts. CONTACT: Mr. Fernando Miguel Altare, Trustee Piedras 153 Buenos Aires LEES S.A.C.I.A.I.F.: Court Grants Reorganization Plea ----------------------------------------------------- Lees S.A.C.I.A.I.F. successfully petitioned for reorganization after Mar del Plata's civil and commercial Court No. 14 issued a resolution opening the Company's insolvency proceedings. Under insolvency protection, the Company will continue to manage its assets subject to certain conditions imposed by Argentine law and the oversight of a court-appointed trustee. Infobae relates that Alfredo Casemayor will serve as trustee during the course of the reorganization. The trustee will be accepting creditors' proofs of claim for verification until Sep. 30, 2005. After verifications, the trustee will prepare the individual reports and present it in court on Nov. 11, 2005. Mr. Casemayor will also present a general report for court review on Dec. 30, 2005. The Company will endorse the settlement proposal, drafted from the submitted claims, for approval by the creditors during the informative assembly scheduled on April 25, 2006. CONTACT: Lees S.A.C.I.A.I.F. 9 de Julio 5602 Mar del Plata Mr. Alfredo Casemayor, Trustee 25 de Mayo 2980 Mar del Plata MIR S.A.: General Report Deadline Approaches -------------------------------------------- The general report on the liquidation of Buenos Aires-based Mir S.A. is due for filing tomorrow, Sep. 8, 2005. Court-appointed trustee Norma Alicia Balmes will include in the report the summary of the Company's financial status as well as the relevant events pertaining to the bankruptcy. On June 2, 2005, the claims of the Company's creditors were authenticated. The validated claims were presented in court as individual reports on July 28, 2005. The Company began liquidating its assets following the bankruptcy pronouncement issued by Court No. 12 of the city's civil and commercial tribunal. The bankruptcy process will end with the disposal of Company assets in favor of its creditors. CONTACT: Ms. Norma Alicia Balmes, Trustee Avda Roque Saenz Pena 1185 Buenos Aires TELECOM ARGENTINA: Expects to Book ARS1.584B Gain From Debt Swap ---------------------------------------------------------------- Telecom Argentina SA announced Friday that it will post a ARS1.584-billion gain in the third quarter from its recently completed US$2.63-billion debt restructuring, reports Dow Jones Newswires. However, the fixed-line operator said the final amount of its debt restructuring gain could change because company management is "evaluating the discount rate to use for calculating the net present value of the new debt." On Wednesday, the Company issued US$1.8 billion in new bonds and also made capital payments for all dates falling between October 2005 and October 2007. Telecom Argentina's debt restructuring agreement commits it to make early debt payments if it has the money to do so. For Friday's estimate, the Company used a discount rate of 11% for dollar-denominated debt, 10% for euro debt and 7% for yen debt. CONTACT: TELECOM ARGENTINA S.A. Pedro Insussarry Phone: (54-11) 4968-3743 Moira Colombo Phone: (54-11) 4968-3627 Gaston Urbina Phone: (54-11) 4968-3628 Morgan Stanley & Co. Incorporated Carlos Medina Phone: (1-212) 761-6520 MBA Banco de Inversiones S.A. Diego Steverlynck Phone: (54-11) 4319-5865 TELECOM ARGENTINA: S&P Ups CCR to 'B-' From 'D' ----------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit rating on Telecom Argentina S.A. (TECO) to 'B-' from 'D' and its long-term Argentina national scale rating to 'raBBB-' from 'D' after the closing of the company's restructuring process in an out-of-court agreement. The "Acuerdo Preventivo Extrajudicial" (APE) was approved by 94.4% of creditors and, in accordance with Argentine law, is also binding for lenders voting against it. The outlook is stable. At the same time, Standard & Poor's affirmed its 'B-' ratings on the series issued under the restructuring (Series A notes with final maturity in October 2014 for up to the equivalent of $877 million and Series B notes with final maturity in October 2011 for up to $999 million). The 'D' senior unsecured debt ratings on the exchanged notes and 'D' short-term Argentina national scale rating were withdrawn at the company's request. In addition to the debt issuance, the APE involved the payment of $565 million in principal and of $237 million in interest (accrued between Jan. 1, 2004, and Aug. 31, 2005). In conjunction with the exchange, TECO cancelled pending maturities up to August 2005 and made principal prepayments on maturities between October 2005 and October 2007 (for an aggregated amount of $533 million). As a result of this, consolidated debt declined to about $1.7 billion, from $3.4 billion in June 2005. "The upgrade reflects TECO's improved financial profile following the restructuring," said Standard & Poor's credit analyst Ivana Recalde. "This is due to much lower debt levels; longer debt terms; a manageable maturity schedule; and a lighter financial burden--mainly as a result of the lower debt levels." As a result of the prepayments, TECO will not face any significant debt maturities before 2008--aside from a mandated cash sweep in case of excess cash--which reduces short- and medium-term refinancing risk. The stable outlook reflects our expectation that the company's good competitive position and the relatively stable economic scenario will allow TECO to further reduce debt and to consolidate financial improvements after the restructuring. Rating upside is limited given the current business environment in Argentina, especially with regard to regulatory risk. The ratings could be pressured if tariff inflexibility persists under a higher-than-expected inflationary and exchange rate scenario, if government intervention increases, or financial flexibility deteriorates significantly. Primary Credit Analyst: Ivana Recalde, Buenos Aires (54) 114- 891-2127; ivana_recalde@standardandpoors.com Secondary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114- 891-2125; pablo_lutereau@standardandpoors.com ============= B O L I V I A ============= AGUAS DEL ILLIMANI: Agrees to Audit Conditions ---------------------------------------------- Bolivian capital La Paz water concessionaire Aguas del Illimani (AISA) will provide any necessary information to the government- appointed auditors, Business News Americas reports, citing an AISA spokesperson. "The terms of the contract allow for an audit of this kind which is a regulatory audit and will most likely cover the period 1997 to date," the spokesperson added. Authorities have short-listed seven firms they hope will present proposals to audit AISA. Sisab, which is responsible for supervising the operation of the concession, expects to complete the selection by the end of the month, a source from the regulator said. Sisab will pay for the audit from its budget but perhaps with some government contribution, the source added. =========== B R A Z I L =========== ELETROPAULO METROPOLITANA: Moves to Ensure Payment -------------------------------------------------- Eletropaulo Metropolitana Eletricidade de Sao Paulo S/A took on September 2, 2005 the applicable legal measures to ensure the full payment of the City Government's debt. September 2, 2005, it took the applicable legal measures to ensure the full payment of the said debt and thus bring into force the full effect of the legal instrument signed with the City Government. On September 16, 2004, the Company published an Announcement to the Market, informing the latter that it had entered into a Payment Agreement (the "Agreement") with the Sao Paulo City Government (the "City Government") as the result of a renegotiation of the terms and conditions of a previous covenant titled Instrumento de Consolidacao de Dividas, Encontro de Contas e Outras Avencas [Debt Consolidation Agreement, Settlement of Accounts and Other Contracts], signed with the City Government on October 2, 2002. The Agreement concerns the settlement of electricity supply and service bills for the years 1996 through 2004, totaling R$542,572,060.90 (five hundred and forty-two million, five hundred and seventy-two thousand and sixty Reais and ninety cents), of which R$10,000,000.00 (ten million Reais) were paid by the City Government in June 2004. The parties thereto agreed, among other things, that the overdue bills related to the period from February 22, 1996 through January 31, 2001, in the amount of R$303,938,500.64 (three hundred and three million, nine hundred and thirty-eight thousand and five hundred Reais and sixty-four cents), should be settled in 12 annual installments, with the first maturing on August 31, 2005, and without detriment to any other sums owed by the City Government to the Company. Considering that this commitment was not honored, the Company hereby informs the market that, on September 2, 2005, it took the applicable legal measures to ensure the full payment of the said debt and thus bring into force the full effect of the legal instrument signed with the City Government. This being an assumed debt with specific sums, the chances of success are high. Therefore, the Company continues to gauge the potential impact of this case on its financial statements, even though it does consider appropriate the current level of provisions made for receivables from the City Government. In terms of liquidity, the Company's ability to honor its financial obligations remains intact despite the City Government's default on this date. The Company will keep the market informed of any supervening events that may come to pass. 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 GERDAU: Moody's Assigns Ba1 Foreign Currency Rating to Bonds ------------------------------------------------------------ Approximately USD 300 Million of Debt Securities Affected Moody's Investors Service ("Moody's") assigned a Ba1 foreign currency ("FC") rating to the proposed USD 300 million guaranteed senior unsecured perpetual bonds to be issued by Gerdau S.A. ("Gerdau"). The bonds will be jointly, severally and unconditionally guaranteed on a senior unsecured basis by Gerdau's operating subsidiaries: Gerdau Acominas S.A., Gerdau Acos Longos S.A., Gerdau Acos Especiais S.A. and Gerdau Comercial de Acos S.A. In addition, Moody's assigned a Ba2 global local currency ("GLC") corporate family rating to Gerdau. The rating outlook is stable. For the sole purpose of this report, the Brazilian operations of Gerdau group, comprised by the operating company guarantors, are herein referred to as "Gerdau Brazil". The Ba1 FC rating for the perpetual bonds reflects the creditworthiness of the Gerdau group and the Ba1 GLC corporate family rating assigned to Gerdau Brazil, and additionally incorporates the element of convertibility risk, or the likelihood that the Brazilian government might declare a general debt moratorium to counter a foreign currency crisis. The foreign currency bond rating considers the probability of a sovereign foreign currency default implied by the government's B1 FC bond rating and the likelihood that, in the event of such a default, the government would impose a general foreign currency payments moratorium. Considered in the Ba1 FC bond rating is the possibility that Gerdau Brazil, as a key long steel producer in Brazil's markets, with a good position in the export markets, might be exempt from a debt moratorium, if such were to be imposed. Furthermore, the Ba1 FC bond rating also incorporates the substantial revenues of the Gerdau group in foreign currencies, primarily those generated by Gerdau Ameristeel in North America. Finally, the assigned Ba1 FC bond rating takes into account the relatively modest level of secured debt of Gerdau Brazil. The Ba1 GLC corporate family rating assigned to Gerdau Brazil is based on the consolidated financial statements of Gerdau Acominas S.A. prior to its July 2005 spin-off that resulted in the transfer of a substantial part of its operating assets to three new enities, namely Gerdau Acos Longos S.A., Gerdau Acos Especiais S.A. and Gerdau Comercial de Acos S.A., while Gerdau Acominas S.A. itself continues to own the Ouro Branco plant, which represents some 40% of the group's production capacity in Brazil. The rating of Gerdau Brazil is supported by (1) its leading market position in the Brazilian long-steel sector, (2) operational diversity, (3) efficient production and distribution operations, and (4) comfortable financial leverage and strong cash flow generation. The rating is primarily restrained by (1) the cyclicality of the steel industry, (2) erratic demand for long-steel in the domestic market due to the ups and downs of the local economy, (3) sales concentration on commodity products, and (4) potential increase of financial leverage and negative free cash flow due to substantial capex planned for the coming years. Gerdau Brazil is the country's largest producer of long steel with a solid and relatively stable share of about 48% in a market dominated by few players, where the second largest holds some 35% market share. A major factor for the group's good market penetration is its efficient distribution network, which includes 77 own distribution stores throughout Brazil. Some 83% of Gerdau Brazil's sales in the domestic market are originated in the Southeast and South regions of Brazil, which together represent some 75% of the country's GDP. The operational diversity provided by its 6 electric arc furnaces and 4 integrated mills, sized and located to attend their regional markets, combined with cost-efficient manufacturing operations deriving from massive investments in technology and efficient raw material acquisition, particularly for steel scrap and pig iron. In addition, Gerdau Brazil's plants have operated at close to full capacity, contributing to fixed costs dilution. Gerdau Brazil has reported a substantial growth in revenues over the past years, in great part reflecting the acquisition of Acominas, but also due to the improved steel prices. The group's tight cost control is reflected in the strong and relatively stable EBITDA margins in the 30% range even during periods of depressed prices, which has translated into strong and steady cash flow from operations to net revenues in the high 20% range. In line with the group's prudent management, financial leverage at Gerdau Brazil has been maintained at satisfactory levels when compared to internal cash flow generation. Also management's policy to maintain a comfortable level of cash as a liquidity reserve was recognized by Moody's. Moody's, however, views current metrics as more representative of the peak of the cycle and we would expect some contraction in the level of earnings generated as prices retreat. On the other hand, the rating of Gerdau Brazil is tempered by the event risk and potential increase in financial leverage and negative free cash flow deriving from Gerdau Brazil's aggressive investment plans for the coming years, which include the expansion of production capacity of its Ouro Branco plant from 3 million tpy of crude steel to 4.5 million tpy in a first step, and further to 7 million tpy in a second stage. Gerdau Brazil's rating also incorporates the fact that domestic sales growth has been impaired by the ups and downs of the Brazilian economy, high interest rates constraining the population's purchasing power, lack of investments in infrastructure by the government, and regulatory uncertainties that have maintained private investments at a slow pace. The Ba2 GLC corporate family rating assigned to Gerdau S.A. incorporates, in addition to the Ba1 GLC rating of Gerdau Brazil that represents some 51% of the group's consolidated revenues, also the Ba3 corporate family rating of Gerdau Ameristeel that contributes about 45% to the group's total consolidated revenues. While the Gerdau group benefits from the strong market shares of its subsidiaries in other Latin American countries (Chile, Uruguay, Argentina), these operations provide relatively modest contribution to the group in terms of revenues and EBITDA, given the small size of those markets relative to Brazil and North America. The acquisitions made by the Gerdau group in North America over the past years, while helping in the group's geographic diversification into a more stable market, also represents substantial integration risk to the group. Although the Gerdau group gathered ample experience in the turnaround and integration of new acquisitions during the privatization of the steel sector in Brazil, Moody's believes the successful integration of recently acquired assets in the US, and the need of further improvement of operational efficiency and margins in North America, represent relevant challenges for the group's management. Although Moody's understands Gerdau is well- positioned in the Americas steel industry consolidation process, we believe the group's acquisitive strategy represents substantial event risk. The Ba2 GLC rating of Gerdau also takes into consideration its healthy credit metrics on a consolidated basis. Management's focus on cost-efficiency is reflected in the relatively stable operating margins of around 20%, as measured by EBITDA, peaking at 27% in the exceptional year of 2004. Overall, Moody's regards the balance sheet structure of Gerdau group as sound, based on adequate leverage, good liquidity position, and helped by a disciplined dividend distribution. Gerdau group's sales are concentrated on commoditized products, such as slabs, billets and common long steel, although Moody's understands the particularities of the Brazilian and Latin American markets, where the Group benefits from solid market shares and limited competition from imports, mitigates the commodity risk for those markets. This, however, is not valid for the North American market, a net importer of steel. Moody's expects the ongoing consolidation of the steel industry in North America will help to discipline the market and reduce margin volatility over the medium term. RATING OUTLOOK The stable outlook reflects Moody's view that Gerdau will maintain its prudent financial management and comfortable liquidity position, continue its focus on the improvement of its cost-structure, as well as successfully consolidate the integration of the North American assets. WHAT COULD PRESSURE THE RATINGS DOWN The ratings could be under pressure for possible downgrade in case of reduced consolidated EBITDA margins to below 20% or if Debt / EBITDA grew beyond 2.5x on a consistent basis. Also, a sharp deterioration in the group's liquidity position could have an adverse impact on the rating. For the bonds, a substantial increase in the level of secured debt of the guarantors could lead to a downgrade of the current bond rating. WHAT COULD PRESSURE THE RATINGS UP The ratings of Gerdau could be under pressure for possible upgrade in case of a substantial and permanent improvement in consolidated EBITDA margin to the high 20% range. Headquartered in Porto Alegre, Brazil, Gerdau is the largest long steel producer in Brazil and the second largest long steel manufacturer in North America, with consolidated net revenues of about USD 7 billion in 2004. NET SERVICOS: Prior Debenture Terms, Details Approved ----------------------------------------------------- The Fiscal Council of Net Servicos de Comunicacao S.A. voted for the terms and conditions of debenture issuance during the 1st Fiscal Council Meeting previously held August 1, 2005. MINUTES OF THE 2nd FISCAL COUNCIL MEETING Date and time: September 1, 2005, at 1:00 p.m. Attendance: All members of the Fiscal Council, Messrs. Martin Roberto Glogowsky, Charles Barnsley Holland and Antonio Jose Alves Junior, in accordance with the signatures bellow. Presiding Board: Martin Roberto Glogowsky - Chairman Antonio Jose Alves Junior - Secretary Resolutions: For the purposes of complying with the provision in the clause 1.5 of the Minutes of the 1st Fiscal Council Meeting of the Company, dated as of August 1, 2005, the Fiscal Council has analyzed the deed of the issuance and the preliminary prospectus related the Company's fifth public debenture issuance, and voted for the terms and conditions of the referred offering and debenture issuance. Closure: Nothing more to be dealt with, the meeting was adjourned, drawing up these present minutes which, after being read, were approved and signed by all attending consultants. CONTACT: Net Servicos de Comunicacao S.A. Investor Relations Marcio Minoru Phone: 011-5511-2111-2811 or E-mail: minoru@netservicos.com.br or Sandro Pina Phone: 011-5511-2111-2721 or E-mail: sandro.pina@netservicos.com.br URL: http://www.ir.netservicos.com.br PARMALAT BRASIL: Presents Reorganization Plan to Court ------------------------------------------------------ Parmalat Brasil, a unit of cash-strapped Italian dairy producer Parmalat Finanziaria S.p.A., has presented its recovery plan to the court, according to an Investnews report. The plan, drafted with Integra consultants, confirms the unit's economic viability and presents a schedule for the payment of its BRL800-million debt to suppliers and banks. The plan includes the sale of operating assets to help the unit pay off part of the debt and to reinforce its working capital. Parmalat Brasil filed for bankruptcy protection on June 24, 2005, under Brazil's new bankruptcy law. The filing came after the unit's creditors denied the extension of the BRL800-million payment deadline for the Company's debt. Parmalat Brasil first filed for bankruptcy protection in 2004 under the old Brazilian bankruptcy law. The unit filed for bankruptcy again to take advantage of the New Bankruptcy and Restructuring Law of Brazil (NBRL), which became effective on June 9, 2005. Under the NBRL, debtors are permitted to remain in possession and control of their businesses and properties. In addition, as part of the judicial reorganization under the NBRL, most creditors are effectively prohibited from enforcing claims against the Debtors. In July, a judge in Sao Paulo required Parmalat Brasil to file a Plan of Reorganization by August 29, 2005. The Judge said the Company must devise a business plan including methods and timetables for paying creditors. UNIBANCO: Strong Demand Bumps Up BRL2.4-Bln Debenture Issue ----------------------------------------------------------- Unibanco Leasing, a unit of Uniao de Banco Brasileiros (Unibanco), the country's third largest private bank, sold BRL2.4 billion worth of non-convertible debentures, reports Dow Jones Newswires. The unit had originally planned to issue only BRL2 billion worth of debentures but due to strong demand, the unit increased the issue by BRL400 million. The debentures, which will mature in January 2020, will pay an annual interest rate corresponding to Brazil's interbank rate. Unibanco itself coordinated the operation. ========= C H I L E ========= LE MANS DESARROLLO: SVS Initiates Annuity Marketing Efforts ----------------------------------------------------------- Securities and insurance regulator, the SVS, began a roadshow to sell the annuities portfolio of bankrupt life insurer Le Mans Desarrollo, reports Business News Americas. Troubled Company Reporter - Latin America reported in June that Le Mans, which was intervened in 2003 following the collapse of its parent, local financial group Inverlink, has assets totaling some CLP33 billion (US$55.6 million) - not enough to cover the pensions of its 3,300 affiliates. Nevertheless, sources say pension payments will be fully honored over the course of 10-12 years, after which the state will assume responsibility of any losses resulting from the insurer's bankruptcy. =============== C O L O M B I A =============== EMCALI: Agrees to Pay for Reconstructing Utility Networks --------------------------------------------------------- Cali's multi-utility Emcali reached an accord with transport firm Metrocali, under which it will pay for alterations to utility networks needed for the MIO public transport system, reports Business News Americas. The accord calls for an initial investment of COP32 billion (US$14 million) between 2005 and 2009 on the part of Emcali for moving or reinstalling water and sewerage pipes and electricity and telecommunications lines on trunk corridors. On the pre-trunk corridors of the MIO mass public transport system, the public service company for the city, capital of Valle de Cauca department, will provide COP48 billion as the money becomes available. In addition, Emcali will be responsible for the maintenance of infrastructure of the public services once the construction firm contracted by Metrocali has completed the alterations. TELECOM: Telefonica Continues to Explore Possible Bid ----------------------------------------------------- Spain's Telefonica has not given up hopes of acquiring a controlling stake in Colombia's state-run telephone company Colombia Telecomunicaciones (Telecom), also sought by Mexican magnate Carlos Slim. On Friday, Telefonica Chairman Cesar Aliera met with Colombian President Alvaro Uribe to explore a possible bid for Telecom. The meeting came a week after Mr. Slim's Mexican telecommunications group Telmex offered to buy a majority stake in Telecom for US$350 million in a cash-and-stock deal. The legality of Telmex's offer, however, was questioned by the nation's comptroller general, giving rivals like Telefonica more time to work on a counteroffer. Faulting the deal for lack of transparency and calling it unduly generous toward Telmex, auditor general Antonio Hernandez advised Telecom to say no to Telmex's offer. "The government wants to hear other offers, not just from Telmex," said Carlos Silva, head of research at Bogota-based brokerage Ultrabursatiles. "We think it will be a months-long process before we see a complete answer about the future of Telecom." Colombian Communications Minister Martha Pinto said on Tuesday the country would reject Telmex's offer if the deal broke the law. But while he criticized the deal, Mr. Hernandez never said it was illegal. =============== H O N D U R A S =============== HONDUTEL: Privatization May Mean $50M-80M Loss to State ------------------------------------------------------- Lobby group Bloque Popular is seeking to delay the market liberalization in order to give state telecoms monopoly Hondutel more time to prepare for competition by gradually dropping its tariffs, Business News Americas reports. Beginning December 25 this year, Hondutel will lose its monopoly on international long distance, fixed-line telephony, public telephony, telegraphy and telex. The 1995 telecommunications law left all other sectors open. Once Hondutel loses its exclusivity rights to certain telecoms services, the state stands to lose US$50 million - US80 million a year in income. A new telecoms law is being debated in congress and is expected to be approved this month, Honduran telecoms regulator Conatel president Jose Renan Caballero said last month. The law granted a license to offer PCS services in the 1900Mhz band. According to Caballero, the new law will set up the framework for the new competitive scenario. =========== M E X I C O =========== AOL LATIN AMERICA: Court Sets October 28 Claims Bar Date -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware established 4:00 p.m. on Oct. 28, 2005, as the deadline for all creditors owed money on account of claims arising prior to June 24, 2005, against America Online Latin America, Inc., and its debtor-affiliates, to file their proofs of claim. Creditors must file written proofs of claim on or before the Oct. 28 Claims Bar Date and those forms must be actually received by: Bankruptcy Services, LLC 757 Third Avenue, 3rd Floor New York, New York 10017 Governmental Claims Bar Date The Hon. Mary Walrath also established 4:00 p.m. on Dec. 21, 2005, as the deadline for all governmental units owed money by the Debtors on account of claims arising prior to June 24, 2005, to file their written proofs of claims. 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, Sep. 6, 2005, Vol. 9, No. 211) AOL LATIN AMERICA: Seeks Court Approval for Lease Amendment ----------------------------------------------------------- America Online Latin America, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to: (i) amend a general office space lease dated Sept. 23, 1999, between AOL Management LLC and CYP Owner LLC, as successor-in-interest to Cypress Centre LLC; and (ii) enter into a sublease agreement with NECC Telecom, Inc., for Suite 400, nunc pro tunc to Aug. 31, 2005. Under the Lease Amendment, the Debtors seek to reduce approximately 26,816 rentable square feet being rented pursuant to the terms of the Lease to approximately 3,522 rentable square feet by surrendering Suite 400 located at 6600 North Andrews Avenue, Ft. Lauderdale, Florida, to CYP Owner. The Debtors tell the Court that they no longer need the office space after the implementation of the wind down of their business operations. The Debtors are relocating to Suite 300 of the same building with a reduced monthly rent payment of $6,900 from $68,000. In addition, the parties will release each other from all claims arising on or after Sept. 30, 2005, under the Lease with respect to Suite 400. As the lease does not expire until March 2006, the Debtors say it would stand to save $360,000 in rent reductions over the life of the lease amendment. Sublease The Debtors entered into a sublease agreement asking NECC to relocate to Suite 400 on an immediate basis for a term of 30 days until the effective date of the Lease Amendment, subject to Bankruptcy Court approval. The Debtors will share Suite 400 with NECC during the month of September until they complete their relocation to Suite 300. The sublease does not require NECC to pay any rent to AOL Management from Aug. 31, 2005, to Sept. 30, 2005. The Court will convene a hearing to consider the Debtors' request at 2:00 p.m. on Sept. 19, 2005.(Troubled Company Reporter, Tuesday, Sep. 6, 2005, Vol. 9, No. 211) ASARCO: Meeting of Creditors Slated for September 14 ---------------------------------------------------- The United States Trustee for Region 7, Richard W. Simmons, will convene a meeting of Asarco LLC and its debtor-affiliates' creditors at 10:30 a.m. on Sept. 14, 2005, Room 1107, 606 North Carancahua, in Corpus Christi, Texas. This meeting is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the bankruptcy case. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-0521 thru 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos Of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. ASARCO has asked that the five subsidiary cases be jointly administered with its chapter 11 case.(ASARCO Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) SICARTSA: Talks with Villacero Flop, Labor Ministry Blamed ---------------------------------------------------------- Negotiations on resolving the month-old strike of Sicartsa workers failed to advance and Mexico's labor ministry is to blame, Business News Americas reports. An official of the mining-metalworkers union STMMRM blamed the ministry for the lack of progress in putting a stop to the strike against steelmaker Sicartsa because it did not invite union workers to the negotiation table. STMMRM has been waiting for the ministry to invite workers into the negotiation with company officials since September 2, a day after the workers decided that the new contract they made with parent company Grupo Villacero last week, which was supported by the government, was not enough and thus continued the strike that began on August 1. Villacero had proposed a 1-2% wage increase on every thousand tonnes of steel billets shipped each week in hopes of ending the month-old strike. However, 781 representatives from the southern Mexican steel plant Sicartsa had voted against the proposition versus the 731 that agreed. The strike has cost the Company more than US$87 million in lost production. UNITED RENTALS: Moody's Junks Senior Sub. Debt, Preferred Shares ---------------------------------------------------------------- Moody's Investors Service lowered the long-term ratings of United Rentals (North America) Inc. and its related entities -- Corporate Family Rating (previously called Senior Implied) to B2 from B1; Senior Unsecured to B3 from B2; Senior Subordinate to Caa1 from B3; and Quarterly Income Preferred Securities (QUIPS) to Caa2 from Caa1. The ratings remain under review for possible further downgrade. The company's Speculative Grade Liquidity Rating is affirmed at SGL-3. The rating action is prompted by the greater challenges that United Rentals faces in resolving pending accounting investigations in a timely fashion to bring its financial reporting current, as well as in negotiating with various creditors regarding waivers of covenant violations stemming from its inability to meet financial statement reporting requirements. Currently, the company is in violation of the reporting and filing covenants contained in its convertible notes, its senior and subordinated notes, and its preferred securities. Similar requirements contained in its bank facilities have been waived by lenders through December 2005. While United Rentals' business continues to perform well, Moody's rating action considers that it could be some time before the accounting investigation can be resolved, and that negotiations with creditors could become increasingly challenging and costly for the company. Moody's also notes that until these matters are resolved holders of at least 25% of any of United Rentals' outstanding debt issues could issue a notice of default which could lead to an acceleration of the debt unless resolved within a 30 day period. Recently, holders of more than 25% of the aggregate principal amount of the convertible notes contacted United Rentals and proposed that they would be willing to consent to waivers if certain terms and conditions are met. To date, United Rentals has been unable to agree with the holders of the convertible notes on the terms necessary for a waiver. In addition, United Rentals' senior and subordinated note holders have formed an ad hoc committee whose members collectively hold more than 25% of each of the remaining notes. United Rentals has commenced a consent solicitation seeking waivers from bondholders that would provide it with time to resolve the accounting investigations and bring its financial reporting current. While successful completion of the consent solicitation would be beneficial for the company, Moody's notes that until waivers are agreed for all classes of debt, the debt holders represented by the two groups noted above are reported to have sufficient standing to cause a notice of default to be issued under their respective indentures at any time. In addition to the covenant violations precipitated by the delayed filing of its financial statements, United Rentals is contending with a number of other challenges relating to its reporting and control deficiencies: 1) the company's CFO was recently terminated for cause after refusing to answer questions raised by a special committee of the company's Board of Directors; 2) the SEC is continuing its inquiry which appears to relate to a broad range of the company's accounting practices and which is not confined to a specific period or to matters which have been disclosed to date; 3) the SEC has also issued a subpoena to one of United Rentals' suppliers for information regarding certain transactions in 2000 and 2001; and 4) United Rentals may also face additional costs due to shareholder litigation stemming from these matters. Moody's continued review is focusing on: * the company's progress in completing the consent solicitation for waivers; * the nature and degree of any accounting restatements and other changes that may be necessary as a result of the pending investigations; * the company's progress in resolving the SEC investigation and bringing its financial reporting current; and * its ability to implement more effective internal control and accounting practices. The review will also consider: * the company's operating performance and cash flow generation from its business; * its ability to sustain an adequate liquidity profile while these matters are being resolved; * its progress regarding the hiring of a new CFO; and * the potential impact of ongoing shareholder litigation. Successful resolution of these matters could facilitate stabilization of the rating, and a continued favorable operating trend could strengthen the company's rating prospects over time. However, until these matter are resolved, Moody's believes that the potential for adverse developments warrant continuation of the review for possible downgrade. The SGL-3 Speculative Grade Liquidity Rating continues to reflect Moody's belief that the company should be able to maintain an adequate liquidity profile through a combination of free cash flow generation, favorable levels of cash balances and availability under the bank facility. Covenant waivers may be needed if resolution of the accounting and SEC investigations takes a protracted period or if the holders of the convertible notes or the senior and subordinated notes deliver a notice of default under their respective indentures. Moody's notes that the company is pursuing consent solicitations which could alleviate this potential pressure on liquidity. The ratings downgraded and under review for possible further downgrade are: United Rentals (North America), Inc.: * Corporate Family Rating to B2 from B1 * Senior Secured Bank Credit Facility rating to B2 from B1 * Senior Unsecured debt rating to B3 from B2 * Senior Subordinated debt to Caa1 from B3 United Rentals Trust I: * Quarterly Income Preferred Securities to Caa2 from Caa1 United Rentals, headquartered in Greenwich, Connecticut, is the world's largest equipment rental company. The company also sells new and used equipment and contractor supplies.(Troubled Company Reporter, Tuesday, Sep. 6, 2005, Vol. 9, No. 211) ============= U R U G U A Y ============= ANCAP: Budgets $4M for Pilot Alcohol Fuel Plant ----------------------------------------------- State oil firm ANCAP (Administracion Nacional de Combustibles Alcohol y Portland) is implementing a pilot program to produce 120 cubic meters a day of alcohol fuel from sugar cane in the country's coastal region, reports Business News Americas. According to ANCAP VP Raul Sendic, the Company has earmarked US$4 million to build a plant, which is expected to start up in the first half of 2006. The program forms part of ANCAP's medium-term objective, which is to cut back on imports of expensive fuels, which will cost the Company some US$900 million this year alone. ANCAP currently imports about 1 million barrels of crude a month from Venezuela under an agreement signed in March by both countries. ANCAP is Uruguay's government-owned oil & gas company with strong roots in the domestic downstream market. The government incorporated the Company in 1931 to operate the state monopoly in the fuel and natural gas sectors. ANCAP maintains exclusive rights over refining activities and crude oil, refined products, and natural gas imports in the country. The Company also participates in the cement sector, although it does not have a monopoly in this activity. ROYAL SHELL: Official Confirms Company Considering Exit ------------------------------------------------------- Royal Dutch Shell PLC is analyzing the possible sale of its businesses in Uruguay, where it runs 89 service stations as marine and aviation fuel sales operations, Dow Jones Newswires reports, citing an unnamed company official. The official was confirming media reports in Argentina and Uruguay over the weekend that the Company is considering a sale. "Right now it is nothing more than analysis and there are no details about it," the official said. With regards to the possibility of selling the Argentine operations, the official said "there was an analysis and we decided that we will stay here." ================= V E N E Z U E L A ================= CANTV: Inks Two-Year Wage Accord With Workers --------------------------------------------- Telecommunications firm CA Nacional Telefonos de Venezuela (CANTV) struck a two-year wage deal with workers, according to an AP report. The Labor Ministry revealed that the deal is expected to benefit 2,960 workers and includes an increase in the lowest wage level offered by CANTV to VEB1,150,000 (US$535) a month, up from VEB890,000 (US$414). CANTV's stock price has suffered in recent weeks after Venezuela's high court issued a ruling in favor of workers seeking adjustments to their pensions. The Company must now adjust pensions to a new minimum wage level as well as past devaluations and inflation. HEINZ PLANT: Monagas Governor Orders Plant Seizure -------------------------------------------------- The head of the Venezuelan state of Monagas ordered troops to seize an abandoned tomato-processing plant owned by H.J. Heinz Co., according to an AP report. Angelica Rivero, spokeswoman for Monagas governor Jose Gregorio Briceno, explained: "The governor decided to seize the plant so it can be protected from looters and later be put to use." Ms. Rivero said the plant still belongs to Heinz but hasn't been used for years. Gov. Gregorio Briceno told the state-run Bolivarian News Agency that the plant changed hands several times under previous governments before Heinz purchased it in 1997 and later ceased operations. The actual expropriation order for the plant should come in two weeks' time. Venezuela's Congress must first declare a particular asset of "public interest" before the government can fully take it over. *********** 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. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. 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