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/raid1/www/Hosts/bankrupt/TCRLA_Public/050912.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 Monday, September 12, 2005, Vol. 6, Issue 180 Headlines A R G E N T I N A AGUAS ARGENTINAS: Government Seeks Extension to Finalize Terms ALIMENTOS FARGO: SANALP 2005 Commences Tender for '08 Notes ALPALINE S.A.: To Propose Settlement Plan to Creditors ALPARGATAS TEXTIL: Final Plan Announcement Set for Meeting BAUD MOL: Court Appoints Trustee for Reorganization CALZADO CATAMARCA: Final Meeting Set for November 11 IRSA: Reports 17.5% Increase in Full-Year Net Profit LOMA NEGRA: Makes Early Repayment on $39.3M Bonds PREVISION MEDICA: Trustee to Present General Report in Court SIDERAR: Workers Threaten Strike Over Agreement Non-Compliance TGS: CIESA Closes Debt Restructuring Agreement with Creditors TGS: Ratings Unaffected by CIESA Debt Restructuring B R A Z I L AES TIETE: Bear Stearns Ups Rating to Outperform CELG: Aneel Authorizes Minor Rate Hike GERDAU: Ratings Reflect Sector Volatility, Competition GERDAU: CADE to Review Price Fixing Allegations Wednesday ODEBRECHT: S&P Assigns 'BB-' to New $100M Bond Issue VARIG: Reports Lower Net Loss for Jan-July 2005 Period C O L O M B I A ECOPETROL: Oxy Secures La Cira-Infantas Contract C O S T A R I C A BICSA: Ratings Reflect Low Profitability, Weak Loan Portfolio J A M A I C A KAISER ALUMINUM: Court OK's 2nd Amended Disclosure Statement SANS SOUCI: Carreras Sells Hotel to Couples for $18.75M M E X I C O ASARCO: U.S. Trustee Appoints 7-Member Creditors' Committee SATMEX: Strikes Deal With Arianespace For SatMex 6 Launch VITRO: Signs Technical Consulting Agreement with Allied Glass WOLVERINE TUBE: Restructuring Includes Mexico Expansion P A N A M A WILLBROS GROUP: Seeks Approval to Alter Note Terms - - - - - - - - - - ================= A R G E N T I N A ================= AGUAS ARGENTINAS: Government Seeks Extension to Finalize Terms -------------------------------------------------------------- The government of Argentina has asked French utility group Suez to extend to Sep. 11 from Sep. 7 the ultimatum issued by the latter for an agreement over the renewal of its water services concession for Buenos Aires. Suez controls Aguas Argentinas, which has run the Buenos Aires waterworks since 1993 under a 30-year contract. The French parent has threatened to pull out of the concession if it can't secure an accord. In its final contract proposal submitted in July, Suez asked the government for a 20% rate increase in January and another 15% hike in the second half of 2006. Suez CEO Gerard Mestrallet said he is not optimistic about the outcome of talks with the government on resolving the dispute. ALIMENTOS FARGO: SANALP 2005 Commences Tender for '08 Notes ----------------------------------------------------------- Madera L.L.C., an entity controlled by Mexican investor Fernando Chico Pardo, and Grupo Bimbo S.A. de C.V., owners together of over 99.9% the outstanding equity of Compania de Alimentos Fargo S.A. (the "Company"), announced Thursday that their affiliate, SANALP 2005, S.L. (the "Offeror"), has commenced a cash tender offer for any and all of the Company's outstanding 13-1/4% Notes due 2008, CUSIP number 204440AC5/P30566AA4 and ISIN number US204440AC51/USP30566AA46 (the "Notes"). The purpose of the Offer is for the Offeror to acquire at least 80%, and up to 100%, of the principal amount of the Notes and have the tendering noteholders provide certain approvals and waivers (the "Holder Approvals"). The Holder Approvals will, among other things, permit the Company to obtain the necessary approval of a plan of reorganization in its reorganization proceedings, or concurso, to allow the Company to restructure its debt. Such solicitation of Holder Approvals, in conjunction with the tender offer for the Notes, is referred to collectively as the "Offer." The terms and conditions of the Offer are set forth in an Offer to Purchase and Solicitation of Holder Approvals dated September 8, 2005 (the "Offer to Purchase"). Subject to certain conditions precedent described in the Offer to Purchase, holders who validly tender Notes and deliver Holder Approvals prior to 5:00 p.m., New York City time, on October 6, 2005, unless extended (the "Early Tender Payment Deadline"), will be entitled to receive the Total Tender Offer Consideration of $180.00 per $1,000 principal amount of Notes (which includes an Early Tender Payment of $40.00 per $1,000 principal amount of Notes). Holders who validly tender Notes after the Early Tender Payment Deadline but prior to 5:00 p.m., New York City time, on July 1, 2006, unless extended (the "Expiration Time"), will be entitled to receive the Basic Tender Offer Consideration of 140.00 per $1,000 principal amount of Notes, which is equal to the Total Tender Offer Consideration less the Early Tender Payment. Payment will be made promptly after the Expiration Time. The Offer is subject to the satisfaction of various conditions described in the Offer to Purchase. The Offeror reserves the right to extend, amend or modify the Offer, subject to the conditions set forth in the Offer to Purchase. This news release is not an offer to purchase, a solicitation of an offer to sell the Notes or a solicitation of a consent or approval with respect to any securities. The Offer is being made only by reference to the Offer to Purchase dated September 8, 2005, and the related applicable Letter of Transmittal and Approval. About the Agents Goldman, Sachs & Co. is the exclusive Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Questions regarding the terms of the tender offer or consent solicitation should be directed to Goldman, Sachs & Co. toll free in the United States at (800) 828-3182 or at +1 212 357-3019 for international callers (call collect). The Information and Tender Agent is Bondholder Communications Group. Any questions or requests for assistance or additional copies of documents may be directed to the Information and Tender Agent at +1 888 385 2663 (Toll-Free) or +1 212 809 2663 or +44 207 236 0788. About Compania de Alimentos Fargo S.A. Compania de Alimentos Fargo S.A. is the leading producer and distributor of packaged bread and bakery products in Argentina. The Company is the sole bakery supplier for McDonald's in Argentina and one of the leading producers and distributors of frozen dough, which is used to bake traditional bread. The Company's wide range of products also includes sweets, empanada tortillas, pastry, pasta and other manufactured flourbased products. CONTACT: Goldman, Sachs & Co. Dealer Manager and Solicitation Agent 800-828-3182 +1-212 357-3019 (call collect) or Bondholder Communications Group Tender Agent 888-385-2663 +1-212-809-2663 +44-207-236-0788 ALPALINE S.A.: To Propose Settlement Plan to Creditors ------------------------------------------------------ Alpaline S.A. will propose its completed settlement plan to creditors in an informative assembly scheduled for Nov. 11, 2005, Infobae reports. The Company, which is operating in Buenos Aires, began reorganization proceedings after the city's civil and commercial Court No. 19, with assistance from Clerk No. 37, granted its petition for "concurso preventivo". ALPARGATAS TEXTIL: Final Plan Announcement Set for Meeting ---------------------------------------------------------- Buenos Aires-based company Alpargatas Textil S.A. will meet its creditors in an informative assembly scheduled for Nov. 11, 2005 to propose its completed settlement plan. The city's civil and commercial Court No. 19, with assistance from Clerk No. 37, issued a resolution opening the Company's reorganization. BAUD MOL: Court Appoints Trustee for Reorganization --------------------------------------------------- Baud Mol S.A., a company operating in Buenos Aires, is ready to start its reorganization after the city's civil and commercial Court No. 6 appointed Ms. Clara Auerhan to supervise the proceedings as trustee. Clerk No. 12 assists the court on this case. An Infobae report states that Ms. Auerhan will verify creditors' claims until Oct. 12, 2005. Afterwards, she will present these claims as individual reports for final review by the court on Nov. 28, 2005. She will also provide the court with a general report pertaining to the Company's reorganization on Feb. 9, 2006. The court has scheduled the informative assembly on July 28, 2006. CONTACT: Ms. Clara Auerhan Uruguay 872 Buenos Aires CALZADO CATAMARCA: Final Meeting Set for November 11 ---------------------------------------------------- The informative assembly for the Calzado Catamarca S.A. reorganization will be on Nov. 11, 2005. During the assembly, the Company will endorse the settlement proposal to its creditors for approval. The said proposal is drafted from the submitted claims of creditors. Calzado Catamarca S.A. successfully petitioned for reorganization after Court No. 19 of Buenos Aires' civil and commercial tribunal issued a resolution opening the Company's insolvency proceedings. Clerk No. 37 assists the court on this case. CONTACT: Calzado Catamarca S.A. Buenos Aires IRSA: Reports 17.5% Increase in Full-Year Net Profit ---------------------------------------------------- IRSA-Inversiones y Representaciones SA, the largest real estate company in Argentina, reported a ARS103.2-million net profit for the full fiscal year ended June 30, 17.5% higher than the ARS87.9-million in 2004, reports Dow Jones Newswires. The Company, which also develops premium office space and high- end residential units, ended the year with a 33.5% increase in operating profit to ARS141.2 million from ARS105.8 million in the full year 2004. The improvement comes amid a strong recovery in its Class A office space, where occupancy rose to 97% by the end of the year. In 2004, occupancy was 87%. The management of IRSA has come under fire for alleged dealings related to mortgage bank Banco Hipotecario, in which IRSA owns a 28.9% stake. The real estate company also manages the bank. Late last month, securities regulator CNV said IRSA Director Eduardo Elsztain, who is also Banco Hipotecario's vice president, engaged in manipulative stock market transactions. Elsztain has since asked Economy Minister Roberto Lavagna to clarify the government's position on IRSA's future as the managing shareholder in the bank. The national government controls a 48.9% stake in Banco Hipotecario. CONTACT: IRSA Inversiones y Representaciones S. A. Alejandro Elsztain, Director Gabriel Blasi, CFO Tel: +011-5411 4323-7449 E-mail: finanzas@irsa.com.ar LOMA NEGRA: Makes Early Repayment on $39.3M Bonds ------------------------------------------------- Loma Negra, Argentina's biggest cement company, made an early repayment on US$39.3 million of bonds using excess cash funds generated in the first six months of the year, reports Business News Americas. "After these payments, there are no more capital quotas of circulating Loma Negra bonds that can be called in before September 5, 2008," the Company said in a statement to the Buenos Aires stock exchange. Construcoes e Comercio Camargo Correa SA, Brazil's fourth- biggest cement producer, earlier agreed to buy Loma Negra and its subsidiaries for US$1.025 billion. The figure includes US$250 million in debt. Under the deal, Camargo-Correo will keep Loma Negra's nine plants open as well as assume the Argentine company's 1,850 employees. Juliano de Oliveira, who was general manager of Camargo-Correa's cement business, will be general manager of Loma Negra. The deal is currently being examined by Argentine antimonopoly authorities. PREVISION MEDICA: Trustee to Present General Report in Court ------------------------------------------------------------ Court-appointed trustee Walter Arturo Calleja will present the general report on the Prevision Medica Complementaria S.A. liquidation in court tomorrow, Sep. 13, 2005. On May 20, 2005, Mr. Calleja reviewed claims forwarded by the Company's creditors. The validated claims were submitted as individual reports for court approval on July 6, 2005. Prevision Medica Complementaria S.A. of Buenos Aires began liquidating its assets after Court No. 8 of Buenos Aires' civil and commercial tribunal declared the Company bankrupt. The city's Clerk No. 16 assists the court on this case. CONTACT: Mr. Walter Arturo Calleja, Trustee Lambare 1140 Buenos Aires SIDERAR: Workers Threaten Strike Over Agreement Non-Compliance -------------------------------------------------------------- Flat steel producer Siderar is currently in talks with workers regarding the issue of salary increases, Business News Americas reports, citing an unnamed Siderar official. The official's comments came amid reports that the UOM metalworkers' union plans to carry out a strike because the Company has allegedly failed to comply with an agreement regarding salary increases. The UOM reportedly agreed with steelmakers in July to a hike of roughly 20%, which is to be implemented in three phases and to be completed in January. The agreement materialized after the union staged a partial strike at some 20 plants in the province of Buenos Aires, which impacted companies from the Techint group including Siderar, Dalmine, Siderca and Arcelor-controlled Acindar. According to Business News Americas, Siderar employs some 10,000 steel workers and is one of two companies that have not reached an agreement with the union to finalize the salary hike. TGS: CIESA Closes Debt Restructuring Agreement with Creditors ------------------------------------------------------------- Transportadora de Gas del Sur S.A. ("TGS" or "the Company") (NYSE: TGS, MERVAL:TGSU2) announced that it has received a notice from its controlling shareholder, Compania de Inversiones de Energia S.A. ("CIESA"), reporting that CIESA has closed a restructuring agreement (the "Agreement") in respect to its financial indebtedness with all its creditors. The debt subject to restructuring amounting to approximately US$270 million (including accrued interest), consists of US$220 million notes and other financial debts for approximately US$2 million, which are in default since April 2002. As a consequence of this Agreement, CIESA refinanced debt of approximately US$23 million for a 10 year-period, and once the approval from the Ente Nacional Regulador del Gas and the Comision Nacional de Defensa de la Competencia are obtained, will deliver to its financial creditors approximately 4.3% of its current holding of TGS's Class B shares and will swap its remainder financial debt for equity. As a result of its financial restructuring and subject to the requested approvals, CIESA capital stock will consist of: (i) Class A shares, representing 50% of both CIESA's shares and voting rights, which will be held by Petrobras Energia S.A. and a subsidiary; and (ii) Class B shares, representing the remainder 50% of both CIESA's shares and voting rights, which will be held by financial creditors. From then on, Enron Corp. and ABN AMRO BANK N.V., as Trustee, will cease to be CIESA's shareholders. CONTACT: Transportadora de Gas del Sur S.A. Don Bosco 3672, 5th Floor 1206 Capital Federal Buenos Aires, Phone: (212) 688-5144 Fax: (212) 688-5213 E-mail: eduardo_pawluszek@tgs.com.ar Web Site: http://www.tgs.com.ar/ TGS: Ratings Unaffected by CIESA Debt Restructuring --------------------------------------------------- Standard & Poor's Ratings Services said Thursday that Transportadora de Gas del Sur S.A.'s (TGS, B-/Stable/--) ratings will not be affected by the recent announcement by its 51% controlling company Compa��a de Iversiones de Energ�a S.A. (CIESA, not rated) that it has closed an agreement with all its creditors to restructure its approximately US$270 million (including accrued interests) of financial indebtedness. Under this agreement, and subject to regulatory approvals, CIESA refinanced approximately US$23 million for a 10-year period and will swap its remaining financial debt for equity. Once the transaction is closed, CIESA will be jointly controlled 50% by Petrobras Energia S.A. (B/Positive/--) and 50% by financial creditors. From a credit perspective, neither the debt restructuring agreement at CIESA nor the expected indirect change in TGS' ownership structure is expected to affect TGS' ratings or outlook. Standard & Poor's has already incorporated in its analysis a potential debt-for-equity exchange at CIESA and projections of TGS' dividend payments to repay CIESA's outstanding debt (which are severely limited by the terms and conditions of TGS' debt). Finally, TGS' current ratings do not factor in any financial support from its owners. Primary Credit Analyst: Luciano Gremone, Buenos Aires (54) 11- 4891-2143; luciano_gremone@standardandpoors.com Secondary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114-891-2125; pablo_lutereau@standardandpoors.com =========== B R A Z I L =========== AES TIETE: Bear Stearns Ups Rating to Outperform ------------------------------------------------ Investment house Bear Stearns upgraded its rating for Brazilian utility AES-Tiete SA from peer perform to outperform. Dow Jones Newswires reports that the revision followed an industry-wide analysis by Bear Stearns for Brazil that focused on first-half balance sheet performance and recent government-ordered rate hikes for utilities. Bear Stearns revised its price target for AES Tiete to 2006, saying that, by the end of next year, the price could reach US$20.66, up from the previous year-end 2005 price target of US$16.00. On Sept. 5, the share closed at US$17.88. Bear Stearns said AES Tiete's first-half cost profile was better than expected. In addition, the Company obtained what Bear Stearns called "a slightly higher than anticipated price adjustment in the company's bilateral contract with Eletropaulo," a Sao Paulo-based utility. In 2006, all of Tiete's production will be sold via the Eletropaulo contract at what Bear Stearns called "an attractive gross price" of BRL132 ($1=BRL2.32) per megawatt hour. "We expect the Company to continue its attractive 95% dividend payout, as its parent companies need the funds to service debt obligations. Our upgrade to Outperform reflects 16% upside to our new price target plus a 10% dividend yield," Bear Stearns added. AES Tiete is controlled by the Brasiliana holding company, which is a joint venture between U.S.-based AES Corp. (AES) and Brazil's National Development Bank, or BNDES. CELG: Aneel Authorizes Minor Rate Hike -------------------------------------- State-owned utility Companhia Energetica de Goias (Celg) secured authorization from the National Power Authority (Aneel) to increase rates by 0.5%. According to Dow Jones Newswires, the increase will be effective for one year beginning Sep. 12. Analysts believe the combination of low inflation and a weak U.S. dollar against the Brazilian real were responsible for the relatively low rate increase. The strong real reduces overseas borrowing costs for Brazilian companies. Celg is 57%-controlled by the Goias state government. In April, the Company, which serves the electricity needs of 1.8 million people in the Goias state, said it intended to offer 25% of its capital on the Brazilian Stock Exchange's Novo Mercado. The offering has not yet taken place. CONTACT: Companhia Energetica De Goias (Celg) Rua 2, Qd A - 37 S/N Jardim Goias, 74805-180 Goiania - GO 74043-011 BRAZIL +55 62 243-1041 +55 62 243-1070 GERDAU: Ratings Reflect Sector Volatility, Competition ------------------------------------------------------ Corporate Credit Rating Local currency: BB+/Stable/-- Foreign currency: BB-/Stable/-- Major Rating Factors Strengths: - Geographically diversified; - Strong market share and cost position in Brazil; - Increasingly benefiting from consolidation trends in North America; and - Wide product scope in long steel products Weaknesses: - Cyclical and volatile industry; - Concentrated in commodity-grade steel products; - Traditionally acquisitive and projecting significant capital expenditures for the next three years; and - Intermittent import competition and volatile performance in North America. Rationale The ratings on Brazil-based steelmaker Gerdau S.A. (Gerdau) reflect Gerdau's exposure to the volatile and cyclical commodity long steel industry, which is peculiarly vulnerable to import competition in North America and to demand swings in Brazil; an acquisitive growth strategy that may cause some peaks of financial leverage in the future (despite the currently very comfortable liquidity and debt profiles); and a heavy capital budget during the next three years ($3.2 billion) aimed at both brownfield and greenfield capacity expansions. These negatives are partly mitigated by Gerdau's adequate geographic diversification through the Americas, with very strong and growing market shares in Brazil and North America, respectively; an improving financial profile and the increasing profitability of its North American operation; and the expectation that the company will follow a prudent acquisition policy in the long term that should not jeopardize capital structure improvements accomplished in the past couple of years. The 'BB+' local currency rating is one-notch higher than that of the 'BB' local currency sovereign rating on the Federative Republic of Brazil, Gerdau's home country. This reflects Standard & Poor's opinion that strengthening business fundamentals for Gerdau's operations both in North America (whose cash flow protection measures should remain strong) and in Brazil (whose export capabilities will continue to be expanded), coupled with the expectations of a sustained less aggressive financial stance in the future, will allow Gerdau to adequately weather stressful market and economic conditions in Brazil and preserve overall profitability, cash flows, and liquidity. Gerdau is the largest long steel producer in Brazil and the second-largest mini-mill steel maker in North America. The company controls operations in Chile, Uruguay, and Argentina. Net sales, EBITDA, and total debt amounted to $7.2 billion, $1.9 billion, and $2.5 billion (adjusted for operating leases and pension liabilities in North America), respectively, in the past 12 months ended June 30, 2005. Gerdau's business position is satisfactory. Besides holding a very strong market position in Brazil, with a market share of 48% in the context of a fairly concentrated industry environment, Gerdau has managed to increase both geographic and product diversification in the past couple of years by expanding its North American subsidiary, Gerdau Ameristeel Corp. (BB-/Positive/--), which today accounts for 45% of total revenues and 30% of EBITDA and has been an active participant in the consolidation of the steel industry in the region. Gerdau has also gradually expanded its export capabilities with the acquisition of an export-oriented integrated steel mill in Minas Gerais (the Ouro Branco mill) that is currently being expanded to 4.5 million metric tons per year (mtpy) of capacity from its current 3.0 million mtpy. Strong distribution capabilities and efficient scrap sourcing in the fragmented Brazilian long steel market, as well as an increasingly spread- out fabrication network in North America, are also long-term positives. Still, Gerdau is essentially a commodity long steel company (merchant and reinforcing bars and other common long steel products), which thus expose it to the volatile steel cycle and erratic profitability (more so in North America, where Gerdau Ameristeel's exposure to intermittent import threats is a concern, as currently evidenced by the weak wire rod market). Part of this risk is mitigated by Gerdau's fair product diversification across a broad end-user base, with no significant exposure to any individual customer. Gerdau's financial profile has been somewhat aggressive due to the company's very active acquisition strategy, but credit measures are currently very strong for the rating category given the cash windfalls being enjoyed by the steel sector at large. Market conditions have been drastically slowing down in the U.S. and Europe, signaling that downward pressure can hit both profitability and cash generation prospects in the short term. As it is focused on commodity types of steel, Gerdau may face downward pressure on margins as well, as market conditions in Brazil are also relatively weak. Still, we expect Gerdau to sustain profitability and cash flow protection measures at higher levels than those of the last trough, given three main factors: strengthened cost competitive export capabilities should help the company weather domestic downturns in Brazil; operating improvement at recent acquired assets, larger scale, synergy and best-practice gains, as well as a relatively more concentrated industry environment for Gerdau Ameristeel should allow for stronger results; and broader geographic diversification, with the company's strong foothold both in South and North America (more or less in 50-50 proportion) should permit Gerdau to benefit from different regional demand patterns, also contributing to margin and cash flow stability. While we believe Gerdau will maintain a prudent approach to acquisitions, leverage spikes may occur from time to time, which may put some pressure on the company's credit profile if market conditions suddenly and simultaneously shift unfavorably. Nevertheless, we also expect Gerdau to sustain moderate leverage and a less aggressive approach toward acquisitions, even assuming this growth strategy. Liquidity Gerdau's current liquidity is very strong. The company holds cash reserves of $1.1 billion as of June 2005, out of which approximately $155 million are at Gerdau Ameristeel and the rest are available elsewhere in the organization to service the parent company's obligations. Exposure to short-term debt maturities have been dramatically reduced through 2004, and the current debt amortization schedule is smooth: debt maturities through June 2006 amount to approximately $550 million and are followed by a level of $300 million of debt amortizations each of the next three years. Those compare with FFO of $1.5 billion and free operating cash flow (FOCF) of $300 million in the past 12 months ended June 30, 2005. With significant capital expenditures projected for the next three years (totaling $3.2 billion through 2007), Gerdau might well reduce FOCF to weaker levels in the medium term, but cash liquidity and long-term credit financing already secured for some of the projects under implementation grant the company some additional comfort to manage organic growth. While Gerdau does not count on committed credit facilities, a forthcoming perpetual notes issuance of $250 million should also help further strengthen Gerdau's short-term liquidity and overall capital structure and grant it some additional flexibility to manage investments in the near term. Outlook The stable outlook reflects our expectations of prudent debt management and acquisition policy in the future. Gerdau's credit measures are substantially strong today as a result of the strong performance of the steel industry worldwide, but we see fundamental improvement in both Gerdau's business and financial profiles that should be preserved under a less favorable environment. Weaker market conditions should cut part of the comfort cushion reported in June 2005 but should still be consistent with the rating category. Indeed, while we believe Gerdau's credit ratios may well decline in the future from its current peak, we still expect it to remain at substantially stronger levels than those of the last trough in 2001-2002. As such, we see Gerdau's through-the-cycle funds from operations (FFO) to total debt, total debt to EBITDA, and EBITDA interest coverage ratios hovering in the range of about 30%-40%, 1.5x-2.0x, and 5.0x-10x, respectively (currently at a robust 65%, 1.2x, and 14.1x in the past 12 months ended June 30, 2005). In a severe downcycle either in Brazil or worldwide, we would not expect Gerdau to report these ratios to be any weaker than 20%, 3.0x, and 4.0x, respectively. Aggressive M&A activity or expansion of Gerdau's current capital expenditures plans could put downward pressure on the ratings or trigger a lowering of the ratings or an outlook revision to negative. While upside potential is somewhat limited in the near term given the company's growth strategy, a positive ratings action or outlook revision could be predicated on larger synergetic gains in North America, performance enhancements in Brazil, and evidence of commitment with target financial ratios that are more conservative than the current ones. Primary Credit Analyst: Reginaldo Takara, Sao Paulo (55) 11- 5501-8932; reginaldo_takara@standardandpoors.com Secondary Credit Analyst: Beatriz Degani, Sao Paulo (55) 11- 5501-8933; beatriz_degani@standardandpoors.com GERDAU: CADE to Review Price Fixing Allegations Wednesday --------------------------------------------------------- Justice Ministry Antitrust Division (CADE) will hear Wednesday a case involving allegations of price fixing against steelmakers Gerdau, Belgo-Mineira and Barra Mansa, reports Dow Jones Newswires. The hearing was originally scheduled for Aug. 31. But, on that same day, Gerdau obtained an injunction and faxed it to CADE about 30 minutes into the scheduled hearing, which was then suspended. Last week, however, a panel of judges voted 2-1 to overturn the injunction, allowing the case to proceed before CADE. The case dates back to 1999, when two construction trade associations complained to the Justice Ministry Consumer Affairs Division (SDE) that Gerdau, Belgo-Mineira and Barra Mansa fixed prices for steel bars used in construction. SDE submitted a report to CADE in September 2003, saying that their investigation showed the companies had held meetings to divide the Brazilian market and set prices for steel bars. If the three companies are found guilty of the accusations, they could face fines of up to 30% of gross revenue for the year preceding the date of the initial complaint, according to CADE. Gerdau said it would appeal CADE's authority to judge the case. "Gerdau affirms that it will continue fighting at every legal venue to have its rights recognized," the Company said in a statement. ODEBRECHT: S&P Assigns 'BB-' to New $100M Bond Issue ---------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to the forthcoming perpetual bonds issuance by Odebrecht Overseas Ltd. (OOL) in the amount of $100 million and unconditionally guaranteed by Brazil-based heavy engineering and construction (E&C) company Construtora Norberto Odebrecht S.A. (CNO). At the same time, Standard & Poor's affirmed its 'BB-' local and foreign currency ratings on CNO. The outlook on CNO is stable. "The perpetual bonds issued by OOL will be guaranteed on a senior unsecured basis by CNO and will allow for early redemption only at the company's option, in whole but not in part, starting in September 2010," said Standard & Poor's credit analyst Reginaldo Takara. "The net proceeds will be used for general corporate purposes, including working capital and repayment of long-term debt." The ratings on CNO reflect the company's exposure to the competitive, volatile, and cyclical heavy E&C business, some backlog concentration in public works in economically and politically volatile countries, and a somewhat leveraged financial profile. These risks are somewhat offset by CNO's long-standing experience in the E&C business, the quality and sector and geographic diversification of its backlog, and consistent profitability and cash flow protection measures within the past few years as a result of significant efforts to focus on more profitable projects. CNO is the largest heavy construction company in Brazil, with net sales and EBITDA of $2.3 billion and $165 million in the last 12 months ended June 30, 2005. The company reported a total debt balance of $499.2 million on the same date. The stable outlook for the local currency rating reflects our expectations that CNO's financial ratios will continue improving through 2005 with further debt reduction, allowing for credit measures to comfortably fall into its current rating category. Reducing refinancing risks thanks to debt repayment and the standby committed credit facility that goes over 2006 are also short-term positives. We foresee positive trends for CNO's operating performance in 2005 and 2006, with the recovery of Brazilian projects, stable margins at its traditional markets in South America and Angola, and increasing activity in the U.S., Portugal, and Mexico. However, a positive revision of the ratings would depend on significant improvement on credit measures, essentially with an overall lower debt position relative to long-term cash flows. A reversal in trends would be first signaled by a deterioration in backlog; harsher changes in profitability trends and cash generation would also be reasons for a negative ratings revision. The stable outlook for the foreign currency rating reflects that of the foreign currency sovereign rating of the Federative Republic of Brazil. Primary Credit Analyst: Reginaldo Takara, Sao Paulo (55) 11- 5501-8932; reginaldo_takara@standardandpoors.com Secondary Credit Analyst: Milena Zaniboni, Sao Paulo (55) 11- 5501-8945; milena_zaniboni@standardandpoors.com VARIG: Reports Lower Net Loss for Jan-July 2005 Period ------------------------------------------------------ Cash-strapped airline Viacao Aerea Riograndense SA (Varig) reported Thursday a net loss of BRL508.7 million for the first seven months of 2005, lower than the loss of BRL542.1 million in the same period of 2004, relates Dow Jones Newswires. During the seven months ended July, the airline's net revenue was up at BRL4.1 billion, compared to BRL3.9 billion a year ago, while costs rose 16% to BRL3.2 billion. Financial costs fell 47% to BRL215.8 million, primarily due to BRL100 million in foreign exchange gains. The Brazilian real has appreciated significantly during 2005, reducing the cost of U.S. dollar-denominated debts. Varig will be reporting financial results on a monthly basis as part of the court-managed financial restructuring process that began on June 17. The airline filed for a judicial reorganization proceeding under Brazil's New Bankruptcy and Restructuring Law due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The new law, which took effect on June 9, 2005, is similar to a Chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, under which 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. As of March 31, 2005, Varig reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. Varig is scheduled to present to the court this month its debt restructuring plan, which if authorized, would then be put to creditors for their approval. Recent reports revealed that a number of groups have presented financing plans to Varig or to the court handling the debt restructuring process. Estado news agency reported that a group of Italian and U.S. private equity investors have offered to invest up to US$1.2 billion to buy control of Varig from the Fundacao Rubem Berta, which owns a majority of the airline's shares. According to the report, the investors are looking at a four- to five-year turnaround for Varig. At the same time, Brazilian businessman Nelson Tanure, owner of the Jornal do Brasil and Gazeta Mercantil newspapers, is reported to have offered to invest US$90 million in Varig. =============== C O L O M B I A =============== ECOPETROL: Oxy Secures La Cira-Infantas Contract ------------------------------------------------ State oil firm Ecopetrol awarded the local Occidental Andina unit of US oil company Occidental (NYSE: OXY) a contract to boost recovery and reserves on the La Cira-Infantas field in Santander department, reports Business News Americas. Ecopetrol, which has been seeking to reduce declining production on mature fields, invited eight foreign companies to bid on the contract in July 2003 and technical and economic studies took two years. The project is divided into three stages. In the first two, pilot projects will be carried out in small areas of the field to determine their viability and the third and final stage will depend on their success. Oxy will invest a least US$80 million in the first two stages of the project. According to Ecopetrol, Oxy's investment could increase "significantly" if the final stage of the project proves viable. La Cira-Infantas was discovered in the early 1900s and its maximum production reached 60,000 barrels a day (b/d). Today, the field's output has declined to 5,400b/d, equivalent to 1% of the country's total output. =================== C O S T A R I C A =================== BICSA: Ratings Reflect Low Profitability, Weak Loan Portfolio ------------------------------------------------------------- Rationale The ratings assigned consider Banco Internacional de Costa Rica S.A.'s (Bicsa) low profitability and the weak growth of its loan portfolio, along with lower capitalization than one year ago. The ratings are supported by the short-term nature of its loan portfolio, the current refocus of the operations in its core business of trade finance, and the reorganization that should improve the future efficiency of the bank. Although the ratings are assigned to Bicsa Panama, Standard & Poor's Ratings Services monitors the bank on a consolidated basis. The negative outlook indicates that despite the efforts taken to improve the overall business, both loan growth and profits could remain weak given the strong competition in the bank's core business, as well as moderate growth in the Central American region, the bank's core market. In the past two years, credit events have affected the bank's bottom line and asset quality, as credit underwriting diverged somewhat from Bicsa's core business, which is trade finance. Some of the nontrade finance operations were originated to compensate overall low loan growth and to improve margins. In our view, some of those loans do not fully match Bicsa's core business and have a higher degree of risk than do trade finance operations. Even though an aggressive write-off policy has improved asset quality, should new problems arise, asset quality could deteriorate again. Strong competition in Bicsa's main line of business has hindered adequate loan growth, and we expect this trend to continue. Profitability has been low as a consequence of lack of growth and high cost structure and as provisions for credit problems depressed profits. In the future, thanks to the reorganization and cost reduction implied, profits should improve, but could remain below those of other financial institutions in the same rating category. As Bicsa's profitability has not been high enough to increase capital organically in the past three years, and its main shareholders approved a $41 million dividend payment in 2004, Bicsa's adjusted total equity ratio was reduced to 14% as of June 2004 from 17% in December 2003. As capital represents a less important source of funding, Bicsa will have to replace it with other funding sources. The short-term nature of its loan portfolio gives Bicsa more flexibility than other banks to adapt to changing market conditions. In addition, after September 2004, the bank has refocused in trade finance and has reorganized its loan origination group. It also transferred its credit card business and loans denominated in Colones to Banco Nacional de Costa Rica, its shareholder. Nevertheless, at June 2005, Bicsa's consumer loan portfolio increased significantly and while it still represents a small portion of total loans, this is not the bank's core business. Although Bicsa's number of employees has been cut in half, efficiency levels have not improved because income generation has not been sufficient yet. Outlook Although Bicsa's core business was refocused and operating costs were reduced, we still believe that management faces important challenges. There is significant competition in the trade finance business, which is driving margins to very low levels. In addition, economic growth in the Central American region is expected to remain moderate. Therefore, we do not expect Bicsa's future performance to change dramatically. Should the bank's financial performance deteriorate further, the ratings could be lowered. Nevertheless, if financial performance improves significantly, the outlook could be revised to stable, and if this becomes a consistent trend, the ratings could be raised. Primary Credit Analyst: Angelica Bala, Mexico City (52) 55- 5081-4405; angelica_bala@standardandpoors.com Secondary Credit Analyst: Leonardo Bravo, Mexico City (52)55- 5081-4406; leonardo_bravo@standardandpoors.com ============= J A M A I C A ============= KAISER ALUMINUM: Court OK's 2nd Amended Disclosure Statement ------------------------------------------------------------ Kaiser Aluminum Corporation announced Friday that the U.S. Bankruptcy Court for the District of Delaware has approved the Company's Disclosure Statement that relates to its Second Amended Plan of Reorganization (POR). The court has scheduled a confirmation hearing with respect to the POR for January 9, 2006 and January 10, 2006. Assuming plan confirmation at that time, the company could emerge from Chapter 11 by the end of January or early February 2006. "Today's [Friday] ruling completes the first of three final milestones to the company's successful completion of its reorganization," said Jack Hockema, president and chief executive officer, Kaiser Aluminum. "We anticipate that the remaining two -- voting by the creditors and confirmation by the bankruptcy and district courts -- will be completed according to the court's schedule within the next four months. As a result, we now have a definitive, court-approved schedule to emerge early next year as a globally competitive company with a strong balance sheet, best-in-class operations, and the ability to grow in our key transportation and industrial markets." Mr. Hockema continued, "I credit today's [Friday] achievement to the outstanding support of our employees, customers, suppliers, and other stakeholders who share our commitment of driving Kaiser Aluminum to its full potential in terms of customer service, quality, product development, and financial performance." The Company expects to commence a 60-day solicitation of acceptances of the POR by creditors by September 15, 2005. Because the POR reflects previously disclosed agreements reached with the company's major creditor constituents, the company is optimistic that it will receive the necessary acceptances for plan confirmation. However, no assurance can be given that the plan will ultimately receive the necessary acceptances by creditors, or be confirmed by the Bankruptcy Court or U.S. District Court, or that the transactions contemplated by the plan will ultimately be consummated. As more fully discussed in the company Quarterly report on Form 10-Q for the period ended June 30, 2005, the Company's restructuring would resolve prepetition claims that are currently subject to compromise. Those claims include, among others, retiree medical, pension, asbestos, and other tort, bond, and note claims. The plan would also result in the cancellation of the equity interests of current stockholders and the distribution of equity in the emerging Company to creditors or creditor representatives. The majority of the new equity would be distributed to two voluntary employee benefit associations that were created in 2004 to provide medical benefits or funds to defray the cost of medical benefits for salaried and hourly retirees. Retiree medical plans existing at that time were cancelled. All personal injury claims relating to both prepetition and future claims for asbestos, silica and coal tar pitch volatiles, and existing claims regarding noise- induced hearing loss, would be permanently resolved by the formation of certain trusts funded primarily by the Company's rights to proceeds from certain of its insurance policies and the establishment of channeling injunctions that would permanently channel these liabilities away from the Company and into the trusts. Complete details are included in the plan and disclosure statement, which the Company has posted in the "Restructuring" section of its web site. Kaiser Aluminum Corporation (OTCBB:KLUCQ) is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company has more than 2,000 employees and 11 plants in North America having the capacity to produce more than 400 million pounds annually of value-added sheet, plate, extrusions, forgings, rod, bar, and tube. Upon emergence, the company also expects to continue to own its 49 percent interest in Anglesey Aluminium Limited, which operates an aluminum smelter in Wales. CONTACT: Kaiser Aluminum Geoff Mordock Phone: 213-489-8271 URL: www.kaiseraluminum.com SANS SOUCI: Carreras Sells Hotel to Couples for $18.75M ------------------------------------------------------- The Carreras Group has sold its high-end hotel Sans Souci Resort and Spa in White River, St Mary to Lee Issa's Couples Resorts for US$18.75 million, The Jamaica Observer reports. Carreras chief executive officer Michael Bernard signed the agreement with Issa in the Sans Souci boardroom. The deal would be fully consummated on September 11, at which time the resort would be renamed Couples Sans Souci. According to Issa, the payment to Carreras would be in lump sum and largely funded through loans. Gary Stephens, the director of operations for Couples Resorts, said that under the agreement, the full compliment of 280 staff members and management team will remain at Sans Souci, with Pierre Battaglia remaining as general manager, in order not to disrupt operations at the resort. The permanent staff, who will receive redundancy payment from Carreras, will be offered the usual three-month employment option and casual staff one-month. After which their performance will be reviewed to determine their future with the hotel. "Sans Souci is known for its quality service and we certainly don't want to change that," said Mr. Stephens. "In fact, we want to add to that. " The new owners plan to increase the number of rooms as one strategy towards driving revenue, cutting average fixed overhead and shoring up the bottom line. Lee Issa's Couples Resorts will be looking at expanding once the Couples Sans Souci name will be firmly put out, Stephens said. Couples also plan to include in the pre-paid package full water sports activities such as scuba diving. Sans Souci has 148 suites spread across 27 acres of beachfront. The hotel was bought by Carreras from Pan Jam in 1990. For several years, the hotel was managed by John Issa's SuperClubs Group, but a few years ago SuperClubs fell out with Carreras, which then brought the management in-house. Carreras has been offloading assets in Jamaica to focus on tobacco distribution and funds management. The hotel was its last remaining significant non-tobacco asset. The sale of the luxury all-inclusive hotel therefore ends the group's involvement in the tourism industry while it strengthens Couples' position in the hotel business. The new acquisition will bring to four the number of hotels operated by the House of Issa and increase the room count to 900. =========== M E X I C O =========== ASARCO: U.S. Trustee Appoints 7-Member Creditors' Committee ----------------------------------------------------------- Pursuant to Section 1102(a) and 1102(b) of the Bankruptcy Code, Richard W. Simmons, the United States Trustee for Region 7, appoints seven creditors to the Official Unsecured Creditors' Committee in ASARCO LLC's case: (1) Deutsche Bank Trust Company 60 Wall Street, 60-2715 New York, NY 10005 Attention: Mr. Stanley Burg Phone: (212) 250-5280 (2) Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 Attention: Mr. Steve Cimalore Phone: (302) 636-6058 (3) Road Machinery, LLC 716 S. Seventh Street Phoenix, Arizona 85034 Attention: Mr. Chuck Paugh Phone: (602) 252-7121 (4) Hecla Mining Company 6500 Mineral Drive, Suite 200 Coeur d'Alene, Idaho 3815 Attention: Mr. Mike White Phone: (208) 769-4110 (5) Pension Benefit Guaranty Corporation 1200 K Street, N.W. Washington D.C. 20005-4026 Attention: Mr. Roger Reiersen Phone: (202) 326-4070 x 3704 (6) United Steelworkers Five Gateway Center Pittsburgh, Pennsylvania 15222 Attention: David R. Jury Phone: (412) 562-2545 (7) The Doe Run Resources Corporation 1801 Park 270 Drive, Suite 300 St. Louis, Missouri 63146 Attention: Mr. Lou Marucheau 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- 20521 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) SATMEX: Strikes Deal With Arianespace For SatMex 6 Launch --------------------------------------------------------- Mexican satellite operator Satelites Mexicanos (Satmex) has signed an accord with Arianespace to launch its SatMex 6 satellite. According to Dow Jones Newswires, the satellite, whose launch is seen as essential for Satmex's future survival, is currently in the U.S. where it is being reconditioned. Satmex must get the satellite airborne by June 30, 2006 to comply with an agreement reached with U.S. creditors earlier this year. Satmex said it has the financial resources needed for the launch, but didn't say where the money came from. The Company has estimated the cost of launching Satmex 6 at US$55 million. Satmex, which is in default on $524 million of bond debt, reached agreement last month with U.S. bondholders under which the creditors withdrew an involuntary Chapter 11 petition from a U.S. court as SatMex seeks to restructure through Mexican courts, although the creditors retain the right to return to the U.S. court if terms of the agreement aren't met. Satmex is owned by Loral Space & Communications Ltd. of the U.S., and Principia SA. The Mexican government has a 23.6% non- voting stake in the Company. VITRO: Signs Technical Consulting Agreement with Allied Glass ------------------------------------------------------------- Vitro and Allied Glass Containers, the Leeds based glass packaging specialist, have recently entered into a technical assistance agreement with Vitro, in which the United Kingdom company will provide a practical support programme, structured around the company's knowledge and experience in the production of intricate bottle shapes. This commits Allied Glass Containers to providing a designated team of specialists, who will visit Vitro production facilities to give technical assistance, and providing bespoke training programmes at their two manufacturing sites in the UK. In addition, Allied Glass is also responsible for giving support in areas including the production of specification and mould drawings and 3D modeling for shaped containers. "We are honored to work with Allied Glass Containers in order to provide our current and future customers with the most innovative products that will allow them to be ahead of the consumers market trend, said Alfonso Gomez Palacio, President of Vitro's Glass Containers business unit. Richard Summers, who is the Operations Director at Allied Glass Containers' Leeds, site says, "Here at Allied Glass we are very flattered to have been approached by Vitro to develop this support and development programme as it reflects our world-wide reputation for the production of intricate glass containers." Vitro's Glass Containers business has developed the distinctive ability to satisfy precisely its customers' needs; this allows us to participate actively in several high-demanding niche markets, especially those showing growth potential, such as beverages, beer, wines and liquors, cosmetics and fragrances, among others. For that reason, Vitro is leading the industry in Mexico in several fundamental areas, including its development of innovative, state-of-the-art technology to manufacture value-added containers, its care for the environment, and its social responsibility. Vitro, S.A. de C.V. (NYSE: VTO; BMV: VITROA), through its subsidiary companies, is one of the world's leading glass producers. Vitro is a major participant in three principal businesses: flat glass, glass containers and glassware. Its subsidiaries serve multiple product markets, including construction and automotive glass; food and beverage, wine, liquor, cosmetics and pharmaceutical glass containers; glassware for commercial, industrial and retail uses. Vitro also produces raw materials, equipment and capital goods for industrial uses. Founded in 1909 in Monterrey, Mexico-based Vitro has joint ventures with major world-class partners and industry leaders that provide its subsidiaries with access to international markets, distribution channels and state-of-the- art technology. Vitro's subsidiaries have facilities and distribution centers in eight countries, located in North, Central and South America, and Europe, and export to more than 70 countries worldwide. CONTACT: Vitro, S.A. de C.V. Media Albert Chico Smith Phone: 52 (81) 8863-1335 E-mail: achico@vitro.com Financial Community Leticia Vargas/Adrian Meouchi Phone: 52 (81) 8863-1210/1350 E-mail: lvargasv@vitro.com ameouchi@vitro.com URL: http://www.vitro.com US Contacts Susan Borinelli/Michael Fehle The Breakstone Group Phone: 646-452-2336 E-mail: sborinelli@breakston-group.com mfehle@breakstone-group.com WOLVERINE TUBE: Restructuring Includes Mexico Expansion ------------------------------------------------------- Wolverine Tube, Inc. (NYSE:WLV) announced Thursday several strategic initiatives in its continuing effort to reduce operating expenses, enhance cash flow and improve operating efficiencies. These initiatives include a reduction in the Company's corporate headquarters' workforce by nearly twenty percent, a reduction of certain support functions in its U.S. manufacturing operations, a reduction in leased facilities for executive and administrative offices and the continued process of production rationalization in response to global competition. The Company currently expects to take a pre-tax restructuring charge over the next few quarters totaling approximately $1.5 million ($0.07 per diluted share after tax) to account for these initiatives, including severance and other related expenses. These actions should result in year-over-year cost savings of up to approximately $4.0 million annually, once fully implemented, primarily reflecting reduced Selling, General and Administrative expenses. "While such decisions are difficult, they are at the same time necessary," said Dennis Horowitz, Chairman and Chief Executive Officer. "We intend to continue to drive changes that will allow us to compete more profitably on a global basis. We believe that these actions will more powerfully position our Company going forward." Dennis Horowitz continued, "Specifically, the Company will reduce headcount across a broad number of corporate functions. At the same time, efforts within these functions will be more sharply focused so as to provide the same, or even a more enhanced, level of support to our customers on a global basis." The Company will also be reducing certain indirect personnel, administrative functions and support staff at various U.S. manufacturing operations. The Company will relocate its corporate credit function from its current leased facility to existing office space at the Company's Decatur, AL corporate location and the current Huntsville, AL headquarters leased office space will be reduced by nearly fifty percent. The Company plans to expand its Shanghai, China operation to meet local increasing customer demand for technical tube and fabricated products. As previously discussed, the Company is nearing the completion of the relocation of its North American technical tube manufacturing operations from its Decatur, AL facility to facilities in Shawnee, OK and Monterrey, Mexico. Further, the Company continues to expand its fabricated products offering in Mexico. Dennis Horowitz commented, "While these actions affect a broad range of functions and are far-reaching, they also enable us to continue to support customers at the high level they have come to expect from Wolverine. We will continue to take steps to match our business with current and anticipated global demand, and we will continue to examine prudent ways to reduce expense levels and increase business. With these changes and our continued focus on profit and cash generation, Wolverine should be in a stronger position to compete in an ever changing global marketplace." ABOUT WOLVERINE TUBE, INC. Wolverine Tube, Inc. is a world-class quality partner, providing its customers with copper and copper alloy tube, fabricated products, metal joining products as well as copper and copper alloy rod, bar and other products. CONTACT: Wolverine Tube, Inc. Thomas B Sabol, Senior Vice President and Chief Financial Officer Tel: (256) 580-3500 URL: http://www.wlv.com http://www.silvaloy.com =========== P A N A M A =========== WILLBROS GROUP: Seeks Approval to Alter Note Terms -------------------------------------------------- Willbros Group, Inc. (NYSE: WG) is soliciting consents from the holders of its outstanding 2.75% convertible senior notes due 2024 to amend certain provisions in the indenture governing the notes. By consenting to the proposed amendments to the indenture, holders of the notes will also be consenting to: -- waive any potential defaults that may have occurred before the proposed amendments become effective; -- rescind a purported notice of default that was delivered to Willbros under the indenture; and -- clarify that for a period ending on the nine-month anniversary of the date the proposed amendments become effective, no default will occur if Willbros fails to timely file a periodic report with the SEC. Approval of the proposed amendments and waiver requires the consent of the holders of a majority in principal amount of the outstanding notes. The record date for the solicitation is Sept. 6, 2005. The proposed amendments provide that: * the initial date on or after which Willbros may redeem all or any portion of the notes will change from March 15, 2011 to March 15, 2013; and * in the event of a fundamental change involving a sale of Willbros in which at least 10 percent of the sales proceeds are paid in cash, Willbros will pay a make-whole payment to the holders of the notes. The make-whole payment will consist of no more than the present value of two years of scheduled interest payments on the notes. No separate cash fee is being paid to holders for delivering consents. Financial Filing Delay Willbros previously disclosed that it would not be able to timely file its annual report on Form 10-K for the year ended Dec. 31, 2004, and its quarterly reports for the periods ended March 31, 2005, and June 30, 2005, and Willbros has not filed them to date. On June 10, 2005, Willbros received a letter from a representative of Whitebox Advisors, LLC, asserting that, as a result of Willbros' failure to timely file with the SEC its 2004 Form 10-K and Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, Whitebox Advisors was placing Willbros on notice of an event of default under the indenture. Willbros has previously indicated that it does not believe that it has failed to perform its obligation under the indenture. On Aug. 19, 2005, Willbros reached an agreement with Whitebox Advisors, the beneficial owner of approximately 25.1% of the notes as of June 10, 2005, pursuant to which it agreed to prepare an amendment to the indenture and solicit approval for the proposed amendments and waiver. Whitebox Advisors has agreed to deliver a letter of consent in favor of the proposed amendments and waiver. The solicitation expires at 5:00 p.m., New York City time, on Sept. 21, 2005, unless extended by Willbros. Willbros will announce any extensions of the solicitation by press release no later than 9:00 a.m., New York City time, the day after expiration of the solicitation. Willbros has retained Bear, Stearns & Co. Inc. to serve as solicitation agent for the solicitation, and D.F. King & Co., Inc. to serve as the information agent and tabulation agent. Questions regarding the solicitation may be directed to the solicitation agent at (877) 696-2327 (toll free). Copies of the consent solicitation statement and related documents may be obtained at no charge by contacting the information agent by telephone at (888) 886-4425 (toll-free) or (212) 269-5550, or in writing at 48 Wall Street, 22nd Floor, New York, NY 10005. Willbros Group, Inc. -- http://www.willbros.com/-- is an independent contractor serving the oil, gas and power industries, providing engineering and construction, and facilities development and operations services to industry and government entities worldwide. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and Sheryl Joy P. Olano, Editors. Copyright 2005. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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