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/raid1/www/Hosts/bankrupt/TCRLA_Public/051003.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, October 3, 2005, Vol. 6, Issue 195 Headlines A R G E N T I N A A.L.U.B.A. ASOCIACION: Court Grants Reorganization Plea AGUAS ARGENTINAS: Sends Formal Request to Cancel Contract BANCO RIO: To See Profits Next Year on Stronger Balance Sheet CAPEX: Fitch Ratings Withdraws National, International Ratings COMPANIA MEGA: S&P Withdraws 'B' Senior Notes Rating METROGAS: Back in Contract Renegotiationss With Government MIRALEJOS S.A.C.I.F.I. y A.: Closes Reorganization MULTICANAL: Federal Judge Wants Bankruptcy Court to Rule on Case VINTAGE PETROLEUM: S&P Affirms BB- Corporate Credit Rating B A R B A D O S SUNBEACH COMMUNICATIONS: Cabinet Shields Buyout Offer Decision B E L I Z E * BELIZE: IMF Exec Board Concludes 2005 Article IV Consultation B E R M U D A INTELSAT: Sr. Exec Testifies on Importance of Satellites B R A Z I L BANCO ITAU: Set to Lose Parana Banking Contract BRASIL FERROVIAS: Receives $290M Financial Aid from BNDES COPEL: Elects New Fiscal Council Member ELETROPAULO METROPOLITANA: Completes BRL800 Mln Debenture Sale SABESP: To Raise $111M Using FIDC Fund Model SABESP: Ratings Reflect Volatility of Brazilian Economy C H I L E AES GENER: 'BB+' Ratings Affirmed; Outlook Revised to Positive C O L O M B I A TERMOEMCALI FUNDING: 100% of Noteholders Tender 10.125% Sr. Nts. E L S A L V A D O R * EL SALVADOR: Ratings Reflects Improved Economic Prospects J A M A I C A AIR JAMAICA: Rating Based on Govt's Guarantee on Debt Payments NCB JAMAICA: JMD600 Mln Payment Came From Hilton M E X I C O AOL LATIN AMERICA: To File August 2005 Monthly Report This Month CENTRAL PARKING: Updates Certain Fourth Quarter Developments MERIDIAN AUTOMOTIVE: Panel Wants Sanchez-DeVanny as Counsel V E N E Z U E L A PDVSA: Petrobras Board Approves Refinery in the Northeast SINCOR: Total Devises Plan to Solve Conflict with Govternment - - - - - - - - ================= A R G E N T I N A ================= A.L.U.B.A. ASOCIACION: Court Grants Reorganization Plea ------------------------------------------------------- A.L.U.B.A. Asociacion de Lucha Contra la Bulimia Anorexia y Otros Transtornos Alimentarios successfully petitioned for reorganization after Buenos Aires' civil and commercial Court No. 23 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 accounting firm Fiorillo, Bugueiro y Asociados will serve as trustee during the course of the reorganization. The trustee will be accepting creditors' proofs of claim for verification until Dec. 2, 2005. After verifications, the trustee will prepare the individual reports and submit it in court on Feb. 17, 2006. The trustee will also present a general report for court review on March 31, 2006. The Company will endorse the settlement proposal, drafted from the submitted claims, for approval by the creditors during the informative assembly scheduled on Sep. 19, 2006. Clerk No. 45 assists the court on the proceedings. CONTACT: Fiorillo, Bugueiro y Asociados, Trustee Rodriguez Pena 434 Buenos Aires AGUAS ARGENTINAS: Sends Formal Request to Cancel Contract --------------------------------------------------------- Water provider Aguas Argentinas has sent a letter to the Argentine government formally requesting the cancellation of its 30-year contract. Local daily La Nacion revealed Thursday that in the letter, Aguas Argentinas was asking for the proceedings to be done "in the shortest time possible" and reserving the right for French parent Suez to expand its claim against Argentina in the World Bank's arbitration tribunal, ICSID (International Center for the Settlement of Investment Disputes). La Nacion added that Aguas Argentinas said in the letter it would seek to guarantee service for 90 days, the timeframe established for the transition to a new owner. Legal experts say Suez's contract allows the government to execute certain monetary guarantees if it finds non-compliance with the agreement. The state can also sue Aguas Argentinas if it decides the guarantees don't cover damages resulting from breach of contract. Argentine government officials have intimated to Suez that it must stay for a year after its withdrawal announcement to be in compliance with the contract. Planning Minister Julio De Vido said last week that the government is "analyzing the legal alternatives to apply in this case." Meanwhile, Spanish firm Aguas de Barcelona (Agbar) has confirmed again that it plans to follow Suez's footsteps and pull out of Aguas Argentinas. It has also turned down the opportunity to operate the Buenos Aires concession itself. Despite overtures from the Argentine government, as well as from Spain's Prime Minister Jose Luis Rodriguez Zapatero, Agbar has reportedly said that it sees taking charge as "technically very difficult." The government talks with Agbar are ongoing, according to observers, but the authorities are starting to look at other options. Their aim is to find a new operator or have the current operator continue until the end of the southern hemisphere summer at least. BANCO RIO: To See Profits Next Year on Stronger Balance Sheet ------------------------------------------------------------- Banco Rio, the Argentine unit of Spanish financial group Grupo Santander (NYSE: STD), expects to return to profits in the first half of 2006, reports Business News Americas. Planning manager Luis Aragon said, "The bank will clean up its balance sheet as soon as possible. This has affected this year's results but most of that process has already been completed." Rio saw its losses balloon in the second quarter this year to ARS249 million (US$86.4 million) after making liability payments to strengthen its operations. Earlier this year, Rio paid corporate bond obligations worth US$458 million ahead of schedule, while also paying its full ARS380-million debt with the central bank. Moreover, Rio's shareholders authorized a ARS310-million capital increase to further strengthen the balance sheet. Despite Rio's net losses, the bank has seen its operating results growing strongly over the last few months. In 1H05, the bank's operating profit jumped 137% to ARS76.6 million. CAPEX: Fitch Ratings Withdraws National, International Ratings -------------------------------------------------------------- Fitch Ratings has withdrawn the national and international foreign currency and local currency ratings of Capex S.A. (Capex). The defaulted securities were restructured, and there is no debt outstanding against the rated instrument. Fitch will no longer provide analytical service or coverage of this issuer. Capex's principal business is thermoelectric generation. Upstream hydrocarbon assets supply its natural gas feedstock needs and support secondary business activities in the commercialization of liquid hydrocarbons. CONTACT: Cecilia Minguillon +5411-5235-8100, Buenos Aires Ana Paula Ares +5411-5235-8100, Buenos Aires Jason Todd +1-312-368-3217, Chicago MEDIA RELATIONS: Sandro Scenga +1-212-908-0278, New York COMPANIA MEGA: S&P Withdraws 'B' Senior Notes Rating ---------------------------------------------------- Primary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114-891-2125; pablo_lutereau@standardandpoors.com Secondary Credit Analyst: Luciano Gremone, Buenos Aires (54) 11-4891-2143; luciano_gremone@standardandpoors.com Standard & Poor's Ratings Services withdrew its 'B' rating on all the outstanding senior notes of Compania MEGA S.A. (Mega) after their early cancellation. "As expected by Standard & Poor's, Mega's outstanding operational and financial performance within a favorable pricing scenario, together with the flexibility provided by the sponsors, allowed the project to cancel all its financial debt early," said Standard & Poor's credit analyst Pablo Lutereau. METROGAS: Back in Contract Renegotiationss With Government ---------------------------------------------------------- Argentine gas distributor Metrogas is meeting with the government, intending to secure a new revised contract, El Cronista reports. In April this year, Metrogas turned down the utility contract offered by the government, under which a 15% tariff was offered for application on commercial and industrial client accounts. Metrogas wants the same deal as Gas Ban, which secured a 27% tariff hike after promising investments of ARS45 million in 2006 and to call off legal action at Ciadi, the World Bank tribunal. It is not known whether Uniren, the agency for contract negotiations, will accept Metrogas' terms. It appears that the agency wants to continue in its belief that the first firm to sign a new deal should always have an advantage. CONTACT: MetroGAS S.A. Gregorio Araoz de Lamadrid 1360 C 1267 AAB Buenos Aires, Argentina Phone: 5411-4309-1000 MIRALEJOS S.A.C.I.F.I. y A.: Closes Reorganization -------------------------------------------------- The reorganization of Miralejos S.A.C.I.F.I. y A. has been concluded. Data revealed by Infobae on its Web site indicated that the process was concluded after the Civil and Commercial Court No. 2 of Buenos Aires' civil and commercial tribunal, with assistance from Clerk No. 4, homologated the debt agreement signed between the Company and its creditors. MULTICANAL: Federal Judge Wants Bankruptcy Court to Rule on Case ---------------------------------------------------------------- A U.S. federal judge decided Wednesday to ask a U.S. Bankruptcy Court to determine whether Multicanal's proposal to fix discrimination against U.S. retail bondholders qualifies for an exemption from the registration requirement of the U.S. Securities Act, reports Dow Jones Newswires. Multicanal was granted creditor protection by previous U.S. bankruptcy court decisions in August 2004 and January 2005. Argentinian Recovery Co. (ARC), a group formed to consolidate investment fund W.R. Huff Asset Management's holdings in Multicanal, had appealed the case to the federal district court, recalls Dow Jones Newswires. However, Judge Alvin Hellerstein of U.S. District Court in the Southern District of New York upheld the bankruptcy courts' broad recognition of Multicanal's out-of-court debt restructuring in April. Multicanal was asked to resolve disparate treatment between retail bondholders, who were offered only the cash component of the debt swap proposal, and more sophisticated institutional creditors, who were given debt and equity options. Multicanal's "cure" for the lopsided creditor treatment was to offer retail bondholders other options - new bonds and equity. But ARC disputed the move, saying that such a remedy would require a new bondholder vote, since the other alternatives hadn't been offered to small creditors the first time. ARC also wanted Multicanal to register the new securities with the SEC. Judge Hellerstein asked the Argentine company to get a no-action letter from the SEC, which would have granted Multicanal an exemption from the registration requirement of the Securities Act. In April, Multicanal applied for its no-action letter, but the SEC declined the Company's request, saying it fell short of the qualifications of the specific exemption it requested. In early September, Multicanal told the court it intended to register just the securities offered to the U.S. retail bondholders under its proposed remedy, but ARC said the Company's proposed registration would discriminate against those bondholders that previously voted to approve the debt restructuring plan, since those creditors' securities would be unregistered and therefore less valuable. On Wednesday, Judge Hellerstein asked the bankruptcy court to rule on two issues. The first is whether Multicanal qualifies for a registration exemption. The second is whether the Argentine company's proposed registration with the SEC is in fact discriminatory. Though Multicanal failed to convince the SEC that it qualified for an exemption under one section of the Securities Act, Judge Hellerstein said the Company could try to qualify under a different section. A key component of that section involves whether there has been a "fairness hearing" on the Company's US$509 million debt restructuring plan. Multicanal argues that Argentine courts' approval of the debt proposal constituted a fairness hearing, but ARC says the local courts' rulings were too narrow. The U.S. bankruptcy court will have to rule on this disagreement as well, and could decide to hold its own, definitive fairness hearing. VINTAGE PETROLEUM: S&P Affirms BB- Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Vintage Petroleum Inc. and revised its outlook on the company to stable from negative. Tulsa, Oklahoma-based Vintage had about $550 million of debt as of June 30, 2005. The stable outlook indicates Vintage's improved financial profile, and in particular, lower debt leverage and stronger cash flows as result of increased realized commodity prices. The company's balance sheet is better positioned to absorb acquisitions, which the company is likely to pursue to address poor historical reserve replacement performance. The company will be challenged to increase production materially on its current asset base, and management expects to be acquisitive. As evidenced by Vintage's recent Alabama purchase, the company intends to expand its U.S. presence significantly, which would provide needed geographic and commodity rebalancing. "The stable outlook reflects Standard & Poor's view that Vintage's improved financial profile can absorb a modest amount of additional leverage in the pursuit of incremental asset purchases," said Standard & Poor's credit analyst Ben Tsocanos. Acquisitions are likely necessary to offset the significant production declines it has suffered due to constrained capital spending and asset sales. "Future ratings improvement is predicated largely on addressing production declines in a credit-neutral manner, but deterioration in operating performance or substantial worsening of the financial profile through outsized debt-funded acquisitions could result in a negative outlook or lower ratings," he continued. =============== B A R B A D O S =============== SUNBEACH COMMUNICATIONS: Cabinet Shields Buyout Offer Decision -------------------------------------------------------------- The Cabinet has made its decision regarding an offer by Trinidad and Tobago firm Telcom Holdings to purchase a majority shareholding of Sunbeach Communications Inc., the Barbados Advocate reports. However, the Cabinet has refused to publicize its decision regarding the buyout offer. Anthony Wood, Minister of Energy and Public Utilities, said, "The Cabinet did consider the request by Sunbeach for the majority shareholding in the company to be acquired by Telecoms Holdings Limited of Trinidad and Tobago, and we have come to a point of determination as to how we should tend to the matter." "Because we have not signalled to the companies involved in the decision of the Cabinet, I think that it would be a little improper for me to give you - in any definitive way - what has been the position of the Cabinet. And during the course of this week, we will be writing Sunbeach informing them of the decision of the Cabinet," he added. Dr. Joseph Laquis, who heads Telcom Holdings, recently made an offer to purchase Sunbeach's majority share holding and launch the Company's long-awaited cellular service. "I am aware that Dr. [Joseph] Lacquis has been giving full vent to the issue from his side, but (of course) a responsible Cabinet minister cannot do his business in that manner when matters are before the Cabinet for its review and adjudication," Mr. Wood stated. "As soon as I have dispatched the letter to management of Sunbeach, then I will be in a position to speak to you in a very definitive way as to the decision of the Cabinet and what would have prompted and caused the Cabinet to adjudicate on the matter in that particular way," he concluded. Telcom Holdings operates the cellular company LaqTel Communications. =========== B E L I Z E =========== * BELIZE: IMF Exec Board Concludes 2005 Article IV Consultation --------------------------------------------------------------- On September 14, 2005, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Belize.1 Background The Belizean economy grew by 4.5 percent in 2004, mainly reflecting strong performance in the agriculture, fisheries, and tourism sectors. Inflation remained subdued at around 3 percent. The overall fiscal deficit of the central government, however, widened to 8 3/4 percent of GDP in FY04/05 (April to March), from about 8 1/3 percent of GDP in the previous year. The deficit was significantly larger than the authorities' target of 2 3/4 percent of GDP, with noninterest current expenditure exceeding budgeted levels by some 3 percent of GDP and substantial overruns in interest payments, mainly related to high costs of borrowing that reflected the sharp deterioration in Belize's external creditworthiness. Public finances were also burdened by the weak position of the Development Finance Corporation (DFC). The balance of payment remained under significant pressure. Although the external current account deficit narrowed somewhat in 2004-to 18 percent of GDP from an average of 22 percent of GDP during 2001-03-it remained unsustainably high. Lower net loan disbursements in 2004 more than offset a marginal increase in capital inflows to finance investment projects, causing the capital account surplus to erode, and gross international reserves fell sharply. More recently, notwithstanding the authorities' success in refinancing several large debts with external commercial creditors, Belize's access to international capital markets has become more difficult, with marked reductions in assessments by rating agencies. In response to growing pressure on the reserves of the central bank and increasing concerns regarding the risks to the balance of payments, the authorities announced in May a major adjustment program. This included fiscal measures aimed at reducing the FY05/06 deficit to less than 4 percent of GDP, mainly through tax increases and a curtailment of capital expenditure and civil service employment. In addition, the Central Bank of Belize tightened monetary policy to contain credit expansion. Executive Board Assessment While Directors welcomed Belize's low inflationary environment and continued strong growth performance, which reflect the robust expansion in the tourism, fisheries, and agricultural sectors, they expressed concern that Belize's fiscal and external current account deficits remain unsustainably high, resulting in substantial increases in the external public debt and a serious erosion of domestic and international confidence. Directors underscored the urgency of addressing these imbalances to safeguard the country's international reserves and ensure the sustainability of the pegged exchange rate system. They encouraged the authorities to mount a campaign to educate the public on the benefits of reform and the growing risks of inaction. Directors welcomed the steps taken earlier this year to tighten fiscal and monetary policies, but were concerned that implementation delays and the emergence of new expenditure commitments would make it difficult to meet the authorities' fiscal targets for fiscal year 2005/06. Moreover, even if these targets are met, a significant external financing gap is still likely to emerge in 2006. Against this background, Directors called for greater efforts to reduce domestic demand, close the remaining financing gap, and restore confidence and Belize's creditworthiness. Directors therefore urged the adoption of additional measures to boost fiscal revenue and rein in expenditure. They called for a reduction in tax holidays and exemptions to broaden the tax base and increase tax buoyancy. They encouraged the early introduction of a value added tax and the adoption of measures to ensure the pass-through of international oil price changes to domestic petroleum prices. Directors suggested that further expenditure cuts be explored in the areas of goods and services and capital spending, excluding essential social services. Directors commended the authorities' efforts to improve governance and transparency, including the passage of fiscal transparency legislation and the decision to establish commissions of inquiry into the Development Finance Corporation (DFC) and the Social Security Board. Directors welcomed the recent monetary policy measures aimed at tightening domestic liquidity conditions. They encouraged the authorities to monitor domestic liquidity closely and further tighten monetary conditions to support the balance of payments until an additional fiscal effort takes hold. Directors welcomed the steps taken to improve financial supervision and prudential regulation, including extension of supervisory coverage to the DFC. However, they expressed concern with the lack of progress in resolving the DFC, which continues to be a drain on the public finances as a result of its deteriorating asset base. In order to stem further losses, Directors urged the authorities to halt operations of the DFC immediately and dispose of its assets in a transparent and orderly manner. Directors also emphasized the need to monitor actively commercial bank balance sheet vulnerabilities in light of rapid growth in credit to the private sector. Directors noted that the balance of payments has come under increased strain as a result of adverse terms of trade shocks, including the rise in world oil prices. These shocks have compounded the severe pressures stemming from Belize's external debt service obligations. Directors agreed that in these circumstances the authorities' intention to approach external creditors to seek debt service relief is appropriate. However, Directors underlined the importance of engaging with external creditors in a transparent and equitable manner, and within the framework of a credible medium-term debt strategy. In this regard, a few Directors considered that a Fund-supported program would underpin Belize's efforts to bolster confidence and secure an agreement with external creditors. Directors also called for a strengthening of the debt database to help improve debt management. Directors welcomed the unification of the foreign exchange market through the closure of the "cambios". They noted that Belize does not maintain exchange restrictions or multiple currency practices. However, Belize maintains non-tariff barriers and tax and duty exemptions that contribute to a misallocation of resources. Directors encouraged the authorities to phase out import restrictions in favor of tariffs and excises, noting that this will also strengthen revenue collection. Directors commended the authorities for recent improvements in the quality and timeliness of publication of statistical information, and supported the authorities' request for technical assistance to facilitate participation in the General Data Dissemination System. ============= B E R M U D A ============= INTELSAT: Sr. Exec Testifies on Importance of Satellites -------------------------------------------------------- Intelsat's Tony Trujillo testified Thursday before the U.S. House of Representatives, following Hurricanes Katrina and Rita, about the importance of satellite technology in providing quick and reliable communications during disaster recovery efforts. Mr. Trujillo, Senior Vice President, Corporate Services and Government Relations of Intelsat, is also Chairman of the Satellite Industry Association (SIA). In his testimony on behalf of SIA before the House Committee on Energy and Commerce Subcommittee on Telecommunications and the Internet, Trujillo emphasized the critical importance of the following initiatives and recommendations: -- Satellites should be regarded as an essential component in all future critical telecom network planning -- Satellite systems must be pre-deployed to a cadre of trained professionals -- Satellite personnel must be credentialed as first responders -- Satellite spectrum must be preserved and protected Mr. Trujillo stressed the importance of applying the lessons learned from Hurricanes Katrina and Rita to improve the future of disaster relief and recovery telecommunications, as various components of the disaster relief efforts are evaluated for their effectiveness. Intelsat and others in the communications satellite sector have played a vital role in facilitating communications for rescue personnel, charity organizations, evacuees, communications carriers and news organizations. Intelsat was able to reconfigure capacity and donate service to help cellular providers re-establish their networks, and to quickly provide capacity for emergency services via mobile vans for relief agencies, and mobile offices and command centers for the Department of Homeland Security, the Federal Emergency Management Agency, and law enforcement agencies. "While the outages on terrestrial networks severely impeded the ability of first responders and others in the recovery and relief efforts, satellite technology, because of its inherent resilience and flexibility, performed flawlessly," said Mr. Trujillo. "Incorporating satellite components into any terrestrial network before a disaster strikes provides critical redundancy and access to immediate communications that can be easily and quickly deployed to increase the effectiveness of disaster recovery and relief efforts." About Intelsat Intelsat is a global communications provider offering flexible and secure services to customers in over 220 countries and territories. Intelsat has maintained a leadership position for over 40 years by distributing video, voice, and data for television and content providers, government and military entities, major corporations, telecommunications carriers, and Internet service providers. Intelsat's reach, power and expanding solutions portfolio deliver information reliably and quickly to every corner of the globe. CONTACT: Intelsat Jodi Katz Tel: 202-944-8223 E-mail: jodi.katz@intelsat.com URL: www.intelsat.com =========== B R A Z I L =========== BANCO ITAU: Set to Lose Parana Banking Contract ----------------------------------------------- Private bank Banco Itau will lose a contract to provide banking services to Parana's government employees, Dow Jones Newswires reports. A spokesman for Parana, Governor Roberto Requiao, said the governor will not renew the contract, which expires at the end of October. The contract started in 2002, when Itau bought control of the former Parana state government bank Banestado for about 1.6 billion Brazilian reals. Under the contract, Banco Itau had the exclusive right to provide banking services to 210,000 Parana state workers. Now, the government of Parana will open to public bidding the banking services contract, which involves some BRL700 million in monthly transactions. A frequent critic of Itau, Gov. Requiao has been saying the bank obtained control of Banestado for a low price. He believed the bank was worth at least BRL1.8 billion. BRASIL FERROVIAS: Receives $290M Financial Aid from BNDES --------------------------------------------------------- National development bank BNDES has provided rail holding Brasil Ferrovias (BF) a total of BRL647 million (US$290mn) in financial aid this year, Business News Americas reports. Of the total amount, BRL265 million are new loans while the remaining BRL382 million are old loan debts that were transformed into capital injections. According to a BF spokesperson, the Company's total debt with BNDES stands today at BRL1.3 billion, with half of that sum maturing in 2014 and the rest in 2016 and 2017. In May, the government completed restructuring plans for BF. The process calls for the holding's capitalization and an injection of BRL1.5 billion (US$609 million). The BRL647 million provided by BNDES is part of the Company's restructuring. Another BRL446 million will come from a debt-for- equity swap and BRL375 million from shareholders. Also under the plan, BF will be split into two holding companies. One will retain the Brasil Ferrovias name and continue to control concessionaires Ferroban and Ferronorte, whose shareholder makeup will not be modified. The other holding company, which will be named Novoeste Brasil, will have the following shareholders: Previ (20.8%), Funcef (20.8%), Constran (18.6%), LAIF (17.7%), Bradesco (4.11%), BRB (6.47%), JP Morgan (5.5%) and others. COPEL: Elects New Fiscal Council Member --------------------------------------- Companhia Paranaense De Energia - COPEL elected Mr. Heron Arzua as an effective member of the Fiscal Council on an Extraordinary General Meeting held on September 28, 2005 to fill in the vacancy left by Mr. Paulo Roberto Trompczynski, who has resigned to his term of office after taking the position as the Company's Financial and Investor Relations Officer SUMMARY OF THE MINUTES OF THE 166th EXTRAORDINARY GENERAL MEETING 1. VENUE: Rua Coronel Dulcidio, n 800, Curitiba - State of Parana. 2. DATE AND TIME: September 28, 2005 - at 2:30 p.m. 3. CALL NOTICE: Call notice published by the Official Gazette of the State and newspapers "O Estado do Parana" and "Diario Comercio Industria e Servicos - DCI". 4. QUORUM: fifty nine wholes, seventy one hundred per cent (59.71%) of the voting capital, as per signatures on the Shareholders' Attendance Book 3, page 38, over leaf. 5. PRESIDING BOARD: SILMARA BONATTO CURUCHET - Chairwoman; RUBENS GHILARDI - Executive Secretary of the Board of Directors and CEO of the Company; MARLOS GAIO - Secretary. 6. DELIBERATIONS: I. Elected by unanimous vote, as an effective member of the Fiscal Council, to complete the 2005/2006 term of office, Mr. Heron Arzua, a Brazilian citizen, married, lawyer, Identity Card (RG) # 273.343 -PR, Individual Taxpayer's Register (CPF/MF) # 000.196.829 -72, domiciled at Alameda Julia da Costa, 1425, ap. 201, Bigorrilho, in the city of Curitiba, State of Parana, fulfilling the vacancy left by Mr. Paulo Roberto Trompczynski, who has resigned to his term of office after taking the position as the Company's Financial and Investor Relations Officer. Being the voting minority shareholders consulted separately, under the terms of article 240 of the Brazilian Corporate Law, it was also elected by unanimous vote, to the same term of office, to fulfill the vacancy left after Mr. Felipe Hirai's withdrawal, as an alternate member of the Fiscal Council, Mr. Mauricio Jonas de Oliveira, a Brazilian citizen, married, business manager, Identity Card (RG) # 19.503.423 -SP, Individua l Taxpayers' Register (CPF/MF) # 251.176.838 -03, domiciled at rua Manoel Carneiro da Silva, 271, ap. 41, city of Sao Paulo, State of Sao Paulo. II. The item 2 was removed from the agenda, as it was a request from the controlling shareholders and, as information provided by the representative, in the light of some new factors, this discussion was no longer necessary. CONTACT: Copel Investor Relations E-mail: ri@copel.com Phone: (55-41) 3222-2027 ELETROPAULO METROPOLITANA: Completes BRL800 Mln Debenture Sale -------------------------------------------------------------- Electric power utility Eletropaulo Metropolitana Eletricidade de Sao Paulo SA has completed its sale of BRL800 million worth of non-convertible debenture issue, reports Dow Jones Newswires. The debentures will mature in August 2010 and will pay an annual interest rate of 2.9 percentage points over the local interbank rate. The operation, which was coordinated by Banco Itau BBA, Unibanco and Banco Pactual, secured a BB+ rating from Fitch Ratings. The Troubled Company Reporter - Latin America detailed in a previous report that Eletropaulo expects to use BRL720 million of the issue to pay part of its existing BRL1.5 billion debt. It will use the remaining balance for its investment program and to strengthen its cash reserves. Eletropaulo defaulted on over US$2 billion in debts in 2002 but resumed payments in 2004 after extended negotiations with creditors in Brazil and abroad. Eletropaulo is controlled by US power company AES (NYSE: AES) through a 50% stake in holding company Brasiliana, in which one of the Company's largest creditors, national development bank BNDES, has the other 50%. 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 SABESP: To Raise $111M Using FIDC Fund Model -------------------------------------------- Sao Paulo water utility Sabesp is looking to raise BRL250 million (US$111 million) through an FIDC fund to pay back long- term debentures worth BRL250 million that mature in 2006. This means that Sabesp will use future revenues from accounts receivable as a guarantee to pay back the loan. Sabesp expects to launch the fund by the end of this year. The launch will be coordinated by Votorantim bank, while federal bank CEF will administer the fund and Banco do Brasil will be its custodian. SABESP: Ratings Reflect Volatility of Brazilian Economy ------------------------------------------------------- Corporate Credit Rating: BB-/Stable/-- Business risk profile: Weak Financial risk profile: Aggressive Debt maturities: 2005 BrR1.02 bil. 2006 BrR633 mil 2007 BrR771 mil. 2008 BrR905 mil. 2009 BrR1.15 bil. 2010 BrR714 mil. 2011 BrR2.26 bil. Outstanding Rating(s): Sr unsecd debt - Foreign currency - BB- Major Rating Factors Strengths: - Strong and solid cash generator and capacity to raise resources through the capital markets and development banks; - Strategic importance as a regional provider of water and wastewater service; - Virtual monopoly of service in a large territory, providing efficient and quality service; and. - Capacity to progress in its capital development program. Weaknesses: - Lack of a defined regulatory framework for the water utility sector; - Significant refinancing needs in upcoming years and exposure to foreign exchange risk because there are no hedging instruments in place; - Volatility of the Brazilian economy; and - Collection risk from the public sector, even though some improvement has been noticed. Rationale The global scale corporate credit rating on water utility Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP; BB-/Stable/--) reflects the significant amount of its annual debt maturities (averaging Brazilian real (BrR) 835 million per year), combined with its significant refinancing needs and exposure to currency mismatch. The rating also reflects the lack of a defined regulatory framework for the water and utility sector in Brazil, and the company's challenges to reduce overdue accounts receivables of wholesale clients and water losses. These risks are partially offset by SABESP's strategic importance as a regional provider of water and wastewater service in the state of Sao Paulo. The company covers a large and broad territory and has a natural monopoly for these services. SABESP also has the capacity to expand the capital expenditure program that increased wastewater collection and treatment capability through the system. SABESP is a strong cash generator and probably is the Brazilian water and wastewater company with the most access to financial markets, and it may raise funds through the capital markets and multilateral banks to deal with its debt maturities and its investment requirements. In first-half 2005, the company's net revenues and EBITDA improved about 12% and 16%, respectively, compared with the same period in 2004, amounting to about BrR2.4 billion and BrR1.1 billion, respectively. Such improvement is related to the tariff increase of 6.8% in August 2004 and the 4.7% increase in the volume demand in the first six months of 2005. For the end of 2005, we believe SABESP's revenues and EBITDA will improve compared with 2004's numbers due to the absence of the water- reduction program in 2005 (the program ended in September 2004), allowing consumers to return to past consumption habits and the 9% tariff increase applied in August 2005. Standard & Poor's Ratings Services expects SABESP to report about BrR4.7 billion in revenues and BrR2.1 billion in EBITDA, an improvement of 7% and 10%, respectively, when compared with 2004's results. As a result, EBITDA to interest is expected to reach 3.3x in 2005, up from 2.8x in 2004, and EBITDA to total debt would also improve to 32% from 27% in the same period. SABESP is the largest water and sewage company in the Americas in terms of revenues and number of clients. The company is responsible for water production and distribution and sewage collection and treatment in 368 of the 654 municipalities in the State of Sao Paulo, including the city of Sao Paulo. Sao Paulo is Brazil's most populous and economically productive state, and is SABESP's main market, representing 56.1% of revenues. The company has formal concession agreements with about 90% of the municipalities. About 44% of these agreements mature in 2005 and 2006 (17 agreements in 2005 and 127 in 2006). Standard & Poor's expects most of these contracts to be renewed because the assets that make up the existing municipal water and sewage systems are owned by SABESP and because of the high efficiency and quality of services, good working relationships with the communities, and economies of scale. However, these are smaller contracts in terms of contribution to total revenues, and in the worst-case scenario that all municipalities decide not to renew with SABESP, about 4% of its net revenues in 2005 and 9% in 2006 will be negatively affected. Liquidity SABESP's main weaknesses are its aggressive financial profile, largely due to its high leverage and its exposure to foreign exchange risk because no hedge instruments are in place. However, the company has reduced its foreign currency debt exposure by about 30% during 2005 and continues to improve its cash generation thanks to the tariff adjustment and increase in volume demand. In June 2005, the short-term debt was BrR1.4 billion (BrR1 billion matures up to December 2005 and about BrR400 million matures up to June 2006), which included the maturity of BrR249 million debentures (fourth and fifth issuance), US$275 million (BrR649 million) Eurobonds, and the remainder refers to working capital loans and financing for capital expenditures. To deal with its short-term obligations, SABESP placed its eighth debenture issuance in the total amount of BrR700 million to refinance the Eurobonds. This local market transaction significantly reduced the company's exposure to the exchange rate fluctuation to the current 21% from 38% at the end of 2004, which Standard & Poor's views positively because the company has no hedging instruments. Another source of liquidity was its seventh debentures issue of BrR300 million that was used to partially pay its fourth and fifth debentures. In addition, the company counts on its free operating cash flow, which is expected to reach about BrR350 million at the end of 2005 and its very good access to the international and national capital markets. SABESP's total debt reached BrR7.4 billion in June 2005, of which 81% is long-term debt. In 2006, the company will face BrR633 million in maturities. This total amount is expected to be paid with proceeds from capital market transactions and cash generation. Outlook The stable outlook on the foreign currency rating reflects that of Brazil's sovereign foreign currency rating. The stable outlook on the local currency and national scale ratings reflect Standard & Poor's expectations that SABESP will continue to receive approval from the state government to adjust tariffs in such a way to maintain its capacity to generate free cash flow, continue to experience good access to capital markets, and fund much of its capital program through multilateral banks. A change in outlook would come from a more robust decrease in leverage (EBITDA to total debt to 38% and total debt to EBITDA to 2.5x), which is not currently anticipated. Primary Credit Analyst: Juliana Gallo, Sao Paulo (55) 11-5501-8948; juliana_gallo@standardandpoors.com Secondary Credit Analyst: Milena Zaniboni, Sao Paulo (55) 11-5501-8945; milena_zaniboni@standardandpoors.com ========= C H I L E ========= AES GENER: 'BB+' Ratings Affirmed; Outlook Revised to Positive -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on Chile's second-largest power generator AES Gener S.A., and revised the outlook to positive from stable. The outlook revision reflects the improvement in the company's business profile after the passage of the Short Law II in May 2005, which triggered a significant increase in electricity prices in Chile, thus benefiting cash flow generation for power generators in Chile. The ratings on AES Gener reflect its higher-than-average power generation cost when compared with the relatively large hydroelectric generators in the Central Interconnected System (SIC) under normal hydrological conditions and the increasing natural gas supply risk that affects its natural gas-fired generation and the cost of its power purchases. However, thermal capacity provides protection from droughts, and large long-term power sales contracts with solid offtakers like Chilectra S.A. and Chilquinta Energia S.A. in the SIC at the node price provide stable cash flow in periods of high hydrology. The ratings also reflect that a great portion of its cash flow comes from its operations in the growing Chilean market (about 70% to 80% of its EBITDA), and its good financial profile. "The positive outlook incorporates our expectation that, under a base case scenario, AES Gener's debt service coverage ratios will continue improving in the next three years despite the projected increase in natural gas shortages in Chile," said Standard & Poor's credit analyst Sergio Fuentes. The ratings could be raised if AES Gener's financial performance continues to consolidate and if there is evidence that the company can weather a potential combination of natural gas shortages with poor hydrology and high prices of alternative fuels, mainly in 2007 and 2008, without a significant deterioration of its debt-repayment capacity. Primary Credit Analyst: Sergio Fuentes, Buenos Aires (54) 114-891-2131; sergio_fuentes@standardandpoors.com Secondary Credit Analysts: Pablo Lutereau, Buenos Aires (54) 114-891-2125; pablo_lutereau@standardandpoors.com Marta Castelli, Buenos Aires (54) 114-891-2128; marta_castelli@standardandpoors.com =============== C O L O M B I A =============== TERMOEMCALI FUNDING: 100% of Noteholders Tender 10.125% Sr. Nts. ---------------------------------------------------------------- TermoEmcali Funding Corp. disclosed that 100% of its outstanding 10.125% senior secured notes due 2014 have been tendered as of Sept. 13, 2005. The Company previously launched an offer to exchange all outstanding notes, a consent solicitation and solicitation of acceptance of a prepackaged plan of reorganization on Aug. 11, 2005. As reported in the Troubled Company Reporter on Aug. 30, 2005, the Company's out-of-court restructuring consisted of an offer to exchange each $1,000 of outstanding principal amount of 10- 1/8% Senior Secured Notes Due 2014 for $968.58 in principal amount of new Restructured Senior Secured Notes Due 2019. The Restructured Notes will bear interest rates escalating from 6% per annum effective as of the first day of the month in which the exchange offer is effective to 10-1/8% per annum effective from July 1, 2009, plus $31.42 in Cash. The payment recognizes that if $1,000 principal amount of Existing Senior Secured Notes had been exchanged for $1,000 principal amount of Restructured Senior Secured Notes on June 16, 2004, an additional $31.42 in principal would have been amortized since that exchange is based on the actual interest payments exceeding the interest that would have been paid at the applicable restructured interest rates to the holders of the Existing Senior Secured Notes since June 16, 2004. The Restructured Senior Secured Notes are expected to have the opportunity for principal prepayments, monthly installment payments, and certain security that would not be available to the Existing Senior Secured Notes. Consent Solicitation The financial restructuring also consisted of a consent solicitation for the New Indenture, the New Common Agreement and to amend, waive or terminate certain agreements or provisions thereof, including, but not limited to, the Existing Indenture and the Existing Common Agreement applicable to the Existing Senior Secured Notes. By validly tendering the Existing Senior Secured Notes, noteholders will automatically be deemed to have: (a) given consent to the proposed amendments, waivers and terminations with respect to all of the Existing Senior Secured Notes tendered; (b) agreed to the exchange; (c) authorized and directed the Existing Indenture Trustee to execute the proposed amendments, waivers and terminations and to take such further necessary action to effectuate the exchange, including directing the Collateral Agent to execute the amendments, waivers and terminations and to take such further action necessary on its part to effectuate the exchange; (d) accepted the Prepackaged Plan and (e) accepted the releases. The proposed amendments, waivers and terminations will become operative only if the Exchange Offer closes. Obtaining the requisite consent of the holders of at least 94.5% of the aggregate outstanding principal balance of the Existing Senior Secured Notes is one of the conditions to the closing of the Exchange Offer. The Prepackaged Plan The Claims held by holders of its Existing Senior Secured Notes constitute the only impaired class under the Prepackaged Plan. In the event that less than 94.5% of the aggregate outstanding principal balance of the Existing Senior Secured Notes are tendered in connection with the Exchange Offer, but if the Prepackaged Plan is accepted by holders of at least 66% of the aggregate principal amount of the Existing Senior Secured Notes who vote and who represent at least 50% of the total number of beneficial holders of the Existing Senior Secured Notes who vote, the Company may commence a voluntary case under Chapter 11 of the Bankruptcy Code for purposes of effectuating the restructuring through the Prepackaged Plan. Deutsche Bank Trust Company Americas serves as the Indenture Trustee for the Restructured Senior Secured Notes. The Company and Emcali are parties to a 20-year power purchase agreement pursuant to which the Company sold electric generating capacity and energy to Emcali. The Power Purchase Agreement has been suspended pending the effectiveness of the exchange offer and the issuance of notes payable by Emcali to TermoEmcali. At such time, the PPA is to be terminated. Full-text copies of the Company's Offering Memorandum and Disclosure Statement and related documents are available at no charge at its exchange agent's website at http://www.bondcom.com/termoemcalior at these addresses: Bondholder Communications Group -- New York Attn: Trina Caliveri 30 Broad Street, 46th Floor New York, NY 10004 Telephone: (212) 809-2663 Fax: (212) 437-8727 E-mail: tcaliveri@bondcom.com Bondholder Communications Group -- London Attn: Trina Caliveri 3rd Floor, Prince Rupert House 64 Queen Street London, EC4R 1AD Telephone: +44 20 7236 0788 Fax: +44 20 7236 0779 E-mail: tcaliveri@bondcom.com TermoEmcali Funding Corp. was formed to develop, construct, own and operate a natural gas-fired electric power generation facility, which is located near Cali, Colombia. The Company is owned by Leaseco, Cauca Valley Holdings Ltd., TermoEmcali Holdings Ltd., Emcali E.I.C.E. E.S.P., and Inversiones Inca S.A. Leaseco, a Cayman Islands company, is owned and controlled by Cauca Valley and Holdings, both of which are Cayman Islands companies. As previously reported in the Troubled Company Reporter-Latin America on July 28, 2005, the 'D' rating on TermoEmcali Funding Corp.'s US$165 million senior secured notes due 2014 reflects the Colombian company's failure to make its September 2004 debt- service payment. Since then, the project-financed entity also failed to make its debt-service payments through June 2005. ===================== E L S A L V A D O R ===================== * EL SALVADOR: Ratings Reflects Improved Economic Prospects ----------------------------------------------------------- Rationale The ratings (BB+/Stable/B) on the Republic of El Salvador are supported by: - A stable monetary environment created by the 2001 adoption of the U.S. dollar as the local currency; - A fairly strong and well-regulated banking system relative to those of its neighbors; - Strong and increasing flows of workers remittances, which increased to 16% of GDP in 2004 from 14.7% in 2002 and are forecasted to reach 17% in 2005; and - Improved economic prospects as a result of the Central America Free Trade Agreement (DR-CAFTA). The ratings are constrained by: - Low levels of investment and savings, which have produced sluggish levels of economic growth with negative per capita levels in 2003 and 2004 (albeit forecasted to turn positive in 2005-2006); - A relatively low tax base and the increasing cost of pension reform, which continue to limit fiscal flexibility, in the context of a country with a dollarized economy, widespread poverty, and public security concerns; and; - External competitiveness that has weakened in recent years, reflected in stagnant export growth and low levels of foreign direct investment (FDI). El Salvador implemented a wide range of structural reform over the last decade: the financial system has been strengthened, the social security system privatized, and the U.S. dollar was adopted as the local currency in 2001. Nevertheless, the economic growth rate has been disappointing in recent years, averaging an annual 1.9% during 2000-2004 with minus 0.16% average annual per capita growth. The U.S. Congress ratified DR- CAFTA in July 2005. Given the country's stable political and macroeconomic scenario, if El Salvador's government manages to capitalize on this agreement-and increase its economic integration with the U.S. and with other Central American economies-growth prospects could improve over the medium term. Despite efforts to rationalize government operations, El Salvador's narrow tax base has resulted in relatively high deficits for a fully dollarized economy. President Antonio Saca's Administration managed to pass a tax package in early 2005 that is expected to increase tax revenue by about 1.2% of GDP. However, this increase will be more than offset by increases in pension payments and public investment. Nevertheless, this represents a step in the right direction and demonstrates a commitment to augment El Salvador's tax revenue base in an effort to address the country's social needs. El Salvador's general government deficit, which totaled 2.7% of GDP in 2004, is projected to increase to 3.0% of GDP in 2005. This is attributable to an increase in government investment, which represents the Administration's attempt to recover from its almost nonexistent 2004 public investment plan (caused by the delays in the 2004 budget approval process). In addition, the cost of switching to a private pension system, which accounts for two-thirds of the deficit, is expected to peak at just above 2.0% of GDP in 2006. Outlook The stable outlook reflects Standard & Poor's view that fiscal performance will not deteriorate significantly. El Salvador has no monetary flexibility, and it is therefore imperative that fiscal performance be prudent. At the same time, the authorities should be able to use DR-CAFTA as an engine of economic growth over the medium term. If economic growth and fiscal performance improves, the ratings could be raised. However, if the deficit deteriorates more than expected and growth continues at the current disappointing levels, the ratings could come under downward pressure. Primary Credit Analyst: Roberto Sifon Arevalo, New York (1) 212-438-7358; roberto_sifon-arevalo@standardandpoors.com ============= J A M A I C A ============= AIR JAMAICA: Rating Based on Govt's Guarantee on Debt Payments -------------------------------------------------------------- Rationale The rating on Air Jamaica Ltd., which is equal to the long-term foreign currency sovereign credit rating on Jamaica, is based on the government's unconditional guarantee of both principal and interest payments. In August 2005, Air Jamaica raised a $125 million 10-year loan from RBTT, on top of the $200 million issued in June 2005. Standard & Poor's Ratings Services believes the company had almost completed its financial restructuring process and now the company will focus on improving its operational performance. Air Jamaica has already started its operations enhancement, cutting unprofitable routes, increasing flight frequencies during holiday seasons, and raising direct sales activities on the web. The sovereign credit ratings on Jamaica are constrained by a high general government debt burden, limited fiscal flexibility, and vulnerability stemming from the island's geographical location and size. General government debt stock has been declining, reflecting improving fiscal performance since mid- 2003, and is expected to decline toward 130% of GDP by the end of this fiscal year (down from 138% in 2003 and 140% in 2002). Still, the looming debt size remains a major constraining factor on the ratings. Jamaica's debt profile is unfavorable, with a high (albeit declining) sensitivity to interest- and exchange- rate fluctuations, and an increasing share of more expensive commercial debt. The ratings are supported by the island's improving fiscal and external liquidity position (despite external shocks), ongoing commitment to fiscal austerity, and stronger growth prospects- all of which have helped stabilize the Jamaican dollar and increase investor confidence. Medium-term growth is expected to hover at about 2.5%-3.0% of GDP, based on significant investment in the tourism ($600 million during the next five years) and mining ($300 million during the next three years) sectors. Liquidity Air Jamaica's liquidity is limited. The company's liquidity is almost completely reliant on government support because its operations have generated operating losses since 1994. The government of Jamaica has committed to recapitalize the company's annual unpaid payroll taxes, education, and departure tax liabilities, but these will not exceed $30 million per year during the next five years. Outlook The stable outlook reflects the outlook on the sovereign credit rating on Jamaica. Any rating action on Jamaica would be reflected in the ratings on the Air Jamaica notes. Jamaica's stable outlook balances the improvement in the government's fiscal and debt positions, supported by promising growth prospects and a stronger external liquidity stance, with significant risk stemming from the size of the government's debt. Primary Credit Analyst: Juan P Becerra, Mexico City (52) 55-5081-4416 Secondary Credit Analyst: Santiago Carniado, Mexico City (52) 55-5081-4413; santiago_carniado@standardandpoors.com NCB JAMAICA: JMD600 Mln Payment Came From Hilton ------------------------------------------------ The JMD600-million (US$10.25 million) settlement payment that NCB Capital Markets Ltd, a unit of NCB Jamaica Ltd, received recently was made by Hilton Kingston (formerly Wyndham Hotel). The Jamaica Observer disclosed that NCB bought the hotel in the early 1990s during the height of its foray in real estate. In May 1998, NCB sold the hotel to Ron Kelly's RHK Capital Inc of Canada. To facilitate the transaction NCB provided a second mortgage to the purchasers for US$7.5 million. NCB issued the mortgage on May 29, 1998 with a repayment date five years later, on May 29, 2003, and with the purchaser having the option to extend the repayment date to May 29, 2008. According to report, the terms of the loan had a complex, multi- tiered interest rate, which required the borrower to pay an increasing amount of interest per annum, starting at 7.5% in the first year, and reaching 14.25% by year ten in 2008 - if the extended option was exercised. With the increasing cost of interest payments, the purchaser opted to repay it in full leading NCB to report more than a week ago that it had "received a settlement of US$10.25 million in respect of a debt for which it had fully provided". =========== M E X I C O =========== AOL LATIN AMERICA: To File August 2005 Monthly Report This Month ---------------------------------------------------------------- America Online Latin America, Inc. ("AOLA") and its subsidiaries AOL Puerto Rico Management Services, Inc., America Online Caribbean Basin, Inc. and AOL Latin America Management LLC have not yet filed their consolidated monthly operating report for August 2005 with the United States Bankruptcy Court for the District of Delaware, but expect to file such monthly operating report by October 14, 2005. CONTACT: AOL Latin America 6600 N. Andrews Ave. Suite 400 Ft. Lauderdale FL 33309 Phone:(954) 233-1803 CENTRAL PARKING: Updates Certain Fourth Quarter Developments ------------------------------------------------------------ Central Parking Corporation (NYSE:CPC) announced an extension and modification of the price range of its "Dutch Auction" tender offer for up to 4,400,000 shares of its common stock. The tender offer, which was previously extended to September 30, 2005, has been further extended until 12:00 Midnight, New York City time, on October 14, 2005. Furthermore, the Company has modified the range of purchase prices at which it will purchase shares of its common stock in the tender offer to not less than $14.00 per share and not more than $16.00 per share. The Company has extended the tender offer and modified its price range in light of the recent developments regarding the Company's United Kingdom operations. As previously announced, the Company has become aware of certain related party issues in its United Kingdom operations, primarily related to its United Kingdom Transport business. The Company and the audit committee of its Board of Directors are continuing to investigate this situation with the assistance of outside legal, accounting and forensics professionals. This investigation has revealed that certain management-level employees located in the Company's United Kingdom office appear to have engaged in unauthorized related party transactions utilizing Company assets and to have made improper and inaccurate entries to the Company's financial statements for the United Kingdom operations. As part of the investigation, the Company is evaluating its legal rights against the parties involved in the related party transactions. The Company is also engaged in work to determine the quarterly and year-end financial results of its UK operations. Although the year-end review and investigation are not concluded, at this time the Company believes that there may be a negative financial impact on its prior fiscal 2005 quarters in the range of US $8 to 10 million, consisting primarily of over-accrual of revenues and improper capitalization of expenses. Based upon the foregoing, management, the Audit Committee and the Board of Directors, after consultation with the Company's independent auditors, have determined that the Company will restate its quarterly financial statements for the first three quarters of fiscal 2005. The overall negative financial impact on the Company's fiscal year ending September 30, 2005, including the US $8 to 10 million related to prior quarters, is estimated to be in the range of US $13 to 15 million, including current period operating losses and anticipated expenses of the investigation. The United Kingdom operations represented approximately 2.7% of the Company's revenues previously reported in the Company's financial statements through the first three quarters of the current fiscal year. In addition, management is required by Section 404 of Sarbanes- Oxley to do an assessment of its internal controls over financial reporting as of September 30, 2005, and the Company's independent auditors are required to issue an opinion with respect to the Company's internal controls over financial reporting. Based on the issues with the United Kingdom operations and the Company's determination regarding restatement of its quarterly financial statements for the first three quarters of fiscal 2005, the Company believes that it is likely that the Company will identify and report a material weakness in the Company's controls over financial reporting as of September 30, 2005. In light of these developments, the Company's "Dutch Auction" tender offer has been extended to 12:00 Midnight, New York City time, on October 14, 2005, unless the Company elects to further extend the tender offer. Furthermore, the Company has decreased the range of purchase prices at which it will purchase shares of its common stock in the tender offer to not less than $14.00 per share and not more $16.00 per share. The Tender offer was extended in order to ensure that the information contained herein and in an amendment to the Company's Schedule TO to be filed on September 30, 2005 is available to shareholders for a sufficient period of time prior to the expiration of the self- tender. Shareholders that have already tendered shares and indicated that they would accept the final price determined by the Company in the tender offer, and who do not wish to change that direction, do not need to take any action in response to the extension. Shareholders that have already tendered shares at a specified price must deliver a new Transmittal Letter to the Depositary either indicating that they intend to accept the final price determined by the Company in the tender offer or specifying the price, not greater than $16.00 per share and not less than $14.00 per share, at which they are willing to sell their previously tendered shares. Shareholders who have previously tendered shares and wish to withdraw shares previously tendered should follow the procedures described in the Offer to Purchase. Shareholders who have not previously tendered shares and who wish to remain investors do not need to return any paperwork. Central Parking Corporation, headquartered in Nashville, Tennessee, is a leading global provider of parking and transportation management services. As of June 30, 2005, the Company operated more than 3,400 parking facilities containing more than 1.5 million spaces at locations in 37 states, the District of Columbia, Canada, Puerto Rico, the United Kingdom, the Republic of Ireland, Mexico, Chile, Peru, Colombia, Venezuela, Germany, Switzerland, Poland, Spain, Greece and Italy. CONTACT: Central Parking Corporation Emanuel Eads Tel: 615-297-4255 E-mail: eeads@parking.com MERIDIAN AUTOMOTIVE: Panel Wants Sanchez-DeVanny as Counsel ----------------------------------------------------------- Christopher S. Sontchi, Esq., at Ashby & Geddes, P.A., in Wilmington, Delaware, relates that on Aug. 26, 2005, the Official Committee of Unsecured Creditors of Meridian Automotive Systems-Composites, Inc., filed a complaint for the avoidance of liens and claims and related declaratory relief against Credit Suisse First Boston, as agent, and certain additional lenders that were party to the First Lien Credit Agreement and the Second Lien Credit Agreement, both dated April 28, 2004. The Complaint seeks a declaratory judgment that the First Lien Lenders and the Second Lien Lenders do not have valid, perfected and enforceable security interests in the capital stock of MASI's Mexican subsidiaries as well as certain of the MASI's assets in Mexico. By this application, the Committee seeks authority from the U.S. Bankruptcy Court for the District of Delaware to retain Sanchez- DeVanny Eseverri, S.C., as special Mexico counsel, effective as of Aug. 30, 2005, to assist the Committee's counsel with prosecuting the Adversary Proceeding with respect to the Mexican Assets. The Committee believes that SDE is well qualified to represent it in the Adversary Proceeding because the firm has substantial experience in civil and commercial litigations in Mexico. SDE will be paid in accordance with its ordinary and customary hourly rates: Senior Partner $300 Partner $215 Associate $150 Paralegal/Clerk $60 The Debtors will also reimburse SDE for all costs and expenses reasonably incurred in connection with its services. Ana Laura Mendez, Esq., a partner at SDE, assures the Court that the firm: -- is disinterested within the meaning of Section 101(14) of the Bankruptcy Code; -- does not represent or hold an interest that is adverse to the Debtors with respect to the matters on which the firm is employed; and -- does not have any material connections with the Debtors, their officers, affiliates, creditors or any other parties-in-interest. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000). ================= V E N E Z U E L A ================= PDVSA: Petrobras Board Approves Refinery in the Northeast --------------------------------------------------------- Petroleo Brasileiro S.A. - Petrobras, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, announced that in a meeting held Thursday, the Executive Board approved five ventures with the state-owned company Petroleos de Venezuela S.A. - PDVSA, which represents a landmark in the relationship between the two companies. 1.) Refinery in the Northeast of Brazil in Pernambuco The Executive Board authorized the detailing of studies regarding the implementation of a refinery in Pernambuco. Each company would participate 50% and it would have the capacity to process 200,000 barrels of heavy oil per day, half for Petrobras and half for the Venezuelan company. This is the first project involving the construction of a new refinery approved by the Petrobras Executive Board since the conclusion of the Vale do ParaIba Refinery (REVAP) in 1979. The projected investment is US$2.5 billion (being 50% from each company). The aim of the refinery will be to maximize the production of diesel oil and liquefied petroleum gas, to meet the increase in demand for derivatives in the Northeast, in 2011. At present, there is a deficit of oil products in the Northeast. The possible location for the refinery was subject to a wide and detailed study in five northeastern states. A work group that involved the collaboration of 100 personnel including consultants and technicians from both companies examined techno-economic, environmental and social aspects. The Executive Board approved the recommendation of a techno- economic, environmental and social study to locate the new refinery in Suape, in Pernambuco, close to Recife. This region was chosen because it provided the most adequate elements for the venture, taking into account the following factors, amongst others: - The industrial region of SUAPE has been in existence for more than 25 years and has proven experience; - The region has oceanographic conditions that facilitate the construction of a port on a scale required for the refinery, without major investments; - The local market of Pernambuco is the second largest in the Northeast after Bahia; - The availability of local labor and infrastructure that will attend to the needs of the project execution, without major development costs; - The local environment has less fragile characteristics than other areas in the region. According to the Executive Board decision regarding the technical aspects, the focus of the refinery production will, as a priority, substitute the import of derivatives such as diesel oil, liquefied petroleum gas (LPG) and naphtha. Another characteristic of the enterprise will be the use of heavy oil from Brazil and Venezuela as raw material. These countries have large reserves of this type of oil. The project, which will have a significant conversion capacity, should reach the margin of refining at present found in the transformation of heavy oils by distillation means (gasoline and diesel). 2.) Development of the Mariscal Sucre Project The Executive Board approved the signing of a Pre-Agreement regarding the formation of a Joint Venture, its legal structure still to be defined, to develop fields north of Paria (Rio Caribe, Mejillones Patao and Dragon), which are natural gas reserves estimated at 11 tcf (SPE criteria), with investments of US$2.2 billion. The preliminary document foresees the conclusion of the negotiations by January 2006. 3.) Agreement for the Quantification of the Reserves in the Carabobo Field The Executive Board approved the terms by which PDVSA agrees to provide the geological data that allows the execution of quantification and certification studies for the reserves of the Carabobo 1 Field, in the Orinoco stripe in Venezuela. The objective is a combined exploration of the abovementioned field by a company, with 51% participation of PDVSA and 49% of Petrobras. The Carabobo Field has an estimated daily production of 150,000 barrels of extra-heavy oil of 9 API. In the case of the initiative becoming a reality, the oil will be treated in a refinery to give it characteristics similar to those in the Marlim field production. 4.) New Business The Executive Board approved the terms by which PDVSA agrees to provide the geological data regarding the Lido, Limon, Nieblas, Adas and La Paz fields in Venezuela for joint appraisal and certification by PDVSA and Petrobras. The formation of a Joint Venture is foreseen, its legal structure and participation percentages yet to be defined, according to the appraisal of certified reserves and production curves. The current reserves estimates are of 437 million barrels of oil and 1,4 tcf of gas. 5.) Migration of Service Contracts of Petrobras Energia S.A. (PESA) The Executive Board is aware that the Board of Directors of PESA has authorized the signing by the President, subject to the signature of the other interested parties, of Transitory Agreements regarding the regions Mata, Acema, La Concepcion and Oritupano-Leona, where it has participation in Venezuelan. It aims to adapt its operating terms and conditions to the change of the local petroleum legislation. It also authorized the convocation of Shareholders' Meeting by PESA and its controller, Petrobras Energia Participaciones S.A.(PEPSA), to ratify its terms. In conclusion, the investments relating to the refinery in Pernambuco are considered in the recently approved Petrobras business plan for the period 2006-10. The investments fit into the strategy of leading the market in petroleum, natural gas and oil products in Latin America, operating as an integrated energy company, with a selective expansion in international activities. CONTACT: Petroleo Brasileiro S.A - Petrobras Investor Relations Department Raul Adalberto de Campos- Executive Manager E-mail: petroinvest@petrobras.com.br Av. Republica do Chile, 65 - 4th floor 20031-912 - Rio de Janeiro, RJ Phone: (55-21) 3224-1510 / 9947 URL: http: //www.petrobras.com.br/ri/english SINCOR: Total Devises Plan to Solve Conflict with Govternment ------------------------------------------------------------- French oil giant Total has come up with a proposal to solve a dispute with Venezuela's government over how to share profits from the Sincor synthetic crude project. Total currently holds a 47% stake in Sincor, Petroleos de Venezuela (PDVSA) 38% and Norway's Statoil 15%. Total recommended that parties to Sincor should adopt a new contract whereby the government's participation increased when the oil price rose. The idea is to "establish a system under which the participation [of the partners in Sincor] changes depending on the price of oil. This has been done in several countries worldwide," said Total E&P division president Christophe de Margerie. Total accepts that the terms of the agreement should be more favorable for the government because the price of crude has risen dramatically since the contract was signed in the 1990s, de Margerie said. *********** 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *