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/raid1/www/Hosts/bankrupt/TCRLA_Public/060126.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 Thursday, January 26, 2006, Vol. 7, Issue 19 Headlines A R G E N T I N A BANCO PATAGONIA: 2005 ROE Jumps to 38% on Extraordinary Gains REPSOL: Inks Exploration & Production Pact with Tierra del Fuego * MENDOZA: District Court's Ruling Upheld by Court of Appeals B R A Z I L AMPLA ENERGIA: Board Approves Generation Asset Sale to Sabricorp BANCO FIBRA: S&P Rates $50 Million Senior Unsecured Debt at 'B+' CATAGUAZES-LEOPOLDINA: S&P Says Sale Does Not Affect Ratings CEF: Perto Wins Bid to Supply 4,960 Automated Teller Machines CSN: Volatile Demand Prompts S&P's BB Rating on Corporate Credit NATIONAL STEEL: S&P Affirms 'B+' Corporate Credit Rating * Central Bank Cuts Key Lending Rate to 17.25% C A Y M A N I S L A N D S CUFRA CONSULTING: To Lay Accounts on Liquidation on February 6 EDGE INVESTMENT: Sets Final Meeting on February 16 EDGE INVESTMENT: Showing Manner of Liquidation on February 16 HAMILTON MULTI-STRATEGY: To Present Liquidation Accounts SURF CAPITAL: Schedules Final Meeting on February 9 C O L O M B I A MINERCOL: Deadline to Liquidate Assets Moved to Dec. 31 C O S T A R I C A * Government Investing US$660 Million for Diesel Generators J A M A I C A * NY Stock Exchange Executive Projects 3% GDP Growth This Year M E X I C O AXTEL: Investing US$150 Million to Fund Expansion in Five Cities CFE: Inks Power Accord with CNFL and ICE TELMEX: Issuing 10-Year Peso Bonds on International Markets TELMEX: To Pay US$428,306 for Refusing SCE of Billing Details P A N A M A AES CORP: AES Panama in Talks to Improve Condado Watershed AES CORP: TermoAndes Arbitration Seeks US$10MM for Gas Supplies P U E R T O R I C O DORAL FINANCIAL: Gets Holders' Consent to Indenture Amendments DORAL FIN'L: Inks Supplemental Indenture for Floating Rate Notes MUSICLAND HOLDING: US Trustee Appoints 7-Member Creditors Panel U R U G U A Y NUEVO BANCO: Advent International Agrees to Delay Sale Closing V E N E Z U E L A PDVSA: Aiming to Surpass Saudi Arabia's Oil Production PDVSA: Contributes US$22.3 Billion to State Coffers in 2005 - - - - - - - - ================= A R G E N T I N A ================= BANCO PATAGONIA: 2005 ROE Jumps to 38% on Extraordinary Gains ------------------------------------------------------------- Banco Patagonia realized a 38% financial gain for 2005 as a result of the appreciation of government-backed securities, financial director Ruben Iparraguirre told Business News Americas. In 2004, the bank recorded an ROE of 20%. Mr. Iparraguirre said this the bank's ROE will come down to more normal levels this year as the extraordinary gains were a one- off phenomenon, Business News reports. In 2002, former President Eduardo Duhalde imposed the conversion into pesos of dollar-denominated loans and deposits during Argentina's economic and financial crisis. Banks received 8.5 billion pesos in government bonds in compensation, Business News relates. "We valued those bonds at market value, which was around 60-70% of their technical value. The government allowed banks to price those bonds at their technical value but we did not use this exemption. Due to Argentina's improved economy, the bonds are now priced at about 90% of their technical value, so we reaped the benefits of that," Mr. Iparraguirre told Business News. The bank also expanded its loan portfolio by 70% to 1.3 billion pesos in 2005. The bank wants to maintain or surpass the loan growth this year. Patagonia currently commands 2.2% market share in the Argentine loan market, Business News relates. Mr. Iparraguirre disclosed to Business News that Patagonia would buy the bidding rules for the upcoming sale of fellow local bank Banco Bisel. Business News relates that Bisel was left behind along with Bersa and Suquia by French banking giant Credit Agricole after the latter withdrew from Argentina in the midst of the country's economic and financial crisis in 2002. The three were taken over by the country's largest bank, federally owned Banco Nacion, with the aim of selling them back to the private sector at a later stage. Banco Nacion is not expected to publish the Bisel bidding rules before March. Banco Patagonia became Argentina's fifth largest locally owned private bank through its purchase of Lloyds TSB Argentina in late 2004. The bank's equity totaled 789 million pesos and its assets 4.22 billion pesos at November 30, 2005. In 2004 the bank posted a 90.8 million-peso (US$30 million) net profit compared to a 594 million-peso loss in 2003. Patagonia's profits amounted to 196 million pesos at November 30, 2005. * * * On Dec. 12, 2005, Moody's Latin America Calificadora de Riesgo S.A. reaffirmed the 'BB' rating on US$80 million worth of bonds issued by Banco Patagonia S.A. (f.k.a. Banco Patagonia Sudameris SA), the CNV revealed in its Web site. The undated bonds were described as "Serie 3 Oblig Negociables" and are classified under "Series and/or Class." The rating reflects the bank's financial status as of Sep. 30, 2005. A "BB" rating indicates that the future of these bonds cannot be well assured. REPSOL: Inks Exploration & Production Pact with Tierra del Fuego ---------------------------------------------------------------- Repsol YPF representative Juan Carlos Fernandez Zarate signed a contract with Tierra del Fuego, Argentina's governor Hugo Coccaro to promote exploration and production of hydrocarbons in areas owned by the provincial government, Business News Americas reports. Under the agreement, Repsol will determined the mechanisms and joint procedures for the exploration and production of hydrocarbons in areas owned by the province through constitutional mandate, Business News relates. Other than its potential exploration upside, Tierra del Fuego also offers an attractive tax-free zone to foreign oil companies. "We know about the province's potential in terms of oil and gas but we need a strong investment. We have decided to sign an agreement for reciprocal cooperation so our technical teams can keep working and see the possibility of investment in the future," newspaper Ambito Financiero quoted Mr. Coccaro. "We have invited the representatives of YPF in the same way we did with the consortium of Total, Wintershall and Panamerican Energy, which are the companies that work in this area." Natural gas production has started in June 2005 from the Carina and Aries fields in the Cuenca Marina Austral-1 (CMA-1) block off the coast of Tierra del Fuego. Gas production from Carina and Aries will gradually substitute declining production on existing fields in Tierra del Fuego and supply more gas to the Argentine market. * * * On June 20, 2005, Moody's Investors Service upgraded the ratings of Spanish oil company Repsol YPF's local subsidiary YPF S.A. Moody's upgraded YPF's senior unsecured rating to Ba3 from B1 and the unit's domestic currency issuer rating to Baa2 from Baa3. YPF's foreign currency issuer rating of Caa1 remained unchanged, as it is constrained by the sovereign ceiling of Argentina. YPF's Corporate Family Rating (formerly known as the senior implied rating) is aligned with the foreign currency issuer rating at Caa1. * MENDOZA: District Court's Ruling Upheld by Court of Appeals ------------------------------------------------------------- The U.S. Court of Appeals, Second Circuit, slammed Greylock Capital Management's bid to reverse a decision issued by the New York Southern District Court approving Mendoza, Argentina's debt restructuring in 2004. Maria Jose Van Morlegan, Esq., said in a prepared statement to the Buenos Aires Exchange that the Court of Appeals supported District Court Judge Harold Baer's decision that affirmed the fairness of the terms of the debt exchange. Ms. Morlegan said that the court agreed with Mendoza's argument that the contract that regulated the debt exchange allowed for a simple majority of bondholders to accept the province's use of special clauses to repeal its sovereign immunity. According to Dow Jones, the so-called "exit consent clauses" were challenged by Greylock and by Rabbi Jacob Joseph School, another bondholder that had declined to participate in the exchange, on the grounds that they impair their capacity as holdouts to sue the province for non-payment of its bonds. =========== B R A Z I L =========== AMPLA ENERGIA: Board Approves Generation Asset Sale to Sabricorp ---------------------------------------------------------------- As previously reported on Jan. 3, Ampla Energia e Servico inked an asset sale agreement with Sabricorp Participacoes. Under the APA, Ampla's generation assets will be sold for 105 million reais (US$46.5 million), Business News Americas reports. At a meeting on Jan. 19, Ampla's Board of Directors gave its stamp of approval to the transaction, Business News states. The sale of the assets includes nine power plants with combined capacity of 62MW. The sale of the generation assets awaits approval of the power regulator, Aneel. According to Business News, the company's decision to sell the assets is in compliance with a power sector legislation that requires Brazilian companies to separate generation and distribution assets completely. Ampla, formerly known as Cerj, was privatized in 1996 and is controlled by Spanish power company Endesa (NYSE: ELE). The Company's major shareholders are the Endesa/Enersis group with 91.9% and Energias de Portugal S.A. with 7.7%. In 2004, the Company distributed 7,292 megawatt-hours to 2.1 million customers, representing a 2.4% share of Brazil's electric distribution market. * * * On Nov. 25, 2005, S&P assigned a BB- corporate credit rating to Brazilian electric utility Ampla Energia e Servicos. BANCO FIBRA: S&P Rates $50 Million Senior Unsecured Debt at 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned on its 'B+' foreign- currency senior unsecured debt rating to Banco Fibra S.A.'s $50 million notes to be issued under the bank's $250 million EMTN program. The issue matures in three years with semiannual payments. The outlook is stable. "The ratings on Banco Fibra S.A. incorporate the bank's low profitability when compared with that of the industry; the challenge to build a diversified funding base given the natural concentration of its deposits, an issue for most wholesale banks; and its exposure to the fierce competition affecting most banks operating in the segment of midsize companies, and the consequent pressure on margins," said Standard & Poor's credit analyst Beatriz Degani. These risk factors are tempered by the bank's strong asset quality indicators; its good track record and expertise in the corporate and middle-market segments; strong liquidity to face economic downturns and cover unexpected losses; and the benefits in terms of ownership with the implicit support from the shareholder. Banco Fibra is a commercial midsize bank, positioned as the 20th-largest private bank in Brazil, with total assets amounting to Brazilian reais (BrR) 9.2 billion (US$3.9 billion) as of June 2005. Despite its relatively small market share, Banco Fibra is among the top banks operating in the small corporate and middle- market segments, currently serving approximately 750 corporate clients. The stable outlook reflects our expectation that the bank will be able to successfully implement its growth strategy in the middle-market segment and still sustain its good asset quality indicators (NPLs) at a rate of less than 4% and maintain a BIS ratio of more than 15%. We also expect profitability to improve to an adjusted ROA of about 2%. The outlook could be revised to negative or the ratings could be lowered if there is a significant deterioration in Banco Fibra's asset quality ratios (vis-a-vis its current levels); if the bank's liquidity and funding are pressured; or if it fails to show more robust profitability levels. Conversely, the outlook could be revised to positive or the ratings could eventually be raised in the longer term, depending on the bank's capacity to deliver the expected results of its growth lending strategy in a consistent manner during a longer period of time. Such a positive rating action would also depend on the bank sustaining its strong liquidity position. CATAGUAZES-LEOPOLDINA: S&P Says Sale Does Not Affect Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services said on Jan. 20, 2006, that Alliant Energy Corp.'s (BBB+/Stable/A-2) announcement that it will sell its sizable minority ownership in the Cataguazes Group does not affect ratings on Brazilian electric utility Companhia Forca e Luz Cataguazes-Leopoldina (Cataguazes-Leopoldina; B+/Negative/--). Alliant currently holds significant minority stakes at Cataguazes-Leopoldina and other companies in the Cataguazes Group, and it is selling its entire Brazilian portfolio to the Brazilian private-investor Antonio Jose de Almeida Carneiro for US$152 million. For the ratings on Cataguazes-Leopoldina, this minority ownership sale is positive because of the contentious relationship between Alliant and the Botelho family (the controlling shareholder). Since 2003, Alliant and the Botelhos have disagreed on several aspects regarding the Group's management, resulting in a conflictive relationship between the parties. This divergence is one of the risk factors for Cataguazes-Leopoldina's ratings because it could impose financial obligations on the Group or might affect its business performance. Currently, there are some legal proceedings filed by Alliant and still awaiting a Brazilian court's final decision, which, according to Mr. Carneiro's announcement, would be completely withdrawn when the sale closes on Jan. 26, 2006. CEF: Perto Wins Bid to Supply 4,960 Automated Teller Machines ------------------------------------------------------------- Business News Americas reports that Brazilian tech firm, Perto, won a 77 million-real (US$33.8 million) contract to supply 4,960 automatic teller machines for the country's second largest bank, federally owned Caixa Economica Federal. Santa Catarina-based Perto topped Diebold Procomp and Itautec's bids in a public online tender. According to Perto the contract represents the biggest self-service equipment deal in Brazil's banking sector during the last several years, Business News relates. Perto aims to complete the project in 18 months. Perto has already installed 20,000 ATMs in Brazil for Dutch bank ABN AMRO and local financial institutions Banco do Brasil, Bradesco, Nossa Caixa and Unibanco. Brazil is estimated to have some 140,000 ATMs. * * * On Oct. 19, 2005, Moody's Investors Service upgraded Caixa Economica Federal's long-term foreign currency deposit rating to B1 from B2 with a positive outlook. The action followed Moody's upgrade of Brazil's foreign currency ceiling for deposits to B1, from B2, and the foreign currency country ceiling for bonds and notes to Ba3, from B1. The country ceilings have a positive outlook. CSN: Volatile Demand Prompts S&P's BB Rating on Corporate Credit ---------------------------------------------------------------- Standard and Poors' Rating Services gave on Jan. 20, 2006, a 'BB' corporate credit rating on Brazilian flat carbon steelmaker Companhia Siderurgica Nacional. The 'BB' corporate credit rating on CSN reflects the company's exposure to volatile demand and price cycles, increasing competition in its home and predominant market of Brazil, aggressive dividend policy and capital investment plan, and sizable gross-debt position. These risks are partly offset by CSN's privileged cost position and sound operating profile, favorable market position in Brazil, strong export capabilities to offset occasional domestic demand sluggishness, and increasing business diversification. CSN is one of the lowest-cost steel producers in the world, which is a result of its access to proprietary, high-quality iron ore (at the Casa de Pedra mine); self-sufficiency in energy; streamlined facilities; and logistics advantages. This is in addition to the group's strong market position in the fairly concentrated steel industry in Brazil. The domestic market remained weak through second-half 2005 with significant impact on CSN's sales in Brazil, leading the company to export 48% of its production in the period under mixed price conditions (as US and Europe remained somewhat weak). CSN is expected to continue performing substantially better than its international peers due to its proprietary iron-ore reserves and resulting favorable cost position. An expansion of its mine capacity is under way, and incremental production is expected to be sold under long-term contracts. CSN's operating performance in the past 12 months ended Sept. 30, 2005, remained sound, though slowing down somewhat. Rising coal prices were partly offset by a continuing and significant decline in the cost of coke and the foreign currency rate appreciation. The company announced that it closed a coke purchase contract that covers half of its coke requirements in 2006, which should moderate the impact of this specific feedstock in its cost matrix in the next several quarters. With an EBITDA margin hovering in the range of 45%-50%, CSN should continue performing well above international peers and reporting strong credit measures. As calculated by Standard & Poor's, CSN's EBITDA margin reached a high 49% in the past 12 months ended Sept. 30, 2005, boosted primarily by a better product mix, with increased galvanized steel. EBITDA interest coverage and funds from operations FFO to adjusted total debt were at 4.8x and 19.8%, respectively, in the 12 months ended Sept. 30, 2005, weakened by derivatives losses due to currency appreciation and a substantial increase in total debt, as the company kept issuing long-term loans, including perpetual notes, in order to further strengthen its liquidity position. The company is expected to gradually pay down more expensive and shorter-tenor loans in the next several quarters with the built- up cash position, somewhat moderating financial leverage in 2006. Nevertheless, we highlight that CSN should remain exposed to the risk of a rapid deterioration of its gross-debt financial ratios if market conditions weaken further in the medium term, considering that the company's gross financial leverage should remain significantly high in the near future. The group's total gross debt, adjusted for debt at CSN's controlling shareholder Vicunha Siderurgia S.A. aka VicSid and pension liabilities, amounted to nearly $5.3 billion at Sept. 30, 2005 -- compared with $4.2 billion in December 2004 -- boosted by $750 million in perpetual notes issued in July 2005. Debt at the parent company level amounted to BrR1.2 billion in debentures -- approximately $520 million -- that may be replaced by a perpetual notes issuance at a higher layer of its corporate structure National Steel S.A., or NatSteel. Upon the conclusion of this transaction, VicSid, as well as other layers in the structure -- including Vicunha Acos S.A. aka VicAcos -- are expected to be virtually free of any debt obligation. While the change in the debt profile at shareholder's level is positive in the short term to CSN, as it tends to reduce dividend requirements and allow CSN to hold a higher proportion of its cash flow to fund capital expenditures, we will continue to view NatSteel's notes as if they were CSN's own debt for the purposes of financial ratio calculation. Additionally, at higher levels in the company's ownership structure, the controlling Steinbruch family has a private agreement to take its old partner over, which also suggests that despite lower cash requirements at NatSteel's level, CSN's dividend policy will remain aggressive in order to service cash requirements at higher layers of the corporate structure. Liquidity CSN's liquidity has been an important short-term mitigating factor to the company's increasing gross-debt position and persistently high short-term debt maturities. Cash reserves amounted to $2 billion at Sept. 30, 2005, and remain exceptionally high, having averaged about $1.1 billion in 2004. Cash liquidity is more than enough to cover short-term debt maturities of $844 million within the next 12 months through September 2006. We expect some reduction in debt balances in the fourth quarter of 2005 and the first half of 2006, but at a gradual pace. As a result, high gross debt balances should continue to translate into a high interest burden; currency volatility should also continue to have a relevant effect on the company's overall financial performance. Refinancing risk is mild. There is some debt concentration in 2008, 2013, and 2015 coming from bullet bond maturities. The company is expected to reach adequate long-term financing to fund a portion of programmed investments, while the remainder will likely be financed with internal cash generation, as we still expect strong FFO for the next several quarters due to the favorable fundamentals. Outlook The stable outlook reflects our expectations that CSN will manage to preserve strong liquidity in the near future thanks to its robust cash generation and despite its significant capital expenditures program and dividend distribution. The outlook also assumes that CSN will be able to maintain sound operating results through the steel cycle thanks to its favorable cost position and access to steel export markets. The rating could come under downward pressure if a continuing increase in gross debt leads financial metrics to deteriorate in a permanent manner. Acquisitions or further capital commitments that could potentially hurt the company's current liquidity condition or add financial leverage are not assumed and could equally lead to a negative revision of the ratings or a negative outlook. On the other hand, strengthening results to levels not factored in or a more moderate financial stance (essentially deriving from lower total gross debt balances and lower exposure to short-term debt) could lead to a positive revision of the ratings or outlook in the medium term. However, this scenario is seen as unlikely considering the company's significant capital and dividend commitments already scheduled for the near future. NATIONAL STEEL: S&P Affirms 'B+' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on National Steel S.A., a company incorporated in Luxembourg and one of the indirect shareholders of Brazilian flat carbon steel maker Companhia Siderurgica Nacional (CSN, BB/Stable/--). The 'B+' rating assigned to NatSteel's forthcoming perpetual notes in the amount of $500-million perpetual notes was also affirmed. The outlook is stable. NatSteel is a special-purpose vehicle whose only purpose is to hold the perpetual notes and a direct stake in Vicunha A�os S.A., an intermediary holding company that controls Vicunha Siderurgia S.A., which in turn holds a 42.74% voting stake of CSN. "The rating on the perpetual notes reflects CSN's ultimate ability to upstream dividends to NatSteel throughout the layers of its corporate structure," said Standard & Poor's credit analyst Reginaldo Takara. "The rating is two notches lower than CSN's 'BB' corporate credit rating to reflect structural subordination of the perpetual notes relative to CSN's own operating and financial obligations." We believe that CSN's controlling shareholder has significant economic incentives to make dividend distribution to be approved in amounts sufficient to comfortably pay interests on the notes. Furthermore, we do expect CSN to sustain strong cash flow fundamentals in the future based on its very low-cost structure and market position and thus upstream dividends without compromising its own financial profile. Nevertheless, we assess subordination and recovery prospects on the perpetual notes by assuming a default scenario for CSN, under which the steel maker's ability to distribute dividends would already have been compromised and NatSteel's perpetual bondholders would be in a significantly disadvantageous position compared with creditors at CSN's level. We estimate that operating (suppliers, employees, taxes) and financial liabilities at CSN's level represent more than 50% of CSN's adjusted total assets, which significantly reduces recovery prospects in a scenario of CSN's default. While the perpetual notes will have a first pledge of a 17% stake of CSN's shares, which provided bondholders with a comfortable coverage of about two times the notes' principal amount, Standard & Poor's is typically skeptical about share collateral values in the long run (more so for a perpetual issuance), especially when assuming a default scenario, which implies that only minimal if any credit is given to the collateral when determining recovery prospects for perpetual bondholders. The outlook on NatSteel's rating is based on the corporate credit ratings on CSN. The stable outlook on CSN reflects our expectations that CSN will preserve strong liquidity and sound operating results through the steel cycle. NatSteel's rating could come under downward pressure if CSN further increases gross debt levels or acquisitions or further capital commitments potentially hurt CSN's current liquidity condition. The ratings' upward potential is limited by CSN's significant capital expenditures program in the next couple of years and current relatively aggressive gross debt leverage. * Central Bank Cuts Key Lending Rate to 17.25% ---------------------------------------------- The Associated Press reports that Brazil's central bank cut the country's benchmark lending rate for a fifth consecutive month in an effort to stimulate an economic recovery. The reference Selic rate was reduced to an annual 17.25% from 18% with no bias. Observers noted that Brazil's IPCA inflation rate came in at 0.36% in December 2005, within market estimates and down from 0.55% posted in November 2005, AP relates. Analysts said that the central bank will likely accelerate the pace of rate cuts because of weak economic activity, AP states. The inflation rate for 2005 was 5.69%, and, according to market surveys released by the central bank, is seen at 4.6% in 2006. The central bank's next interest rate announcement is scheduled for March 8. =========================== C A Y M A N I S L A N D S =========================== CUFRA CONSULTING: To Lay Accounts on Liquidation on February 6 -------------------------------------------------------------- Cufra Consulting Ltd. (In Voluntary Liquidation) The Companies Law (2004 Revision) Pursuant to section 145 of the Companies Law (2004 Revision), the Final Meeting of the Shareholders of Cufra Consulting Ltd. will be held at the office MBT Trustees (Cayman) Ltd, 3rd Floor, Piccadilly Center, Elgin Avenue George Town, Grand Cayman, Cayman Islands, on Feb. 6, 2006, at 12:00 noon. Business: 1. To lay accounts before the meeting, showing how the winding up has been conducted and how the property has been disposed of, as at the final winding up on Feb. 6, 2006. 2. To authorize the liquidator to retain the records of the Company for a period of five years from the dissolution of the Company, after which they may be destroyed. Proxies: Any person who is entitled to attend and vote is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member or creditor. CONTACT: Mr. Paolo Giacomelli, Voluntary Liquidator MBT Trustees Ltd. P.O. Box 30622 SMB, Grand Cayman Telephone: 945-8859 Facsimile: 949-9793/4 EDGE INVESTMENT: Sets Final Meeting on February 16 -------------------------------------------------- Edge Investment Offshore Fund, Ltd. (In Voluntary Liquidation) The Companies Law (2004 Revision) Notice is hereby given, pursuant to section 145 of the Companies Law (2004 Revision) that the final extraordinary general meeting of the shareholders of Edge Investment Offshore Fund, Ltd. will be held at Grand Pavilion Commercial Centre, Suite # 7, 802 West Bay Road, Grand Cayman, Cayman Islands, on Feb. 16, 2006, at 10:00 a.m. (Cayman time), for the purposes of: Business 1. Having an account laid before the members showing the manner in which the winding-up has been conducted and the property of the Company disposed of, and of hearing any explanation that may be given by the liquidator; and 2. To authorize the liquidator to retain the records of the Company for a period of five years from the dissolution of the Company, after which they may be destroyed. Proxies: Any person who is entitled to attend and vote at this meeting may appoint a proxy to attend and vote in their stead. A proxy need not be a member or a creditor. CONTACT: A.R.C. Directors Ltd., Sole Voluntary Liquidator PO Box 10250 APO Grand Pavilion Commercial Centre Suite # 7, 802 West Bay Road Grand Cayman, Cayman Islands Phone: 1 345 769 3400 Fax: 1 345 769 3404 EDGE INVESTMENT: Showing Manner of Liquidation on February 16 ------------------------------------------------------------- Edge Investment Master Fund, Ltd. (In Voluntary Liquidation) The Companies Law (2004 Revision) Notice is hereby given, pursuant to section 145 of the Companies Law (2004 Revision) that the final extraordinary general meeting of the shareholders of Edge Investment Master Fund, Ltd. will be held at Grand Pavilion Commercial Centre, Suite # 7, 802 West Bay Road, Grand Cayman, Cayman Islands, on Feb. 16, 2006, at 10:00 a.m. (Cayman time), for the purposes of: Business 1. Having an account laid before the members showing the manner in which the winding-up has been conducted and the property of the Company disposed of, and of hearing any explanation that may be given by the liquidator; and 2. To authorize the liquidator to retain the records of the Company for a period of five years from the dissolution of the Company, after which they may be destroyed. Proxies: Any person who is entitled to attend and vote at this meeting may appoint a proxy to attend and vote in their stead. A proxy need not be a member or a creditor. CONTACT: A.R.C. Directors Ltd., Sole Voluntary Liquidator PO Box 10250 APO Grand Pavilion Commercial Centre Suite # 7, 802 West Bay Road Grand Cayman, Cayman Islands Phone: 1 345 769 3400 Fax: 1 345 769 3404 HAMILTON MULTI-STRATEGY: To Present Liquidation Accounts -------------------------------------------------------- Hamilton Multi-Strategy Fund, Ltd. (In Voluntary Liquidation) The Companies Law (As Amended) Pursuant to section 145 of the Companies Law (as amended), the Final Meeting of the Shareholders of Hamilton Multi-Strategy Fund, Ltd. will be held at the registered office of the Company on Feb. 15, 2006, at 2.00 p.m. Business: 1. To lay accounts before the meeting, showing how the winding up has been conducted and how the property has been disposed of, as at final winding up on Feb. 15, 2006. 2. To authorize the Liquidators to retain the records of the Company for a period of five years from the dissolution of the Company, after which they may be destroyed. Proxies: Any person who is entitled to attend and vote at this meeting may appoint a proxy to attend and vote in his stead. A proxy need not be a member or a creditor. CONTACT: John Cullinane and Derrie Boggess Joint Voluntary Liquidators c/o Walkers SPV Limited Walker House, P.O. Box 908 George Town, Grand Cayman SURF CAPITAL: Schedules Final Meeting on February 9 --------------------------------------------------- Surf Capital (In Voluntary Liquidation) The Companies Law (2004 Revision) Section 145 NOTICE is hereby given pursuant to section 145 of the Companies Law that the final general meeting of Surf Capital will be held at the offices of Maples Finance Limited, Queensgate House, George Town, Grand Cayman, Cayman Islands, on Feb. 9, 2006, for the purpose of presenting to the members an account of the winding up of the Company and giving any explanation thereof. CONTACT: Messrs. Murray McGregor and Jon Roney Joint Voluntary Liquidators Maples Finance Limited, P.O. Box 1093GT Grand Cayman, Cayman Islands. =============== C O L O M B I A =============== MINERCOL: Deadline to Liquidate Assets Moved to Dec. 31 ------------------------------------------------------- Business News Americas reports that Colombia's government has postponed to Dec. 31, 2006, the deadline to liquidate national mining company, Minercol. The original deadline will expire on January 28. Some issues that need to be resolved include the finance and public credit ministry's actuarial calculations, finishing paperwork in order to transfer assets, and defining which organization would manage Minercol's pensions, Business News states. The liquidation decree for Minercol was issued on Jan. 28, 2004. Since then, Minercol has passed all its mining-related assets on to Ingeominas, Colombia's mining and geology institute. Minercol was created June 27, 1997, from the merger of Minerales de Colombia and the Colombian Coal Company (Empresa Colombiana de Carbon). =================== C O S T A R I C A =================== * Government Investing US$660 Million for Diesel Generators ----------------------------------------------------------- The government of Cuba has invested US$660 million to install 205 diesel-operated generators in the country. The program aims to improve the nation's electricity systems by reducing blackouts and reliance on aging, expensive fuel-oil fired thermoelectric plants, Business News reports. President Fidel Castro said the country will be able to save up to US$1 billion by installing the new generators and using other alternative energy sources, Business News states. Cuba's national SEN grid has installed capacity to generate 3,000MW. The government said that the generators will be operational by May 1, 2006, resulting to 100% of Cuban families that receive electricity will no longer need to consume kerosene or liquefied petroleum gas at certain times of the day due to blackouts, Castro said, Business News relates. "The country will not build more [fuel-oil fired] thermoelectric plants, that is history, it will build only combined cycle plants using gas or plants using another kind of cheap fuel," President Castro was quoted saying, adding the government also plans to install wind parks around the island. Cuba has been receiving fuel assistance form Venezuela after subsidies from the Soviet Union stopped arriving. Venezuela's state oil firm PDVSA provides Cuba with some 100,000 barrels a day in crude and liquid fuels, including diesel for power generation, while Cuba in turn sends teachers, doctors and other advisors to Venezuela, Business News relates. ============= J A M A I C A ============= * NY Stock Exchange Executive Projects 3% GDP Growth This Year -------------------------------------------------------------- Alex Ibrahim, a senior executive of the New York Stock Exchange, said during a conference that global growth momentum will help to move Jamaica towards three per cent growth in its gross domestic product during the next fiscal year, which runs from April 1, 2006 to March 31, 2007, the Jamaica Observer reports. "Here in Jamaica the growth is expected to be slightly below three per cent in 2006/2007," Mr. Ibrahim, who is managing director of the Global Corporate Client Group, was quoted saying. "Although small, this represents Jamaica's most rapid economic expansion since the late 1980s." Jamaica's economy grew by 6.8% in 1989, the last year under Edward Seaga's administration of the 1980s. The nation's economy grew by 5.6% the following year under Michael Manley's regime, the Observer relates. Growth rate declined to 1% in 1991, and has never revived. Between January 1 and September 30, 2005, the growth was 1.1%. "The global economy today is growing at its fastest pace in 30 years: five per cent in 2004, four per cent in 2005 and will continue robust growth expected in 2006," said Mr. Ibrahim. "Indeed, there is a world of unprecedented opportunities for business industries and markets in every region of the world including Jamaica and the Caribbean nations." "The Caribbean needs to develop its capital market by first moving to a level of regional integration that allows us to develop the critical mass to attract international capital," said Roy Johnson, executive chairman of the Jamaica Stock Exchange. "External equity investors are more interested in investment across the region than companies operating in one location." Mr. Johnson argued that the Caribbean should recognize that it was competing with markets with strong regional linkages, for example, Latin America and Asia and "not only with the sophisticated developed markets of New York, London and Tokyo," the Observer relates. Jamaica has maintained its "B" rating for its long and short- term sovereign debt by the prestigious Standard and Poor's International Rating Agency. S&P further said that the outlook on the Jamaican economy remained stable. =========== M E X I C O =========== AXTEL: Investing US$150 Million to Fund Expansion in Five Cities ---------------------------------------------------------------- Axtel S.A. de C.V. plans to shell out US$150 million to launch its telecommunication services in five new cities in Mexico this year, Chief Executive Officer Tomas Milmo told Business News Americas. Axtel S.A. will be expanding in the northern cities of Chihuahua and Torreon, the port of Veracruz as well as Irapuato and Celaya in central Mexico, Business News reports. The company already provides services in Guadalajara, Puebla, Leon, Toluca, Queretaro, San Luis Potosi, Aguascalientes, Saltillo, Tijuana, Monterrey and Ciudad Juarez. Axtel posted net profits of 306 million pesos (US$29 million) for 2005 compared to a loss of 79.6 million pesos in 2004. Axtel is one of the fastest growing fixed line telcos in Mexico. It began trading on the BMV and the New York Stock Exchange in December while Milmo told investors last month the company is interested in acquiring one of its competitors, Avantel or Alestra. * * * On Nov. 3, 2005, Standard & Poor's Ratings Services raised its local and foreign currency corporate credit ratings on Monterrey, Mexico-based Axtel S.A. de C.V. to 'B+' from 'B'. The outlook was revised to positive from stable. The rating on Axtel's US$250 million senior notes due 2013 was also raised to 'B+' from 'B'. CFE: Inks Power Accord with CNFL and ICE ---------------------------------------- Mexican state power company CFE aka Comision Federal de Electricidad signed a technical exchange agreement on Jan. 22 with Costa Rica's state-owned power distributor, CNFL, and state-run electricity company, ICE, Business News Americas reports. Alfredo Elias, CFE's head, and Carlos Castro, the vice-president of CNFL and ICE, signed the agreement in Mexico City. Under the framework of the plan, Puebla-Panama will allow both countries and the Central American region in general to benefit from the technical cooperation between the three entities, Business News relates. The agreement includes the exchange of technical information, training for workers as well as visits by local experts for joint study and research projects. According to Business News, Mexico and Costa Rica have been working together for some time on electricity issues affecting the region, so this agreement will allow them to help develop energy projects that benefit the whole region. CFE is a state-owned integrated power company that dominates generation, transmission and distribution in Mexico. It has 20.6 million clients, 39,182km of transmission infrastructure, 156,647MVA transformation capacity and 163 generation plants that at end-March 2003 had 40,350MW combined capacity. Seventy five per cent of sales are direct to the client, 24.5% are to Mexico City distributor Luz y Fuerza del Centro and the remaining 0.5% are exports. The industrial sector accounts for 61% of direct sales, followed by residential (23%), commercial (7%), agriculture (5%) and services (4%). The company suffered increasing losses for 2003 and 2004. CFE incurred MXN6.2 billion loss in 2003, and MXN119 billion loss in 2004. TELMEX: Issuing 10-Year Peso Bonds on International Markets ----------------------------------------------------------- Mexican fixed line giant Telefonos de Mexico S.A. aka Telmex will issue 10-year peso-dominated bonds on international markets, Business News Americas reports. The bonds are reportedly payable in Mexican pesos or in US dollars and are expected to be priced toward the middle of this week. Credit Suisse and Deutsche Bank are managing the deal. This would be the second peso-dominated offering ever by a Mexican company in international markets. * * * As reported in Troubled Company Reporter on March 9, 2005, court No. 4 of Buenos Aires' civil and commercial tribunal declared Telmex bankrupt, appointing Ms. Maria Lilia Orazi as the trustee. TELMEX: To Pay US$428,306 for Refusing SCE of Billing Details ------------------------------------------------------------- Fixed line giant Telefonos de Mexico S.A., aka Telmex, has been fined MXN4.5 million (US$428,306) by anti-monopoly commission CFC for withholding billing details to Sistema Computarizado de Emergencia, aka SCE, Business News Americas reports. SCE, which operates an emergency phone service in Nezahualcoyotl, Mexico state, went to CFC in 2003 with a complaint that Telmex had refused to provide call charging details, making it impossible for SCE to offer its service. Telmex has lost an appeal against the fine, which was first imposed late last year. * * * As reported in Troubled Company Reporter on March 9, 2005, court No. 4 of Buenos Aires' civil and commercial tribunal declared Telmex bankrupt, appointing Ms. Maria Lilia Orazi as the trustee. =========== P A N A M A =========== AES CORP: AES Panama in Talks to Improve Condado Watershed ---------------------------------------------------------- AES Corp. subsidiary AES Panama, S.A. is in discussions with the Autoridad Nacional del Ambiente to improve conditions on a watershed adjacent to the Company's gas turbine plant at Condado del Rey, in Panama. As part of the discussions, the Company agreed to pay a fine of US$250,000, and improve auditing and environmental management plans at the plant. On April 26, 2003, about 4,000 gallons of oil spilled as a result of incorrect loading and storage tank value settings at the plant. Remediation efforts were promptly conducted and completed. AES Corporation -- http://www.aes.com/-- is a leading global power company, with 2004 revenues of $9.5 billion. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. AES generating 44,000 megawatts of electricity through 124 power facilities and delivers electricity through 15 distribution companies. AES Corp.'s 30,000 people are committed to operational excellence and meeting the world's growing power needs. * * * As reported in the Troubled Company Reporter on Jan. 11, 2006, Moody's affirmed the ratings of The AES Corporation, including its Ba3 Corporate Family Rating and the B1 rating on its senior unsecured debt. The rating outlook remained stable. As reported in the Troubled Company Reporter on June 23, 2005, Fitch Ratings upgraded and removed the ratings of AES Corporation from Rating Watch Positive, where it was initially placed on Jan. 18, 2005, pending review of the company's year- end financial results. Fitch said the Rating Outlook was Stable. AES CORP: TermoAndes Arbitration Seeks US$10MM for Gas Supplies --------------------------------------------------------------- An arbitration for the re-dollarization of TermoAndes S.A.'s gas price in Argentina is seeking about US$10 million for past gas supplies. Since the beginning of 2002, AES Corp.'s subsidiary TermoAndes S.A. has converted its obligations under its gas supply and gas transportation contracts into pesos in accordance with the pesofication established by the Public Emergency Law and related decrees in Argentina. Pursuant to the regulations, payments must be made in Argentine pesos at a 1:1 exchange rate. Gas suppliers Tecpetrol, Mobil and Compani0.a General de Combustibles S.A. have objected to the payment in pesos. On January 30, 2004, the gas suppliers presented a demand for arbitration at the country's International Chamber of Commerce requesting the re-dollarization of the gas price. In October 2004, the case was submitted to a court of arbitration for determination of the terms of reference. The parties are in the process of submitting evidence to the arbitrator. AES Corporation -- http://www.aes.com/-- is a leading global power company, with 2004 revenues of $9.5 billion. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. AES generating 44,000 megawatts of electricity through 124 power facilities and delivers electricity through 15 distribution companies. AES Corp.'s 30,000 people are committed to operational excellence and meeting the world's growing power needs. * * * As reported in the Troubled Company Reporter on Jan. 11, 2006, Moody's affirmed the ratings of The AES Corporation, including its Ba3 Corporate Family Rating and the B1 rating on its senior unsecured debt. The rating outlook remained stable. As reported in the Troubled Company Reporter on June 23, 2005, Fitch Ratings upgraded and removed the ratings of AES Corporation from Rating Watch Positive, where it was initially placed on Jan. 18, 2005, pending review of the company's year- end financial results. Fitch said the Rating Outlook was Stable. ===================== P U E R T O R I C O ===================== DORAL FINANCIAL: Gets Holders' Consent to Indenture Amendments -------------------------------------------------------------- Doral Financial Corporation announced Monday that holders of a majority of the outstanding principal amount of its $625,000,000 Floating Rate Senior Notes due 2007 have delivered consents to proposed amendments to the related indenture and waivers of certain defaults in the Company's Floating Rate Notes consent solicitation. In the Floating Rate Notes consent solicitation, the Company sought and obtained the consent of holders to amendments to the Indenture to allow it additional time to file with the trustee its quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2005, June 30, 2005, and September 30, 2005, and its annual report on Form 10-K for the fiscal year ended December 31, 2005. The Company sought and obtained waivers of certain defaults that have occurred and that may occur under the Indenture. The Company also announced the extension of the expiration date for its consent solicitation relating to its $100,000,000 7.65% Senior Notes due 2016, its $30,000,000 7.00% Senior Notes due 2012, its $40,000,000 7.10% Senior Notes due 2017 and its $30,000,000 7.15% Senior Notes due 2022 from 5:00 p.m., New York City time, on January 23, 2006, to 5:00 p.m., New York City time, on January 26, 2006, unless further extended. All other terms and conditions of the Fixed Rate Notes consent solicitation remain the same. The Company is seeking similar amendments and waivers to the Indenture in the Fixed Rate Notes consent solicitation as were sought and obtained in the Floating Rate Notes consent solicitation. Doral Financial Corporation, a financial holding company, is the largest residential mortgage lender in Puerto Rico, and the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency, Inc. and Doral Bank FSB, a federal savings bank based in New York City. DORAL FIN'L: Inks Supplemental Indenture for Floating Rate Notes ---------------------------------------------------------------- Doral Financial Corporation disclosed that it executed a supplemental indenture relating to its $625,000,000 Floating Rate Senior Notes due 2007. The supplemental indenture was made in connection with the Company's consent solicitation of its Floating Rate Notes. The consent solicitation expired at 5:00 p.m., New York City time, on January 23, 2006. Under the supplemental indenture, the company will have until April 24, 2006, to file with the indenture trustee its quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2005, June 30, 2005, and September 30, 2005. The company is also given until May 24, 2006, to file its annual report on Form 10-K for the fiscal year ended December 31, 2005, before the failure to file those reports becomes a default under the Indenture that would allow holders to deliver a notice of default to the trustee or the Company. In the floating rate notes consent solicitation, the Company sought and obtained the consent of holders to the amendments to the Indenture, which amendments are effected by the supplemental indenture. The Company also sought and obtained waivers of certain defaults that have occurred and that may occur under the Indenture. The amendments and waivers became effective upon execution of the supplemental indenture on Tuesday at approximately 1:00 p.m., New York City time. According to the terms of the floating rate notes consent solicitation, the Company paid a consent payment of $2.50 per $1,000 principal amount of floating rate notes to holders that consented prior to the expiration time. Doral Financial Corporation, is holding company and the largest residential mortgage lender in Puerto Rico. Doral is the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency, Inc., and Doral Bank FSB, a federal savings bank based in New York City. MUSICLAND HOLDING: US Trustee Appoints 7-Member Creditors Panel --------------------------------------------------------------- Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Deirdre A. Martini, the U.S. Trustee for Region 2, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in Musicland Holding Corp., and its debtor-affiliates' Chapter 11 cases: 1. Deluxe Media Services, Inc. 568 Atrium Drive Vernon Hills, IL 60061 Tel: (201) 512-8757 Attn: Curtis Roberts, Esq. 2. Navarre Corporation 7400 49th Avenue North New Hope, MN 55428 Tel: (763) 971-2770 Attn: Ryan F. Urness, Esq. 3. Universal Studios Home Entertainment LLC 100 Universal City Plaza 1440/6 Universal City, CA 91608 Tel: (818) 777-7601 Attn: John Roussey, V.P. Credit Home Entertainment 4. Ventura Distribution, Inc. 2590 Conejo Spectrum Street Thousand Oaks, CA 91320 Tel: (805) 498-7800 Attn: William P. Clark 5. Fender Musical Instruments Corporation 8860 E. Chaparral Road, Suite 100 Scottsdale, Arizona 85250-2610 Tel: (480) 5696-7127 Attn: Mark Van Vleet, Secretary and General Counsel 6. Electronics Arts 290 Redwood Shores Parkway Redwood City, CA 94065 Tel: (650) 628-7304 Attn: Norma Cash, Director, Shared Services 7. Simon Property Group, LP 115 W. Washington Street Indianapolis, IN 46204 Tel: (317) 263-2346 Attn: Ronald M. Tucker, Esq., VP/Bankruptcy Counsel Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) ============= U R U G U A Y ============= NUEVO BANCO: Advent International Agrees to Delay Sale Closing -------------------------------------------------------------- Uruguay's central bank and US investment fund Advent International agreed to delay until the first half of February approval of Advent's purchase of Nuevo Banco Comercial aka NBC, according to a report from the El Pais. NBC was sold to Advent Int'l and a syndicate of lenders in September last year for US$167 million. Advent wants the sale completed by end of January but the bank's board of directors asked for a 90-day extension of the approval and handover. The delay, El Pais says, was caused by a question on how much of NBC's 451 million-peso profit in 2005 should go to the government and how much will stay in the bank's coffers. NBC was created in March 2003 from the assets of Banco Comercial, Banco Montevideo and Banco Obrera. The three banks were suspended after a run on deposits during the financial crisis that swept Uruguay in 2002. ================= V E N E Z U E L A ================= PDVSA: Aiming to Surpass Saudi Arabia's Oil Production ------------------------------------------------------ Venezuela's state-owned petroleum company, PDVSA, has announced plans to reach crude oil production levels of 5.8 million barrels per day by 2012 and 7.5 million barrels per day by 2020. PDVSA also wants to invest $3 billion in expanding its refining capacity. It will form strategic alliances with numerous countries in order to use refineries located in the Caribbean and South America. PDVSA will invest $56 billion between 2005 and 2012 to accomplish its goals. Venezuela will pay 85% of this investment with its own resources, and the remaining 15% will come from private entities. Venezuelan President Hugo Chavez has divided this expansion project into two stages. The first phase will occur between 2005 and 2012, and the second phase between 2012 and 2030. PDVSA is hoping to turn Venezuela into the country with the most crude oil reserves in the world, surpassing even Saudi Arabia. Over the last few years, the Venezuelan petroleum industry has been trying to increase its crude oil production since it is estimated that Venezuela's crude oil reserves could be greater than 77 billion barrels. Venezuela initially attempted to become the world's oil superpower in the 1990s, but the plan was abandoned in 1998 due to a fall in oil prices. However, lately the high price of oil, uncertainty about worldwide oil reserves, increases in the demand for energy, and recent initiatives to increase regional integration in South America have convinced Venezuela that now is the time to undertake an aggressive expansion project. Boost in Production During the first six months of 2005, Venezuela's oil production reached 3,312,000 barrels per day. Of this, 2,291,000 barrels were supplied by the Venezuelan oil company and 352,000 barrels were supplied by private companies. Luis Vierma, PDVSA's Vice President of Exploration and Production, has declared that PDVSA hopes to increase production to as much as 4,019,000 barrels per day by 2012, as well as generate 615,000 additional barrels per day of new synthetic crude oil products in the Franja de Orinoco region. Vierma also stated that, in order to achieve these goals, PDVSA will emphasize the recovery of oil from known fields, accelerate exploration for natural gas within Venezuela, and begin numerous new projects in Franja de Orinoco. Moreover, Vierma indicated that there will be a need to construct, adapt and improve Venezuela's entire petroleum infrastructure, including refineries, terminals, oil pipelines, and tanks. The effort will be focused in the eastern portion of the country where PDVSA estimates it can increase oil production by 6.6 million barrels per day. PDVSA will construct 21 tanks, three new ports for oil transport, and 650 additional kilometers of pipelines in this eastern region. It is estimated that PDVSA will need to spend $40.9 billion to support these exploration and production activities. Eulogio del Pino, a director of PDVSA, stated that PDVSA will increase natural gas production from 6.3 billion cubic feet to 11.5 billion cubic feet. The increases will be distributed as follows: -- in Zulia production will increase from 1.1 billion cubic feet to 1.4 billion cubic feet, -- in Yucal Placer, in the center of the country, it will increase from 1 billion cubic feet to 3 billion cubic feet, and -- in Anaco the increase will be from 1.7 billion cubic feet to 2.8 billion cubic feet. Moreover, the production of natural gas of the Proyecto Mariscal Sucre (currently at about 1.2 billion cubic feet of production) and the Plataforma Deltana (currently at 1 billion cubic feet of production) will also be increased. New Projects Alejandro Granado, PDVSA's Vice President of Refining, explained that Venezuela's petroleum industry will concentrate on increasing crude oil processing capacity through the expansion of existing refineries and investments in plants in the Caribbean and South America. Granado said PDVSA is considering spending $10.5 billion to build three new Venezuelan refineries in Cabruta, Caripito, and Barinas. If they are built, processing capacity in Venezuela will increase to 700,000 barrels per day. Moreover, investments in four of PDVSA's existing Venezuelan refineries could result in an increase of processing of heavy and extra heavy crude oil by 62%. These investments would most affect the Paraguana refinery. Granado also explained that PDVSA has the intention to reach an international processing capacity of 2.3 million barrels per day by 2012. Relations with Other Countries Granado said that the governments of Venezuela and Cuba are working together to reactivate the Cienfuegos refinery, which will require an estimated $44 million investment. Cienfuegos has a processing capacity of 70,000 barrels per day, which is to be used to meet the local fuel demand. Venezuela and Jamaica are working on a project to expand the capacity of the Kingston refinery to up to 50,000 barrels per day. They are planning to invest $197 million between 2006 and 2008 for this project. Venezuela is also considering the possibility of processing 50,000 barrels per day from the La Franja de Orinoco region at the La Teja refinery in Uruguay. This project could be ready by 2011 and would require approximately $600 million in investment. Granado also announced that Venezuela would construct the San Jose Abreue Lima refinery in Brazil through its alliance with Petrobras. This $3 billion investment is expected in 2011, and the refinery is expected to have a processing capacity of 200,000 barrels per day of crude oil coming from La Franja de Orinoco and Brazilian oil fields. There is also talk of possibly refining Venezuela's crude oil in the Cartagena refinery in Colombia. While at the same time, PDVSA also wants to expand its market share in Chile and Peru. Increase in PDVSA's Petroleum Transport Fleet Asdrubal Chavez, PDVSA's internal director, announced that by 2012 PDVSA will have 58 tankers in its fleet. These tankers will carry 45% of the petroleum exported by Venezuela. The building and maintenance of ships will occur via strategic alliances with Argentina, Brazil, China, and Spain. PDVSA will spend an estimated $2.2 billion for the construction of 42 new oil tankers. Other Projects President Chavez has also announced the Petroandina Initiative, which includes the building of an oil pipeline from Venezuela to the Pacific Ocean. The pipeline will traverse Colombia. This will allow Venezuela to gain greater access to Asian Markets by making oil transport faster and lowering freight costs. Asdrubal said that PDVSA will use its plants in Aruba, Bonaire, and Isla in Curazao as distribution centers to distant markets such as China and India. These centers have deep-water terminals that are compatible with tankers that have the capacity of holding 2 million barrels of oil. On Jan. 23, 2005, Fitch Ratings has upgraded the local and foreign currency ratings of Petroleos de Venezuela S.A. aka PDVSA to 'BB-' from 'B+'. The rating of PDVSA's export receivable future flow securitization, PDVSA Finance Ltd, has also been upgraded to 'BB+' from 'BB'. In addition, Fitch has assigned PDVSA a 'AAA(ven)' national scale rating. The Rating Outlook is Stable. Both rating actions follow Fitch's November 2005 upgrade of Venezuela's sovereign rating. PDVSA: Contributes US$22.3 Billion to State Coffers in 2005 ----------------------------------------------------------- PDVSA aka Petroleos de Venezuela S.A. contributed US$22.3 billion to the country's coffers in 2005, compared to a US$12 billion contribution in 2004, energy and oil minister and company president Rafael Ramirez told reporters. The agency's average price for its crude was US$45.39 per barrel, higher than the estimated US$23 per barrel price in its budget. Despite the huge differential between the budgeted price and the actual price in 2005, PDVSA reported no windfall revenue. Mr. Ramirez disclosed that his company had paid US$13 billion in royalties, US$8 billion in income tax and US$1.3 billion in dividends to the company's sole shareholder, the Venezuelan government. PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. On Jan. 23, 2005, Fitch Ratings has upgraded the local and foreign currency ratings of Petroleos de Venezuela S.A. aka PDVSA to 'BB-' from 'B+'. The rating of PDVSA's export receivable future flow securitization, PDVSA Finance Ltd, has also been upgraded to 'BB+' from 'BB'. In addition, Fitch has assigned PDVSA a 'AAA(ven)' national scale rating. The Rating Outlook is Stable. Both rating actions follow Fitch's November 2005 upgrade of Venezuela's sovereign rating. *********** 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, Marjorie C. Sabijon and Sheryl Joy P. Olano, Editors. Copyright 2006. 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 * * *