/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/010209.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 Friday, February 9, 2001, Vol. 2, Issue 29 Headlines B O L I V I A COTEL: Auction Abandoned In The Absence Of Offers B R A Z I L CVRD: Gets New Software To Solve Logistics Problem ERITMO: Lays Off Undisclosed Number Of Workers FURNAS: Anticipates Posting $300M Profit For 2000 FURNAS: New Privatization Plan Still At An Early Stage VESPER: Global Telecom Fallout Likely To Affect Investments C H I L E ENTEL: To Raise US$332M With New Equity M E X I C O GRUPO BITAL: Atlantico Acquisition Suffers Setback MINERA AUTLAN: Trading Of Shares Temporarily Suspended XEROX: Dismissed Employee Files Lawsuit XEROX: Dividends Declared On Stock XEROX: Looks To Sell Certain Assets To Raise Cash P E R U BANCO NUEVO/NBK Bank: BNP Paribas Wins Contract As Adviser - - - - - - - - - - ============= B O L I V I A ============= COTEL: Auction Abandoned In The Absence Of Offers -------------------------------------------------- The auction of a controlling stake in Bolivia's largest fixed line operator Cotel was abandoned when none of the 15 registered bidders presented an offer, reported BNamericas.com Wednesday. According to government appointed manager Rene Bustillo, it was very unlikely that another attempt would be made to find an investor prior to full market deregulation this November 11. He attributed the failure to the social and economic conditions in Bolvia. "Local telephony service in La Paz apparently is not attractive under the given conditions. We have done everything possible to carry out this process and we have to admit no one is interested in the cooperative," Bustillo explained. Cotel, intervened in August last year after a nine-day strike by employees protesting corruption and staff cuts jeopardized service, needs financial backing of a foreign investor to ensure its future. The company is saddled with debts nearing US$43 million and has only 165,000 lines in service out of a total line capacity of nearly 220,000. "From my point of view it will be very difficult for the company to stay afloat without a radical change and heavy investment", Bustillo said. He is expected to meet with Telecommunications Superintendent Guido Loayza to discuss alternatives. Bustillo's management period ends on February 13, after which, Cotel will likely be returned to shareholder management. =========== B R A Z I L =========== CVRD: Gets New Software To Solve Logistics Problem -------------------------------------------------- Inteligencia Computacional Aplicada (ICA) has developed a software for Companhia Vale do Rio Doce (CVRD) to solve logistics problems at the Port of Tubarao, Vitoria, Espirito Santo state, South American Business Information said Wednesday. S4 Shipment Scheduler & Simulation System, as the software is known, can make 25,000 simulations in three minutes supplying information for planning, according to Mr. Marco Aurelio Pacheco from PUC-Rio. The company did not reveal the amount it invested for the development of the said software. ICA, a department from Brazilian university PUC-Rio, has also developed softwares to Souza Cruz, Eletrobras/Copel, Embratel, Petrobras/Cenpes and Light. ERITMO: Lays Off Undisclosed Number Of Workers ---------------------------------------------- Francisco de la Torre, Chief Executive Officer at Miami-based music site Eritmo (www.eritmo.com), said in a BNamericas.com report that the company has laid off an undisclosed number of staff and is entering a "cybernation period to cope with these difficult financial market conditions." Torre's response comes after a recent article published in an Internet magazine Punto-com stated an anonymous former Eritmo employee said the company had run out of cash and was closing down. Although he declined to provide further details about the company's current state or future plans, he maintained that the company is still operating and negotiating with potential investors. FURNAS: Anticipates Posting $300M Profit For 2000 ------------------------------------------------- Officials of Rio-de-Janeiro based power utility Furnas announced in a Reuters report released Wednesday that the company should be posting a record profit of around 600 million reais ($300 million) for 2000. The said profit is seen likely to surpass previous year's result by 70 percent, according to Furnas President Luiz Carlos Santos as quoted by his spokesman. Furnas financial director Paulo Pinto attributed the projected record 2000 profits to higher revenues, in part due to a 15 percent electricity rate hike in mid-2000. "The (profits) results are still provisional, the final figure may be bigger or smaller," he warned. Company officials could not provide any electricity production or revenues data. It's still not clear when the results would be published after Eletrobras said on Tuesday it would adjust the books of the unit to meet rigid U.S. accounting standards as part of preparations for Furnas privatization later this year. The company also announced it has signed a partnership agreement with Argentina's Gener power firm, controlled by Chile's Gener -- a unit of U.S.-based AES Corp. -- allowing Brazil to build transmission lines and import energy from neighboring Argentina. Under the agreement, Argentine's Gener should be supplying Furnas with 400 megawatts of energy in 2002, rising to the project's full capacity potential to 1,200 megawatts in mid-2003. FURNAS: New Privatization Plan Still At An Early Stage ------------------------------------------------------ The new plan to privatize Furnas, which the government wants to sell to a wide shareholder base, is still at its early phase, Brazil Financial Wire reported Wednesday. The central government which controls the electricity generator and transmission company will be hiring firms to model the sale of the company and advise on a tentative restructuring plan. The advising firms will be responsible for overseeing a management overhaul, accounting and planning models at Furnas, and, more importantly, they will be in charge of preparing the company to comply with international good governance practices. Adjusting accounting methods to the norms of the U.S. Securities and Exchange Commission will be essential to launch an international IPO. Before the government can sell stocks in Furnas to a wide shareholder base, it must first float the company. The readership is reminded that Furnas is not publicly traded in Brazil or elsewhere. Firmino Sampaio, president of federal electric holding for the power sector Eletrobras, emphasized that even if the administration fails to divest Furnas this year, the company will stand to benefit from the accounting and management practice reforms. VESPER: Global Telecom Fallout Likely To Affect Investments ----------------------------------------------------------- The global telecom fallout is seen likely to affect the near-term investment strategy of Brazilian long distance carrier Vesper, according to a report released by Brazil Financial Wire Wednesday. However, long-term plan remains unchanged, assured Velocom president David Leonard after he met with Anatel president Renato Guerreiro. Velecom is the company that controls Vesper. Leonard refused to comment on the size of Vesper's near-term investment but he said that the company intends to act in a rational and controlled manner. He also assured that Velocom is still interested in buying Bell Canada's stake in V,sper. According to him, despite the collapse of negotiations, talks are still under way. ========= C H I L E ========= ENTEL: To Raise US$332M With New Equity --------------------------------------- Entel said it would raise nearly US$332 million in equity capital by next June, according to a South American Business Information Tuesday Edition. The company is taking this action to fund investments, which will vary from US$300 million to US$400 million in the short-term, both in Chile and abroad. Part of the newly issued shares will correspond to ADR's. Currently, Entel's cash is only at US$100 million to back its investments because the US$65-million syndicated loan taken out last December was used to by a 25-percent stake in Entel Telefonia Personal (PCS) from Motorola. =========== M E X I C O =========== GRUPO BITAL: Atlantico Acquisition Suffers Setback -------------------------------------------------- Even if bank bailout agency IPAB and Bital immediately strikes an agreement on how to share the costs of recapitalizing Atlantico, the completion of Bital's acquisition of government-intervened Banco Atlantico would still be delayed by a further two months. This was announced by Grupo Financiero Bital top executive Jaime Ruiz Sacristan in an El Economista/Infolatina report released Tuesday. Sacristan explained that the postponement would be a result of legal and corporate procedures required to close the transaction. As a result, an equity issue and a debt issue planned by Bital would also be delayed by several months. MINERA AUTLAN: Trading Of Shares Temporarily Suspended ------------------------------------------------------ The National Securities and Banking Commission issued a 60-day suspension of trading of Monterrey-based Compania Minera Autlan's shares in Mexico's stock exchange effective Feb. 2, Mexico's bourse said in a Reuters report Tuesday. The action was taken after the Mexican manganese and iron alloys producer defaulted on its $7-million debt due last week. The company said it has already met with creditors to discuss restructuring some $74 million in debt, $60 million of which, according to strategic planning sub-director Hector Cacho, will come due this year. Company executives hope to have a debt-restructuring plan in place by June, Cacho added. XEROX: Dismissed Employee Files Lawsuit --------------------------------------- James F. Bingham, a former assistant treasurer at Xerox Corp., filed a lawsuit against his former employer claiming that he got terminated after he warned that the company's accounting irregularities stem from its headquarters in Stamford and not in Mexico City. In an Associated Press report published Tuesday, Bingham stated that Xerox used improper assumptions and other techniques to inflate revenue from leasing copiers and other office equipment to customers. He claimed that Xerox improperly set aside a $100- million reserve from a 1997 deal to artificially boost future profits. And he said the company had been reporting revenues and profit that it shouldn't. According to him, the same practices are followed in other divisions of the company and concluded there was a high likelihood that Xerox had issued misleading financial statements, citing a copy of his Aug. 28 presentation to Xerox executives. While saying he could not calculate an exact number, Bingham estimated errors of various kinds had boosted Xerox's pretax income by as much as $1.2 billion in the five years through 1999, a period in which it had reported pretax income from continuing operations of $8.7 billion. Bill McKee, a spokesman from Xerox, refused to discuss the specific reasons for Bingham's termination. However, he assured it wasn't in retaliation for any activity. Greg Tayler, Xerox Controller, considers the firing an unfortunate situation but said the allegations were presented to the company's auditors, KPMG. "We took a look at the issues he raised," Tayler said, adding, "we believe they are factually without merit." XEROX: Dividends Declared On Stock ---------------------------------- Xerox Corporation's (NYSE:XRX) Board of Directors today declared the regular quarterly dividends on the company's common and preferred stock, both unchanged from the previous quarter and payable April 1, 2001 to shareholders of record March 2, 2001. Payments will be 5 cents per share on the common stock and $1.5625 per share on the Series B convertible preferred stock issued in connection with the Xerox employee stock ownership program. XEROX: Looks To Sell Certain Assets To Raise Cash ------------------------------------------------- Xerox Corp., which is seeking to dispose certain assets in order to raise cash to reduce its heavy debt load, met with at least three leveraged-buyout firms, sources close to the situation related in The Wall Street Journal Monday. Among the firms, which the officials of the struggling copier have reportedly met with, are San Francisco buyout firm Texas Pacific Group; the New York firms Kohlberg Kravis Roberts & Co. and Clayton Dubilier & Rice; and Silver Lake Partners, of San Francisco. Xerox, which has posted steep losses, has announced plans to raise as much as $4 billion from the sale of certain assets, one of which is half of its 50-percent stake in Fuji Xerox Co., which it intends to sell to Japan's Fuji Photo Film Co. Credit Suisse First Boston analyst Gibboney Huske said it was unlikely that the entire company would become a candidate for a takeover by a leveraged-buyout firm. ======= P E R U ======= BANCO NUEVO/NBK Bank: BNP Paribas Wins Contract As Adviser ---------------------------------------------------------- BNP Paribas SA, France's biggest bank, won the contract to advise Peru on selling two retail banks, beating Fleming Latin Pacific Peru SA and J.P. Morgan Chase & Co., Bloomberg reported Wednesday. The French bank is given 90 days to devise a sales strategy and drum up investor interest for Banco Nuevo Mundo and NBK Bank, which were seized by the government after it run on deposits in December. As of Nov. 30, NBK had assets of 2.04 billion soles ($583 million) and deposits of 840 million soles, while Nuevo Mundo's assets totaled 2.63 billion soles and deposits 940 million soles. However, both private banks were unable to meet their obligations after clients withdrew deposits in mid-December on speculation that the banks faced a cash shortage after former President Alberto Fujimori's government collapsed in November. The government appointed administrators and named other banks to cover deposits in soles to the equivalent of as much as $20,000. Peru will likely close the banks if it can't find buyers, analysts 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 American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Janice Mendoza, Editors. Copyright 2001. 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 301/951-6400. * * * End of Transmission * * *