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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, July 16, 2001, Vol. 2, Issue 137
Headlines
A R G E N T I N A
AEROLINEAS ARGENTINAS: AeroContinente Has Enough Cash To Bid
EL SITIO: Company Profile
B O L I V I A
EL MUTUN: Short-Listed Banks Get Bid Rules; Submit Offers 07/24
B R A Z I L
BANCO ECONOMICO: BC Wants To Auction Copene Stake For $307M Min.
COMPESA: Restructures To Restore Profitability
CVRD: Hires Mr. Roger Agnelli As CEO To Manage Restructuring
C H I L E
AESGENER: Agreement With Local Group Over Puerto Ventanas Sale
AESGENER: Mulls Building Combined Cycle Plant
M E X I C O
BANCRECER: Forthcoming Auction Still Has Five Potential Bidders
COMERCI: Sales Results Trigger Apprehension Among Analysts
CORPORACION GEO: Could Be Forced To Set Priorities
GRUPO PULSAR: CNBV Enters Final Stage On Vector Audit
GRUPO TELEVISA: Remains In Talks With Worldcom Over Skytel Stake
VITRO: Issues Explanation Regarding Preliminary 2Q01 Results
V E N E Z U E L A
BANCO INDUSTRIAL: Venezuela To Inject $103.9M
CORIMON: Slowly Regains Old Shape
SEGUROS PROFESIONAL: Struggles To Fight Off Financial Woes
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A R G E N T I N A
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AEROLINEAS ARGENTINAS: AeroContinente Has Enough Cash To Bid
------------------------------------------------------------
Peru's leading airline AeroContinente, which recently offered to
pay $100 million for Spain's stake in the troubled airline
Aerolineas Argentinas SA, revealed it already has secured
financing for its bid, Reuters reported Thursday. According to
CEO Carlos Morales, the only hurdle from its side would be large
airport or fuel debts.
"We have the financing assured. We are a solid company and the
cash will come from our own funds and international banks," said
Morales.
"All we ask is that they guarantee payment of debts for fuel and
with the airport and that they pay two months salary in advance
for staff to enable the re-launch," he added.
Morales reiterated a bid pledge that AeroContinente would not
sack staff saying, "it would not be logical to fire 7,000."
The Peruvian airline said it would make the payment over 10 years
without interest, and would supply the airplanes needed to
maintain the defunct Argentine airline's domestic and
international flights.
EL SITIO: Company Profile
-------------------------
NAME: El Sitio, Inc.
Avenida Belgrano 845, 1092
Buenos Aires
TELEPHONE: (212) 325-2580
WEBSITE: www.elsitio.com
TYPE OF BUSINESS: El Sitio Inc. is an Internet media company
providing country-specific and global
interactive content for Spanish and
Portuguese-speaking audiences in Latin America
and the United States. The Company currently
has, in addition to a global Website, country-
specific Websites for, and sales and content
production offices in, Argentina, Brazil,
Chile, Colombia, Mexico, the United States and
Uruguay.
SIC: SERVICES-PREPACKAGED SOFTWARE [7372]
EMPLOYEES: 392 (last reported count)
TOTAL ASSETS: US$137.1 million (quarter ended Dec. 2000)
TOTAL LIABILITIES: US$20.9 million (quarter ended Dec. 2000)
TRIGGER EVENT: Net revenues fell 20 percent to $4.5 million for
the three months ended 3/31/01. Net loss
applicable to Common rose 6 percent to $21.5
million. Results reflect softness in advertising
demand due to regional economic conditions,
partially offset by lower marketing and corporate
expenses. In May 18 of this year, the company
announced it received notification from the
Nasdaq National Market that its common shares
have failed to maintain a minimum bid price of
$1.00 for 30 consecutive trading days as required
by Nasdaq rules. El Sitio has until August 14,
2001 to regain compliance with Nasdaq's continued
listing requirements.
El Sitio has been buffeted with several class
action lawsuits lodged against it by a number of
large law firms representing various classes of
equity holders.
CHAIRMAN OF THE BOARD: Roberto Vivo-Chaneton
PRES./CEO: Roberto Cibrian-Campoy
CFO/SEC./DIRECTOR: Horacio Milberg
Last TCRLA Headline DATE: Friday, July 13, 2001, Vol. 2, Issue
136
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B O L I V I A
=============
EL MUTUN: Short-Listed Banks Get Bid Rules; Submit Offers 07/24
---------------------------------------------------------------
The five investment banks, which were short-listed for a contract
to handle the sale of Bolivia's El Mutun iron ore deposit, have
received bidding rules and are due to submit offers on July 24,
according to a spokesperson for deposit owner, state mining firm
Comibol, Business News Americas reported Thursday. Rolando Ibanez
of Comibol says that the proposed auction schedule establishes
four to 10 days for the evaluation of bids and awarding of the
contract. Accordingly, the winner will likely be announced early
August. Afterwards, the successful bank would take six to seven
months to conclude the sale process, during which time it must
contact potential investors, prepare bidding rules, organize an
international public auction and draw up a mechanism to qualify
bids and award the deposit.
El Mutun is one of the world's largest iron ore deposits with
estimated resources of 40Bt. The government estimates investment
of US$50 million will be required to put the deposit into
production.
Among the firms which have shown interest are Argentina's Techint
group, Germany's Lurgi, Sidersul of Brazil, UK-based Rio Tinto,
and Fermy Investment - a group made up of Bolivian, Argentine and
US businessmen.
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B R A Z I L
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BANCO ECONOMICO: BC Wants To Auction Copene Stake For $307M Min.
----------------------------------------------------------------
The Brazilian Banco Central (BC) wants its stake in Petroquimica
do Nordeste SA (Copene), the country's largest producer of base
petrochemicals, to go on the auction block on July 25 for at
least 785 million reais ($307 million), according to a report in
Bloomberg Thursday. BC is looking to sell its 23.7 percent of the
voting shares in Norquisa, the group that controls Copene, to
cover part of the costs it incurred in the liquidation process of
the former Banco Economico. Banco Economico is also a shareholder
in the petrochemical company.
BC, along with other Copene shareholders, including Odebrecht and
Suzano, already failed twice over the last seven months to
auction control of Bahia-based Copene, which produces
polyethylene and other chemicals to be transformed into products
like plastics and fertilizers.
"This time around we are trying to make it simpler," said BC
Director Carlos Eduardo Freitas. "We hope this new auction
format will end an impasse."
COMPESA: Restructures To Restore Profitability
----------------------------------------------
Compesa, a water and sewage services company which has been
posting losses in the last two years, is restructuring to restore
profits, according to a report Wednesday in Gazeta Mercantil.
Pernambuco-based Compesa, which is controlled by the local
government, registered losses of R$76 million in 1999 and R$46
million in 2000. According to the company's chief executive, Mr.
Gustavo Mata Sampaio, Compesa requires a R$2-billion investment
to resume its performance. Compesa provides services to 5.6
million people, or 75 percent of Pernambuco state population. The
company expects to end this year with R$270 operating earnings,
31 percent growth compared with 2000.
CVRD: Hires Mr. Roger Agnelli As CEO To Manage Restructuring
------------------------------------------------------------
In the context of its restructuring, started with the unwinding
of cross-shareholdings with CSN, Companhia Vale do Rio Doce
(CVRD) informs that Mr. Roger Agnelli was hired to be its Chief
Executive Officer (CEO). Mr. Agnelli will replace Mr. Jorio
Dauster.
Mr. Agnelli is resigning to the positions of Chairman of the
Board of Directors of CVRD, President of Bradespar S/A and member
of the Board of Directors of other companies to dedicate himself
exclusively to be CVRD's CEO. Mr. Luiz Tarquinio Sardinha Ferro,
currently Vice Chairman of the Board of CVRD, will replace Mr.
Agnelli as CVRD Chairman of the Board.
Mr. Dauster developed an important role during a transition phase
of CVRD and he has contributed to the recent significant
movements and achievements of the Company.
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C H I L E
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AESGENER: Agreement With Local Group Over Puerto Ventanas Sale
--------------------------------------------------------------
The Chilean unit of U.S. utilities group AES Corp., AESGener,
announced Tuesday that it has reached an agreement with a local
investment group over the sale of its Puerto Ventanas subsidiary
for about $61.7 million, Reuters revealed in a report.
"The definitive sale contract will be signed by July 26 at the
latest with a price set at 39.627 billion pesos ($61.7
million)," AESGener said in a statement.
AESGener holds 69.87 percent in Puerto Ventanas, a port in
central Chile, specializing in fuel and bulk cargo. Several local
entrepreneurs linked to the Sigdo Koppers building group
expressed an interest in buying the port last week. They have
offered 745.00846 pesos per share for 53.2 million shares,
equivalent to 66.33 percent of the company, AESGener said.
AES took over the control of Chile's Gener in December 2000 and
shortly after that, announced plans to sell more than $800
million in assets as part of a restructuring process.
AESGENER: Mulls Building Combined Cycle Plant
---------------------------------------------
If it emerges as the successful bidder in the auction opened by
Codelco, Chilean company AESGener is likely to set up a combined
cycle plant with a capacity for 370 MW, El Diario reported July
5, 2001. AESGener is reportedly studying the possibility.
Meanwhile, the state-owned company recently revealed the result
of the tender to supply 400 MW to three of its divisions:
AESGener presented the best offer for El Teniente and Andina,
although the bid has not complied with all the requirements set
by Codelco, which started new negotiations to improve AESGener's
offer.
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M E X I C O
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BANCRECER: Forthcoming Auction Still Has Five Potential Bidders
---------------------------------------------------------------
Sources at the Mexican office of Deutsche Bank refuted a report
that Netherlands-based ING and Spanish bank Sabadell have not
registered to bid for government-intervened banking institution
Bancrecer, Mexico City daily Reforma said Thursday. Deutsche Bank
is handling Bancrecer's sale for bank bailout agency IPAB. A
report by Reforma business columnist Alberto Aguilar on Wednesday
suggested that sources at ING and Sabadell had said that both
firms were not interested in acquiring Bancrecer. On Thursday,
Aguilar stated that Deutsche Bank sources had denied the report,
saying five potential bidders had signed up formally to
participate in the auction.
COMERCI: Sales Results Trigger Apprehension Among Analysts
----------------------------------------------------------
Analysts at Grupo Financiero Banorte warned that the recent sales
results at Mexico's No. 2 supermarket retailer Controladora
Comercial Mexicana (Comerci) show that the company is continuing
to lose its market share, Mexican financial daily El Economista
stated in a report Thursday. Comerci is apparently losing ground
mainly to Wal-Mart Mexico
Comerci posted a dip in same store sales in June 2001, down 0.35
percent compared to June 2000, when it registered a 9.2 percent
growth. First semester 2001 same store sales are down 0.1 percent
while after six months of 2000 they were up 3.9 percent.
Banorte analysts described Comerci's continuing loss of market
share as `quite troubling.' Just recently, the supermarket
retailer said it would cease releasing monthly sales figures.
Salomon Smith Barney retail sector analysts, however, saw this as
an indication of the severity of the company's current situation.
Comerci this year plans to invest a total of $135 million to open
10 new stores and eight "California" restaurants.
CORPORACION GEO: Could Be Forced To Set Priorities
--------------------------------------------------
Mexico's number one housing construction group Corporacion Geo is
working on the sale of shares in its Chilean construction
division on the Chilean stock market within two years, Mexican
financial daily El Economista reported early last week. However,
Geo's Chilean operations, a company which builds over 1,000
houses annually, could even be sold off so as to concentrate on
Mexican housing construction in view of president Vicente Fox's
grandiose schemes.
The Mexican government is now relying on Corporacion Geo to help
build 750,000 new homes in the next 5 years in its bid to reduce
Mexico's estimated deficit of 6 million homes. But this
expectation by the government is putting pressure on the
country's troubled low-income housing developer. GEO also needs
to find ways to cut its debt load and refinance a $50-million
loan before next May.
GRUPO PULSAR: CNBV Enters Final Stage On Vector Audit
-----------------------------------------------------
Mexican financial sector regulator the National Banking and
Securities Commission (CNBV) is now in the final stage of an
audit of Mexico City brokerage and funds manager Vector, which is
owned by Monterrey-based Grupo Pulsar, Mexico City daily Reforma
reported Thursday. Preliminary results of the audit reportedly
show that there were indeed private transactions involving both
Pulsar and Pulsar subsidiary Savia. However, up to now, the
extent of Vector's involvement in issuing notes on Pulsar and
Savia is still not clear to the CNBV auditors. According to the
report, the clients who purchased the notes for the most part
were Monterrey investors who habitually back Pulsar Chairman
Alfonso Romo in financial investment transactions.
Meanwhile, the Mexican independent funds manager Prudential Apolo
remains in acquisition talks with Vector, and is expected to
begin pre-acquisition due diligence proceedings soon.
GRUPO TELEVISA: Remains In Talks With Worldcom Over Skytel Stake
----------------------------------------------------------------
Talks between Mexican media group Televisa and U.S.-based
Worldcom regarding Televisa's sale of a majority stake in Mexican
paging company SkyTel continues, Mexico City daily Reforma
reported Thursday. The reference price for Televisa's Skytel
stake has already been set by the Mexican investment bank
Protega. However, Worldcom, which already owns a minority stake
in the company, is not likely to be willing to pay the reference
price given the recent, dramatic decline in the number of
Mexicans subscribing to paging services. Mexican pager users for
the past 12 months have been migrating in increasing numbers to
mobile phones and PCS services. But according to the report,
Televisa is thought to be anxious to offload the stake, and the
sale is expected to go ahead.
VITRO: Issues Explanation Regarding Preliminary 2Q01 Results
------------------------------------------------------------
Vitro, S.A. de C.V. (NYSE: VTO; BMV: VITROA) said Thursday it
wishes to make the following correction with respect to certain
information disclosed in the announcement of preliminary second
quarter 2001 results issued on July 10, 2001.
In the July 10 announcement, the fourth paragraph read: "The
Company continues with its strategy to divest non-core assets and
completed the sale of 50% of Regioplast to its partner Owens
Corning for approximately US$8 million."
The paragraph should have read: "(...) to its former partner
Owens Illinois (...)."
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V E N E Z U E L A
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BANCO INDUSTRIAL: Venezuela To Inject $103.9M
---------------------------------------------
Venezuela will pump 75 billion bolivars ($103.9 million) into
state bank Banco Industrial de Venezuela. The financial
bolstering comes amid allegations by local magazine Primicia that
the bank lost $150 million in bad loans due to mismanagement
under president Fernando Alvarez Paz Alvarez's two-year tenure,
Bloomberg said Thursday.
However, Alvarez countered the magazine's allegations, saying
that a large dividend payment made to the government at the end
of 1998 and rapid growth last year reduced the bank's capital and
made the injection necessary.
"This article is irresponsible journalism and a satanic lie,"
said Alvarez. "The bank is healthy and profitable."
Funds for the recapitalization will come from the bank's two
shareholders, the Finance Ministry and state development bank
Banco de Desarrollo Economico y Social de Venezuela.
"With this money, we will meet the banking system's capital
requirements and continue to grow," said bank president Fernando
Alvarez Paz. Alvarez will be replaced Wednesday by Jorge
Castillo, a naval officer.
CORIMON: Slowly Regains Old Shape
---------------------------------
Restructuring at Venezuelan paints group Corimon (Corimon
(Corporacion Industrial Montana) has yielded positive results.
The company's debts have been reduced by US$30 million and
operating profits are up 300 percent in the first three months of
2001 (the last quarter of its financial year), El Nacional said
Wednesday in a report.
Also confirming Corimon's return to its old form is the 100
percent increase in its share price during the second quarter of
this year, from Bs$2 to Bs$4. In addition, the Corimon chain of
shops grew from just over 40 at the turn of the year to over 60
presently. Sales are up 6 percent in the year - Corimon has a 30
percent national market share - as the chain takes off in the
Caribbean. Corimon shares are up 8.75 percent in July. Corimon's
recovery was aided by selling off Construcentro stores.
SEGUROS PROFESIONAL: Struggles To Fight Off Financial Woes
----------------------------------------------------------
The Venezuelan insurance Superintendencia ordered intervention in
Seguros Profesional of the Venezuelan insurance sector at the end
of May and into early June 2001. The mandate is the result of
insurmountable losses, El Nacional revealed July 9, 2001. Seguros
Profesional ran up losses of Bs$2.8 billion in 1998 and 1999, a
total which represents 282.58 percent of the group's Bs$983.8
million in capital. The firm has outstanding payments to clients
of Bs$1.7 billion to meet.
In February this year, Profesional ran into deep trouble. It
received a boost via Dinauto's entry into the company's
shareholdings to the tune of 1.2 million shares and promising
capitalization plans involving a merger with La Zuliana. However,
a loss of Bs$2.3 billion was still outstanding at the end of
March despite Superintendencia's insistence in late 2000 that it
be corrected via a capital injection.
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 * * *