/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/010813.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, August 13, 2001, Vol. 2, Issue 157 Headlines B R A Z I L ACHE: Deals With Serious Shareholders' Crisis BARRAMAR: 3 Firms Form Consortium To Rescue Company CELESC: To Conclude Negotiation Of US$61.2M Debt CVRD: Ships Largest Cargo Of Soy, Bran GLOBO CABO: Analysts Project Deeper Losses in 2Q01 TELEMAR: Anatel Expresses Qualms Regarding President's Dismissal TELEMAR: Obtains US$300M Loan From JBIC TRANSBRASIL: Workers To Strike Over Wage Delays; Forfeit Planes C H I L E STARMEDIA: ING Barings Analyst Lowers Price Target To 20 Cents M E X I C O GRUPO DINA: May Close Truck Plant Due To Lack Of Orders LUZ Y FUERZA: Seeks Assistance To End Electricity Theft MAXCOM: Sees Growth In Fixed Line Clients In July QUADRUM/INTERACCIONES/MIFEL: Likely To Face Govt. Intervention P A R A G U A Y ANTELCO/CORPOSANA: Govt. Hires U.S. Firm For Privatization - - - - - - - - - - - =========== B R A Z I L =========== ACHE: Deals With Serious Shareholders' Crisis --------------------------------------------- Major Brazilian lab Ache is confronted with a serious shareholder crisis as its recent special shareholder meeting. The meeting saw the appointment of Mr. Adalberto Dellape Baptista as the company's chairman of the Board of Directors. However, Baptista's selection was later voided by an injunction, Gazeta Mercantil reported Thursday. Baptista, one of the company's heirs, was the person responsible for initiating the meeting. Ache, with a R$450-million turnover is controlled by three holding companies: Partage, Marvic's and Ventura, each with 33 percent. In 2000, Ache reported a loss of R$32.8 million when it dismissed more than 500 employees. BARRAMAR: 3 Firms Form Consortium To Rescue Company --------------------------------------------------- Alcatel, Pegasus and Telefonica have formed a consortium to salvage Barramar and its US$235 million of debt, Valor Economico said in a report. The three companies agreed to assume the debts of the company, which stopped work on installation of pipelines along highways to be rented to fiber optic communications companies last year. Consequently, Pegasus and Telefonica will have the largest fiber optic network in the state of Sao Paulo. The right of way contracts with the companies managing the highways have been renegotiated, including a 30 percent reduction in costs. Meanwhile, one of Barramar's former directors is involved in a legal dispute, claiming that he has the right to buy 50 percent of the shares in the company. A verdict on the legal action is pending. CELESC: To Conclude Negotiation Of US$61.2M Debt ------------------------------------------------ Centrais Eletricas de Santa Catarina (Celesc), is set to conclude the negotiation of US$61.2 million in debt in EuroCP that was due in July 2001, Gazeta Mercantil reported Wednesday. Accordingly, the sum will be paid in 48 installments of US$1,275 each and is guaranteed by 20.67 percent growth on charge rate authorized by Agencia Nacional de Energia Eletrica (Aneel). CVRD: Ships Largest Cargo Of Soy, Bran -------------------------------------- Brazilian mining company Companhia Vale do Rio Doce (CVRD) recently shipped the largest cargo of soy and bran ever loaded in a single port in Brazil, and possibly the world, Valor Economico disclosed in a report. The cargo, which totaled 118,900 m tons, was bound for Amsterdam and was loaded in the port of Tubarao in Espirito Santo. Vale reportedly saved US$2 million, as well as reduced maritime freight costs, because of the time saved in not having the ship visit other ports. The company is increasing its share of the market for soy shipment. In 1997, it shipped 830,000 m tons of soy products and this year expects to move 2 million m tons. GLOBO CABO: Analysts Project Deeper Losses in 2Q01 -------------------------------------------------- Five analysts polled by Reuters predict that Brazilian cable TV front-runner Globo Cabo may triple its net loss in the second quarter from the year-ago period. As a slump in Latin America's No. 1 economy and a devaluation of the local currency bite into the company's earnings the future remains difficult at best. According to an average of five analysts' estimates, Globo Cabo's net loss may widen to $111 million (274 million reais) from a loss of $35 million. Losses could even exceed that since most calculations were made before the company reported worse-than- expected operating figures last week. "Essentially we are seeing no growth (in subscribers) and the bottom line is heavily impacted by the devaluation of the currency," said Jose Linares, an analyst at JP Morgan. In addition, as fears of an economic collapse in neighboring Argentina erode the value of Brazil's real currency, push up interest rates and slow growth, subscribers are viewing pay-TV more and more as a luxury. "What really is a concern is that we are not going to see any type of growth for the rest of the year," said Rene Pimentel, an analyst at Deutsche Bank. The currency has lost a fifth of its value against the dollar this year, pushing up financing costs on Globo Cabo's debt of about $700 million, half of which is in dollars. The five analysts forecast a loss per American Depositary Receipt (ADR) of 39 cents. The latest Thompson Financial/First Call forecast of six analysts was a loss of 35 cents per ADR. TELEMAR: Anatel Expresses Qualms Regarding President's Dismissal ---------------------------------------------------------------- Telemar's board meeting last month, resulting in the firing of company president Manoel Horacio, spurred suspicions from Anatel, the Brazilian telecommunications regulation agency, according to a Valor Economico report. The controversy centers on rumors that representatives of Opportunity Bank may have voted in the decision. Such a move would be considered illegal under existing regulations, considering that the bank is also a shareholder in another telephone company, Brasil Telecom. Anatel already has an unsigned copy of the minutes of the meeting but is still pressing for a signed copy in order to clarify the situation. TELEMAR: Obtains US$300M Loan From JBIC --------------------------------------- The developing countries telecommunications development fund of Japan Bank for International Cooperation (JBIC) has granted a US$300-million loan to Telemar, Valor Economico revealed Wednesday in a report. The loan is reportedly for ten years, and has an interest rate of 1.8 percent. The company will use the money to comply with the government's requirements for universalization of phone service ahead of schedule. The loan reportedly is not linked to purchase of Japanese equipment. TRANSBRASIL: Workers To Strike Over Wage Delays; Forfeit Planes -------------------------------------------------------------- Due to the delay in payment of their wages, the employees of Brazilian air transportation company Transbrasil will lodge a 12- hour strike, Jornal do Commercio said Thursday in a report. No definite date as to when the said strike will take place has been announced. Transbrasil, which has debts of R$800 million, deposited only part of the wages for July. Meanwhile, Transbrasil are to return two Boeing 737-300 leased from the Australian aircrafts leasing company Ansett due to the non-payment of the monthly installments. The return of the aircrafts will represent a 22-percent reduction on Transbrasil's 737 jets fleet, mainly used in domestic traffic. The company holds nine 737 units and five 767. From the total 14, nine are currently in service. According to Ansett, each aircraft lease is estimated at US$230,000. ========= C H I L E ========= STARMEDIA: ING Barings Analyst Lowers Price Target To 20 Cents -------------------------------------------------------------- Lars Schonander of ING Barings set a new price target for Web site operator StarMedia Network Inc.'s shares, Bloomberg reported Thursday. "The choice is between zero and 20 cents," Schonander forecasted. "The company has two quarters (worth of cash) to go. Beyond then it's highly questionable what will happen with the company." The Internet analyst's 20-cent forecast ranks as the lowest price target on a U.S. stock since Thomson Financial/First Call began tracking analyst price predictions in 1998. Schonander lowered StarMedia to `sell' from `hold' and said the shares are likely to slide to 20 cents in the next 12 months. He previously forecast the shares would reach $2.55. The 20-cent forecast "is a loose estimate of what I think will be left" after the company folds, Schonander said. =========== M E X I C O =========== GRUPO DINA: May Close Truck Plant Due To Lack Of Orders ------------------------------------------------------- Consorcio G Grupo Dina SA late last month closed its parts plant, which made the interior pieces for truck cabs. The company is currently negotiating with the union on final compensation for the plant's 120 employees, CEO Gamaliel Garcia said in a Bloomberg report released Thursday. The executive also warned that the company is also close to shutting down its truck plant due to a lack of customers, leaving the country without a Mexican-owned producer of trucks and buses. "If we're not able to attract production, we'll have to shut the truck plant as well," Gamaliel said. Dina has made only 150 trucks in the last six months compared to the 12,000 trucks it made annually in the early 1990s, according to the officer. The Dina truck and plastic parts plants haven't been operating since February when the company declared a work stoppage because it lacked orders. Since then, Dina has been paying workers about half their normal salaries. Gamaliel disclosed that the union representing workers at the truck plant agreed to a 40-percent reduction in the 506-member workforce. Dina, though, doesn't have the money to pay those workers the severance compensation stipulated by Mexican law and the layoffs haven't been made yet, he said. Dina executives plan to meet with Labor Ministry officials to forge a plan for either attracting new business or shutting the plant, Gamaliel said. Meanwhile, the company will hold a shareholders' meeting on August 24, 2001, at which it is likely to propose the closure of over half its activities and the de-listing of company shares. LUZ Y FUERZA: Seeks Assistance To End Electricity Theft ------------------------------------------------------- Mexican electricity utility Luz y Fuerza del Centro (LFC) needs the assistance of authorities in order to put an end to the theft of electricity, according to Vice President Kennet Smith, Mexican financial daily El Economista reported Thursday. LFC had losses of 23 percent of its energy last year, of which 13 percent was due to theft. The company lacks the resources to prevent people from illegally connecting to its lines in order to obtain service without paying, said Smith. The organization currently aims to end the illegal use of electricity, and to improve profits without reducing the subsidies that consumers currently receive and continue to need. MAXCOM: Sees Growth In Fixed Line Clients In July ------------------------------------------------- Mexican upstart telecom Maxcom last month saw a 14-percent increase in the number of fixed telephone line clients, to 37,922, over June, Mexico City daily Reforma reported Thursday. Company sources revealed that the mixture of residential to commercial lines grew to 55-45 percent. Maxcom, which is headed by Fulvio del Valle, is currently awaiting concessions from the Communications and Transport ministry to expand its local service to several other cities. Del Valle earlier said he sees a potential for 8 million new fixed phone lines in Mexico within the next seven years. He accused Telefonos de Mexico (TELMEX) of neglecting potential clients in remote areas of the country. QUADRUM/INTERACCIONES/MIFEL: Likely To Face Govt. Intervention -------------------------------------------------------------- Mexican financial regulator the National Banking and Securities Commission (CNBV) is said to be closely monitoring the banks Quadrum, Interacciones and Mifel, Mexican financial daily El Economista revealed in a report. The three institutions are widely believed to be experiencing insolvency problems. Although CNBV Chairman Jonathan Davis refused to mention the banks' names until they get a definite diagnosis, CNBV figures indicate that these three banks are struggling with growing past-due loans. As such, the banks could be subjected to intervention if their financial health does not recover quickly. The CNBV is in talks with management of the three banks in order to find solutions to their individual problems, said Davis. "All banks with liquidity or solvency problems are at risk of intervention, depending on the grade of their problems," he said. =============== P A R A G U A Y =============== ANTELCO/CORPOSANA: Govt. Hires U.S. Firm For Privatization ---------------------------------------------------------- The Paraguayan government on Thursday hired U.S. law firm Baker and McKenzie to serve as an international legal adviser in the privatization of Antelco telephone company and Corposana water company, EFE said in a report. According to an official report, the U.S. firm will initially conduct a juridical audit of the two state-owned companies and inspect their concessions and licenses. Secondly, the firm will prepare a rough draft of the contract for the sale of shares and formulate an amendment plan for the companies' statutes to prepare them for privatization. The contract was signed by State Reform Minister Juan Ernesto Villamayor and a representative from Baker and McKenzie, Chilean attorney Antonio Ortuzar Vicuna, among others, at a meeting in Asuncion. For financial and investment advice, both Antelco and Corposana will turn to Spain's Banco Santander Central Hispano. 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 and Edem Psamathe P. Alfeche, 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 * * *