/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/010829.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 Wednesday, August 29, 2001, Vol. 2, Issue 169 Headlines B R A Z I L ALPARGATAS: Dealing With 96 Bankruptcy Lawsuits BANESPA: Santander Sells Subsidiary To Bradesco For US$50M INEPAR: Steps Up Telecom Asset Divestments To Focus On Energy TELEMAR: To End Year With R$9.8M In Gross Debt TRANSBRASIL: Announces Return Of Boeing 767-300 TRANSBRASIL: Loses Turbine Engine Due To Nonpayment WILLIAMS COMMUNICATIONS: Closes ATL-Algar Sale For $400 Million WILLIAMS COMMUNICATIONS: Fitch Downgrades Rating; Watch Negative M E X I C O ATLANTICO: IPAB Had Enough Reserves To Cover Loss BANCA MIFEL: CEO Defends Financial Status GRUPO DINA: Empresarial Attempts To Salvage Ailing Truck Maker GRUPO DINA: To De-list Stock From Mexican Exchange GRUPO PULSAR: Creditor Banks Support Restructuring Plan QUADRUM: Elektra Rules Out Capitalization Plan N I C A R A G U A ENITEL: Govt. Criticizes Opposition Party Over Judicial Embargo ENITEL: France Telecom Withdraws Offer To Buy Stake P E R U PETROPAR: Auction Could Lead To Payment Of Lower Prices SIDERPERU: Credit-Rating Agency Downgrades Corporate Bonds V E N E Z U E L A SAMSUNG: Venezuelan Sales Decline By 60% Due To Lawsuit SIDOR: Inaugurates New Projects To Boost Production - - - - - - - - - - - - =========== B R A Z I L =========== ALPARGATAS: Dealing With 96 Bankruptcy Lawsuits ----------------------------------------------- Textile and footwear conglomerate Alpargatas SA disclosed that the company, along with its business units, is facing a total of 96 various bankruptcy charges in local commercial courts, AFX- Europe reported Sunday. In a letter to the bourse, the company revealed that creditors claiming to own bonds or other privately placed securities have filed 47 suits, some have been appealed, while some dockets called for a review by the Supreme Court. There are 7 suits filed by other financial creditors, 31 by commercial creditors, and 8 by labor creditors, including related claims such as legal fees awarded to experts in court cases. In addition, Alpargatas Textil is facing two filings, and Alpargatas Calzado a further charge. No amount was given for the total amount claimed by these creditors. BANESPA: Santander Sells Subsidiary To Bradesco For US$50M ---------------------------------------------------------- Santander bank has sold Banespa subsidiary (BBI) in Luxemburg to Bradesco in an transaction valued at US$50 million, according to a report in Valor Economico Thursday. The move is the first for Santander after it spent R$8 billion in its purchase of Banespa. BBI, which is active mainly in financing foreign trade, private banking and eurobonus, generated a profit of R$4.22 million last year and had equity of R$72 million. INEPAR: Steps Up Telecom Asset Divestments To Focus On Energy ------------------------------------------------------------- The Inepar group, which plans to concentrate its activities in energy, sold more of its telecommunications assets as part of its restructuring process, Gazeta Mercantil reported Monday. Inepar S/A Ind£stria e Constru‡oes sold 36.5 percent of a 49 percent stake in Mastec Inepar to its US partner, Mastec, for US$10.2 million. Inepar Mastec offers engineering services and sets up infrastructure for local operators Telemar, Telef“nica, Brasil Telecom, Tele Centro-Oeste, Norte Brasil Telecom, Global Telecom and CRT Celular. "Energy generation and transmission are markets with more potential in Brazil," said Inepar director Guillermo Morando. TELEMAR: To End Year With R$9.8M In Gross Debt ---------------------------------------------- Brazilian telecoms carrier Telemar will probably end the year with R$9.8 million in gross debt, according to a report Thursday in Valor Economico. The company posted net income of R$5.589 billion in July and has 16,333 lines installed, of which 13,927 are active. The utilization rate fell from 86 percent to 85.3 percent in July while provision for bad debt continues to increase, reaching 4.4 percent of gross income. Telemar recently signed a US$256-million contract with the German company Siemens for the supply of cell phone infrastructure. The deal will see Siemens supplying the infrastructure networks in the states of Bahia, Sergipe, Rio Grande do Norte, Paraiba, Pernambuco and Alagoas. TRANSBRASIL: Announces Return Of Boeing 767-300 ----------------------------------------------- The US Court returned to Transbrasil Thursday the Boeing 767-300, which it detained in the beginning of this month, Transbrasil announced Friday in a Gazeta Mercantil report. The aircraft, which stopped in Miami Airport, reportedly belongs to Pegasus Leasing Company. "We are being accused daily, suffering from enormous pressure from all parts, but we are winning all the battles in court. The order of bankruptcy from GE Capital was thrown out by the Brazilian court and now the US court understands that we are in a reorganization process and making an effort of good faith to minimize our problems and those of our partners," affirmed the Transbrasil President Antonio Celso Cipriani. According to the report, Judge Steve Levien of the 11th Circuit of Miami-Dade County, annulled the block that withheld the airplane in the airport and authorized its immediate removal and return to Brazil. Transbrasil also revealed that the sale and leaseback agreement with Pegasus has been in the process of renegotiation for several months. TRANSBRASIL: Loses Turbine Engine Due To Nonpayment --------------------------------------------------- Embattled Brazilian carrier Transbrasil has had to return a turbine engine to the leasing division of Lufthansa because of failure to meet its payment obligations, Valor Economico reported Thursday. The move, which leaves another of Transbrasil's planes grounded, comes amidst an attempt by the government to seek solutions to the crisis in the airline sector. The government's efforts involve possible renegotiating of tax payments owed to the government and returning of taxes collected by some state governments. WILLIAMS COMMUNICATIONS: Closes ATL-Algar Sale For $400 Million --------------------------------------------------------------- In a company press release, Williams Communications (NYSE: WCG), a leading provider of broadband services for bandwidth-centric customers, announced Monday it has closed on the previously announced sale of its remaining interest in Brazilian Wireless Provider ATL-Algar Telecom Leste, S.A., to America Movil, S.A. de C. V. (NYSE: AMX) (Nasdaq: AMOV) (BMV: AMX) (America Movil). Williams Communications received $300 million at closing and will receive an additional $100 million from America Movil on May 15, 2002. "This is an important step in the successful execution of our financing plan and reaffirms Williams Communications' commitment to focus its resources and core competencies on our broadband network business," said Howard Janzen, chairman and chief executive officer of Williams Communications. In spite of the difficult market conditions, we continue to deliver on each of our promises to enhance our balance sheet and increase shareholder value." About Williams Communications Group, Inc. Based in Tulsa, Okla., Williams Communications Group, Inc., is a leading broadband network services provider focused on the needs of bandwidth-centric customers. Williams Communications operates the largest, most efficient, next-generation network in North America. Connecting 125 U.S. cities and reaching five continents, Williams Communications provides customers with unparalleled local-to-global connectivity. By leveraging its infrastructure, best-in-breed technology, connectivity and network and broadband media expertise, Williams Communications supports the bandwidth demands of leading communications companies around the globe. For more information, visit www.williamscommunications.com. Contact: Anthony Hoffman Williams Communications (media) (918) 573-0159 anthony.hoffman@wcg.com Patricia Kraft Williams Communications (investors) (918) 573-0649 patricia.kraft@wcg.com WILLIAMS COMMUNICATIONS: Fitch Downgrades Rating; Watch Negative ---------------------------------------------------------------- Fitch has downgraded Williams Communication Group's (WCG) senior unsecured debt rating to `CCC+' from `BB-', the senior secured debt rating to `B' from `BB', and the convertible preferred stock to `CCC-' from `B'. WCG's long-term ratings are also placed on Rating Watch Negative. The rating action reflects concerns regarding the company's exposure to certain covenants in its secured credit facility and the slower-than-expected rate of EBITDA growth. The company's strong liquidity position only partly offsets these concerns. A key consideration in this rating action is the company's exposure to certain covenant requirements that could lead to events of default. One covenant of concern requires WCG to generate proceeds of at least $700 million from the sales of its Solutions business and ATL investment by Sept. 30, 2001. The second major covenant concern requires that certain other transactions resulting in net cash proceeds of at least $500 million in aggregate by Dec. 31, 2001, of which at least $150 million must be in the form of additional equity. The equity component of this requirement is significant -- considering the company's current market capitalization is less than $1 billion - - and would result in significant dilution to its current shareholders. The company also faces ongoing EBITDA related covenants. Resolution of the Rating Watch will require the successful mitigation of these covenants. A further consideration in this rating action has been the slower-than-expected rate of EBITDA growth due in part to slower overall economic conditions resulting in reduced spending by telecom providers. In addition, SBC, with which WCG has a significant relationship, has experienced delays in receiving Section 271 relief for long distance service. This has also negatively impacted the company's results. Prolonged delays on SBC's Section 271 approvals and continued economic slowness will challenge the company in its efforts to load its network. Slower loading could result in further EBITDA improvement delays. However, WCG does have a strong liquidity position as it is fully funded into 2004. The company also benefits from its fully completed broadband long distance network. These fundamental strengths could lead to longer term credit stabilization or improvement with the successful meeting of its covenant requirements and further network loading. =========== M E X I C O =========== ATLANTICO: IPAB Had Enough Reserves To Cover Loss ------------------------------------------------- Mexico's bank bailout agency IPAB, which is trying to conclude a drawn out process of selling Banco del Atlantico to financial group Bital, revealed that it had adequate reserves to cover Atlantico's loss, reported Mexican financial daily El Economista Monday. These reserves have grown to 14.6 billion pesos at the end of June this year. IPAB revealed in its financial statement for the first half of the year that recognizing the full legal efficacy of the letter of intention from Grupo Financiero Bital, the government board approved an agreement complementary to the said letter. IPAB also implied that it had managed to transform the profile of its debt, through changing a significant portion of it debt to long term. BANCA MIFEL: CEO Defends Financial Status ----------------------------------------- Hector Reyes Retana, chief executive officer at Mexican Banca Mifel, said that the status of the bank and its businesses are in perfect condition and are not in any danger of being intervened in by the financial regulator, the National Banking and Securities (CNBV), reported Mexico City daily Reforma Monday. In fact, the group is planning to launch several products during the rest of the year. "We have adequate capitalization of 8 percent, as the financial authorities require. It is very important, because if you have excess capital it means that it is not finding the business it was originally meant for, in which case it is invested in government securities. For Mifel, the capitalization is at 11.6 percent at the close of June this year, considering the risks of credit and the market," Reyes said. GRUPO DINA: Empresarial Attempts To Salvage Ailing Truck Maker -------------------------------------------------------------- Mexico's Grupo Empresarial G SA, the primary shareholder of Consorcio G Grupo Dina SA, will offer to buy the remaining shares in the truck maker, Bloomberg reported Monday. The move signals an attempt by Empresarial, which is controlled by the Gomez Flores family, to rescue a company that has struggled to fulfill debt obligations and fight off competition. Empresarial plans to make its tender offer once stock market regulators grant the Mexico City-based company permission to remove its shares from the stock market. About 45 percent of Dina's shares are in shareholders' hands. "You have to make a tender offer before de-listing the shares to guarantee minority shareholders' rights," related Renato Mendez, Dina's chief financial officer. While the terms of the tender offer won't be known until Empresarial makes it formal, Mendez said minority shareholders will likely be paid a price that resembles the average price of Dina's shares for the past 30 days or its book value - whichever is higher. GRUPO DINA: To De-list Stock From Mexican Exchange -------------------------------------------------- Consorcio G Grupo Dina SA was expected to initiate a process Monday with Mexico's financial regulator the National Banking and Securities Comission (CNBV) and with the Mexican Stock Exchange (BVM) to de-list its stock, Mexican financial daily El Economista said in a report. Dina's board finalized the decision over the past weekend and pointed out the importance of the move as part of the company's short-term strategy to restructure its assets. The plan is expected to save Dina $1 million. Dina owes $220 million in debt payments to bond holders, and is considering the sale of Motor Coach Industriales to meet its debt obligations. GRUPO PULSAR: Creditor Banks Support Restructuring Plan ------------------------------------------------------- Creditor banks of holding company Grupo Pulsar already have agreed to support the restructuring plan proposed by the company and its creditors, Manuel Sescosse, president of Centro Bancario de Nuevo Leon (CBNL), disclosed in a Mexico City daily Reforma report released Monday. "The banks have been in agreement with the company to support it, for it to do all it has to do in order to get out of the 'stressful' situation it's in, that obviously is a result of the world economic crisis and the sector (the company) operates in," said Sescosse. Pulsar has debts of over $200 million to bank creditors including the Standard Bank of London, Dresdner Bank, Banorte, Santander Mexico and Banamex. QUADRUM: Elektra Rules Out Capitalization Plan ---------------------------------------------- Grupo Elektra, Banca Quadrum's partner in a strategic alliance for the financing of homes under the Elektra brand name "Credimax," has not offered to capitalize the CNBV-intervened bank, contrary to earlier market rumors, Mexico City daily Reforma said Monday. "As of today there is nothing to that, except for our alliance with Quadrum for the sale of Fovi home mortgages under the brand Credimax Tu Hogar," said a source from Elektra. Analysts believe that it was unlikely that Elektra would come to Quadrum's rescue. According to Francisco Chavez, a Salomon Smith Barney analyst, Credimax needs time to be tested before Elektra considers going further into bank financing. ================= N I C A R A G U A ================= ENITEL: Govt. Criticizes Opposition Party Over Judicial Embargo --------------------------------------------------------------- Nicaragua's ruling conservatives criticized a move by the opposition leftwing Sandinistas to slap a judicial embargo on state phone company Enitel, EFE reported Sunday. "Any willingness by the International Monetary Fund and other multilateral organizations to help Nicaragua get its ($6.5 billion) foreign debt condoned will go up in smoke," according to conservative Nicaraguan President Arnoldo Aleman. A Managua judge, who acted on a motion filed by the Sandinista mayor of the Nicaraguan capital, Henry Lewites, on Friday, embargoed all the goods and assets owned by the Nicaraguan Telecommunication Enterprise (ENITEL). The Sandinistas decided take on ENITEL claiming that the company owes the Managua municipal government $27.8 million in unpaid sales tax, a levy which the central government maintains is illegal and unconstitutional. Unless the judges reverse course, Aleman insisted, "we're in for a long legal battle that will only muddle things further and where the mayor is going to have to pay court costs for having tried to levy an illicit tax". He said the August 31 scheduled privatization of the government's 49 percent stake in ENITEL would proceed and that it was willing to give the future owners an ironclad guarantee that it would assume full responsibility for any debt the courts might confirm on appeal. ENITEL: France Telecom Withdraws Offer To Buy Stake --------------------------------------------------- Nicaragua's state-owned operator Empresa Nicaraguense de Telecomunicaciones (Enitel), which has made three attempts since 1997 to find a buyer for a 40-percent stake valued at $80 million, lost another potential buyer, AFX-Europe reported Friday. France Telecom reportedly decided to withdraw its offer for a stake in Enitel. In September 2000, the French company offered $63 million for the equity position but Enitel rejected the offer. Presently, only Swiss Telia AB and Mexico's Radio Movil Dipsa remain as possible buyers. ======= P E R U ======= PETROPAR: Auction Could Lead To Payment Of Lower Prices ------------------------------------------------------- Paraguayan oil company Petropar's auction for crude petroleum and oil products water transportation services, which it launched August 20, is expected to help the company pay lower prices, Diario Noticias reported last Wednesday. Petropar revealed that the companies bidding in the auction included Yeruti SRL, UABL Paraguay, Soparna, the Consorcio Paraguay Nave-Unitrans consortium, Merco Fluvial, Naviera Cono Sur, Petrovia, Mercopar and National Shipping. Only National Shipping was disqualified, Petropar added. SIDERPERU: Credit-Rating Agency Downgrades Corporate Bonds ---------------------------------------------------------- Lima-based credit-rating agency Apoyo & Asociados informed Peru's Stock Exchange that it has reduced the corporate bonds of Siderperu, the country's sole integrated steel maker, to local- rating C from AA-, Business News Americas reported August 23, 2001. The new classification comes after the company entered into a form of bankruptcy protection to organize a complete refinancing. As debt repayments are now suspended, the corresponding guarantees' value is less, the chances of executing them reduced and the instruments' risk has increased significantly, said Apoyo analyst Ernesto Bazan. Bazan revealed that Siderperu nearly struck a refinancing agreement with all its bank creditors. However, the company could not reach unanimous agreement, thus, the application for legal protection. The banks have been asking it to reduce its credit position after several weeks of liquidity problem, he added. Its creditors have until September 11 to present evidence of what is owed, Bazan said. ================= V E N E Z U E L A ================= SAMSUNG: Venezuelan Sales Decline By 60% Due To Lawsuit ------------------------------------------------------- Samsung's legal battle with supposed exclusive distributor Samtronic de Venezuela C.A. has resulted to a 60-percent drop so far this year in Samsung's sales in Venezuela, El Nacional reported Saturday. The Venezuelan Procompetencia body ordered Samsung, the troubled South Korean Maker of consumer electronics, on June 22, 2001 not to supply firms other than Samtronic. However, the multinational electronics company has not abided by the authority's ruling and is selling 70 percent of product at a 30 percent discount through other firms. Just recently, Venezuela' High Court ruled that Samsung breached terms of an exclusivity contract with Samtronic. The ruling may clear the way for Samtronic to obtain $236 million in compensation from Samsung, which has allegedly allowed its television sets, freezers and computers to enter the Andean country illegally since 1997. The suit, filed last September by Samtronic against Samsung's 49 subsidiaries around the world, seeks damages from lost sales. SIDOR: Inaugurates New Projects To Boost Production --------------------------------------------------- Siderurgica Del Orinoco (Sidor) launched three new furnaces at its slab steel works, as well as the all-new all-automated version of its hot laminates plant, in Ciudad Guayana, Venezuela, El Nacional reported Saturday. With these two process, requiring investments of over US$123 million, the company hopes to reach a total of 3 million tons of liquid steel produced in 2001 despite the growing threat of "dumping" from other countries. 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 * * *