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/raid1/www/Hosts/bankrupt/TCRLA_Public/011019.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, October 19, 2001, Vol. 2, Issue 205 Headlines A N T I G U A & B A R B U D A LIAT LTD.: Not Ruling Out Potential Alliance With Competitor A R G E N T I N A AEROLINEAS ARGENTINAS: May Establish Code-Sharing With Spanair AMERICA TV: Seeks Protection From Creditors Over $45.2M Debt PLASCAR: Cedes To Recession, Closes Rosario Plant Moody's Drops 3 Argentine Telecoms From Caa1 To Caa3 B R A Z I L EMBRAER: Analyst Expects Charter Demand In Current Conditions MOULINEX: Court Grants More Time To Bidders To Finalize Offers VARIG/TRANSBRASIL: Selling New Debentures To Cover Airport Debts C H I L E LANCHILE: Recent Stock Gains Likely Overreaction TELEFONICA CTC: Plans To Sell $200M Worth of Bonds C O L O M B I A AVIANCA/ACES: Merger Ruling Now Expected In November E C U A D O R BANCO DEL PACIFICO: Spanish Group Takes Over Operations M E X I C O AEROMEXICO: Recent Losses Dwarf Net Earnings By Five Times AIRSHIELD CORPORATION: Core Materials Acquires All Assets AMERIJET INTERNATIONAL: Company Profile BANRURAL: Regulators Step In To Reorganize Bank P A R A G U A Y ANTELCO: Telecom Argentina Expected To Bid For Administration P E R U EDELNOR SA: To Sell 100M Soles Worth Of Five-Year Bonds INCA SUR: Operation Halted For Breach In Restructuring Condition PESQUERA SAN ANTONIO: Acquisition, Restructuring Postponed - - - - - - - - - - - ================================= A N T I G U A & B A R B U D A ================================= LIAT LTD.: Not Ruling Out Potential Alliance With Competitor ------------------------------------------------------------ Cash-strapped regional airline LIAT is still open to the possibility of a business alliance with its closest competitor, Caribbean Star, but is adamant that its rival should make the first move, RJR Radio Jamaica reported Tuesday. "The owner of Caribbean Star knows where LIAT is and I think he knows the Chairman's number, so if he wants to invest in this company or do anything that helps the welfare of LIAT, he only has to pick up the phone," said LIAT CEO Gary Cullen. Cullen made it clear that LIAT would not be going begging on anyone's doorstep and any demonstration of interest has to "come from without and then it can be examined within." A year ago, Caribbean Star owner Allan Stanford had expressed some interest in LIAT, but it is not clear whether that offer is still on the table. However, Chairman of the LIAT Board of Directors, Wilbur Harrigan, has promised that should the opportunity arise "we will look at it." LIAT celebrated its 45th year of operation Monday. ================= A R G E N T I N A ================= AEROLINEAS ARGENTINAS: May Establish Code-Sharing With Spanair -------------------------------------------------------------- Argentine airline Aerolineas Argentinas, which was recently taken over by Air Comet, may forge a code sharing agreement with Spanish airline Spanair, Gonzalo Pascual revealed in a report Wednesday in Expansion. However, Pascual, who is chairman of Spanair and member of the Air Comet consortium, did not specify when this would take place. Meanwhile, Pascual also announced that Aerolineas, which is currently suspending payments, would start flights to Spain within two weeks, adding Australia and New Zealand on the route list soon. Once it reaches an agreement with the US authorities, the company will resume flying to Miami. AMERICA TV: Seeks Protection From Creditors Over $45.2M Debt ------------------------------------------------------------ Mounting debts and declining advertising revenues forced Argentina's America TV to seek protection from creditors early this week, reported AFX European Focus Wednesday. According to a company statement, its "inability to obtain reasonable credit" further exacerbated an already weakened financial position. The Argentinean television network has reportedly amassed a P45- million ($45.2 million) debt load. Along with its petition Tuesday, the Company also asked for an extension of time in which to publish its total liabilities. Paraguayan magnate Carlos Avila owns 80 percent of the network, which he acquired last year for $150 million. Former owner businessman Eduardo Eurnekian retained the balance of company equity. PLASCAR: Cedes To Recession, Closes Rosario Plant ------------------------------------------------- After suffering from a 3-year recession and a 40-percent drop in sales in the local market, Plascar, the auto-parts manufacturer of the American group Textron, closed its plant in Rosario, Santa Fe Province, where it supplied auto-parts to General Motors (GM), El Cronista reported Tuesday. Plascar invested nearly US$5mil in an 8,000-sq. meter factory and has operated in Argentina for almost 3 years. The company has already reached an agreement with Emplast of the German group Dynamit and with L' Equipe Monteur to take over the supply to GM of Plascar's auto-parts. Moody's Drops 3 Argentine Telecoms From Caa1 To Caa3 ---------------------------------------------------- Moody's Investor Services has cut the long-term foreign currency debt ratings of the following issuers in conjunction with the rating agency's downgrade of the Republic of Argentina's sovereign cross border obligations to Caa3 from Caa1. The rating outlooks are stable as are those on the Republic of Argentina's ratings. The ratings on the following outstanding long-term bonds and notes issuers have been downgraded to Caa3 from Caa1: - Compania de Radiocommunicationes Moviles S.A. - CTI Holdings S.A. - Telecom Argentina STET-France Telecom S.A. These ratings are constrained by the sovereign ceiling. =========== B R A Z I L =========== EMBRAER: Analyst Expects Charter Demand In Current Conditions ------------------------------------------------------------- Empresa Brasileira de Aeronautica SA (Embraer) is likely to see gains due to a rising demand for charter flights following the September 11 terrorist attacks in the US, Bloomberg revealed Wednesday. According to Paschoal Paione, an analyst at Fator Doria Atherino, people nowadays search for more security and this could boost demand for corporate aircraft. Paione rates Embraer's shares `buy', at a price target of 13.75 reais. MOULINEX: Court Grants More Time To Bidders To Finalize Offers -------------------------------------------------------------- After examining offers for French domestic appliances group Moulinex on Tuesday, the commercial court of Nanterre decided to postpone the deadline for the submission of offers for a further two days to give candidates more time to finalize their bids. The court was scheduled to convene again Thursday at 3pm and subsequently announce its decision. The court examined three offers Tuesday. The favorite, from French electrical appliances group SEB, was examined last, after the court saw representatives from not very credible Canadian group Euroland, which has not yet produced a guarantee cheque, and French financier Fidei. The stumbling block of the offers from Seb and Fidei is the fate of Moulinex's stock. The banks (Societe Generale, BNP Paribas and Credit Lyonnais) want to keep them as a payment guarantee. The threat of liquidation is therefore as real as ever for Moulinex. VARIG/TRANSBRASIL: Selling New Debentures To Cover Airport Debts ---------------------------------------------------------------- Brazil's Infraero airport authority granted Varig and Transbrasil more time to pay airport debts as the two carriers scramble to reduce expenses in order to survive the global crisis hitting the aviation industry, Reuters reported Wednesday. According to Infraero, flagship carrier Varig and smaller player Transbrasil would sell the airport authority debentures to cover their 252.6 million reais ($92.8 million) debts and buy them back from January 2002 over a period of up to five years. "The companies asked for a breather, a suspension of the payments," said Infraero Finance Director Antonio Lima Filho. "So what we are doing is restructuring their debt." While the mechanism offers relief to both airlines, it falls far short of the their wish for a government bail-out. The Infraero debts are a drop in the bucket compared to Varig's total debt of $1.3 billion as of June and Transbrasil's $350 million. ========= C H I L E ========= LANCHILE: Recent Stock Gains Likely Overreaction ------------------------------------------------- LanChile SA, Chile's top airline, may pare an 11.2 percent gain in the prior three sessions in the market on concern that the increase was overdone given declining air travel, Bloomberg suggested Wednesday. The carrier fired about 6 percent of its workforce this month to cut costs after terrorist attacks in the U.S. on Sept. 11 reduced ticket purchases, though the reductions may not be enough to offset lower sales. LanChile shares on Tuesday rose 6.8 percent to 865 pesos. TELEFONICA CTC: Plans To Sell $200M Worth of Bonds -------------------------------------------------- Chile's biggest telephone company Telefonica CTC Chile revealed it might sell at least $200 millions of bonds in Chile but didn't say how it would use the debt, Bloomberg reported Wednesday. "We're looking at opportunities to sell bonds in the domestic market," said Telefonica CTC Chief Executive Claudio Munoz. "It could be that amount or something more if we see more space to sell bonds." The planned sale comes as a weakening currency increases the cost of foreign debt. Munoz said that Telefonica already has $2.2 billion in debt. According to the executive, the company plans to invest $250 million this year as it expands its mobile telephone services and data transmission businesses, and will likely invest a similar amount next year. =============== C O L O M B I A =============== AVIANCA/ACES: Merger Ruling Now Expected In November ---------------------------------------------------- Colombia's Civil Aviation agency on Wednesday extended its October 27 deadline to rule on the proposed merger of Avianca and Aces saying it wants more information, according to a report Wednesday in Reuters. The agency said it had asked the companies how they would divide airport facilities and flight routes if they were allowed to merge. Civil Aviation chief Juan Carlos Velez said that once the companies submitted their written responses, the agency would take up to 20 business days to issue a final decision on the merger. The additional time will likely push a ruling well into November. ============= E C U A D O R ============= BANCO DEL PACIFICO: Spanish Group Takes Over Operations ------------------------------------------------------- Spanish firm Interdin & Ahead Advisory Group (IAAG) was expected to take over early this week the management of Ecuador's Banco del Pacifico, according to a report in El Comercio. The Group's assumption of the bank's management is part of the agreement it inked recently with the country's Central Bank in a bid to conform to an International Monetary Fund condition. Earlier, the IMF required Ecuador to balance the "financial situation" of its banking sector as a precondition for the approval of the country's loan application. Following its takeover, the Spanish group will now be responsible for the sale of the bank, including Banco del Pacifico Ecuador, Pacific National Bank and other subsidiaries. The Central Bank, which assumed control of the bank last July, may purchase Banco del Pacifico's portfolio for US$66 million to increase the bank's capital. The Group's takeover is expected to make Banco del Pacifico more attractive to foreign investors. The government plans to privatize the bank this year. =========== M E X I C O =========== AEROMEXICO: Recent Losses Dwarf Net Earnings By Five Times ---------------------------------------------------------- Losses at Aeromexico following last month's attacks in the US is now nearing $40 million, an amount equivalent to more than five times its net earnings from last year, Mexican financial daily El Economista reported Wednesday. "We don't expect passenger levels to recover soon, because we are suffering from an acute crisis," said Aeromexico Vice President of Marketing Alejandro Yberry. "This is going to last, but it's difficult to know for how long, given that there is no precedent," he added. Aeromexico is suffering from insurance premiums that have risen from 1.10 dollars per passenger to 3.80 dollars per passenger. "This is the main financial effect," he said. AIRSHIELD CORPORATION: Core Materials Acquires All Assets --------------------------------------------------------- Core Materials Corporation (Amex: CME) announced Wednesday that it has acquired substantially all the assets of Airshield Corporation, a privately held manufacturer of fiberglass reinforced plastic parts for the truck and automotive-aftermarket industries. Airshield is based in Brownsville, Texas, with manufacturing operations in Matamoros, Mexico. Airshield has been operating under Chapter 11 bankruptcy protection since March 2001. "We believe this acquisition represents an excellent strategic addition for us," said James L. Simonton, president and chief executive officer. "Not only are we acquiring an attractive book of business and expanding our relationships within the truck industry, but we are also adding a Southwest location, some valuable new manufacturing processes, and new customer markets. In support of our strategic plan to diversify our process and customer base, we see the Airshield acquisition as an excellent complementary fit." Simonton said the Company would fund the acquisition out of current cash reserves and does not expect to incur any new long- term debt. He declined to disclose the purchase price but noted that Airshield's annual sales have ranged from approximately $22 million in 1999 to an estimated $15 million for 2001. The business currently employs about 500 people. "We were strongly encouraged by their customers and ours to consider this acquisition and were able to purchase these assets at a fair value in light of Airshield's bankruptcy," he added. Core Materials manufactures medium- to high-volume compression molded fiberglass reinforced products. Airshield, using a more labor-intensive manufacturing process, produces lower-volume open and closed molded fiberglass reinforced products. This provides Core Materials Corporation a broader product offering to serve a larger segment of the fiberglass reinforced plastics market. Airshield's customers include Freightliner Corporation, International Truck and Engine Corporation, Paccar Inc., Mack Trucks, Inc. and Lund International Corporation. "In addition to acquiring the assets and book of business, we believe we are also obtaining some very capable and dedicated personnel who are committed to growing the business," said Simonton. There is a growing truck and automotive manufacturing business in Mexico that we are interested in serving. Entering this market through an established operation, with experienced people, is preferable to building a greenfield facility." Core Materials Corporation is a compounder and compression molder of sheet molding composites (SMC). The company produces high quality fiberglass reinforced, molded products and SMC materials for varied markets, including transportation, marine, agricultural and commercial products. Core Materials, with its headquarters in Columbus, Ohio, currently operates plants in Columbus and Gaffney, South Carolina. CONTACT: James L. Simonton of Core Materials Corporation, +1-614-870-5014 (CME) AMERIJET INTERNATIONAL: Company Profile --------------------------------------- NAME: Amerijet International, Inc. 498 SW 34 Street FT. Lauderdale, FL 33315 PHONE: (954) 359-7670x753 FAX: (954) 359-0466 WEBSITE: http://www.amerijet.com E-MAIL: personnel@amerijet.com TYPE OF BUSINESS: Amerijet was established in 1974 and is headquartered in Ft. Lauderdale. The company currently has 375 employees and 25 agents, and provides direct air service to 26 destinations throughout the Caribbean, Mexico and Latin America. It offers worldwide service to a total of 553 destinations including its European and Asian ports. Amerijet maintains 55 offices worldwide, and a North American road feeder system. TRIGGER EVENT: Amerijet International filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in August. The action was precipitated by a combination of factors, including Federal Express taking over the United States Postal contract from Emery Worldwide, resulting in Amerijet's loss of a major aircraft charter contract with Emery in January 2001, which idled six Boeing 727 aircraft representing one-half of Amerijet's air fleet. MEDIA CONTACTS: FOR REORGANIZATION INFORMATION: Howard Berlin, Esq. Kluger, Peretz, Kaplan & Berlin, P.A. 305-379-9000 (office) 305-608-3363 (mobile) Michael Seese, Esq. Kluger, Peretz, Kaplan & Berlin, P.A. 305-379-9000 (office) (305) 606-0900 (mobile) FOR CORPORATE INFORMATION: Steven Peretz, Esq. Kluger, Peretz, Kaplan & Berlin, P.A. 305-379-9000 (office) 305-794-9007 (mobile) Last TCRLA Headline DATE: Tuesday, October 16, 2001, Vol. 2, Issue 202 BANRURAL: Regulators Step In To Reorganize Bank ----------------------------------------------- Banrural is to be reorganized in order to create a bank to support and regulate the operation of rural savings societies, Mexico City daily El Universal reported Wednesday. A source at financial regulator the National Banking and Securities Commission (CNBV) disclosed that the rural savings societies will be organized, and federations and confederations will be created to be in charge of directly supervising the operations of the financial intermediaries. The CNBV, Banrural and the ministries of Finance and Agriculture are completing plans for a program that will begin this year, the CNBV source said. "We are considering the Spanish model, in which supervision is delegated," they said. A couple of weeks ago, Banrural was rumored to be teetering on the edge of technical bankruptcy due to a 490-million-peso loss in the first half of this year, as well as an 85-percent decline in its reserves. =============== P A R A G U A Y =============== ANTELCO: Telecom Argentina Expected To Bid For Administration ------------------------------------------------------------- The Reform Secretariat announced Wednesday that Telecom Argentina will take part in the bidding of Paraguay's National Telecommunications Administration, EFE said in a report. Accordingly, the Argentine firm has already met the requirements to qualify to participate in the bidding, in which Spain's Telefonica, Brazil's Telecom and local cellular telephone companies Telecel, Personal and Copesa, as well as U.S.-based AES, International Telecommunications Consortium (Coimsa) and Preferential Option Beneficiaries Consortium, will also be competing. Antelco's 5,000 employees are represented in the deal by a committee that will protect their rights in accord with a government order offering workers the option to purchase between 10 percent and 100 percent of the company's shares. The government appointed outside administrators to clean up Antelco's balance sheet in preparation for sale to the private sector. The Paraguayan telephone company is considered one of Latin America's least advanced, given its lack of coverage, outdated technology and bloated payroll, which was cut from 6,000 to 5,000 workers prior to the start of the privatization process. ======= P E R U ======= EDELNOR SA: To Sell 100M Soles Worth Of Five-Year Bonds ------------------------------------------------------- Peruvian electricity distributor Edelnor SA plans to sell up to 100 million soles ($29 million) worth of five-year bonds in the second part of a debt program that will help roll over existing debts, Bloomberg reported Wednesday. Accordingly, the interest rate for the bonds was scheduled to be determined Thursday through a Dutch auction. The planned sale, which will be handled by BBVA Continental brokerage, is the second part of a program to issue up to $150 million worth of bonds. In July, the company sold 80 million soles ($22.7 million) of five-year bonds as the first part of the program. The debt was sold at an annual interest rate of 7.5 percent plus a variable that compensates for inflation. In June, Edelnor had to pay $15 million for a maturing three- year, dollar-denominated bond issue. The company also has to pay for a four-year, sol-denominated bond worth 146.3 million soles that matures Oct. 20. Edelnor spokesman Eduardo Maza said in July that the $150 million debt issue would raise funds both to help pay for maturing debt and to partly finance investment. INCA SUR: Operation Halted For Breach In Restructuring Condition ---------------------------------------------------------------- Creditors reportedly halted the operations of the Peruvian company Inca Sur early this month for failing to meet the conditions set in its restructuring plan, said South American Business Information. The Company, which is about to be liquidated by Gestion y Comercio, has an outstanding debt of US$8 million. It sells plastic products under the Duraplast brand. PESQUERA SAN ANTONIO: Acquisition, Restructuring Postponed ---------------------------------------------------------- Creditors of Pesquera San Antonio agreed on October 9 to delay for 15 days the acquisition of the Peruvian fishing company by the consortium formed by Diamante and Copeinca, South American Business Information said in a report. As a result, the restructuring of the fishing company will also be delayed. The consortium reportedly offered US$39.78 million for the company's assets. Of the amount, US$26.69 million will be used to pay 70 percent of the company's debts, while US$13.1 million will represent the consortium's payment for the Company's fishing fleet. 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 240/629-3300. * * * End of Transmission * * *