/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/011112.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, November 12, 2001, Vol. 2, Issue 221 Headlines A R G E N T I N A IMPSAT: Milberg Weiss Announces Class Action Suit B R A Z I L AES CORP.: S&P Removes Ratings From CreditWatch CELESC: State Government Division Program In Works CELESC: Finalizes Debt Swap EMBRAER: Brazilian And Canadian Reps To Meet By Late November ENRON: Confirms Discussions With Dynegy ENRON: Provides Info Re Balance Sheet, Restated Earnings LOJAS AMERICANAS: Anticipates Strong Results In December PORTOBELLO: Debt Now More Than Double Company Assets SOLETUR: Travel Agencies Hotly Contest Vacated Market Share TELEMAR: Shares Rise On Anticipated Investment Needs Reduction TELEMAR: Cost Reductions Result In Loss Of 3,300 Jobs TELESYSTEM INTERNATIONAL: Results Show $219.5M Growth in Brazil TRANSBRASIL: Persevering Amid Grave Aircraft Reduction VARIG: Grants Employees Holiday Breaks Without Pay To Cut Costs VESPER: Qualcomm Nears Restructuring End H O N D U R A S GEOMAQUE EXPLORATIONS: Relates Restructuring, Vueltas Mine Info M E X I C O AEROMEXICO/MEXICANA: Insurance Premium Aid Anticipated NATIONAL VISION: Reports Third Quarter and Nine-Month Results SINGER N.V.: 3Q Results Show Continuing Profitability - - - - - - - - ================= A R G E N T I N A ================= IMPSAT: Milberg Weiss Announces Class Action Suit ------------------------------------------------- The Plaintiffs' Executive Committee in In re: Initial Public Offering Securities Litigation, 21 MC 92 (SAS) announces that a class action lawsuit was filed on November 1, 2001, on behalf of purchasers of the securities of IMPSAT Fiber Networks Inc. ("IMPSAT" or the "Company") (NASDAQ: IMPT) between February 1, 2000 and December 6, 2000, inclusive. A copy of the complaint filed in this action is available from the Court or can be obtained from the counsel listed below. The action is pending in the United States District Court, Southern District of New York, located at 500 Pearl Street, New York, NY against defendants IMPSAT, Ricardo A. Verdaguer (CEO, President and Director), Enrique M. Pescarmona (Chairman), Guillermo Jofre (CFO) and underwriters Morgan Stanley & Co. Inc., Goldman Sachs & Co., Salomon Smith Barney Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc. (the "Underwriter Defendants"). The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about February 1, 2000, IMPSAT commenced an initial public offering of 11,500,000 of its shares of common stock at an offering price of $17 per share (the "IMPSAT IPO"). In connection therewith, IMPSAT filed a registration statement, which incorporated a prospectus (the "Prospectus"), with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that the Underwriter Defendants solicited and received excessive and undisclosed commissions from certain investors. In return, it is alleged the Underwriter Defendants allocated to those investors material portions of the restricted number of IMPSAT shares issued in connection with the IMPSAT IPO. The suit also alleges the Underwriter Defendants entered into agreements with customers whereby the Underwriter Defendants agreed to allocate IMPSAT shares to customers in the IMPSAT IPO, in exchange for which the customers agreed to purchase additional IMPSAT shares in the aftermarket at pre-determined prices. If you bought the securities of IMPSAT between February 1, 2000 and December 6, 2000, you may, no later than January 1, 2002 request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. This action is being prosecuted by the Plaintiffs' Executive Committee of In re: Initial Public Offering Securities Litigation, 21 MC 92 (SAS). By Order, dated October 12, 2001, the Honorable Shira A. Scheindlin appointed the following firms to serve as the Plaintiffs' Executive Committee: Berstein Liebhard & Lifshitz, LLP, Milberg Weiss Bershad Hynes & Lerach LLP, Schiffrin & Barroway LLP, Sirota & Sirota LLP, Stull, Stull & Brody and Wolf Haldenstein Freeman & Herz LLP. The Court has given responsibility for the prosecution of the IPO Securities Litigation to the Plaintiffs' Executive Committee. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys: Steven G. Schulman or Samuel H. Rudman One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 Phone number: (800) 320-5081 Website: http://www.milberg.com To see company's latest financial statement: http://www.bankrupt.com/misc/Impsat.doc =========== B R A Z I L =========== AES CORP.: S&P Removes Ratings From CreditWatch ----------------------------------------------- Standard & Poor's removed its double-'B' corporate credit and senior unsecured debt ratings on The AES Corp., its single-'B'- plus rating on AES' subordinated debt, and its single-'B' rating on the company's trust preferred securities from CreditWatch with negative implications on Wednesday. Standard & Poor's also removed from CreditWatch with negative implications its ratings on certain AES subsidiaries whose ratings are linked to AES. These include IPALCO Enterprises Inc. and its affiliate, Indianapolis Power & Light Co. (IPL), and the local currency and national scale ratings of Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. (Eletropaulo). The outlook on all AES, IPALCO, and IPL ratings is stable. The outlook on all Eletropaulo ratings is negative, reflecting the outlook of the Brazilian sovereign. The rating actions follow an announcement that AES has withdrawn its tender offer for 43.2% of the outstanding shares of CANTV, Venezuela's only full-service telecommunications company. The CreditWatch reflected Standard & Poor's concern about the heightened risk profile for AES Corp. that the acquisition of CANTV would have caused. At the time of the CANTV tender offer announcement, the outlook on AES was positive. The change to stable from positive reflects Standard & Poor's belief that financial flexibility has been reduced due in part to reduced equity values, thus reversing what had been a notably positive trend for AES. IPALCO's and affiliate IPL's triple-'B' ratings are higher than that of AES by virtue of the cumulative value provided by such enhancements as structural protections, covenants, a pledge of stock, and an independent director. However, these protections limit the rating differential to three notches in the case of IPALCO and IPL. Eletropaulo does not benefit from such insulation, and as such its double-'B' local currency rating is capped by the rating of AES Corp. based on AES' planned majority ownership position. OUTLOOK: STABLE AES' stable outlook reflects Standard & Poor's expectation that AES' current portfolio of operating projects and distribution companies will provide cash flow adequate for the rating category. IPALCO's and IPL's outlook mirrors that of the parent, AES. Standard & Poor's will continue to monitor AES' projects in developing economies, as well as its liquidity position and ability to adapt to financial market conditions. Eletropaulo's negative outlook reflects that of the Brazilian sovereign. CONTACT: Standard & Poor's, New York Scott Taylor, 212/438-2057 or Barbara A Eiseman, 212/438-7666 or Cheryl E Richer, 212/438-2084 CELESC: State Government Division Program In Works -------------------------------------------------- Brazilian power utility Centrais Eletricas de Santa Catarina SA (Celesc) may be split up if a program that the Santa Catarina State government is trying to develop is implemented, Valor Economico reported Wednesday. The program would create two subsidiaries, one for power generation and another for telecommunications. It would also impose a hold on the power distribution sector to control the subsidiaries. The strategy is being developed by the consulting company Accenture (ex- Andersen Consulting). CELESC: Finalizes Debt Swap --------------------------- Santa Catarina State power company, Celesc, has transferred its R$599 million debt to the Exchequer in a swap for Letras do Tesouro Nacional (treasury bill), Valor Economico reported Wednesday. Celesc will be able to sell the Letras to cover its short-term debt of R$140 million in Euro Commercial Papers. If successful, the sale will allow Celesc to eliminate a good part of its debt, which is exposed to the exchange rate. Celesc will then be able to begin investing again. EMBRAER: Brazilian And Canadian Reps To Meet By Late November ------------------------------------------------------------- Representatives of Brazil and Canada are scheduled to meet in Sao Paulo late this month in order to begin negotiations regarding a bilateral agreement between Embraer and Bombardier, O Estado de Sao Paulo reported Wednesday. Negotiations come after five years of a trade war and six arbitrations under the WTO. According to a Brazilian source, Canada suggested the meeting as the WTO has condemned the sale of 200 aircrafts from Bombardier worth US$4 billion. The subsidies have harmed the competitiveness of Embraer's jets. To see company's latest financial statements: http://www.bankrupt.com/misc/Embraer.pdf CONTACT: Anna Cecilia Bettencourt +55 12 345 1106 acecilia@embraer.com.br Milene Petrelluzzi +55 12 345 3054 milene.petrelluzzi@embraer.com.br ENRON: Confirms Discussions With Dynegy --------------------------------------- Enron Corp. confirmed Thursday that it was in discussions with Dynegy, Inc. relating to a possible business combination transaction. No agreement has yet been reached. Enron does not contemplate making any further announcement unless discussions are terminated or result in a definitive agreement However, according to a report in the Associated Press, Dynegy Inc. is seeking to buy the embattled energy-trading company for about $8 billion in stock, or roughly $10 per share. Under the terms of the deal, Enron would receive an immediate $1.5 billion cash infusion from oil giant Chevron Texaco, which holds a 27 percent stake in Dynegy. Chevron Texaco would provide an additional $1 billion injection at a later date, while Dynegy would assume $12.8 billion in Enron debt, plus billions of dollars in other debt that has been kept off the beleaguered company's balance sheet and has been a significant contributor to its current problems. Previously, investment bankers had suggested that Enron might be forced to sell power plants, pipelines and even some of its energy trading assets. Among the assets that could go on the block are pieces of its international operations, projected to fetch Enron about $6.5 billion, according to analysts. Assets under consideration include power plants and transportation services in Brazil, Argentina, Australia, and also Europe. Collectively, they are contributing an average of 15 percent returns on equity for Enron and up to $700 million of annual earnings. CONTACT: Mark Palmer of Enron Corp., +1-713-853-4738 ENRON: Provides Info Re Balance Sheet, Restated Earnings -------------------------------------------------------- Enron Corp. (NYSE: ENE) provided additional information Thursday about various related party and off-balance sheet transactions in which the company was involved. Specifically, Enron's filing provides information about: -- a required restatement of prior period financial statements to reflect the previously disclosed $1.2 billion reduction to shareholders' equity, as well as various income statement and balance sheet adjustments required as the result of a determination by Enron and its auditors, based on current information, that certain off-balance sheet entities should have been included in Enron's consolidated financial statements pursuant to generally accepted accounting principles; -- the restatement of its financial statements for 1997 through 2000 and the first two quarters of 2001. As a result, financial statements for these periods and the audit reports relating to the year-end financial statements for 1997 through 2000 should not be relied upon; -- the accounting basis for the above-mentioned reduction to shareholders' equity; -- the special committee appointed by the Enron Board of Directors to review transactions between Enron and related parties; -- information regarding the two LJM limited partnerships formed by Enron's then chief financial officer, his role in the partnerships, the business relationships and transactions between Enron and the partnerships, and the economic results of those transactions as known thus far; and -- transactions between Enron and certain other Enron employees. "We believe that the information we have made available addresses a number of the concerns that have been raised by our shareholders and the SEC about these matters," said Ken Lay, Enron chairman and CEO. "We will continue our efforts to respond to investor requests for information about our operational and financial condition so they can evaluate, appreciate and appropriately value the strength of our core businesses." Restatement of Earnings As further described on Enron's website, and its Form 8-K Report, Enron will restate prior years' financial statements to reflect its review of current information concerning the transactions discussed below. After taking into account Enron's previously disclosed adjustment to shareholders' equity in the third quarter of 2001, these restatements have no effect on Enron's current financial position. Based on this review, Enron has determined that: -- the financial activities of Chewco Investments, L.P. (Chewco), a related party which was an investor in Joint Energy Development Investments Limited Partnership (JEDI), should have been consolidated beginning in November 1997; -- the financial activities of JEDI, in which Enron was an investor and which was consolidated into Enron's financial statements during the first quarter of 2001, should have been consolidated beginning in 1997; and -- the financial activities of a wholly-owned subsidiary of LJM1, which engaged in structured transactions with Enron that were designed to permit Enron to mitigate market risks of an equity investment in Rhythms NetConnections, Inc., should have been consolidated into Enron's financial statements beginning in 1999. Enron's current assessment indicates that the restatement will include a reduction to reported net income of approximately $96 million in 1997, $113 million in 1998, $250 million in 1999 and $132 million in 2000, increases of $17 million for the first quarter of 2001 and $5 million for the second quarter and a reduction of $17 million for the third quarter of 2001. These changes to net income are the result of the retroactive consolidation of JEDI and Chewco beginning in November 1997, the consolidation of the LJM1 subsidiary for 1999 and 2000 and prior year proposed audit adjustments. The consolidation of JEDI and Chewco also will increase Enron's debt by approximately $711 million in 1997, $561 million in 1998, $685 million in 1999 and $628 million in 2000. The restatement will have no negative impact on Enron's reported earnings for the nine-month period ending Sept. 2001. LOJAS AMERICANAS: Anticipates Strong Results In December -------------------------------------------------------- The Brazilian retail trade chain Lojas Americanas, which currently operates with a total of 97 stores, anticipates brisk Christmas sales, Gazeta Mercantil reported. Accordingly, the chain posted EBITDA of R$23.6 million in the third quarter of this year, or 7.6 percent of the net sales. Gross sales increased by 2.2 percent, jumping from R$369 million to R$377 million or a total of R$1.13 billion between January and September 2001. The group's Internet arm, Americanas.com, with 235,000 customers, reported sales of R$47 million during the period against the R$12.3 million reported in the same period last year. However, Lojas reported a loss of R$11.1 million between January and September 2001 against R$30.4 million reported in same period of the previous year. PORTOBELLO: Debt Now More Than Double Company Assets ---------------------------------------------------- Portobello's board of directors approved recently a plan to increase the company's capital by R$21.8 million before the year ends in order to reduce debts, Gazeta Mercantil reported. At present, the Company's R$157.3 million debt is one-and-a-half times its assets, which analysts believe stands only at R$118.1 million. The report, however, did not indicate how Portobello, which manufactures ceramic facings, intends to raise the additional capital. The Company recently reported a R$215 million gross earning from January to September, slightly up from the R$213 million recorded last year. SOLETUR: Travel Agencies Hotly Contest Vacated Market Share ----------------------------------------------------------- Several tourist service agencies are now jockeying for position in order to corner at least a part of the huge market share left by now-bankrupt Soletur, reported Jornal do Brasil. According to the report, the competition among these other players has intensified due to promising forecasts that domestic tourism will boom this summer. The report said Brazilian carrier, Varig, has recently invested R$20 million to launch Varig Travel, which is going to be in association with PanExpress. The new travel agency expects turnover to rise from R$300 million in the first year of operations to R$500 million in 2003. It plans to open 80 agencies across Brazil. Meanwhile, Stella Barros, which is also in the thick of the fight for Soletur's market share, reportedly received a $10-million cash injection from Citibank. Soletur voluntarily declared bankruptcy recently after admitting it cannot pay the R$30-million debt it has accumulated. Some 7,000 customers who had already paid for tourist packages were affected by the declaration. TELEMAR: Shares Rise On Anticipated Investment Needs Reduction -------------------------------------------------------------- Tele Norte Leste Participacoes SA (Telemar), which posted a net loss of 429 million reais ($165 million) in the third quarter of this year, saw its preferred shares rise 1.2 percent to 33.20 reais, Bloomberg reported Thursday. Brazil's largest fixed-line phone operator said that it will focus on the return of investments made during 2001. Its investment level will drop substantially next year. "The focus on investments profitability, the reduction of certain operational expenses (personnel and third parties services), due to the conclusion of the anticipation of targets, the possibility of lower exchange rate volatility in 2002 should improve company's results that year. In addition, with the reduction of investment needs next year, the company will be able to direct its cash generation to reduce level of debt," Carolina Gava, analyst at BES Securities, said in a report. TELEMAR: Cost Reductions Result In Loss Of 3,300 Jobs ----------------------------------------------------- Brazilian fixed-line telephone-company, Tele Norte Leste Participacoes SA (Telemar), fired 3,300 workers in October to cut costs, Bloomberg reported Wednesday. According to the company's Investor Relations Director, Roberto Terziani, Telemar dismissed 1,700 people at its wireline subsidiaries and another 1,600 people at its Connect unit, which installs new phone lines. "As we get closer to meeting our targets we will be reducing further the number of employees at Connect," Terziani said. The Rio de Janeiro-based operator had 36,242 employees at the end of September. TELESYSTEM INTERNATIONAL: Results Show $219.5M Growth in Brazil --------------------------------------------------------------- Telesystem International Wireless, Inc. bared last week the following highlights of its third quarter and first nine months results: 1. EBITDA reaches $169 million for first nine months. Total cellular subscribers increase to over 4.7 million. -- Continuing cellular operations recorded 459,000 net subscriber additions for the third quarter, a sequential increase of 7% compared to 429,000 net additions for the second quarter of 2001. Total cellular subscribers reached 4,781,600, an increase of 71% compared to 2,795,300 at September 30, 2000. -- Operating income before depreciation and amortization (EBITDA) more than tripled to $60.1 million compared to $16.7 million for the third quarter of 2000. Operating income was $8.0 million compared to an operating loss of $27.0 million in the same 2000 period. For the first nine months, EBITDA was $169.0 million, up 104% compared to $82.7 million last year, while operating income was $29.8 million compared to an operating loss of $37.9 million for the same period last year. 2. On a stand-alone basis, ClearWave N.V. recorded a net income of $5.4 million for the third quarter and $5.3 million for the first nine months of 2001. 3. The Company recorded a non-cash gain of $238.9 million on the forgiveness of debt following the exchange of its Senior Discount Notes for new Senior Guaranteed Notes and cash, completed during the third quarter. 4. Consolidated service revenues for the third quarter increased 19% to $196.6 million compared to $165.7 million for the same period in 2000. EBITDA was $60.1 million, an increase of 260% compared to $16.7 million in the third quarter last year. Net income for the third quarter, including the gain from the forgiveness of debt and other non-recurring items, was $224.0 million ($13.29 per share and $3.25 per share on a diluted basis) compared to a net loss of $47.8 million ($3.60 per share) for the same period last year. Excluding non-recurring items, net loss for the third quarter would have been $22.2 million. 5. For the first nine months, consolidated service revenues increased to $570.0 million compared to $449.3 million for the same period in 2000. EBITDA was $169.0 million compared to $82.7 million last year. Net loss for the first nine months was $162.2 million ($11.30 per share and $4.91 per share on a diluted basis) compared to $255.4 million ($17.60 per share) last year. Update on Dolphin Telecom plc: As previously disclosed, Dolphin Telecom plc and certain of its subsidiaries voluntarily filed for protection from creditors during the third quarter and the court-appointed Administrators have called for offers to purchase Dolphin's assets. This process is still under way and TIW does not expect the outcome to have a material impact on its financial condition. The financial position and results of operations of Dolphin are reported in the Company's financial statements as discontinued operations. The loss from discontinued operations for the nine-month period ended September 30, 2001, includes the results from operations as well as a net gain of $15.9 million from deconsolidation of Dolphin and is included in net loss but reported separately for current and prior periods. Brazil Cellular TIW holds its investments in Brazil - Telemig Celular Participaoes S.A. (Telemig Celular), licensed in the State of Minas Gerais, and Tele Norte Celular Participaoes S.A. (Tele Norte), licensed in five Northern States, - through Telpart Participaoes S.A. (Telpart). As previously disclosed, the Company is involved in ongoing litigation with one of its partners in Telpart. TIW is reviewing strategic alternatives with regards to their investments. Service revenues for the third quarter declined to $63.7 million compared to $76.7 million for the same period last year. The decrease reflects the sale of the B-Band cellular operations in the first quarter of 2001 and the devaluation of the Real against the US dollar, which more than offset the revenue contribution from subscriber growth in the A-Band operations. For similar reasons, service revenues for the first nine months grew slightly to $219.5 million compared to $213.4 million for the same period in 2000. As measured in Brazilian Real, the A-Band operations service revenues for the nine months grew to R480.0 million compared to R350.2 million for the same period in 2000. The B-Band cellular companies generated service revenues of $6.8 million and $23.3 million, respectively, for the third quarter and first nine months of 2000. Telemig Celular added 101,300 net subscribers for the third quarter to reach 1,531,200, while Tele Norte's customer base grew by 45,900 subscribers for a total of 880,600. Both companies expect continued subscriber growth for the balance of the year. At September 30, 2001, total subscribers increased to 2,411,800 compared to 1,606,000 at the same time last year. EBITDA was stable at $20.5 million for the third quarter compared to $20.0 million for the same period last year, reflecting increase in service revenues mostly offset by the devaluation of the Brazilian currency. For the first nine months, EBITDA increased to $85.2 million compared to $61.6 million for the 2000 period. Operating loss was $0.4 million for the third quarter and operating income was $33.0 million for the first nine months compared to $1.2 million and $5.7 million, respectively, for the same periods last year. Asia Wireless, Corporate and Other The Company's Asia wireless, paging and corporate activities recorded negative EBITDA of $6.4 million for the third quarter and $16.1 million for the first nine months compared to negative EBITDA of $9.3 million and $15.9 million, respectively, for the same periods in 2000. Liquidity and Capital Resources As of September 30, 2001, the Company held cash and cash equivalents of $239.6 million, including restricted cash of $91.6 million and $37.1 million held at the corporate level. The Company has drawn the full amount of $83.5 million available under its corporate credit facility, which expires in July 2002. Investing activities for the third quarter used cash of $101.0 million, of which approximately $74.0 million was invested in the cellular networks in the Czech Republic and Romania. For the first nine months, investing activities used cash of $77.3 million, reflecting mainly the proceeds from the sale of the Company's B-Band affiliates in Brazil which was more than offset by the acquisitions of capital assets. Financing activities for the third quarter provided cash of $2.5 million, resulting from changes in long-term debt offset by the restriction of $91.6 million of cash which became unrestricted subsequent to September 30, 2001. For the first nine months, financing activities provided cash of $237.7 million, which includes the net proceeds of $248.6 million from the issue of Units in the first quarter of 2001. Total consolidated indebtedness as of September 30, 2001 was $1.2 billion, including $282.3 million at the corporate level. On September 19, the Company completed a private exchange offer under which the holders of 99.9% of its outstanding 13 1/4% Senior Discount Notes due 2007 and 10 1/2% Senior Discount Notes due 2007 tendered such notes for an aggregate cash consideration of $50 million and $194.8 million total principal amount of new 14% Senior Notes due December 30, 2003 issued by TIW. Interest on the new Notes is payable semi-annually and the first two payments may be made in cash or additional Notes at the option of TIW. The total accreted value of the two series of Senior Discount Notes as at September 19, 2001 was $491.0 million and the aggregate principal amount at maturity was $546.5 million. The committed cash obligations of the Company for the upcoming twelve-month period, including the repayment in July 2002 of the amended Corporate facility, exceed the committed sources of funds and the Company's cash and cash equivalents on hand. As a result, the Company's ability to realize its assets and meet its obligations during the normal course of business over the next twelve months is uncertain. Its financial statements have been prepared on a going concern basis, which assumes the Company will continue in operation for the forseeable future and will be able to discharge its liabilities and commitments in the ordinary course of business. The Company continues to review opportunities to refinance subordinated debt, amend its debt agreements, arrange new financing and sell assets. In connection with the Company's ongoing effort to refinance Subordinated debt and raise new financing, the holders of the 7.75% convertible debentures consented to postpone payment of the September coupon on such debentures to November 12, 2001. The interest payment can be made in cash or securities. If the Company elects to pay the coupon in securities, the debenture holders would have the option to receive shares or additional debentures. In the event the debenture holders elect to receive shares as consideration of the interest payment, approximately 7.5 million subordinate voting shares will be issued. TIW is a global mobile communications operator with 4.9 million total subscribers worldwide. The Company's shares are listed on the Toronto Stock Exchange (TIW) and NASDAQ (TIWI). TIW is also the strategic partner in two leading cellular operators in Brazil. In Central and Eastern Europe, TIW is a cellular market leader in Romania and launched services in the Czech Republic in March 2000. To see company's financial statements: http://www.bankrupt.com/misc/Telesystem.pdf CONTACT: Telesystem International Wireless Inc. BENOIT FORCIER Director, Investor Relations (514) 673-8468 bforcier@tiw.ca or Telesystem International Wireless Inc. ANDRE GAUTHIER (SOURCE) Chief Financial Officer (514) 673-8493 agauthier@tiw.ca or Telesystem International Wireless Inc. MARK BOUTET Vice President, Communications (514) 673-8406 mboutet@tiw.ca TRANSBRASIL: Persevering Amid Grave Aircraft Reduction ------------------------------------------------------ The severe reduction in the number of aircraft in operation won't prevent Transbrasil SA Linhas Aereas from carrying on with its activities, AFX-Asia reported. "Transbrasil will continue with activities and has no intention of suspending them," the Brazilian firm announced in response to reports that it will be putting its operations on hold. Transbrasil is undoubtedly the airline most affected by the crisis in the Brazilian air transportation sector. Currently, it has 5 Boeings and 4 Embraer Brasilias in operation, down from a total of 21 aircraft in May 2000. VARIG: Grants Employees Holiday Breaks Without Pay To Cut Costs --------------------------------------------------------------- The downturn in the air travel sector is intensifying and accordingly, Brazilian carriers are now experiencing severe cash flow problems, Valor Economico reported. According to the report, Varig and Transbrasil are among those hardest hit. Citing the employees' union, the paper said that Varig is reportedly offering employees unpaid holidays. Reportedly, Transbrasil has only paid part of the salaries for October. The paper added that the favorite cost-cutting carrier measure is early retirement incentives offers. Recently, Varig temporarily suspended direct flights between Rio de Janeiro and Miami after recording a 35 percent drop in ticket sales for flights to the United States. CONTACT: VARIG Brazil Media Relations 21-3814-5480 VESPER: Qualcomm Nears Restructuring End ---------------------------------------- Qualcomm Inc. informed it is mulling over a plan to invest $266 million to buy part of Vesper SA's debt with equipment suppliers and to boost its stake in the Brazilian operator to 86 percent, from about 16 percent at present, Bloomberg reported Wednesday. "We're close to completion of the (Vesper) restructuring," said Chief Financial Officer, Anthony Thornley. Qualcomm, which licenses patents for mobile phones used by 96 million people, plans to later spin off its stake in Vesper to its shareholders. According to Vesper last week, shareholders, including Qualcomm, would provide it capital to buy back at a discount part of the $1.2 billion debt owed suppliers such as Ericsson AB, Lucent Technologies Inc. and Nortel Networks Corp. =============== H O N D U R A S =============== GEOMAQUE EXPLORATIONS: Relates Restructuring, Vueltas Mine Info --------------------------------------------------------------- Geomaque Explorations Ltd. announced that it is continuing to work with its principal lender, Resource Capital Fund II L.P. of Denver, Colorado ("RCF"), on the restructuring of its credit and security arrangements with RCF. The agreement, dated June 9, 2000 (the "Credit Agreement") was reached with RCF to further extend the term finalization to December 17, 2001. In the meantime, RCF has deferred all payments required under the Credit Agreement. As part of the restructuring, it is thought there will be a revised debt repayment schedule which will reflect the anticipated production schedule from the second leach pad at the Vueltas del Rio Mine. Mining will be suspended until the completion of the construction of the second pad, projected for late December. Gold production from pad one will continue in the interim from ore already loaded on that pad. Metallurgical testing currently underway is confirming that revised procedures being used are significantly increasing the speed of gold recovery. The results of this test program will be used to further enhance early gold recovery on pad two. Geomaque Explorations Ltd. is an international mining company that is producing gold from its Vueltas del Rio Mine in Honduras and San Francisco Mine in Mexico, and exploring for precious metals in the Americas. To see company's financial statements: http://www.bankrupt.com/misc/Geomaque_Explorations.pdf CONTACT: John Patterson, President & CEO TEL: (416) 956-7470 FAX: (416) 956-7471 =========== M E X I C O =========== AEROMEXICO/MEXICANA: Insurance Premium Aid Anticipated ------------------------------------------------------ All of Mexico's airlines, including Aeromexico and Mexicana, are likely to get a shot in the arm, following an announcement made by Communications and Transport ministry senior official, Aaron Dychter, Mexico City daily Reforma reported Wednesday. According to Dychter, all Mexican airlines will receive support from the federal government before the end of the year in the payment of their increased insurance premiums. The payment won't be made directly by the executive branch, but will work as a contingency guarantee by the federal government, if and when the legal initiative sent by the ministry to Congress is approved, Dychter said. "Once the law is approved, all of the airlines will receive support," he said. Last week, the executive branch sent Congress a legal initiative to support the airlines with 1 billion pesos to cover the costs of increased insurance premiums. CONTACT: AEROMEXICO Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or mweitzman@aeromexico.com MEXICANA DE AVIACION Jenny Jenks, Marketing Director, International Division of Mexicana Airlines, +1-210-491-9764, or ennyjenks@mexicana.com NATIONAL VISION: Reports Third Quarter and Nine-Month Results ------------------------------------------------------------- National Vision, Inc. (Amex: NVI) (formerly known as Vista Eyecare, Inc.), a national retail optical company, announced Thursday results for the third quarter and nine months ended September 29, 2001. For the quarter, the Company recorded pro forma net sales of $59.7 million and pro forma gross profit of $33.6 million, versus $58.8 million and $32.0 million, respectively, recorded in the comparable period last year from the Company's continuing operations. Sales from domestic stores that are part of continuing operations declined 0.5% from levels recorded in the comparable period last year. Pro forma earnings before interest, taxes, depreciation, and amortization (EBITDA) in the current period were $7.2 million, down slightly from pro forma EBITDA of $7.5 million achieved in the comparable period last year. At the end of the third quarter, the Company operated 505 vision centers, versus 494 vision centers on a pro forma basis at the end of the third quarter a year ago. The Company emerged from protection under Chapter 11 of the Bankruptcy Code on May 31, 2001. In the course of the bankruptcy proceeding, the Company closed or disposed of all of its freestanding locations and terminated the leases for all of its locations in Sam's Club stores. Of the Company's current vision centers, 399 are in domestic Wal-Mart stores, 30 are in Wal- Mart de Mexico stores, 55 are located in Fred Meyer stores, and 21 are in military bases throughout the United States. Jim Krause, President and Chief Executive Officer, commented, "We continue to focus on improving our host retail business, given the overall sluggishness in the optical industry as well as the overall economy. Looking forward, we are still optimistic that National Vision is well positioned to succeed with our retail eyecare business." For the nine months ended September 29, 2001, pro forma net sales were $180.7 million and pro forma gross profit was $100.7 million, versus $177.5 million and $97.9 million, respectively, recorded in the comparable period last year from the Company's continuing operations. Sales for our domestic stores that are part of continuing operations remained constant with levels recorded in the comparable period last year. Pro forma earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased in the current period to $21.6 million from $23.2 million in the comparable period a year ago. All references to pro forma results in this release refer to results of the Company's current vision centers after giving effect to the dispositions made in the course of the bankruptcy proceedings as if they had occurred at the beginning of the periods indicated. Additionally, pro forma results are prior to restructuring and reorganization costs incurred during the bankruptcy proceedings, as well as large non-cash provisions. On August 7, 2001, the Company's common stock and new notes began trading on the American Stock Exchange. The common stock of the Company trades under the symbol "NVI" and the notes trade under the symbol "NVI.A." The Company's first interest payment on the notes of $4.8 million, due on September 30, 2001, was made on the first day of the fourth quarter from existing cash balances. The Company emerged from bankruptcy in the second quarter and adopted "fresh start" reporting when it emerged from bankruptcy on May 31, 2001. The attached Pro Forma Condensed Consolidated Statements of Operations present pro forma information for the continuing businesses. Due to the disposition of unprofitable store operations while the Company was in bankruptcy, the results since emergence are generally not comparable to periods prior to emergence from bankruptcy. The Company also indicated that, as part of its ongoing review of its closing balance sheet of the Predecessor Company prior to its emergence from bankruptcy, it will take a non-cash provision of $3.9 million to adjust managed care receivables to reflect their fair value prior to emergence from bankruptcy. The provision will be reflected in restated financial statements for the second quarter of 2001 and will not have an impact on EBITDA reported by the Company for periods following its emergence from bankruptcy. To see company's financial statements: http://www.bankrupt.com/misc/National_Vision.pdf CONTACT: Angus Morrison, Sr. VP & Chief Financial Officer National Vision, Inc., +1-770-822-4295 SINGER N.V.: 3Q Results Show Continuing Profitability ----------------------------------------------------- Singer N.V. ("Singer" or the "Company") announced Thursday its results for the third quarter of 2001 and for the nine months ended September 30, 2001. 2001 Third Quarter Results For the third quarter of 2001, ending September 30, the Company reported consolidated revenues of $99.5 million. Revenues of Singer's 48 percent-owned Thailand affiliate, which amounted to $20.1 million for the quarter, are not included in this total. Gross profit for the quarter was $36.3 million, representing a gross margin of 36.5 percent on sales. Operating income for the period was $3.6 million, while EBITDA (earnings before interest, taxes, depreciation and amortization) was $10.5 million. The Company's net income for the third quarter of 2001 was $1.0 million. Included in operating income and net income for the quarter is $1.6 million of expense relating to the amortization of intangible assets, primarily the Singer trademark. Effective January 1, 2002, the Company expects to adopt the accounting standard, FASB 142, accounting for "Goodwill and Other Intangible Assets", pursuant to which Singer will no longer amortize the value of the trademark and most other intangible assets subject, however, to any periodic adjustments which may be appropriate to assure that the book value of the Company's intangible assets reflect their fair value. Singer's retail and related consumer credit operations accounted for 69 percent of Singer's third quarter revenues (taking into account the revenues of its non-consolidated affiliate in Thailand) and 42 percent of operating earnings before Corporate costs, eliminations and amortization of intangibles. Particularly strong contributors to earnings in this segment were the retail businesses in Mexico, Bangladesh and Thailand. The Company's sewing business accounted for 31 percent of the Company's third quarter revenues and 58 percent of operating earnings before Corporate costs, eliminations and amortization of intangibles. The sewing manufacturing and marketing operations in Latin America were especially strong contributors to this segment. The Company's results for the third quarter of 2001 continued to be negatively impacted by the ongoing economic crisis in Turkey. Due to the reorganization in bankruptcy and the implementation of "Fresh Start Reporting" on emergence, financial statements of Singer's predecessor company are not comparable to Singer's ongoing results and are not, therefore, presented or discussed herein. 2001 Nine-Month Results For the nine months ending September 30, 2001, Singer reported consolidated revenues of $317.1 million. Singer's non- consolidated affiliate in Thailand accounted for an additional $66.7 million in revenues. Gross profit for the nine-month period was $120.5 million, representing a gross margin of 38.0 percent on sales. Operating profit for the nine-month period was $19.8 million; EBITDA was $38.2 million. The Company's net income for the first nine months of 2001 was $5.1 million. Expense relating to amortization of intangible assets totalled $4.0 million for the nine-month period. Continued Profitability Mr. Stephen H. Goodman, Singer N.V.'s President and Chief Executive Officer, noted, "Singer's continuing profitability in the third quarter of 2001, traditionally the weakest quarter for the Company's operations, represents an important milestone - - the fourth consecutive quarter of profitable operations since the successful conclusion of the Company's Chapter 11 Reorganization in September 2000. This return to profitability follows four years of very substantial losses at Singer's predecessor company." "Unfortunately", Mr. Goodman added, "Singer, like many other companies, is being negatively impacted by the global, economic slowdown and the consequence of the September 11 attacks. The impact of the September 11 events is most significant in those Singer operations closest to the current military activities, Pakistan and the Middle East, and is insignificant in operations less directly affected, such as in Latin America and East Asia. To meet the global, economic challenge, the Company has implemented a comprehensive program of S&A expense reduction designed to reduce S&A expense, commencing in the fourth quarter, by $7.0 million on an annual basis, and to slow any future growth in S&A expense to a rate meaningfully below the rate of growth in revenue, while simultaneously pursing a number of important new strategic revenue and earnings initiatives." "I continue to have confidence", Mr. Goodman concluded, "that the consistent execution of our recovery program, supplemented by the S&A expense reduction program and the new strategic initiatives will result in continuing, improving performance for the balance of 2001." Share Distribution On November 1, 2001 the Singer Creditor Trust made an initial distribution of the common shares of Singer N.V. to the holders of allowed, general unsecured claims against Singer's predecessor company. Trading in such shares has not yet commenced. While it is not expected that the Company's common shares will be listed on any U.S. or overseas securities exchange, the NASDAQ National Market System, the NASDAQ Small Cap Market, the OTC Bulletin Board or a similar trading system in the near future, the Company anticipates that one or more brokerage firms will seek to make a market for the newly distributed common shares through the "Pink Sheets" quotation system. Singer's objective is for brokers and market makers to provide quotations for the Company's common shares using the "Pink Sheets" system as soon as practical; however, no assurances can be given as to approval by the NASD of the common shares for quotation on the "Pink Sheets" system or as to the timing of such approval if given. About Singer N.V. Effective September 2000, as a result of a successful Chapter 11 reorganization, Singer became the parent of several operating companies formerly owned by The Singer Company N.V., as well as acquiring ownership of the SINGER brand name, one of the most widely recognized and respected trademarks in the world. Through its operating companies, Singer is engaged in two principal businesses, retail and sewing. The retail business consists primarily of the retail distribution of a wide variety of consumer durable products for the home in selected emerging markets, primarily in Asia, Mexico and the Caribbean. Retail sales activities in these markets are strengthened by the availability to customers of consumer credit services provided by the Company. In many of the markets where it operates, Singer is recognized as a leading retailer of products for the home. The sewing business consists primarily of the distribution of consumer and artisan sewing machines and accessories, produced by Singer and certain third-party manufacturers, through distribution channels operated by its sewing operating companies and through third-party distributors and dealers, as well as through the operating companies which operate Singer's retail business. Singer is the world's leading seller of consumer and artisan sewing machines, with an estimated worldwide unit market share of approximately 29 percent (excluding China, the former Soviet Republics and Eastern European Countries). To see company's financial statement: http://www.bankrupt.com/misc/Singer.pdf CONTACT: Singer N.V. Barbara Wybraniec, 917/534-5373 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. 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