/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/011128.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, November 28, 2001, Vol. 2, Issue 232 Headlines A R G E N T I N A ACINDAR: Shares Up On Optimism Of Argentine Debt Swap TERRA LYCOS: Defends Employees' Holiday Break Schedule B O L I V I A EL MUTUN: Bids For Sale Advisory Contract To Open November 30 B R A Z I L CEMIG: Shareholders Demand Inquiry Into Minas Gerais State Debt EMBRAER: To Reduce Costs By 30% In All Divisions At Month's End EMBRAER: Obtains $150M Import Loan EMBRATEL: Share Prices Expected To See Recovery ENRON: Petrobras, Petros Close To Acquiring Brazilian Stakes LIGHT/CELESC/ELETROPAULO METROPOLITANA: Shares Up On Power News C H I L E TELEFONICA CTC: To Sell $144M Peso-Denominated Bonds To Pay Debt C O L O M B I A HOTEL DEL LLANO: Resurrects Villavicencio Hotel E C U A D O R INMOBILIARIA BIANCA: Ecuador To Reschedule Asset Sale Again M E X I C O BANCRECER: Banorte To Finalize Acquisition BANCA QUADRUM: Shareholders Given More Time To Mull Bank's Fate HYLSAMEX: Restructuring Plan May Sever Ties With Parent Alfa MEXLUB: Continues To Struggle In Meeting Financial Obligations MINERA AUTLAN: Closing 3 Units, Negotiating One More With Union P A R A G U A Y ANTELCO: Copaco To Acquire Assets For Future Sale - - - - - - - - - - - ================= A R G E N T I N A ================= ACINDAR: Shares Up On Optimism Of Argentine Debt Swap ----------------------------------------------------- Acindar shares were up 0.007 to 0.167 pesos on expectations that Argentina's first phase of the debt swap will be successful and pave the way for the second stage, AFX News reports. One trader at a local brokerage firm revealed that shares increased on expectations that the government will successfully conclude its debt swap on Friday following support from banks and AFJPs (pension fund managers). Acindar recently sold an unused laminator and other equipment to stakeholder Cia. Siderurgica Belgo Mineira for US$13.36 million. The Company posted a net loss of 20.7 million pesos for the first nine months ended September 30 due to lower production volume as well as lower prices in both domestic and export markets. In addition, the company incurred higher financial charges, partly offset by cost reductions in administration and by less depreciation. Acindar said it still continues to carry out a "turnaround plan" that was introduced by its new partner, the Brazilian steel company Belgo-Mineira. So far, the plan has included staff cuts, cost reductions and increases in output. TERRA LYCOS: Defends Employees' Holiday Break Schedule ------------------------------------------------------ The US subsidiary of Spain-based Internet access and content provider Terra Lycos defended its move in asking employees to take a break between Christmas and New Year, Business News Americas reports. According to the Company's spokesperson, the decision has nothing to do with the company's financial state, contrary to rumors that suggest the Company has asked its employees to take their holidays during this traditionally slow time of the year, with low operational productivity, in order to save costs. The spokesperson countered that the Company is actually in a very good position having registered 3Q01 income of US$153 million, a 24-percent increase over 3Q00. Terra has operations in Argentina, Brazil, Colombia, Costa Rica, Chile, El Salvador, Spain, Guatemala, Honduras, Mexico, Nicaragua, Panama, Venezuela, Peru, Dominican Republic, the US and Uruguay. ============= B O L I V I A ============= EL MUTUN: Bids For Sale Advisory Contract To Open November 30 ------------------------------------------------------------- Bids for a contract to handle the sale of Bolivia's El Mutun iron ore mine and steelmaking project will be opened November 30, Patricia Terrazas, an official at the state unit responsible for selecting the winner, announced in a Business News Americas report. "The bidder who offers to carry out the sale for the lowest fees will obtain the highest number of points in the economic bidding," said Terrazas. "But the final winner will be the one who gets the most points in both the bidding and the assessment of technical proposals." This will involve further analysis of documentation, and the process is expected to conclude December 3, Terrazas said. Among the candidates in the bidding is Consorcio de Asesoramiento para el Proyecto Minero Siderurgico Mutun, which includes South Africa's Standard Corporate & Merchant Bank, Germany's North Deutsche Landes Bank, IOS Partners, CAISA brokerage and Holland & Knight, among others, according to the official. Other candidates are: Germany's DMT with a group called Panamerican Investment; a partnership known as Hatch/AWR; and a consortium including PriceWaterhouseCoopers and Ambiente Industrial y Mineria SA (AIMSA), she added. =========== B R A Z I L =========== CEMIG: Shareholders Demand Inquiry Into Minas Gerais State Debt -------------------------------------------------------------- Minority shareholders in Cemig deemed the Minas Gerais-based energy firm's recent R$625-million debenture issue unnecessary, Valor Economico reports. According to them, had the state paid its R$336.9 million debt owed to Cemig, the Company wouldn't have had to resort to the debenture issue. Now the shareholders are demanding an inquiry on the part of the CVM (Comissao de Valores Mobilarios) into the State's debt. The company awaits a formal communication from the CVM before presenting a formal response. The State's debt with the company dates back to the 1995 credit swap. EMBRAER: To Reduce Costs By 30% In All Divisions At Month's End ---------------------------------------------------------------- Brazilian aircraft manufacturer Empresa Brasileira de Aeronautica SA (Embraer) plans to start cutting costs in all its divisions by 30 percent, the company informed through an internal statement, reports AFX-Europe. The cost reduction plan is expected to be implemented at the end of November. Confirming the measure, a press spokesperson said, "the text of the statement will not be made public, nor will any director comment on the matter." According to Sao Paulo Metworkers Union official Edmir Marcolino da Silva, the cuts will lead to job losses of about 500 in companies, which provide services to the Brazilian firm. To see company's latest financial statements: http://www.bankrupt.com/misc/Embraer.pdf CONTACT: Investor Relations Department Phone: 55-12-3945-1216 e-mail: mercapit@embraer.com.br EMBRAER: Obtains $150M Import Loan ---------------------------------- Embraer successfully obtained an import loan to the tune of US$150 million, in a transaction managed by JP Morgan, reports Valor Economico. The Company will use the money over a six-month period to finance the import of airplane parts. Reportedly, European banks also participated extensively in the loan package. The report explains that the participation of the French banks, BNP Paribas, Credit Agricole Indosuez, Natexis Banques Populaires and Societe Generale is due in part to the 20 percent share of Embraer held by several French aerospace companies. Ninety percent of the operation is covered for political and business risk by American AIG. EMBRATEL: Share Prices Expected To See Recovery ----------------------------------------------- Embratel's stocks were up 7.6 percent to 11.19 reais on optimism Brazil's biggest long-distance service provider's shares are inexpensive compared with the outlook for profit growth, reports Bloomberg. Embratel is expected to see an increase in competition next year, but "the share price is highly discounted and has the chance to recover," said John Carioba, a director at Indusval SA's brokerage in Sao Paulo. "Some of my clients are buying Embratel shares betting they will rise," he added. However, the company's shares at the telephone company are still the Bovespa worst-performing in the year with a 64 percent loss. To see company's financial statements: http://www.bankrupt.com/misc/Embratel.pdf CONTACT: Embratel Participacoes S.A. Investor Relations Silvia M.R. Pereira, (55 21) 2519-9662 fax: (55 21) 2519-6388 invest@embratel.com.br or Press Relations Wallace Borges Grecco, (55 21) 2519-7282 fax: (55 21) 2519-8010 cmsocial@embratel.net.br ENRON: Petrobras, Petros Close To Acquiring Brazilian Stakes ------------------------------------------------------------ Petroleo Brasileiro SA and its pension fund Petros are now close to accomplishing the necessary steps for the purchase of Enron Corp.'s participation in the Brazilian gas distributors, CEG and CEG Rio, reveals AFX-Europe. Petrobras, under an agreement reached with the Regulatory Agency for Public Service Concessions of Rio de Janeiro local authorities last week, will undertake a series of investments in exchange for approval to acquire Enron's 13.38 percent stake in CEG and its 33.75 percent stake in CEG Rio. The agreement now awaits the approval of Rio de Janeiro governor Anthony Garotinho. LIGHT/CELESC/ELETROPAULO METROPOLITANA: Shares Up On Power News --------------------------------------------------------------- Shares of three southeastern Brazil electricity distributors Light Servicos de Eletricidade SA, Centrais Eletricas de Santa Catarina SA (Celesc) and Eletropaulo Metropolitana de Sao Paulo SA following an announcement that power rationing will be cut as of December to 10 percent from 20 percent, relates Bloomberg. Light, the financially-strapped power distributor in Rio de Janeiro state, jumped 8 percent to 115 reais. Celesc, the distributor in Santa Catarina state, rose 3.9 percent to 53 Brazilian centavos. Eletropaulo Metropolitana de Sao Paulo SA climbed 3.2 percent to 79.90 reais. The government announced Thursday that power rationing in the southeast will be cut as of December to 10 percent from 20 percent. Distributors stand to benefit from a rate increase of 5 percent proposed by the government a week and a half ago to compensate rationing losses, said David Hurd, Latin America electricity analyst with Deutsche Banc. Alex Brown Inc. in Baltimore. "It was the distributors that leaked news of the tariff increase to the press as if it was a done deal and it is in the market that they will accept it," Hurd said. ========= C H I L E ========= TELEFONICA CTC: To Sell $144M Peso-Denominated Bonds To Pay Debt ---------------------------------------------------------------- Telefonica CTC Chile, the country's biggest telephone company, plans to sell about $144 million of peso-denominated bonds maturing in 21 years in order to pay down debt maturing in 2002, Bloomberg reports. The bonds will have a grace period of seven years and carry a coupon of 6.5 percent. Telefonica CTC, which has about $2 billion in debt, mostly in dollars, is seeking to reduce its foreign currency debts since a 14.7 percent drop in the Chilean peso against the dollar this year has increased its financing costs. The company may offer a put option on the bond to allow investors to sell back the paper at a fixed price, something that should make the investment more attractive as corporate bonds sales surge in Chile. Peso-denominated bond sales by Chilean company may climb to more than $2.6 billion this year from $1.44 billion last year, according to rating agency Feller Rate Clasificadora de Riesgo Ltda. Chilean bond underwriter I.M. Trust and Banco Bilbao Vizcaya Argentaria SA are managing the sale. =============== C O L O M B I A =============== HOTEL DEL LLANO: Resurrects Villavicencio Hotel ----------------------------------------------- Following a nine-month closure, Hotel del Llano reopened in Villavicencio with 85 of the total 117 rooms available to guests, reports Portafolio. The hotel, which is the only 4-star establishment in Villavicencio, Meta, Colombia, had previously run up losses of 1.08 billion pesos. The economic crisis, bad management and the force of unions prompted the hotel's closure which equated to a 120-million-peso loss. The hotel has debts of 3.738 billion pesos, but it has received a capital injection from partners to the tune of 1 billion pesos to cover salaries as a bare minimum. ============= E C U A D O R ============= INMOBILIARIA BIANCA: Ecuador To Reschedule Asset Sale Again ----------------------------------------------------------- Power company Emelec's headquarters will be sold again, but at 50 percent of its original price of US$4.704 million, following the collapse of the recent auction, says El Universo. The Ecuadorian government is yet to define a tentative schedule for the sale of the asset (land and building), which is owned by Inmobiliaria Bianca. Inmobiliaria Bianca reportedly owes Banco del Progreso bank US$8 million. =========== M E X I C O =========== BANCRECER: Banorte To Finalize Acquisition ------------------------------------------ Grupo Financiero Banorte, which owns Mexico's fifth-largest bank, is about to conclude its acquisition of government-rescued banking institution Bancrecer, according to a report by Mexico City daily Reforma. Banorte is slated to pay bank bailout agency IPAB 1.65 billion pesos on November 30, the last step in the completion of the acquisition. The amount accounts for 75 percent of the total agreed price for Bancrecer. Banorte is scheduled to take possession of Bancrecer formally on Dec. 5. BANCA QUADRUM: Shareholders Given More Time To Mull Bank's Fate --------------------------------------------------------------- Financially drained Banca Quadrum got a reprieve recently from the National Banking and Securities Commission, which gave it until early next year to execute a re-capitalization program. Shareholders were originally given until December 15 to decide the fate of the bank, including whether or not to inject fresh capital into its coffers, reports El Economista. The Mexican financial daily, however, did not mention the reason for the "stay of execution," although it pointed out that half of the bank's shareholders are foreigners. Fifty percent of the bank is currently in ADRs administered by the Bank of New York. According to recent report by the Troubled Company Reporter-Latin America, Quadrum needs between US$35 million and US$69 million. Failure of the shareholders to come up with the money will force the Commission to turnover the bank to the banking institute IPAB for liquidation, says the report. The recent Economista report failed to mention the exact date of the new deadline. HYLSAMEX: Restructuring Plan May Sever Ties With Parent Alfa ------------------------------------------------------------ Debt-laden Mexican steel maker Hylsamex is reportedly close to finalizing a program that will restructure its multi-billion- dollar debts, says Mexican financial daily El Economista. The report says the plan will likely involve parent company Alfa S.A. selling part or all of its share in the subsidiary, which racked up US$2.68 billion in debts at the end of the third quarter. However, even if a program could be put in place soon, financial consultant Salomon Smith Barney believes Alfa could still end up paying a US$850 million obligation that matures next year. MEXLUB: Continues To Struggle In Meeting Financial Obligations -------------------------------------------------------------- Mexican automobile lubricants distributor Mexicana de Lubricantes (MexLub) has been struggling to pay down its bank debt over the past eight years, reports Mexico City daily Reforma. The report reveals that the Company paid $120 million in 1993 for rights to sell engine oil and other lubricants at all gas stations operated or franchised by state-run energy conglomerate Petroleos Mexicanos (Pemex). According to analysts, MexLub had paid a premium for the rights, adding that its earnings had barely covered operating costs and bank-debt interest payments. The Company reportedly borrowed $60 million of the total paid to Pemex in 1993. The majority of MexLub's debt is held by Grupo Financiero Banorte, one of Mexico's top five banking institutions. MINERA AUTLAN: Closing 3 Units, Negotiating One More With Union --------------------------------------------------------------- Technically bankrupt mining firm Minera Autlan announced recently that it is permanently winding up operations in Tezuitlan, in the central state of Puebla, says El Economista. According to the company, the sole producer of iron alloys in Mexico, it plans to focus operations at its Molango, Tamos and Nonoalco units. Citing a report by a business columnist, El Economista also said that negotiations between management and union officials are ongoing regarding the shutdown of the Gomez Palacios unit. The same report said that job cutbacks and asset sales are also being contemplated company-wide as part of a plan to reduce costs. A recent report by the Troubled Company Reporter-Latin America pegged the company's debts at US$73.9 million. =============== P A R A G U A Y =============== ANTELCO: Copaco To Acquire Assets For Future Sale ------------------------------------------------- November 20 was the deadline for Copaco's (Compania Paraguaya de Comunicaciones) absorption of the assets of Paraguayan telephone company Antelco, reports South American Business Information. Copaco, which was created only in November 15, decided to take on Antelco's assets for future sale. Copaco will be providing telecoms services both in Paraguay and abroad. Antelco, which has 297,000 lines, is scheduled for privatization in March 2002. The Company is considered one of Latin America's least advanced, given its lack of coverage and outdated technology. The company's bloated payroll was recently cut from 6,000 to 5,000 workers prior to the start of the privatization process. 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 * * *