/raid1/www/Hosts/bankrupt/TCRLA_Public/011221.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, December 21, 2001, Vol. 2, Issue 249
Headlines
A R G E N T I N A
ACINDAR: To Restructure $400M Debt After Missing Loan Payments
ACINDAR: S&P Cuts Ratings, Analyst Advises Bankruptcy Filing
IMPSA: Bond Swap Offer Hinges On Three Primary Factors
IMPSAT: S&P Downgrades Ratings To "D" Following Default
METRO: Cuts Cost By 15% With The Closure Of 1 Branch
SIDECO AMERICANA: Likely To Default On Debt Payments
B A R B A D O S
APW LTD.: Announces Fiscal Q1 Results; Net Loss Of $36.7M
APW LTD: Milberg Weiss Files Securities Fraud Suit
APW LTD: Announces Credit Facility Changes; Restructuring Charge
B R A Z I L
CELESC: Restructuring Bill Gets Approval From Legislature
CELG: Overwhelmed With Debt Woes; Struggling to Make Payments
KVAERNER: Wins $13M Deepwater Contracts From Brazilian Co.
TRANSBRASIL: Steps Up Restructuring To Get Back Into The Air
C H I L E
AEROCONTINENTE: Resumes Chilean Flight Operations
ENAMI: To Sell To Codelco 50% of Ventanas To Slash Debt
INVERRAZ: To Lodge Legal Proceedings Against SQM
E C U A D O R
BANCO DEL PICHINCHA: Fitch Assigns CCC+ and 4T Ratings
M E X I C O
BITAL: One of 5 Banks To Submit To New IPAB Audit
EUZKADI: Shuts Jalisco Plant, Lays Off 1,164 Workers
GRUPO MEXICO: SPCC Auctions $73M of $100M Bond Offering
GRUPO MEXICO: Cuts Metals Production, Sacks Thousands of Workers
HUFFY CORPORATION: Terminates Elamex Ops; Scooters Liquidated
MEXICAN AIRLINES: Seneam CEO Taps Airlines To Get Government Aid
P E R U
NUEVO MUNDO/NBK BANK: Regulator Seeks Bids For Auditing Contract
V E N E Z U E L A
CAVSA: CVG To Submit Dissolution Plan To Officials In 2002
- - - - - - - - - -
=================
A R G E N T I N A
=================
ACINDAR: To Restructure $400M Debt After Missing Loan Payments
--------------------------------------------------------------
Acindar Industria Argentina de Aceros SA, Argentina's biggest
producer of steel rods, will restructure $400 million of debt
after slumping sales forced it to default on loan payments, says
Bloomberg.
According to Jose Giraudo, Acindar's capital markets manager, the
Company won't pay $5.6 million in interest due Feb. 15 on its
11.25 percent bond that matures in 2004, and $250 million in bank
loans after a decline in the construction and auto industries cut
sales while interest rates soared to more than 30 percent.
"We stopped paying capital and interest on bank loans several
days ago and we will now have to restructure the bonds," said
Giraudo, without giving details of the loans.
"Acindar is an old-line Argentine company that has weathered many
storms in the past," said Terrance O'Dwyer, a corporate bond
analyst at Prudential Securities Inc in New York.
"But the combination of poor market conditions and throughout the
world for steel combined with the recession in Argentina have
made it difficult for Acindar to generate sufficient cash to take
care of short-term obligations," O'Dwyer added.
ACINDAR: S&P Cuts Ratings, Analyst Advises Bankruptcy Filing
------------------------------------------------------------
Standard & Poor's lowered its foreign and local currency
corporate credit ratings on Acindar to "D", or payment in
default, from "CCC." It also lowered its rating on Acindar's $100
million senior unsecured notes due 2004 to "CC," or bonds rated
as highly vulnerable, from "CCC."
Credit Suisse First Boston and Chase Manhattan Bank were co-
lenders on the 2004 bond when it was issued in 1997, revealed
Jose Giraudo, Acindar's capital markets manager. He declined to
name the bank advising Acindar on the restructuring or name
creditors but said half the lenders to the Company were
international institutions.
"Acindar should just seek protection from creditors on all its
debt and get it over with," said Christian Reos, a corporate
analyst at Allaria Ledesma & Cia. "It has short term bank loans
of about $141 million, and the banks are charging it a fortune."
IMPSA: Bond Swap Offer Hinges On Three Primary Factors
------------------------------------------------------
Mechanical engineering manufacturer Industrias Metalurgicas
Pescarmona SA (Impsa) said the offer it will make in exchange for
its $137.6 million secured bonds will depend on three factors,
reports AFX.
In the mix of considerations are the Company's current contracts,
new deals in the process of adjudication, and the future flow of
dividends from its build-operate-transfer (BOT) projects.
Impsa said it failed to pay principal and interest on the bond
due Dec. 11 due to "exchange controls," and it was also awaiting
clearance from the central bank.
However, "in any case...the company cannot be alien to the
circumstances the (Argentine) economy is passing through, the
volatility of financial markets, and the prevailing difficulty to
obtain access to credit on both the local and international
markets," Impsa said.
The exchange proposal is subject to "research, analysis and
determination by the firm, together with the financial advice of
Banc of America Securities LLC, it said.
On the 13.25 percent secured obligation due December 11, Impsa
said that "given its small scale in relation to the company's
total liabilities, and its short-term commercial paper nature,"
it is considering an issue to reprogram the maturity, with an
offer to be placed among bondholders and other interested
parties.
IMPSAT: S&P Downgrades Ratings To "D" Following Default
-------------------------------------------------------
Standard & Poor's on Wednesday lowered its rating on Impsat Fiber
Networks Inc.'s $225 million senior unsecured notes due 2008 to
"D" from single-"C." At the same time, the corporate credit
rating of the Company was lowered to "D" from double-"C." These
ratings were removed from CreditWatch.
Standard and Poor's double-"C" rating on Impsat's $125 million
senior unsecured guaranteed notes due 2003 and its single-"C"
rating on the Company's $300 million senior unsecured notes due
2005 remain on CreditWatch with negative implications. These
ratings will be lowered when an effective default occurs.
The downgrade of the $225 million senior unsecured notes to "D"
follows the Company's decision to not make the interest payment
due on Dec. 17, 2001, to preserve cash as part of a financial
restructuring process that will reduce its high debt burden.
Because, in Standard & Poor's view, the missed payment and the
restructuring process imply a general insolvency, the corporate
credit rating was also lowered to "D." The Company has retained
the investment-banking firm Houlihan Lokey Howard & Zukin Capital
as an advisor for a restructuring process, which is expected to
end in the next few weeks.
Standard & Poor's will reassess the credit quality of the Company
once the restructuring process is finalized.
METRO: Cuts Cost By 15% With The Closure Of 1 Branch
----------------------------------------------------
Supermarket chain Metro of Mendoza province, which called in the
receivers last year, is closing one of its branches in the center
of Mendoza city, reports El Cronista.
The closure of this branch will mean a 15-percent reduction in
costs.
Already, Metro has closed 2 branches this year. Its owner, the
Lopez family, is looking for a buyer.
Metro managed to turn over $200 million between 1998 and 1999 but
it had to call in the receivers with a debt of $80 million. Now,
Metro's revenues are only about $20 million.
SIDECO AMERICANA: Likely To Default On Debt Payments
----------------------------------------------------
Marcos Devoto, a corporate debt analyst at Banco Rio de la Plata
SA, predicted that Sideco Americana SA, a holding company that
owns Argentina's postal service, is likely to default on its debt
payments, reports Bloomberg.
Sideco has $125 million in debt due in August. In September,
Correo Argentino S.A., Sideco's 69.23-percent-owned postal
subsidiary originally purchased in the 1997 privatization of the
former Argentine government postal system, filed for "Concurso
Preventivo" (akin to Chapter 11 protection).
Correo is Sideco's largest and most important operation,
representing 53 percent of Sideco's 2000 consolidated revenues
and about 41 percent of consolidated EBITDA of US$$180 million in
2000, prior to concession payments owed by Correo to the
government of Argentina of approximately US$103 million per year.
Correo was a cash drain for Sideco; the Company's other
businesses, while impacted by worsening macroeconomic conditions
in both Argentina and Brazil, have managed to generate funds from
operations of $67 million for the twelve month ended June 30,
2001. However, Correo's filing seriously constrains Sideco's
financial flexibility and deteriorates the Company's overall
credit quality.
===============
B A R B A D O S
===============
APW LTD.: Announces Fiscal Q1 Results; Net Loss Of $36.7M
---------------------------------------------------------
APW Ltd. (NYSE: APW), a leading Technically Enabled Manufacturing
Services "TEMS" Company based in St. Michael, Barbardos,
announced Wednesday its financial results for the fiscal first
quarter ended November 30, 2001. The following results exclude
all non-recurring charges in both the current and prior year
periods.
FISCAL FIRST QUARTER SUMMARY
Sales for the three months ended November 30, 2001 were $220
million, a 24% decline from the fourth quarter ended August 31,
2001, and a decline of 39% from the same period last year.
Cash earnings, which exclude amortization and non-cash financing
costs, were a $14.1 million loss or ($0.35) per diluted share for
the first quarter ended November 30, 2001 compared to cash
earnings of $21.6 million or $0.52 per diluted share for the
prior year quarter on a pro-forma basis.
-----------------------------------------------------------------
Summary of Financial Results for APW Ltd. (excluding non-
Recurring charges)
-----------------------------------------------------------------
(Dollars in millions, except per share amounts)
Q1 02 Q1 01
----- -----
Sales $219.8 $359.7
EBITDA $2.1 $44.3
Cash Earnings $(14.1) $21.6
Cash EPS $(0.35) $0.52
Net Earnings $(22.0) $15.4
Diluted EPS $(0.55) $0.37
-----------------------------------------------------------------
FIRST QUARTER REVIEW
Sales for the three months ended November 30, 2001 were $220
million. Following five months of relatively flat sales for the
months of April through August, a severe disruption occurred from
August to September. The events of September 11, 2001 clearly
negatively impacted the psychology of many businesses leading to
a reduction in demand. Sales for the months of September, October
and November were relatively flat at reduced levels. The lower
revenues of the first quarter reflect additional softening in end
user demand coupled with efforts by our customers to further
reduce their inventory.
Gross profit margin in the first quarter was 14.3% compared with
18.3% in the fourth quarter of fiscal 2001. The decrease is
primarily the result of lower absorption of fixed costs on the
lower sales volume. APW was able to partially offset the margin
loss from lower sales by reducing Manufacturing Overhead (MOH)
expenses to $43.9 million from $49.3 million in the fourth
quarter, an 11% sequential decline. Sales, Administrative and
Engineering (SAE) costs were $40.4 million in the first quarter,
representing a sequential decline of $5.6 million or 12% from the
fourth quarter of fiscal 2001. MOH and SAE expenses declined to
$84.3 million in the quarter, down 12% from $95.2 million in the
fourth quarter and down 31% from the levels in the second quarter
of fiscal 2001, adjusted to include the full quarter impact of
the Mayville Metals acquisition. APW plans to reduce MOH and SAE
to below $75 million per quarter during the fourth quarter of
fiscal 2002, excluding the effect of increased variable costs
associated with anticipated revenue growth. EBITDA before non-
recurring charges was $2.1 million, as compared to $18.0 million
generated in the fourth quarter of fiscal 2001.
Under United States Generally Accepted Accounting Principles
(GAAP), including all non-recurring charges, APW incurred a loss
of $36.7 million or ($0.92) per diluted share in the current
quarter.
Restructuring and other non-recurring items recorded in the
quarter totaled $19.6 million, before taxes. GAAP recognized
restructuring expenses totaled $10.0 million and relate primarily
to severance and lease exit costs associated with facility
closings. Other non-recurring items totaled $9.6 million and
consist primarily of the non-cash write down of equipment and
leasehold improvements of exited facilities. APW's operational
team has continued to be successful in maintaining high levels of
quality and delivery throughout the implementation of the
Company's restructuring initiatives.
Cash flow from operations, excluding cash used in restructuring,
was ($2.0) million during the quarter. Free cash flow, defined as
cash flow from operations less capital expenditures and including
all cash used in restructuring, was ($15.3) million. During the
quarter, primary working capital was reduced by a further $11
million from the fourth quarter of fiscal 2001. Net inventory on
November 30, 2001, was $118.5 million, down $16.5 million or
12.2% from August 31, 2001.
FISCAL 2002 OUTLOOK
APW's business suffered a sharp correction in September. Since
then, APW's sales have been relatively flat. Even though end
market conditions remain challenging, a number of factors suggest
that after a relatively flat second quarter, APW's sales should
improve. This expectation is based on an anticipated improvement
in our short cycle non-OEM business, the increasing demand of
specific large programs and a tapering off of the negative
effects of inventory corrections on demand. Modest sales growth
in the third and fourth quarters of fiscal 2002 due to the
factors described above, combined with additional reductions to
MOH and SAE, should allow APW's recurring EBITDA to increase with
an objective of obtaining at least a 10% EBITDA margin in the
fourth quarter of fiscal 2002.
Richard G. Sim, Chairman, President, and Chief Executive Officer
of APW Ltd. commented: "APW's greatest strength is the
combination of our global supply chain solution and our people
that allow us to provide our customers with a level of service
that is second to none. APW's challenge has been supporting a
leveraged balance sheet during the severe downturn that has
occurred across the technology sector. During this downturn, we
have significantly reduced our fixed costs and working capital
and by so doing, we have been successful in minimizing our use of
cash. APW has continued to win large electronic integration
programs and gain market share with our customers. However, we
believe that APW would be winning more business if it were not
for our level of debt. Consequently, it is a priority to improve
our capitalization and we are evaluating all of our financial and
strategic alternatives."
About APW Ltd.
APW Ltd. is a Technically Enabled Manufacturing Services "TEMS"
company that designs and manufactures large, complex
infrastructure products for OEMs in the communications, large
enterprise hardware and Internet markets.
APW Ltd. has particular skills in the areas of designing and
manufacturing enclosures, thermal management, power supplies and
backplanes; as well as core competencies in product and system
design, integration and supply chain management. APW Ltd.
operates in over 30 locations throughout North America, South
America, Europe and Asia.
CONTACT: APW Ltd.
Mike Gasick, 262/523-7631
APW LTD: Milberg Weiss Files Securities Fraud Suit
--------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP
announces that a class action lawsuit was filed on December 10,
2001, on behalf of purchasers of the securities of APW, Ltd.
(``APW'' or the ``Company'') (NYSE:APW - news) between September
26, 2000 and March 20, 2001, inclusive. A copy of the complaint
filed in this action is available from the Court, or can be
viewed on Milberg Weiss' website at: http://www.milberg.com/apw/
The action, numbered 01-C-1232, is pending in the United States
District Court, Eastern District of Wisconsin, located at 362
U.S. Courthouse, 517 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, against defendants APW, Richard G. Sim and William P.
Albrecht (``Albrecht''). The Honorable Magistrate Judge Patricia
J. Gorence is presiding over the case.
The Complaint alleges that defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, by issuing materially false and
misleading statements to the market. Specifically, throughout the
Class Period, defendants repeatedly issued statements indicating
that, among other things, the Company was growing at a rapid
pace, due, in significant part, to strong demand for its product
offerings by its customers.
The complaint alleges that these statements were materially false
and misleading because, among other things, they failed to
disclose or misrepresented that (a) in fact, the Company was
experiencing decreased demand for its products as its primary
customers were substantially decreasing their orders; (b) due to
the declining demand, APW's customers were overstocked with APW
products and, accordingly, would be decreasing their orders in
the future while they worked down their bloated inventories; and
(c) in response to these negative factors, APW was attempting to
slash costs and, in this regard, had started to reduce its
workforce. On March 20, 2001, defendants finally disclosed this
information and reported that the Company's sales growth had
slowed dramatically and reported a loss of $0.15 per share,
compared to analysts' expectations of a $0.27 per share profit.
Defendants also disclosed that the Company's reduced performance,
combined with other factors, caused the Company to be in breach
of certain covenants in its credit agreement. In response to this
announcement, the price of APW common stock dropped from $20.65
per share on March 20, 2001, to close at $7.39 per share on March
21, 2001. Prior to this disclosure, defendant Albrecht was able
to sell shares of his personally-held stock for gross proceeds of
more than $1.7 million and the Company was able to complete its
acquisition of Mayville Metal Products, which was partially paid
for using the Company's stock as currency.
If you bought the securities of APW between September 26, 2000
and March 20, 2001, you may, no later than February 8, 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. You may retain Milberg Weiss
Bershad Hynes & Lerach LLP, or other counsel of your choice, to
serve as your counsel in this action.
Milberg Weiss Bershad Hynes & Lerach LLP, a 170-lawyer firm with
offices in New York City, San Diego, San Francisco, Los Angeles,
Boca Raton, Seattle and Philadelphia, is active in major
litigations pending in federal and state courts throughout the
United States. Milberg Weiss has taken a leading role in many
important actions on behalf of defrauded investors, consumers,
and companies, as well as victims of World War II and other human
rights violations, and has been responsible for more than $30
billion in aggregate recoveries. The Milberg Weiss Web site
(http://www.milberg.com)has more information about the firm.
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 Email: APWcase@milbergNY.com
Website: http://www.milberg.com
APW LTD: Announces Credit Facility Changes; Restructuring Charge
----------------------------------------------------------------
In an official company announcement, APW Ltd. disclosed the
filing of a Form 10-K which will include ammendments to its
Credit Facility agreements. The amendments to the financial
covenants more accurately reflect the realities of operating in
the current economic environment. The amendments also provide APW
enhanced liquidity and the ability to expand its current
restructuring efforts beyond those previously announced.
The amendment increases the level of additional non-recurring
restructuring charges associated with cost reduction initiatives
from $25 million to $37 million. Certain other financial
covenants were also amended, including sales, EBITDA, and free
cash flow. In addition, a mandatory facility reduction on
February 28, 2002 was eliminated.
Rick Carroll, Vice President and Chief Financial Officer for APW
Ltd. commented, ``We are very pleased with the continued high
level of cooperation between APW and our lenders. Our lenders
unanimously approved the amendments. The additional restructuring
charges that are included in the amendment will allow APW to
continue to pursue its priority of keeping costs in line with the
level of business. As a result of our initiatives, our current
expectations are to achieve cost reductions in excess of $180
million on an annual basis by the summer of 2002 versus pro forma
second quarter of fiscal 2001.''
APW agreed to re-price the existing warrants held by its lenders
and eliminate the previous reduction provision if the Company met
repayment targets by August 31, 2002. Additional warrants were
issued to purchase up to 9.9% of the APW's common stock subject
to cancellation provisions if the facility is repaid by certain
dates.
The complete Second Amendment to the Amended and Restated Multi-
Currency Credit Facility is expected to be filed as an exhibit to
Form 8-K with the SEC by the close of business December 20, 2001.
With the finalization of this amendment, APW has completed its
Form 10-K for its fiscal year ended August 31, 2001. The Form 10-
K will be filed in its entirety today. Included in the year-end
results is a goodwill impairment charge of $166.9 million
associated with the closing of certain facilities and an overall
assessment of the goodwill recoverability in light of current
economic conditions.
For further information, contact:
APW Ltd. Mike Gasick, Treasurer 262-523-7631 www.apw.com
===========
B R A Z I L
===========
CELESC: Restructuring Bill Gets Approval From Legislature
---------------------------------------------------------
Brazil's Santa Carina state legislative assembly (AL) approved
Tuesday the bill to restructure power distributor Celesc, reports
Business News Americas.
The process will include splitting the Company's assets and
bringing in private ownership of the new generation and telecom
units. Distribution would remain in state hands.
However, the legislators amended the bill to ensure that the
government of Santa Catarina maintains control of the new
generation company.
Consultant Accenture and representatives from Celesc, the
government of Santa Catarina and Santa Catarina's industries
federation (Fiesc) drew up the original bill.
Now the bill will be sent to Santa Catarina governor Esperidiao
Amim for enactment, after which a new council will be formed to
set the timetable for the division and creation of the new
companies, as well as calling for bids for stakes in the new
units.
This call for bids should take place in the first quarter next
year, according to Celesc investor relations director Aldo
Schumacher.
"We will draw up an attractive contract to sell stakes in the new
generation company, with a view to attracting private companies
that want to be partners, and in the case of the telecom company
selling control would be the best way," he said.
CELG: Overwhelmed With Debt Woes; Struggling to Make Payments
-------------------------------------------------------------
Apparently the financial troubles at integrated power company
Celg (Companhia Energetica de Goias) continue to get worse.
According to a report by O Globo, as CELG proceeds with its third
attempt to privatize, the company must deal with the problem of
its debt with Furnas totaling R$301.7 million, anly a small part
of which is being repaid in installments.
Meanwhile, another obligation with Eletrobras of R$100 million is
not being repaid.
CELG is hoping that an anticipated R$140 million to R$150 million
bridging loan from the BNDES (Banco Nacional de Desenvolvimento
Economic e Social) will cover losses during the rationing period
and can be applied to its debt.
The Company has failed to meet repayment agreements with its
creditors. The sale to the private sector is seen as the only
solution. But, in its current condition, CELG is having a hard
time attracting buyers.
CELG sells electricity to 1.9 million people in Brazil's midwest
and is expected to post a loss of 160 million reais this year.
KVAERNER: Wins $13M Deepwater Contracts From Brazilian Co.
----------------------------------------------------------
Troubled Anglo-Norwegian engineering group Kvaerner ASA won two
deepwater contracts from Petrobras in Brazil worth a total of $13
million, reports AFX.
According to the group, the first contract is for the supply of
12 sub-sea Xmas Trees, a form of offshore equipment, for
operation in water depths of 2,000 meters, while the second
contract is for the development of a Workover System to be used
for sub-sea installations in up to 3,000 meters of water.
For the Xmas Trees, Kvaerner Oilfield Products' scope in Brazil
includes procurement, project management, engineering and
manufacture, it said.
Including a previous order for 11 Xmas Trees from the same
customer, Kvaerner's Brazilian operation will be supplying Trees
to Petrobras at the rate of one to two per month until mid-2003.
The first Tree from the most recent order will be delivered in
July 2002 and will be installed on the East Albacora Field in the
Campos Basin.
Kvaerner ran up huge debts after an over-optimistic expansion in
the 1990s, including the acquisition of British conglomerate
Trafalgar House. The company diversified into businesses
including cruise lines and a scheme for launching space rockets
from a converted oil platform in the Pacific Ocean.
TRANSBRASIL: Steps Up Restructuring To Get Back Into The Air
------------------------------------------------------------
Brazil's No. 4 airline Transbrasil, on the verge of bankruptcy
for the last two weeks, will lay off another 1,000 jobs, or 45.5
percent of its remaining workforce of 2,200 people, according to
an EFE report.
Among those to be laid off are 300 workers who will accept early
retirement, another 300 who were laid off earlier this week and
400 who will be laid off later in the week.
The restructuring effort is aimed at cutting costs and getting
the airline back in the air after Shell oil cut off their fuel
when bills went unpaid earlier this month.
Limping along with nearly $350 million in debt, Transbrasil has
until early January to get back in the air or it will lose its
flight routes entirely.
According to the Department of Civil Aviation, any airline
grounded for 30 days loses its route concessions, which the
government can then redistribute to other carriers.
In a statement issued Wednesday, Transbrasil said it is
conducting "a series of negotiations to restart operations as
soon as possible."
However, analysts have indicated that the probability of the
company declaring bankruptcy is high.
=========
C H I L E
=========
AEROCONTINENTE: Resumes Chilean Flight Operations
-------------------------------------------------
Peruvian airline AeroContinente officially re-initiated
operations in Chile with domestic and international flights,
reports El Diario.
AeroContinente operates with 150 on-land employees and 80 on-
board employees. It has two aircraft Boeing 767-200 and three
aircraft Boeing 737.
January 10 next year, Aerocontinente's creditors are expected to
agree to a 24-month plan introduced by the Company to repay $12
million in debt.
The Company announced it has reached satisfactory agreements with
70 percent of its creditors and it expects to do the same with
the remaining 30 percent before the end of the year.
ENAMI: To Sell To Codelco 50% of Ventanas To Slash Debt
-------------------------------------------------------
Enami is struggling to repay part of its $470-million debt and
the only way to solve this problem, according to market experts,
is for it to form a strategic alliance with Codelco in the
Ventanas smelting division, says El Diario.
Enami is willing to sell a 50 percent stake of Ventanas to
Codelco, projecting that the sale of the stake could bring in
$200 million immediately to the Company.
Part of the proceeds would be used to pay some of the debt, and
the rest will be used to fund the expansion of the Paipote
smelting unit, which Enami also owns.
However, Codelco would prefer to buy 100 percent of Ventanas.
Enami and Codelco both are state-owned companies. Any final
decision will take place only if the President of the Republic
agrees. So far, President Lagos has endorsed the decision not to
privatize Enami.
INVERRAZ: To Lodge Legal Proceedings Against SQM
------------------------------------------------
Inverraz, a company controlled by the entrepreneur Francisco
Javier Errazuris, is filing legal charges against SQM (Sociedad
Quimica y Minera de Chile), reports El Diario.
Inverraz claimed that SQM contacted Cosayach clients and advised
them not to buy iodine or nitrate from Cosayach because SQM, as
Cosayach's purchaser, will not supply them in the future.
SQM signed an agreement in March to purchase Cosayach for $140
million, but it decided not to proceed with the purchase in
October.
Meanwhile, Inverraz is also taking legal action against State
Street Bank in the USA and in Chile for having put pressure on
Inverraz creditors to receive their payments anticipating this
transaction.
=============
E C U A D O R
=============
BANCO DEL PICHINCHA: Fitch Assigns CCC+ and 4T Ratings
------------------------------------------------------
Fitch, the international rating agency, has assigned for the
first time a Long-term rating of 'CCC+' to Ecuador's Banco del
Pichincha C.A. y Subsidiarias(BPS).
In addition, a Support rating of '4T' was assigned. The long-term
rating reflects the bank's strong and established market position
and wide deposit base in Ecuador and is line with our opinion of
the sovereign's creditworthiness. It also reflects deterioration
in its asset quality, profitability and capital stemming from
weaknesses in its main operating markets.
BPS is comprised of 16 financial companies located mainly in the
South American Andean region, the Bahamas and Miami. Its
principal subsidiary is Banco del Pichincha C.A., the largest
private bank in Ecuador with loan and deposit market shares of
22% and 24%, respectively at end-June 2001. The bank has an
established position in the corporate, middle and consumer
markets and operates through the most extensive branch network in
the country.
CONTACT: Fitch, New York
Ricardo Chaves, 212/908-0606
Linda Hammel, 212/908-0303
Patricio Baus, 593 2 222 2323, Quito
===========
M E X I C O
===========
BITAL: One of 5 Banks To Submit To New IPAB Audit
-------------------------------------------------
Grupo Financiero Bital SA, Mexico's No. 5 bank by assets, is one
of the five banks that could submit to new audits in order to
complete the exchange of IPAB debt for Fobaproa debt, according
to Mexican Bankers' Association (ABM) President Hector Rangel
Domene.
The other four banks, according to Rangel in a Mexico City daily
Reforma report, are Banamex, Bancomer, BBVA and Banorte.
"We are going to begin discussions to see what it would involve,
under what terms," said the leader of Mexico's banking industry.
Two years ago, Congress instructed bank bailout agency IPAB to
conduct audits of the banks, pertaining to the assistance they
received from Fobaproa.
However, the banks refused to submit to new audits, arguing that
Canadian Michel Mackey already carried out a sufficient audit for
the government.
IPAB recently offered to guarantee that the results of the
proposed audits would not economically harm the banks.
Meanwhile, Bital is looking to raise money in order to help it
fund the purchase of Banco del Atlantico and shore up its
finances.
Bital had said it would sell a minority stake next year to a
group that might include General Electric Capital Corp. and ING
Barings LLC for $300 million.
The funds will also help Bital return to profitability after
running Atlantico for four years dried up its capital and left it
struggling to compete against competitors.
EUZKADI: Shuts Jalisco Plant, Lays Off 1,164 Workers
----------------------------------------------------
Compania Hulera Euzkadi said it will permanently close its plant
in El Salto, Jalisco after it fell short of international
standards of production, reports Mexican financial daily El
Economista.
According to spokesperson Jose Mendoza, the Company's attempts to
increase productivity were unsuccessful because of internal union
politics. Euzkadi had suggested to the union several policies to
increase productivity, but none of which were accepted. One of
the Company's main productivity problems was absenteeism, which
reached 25 percent per shift.
The 1,164 plant employees laid off over the weekend will be paid
off to the tune of up to 15 years of minimum salaries
immediately.
Meanwhile, the Jalisco government, which was overwhelmed by the
announcement, said that attempts of surrounding municipalities to
absorb the plant closure won't do much to help the sacked
workers.
"We told (the union) clearly: the state government does not have
the capacity to deal with a situation like this overnight," he
said. "There will be plans and projects to be applied in the zone
to reactivate it, but obviously this will take time," said
Jalisco government official Abraham Gonzalez.
Euzkadi is a subsidiary of Continental Tire de Mexico, owned by
Germany's Continental AG.
GRUPO MEXICO: SPCC Auctions $73M of $100M Bond Offering
-------------------------------------------------------
Southern Peru Copper Corp. (SPCC), the country's biggest copper
miner, sold $73.1 million in 10-year bonds out of $100 million
offered on weaker than expected demand, reports Bloomberg.
Accordingly, the debt will pay an annual interest rate of 3
percentage points above the London interbank offered rate, or
about 4.9 percent, said Carlos Franco, a fixed-income trader at
Credibolsa brokerage, which handled the sale. Demand for the
issue came to $84.3 million, Franco said.
"This was one of the few 10-year bonds launched with a variable
rate and the market isn't yet used to such variable rates.
Perhaps this caused some fear," related Finance Director Marco
Antonio Garcia.
"This was a test for us and the market replied it is ready to
commit a lot of funds at this rate," Garcia added.
The issue came on the day Grupo Mexico SA, which owns 54.2
percent of Southern Peru, announced it would slash production and
lay off up to 3,000 workers amid low metals prices that have
ensnared it in financial woes.
However, Southern Peru said troubles in Mexico would not affect
its operations or workers locally.
"Grupo Mexico manages its companies in Mexico and while it owns
Southern, we have no plans to reduce personnel or cut
production," Garcia said.
Proceeds of the sale will be used to refinance existing debt.
Southern Peru sold the bonds after getting approval from
authorities to boost an earlier approved $200 million bond sale
to as much as $750 million.
GRUPO MEXICO: Cuts Metals Production, Sacks Thousands of Workers
----------------------------------------------------------------
Cash-strapped Grupo Mexico, the world's third-largest copper
producer, said it will cut metals production and lay off
thousands of workers in the coming year due to a languishing base
metals market, reports Reuters.
In a report to its Mexican Stock Exchange shareholders, Grupo
Mexico announced it will restructure its mining division -
Americas Mining Corporation consortium, which operates Asarco in
the United States, Grupo Minero in Mexico and Southern Peru
Copper Corporation in Peru.
Although cost-reducing measures were successful, present market
conditions now force the firm to cut costs even further and enter
a new restructuring stage.
Among the measures the firm will adopt are a postponement of
plans to develop mines, the dismissal of some 2,500 to 3,000
workers and cutbacks in materials, services, contractors and
labor.
In addition, the group will postpone non-priority investments and
analyze the possibility of temporarily shutting down some mines
during the summer, especially in northeastern Mexico.
The firm's U.S. subsidiary will lower its copper output following
the closing of its Mission, Arizona mining unit, which was
brought on by high operating costs and slumping prices.
HUFFY CORPORATION: Terminates Elamex Ops; Scooters Liquidated
-------------------------------------------------------------
HUFFY CORPORATION (NYSE: HUF) announced Wednesday several
additional actions to further reduce on-going operating costs and
working capital requirements. Given Huffy Corporation's view that
the economic climate will continue to be challenging through the
first half of 2002, the Company has taken the following actions
to better position Huffy for stronger earnings in 2002.
* Huffy has elected to terminate the Shelter Services Agreement
for the maquilladora facility operated by Elamex, S. A. de C. V.,
Nuevo Laredo, Mexico and has given formal notice of its intention
to Elamex. The contract termination is effective at the end of
May 2002. The production volume, which was less than 10% of total
units, will be replaced by units imported from Asian suppliers.
* In light of the continuing softness at retail and the uncertain
timing of an economic recovery, Huffy has continued to focus on
reducing working capital requirements -- monitoring accounts
receivable and inventory levels, while seeking more favorable
trade terms from suppliers. As part of this effort Huffy Bicycle
Company has taken steps to dispose of its remaining scooter
inventory during the fourth quarter.
* During the course of 2001, Huffy has reduced its fixed SG&A
level by slightly more than 10%. As a further step towards its
target of reducing administrative costs by an additional 5%-7%,
in January, Huffy will consolidate its Dayton area divisional
finance and information technology infrastructure into a single
resource center.
Don Graber, Chairman, President and CEO, said, "The lower
operating costs and reduced working capital resulting from these
actions position Huffy strongly for the recessionary challenges
that we expect to continue at least through the first half of
2002. These actions will have an impact on fourth quarter
results. Under the termination provisions of the Elamex
agreement, Huffy is responsible for certain costs and will incur
a one-time charge of $2.7 million, the majority of which is a
non-cash write-off of obsolete equipment. The arrangement was put
in place in 1998 to help Huffy Bicycle Company meet requirements
as we transitioned to a new supplier base in Asia and has served
us well. However, relationships with suppliers in the Far East
have improved dramatically over the past four years, both in
terms of cost and timing. We can now make this change and expect,
given the very competitive cost quotations from Asian suppliers,
to recover the one-time costs in less that a year."
"Restructuring charges related to a reduction in staffing levels
at Huffy Bicycle Company in October and the finance and
information technology reconfiguration will add another $1.2
million to restructuring charges in the fourth quarter, and
operating margin in the quarter will be impacted by roughly $4.3
million due to the deep discounts on the disposal of inventories.
However, we fully expect that the consolidation of the finance
and information technology groups alone will reduce SG&A in the
coming year by well over $1.0 million and we will go into 2002
with the lowest inventory levels in the past ten years"
Commenting on results for the fourth quarter and the year, Mr.
Graber, continued, "Although the economic environment continues
to be challenging, we are now seeing some strength at retail,
albeit at somewhat lower price points. Excluding scooter sales
that were close to $71.0 million in the fourth quarter of 2000,
sales in the fourth quarter are currently running ahead of last
year. The basketball backboard business and the service business
will turn in strong quarters, and we are pleased to have been
able to recently announce the new strategic partnership with
Lowe's, which has the potential of adding in excess of $10.0
million to sales in 2002. The bicycle business should report
solid sales in the quarter, assisted by Micro(TM) Monkey Bike and
pogo stick sales. Earnings during the quarter, excluding the
impact of the scooter liquidation, are in line with our
expectations; however, with the margin erosion due to the
liquidation of the scooter inventory, we will now anticipate a
loss for the year, excluding the restructuring charges of $3.9
million, of $0.27 - $0.31 per common share and a net loss of
$0.51 to $0.54 per common share."
"With cash and short-term investments of more than $14.0 million
at the end of September, we anticipate having cash in excess of
$20.0 million at year-end, and remain well positioned to pursue
opportunities to add to shareholder value. We will continue to
work with Sheffield Merchant Banking Group, our external
financial advisors, as we evaluate additional alternatives to re-
deploy assets to enhance shareholder value."
Huffy Corporation is a leading provider of consumer and retail
services and a leading supplier of bicycles and home basketball
equipment.
CONTACT: Robert W. Lafferty
V.P. - Finance, CFO & Treasurer
Huffy Corporation
Phone: +1-937-865-5407
MEXICAN AIRLINES: Seneam CEO Taps Airlines To Get Government Aid
----------------------------------------------------------------
Agustin Arellano, CEO of Mexican Airspace Navigation Services
(Seneam), named the airlines expected to receive aid from the
federal government for navigation services, reports Mexico City
daily Reforma.
These are Aeromexico, Mexicana, Aerolitoral, Aerocaribe,
Aeromexpress, Lineas Areas Azteca, Aeromar, Estafeta, and cargo
company Mas Air, Arellano said.
According to Mr. Arellano, Aerocalifornia is unlikely to pay off
its debt any time soon, because it is at historic levels of more
than 700 million pesos.
"These debts originate from between 1993 and 1999. They're 231
million pesos, and adding interest amount to 700 million pesos.
Just in 2000 and 2001, the company registered debts with Seneam
of 80 million pesos," Arellano said.
According to the Seneam executive, the aid that the federal
government will provide to the airlines will total 32 million
pesos.
=======
P E R U
=======
NUEVO MUNDO/NBK BANK: Regulator Seeks Bids For Auditing Contract
----------------------------------------------------------------
Peru's banking regulator said it has invited auditing firms to
compete for a contract to audit the regulator's intervention
process of Peruvian banks Banco del Nuevo Mundo and NBK Bank,
reports Business News Americas.
Firms, which participated in a valuation of the two banks when
the regulator sought to sell them to avoid liquidation, are
excluded from bidding.
Winners of the auditing contract will investigate how the
regulator managed the assets and liabilities of the two banks
while in receivership.
The regulator, which intervened the two banks last December after
a run on deposits triggered by former President Alberto Fujimori
surprise flee to Japan, have been battered with criticisms in the
handling of the drawn-out intervention processes.
NBK Bank was finally acquired by fellow Peruvian bank Banco
Financiero, while Nuevo Mundo is earmarked for liquidation after
potential buyers were scared off by a legal battle between the
regulator and former owners.
=================
V E N E Z U E L A
=================
CAVSA: CVG To Submit Dissolution Plan To Officials In 2002
----------------------------------------------------------
Francisco Rangel Gomez, president of Venezuela's state heavy
industry holding company CVG, said in a statement that CVG will
present to President Hugo Chavez and the country's Council of
Ministers early next year a proposal to dissolve aluminum group
Cavsa, reports Business News Americas.
"This seeks to return autonomy to aluminum companies Venalum,
Alcasa, Bauxilum and Carbonorca, as each one operates according
to its own processes, which would mean the disappearance of
Cavsa," according to a CVG spokesperson.
The goal of the proposal is to steer the companies back to
profitability after posting losses for some 12 or 14 years.
Cavsa was formed in June 1997 by grouping together the four units
with a view to privatizing Venezuela's aluminum sector en bloc, a
plan that largely failed despite three sell-off attempts during
1998.
According to Rangel, the Cavsa structure was now obsolete as
"privatization is not on the cards at the moment." But, he added:
"What we are going to look for are strategic associations, like
the one we formed in the case of Bauxilum with French company
Pechiney, which is producing good results."
Pechiney will invest $208 million to increase Bauxilum's
production capacity to 2Mtpy in three years from the current
1.7Mtpy, in return for some of the extra output to feed its
aluminum plants. Pechiney is also due to carry out a feasibility
study to construct Alcasa's new primary aluminum production line,
which will require estimated investment of US$1.1bn.
Cavsa's financial situation has been under review for the last
three months, Rangel revealed.
"As president of CVG it is very sad that when people show me
projections for the next year they only indicate what the losses
will be, rather than the profits," he said.
It was "impossible for a single person or one team to control
four large companies, because each one has its own processes when
it comes to purchasing, maintenance, operations and so on," Gomez
said in the statement.
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 * * *