/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020107.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, January 7, 2002, Vol. 3, Issue 4 Headlines A R G E N T I N A GATIC SA: Idles Plants, Month Long Lay Off For 3,200 Workers NII HOLDINGS: Defaults On Principal Payment of $8.3M NII HOLDINGS: Hires Houlihan Lokey Capital As Financial Advisor B R A Z I L TRANSBRASIL: Regulator Extends Deadline To Resume Air Routes C O L O M B I A AVIANCA: Issues $209.4M Worth of Shares To Two Shareholders CHIVOR: Defaults On Bank of America Loan M E X I C O ALFA: Shares Rally On Hylsamex Debt Refinancing Optimism INTERNATIONAL THUNDERBIRD: Mexican Closure Orders Updated P A R A G U A Y CORPOSANA: Sale Pre-qualification Guidelines Now Available V E N E Z U E L A AMERICAN COMMERCIAL: S&P Drops Sr. Notes to D, Bank Line to B+ SIVENSA: Losses Widen Due To Global Decline In Steel Prices SIVENSA: Avoids Posting Loss From Sidor SIVENSA: Orinoco Iron's Future Still Hangs In The Balance SIVENSA: Posts $7.62M Loss In FY2001 From Sale of Danaven SIVENSA: Shareholders Voting On Debt Restructure Plan January 25 - - - - - - - - - - ================= A R G E N T I N A ================= GATIC SA: Idles Plants, Month Long Lay Off For 3,200 Workers ------------------------------------------------------------ Gatic SA, Argentina's largest textile and sportswear manufacturer, decided late December 2001 to temporarily shut down seven plants and sack 3,200 workers for a period of one month, reports The Miami Herald. The Company attributed its decision to Argentina's current economic crisis, which has hit the clothing and footwear industries especially hard. Gatic filed for protection from creditors in October 2001 after accumulating $340 million in debt. The Company, at that time, blamed the filing to smuggling, piracy and the "indiscriminate" opening up of the Argentine market to foreign competitors. CONTACT: Luis Pagani, CEO Av. Presidente Per▋ 2535. CP B1650ISG - San Mart》 Provincia de Buenos Aires - Argentina. Tel. 4724-7200 Fax.4724-7676 NII HOLDINGS: Defaults On Principal Payment of $8.3M ---------------------------------------------------- NII Holdings, Inc. ("NII"), a unit of Nextel Communications Inc., informed the U.S. Securities and Exchange Commission on Thursday that its operating subsidiaries in Argentina failed to make a December 31, 2001 scheduled payment of $8.3 million in principal to a group of banks under its Argentine credit facility. However NII did make a $2.4 million interest payment under the credit facility and entered into a forbearance agreement with over 51% of its lenders. According to the terms of the temporary deal, lenders have agreed to refrain from enforcing their respective rights to principal repayments under this facility until January 22, 2002. NII also signed a similar forbearance agreement with Motorola Credit Corporation pursuant to which Motorola Credit Corporation has agreed to refrain from enforcing any rights to principal repayments as lender under vendor financing facilities with NII due to a cross-default caused by the failure to make the Argentine principal payment until January 22, 2002. As of December 31, 2001, the aggregate principal balance outstanding under the Argentine facility was approximately $108 million and the aggregate principal balance outstanding under the vendor financing facilities was approximately $382 million. NII is currently in discussions with its lenders under these facilities regarding restructuring the obligations. NII HOLDINGS: Hires Houlihan Lokey Capital As Financial Advisor --------------------------------------------------------------- Amidst escalating financial difficulty, NII has retained Houlihan Lokey Howard & Zukin Capital as financial advisor to assist in studying NII's strategic alternatives. NII is beginning negotiations with representatives of the holders of its 13% Senior Redeemable Discount Notes due 2007, 12.125% Senior Serial Redeemable Discount Notes due 2008 and 12.75% Senior Serial Redeemable Notes due 2010, regarding the restructuring of those obligations. According to the Company's press release, there is no assurance that NII will be able to successfully restructure any of its obligations. NII may be required to sell strategic assets, reorganize under Chapter 11 of the U.S. Bankruptcy Code or take other measures. CONTACT: Financial Adviser: Houlihan Lokey Howard & Zukin Capital Franklin W. "Fritz" Hobbs, CEO 1-800-788-5300 toll free Website: www.hlhz.com =========== B R A Z I L =========== TRANSBRASIL: Regulator Extends Deadline To Resume Air Routes ------------------------------------------------------------ A spokesman for Brazil's Civil Aviation Department (DAC) announced that the government's airlines regulator has extended the deadline for the struggling Brazilian carrier Transbrasil to return to the air without losing its routes. The spokesman explained that a formal extension of the deadline, after the initial 30-day term ended on Thursday, was in the works. "We have been closely watching them and receiving information that they are trying hard to return to regular operations ... As we can't help them financially, that's the only way we can extend them a helping hand," the spokesman said. Transbrasil continues to negotiate with creditors, suppliers and trade unions to find a way to begin operating as soon as possible, according to a spokesman of the carrier. Accordingly, the Company is processing refund claims from some 400,000 passengers who had bought tickets. "It's a long process, but we are working to repay," he said. Only five Transbrasil aircraft out of a reduced fleet of 12 are now in working condition. CONTACT: Antonio Celso Cipriani, CFO Rua Geral Pantaleao Telles, No. 4, Jardim Aeroporto 04355-040 Sao Paulo, Brazil Phone: +55-11-533-7111 Fax: +55-11-543-9083 =============== C O L O M B I A =============== AVIANCA: Issues $209.4M Worth of Shares To Two Shareholders ----------------------------------------------------------- Troubled Colombian carrier Avianca raised $209.4 million after two of its shareholders bought new equity issued by the Company. The offering, launched in late December, was intended to raise $218 million, reports Reuters. The two shareholders, Valores Bavaria and Fenicia, bought new shares worth $196.6 million and $12.8 million, respectively, according to Avianca General Secretary Elisa Murgas. Valores Bavaria and Inversiones Fenicia are both controlled by Colombian businessman Julio Mario Santo Domingo. In November, Valores Bavaria, already Avianca's controlling shareholder, approved the share issue as part of plans to ensure that the airline's net assets, which at the time totaled negative $216 million, turned positive. The equity raise is a key preparation for Avianca's planned merger with smaller local rival ACES, which was finally approved by the government late last year. CONTACTS: Armenia, Quindio Cr14 19-38 Tel: (57) (6) 7446912 - Fax: (57) (6) 7447588 Tel: (57) (6) 7442617 - Fax: (57) (6) 7447588 Barranquilla, Atl ntico Cl 72 57-79 Tel: (57) (5) 3535018 - Fax: (57) (5) 3535396 CHIVOR: Defaults On Bank of America Loan ---------------------------------------- Chivor SA, the Colombian unit of AES Corp., informed the stock exchange regulator that it missed payments on a syndicated loan arranged by Bank of America Corp. after it called off a bond sale last month, reports Bloomberg. The amount of the loan arranged in 1996 was not disclosed. In November, Chivor General Manager Eduardo Damian announced that the Company was seeking to restructure a $150 million syndicated dollar loan arranged by Bank of America in a transaction that was conditioned on a planned 470-billion-peso ($203 million) bond sale. The bond sale was canceled in mid-December because of poor demand. At that time, Damian said that Chivor planned to sell the seven- year peso bonds to replace part of its $340-million debt with peso-denominated debt. Chivor owns 8 percent of the country's generating capacity and was acquired in December 1996 by Chile's Gener SA for $643 million, said Damian. AES took over Chivor last year when it bought Gener. CONTACTS: Bogot , Distrito Capital Chivor S.A. E.S.P. Cl 98 22-64 Of 518 Tel: (57) (1) 6236660 - Fax: (57) (1) 6236837 Email: chivorbo@cable.net.co =========== M E X I C O =========== ALFA: Shares Rally On Hylsamex Debt Refinancing Optimism -------------------------------------------------------- Alfa SA, a steel and petrochemical producer, saw its shares jump 8 percent to 11.24 pesos in trading Friday, reports Bloomberg. Investors are betting the Company will successfully refinance debt at its struggling steel unit, which could set off a rally in a stock that tumbled 21 percent last year. TCR-LA previously reported that Hylsamex, the steelmaking subsidiary of conglomerate Grupo Alfa, was in the process of renegotiating some $1.1 billion in debts with creditor banks, and was looking to restructure its operations. Alfa, hamstrung by debts from its other subsidiaries, is looking for a "strategic investor" for Hylsamex, and may also offload some of Hylsamex's non-core assets. CONTACT: Dionisio Garza Medina, CEO Raul Gonzalez Casas, Investor Relations TEL. 52 8748-1177 FAX. 52 8748-2544 rgonzale@alfa.com.mx INTERNATIONAL THUNDERBIRD: Mexican Closure Orders Updated --------------------------------------------------------- In a company press release, International Thunderbird Gaming Corporation (TSE:INB) announced Thursday the following update concerning the Company's operations: Mexico The Company continued to challenge the Mexico Government's closure orders for the three Mexico operations on three parallel paths: (1) The Mexico City office of the internationally renowned law firm of Baker & McKenzie has been leading our efforts through the litigation process, though the Company is not expecting final decisions for at least three months and the process could last longer depending on appeals. Interim legal actions are being pursued that would let the facilities re-open while final decisions are being heard. (2) The Company is assessing a claim under the NAFTA- Chapter 11 claims procedure. The preliminary analysis suggests that the Company has a meritorious claim, but the filing of the claim affects how we proceed on the existing cases. Our strategy is to choose the direction that will get us re-opened as quickly as possible. We perceive the NAFTA claim to be a solid back up. (3) The Political and Media campaign has been ongoing since October 11, 2001 when we were shut down. While the Fox government may claim it is immune to public pressure, our story has been picked up by the gaming trade press, Mexican media as well as by several leaders of US congress who have directed letters and telephone calls to President Fox expressing outrage over the matter. While the diplomatic pressure has not yet yielded the desired result of re-opening our properties, we feel it will weigh in our favor in the overall balance. However, we are focusing our energies on the litigation process. Peter LeSar rejoins Thunderbird Mr. Peter LeSar, formerly head of business development at International Thunderbird, has rejoined Thunderbird in the same capacity after a two-year hiatus during which he successfully founded and acted as CEO of a venture-capital financed, Internet-based translation service company (www.ispeak.net). He has handed over the reins at iSpeak to pursue development with Thunderbird. While previously at Thunderbird, Mr. LeSar developed our project in Pt. Ordaz, Venezuela. His bio can be found at www.thunderbirdgaming.com. Puerto Ordaz expansion opens, receives award - Thunderbird is pleased to announce that it has opened a 4,000 square foot expansion to the original 10,000 square foot casino in Puerto Ordaz, Venezuela on November 30th. Revenues have been strong since opening, with net win for December running more than 50% higher than for November, before the expansion opened. As our operation in Puerto Ordaz is in its first year, we do not know whether this revenue surge will be sustained in the New Year, or whether it is a seasonal spike. We are also pleased to announce that Fiesta Casino Guayana has been named "Business of the Year, 2001" for the State of Bolivar, Venezuela. The prize was issued by "Fedecamaras" (the commerce chamber's master association and the leading business association in the country). "Business of the Year" is an important prize for any company, and is even more exceptional for a multinational gaming company. as it is high public recognition of: a) The positive image and transparency of our business; b) Our contribution to the community as a good corporate citizen; and c) The outstanding quality of our management team. The prize also clearly sets us apart from other gaming companies in the region. Strong Fourth Quarter Revenues Thunderbird is pleased to announce that fourth quarter, 2001 revenues reflecting our proportional interest in properties in Mexico and Venezuela, are expected to exceed third quarter, 2001 revenues reflecting our proportional interests. This strength reflects strong results in Panama and Venezuela and has been achieved despite the closures, which we expect to be temporary, in Mexico. International Thunderbird Gaming Corporation is an owner and manager of international gaming facilities. Additional information about the Company is available on its World Wide Web site at www.thunderbirdgaming.com. CONTACT: International Thunderbird Gaming Corporation Alex Winch, 416/712-1488 or 858/451-3637 E-mail: info@thunderbirdgaming.com Website: www.thunderbirdgaming.com =============== P A R A G U A Y =============== CORPOSANA: Sale Pre-qualification Guidelines Now Available ---------------------------------------------------------- An official from SNRE, Paraguay's state reform agency, revealed that the agency has made pre-qualification guidelines available through February 8 for the sale of state water utility Corposana, says Business News Americas. According to the official, companies have until February 21 to deliver documentation. Pre-qualified companies will have access to the Corposana data room, with offers tentatively scheduled to be opened June 27, the official added. Chicago-based firm Baker & McKenzie has been hired to act as legal adviser to the sale. Spain-based banking group Banco Santander Central Hispano have been hired as the financial consultant. Due to Corposana's $192-million debt and the lack of government financing, the private sector would have to invest some $600- million to make a viable deal, SNRE said. Only 44.8 percent of Paraguay's population has water access, and there is neither service quality control nor guarantee of uninterrupted service, according to the SNRE. CONTACTS: LEGAL ADVISER: Baker & McKenzie Latin America Regional Council c/o Eduardo de Cerqueira Leite - Chairman Av. Dr. Chucri Zaidan 920, 8th floor Market Place Tower I 04583-904 Sao Paulo, SP, Brazil Tel: (55-11) 3048-6800 Fax: (55-11) 5506-3455 Email: info-latinamerica@bakernet.com Marketing Manager: Ellen Van-Waveren Baker & McKenzie Headquarters: 1 Prudential Plaza, 130 E. Randolph Dr., Ste. 2500 Chicago, IL 60601 Phone: 312-861-8800 Fax: 312-861-2899 Bakerinfo.com FINANCIAL CONSULTANT: Banco Santander Central Hispano Plaza de Canalejas,1 28014 Madrid, Spain Phone: +34-91-558-10-31 Fax: +34-91-552-66-70 CORPOSANA: Emilio Bot》-Sanz, Chairman Angel Corc┬tegui Guraya, First Vice-Chairman and CEO Jos� Luis del Valle, EVP Finance ================= V E N E Z U E L A ================= AMERICAN COMMERCIAL: S&P Drops Sr. Notes to D, Bank Line to B+ -------------------------------------------------------------- Standard & Poor's lowered its rating on American Commercial Lines LLC's (ACL) 10.25% senior unsecured notes due 2008 to 'D' from single-'B'-minus and ACL's corporate credit rating to 'SD' from single-'B'-plus and removed both from CreditWatch, where they had been placed with negative implications on May 7, 2001. The rating on ACL's $535 million secured bank facility was lowered to single-'B'-plus from double-'B'-minus and remains on CreditWatch with negative implications. These ratings actions follow ACL's announcement that it did not make the $15.1 million interest payment on its senior unsecured notes which was due Dec. 31, 2001, in order to continue discussions with its bondholders and banks on a financial restructuring of the company. Entities controlled by investor Samuel Zell are reported to have acquired over half of the face value amount of the senior unsecured notes. ACL has adequate cash to make the interest payment at the end of the 30-day grace period, as well as to continue day-to-day operations and make scheduled payments on other obligations. The secured bank facility creditors will likely fare well in the financial restructuring, as the bank facility is secured by essentially all of ACL's assets and the company plans to continue to make scheduled payments. However, the ratings on the secured bank facility remain on CreditWatch with negative implications pending the final outcome of the restructuring. ACL's operating performance improved in the second half of 2001, but its significant debt load and limited financial flexibility has restrained improvement in its credit profile. Financial flexibility will be further limited in 2002 with a return to stricter bank covenants after a waiver was granted in early 2001 in exchange for a $40 million prepayment in October 2001 funded by asset sales. American Commercial Lines LLC (ACL) is a fully integrated network of marine transportation companies, operating over 5,000 barges and approximately 200 towboats on the inland waterways of North and South America and transporting more than 70 million tons of freight annually. Additionally, ACL operates marine construction, repair and ancillary service facilities, and river terminals. At the end of 2000, ACL employed approximately 3,500 individuals. CONTACTS: Standard & Poor's Christopher DeNicolo (1) 212-438-1449 Or Philip Baggaley (1) 212-438-7683 SOUTH AMERICAN OPERATIONS VENEZUELA James Fox - Vice President Tel: US (812) 288-0181 VZ (58-286) 923-3286 Email: Jim.Fox@acbl.net Calle El Callao Edificio Torre Lloyd Oficina 3C Puerto Ordaz 8015 Edo. Bolivar, VENEZUELA Phone: (58-286) 923-3286 Fax: (58-286) 923-4820 DOMINICAN REPUBLIC Enrique Gil - Country Manager Tel: (809) 246-0842 Fax: (809) 246-0588 Email: Enrique.Gil@acbl.net Carretera Mella Km. 10, Muelles Cementos Nacionles, S.A. San Pedro de Macor︿, Repηlica Dominicana Phone: (809) 246-0842 Fax: (809) 246-0588 SIVENSA: Losses Widen Due To Global Decline In Steel Prices ----------------------------------------------------------- Losses at Siderurgica Venezolana SA (Sivensa) have widened as shown in the Company's financial results for the year ended Sept. 30, 2001, reports Bloomberg. The largest publicly traded steel company in Venezuela posted a $101.7-million net loss during the period, 3 percent more than 2000's net loss of $97.7 million. Losses have increased due to a worldwide drop in steel prices. The Company didn't break out fourth-quarter figures. Based on nine-month losses reported earlier, implied fourth-quarter losses fell to $36.4 million from an implied loss of $47.6 million a year earlier. Sivensa, which recently announced it would ask shareholders to approve a capital increase and plan to refinance about $250 million in bank debt, posted a loss in each of the last three years on low steel prices and weak domestic demand. CONTACTS: Oscar Augusto Machado, CEO Henrique Machado Zuloaga, Chairman of the Board Investor Relations. Nueva York Geoffrey Bell and Co. 780 Third Avenue, New York, N.Y. Telephone: (212) 888.37.00 E-mail: d.vandecker@worldnet.att.net Telefax: (212) 888.37.07 SIVENSA: Avoids Posting Loss From Sidor --------------------------------------- Sivensa avoided recording a FY2001 loss from indebted Sidor as it did not participate in a March 2000 capital increase by the fellow Latin American members of the Amazonia consortium, according to a report in Business News Americas. The consortium controls the Ciudad Guayana integrated steel company Sidor. Sivensa's investment in Amazonia is now just recorded at book value. As of September 30, its Amazonia stake was 13.25 percent, compared to an original 20 percent. Sidor defaulted on $31.3 million of interest payments due in November and has started negotiations with its main creditors, said Sivensa. CONTACTS: SIDOR Maritza Izaguirre, President of the Board of Directors Mart》 Berardi, Executive President Av. The Stay, General Building, Floor 7, Chuao, Venezuela. Tel: + 58 212 902-3700 SIVENSA: Orinoco Iron's Future Still Hangs In The Balance --------------------------------------------------------- The $615-million Puerto Ordaz hot-briquette iron operation has been temporarily shut down since March 2001. The decision to take the plant off line came from Operaciones RDI, an affiliate of Sivensa subsidiary IBH, because of maintenance costs and adverse market conditions, reports Business News Americas. "It has not been decided for how long the plant will remain closed," Sivensa stated in its notes accompanying its FY2001 results. "Operaciones RDI's results indicate that the continuity of its operations depend on an increase in their profitability. Operaciones RDI's management is studying alternatives to allow this situation to be regularized," it said. IBH and the then-Australian mineral resource company BHP set up Orinoco Iron in the late 1990s. BHP (since merged with the UK's Billiton) stopped investing more money in the plant and wrote off some $410 million in the project in March 2001. But it and IBH continue the search for a new shareholder to join Orinoco Iron and are also negotiating an "important reduction" in the debt, said Sivensa. BHP said in March last year that it would help to find a new partner for Orinoco Iron. Sivensa's FY2001 loss on Orinoco Iron was $56.3 million, more than triple the $15.5 million the year before. Orinoco Iron's net loss was $126 million, more than double 2000's US$56 million. CONTACTS: ORINOCO IRON Alberto Hassan, CEO Telephone: (582) 707.64.62 Fax: (582) 707.64.64 ahassan@orinoco-iron.com Eduardo Gisbert Vice-president of Operations Telephone: (5886) 94.10.07 Fax: (5886) 94.00.71/07.17 egisbert@orinoco-iron.com Antonio Oxford Murati Director of Institutional Relations Phone: (5886) 94.14.53 Fax: (5886) 94.00.71 aoxford@orinoco-iron.com SIVENSA: Posts $7.62M Loss In FY2001 From Sale of Danaven --------------------------------------------------------- Venezuelan steel group Sivensa said it sold its stakes in Danaven and related auto-sector companies last year in May to the US- based Dana Corp for $21 million, and recorded a $7.62-million loss in its FY2001 results, says Business News Americas. Sivensa sold the stakes in a bid to reduce the group's debt, which at that time totaled an estimated $264 million debt. CONTACTS: DANAVEN MANAGEMENT OF SALES Jose Luis Gonzalez Tels. (0241) 8396216 (0241) 8396191 8396559 Fax: (0241) 8322364 DPTO. OF COBRANZA Lourdes Marquez Tel. (0241) 8396516 DPTO. OF OFFICE Girman Blanco/Claudia Aragon Tels. (0241) 8396216 SIVENSA: Shareholders Voting On Debt Restructure Plan January 25 ---------------------------------------------------------------- Sivensa shareholders will hold an annual extraordinary meeting on January 25, says Business News Americas. On that day, shareholders are expected to vote on a planned restructuring of almost $242 million of the group's $479-million debt. Previous reports have suggested that current shareholders will be asked to reduce their stake in the group by 15 percent and forego dividends until 2007 so debt payments can be made. The proposal also includes a 522,800,000 share issue, totaling $14 million, to bank creditors as part of the deal. The plan is the latest in several efforts to restructure Sivensa's debts since mid-1999. The proposed agreement allows for greater flexibility for payment and better guarantees of collateral for the banks, with increased participation in the company, according to CFO Gustavo Machado. 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 2002. 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 * * *