/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020121.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 21, 2002, Vol. 3, Issue 14 Headlines A R G E N T I N A ARGENTINE BANKS: Government To Ease Banking Restrictions HSBC BANK/BANCO FRANCES: Authorities Raid, Launch Investigation SCH: Continuing Stringent Banking Rules May Cause Argentine Exit B R A Z I L BAYER AG: Shuts Down Brazilian Plant CELESC: To Seek Partners For New Subsidiaries In 15-20 Days COPEL: Parana's Sale Decision To Come Early February COPEL: Debt-Negotiations With Itau To Be Completed Soon VARIG: To Boost Capital With R$40.287M Debenture Issue M E X I C O AHMSA: Won't Meet Bank Creditors' Payment Plan Deadline CINTRA: IPAB To Put On The Block This Year ENRON: Still to Formalize Cogeneration Project Sake With CRE EUZKADI: Disgruntled Workers To Protest Plant Closure GRUPO MASECA: CEO Leaves Post After Sale to Bimbo GRUPO MEXICO: Shares Up On Subsidiary's Timely Debt Payment ISPAT MEXICANA: Employees End Strike After Intense Negotiations PRECISION AUTO: Announces Sale of Mexican Subsidiaries P A N A M A BANCO DISA: Regulator Orders Liquidation - - - - - - - - - - ================= A R G E N T I N A ================= ARGENTINE BANKS: Government To Ease Banking Restrictions -------------------------------------------------------- President Eduardo Duhalde said Thursday Argentina will take steps to relax current banking restrictions, a measure that will allow most depositors to withdraw dollar savings by first turning them into pesos, reports Reuters. "Depositors with up to $5,000 ... can voluntarily turn those funds into pesos. If they want to convert them to pesos at 1.40 (to the dollar) they can now spend that money, by check, debit card, credit card," Duhalde said. According to the Economy Ministry, the measure will be in effect until February 15. Two weeks ago, President Eduardo Duhalde froze more than a third of Argentina's $67 billion in bank deposits, in a bid to prevent banks from failing. All U.S. dollar certificate of deposit accounts were effectively seized for at least a year. Funds greater than $3,000 in individuals' dollar savings accounts were frozen, along with deposits of more than $10,000 to checking accounts. Another measure allows dollar loans to be repaid from dollar deposits in the same bank while peso loans can be repaid with peso deposits from any bank, the Economy Ministry said. Anyone working in Argentina has had their cash withdrawals limited to no more than 1,500 pesos each month under the bank curbs but the new measures announced Thursday night allow savers to invest the balance in term deposits. Two-thirds of savings in Argentina's banks were in dollars by the end of 2001, after the peso had been pegged at par to the dollar in 1991. Duhalde devalued the peso a couple of weeks ago amid a four-year recession. The change should affect about 78 percent of depositors, Duhalde said. Deposits fell to a total of about $69 billion by December from $85 billion at the start of 2001 as a recession since mid- 1998 sparked debt default and devaluation fears. HSBC BANK/BANCO FRANCES: Authorities Raid, Launch Investigation --------------------------------------------------------------- Argentine police searched the offices of HSBC Bank, BBVA Banco Frances SA and other banks in Buenos Aires as part of an investigation into the transfer of deposits out of the country, reports Bloomberg. Court documents revealed that at least two Argentine judges are investigating allegations that banks in the country "subverted the economy" by allowing depositors to transfer billions of dollars overseas. The probe, resulting from allegations brought by a number of legislators, adds to the financial difficulties for the banks that all reported losses in Argentina after the government's debt default and peso devaluation. Argentines believe that banks are to blame for the nation's economic crisis, analysts said. "People are angry at banks because they are being misinformed by the government," said Claudio Maulhardt, an analyst at ABN Amro Bank. The Association of Argentine Banks, the largest banking organization, in order to counter Argentines' perception, took out full page adds in national newspapers, calling on political leaders to shoulder blame for the country's financial collapse. CONTACTS: BANCO FRANCES Gervasio Collar Zabaleta, Chairman Antonio Martinez Jorquera, CEO Jorge Bledel, Head of Treasury and Wholesale Banking Their address: Reconquista 199 1003 Buenos Aires, Argentina Phone: +54-11-4346-4000 Fax: +54-11-4346-4320 SCH: Continuing Stringent Banking Rules May Cause Argentine Exit ---------------------------------------------------------------- Spain's biggest bank Santander Central Hispano (SCH) may be forced to desert Argentina if the government continues to impose its current banking restrictions, a banking source familiar with the situation revealed in a Reuters report. "The bank is still not prepared to put more money into Argentina for now, that hasn't changed. But the signals are changing every day and the latest signs have been positive," the banking source said. "Saying the bank is threatening to leave doesn't make sense...but of course if things deteriorate we would have to consider this. If the rules of the game aren't changed we will be forced out," the source added. However, an official spokesman for SCH said that the bank has yet to make a decision on its Argentine investment. SCH, one of the biggest investors in Latin America, said on Tuesday it was raising its stake in Argentine unit Banco Rio to near 100 percent from 79.1 percent in what it said was simply the fulfilment of a commitment made with the original owners of the stake. CONTACTS: SANTANDER (SCH) Emilio Botin-sanz De Sautuola Y Garcia De Los Rios - Chairman, OR Angel Corcostegui Guraya - First Deputy Chairman, OR Jaime Botin-sanz De Sautuola Y Garcia De Los Rios - Second Deputy Chairman, OR Matias Rodriguez Inciarte - Deputy Chairman, OR Angel Corcostegui Guraya - Deputy Chairman & Chief Executive SCH Address: Paseo De Pereda, Numeros 9 AL 12 Santander, Spain Phone +34 94 2206100 http://www.santandercentralhispano.es/ BANCO RIO Ana Patricia B. S. de Sautuola y O'Shea, Chairman Jose L. E. Cristofani, Executive Vice Chairman and CEO Pablo Caride, Corporate Finance Bartolome Mitre 480 1036 Buenos Aires, Argentina Phone: +54-(0)14-341-1081-1580 Fax: +54-(0)14-341-1074-1084 BANCO RIO LEGAL ADVISOR: Shearman & Sterling 599 Lexington Avenue New York, NY 10022-6069, USA Tel: (+1 212) 848-4000 Fax: (+1 212) 848-7179 Firm Managing Partner: Robert C. Treuhold =========== B R A Z I L =========== BAYER AG: Shuts Down Brazilian Plant ------------------------------------ Bayer AG, Germany's third-largest drugmaker, is going to shut down its Latin American engineering plastics plant based in northeastern Brazil by August this year, according to a report released by Dow Jones Newswires. Bayer said it is cheaper to import the product from Germany than produce it locally. The move will result in the layoff of 150 workers. Bayer, best known for inventing aspirin, suffered the worst crisis in its 139-year history in August when Baycol, also known as Lipobay, was linked to more than 50 deaths worldwide. The withdrawal of the product cost Bayer 600 million pounds and trapped the company in court actions. Earlier, Bayer said it would sell its three chemical units, Haarmann & Reimer, Rhein Chemie Rheinau and PolymerLatex GmbH & Co KG, to help reduce the company's debt levels to a single-digit billion-euro figure in the medium term. CONTACTS: Manfred Schneider, Chairman Pol Bamelis, Member of the Board Attila Molnar, Member of the Mgt. Board Bayer AG 5090 Leverkusen, Building W 1 Bayerwerk, Germany Phone: (800) 269-2377 Fax: (212) 571-3050 CELESC: To Seek Partners For New Subsidiaries In 15-20 Days ----------------------------------------------------------- Aldo Schumacher, director of investor relations at Celesc, announced that Brazil's Santa Catarina state-based electricity will call for bids from private companies, within 15 to 20 days, to become partners in two new generation and telecom subsidiaries, reports Business News Americas. After announcing the bids, potential bidders will have 60 days to acquire the rules and present their bids to Celesc, Schumacher said. Schumacher's announcement came after Santa Catarina governor Esperidiao Amin formalized Wednesday (January 16) the law to divide Celesc into generation, distribution and transmission companies. According to Amin, Celesc Distribucion will remain under Santa Catarina state control, while private capital will be allowed to participate in the generation and transmission companies, which will also be run by independent teams under management contracts. CONTACTS: CELESC Francisco De Asis Kuster, Chairman Enio Andrade Branco, Finance Director Their Address: Rodovia SC 404 - Km 3 Itacorubi 88034-900 Florianopolis - SC Brazil Phone +55 48 231 6011 Home Page http://www.celesc.com.br COPEL: Parana's Sale Decision To Come Early February ----------------------------------------------------- Brazil's Parana state government decision about privatizing integrated power company Copel awaits further details from the federal government as to its specific plans to revitalize the electricity sector, says Business News Americas. According to a Parana government source: "the final decision on the sale of Copel will be made around the beginning of February, because if the government of Parana decides to go ahead with privatization, there are deadlines to meet in the process, and April is the deadline for transferring state assets, because of the general elections in Brazil in November." Meanwhile, the government of Parana has appealed to the high court (STJ) to reconsider its ruling which upheld the suspension of the Copel privatization process. The STJ concurred with a ruling by the regional federal court (TRF) suspending the sale until all injunctions against the sale has been dealt with. Copel was originally scheduled to be sold on October 31 of last year, but the auction was cancelled due to a lack of interest. Belgium's Tractebel showed most interest, but considered the minimum price of $1.85 billion too high. CONTACTS: Alexandre F. Beltrao, Chairman Ingo H. H｜ert, CEO Ferdinando Schauenburg, CFO/Chief Investor Relations Officer Rua Coronel Dulcidio, 800 80420-170 Curitiba, Paran , Brazil Phone: +55-41-322-3535 Fax: +55-41-331-4145 COPEL: Debt-Negotiations With Itau To Be Completed Soon ------------------------------------------------------- Debt negotiations between Copel and Itau bank have been in progress for some months. The talks center on the 500 million reais ($211 million) in debt the government of Parana has with the bank, guaranteed with Copel shares, an unnamed source revealed in a Business News Americas report. Official discussions should be completed within the next few weeks, the source said, adding, the government should not have any problem paying this debt, which expires March 31. VARIG: To Boost Capital With R$40.287M Debenture Issue ------------------------------------------------------ The Brazilian airline Varig will issue R$40.287 million worth of debentures in an attempt to boost its capital stock, reports Gazeta Mercantil. The operation, authorized by Company shareholders, makes way for a single-tranche issue of the new paper. Simultaneously, the Company's board of directors also authorized the restructuring of contracts with Boeing. The contract negotiations should reduce the Company's debt by $370 million, says the report. Varig has been hampered by slow ticket sales and rising operating costs since the September 11 attacks along with most other airlines. The company has announced it would cut 10 percent of its 17,500 workers and roll back fleet growth plans. VARIG CONTACTS: VARIG Brazilian Airlines, Miami Jeff Kriendler, 305/866-2115 email: jkriendler@aol.com Legal Department: Rua 18 de Novembro nr. 800 Navegantes Zip : 90240-040 City : Porto Alegre / RS - Brazil Telephone numbers: (51) 358-7039/7040 (51) 358-7010/7042 INDEPENDENT ACCOUNTANTS Arthur Andersen S/C Rua Alexandre Dumas 1981 Cep: 04.717-906 - Centro / Sao Paulo / S P- Brazil Tels.: (11) 5504-8200 Fax: (11) 5504-8373 INVESTOR RELATIONS MANAGER/STOCKHOLDER SERVICES Leir s Stortti E-mail: leir.stortti@varig.com.br Av. Almte. Silvio de Noronha, n 365 - Bloco "A" - s/416 Centro - Rio de Janeiro - RJ Cep.: 20021-010 Tels.: (21) 3814-5401/5402/5403/5415 Fax: (21) 3814-5543 =========== M E X I C O =========== AHMSA: Won't Meet Bank Creditors' Payment Plan Deadline ------------------------------------------------------- Altos Hornos de Mexico, the embattled iron and steel company, won't be able to complete its proposed $1.85 billion debt restructuring by January 20, the deadline set by the Company's bank creditors, reports Business News Americas. Monclova-based Ahmsa's proposals also have to be submitted to US stock market regulatory SEC. "The attorneys are fine-tuning the sub-editing aspects of the documentation," said company spokesperson Francisco Orduna. Ahmsa's failure to complete the proposal on time has upset creditor banks. According to them, Ahmsa's lawyers have taken four weeks to do work which has taken the banks' attorneys just a week to perform. CONTACTS: Alonso Ancira Elizondo, CEO, Vice Chairman, Pres.&CEO Jorge Ancira Elizondo, Chief Financial Officer Manuel Ancira Elizondo, Chief Operating Officer Their Address: Prolongacion B. Juarez s/n, Monclova , Coahuila 25770 Mexico http://www.ahmsa.com Phone: +52 86 33 81 72 Fax: +52 86 33 65 66 CINTRA: IPAB To Put On The Block This Year ------------------------------------------ Cintra, the holding company for Mexicana and Aeromexico, is now on Mexican bank bailout agency IPAB's list of assets to be put up for sale this year, reports Mexico City daily Reforma. The process of selling the airline could begin by March or April, says the report. Apprehensions regarding the sale of the airlines this year remain due to the battered financial condition of the international airline industry and concerns that the airlines wouldn't fetch an acceptable price. Just recently, Joseph Mohan, sales director at U.S.-based Continental Airlines, disclosed that his company is still interested in acquiring Cintra. Analysts were expecting Cintra to close 2001 with net losses amounting to almost P$1 billion as it struggled to stay afloat amid a global economic recession stemming from the September 11 terrorist attacks in the United States. CONTACTS: Jaime Corredor Esnaola, Chairman Juan Dez-Canedo Ruiz, CEO Rodrigo Ocejo Rojo, CFO Xola 535, Piso 16, Col. del Valle 03100 M,xico, D.F., Mexico Phone: +52-5-448-8050 Fax: +52-5-448-8055 OR C.P. Francisco Cuevas Feliu, Investor Relations Xola 535, Piso 16 Col. del Valle 03100 M,xico, D.F. Tel. (52) 5 448 80 50 Fax (52) 5 448 80 55 infocintra@cintra.com.mx ENRON: Still to Formalize Cogeneration Project Sake With CRE ------------------------------------------------------------ Enron has agreed to sell 80 percent of its stake in an electricity cogeneration project with Vitro to Suez-owned Tractebel, reports Mexico City daily Reforma. However, according to Ruben Flores, an official from the Energy Regulatory Commission (CRE), the agreement has still not been formalized with the CRE. Normally, when a company wants to pull out of this kind of project, it finds a buyer and then presents the deal to the commission for a change in permission, said Flores. "Formally, the CRE has not received any official communication from the companies to modify the existing permission," informed Flores. The project involves construction of a 284-megawatt cogeneration plant to supply electricity to Vitro, which is investing US$400 million in the project. CONTACTS: Mark Palmer of Enron Corp., +1-713-853-4738 Enron Corp. Investor Relations Dept. P.O. Box 1188, Suite 4926B Houston, TX 77251-1188 (713) 853-3956 Email: investor-relations@enron.com Enron Corp. Public Relations Dept. P.O. Box 1188, Suite 4712 Houston, TX 77251-1188 (713) 853-5670 EUZKADI: Disgruntled Workers To Protest Plant Closure ----------------------------------------------------- The National Revolutionary Union of Euzkadi Workers (SNRTE), which represents 1,200 workers of Compania Hulera Euzkadi's recently closed tire plant in El Salto, Jalisco, announced two massive marches this month to protest the plant's "illegal" closure, reports the Associated Press. "Anyone who knows the law can see the closing is unconstitutional," says Jesus Torres, SNRTE Secretary General. On January 22, the SNRTE will lead workers, family members and residents from the town of El Salto, in the western state of Jalisco, to the nearby factory. They plan to picket the plant in an effort to prevent the Company from recovering the equipment inside. The second march is will leave Guadalajara on January 30 and is planned to arrive on February 5 at the presidential residence of Los Pinos in Mexico City. The SNRTE has been locked in a bitter dispute with Euzkadi, owned by German-based Continental Tire, for almost two years over attempts by the Company to boost productivity to what it calls "international standards." The conflict heightened in August 2001, when the union rejected an attempt by Euzkadi to renegotiate the labor contract. The Company proposal, says Torres, would have rolled back important gains, such as a five-day work week and salaries well above the Mexican average, previously achieved by the union. In December, Euzkadi announced it would close the plant, blaming union intransigence and poor productivity. GRUPO MASECA: CEO Leaves Post After Sale to Bimbo -------------------------------------------------- Jose Maria Gonzalez left his post as Chief Executive Officer of Gruma SA, the largest tortilla maker in the U.S., after serving the Company for eight months, says Bloomberg. Gonzalez resigned after reportedly having fulfilled a vow to "turn around or dispose of" the Mexican company's bread making unit. "He was hired for a specific mission," said Fabiola Molina, an analyst with Grupo Financiero Banorte SA. "He completed that mission and he's leaving." Gonzalez, who first tried to salvage Gruma's money-losing bread factories in Mexico and Costa Rica by cutting staff and reducing delivery routes, sold the unit in November to Grupo Bimbo SA for $70 million. CONTACTS: Rogelio S nchez Email: rogelio_sanchez@gruma.com Tel. (52)81 8399-33-11 Lilia G｢mez Email: lilia_gomez@gruma.com Tel. (52)81 8399-33-24 Cecilia Rodr｡guez Email: cecilia_rodriguez@gruma.com Tel. (52)81 8399-33-49 CORPORATE HEADQUARTERS Gruma S.A. de C.V. y Subsidiarias Calzada del Valle 407 Ote. San Pedro, Garza Garc｡a, N.L. M,xico CP 66220 (52)81 8399-33-00 DEPOSITARY & REGISTRAR OF AMERICAN DEPOSITARY RECEIPTS Citibank N.A., A member of Citigroup Depositary Receipts Department 111 Wall Street, 20th Floor/ Zone 7 New York, New York 10043 Tel. (212) 657.4665 Fax. (212) 825.5398/2103 E-mail: miguel.perez-lafaurie@citicorp.com Website: http://www.citibank.com/adr GRUPO MEXICO: Shares Up On Subsidiary's Timely Debt Payment ----------------------------------------------------------- Shares of Grupo Mexico SA, the world's third largest copper producer, climbed 73 centavos, or 6.4 percent, to 12.18 pesos, a three-month high, according to a report released by Bloomberg. The Company recently announced that its subsidiary Southern Peru Copper Corp. will prepay $150 million in foreign debt due over the next seven years before establishing a new credit line for as much as $550 million to finance its expansion in the Andean nation. Standard & Poor's agency called the measure "positive," though it continues to rate the company three notches below investment grade at "BB-." CONTACTS: Germ n Larrea Mota-Velasco, Chairman and CEO Avenida Baja California 200, Colonia Roma Sur 06760 M,xico, D.F., Mexico Phone: +52-5-264-7775 Fax: +52-5-264-7769 C.P. Hector Garcia De Quevedo Topete, Corporate Dir. Av. Baja California No. 200, Colonia Roma Sur C.P. 06760 MEXICO, D.F. Phone: 55-64-70 66 ext 7238 Fax: 55-64-3714 ISPAT MEXICANA: Employees End Strike After Intense Negotiations --------------------------------------------------------------- In an official company news release, Ispat Mexicana, S.A. de C.V. ("Imexsa"), a steelmaking subsidiary of Ispat International N.V. (NYSE: IST)(AEX: IST NA) stated that the illegal blockade at its steel plant in Lazaro Cardenas, which began on December 20, 2001 has been lifted and that the process of normalizing the plant has resumed. After intense negotiations with the national union of mining, metallurgical and similar workers of the Mexican Republic (the "National Union"), and the local section of the National Union, which has since been recognised by the Federal Labour Authorities of Mexico, under the auspices of co-ordinator general of reconcilliation, a settlement agreement was drawn up, which on approval by the General Assembly of the Workers, led to the lifting of the blockade. Imexsa also extended its gratitude to all related parties, including its customers and suppliers who have shown their understanding and their support over this period. CONTACT: ISPAT INTERNATIONAL LIMITED Annanya Sarin, Head of Communications Tel. +44-20-7543-1162, or +31-10-404-6738 B. C. Agarwal, Chief Financial Officer Tel. +44-20-7543-1135 OR Citigate Dewe Rogerson John McInerney, Investor Relations Tel. +1-212-419-4219, for Ispat International Limited PRECISION AUTO: Announces Sale of Mexican Subsidiaries ------------------------------------------------------ Lou Brown, the CEO of Precision Auto Care, Inc. (PACI), announced Thursday in a company press release that PACI sold assets owned by its Mexican subsidiaries to Shell Autoserv Mexico, S.A. de C.V.. The deal will yield $2.7 million up front with the potential of earning more in the event that certain contingencies are met. "The sale of our Mexican assets to Shell Autoserv will enable the management team to focus more on operations with better growth and financial return opportunities. The Mexican operation required a great deal of management attention, effort and expense." Robert Falconi, PACI's CFO said that the money generated from the sale had already been earmarked to be used to pay interest on the Company's senior debt and to liquidate other liabilities. "PACI's senior lenders have been very patient with the Company and we are happy to be able to pay them interest that is due." Precision Auto Care, Inc.'s affiliate, Precision Tune Auto Care, Inc., (PTAC) is the world's largest franchisor of auto care centers, with over 500 operating centers as of January 17, 2002. PTAC franchises Precision Tune Auto Care centers around the world. CONTACT: Robert Falconi, CFO of Precision Auto Care, Inc., +1-800-438-8863, ext. 214 =========== P A N A M A =========== BANCO DISA: Regulator Orders Liquidation ---------------------------------------- Panama's banking regulator ordered the liquidation of Bank Disa effective Jan. 15, 2002, reports Business News Americas. The decision came after shareholders showed little interest in carrying out a capital increase and presenting proposals to potential buyers. In the same order, the official regulator also has designated Olegario Barrelier, Gustavo Perez, and Eduardo Pazmi､o, as liquidators of the bank. Depositors and other creditors have been asked to present their credits, while waiting for the liquidators to present the preliminary report, expected to be released in 30 days. To see financial statements: http://bankrupt.com/misc/Banco_Disa.doc CONTACT: BANCO DISA Calle 51 Este Campo Alegre Panama City, Panama Telephone 263-5933 Fax 264-1084 http://www.bdisa.com *********** 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, Edem Psamathe P. Alfeche and Fe Ong Va､o, 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 * * *