/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020326.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 Tuesday, March 26, 2002, Vol. 3, Issue 60 Headlines A R G E N T I N A BANCO GALICIA: Concludes Bailout Talks With Other Banks BANCO ITAU: Losses Prompt Closure Of 10 Argentine Branches BANCO RIO: Executive Testimony Calms Insolvency Fears REPSOL-YPF: To Contribute ARS110 Mln To Oil Producing Provinces REPSOL YPF: Ups Gasoline, Diesel Prices In Argentina B E R M U D A GLOBAL CROSSING: Execs Admit `Misleading' Disclosure Debatable TERRA NOVA: S&P Lowers Ratings on Performance, Capital Concerns B R A Z I L ANDERSEN: Local Clients Drop Services On Parent's Woes CEMAR: Reduces Investments Due To Liquidity Problems EMBRAER: Strong Real Should Mean Better 4Q01 Results EMBRAER: Expects First Loan Installment for Super Tucano VARIG: Looks To Speed Up Capitalization VESPER: Qualcomm To Sell Stake, Will Wait for Decent Pricing D O M I N I C A N R E P U B L I C SMITH-ENRON: Government To Buy Plant Thru CDE or Creditors E C U A D O R SiTV: Disappointed CEE Announces Sale Plans M E X I C O AEROMEXICO: May Lose Money In Airbus Deal PEMEX: Future Oil Revenues Overshadowed by Mounting Debts PEMEX: Authorities Advance In Money Laundering Probe U R U G U A Y BANCO COMERCIAL: Moody's Confirms Ratings, Outlook Positive V E N E Z U E L A LEEME: Shutters Operations, No New Investor Interest - - - - - - - - - - ================= A R G E N T I N A ================= BANCO GALICIA: Concludes Bailout Talks With Other Banks ------------------------------------------------------- Banco Galicia, Argentina's largest private bank, managed to negotiate for US$800 million to help it escape from bankruptcy, as rescue talks with other banks concluded Wednesday. Half of the US$800 million will come from the sale of parts of Galicia's mortgage portfolio to a group of 18 banks operating in Argentina. The remaining US$400 million will come from different government institutions such as the Central Bank, the deposit insurance agency and the bank capitalization fund. Galicia will also receive some US$110 million from its international creditors, which have agreed to help Galicia by exchanging their debt for equity. International players such as Germany-based Dresdner and UK's Barclays will add an image of solvency that Galicia has been lacking during the country's financial crisis because of its lack of a strong foreign parent. The deal with the foreign creditors also requires that Galicia chairman Eduardo Escasany will step down at the next shareholders' meeting in May as executives from the foreign creditors take seats on the Galicia board. Escasany and the Argentine families Ayerza and Braun control Galicia through financial group Grupo Financiero Galicia (Nasdaq: GGAL). CONTACT: BANCO DE GALICIA Y BUENOS AIRES Teniente General Juan D. Peron 456, Piso 3 1038 Buenos Aires, Argentina Phone: +54-11-4343-7528 BANCO ITAU: Losses Prompt Closure Of 10 Argentine Branches ---------------------------------------------------------- Banco Itau SA, Brazil's fourth-largest bank with has more than 80 branches in Argentina, disclosed plans to close about 10 branches in the recession-plagued country, reports Bloomberg. The closures come after Banco Itau incurred staggering losses when the Argentine government forced banks to convert loans and deposits to pesos. "In 2002, we'll reduce the number of branches we have in Argentina by around 10," said the bank's investor relations director, Henri Penchas. The so-called "pesofication" of the Argentine economy reduced Banco Itau's equity by about BRL122 million (US$51 million), an amount more than covered by about BRL200 million in provisions set aside for Argentine-related losses, Penchas said. Itau said profit from overall operations fell 21 percent in the fourth quarter as an increase in the Brazilian real lowered the value of the bank's foreign currency-denominated assets. In the fourth quarter, provisions for losses in Argentina rose by BRL50 million to BRL200 million reais, the bank said. The conversion of Argentine bank liabilities and assets was decreed in February, yet depositors have until April 15 to decide if they want to convert former dollar deposits into dollar- denominated bonds. CONTACT: BANCO ITAU S.A. Rua Boa Vista, 176 01014-919 Sao Paulo, Brazil Phone: +55-11-237-3000 Fax: +55-11-5582-1133 Home Page: http://www.itau.com.br Contacts: Olavo Egydio Setubal, Chairman of the Board Roberto Egydio Setubal, President and CEO BANCO RIO: Executive Testimony Calms Insolvency Fears ----------------------------------------------------- Banco Rio de la Plata Vice President Jose Luis Cristofani testified before an Argentine judge a week ago, saying that his bank is in a position to return clients' deposits trapped by banking restrictions since December, relates EFE. However, due to the government-imposed restrictions, the deposits currently cannot be released. Cristofani testified before Judge Mariano Berges on Thursday as part of an investigation to determine whether half a dozen banks had committed fraud against their customers by failing to return their savings. The probe is focused primarily on banks, which refused to return deposits, even after being ordered to do so by the courts. Banco Rio is the Argentine subsidiary of Spanish financial group Santander Central Hispano (SCH). CONTACTS: BANCO RIO - Investor Relations: 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 LEGAL ADVISOR Shearman & Sterling 599 Lexington Avenue New York, NY 10022-6069, USA Telephone: (+1 212) 848-4000 Fax: (+1 212) 848-7179 Contact: Robert C. Treuhold, Firm Managing Partner REPSOL-YPF: To Contribute ARS110 Mln To Oil Producing Provinces --------------------------------------------------------------- Repsol-YPF plans to pump ARS110 million into Argentina's oil producing provinces. The funds are part of an advanced payment of ARS240 million pesos that oil companies have agreed to deliver to the government on April 29 in return for a lower rate on the country's recently-implemented crude oil export tax. Argentina's oil producing provinces want guarantees from oil companies on royalty levels, investments and employment levels following an agreement with the national government that would reduce the sting of a controversial new tax in the sector. The agreement between the government and oil producers would cut the 20 percent tax on crude exports in half to 10 percent in 2003. Other leading companies in Argentina such as Pecom Energia, Pan American Energy and Chevron San Jorge are expected to contribute the remaining amounts under the terms of the deal. Recent reports have suggested that Repsol, which purchased Argentina's YPF in 1999 for US$15 billion, may have to sell more assets in order to offset plunging profits and to reduce swelling debts. Repsol stock is the worst performer in the 12-member European Oil and Gas Producers Index this year, trading at a 20 percent discount since it bought YPF. CONTACTS: REPSOL YPF Alfonso Cortina De Alcocer, Chairman & CEO Ramon Blanco Balin, Vice Chairman Carmelo De Las Morenas Lopez, CFO Their Address: Paseo de la Castellana 278 28046 Madrid, Spain Phone +34 91 348 81 00 Home Page: http://www.repsol.com or Av. Roque S enz Pe a, 777. C.P 1364. Buenos Aires Argentina REPSOL YPF: Ups Gasoline, Diesel Prices In Argentina ---------------------------------------------------- Spain's largest oil company, Repsol YPF SA, began implementing a 4-percent price hike on its gasoline and diesel in Argentina in order to offset Argentina's currency devaluation, reports Bloomberg. According to Repsol YPF, the price increases would only partially offset losses at its refining and other operations since Argentina devalued its peso January 6. Argentina's government is seeking to prevent price increases that could spark inflation and rekindle the kind of social unrest that toppled two presidents in December. But companies with revenue in pesos are forced to raise prices to keep current on dollar denominated debts and pay for imported machinery and raw materials. ============= B E R M U D A ============= GLOBAL CROSSING: Execs Admit `Misleading' Disclosure Debatable -------------------------------------------------------------- The chief executive of Global Crossing acknowledged to a House panel that "there is now a debate" as to whether disclosures about some transactions by the Company "may in some fashion have misled the market," relates The New York Times. The Company's executives maintained that their business practices did not cause Global Grossing's collapse and were accurately disclosed. The Company is now being investigated by federal prosecutors and the Securities and Exchange Commission because of its deals, which involved swapping fiber optic capacity with other telecommunications companies. Investigators, according to The Times, are examining whether these were honest transactions or sham deals that allowed Global Crossing to inflate its revenue significantly. In a written testimony submitted Friday to the subcommittee on oversight and investigations of the House Financial Services Committee, the Company's chief executive, John J. Legere, and its chief financial officer, Dan J. Cohrs, said there were "fewer than two dozen" of these deals in 2000 and 2001. "Neither these transactions nor our accounting for them have anything to do with the telecommunication industry's or our company's difficulties," they said. They acknowledged, however, that "there is now a debate as to whether the disclosures concerning these transactions may in some fashion have misled the market." They noted that the Company's board was reviewing the deals with the Company's lawyers and auditors, examining in particular "their business justification as well as the manner in which revenue and expenses were recorded and disclosed." CONTACT: GLOBAL CROSSING Press Contact: Cynthia Artin + 1 973-410-8421 Cynthia.Artin@globalcrossing.com Tisha Kresler + 1 973-410-8666 Tisha.Kresler@globalcrossing.com Analysts/Investors Contact: Ken Simril + 1 310-385-5200 investors@globalcrossing.com TERRA NOVA: S&P Lowers Ratings on Performance, Capital Concerns ----------------------------------------------------- Standard & Poor's said Friday it removed from CreditWatch and lowered its counterparty credit ratings on property/casualty specialty writer Markel Corp.'s London subsidiary, Terra Nova Insurance Co. Ltd., and Markel Corp.'s international operations holding company, Terra Nova (Bermuda) Holdings Ltd., because of poor operating performance and a deterioration in capital adequacy at the units. Concurrently, Standard & Poor's said it removed from CreditWatch and affirmed its triple-'B'-minus counterparty credit rating on Virginia-based Markel Corp. and its single-'A'-minus counterparty credit and financial strength ratings on Markel Corp.'s North American subsidiaries. Also, with these actions, Standard & Poor's said it removed from CreditWatch and affirmed its triple-'B' counterparty credit and financial strength ratings on Markel's run-off subsidiary, Terra Nova (Bermuda) Insurance Co. Ltd. Standard & Poor's withdrew these ratings at the company's request. The counterparty credit and financial strength ratings on Terra Nova Insurance Co. Ltd. is triple-'B'-minus and the counterparty credit rating on Terra Nova (Bermuda) Holdings Ltd. is single- 'B'. The outlook on Markel Corp. and all its subsidiaries is negative. "Although Markel has taken positive restructuring actions and implemented management changes at Markel International, the group still faces operational challenges in this operation in light of the magnitude of changes implemented as well as the size of the losses reported at this division," said Standard & Poor's analyst Laline Carvalho. Thus, significant improvements in operating performance and capitalization at Markel International will be necessary to return the group's outlook to stable. CONTACT: STANDARD & POOR'S RATINGS SERVICES Laline Carvalho, New York, +1-212-438-7178 Marcus Rivaldi, London, +1-44-20-7847-7056 =========== B R A Z I L =========== ANDERSEN: Local Clients Drop Services On Parent's Woes ------------------------------------------------------ Some Brazilian affiliate's clients are releasing the firm as auditor while Andersen's parent company fights a criminal charge brought against it by the U.S. Justice Department. According to an O Estado de Sao Paulo report, Copene, Votorantim, Gerdau and Embraer are now looking for contracts with Andersen's competitors. Auditing and consulting firm Andersen, which is facing charges with obstruction of justice for shredding documents relating to its audit of collapsed energy trader Enron Corp., has been losing clients and foreign affiliates at a brisk pace because of uncertainty about its future. Previous reports revealed that Andersen was negotiating to merge with KPMG in Brazil. If concluded, Andersen will create the largest auditing firm in Brazil, with 37 percent market share. CONTACTS: ANDERSEN (Brazil) E-mail: brazil@andersen.com brazil.careers@andersen.com Belo Horizonte Av. Alvares Cabral, 1741 - 9 andar Belo Horizonte - MG Brasil CEP: 30170-001 Phone: 55 31 3330 1300 Fax: 55 31 3330 1400 Curitiba R. Marechal Deodoro, 717 - 7 andar Curitiba - PR Brasil CEP: 80020-912 Phone: 55 41 223 9511 Fax: 55 41 232 6714 Porto Alegre Av. Carlos Gomes, 403 - 10 , 11 e 12 andares Porto Alegre - RS Brasil CEP: 90480-003 Phone: 55 51 3327 8800 Fax: 55 51 3328 3031 Rio de Janeiro Praia de Botafogo, 300 - 7 andar Rio de Janeiro - RJ Brasil CEP: 22250-040 Phone: 55 21 2559 4141 Fax: 55 21 2552 3253 Sao Paulo R. Alexandre Dumas, 1981 - Chacar de Santo Ant"nio Sao Paulo - SP Brasil CEP: 04717-906 Phone: 55 11 5185 2444 Fax: 55 11 5181 2911 CEMAR: Reduces Investments Due To Liquidity Problems ---------------------------------------------------- Battling its current liquidity problems, Brazil's Maranhao state distributor Cemar (Companhia Energetica do Maranhao) cut pending investments for this year from BRL121 million to BRL50 million. The reduction comes in sharp contrast to original expectations of BRL280 million between 2001 and 2003. The Company has also decided to appeal to Aneel (Agencia Nacional de Energia) concerning the reduction of the extra tax. Cemar, which was privatized for a minimum price of R$522.8 million, had its liquidity hampered by the combined affects of power rationing, the delay in the wholesale power market (MAE) being implemented and less-than-expected financial flexibility. The Company recently had its credit rating downgraded by credit rating agency Standard & Poor's (S&P) to 'brSD' (Selective Default) on the Brazilian national scale from 'brBBB.' S&P also cut the Company's BRL150-million bond emission's rating to 'brCC' from 'brBBB-.' The rating actions reflected Cemar's failure to meet its financial obligations on time and the fact that negotiations for new terms and conditions are continuing with certain creditors. Additionally, U.S.-based company PPL Corp., which purchased 84.7 percent of Cemar in June 2000, announced it will write-off its investment in the state distributor. The total investment figure amounts to US$317 million, from which US$217 million has already been written off. Cemar, employs about 1,500 people and delivers electricity to about 1.04 million customers in the northeastern state of Maranhao from its headquarters in Sao Luis, Brazil. CONTACT: PPL Global LLC 11350 Random Hills Road Suite 400 Fairfax, VA 22030 Phone: 703-293-2600 Fax: 703-293-2659 EMBRAER: Strong Real Should Mean Better 4Q01 Results ---------------------------------------------------- Brazil's Embraer, the world's No. 4 maker of commercial aircraft, is likely to see an improvement in its fourth-quarter performance as a 15 percent appreciation of the local currency, the real, helped decreased the Company's debt costs, reports Reuters. The average forecast among six analysts polled by Reuters was that Embraer would post a net profit of BRL292 million for the fourth quarter, up from BRL247 million in the same period of 2000 and above the BRL253 million in the third quarter of 2001. However, Embraer's operating gains should suffer, given the sharp decline in demand for Embraer's small and mid-sized aircraft after the Sept. 11 attacks on the United States threw the world's aviation industry into crisis. According to analysts, Brazil's leading exporter delivered only 32 jets in the last three months of 2001, down from 41 in the third quarter and 44 in the fourth quarter of 2000. As measured by earnings before interest taxes, depreciation and amortization (EBITDA), Embraer is expected to post BRL401 million, up from BRL304 million a year earlier but down from BRL659 million in the third quarter of 2001. Analysts said that while the real's appreciation during the period helped Embraer lower its costs, it squeezed margins due to the foreign exchange difference between the dollar cost of parts like jet engines and the sale price of its finished jets months later. The real was trading at 2.67 to the U.S. dollar at the start of the fourth quarter but ended the year at 2.32. But for the full year 2001, the real depreciated 16 percent, a foreign exchange difference that in the end should bring strong benefits for Embraer. For the full year, Embraer should almost double its net profit and EBITDA. Net profit is expected to rise to BRL1.1 billion vs. BRL645 million in 2000, while EBITDA should jump to BRL2.2 billion from BRL1.1 billion. Analysts say 2002 will still be a recovery year for Embraer. CONTACTS: EMBRAER Press office: Phone +55 12 3927 1311 Fax + 55 12 3927 2411 Press office mgr. Bob Sharp Email: bob.sharp@embraer.com.br OR Press officer Wagner Gonzalez Email: wagner.gonzalez@embraer.com.br EMBRAER: Expects First Loan Installment for Super Tucano -------------------------------------------------------- Embraer expects to get US$30 million, as first installment from a total of US$420 million loan, to be used in the production of Super Tucano. The US$420-million loan consists of a credit line worth US$156 million offered by Deutsche Bank, Lloyds and Banco Latino Americano de Exportaciones. Another US$126 million will come from the government budget while the remaining US$150 million is guaranteed by four international exports credit agencies. The international agencies will finance the orders for imported components such as US$50 million to Pratt & Whitney, US$65 million to Elbit, US$20 million to Martin Baker and US$9 million to Rohde & Schwarz. CONTACT: Deutsche Bank AG Taunusanlage 12 60262 Frankfurt, Germany Phone: +49-69-910-91000 Fax: +49-69-910-34227 Home Page: http://www.deutsche-bank.de Contact: Investor Relations in New York: Libor Vincent Deutsche Bank AG 31 West 52nd Street 29th Floor New York, NY 10019-6160 USA Tel.: +1-212-469-7125 Fax: +1-212-469-7322 E-mail: db.ir@db.com LLOYDS TSB 71 Lombard St. London EC3P 3BS, United Kingdom Phone: +44-20-7626-1500 Fax: +44-20-7356-1731 Home Page: http://www.lloydstsb.com/ Contacts: Maarten A. van den Bergh, Chairman Peter B. Ellwood, Group Chief Executive M. Kent Atkinson, Group Finance Director and Investor Relations BANCO LATINOAMERICANO DE EXPORTACIONES, S.A. (BLADEX) Calle 50 and Aquilino de la Guardia P.O. Box 6-1497, El Dorado Panama, Republic of Panama Phone: (507) 210-8500 Website: http://www.blx.com/ Contacts: Jose Castaneda, CEO Sebastiao Toledo Cunha, Chairman of the Board Tatiana Calzada, Legal Counselor PRATT & WHITNEY 400 Main Street East Hartford, CT 06108 Phone: 860-565-4321 Home Page: http://www.pratt-whitney.com/ Contact: General Inquiries: Pratt & Whitney Operator, Connecticut Phone: 860-565-4321 ELBIT SYSTEMS LTD. Advanced Technology Center, P.O.B. 539, Haifa 31053 Phone: 972-4-8315315 Fax: 972-4-8550002 Website: http://www.elbit.co.il Contacts: Israel Farchi - Executive V.P., Commercial Affairs Joseph Gaspar - V.P. Chief Financial Officer Investor Relations E-mail: dp10212@elbit.co.il MARTIN BAKER Home Page: http://www.martin-baker.co.uk/ Contacts: Brian A. Miller, Executive Vice President Martin Baker America Inc. PO Box 2223 Arlington Virginia 22202-0223 Phone: 1-703-599-5049 Fax: 202 248 0785 E-mail: bmillermba@aol.com William D Harrison, San Antonio Representative Martin Baker America Inc 2806 Oak Leigh San Antonio Texas 78232-4212 Phone: 210 490 6503 Cell Phone: 210 286 5831 Fax: 210 490 6504 E-mail: wdh123@aol.com ROHDE & SCHWARZ Muhldorferstr. 15 81671 Munchen Germany Phone number: +49 (0)89 4129-0 Fax: +49 (0)89 4129-2164 Home Page: http://www.rohde-schwarz.com Contacts: Friedrich Schwarz, President and CEO Hans Wagner, Co-President and Co-COO Reinhard Bruckner, Co-President and Co-COO VARIG: Looks To Speed Up Capitalization --------------------------------------- The Brazilian air transportation company Varig is pushing for a speedy transaction involving a capital increase, says a report by Jornal do Commercio. The Company is preparing for a global stock offering to be launched by June and has hired the banks, Fator and Credit Lyonnais, to support the deal. The upcoming transaction has drawn the interest of foreign companies like the German Lufthansa, as well as other foreign funds. The Rubem Berta Foundation, which owns 87 percent of Varig, is prepared to give up its majority stake in an effort to raise some US$400 million to cut the carrier's debt load. Meanwhile, Varig commenced a new marketing policy, with the launching of e-ticket. The move came after the Company announced last week that it would begin to offer additional flights and shift some aircraft in its fleet in an effort to boost passenger numbers without inflating costs. Hit by last year's aviation crisis, an overall economic slowdown and a weak Brazilian real currency that hiked dollar-denominated costs, Varig had cut 10 percent of its flights and fired 1,700 employees. CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.) Rua 18 de Novembro No. 800, Sao Joao 90240-040 Porto Alegre, Rio Grande do Sul, Brazil Phone: (51) 358-7039/7040 (51) 358-7010/7042 Fax: +55-51-358-7001 Home Page: www.varig.com.br/english/ Contacts: Dorival Ramos Schultz, EVP Finance and CFO E-mail: dorival.schultz@varig.com.br Investor Relations: Av. Almirante Silvio de Noronha, n 365-Bloco "B" - s/458 / Centro Rio de Janeiro, Brazil CREDIT LYONNAIS 19, Boulevard des Italiens 75002 Paris, France Phone: +33-1-42-95-67-89 Fax: +33-1-42-95-94-37 E-mail: webmaster@creditlyonnais.com Home Page: http://www.creditlyonnais.com Contacts: Jean Peyrelevade, Chairman Dominique Ferrero, Chief Executive Officer BANCO FATOR S.A. Rua Amauri 255 Sao Paulo Brazil Phone: (11) 30681000 Fax: (11) 8530328 E-mail: bancofator@bancofator.com.br VESPER: Qualcomm To Sell Stake, Will Wait for Decent Pricing ------------------------------------------------------------ A top executive of Qualcomm Inc. maintained his plans to sell a majority stake in Brazilian CDMA wireless service provider Vesper, saying that Qualcomm has "no tradition as an operator, our business is technology," reports AFX. However, Qualcomm Inc chairman and CEO Irwin Mark Jacobs said that he is not selling the stake at any price. "But we are in no hurry. It is a difficult time for any business and we will not sell at any price," he said. In November last year, Qualcomm directed the restructuring of Vesper, and renegotiated the Company's debt, injecting BRL266 million and increasing its ownership in Vesper from 16 percent to 70.5 percent. CONTACT: QUALCOMM Sao Paulo, Brazil Av. Engo. Luis Carlos Berrini, 550 8 floor 04571-000 Sao Paulo, Brasil Phone: 55-11-5503-4500 Fax: 55-11-5505-9362 =================================== D O M I N I C A N R E P U B L I C =================================== SMITH-ENRON: Government To Buy Plant Thru CDE or Creditors ---------------------------------------------------------- The Dominican Republic government's purchase of the 175MW Smith- Enron generation plant would be made through state power company Dominican Electricity Corporation (CDE), reports Business News Americas. But according to Smith-Enron's Dominican head Otto Gonzalez, the government could try to negotiate the purchase directly with the Company's creditors. The plant currently lays dormant as the government reportedly owes US$24 million to the Company. But according to Gonzalez, the government's desire to own the Company is the reason behind consistently late power purchase payments. With the purchase, the government would take advantage of the available capacity, restructure the PPA between the plant and the government, and then sell the plant, according to the Trade & Industry Department's energy director Milton Morrison. "The PPA cannot be renegotiated now," said Morrison, "as it was already reworded in 1999 and is valid through 2015, and it would therefore be easier to bring the plant under state control." Morrison did not reveal the price offered or the timeframe in which the government proposal is valid. He added that a Smith- Enron executive will soon be traveling to the Dominican Republic to discuss the proposal in more detail. CONTACT: SMITH-ENRON COGEN., LTD. Avenida Winston Churchill #1100 Edificio La Universal de Seguros 4to. Piso Santo Domingo, D.R. Contact: Sr.Edgar Pichardo Phone: (809)5638182 (809)5678963 ============= E C U A D O R ============= SiTV: Disappointed CEE Announces Sale Plans ------------------------------------------- Financial problems and the lack of knowledge about the broadcasting industry have prompted the Ecuadorian Bishops' Conference (CEE) to sell the Church's "SiTV" television network, revealed CEE chairman Mario Ruiz in a report released by EFE. "We're not allowed to air political ads or erotic or sexual programming, which are the profitable areas," Ruiz said, adding, "we are aware that we (the Church) know nothing about television." The transaction, according to Ruiz, does not represent a good deal for the Church, because "we're not going to make so much as five cents and might lose some money." The bidders for SiTV include Pichincha Bank President Fidel Egas and GamaVision Executive President Marcel Rivas, said Ruiz, without revealing figures. The CEE could reveal SiTV's final buyer before the close of business Friday. CONTACT: SiTV Guayaquil Kennedy Norte y Av. del Bosque Phone: 298200 Fax: 288192 =========== M E X I C O =========== AEROMEXICO: May Lose Money In Airbus Deal ----------------------------------------- Aeromexico could lose money if it proceeds with a plan to exchange 15 of its Boeing DC-9 planes for Airbus equivalents, analysts warned in a Mexico City daily Reforma report. Aeromexico officials have already met with the French company to discuss the deal, which is scheduled for the third quarter of this year. Analysts believe that the exchange could be more expensive that first thought, since Aeromexico has dealt with Boeing for 30 years. At issue are potential hidden costs to the conversion, including maintenance and pilot training expenses. Aeromexico is owned by holding company Cintra, which is heading for the auction block this year. CONTACTS: CINTRA 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 AEROMEXICO Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or mweitzman@aeromexico.com PEMEX: Future Oil Revenues Overshadowed by Mounting Debts --------------------------------------------------------- Petroleos Mexicanos' (Pemex) swelling debt burden is putting at risk the government's future oil revenue. According to a report released by Mexico City daily El Universal, Pemex's Projects of Long-term Productive Infrastructure (Pidiregas) debts now surpass MXN800 billion (US$88.5 billion). Data from the Expenditure Department of the Treasury reveals that large contracts the Company will sell for projects in the Cantarell and Burgos fields and strategic gas program will cover Pemex's financial commitments from 1998 to 2023, including interest payments and debt contracted under Pidiregas. These last debts have risen from MXN353.3 billion (US$ 39.1 billion) at the end of the Zedillo administration in 2000 to MXN850.3 billion (US$94.1 billion) today. The unprecedented debt level at Pemex now greatly surpasses the value of the Company, estimated at MXN565.3 billion (US$62.5 billion). The debt may lead to forfeiting important sectors to private capital without privatizing. PEMEX: Authorities Advance In Money Laundering Probe ---------------------------------------------------- Mexican authorities have opened up new lines of inquiry into possible money laundering and tax fraud. The investigation is part of an ongoing probe surrounding the illegal diversion of money from Petroleos Mexicanos to Franciso Labastida's failed presidential campaign. The investigation advanced to a higher level after the United States began to provide names and account information from banks through which money may have been rerouted. Mexico's Attorney General Rafael Macedo de la Concha said that the discovery efforts had not tailed off, rather "I do not charge anybody with anything until I have the elements needed for conviction." ============= U R U G U A Y ============= BANCO COMERCIAL: Moody's Confirms Ratings, Outlook Positive ----------------------------------------------------------- Moody's Investors Service confirmed Banco Comercial S.A's long term foreign currency debt and deposit ratings of Ba3 and Ba2, respectively, its foreign currency subordinated debt of B1, and its short term foreign currency deposit rating of Not Prime. The ratings agency changed the outlook for the debt and deposit ratings to positive. The rating actions follow a re-capitalization of the bank for a total of US$133 million by its international bank shareholders, JP Morgan Chase, Credit Suisse First Boston, and Dresdner Bank Lateinamerika, together with the Uruguayan Central Bank, which has become a major shareholder. The confirmation and positive outlook for Banco Comercial's foreign currency debt and deposit ratings reflects Moody's view that the Central Bank of Uruguay would make every effort to avoid a default by Banco Comercial on its local currency obligations, given its importance as the largest private sector bank in Uruguay. However, Moody's believes that Banco Comercial is likely to need additional financial assistance to support its significant exposure to Argentina as well as other costs that may arise in connection with the alleged improprieties at its Argentine affiliate, Banco General de Negocios. At the same time, Moody's maintained Banco Comercial's E rating for bank financial strength, with a stable outlook, reflecting the bank's continuing need for outside support. The required level of support remains unclear, pending completion of the bank's ongoing audit by the Central Bank and its international auditors, which is expected to include a final assessment of the bank's Argentine exposure. The bank financial strength rating is Moody's opinion of a bank's stand-alone creditworthiness, and measures the likelihood that a bank will require financial assistance from third parties. Banco Comercial is Uruguay's largest private sector bank and the third largest overall with $2.3 billion in assets and $169 million in equity as of September 30, 2001. New York Jeanne Del Casino Vice President - Senior Analyst Financial Institutions Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 New York Gregory W. Bauer Managing Director Financial Institutions Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 CONTACTS: CREDIT SUISSE GROUP P.O. Box 1 CH-8070 Z�rich Tel. +41 (1) 212 16 16 Fax. +41 (1) 333 25 87 Contact: Lukas Muehlemann, chairman & CEO J.P. MORGAN CHASE & CO. Investor Relations J.P. Morgan Chase & Co. 270 Park Avenue New York, NY 10017-2070 (1-212) 270-6000 URL: www.jpmorganchase.com DRESDNER BANK LATEINAMERIKA AG Neuer Jungfernstieg 16 20354 Hamburg, Germany Tel.: (+49 40) 3595-0 Fax: (+49 40) 3595 3314 Telex: 214 236-0 dl d S.W.I.F.T. DRES DE HL E-Mail: public-relations@dbla.com ================= V E N E Z U E L A ================= LEEME: Shutters Operations, No New Investor Interest ---------------------------------------------------- After a fruitless attempt to find a strategic investor to fund operations, Venezuela-based online Spanish language library Leeme (www.leeme.com) will shut down for an undetermined period starting April 2, according to Leeme founder and CEO Ali Johnston. In a Business News Americas report, Johnston said the firm is offering all of its books at a 50 percent discount until Wednesday, March 27, when it will stop taking orders. The site will continue to function until the end of the month, revealed Johnston. Moreover, the Company is negotiating the sale of its databases, which include the names of 5,000 registered clients and 22,000 newsletter subscribers. Leeme was launched in October 1999 by a group of private investors. In 2000 it achieved "important" growth, according to Johnston, but failed to meet expectations in 2001. *********** 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 Ma. Cristina Canson, 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. 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