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/raid1/www/Hosts/bankrupt/TCRLA_Public/020416.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, April 16, 2002, Vol. 3, Issue 74 Headlines A R G E N T I N A BGN: To Close For 120 Days Beginning Early This Week IMPSA: To Move Production Of Generators To Brazil B E R M U D A FLAG TELECOM: Files Voluntary Bankruptcy Under Chapter 11 GLOBAL CROSSING: Telecom Analyst Grubman, SSB Named in Suit GLOBAL CROSSING: Posts US$152M Loss In First Month Of Insolvency GLOBAL CROSSING: Ex-Employee Seeks Rule 2004 Examination GLOBAL CROSSING: Mounting Bankruptcy Fees Worry Creditors MUTUAL RISK: S&P Lowers Counterparty Credit Rating to 'CC' B R A Z I L BCP: BellSouth Set to Purchase Safra's Stake ENRON: Restructuring Plans To Focus On Brazilian Markets TRANSBRASIL: Court Prevents Infraero From Assuming Control VARIG: Accountant Says Company Desperate For Cash C H I L E TELEX-CHILE: Redes Opticas Completes Equity Tender Offer C O L O M B I A VALORES BAVARIA: To Set Up Radio Holding Co. With A Spanish Firm M E X I C O HYLSA: Noteholders Consent to Indenture Amendments, Waiver MAXCOM TELECOMUNICACIONES: Extends Sr. Note Exchange Period PEMEX PETROQUIMICA: Energy Secretary Sees Hard Times, Low Output P A R A G U A Y COPACO: Base Price Set At US$400 Million COPACO: Starting Sales Drive Ahead of Upcoming Auction - - - - - - - - - - ================= A R G E N T I N A ================= BGN: To Close For 120 Days Beginning Early This Week ---------------------------------------------------- In the midst of an ongoing fraud investigation, Argentine bank Banco General de Negocios SA (BGN) will closed its doors for a 120-day period beginning Monday. The bank is taking the drastic measure in ordter to give it time to liquidate some assets after running short of cash, reports Bloomberg. J.P. Morgan Chase & Co., Credit Suisse First Boston and Dresdner Bank AG -- the three international banks controlling a total of 31 percent of voting shares, sent letters to express their support of the plan, according to Julio Barroero, director of BGN's credit risk department. Shareholders now must decide whether to liquidate the bank entirely, Mr. Barroero added. Banco General, whose debts include as much as US$110 million owed to the three international shareholders, plans to sell through a trust its 94 percent stake in Nuevo Banco de Santa Fe SA (NBSF), a provincial bank in Argentina, and other assets such as loans and government debt securities, Barroero said. The provincial bank would assume responsibility for paying Banco General's ARS180 million (US$64 million) of deposits, he said. The first ARS180 million of proceeds from asset sales will go to the provincial bank. Banco General will use the remaining proceeds to pay off ARS660 million to ARS670 million of credit lines from international banks and other debts, Barroero said. A Banco General board meeting is scheduled for April 18 in Buenos Aires. CONTACTS: BANCO GENERAL DE NEGOCIOS SA Esmeralda 120 Capital Federal 1035 Buenos Aires, Argentina Phone: 011-4394-3003 Fax: 011-4320-6138 Email: interbank@bancobgn.com URL: http://www.bancobgn.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 CREDIT SUISSE GROUP P.O. Box 1 CH-8070 Z〉ich 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 IMPSA: To Move Production Of Generators To Brazil ------------------------------------------------- Argentina's Impsa, part of the Pescarmona group, will move production of hydroelectric generators from the Argentine province of Mendoza to a yet-to-be chosen site in Brazil, says EFE. General expectations are that the Company will move to the southeastern part of Brazil, where the country's three richest states - Sao Paulo, Rio de Janeiro and Minas Gerais - are located. Luis Garcia, the director of Inverall, another Pescarmona company, said Impsa may form an alliance with a Brazilian partner as part of the relocation. The move is part of the Company's plan designed to cope with Argentina's prolonged recession. Impsa blames the horrible financial conditions for its US$15 million worth of losses through October 2001. Meanwhile, Impsa is on the verge of closing an agreement with investors, one of the first successful refinancing cases of an Argentine company in default. The Company's offer includes 2 new bonds, one of which would cover 50 percent over the nominal value of the previous bond. About 66 percent of the shareholders have accepted the offer so far. Impsa's default started last December when it failed to pay nearly US$7 million in interests for a US$137.6 million bond. CONTACTS: IMPSA Latin America Roberto Arancibia Rodriguez Pena 2451 (5503) Godoy Cruz, Mendoza, Argentina Tel: +54-261 4131300 Fax. +54-261 4131416 - 4131423 Email: arancibi@impsa.com.ar Julio Bermant Av. Eduardo Madero 940, piso 19 (1106) Buenos Aires, Argentina Tel.: +54 11 50770888 Fax: +54 11 50770835 Email: bermant@impsa.com.ar Brazil Luis Garcia Av. Alvarez Cabral, 344 18 andar Conjuntos 1801-1802, Cep 30170-000 - Centro - Belo Horizonte - MG - BRAZIL Tel: +55 31 273-2254 Fax: +55 31 273-9734 Email: luis_garcia@osite.com.br ============= B E R M U D A ============= FLAG TELECOM: Files Voluntary Bankruptcy Under Chapter 11 --------------------------------------------------------- In an official press release, FLAG Telecom (Nasdaq: FTHL; LSE: FTL) announced Friday that it has filed a voluntary petition (the "Petition") under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York. Certain subsidiaries of the company have also filed voluntary petitions under Chapter 11. This action was taken after the Board of Directors authorized the filing of the Petition by unanimous vote. The Board's action was taken following the acceleration of the bank debt of FLAG Atlantic Ltd by the syndicate of banks which are its lenders, which constituted a cross-default under the company's indenture for its outstanding senior notes. As announced Thursday, the Board of Directors has authorized FLAG Telecom's management and advisors to negotiate with certain creditors, including representatives of the FLAG Telecom Atlantic Bank Group, holders of its various Senior Notes, and significant trade creditors, regarding a comprehensive financial restructuring. FLAG Telecom will attempt to reach agreement with these representatives regarding the material terms of a financial restructuring in the coming weeks. If and when such an agreement is reached, a plan of reorganization will be filed with the court, and, when approved, will allow the company to emerge from Chapter 11 with a deleveraged balance sheet and a strong operational base. FLAG intends to manage its business in a focused manner, conserving capital and reducing costs where appropriate. It will continue to provide core backbone capacity to traditional carriers, Internet Service Providers and other content providers. About FLAG Telecom FLAG Telecom is a leading global network services provider and independent carriers' carrier providing an innovative range of products and services to the international carrier community, ASPs and ISPs across an international network platform designed to support the next generation of IP over optical data networks. FLAG Telecom has the following cable systems in operation or under development: FLAG Europe-Asia, FLAG Atlantic-1 and FLAG North Asian Loop. Recent news releases and information are on FLAG Telecom's website at www.flagtelecom.com. CONTACT: FLAG Telecom David Morales, VP, Corp. Finance Phone: (+44 20 7317 0837) E-mail: dmorales@flagtelecom.com or Brunswick Jonathan Glass Phone: (+44 20 7404 5959) or Tim Payne Phone:(+1 212 333 3810) or Sloane & Company Charles Southworth Phone: (+1 212 446 1892) E-mail: csouthworth@sloanepr.com GLOBAL CROSSING: Telecom Analyst Grubman, SSB Named in Suit ----------------------------------------------------------- Zamansky & Associates announced Friday that the firm has filed a case on behalf of George Zicarelli, a 60 year old video tape editor for CBS News, against superstar telecom analyst Jack Grubman and his firm Salomon Smith Barney for misleading stock recommendations involving Global Crossing Ltd. The case will examine the purported objectivity of research analysts at major brokerage houses, the influence they have upon a public customer's investment decisions and the undisclosed "conflicts of interest" behind the recommendations which are hidden from the investing public. The case also examines the reality of the "Chinese Wall" which is required at brokerage firms to separate the research analyst (who is required to be objective) from the investment banking division of the firm. According to the suit, Zicarelli lost over $455,000 in Global Crossing stock. His Smith Barney broker "hyped" Jack Grubman as the telecom "guru" who earned $20 million per year and was the source to be followed regarding telecommunication stocks. The broker sent Zicarelli Grubman's research reports as an inducement to buy Global Crossing. Grubman gave Global Crossing a $70 price target and a $35 billion market capitalization - - a level exceeding General Motors, Ford Motor Company and Dow Chemical the three leading U.S. Corporations. As a result of his losses, Mr. Zicarelli was forced to file for bankruptcy in October 2001. Shortly thereafter, Global Crossing filed for bankruptcy and the stock now trades at $.10 a share and has a market capitalization of a mere $85 million. The case will seek to hold Mr. Grubman personally accountable for misleading stock recommendations. The case will also seek to obtain Grubman's internal emails as evidence in the case. Mr. Zamansky is the attorney who represented the successful public customer in his claims against Merrill Lynch and Henry Blodget for misleading recommendations on Infospace stock. After the settlement of the case, Mr. Zamansky provided all evidence to the New York Attorney General's Office who is now investigating Merrill Lynch and other Wall Street firms for misleading stock recommendations. CONTACT: ZAMANSKY & ASSOCIATES Jacob H. Zamansky 40 Exchange Place - 20th Fl. New York, NY 10005 Phone: 212-742-1414 Fax: 212-742-1117 Email: jacob@zamansky.com SALOMON SMITH BARNEY HOLDINGS INC. 388 Greenwich St. New York, NY 10013 Phone: 212-816-6000 Fax: 212-793-9086 Home Page: http://www.smithbarney.com Contact: Michael A. Carpenter, Chairman and CEO Michael J. Day, EVP and Controller GLOBAL CROSSING: Posts US$152M Loss In First Month Of Insolvency ---------------------------------------------------------------- Hamilton, Bermuda-based Global Crossing filed its first monthly financial report with the bankruptcy court on Friday, posting a US$152-million loss in its first 30 days of insolvency, reveals Reuters. The US$152 million loss worked out to 17 cents per share, on total revenue in the period of US$269 million. The latest report lists total assets US$15.1 billion. Net cash provided by operating activities in the period was US$95 million, while total cash and cash equivalents were US$1.1 billion. Net cash flow in the month was US$11 million. All of the financial results also include the performance of its non-debtor subsidiaries, including Asia Global Crossing Ltd, according to the bankrupt telecommunications company, Global Crossing added that the monthly report's balance sheets reflect a complete write-off of all of its goodwill and other intangible assets. CONTACT: GLOBAL CROSSING Press Contacts: Becky Yeamans +1 973-410-5857 rebecca.yeamans@globalcrossing.com Cynthia Artin +1 973-410-8820 cynthia.artin@globalcrossing.com Analysts / Investors Contact: Ken Simril +1 310-385-5200 investors@globalcrossing.com GLOBAL CROSSING: Ex-Employee Seeks Rule 2004 Examination -------------------------------------------------------- Donald Yancy, a former employee of Global Crossing, is seeking permission from the court to conduct Bankruptcy Rule 2004 examinations of the Company, company accountant Arthur Andersen, and two Global Crossing human resources managers, recalls Dow Jones. Under Bankruptcy Rule 2004, the bankruptcy court may order that a company be examined or produce documents for "the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matte which may affect the administration of the debtor's estate." Yancy is a plaintiff in a suit concerning the company's Employees' Retirement Savings Plan. The suit claims that Waste Systems is a fiduciary of the plan and that the debtor and certain individuals breached their fiduciary duties to Yancy, the plan and other participants and beneficiaries of the plan. Yancy seeks a court order directing a Rule 2004 exam to investigate the assets and liabilities of the debtor, to further examine the company's role as a fiduciary of the plan, and to determine the financial viability of the Company. Among other documents, Yancy seeks production of all retirement plan materials, all plan financial statements, and evidence of a plan committee. May 17 is the proposed date for production of documents. As Waste Systems' former auditor, Arthur Anderson would have information relating to the company's financial condition and the retirement plan. Human resources managers John L. Comparin and Bill Norris were included in the motion because they are likely to have information relating to the retirement plan, including the plan's purchase and holding of company stock. GLOBAL CROSSING: Mounting Bankruptcy Fees Worry Creditors --------------------------------------------------------- The creditors of Global Crossing are growing increasingly concerned about the fees demanded by the lawyers, investment bankers and accountants working on the Company's bankruptcy case, reveals The New York Times. Sources close to the Company disclosed that about 20 firms have billed $10 million in fees to cover various charges and expenses since late January when Global Crossing filed for bankruptcy protection. As these fees continue to mount, some creditors may be renewing an effort to liquidate Global Crossing. Global Crossing's bankruptcy filing, the largest by a telecommunications concern, is costlier and more complicated than most proceedings because it is based in Bermuda for tax reasons. Edward Weisfelner, a lawyer representing Global Crossing's creditors, said he was alarmed by some of the fees. "This is something we all need to be careful with as Global Crossing tries to keep costs down in an effort to emerge intact," he said. Much of the creditors' ire is focused on KPMG, the large international accounting firm, which has billed about US$3.2 million since February just for its work related to operations in Bermuda. However, Phil Wallace, one of KPMG's lead accountants working on the case in London, explained that KPMG, which has 40 people working on Global Crossing's bankruptcy in offices in London, Bermuda and New York, is charging more because the intricacies of Bermuda's bankruptcy laws require it to act as a kind of overseer for the entire process. "We're doing a mixture of work usually performed by lawyers, financial advisers and accountants," Mr. Wallace said. "This doesn't mean we're not willing to sit down with creditors to reach a comfortable level for our fees." Three separate law firms, Attride-Stirling & Woloniecki of Bermuda, Denton Wilde Sapte of Britain and Shearman & Sterling of New York, have billed nearly US$600,000 for their work related to the Bermuda aspects of Global Crossing's bankruptcy. Weil, Gotshal & Manges of New York, the lead bankruptcy counsel, has billed about US$1.6 million and Simpson Thacher & Bartlett, also of New York, which serves as litigation and tax counsel, has billed Global Crossing more than US$600,000, people close to the company said. Bankers working on the case are also charging handsomely for their services. The Blackstone Group, Global Crossing's financial adviser, has requested a US$250,000 monthly fee, while Chanin Capital Partners, the creditors' own adviser, is asking for US$200,000 a month. PricewaterhouseCoopers, advisers for Global Crossing's bank lenders, has billed the company more than US$900,000 so far. CONTACTS: KPMG Crown House 4 Par La Ville Hamilton HM08 Bermuda Tel. +1 (441) 295-5063 Fax. +1 (441) 295-9132 Email: kpmg@kpmg.bm ATTRIDE-STIRLING & WOLONIECKI OF BERMUDA Crawford House 50 Cedar Avenue PO Box HM 2879, Hamilton, HM LX Bermuda Telephone: (441) 295 6500 Facsimile: (441) 295 6566 DENTON WILDE SAPTE OF BRITAIN Head Office: Denton Wilde Sapte 5 Chancery Lane, Clifford's Inn, London EC4A 1BU, United Kingdom e-mail: info@dentonwildesapte.com Tel: +44 (0) 20 7242 1212 Fax: +44 (0) 20 7404 0087 SHEARMAN & STERLING OF NEW YORK 599 Lexington Avenue New York, NY 10022-6069, USA Telephone: (+1 212) 848-4000 Fax: (+1 212) 848-7179 Firm Managing Partner: Email: Robert C. Treuhold WEIL, GOTSHAL & MANGES OF NEW YORK New York 767 Fifth Avenue New York, NY 10153 (212) 310-8000 Fax: (212) 310-8007 Contact: John Neary Executive Director Email: john.neary@weil.com SIMPSON THACHER & BARTLETT 425 Lexington Avenue New York, NY 10017-3954 Phone: (212) 455-2000 Fax: (212) 455-2502 THE BLACKSTONE GROUP (New York) 345 Park Avenue New York, NY 10154 USA Phone: (212) 583-5000 Fax: (212) 583-5712 THE BLACKSTONE GROUP (London) The Blackstone Group International Limited Stirling Square 5-7 Carlton Gardens 4th Floor London, SW1Y 5AD U.K. Phone: +44 20 7451 4000 Fax: +44 20 7451 4038 CHANIN CAPITAL PARTNERS New York 330 Madison Avenue 11th Floor New York, NY 10017 (212) 758-2629 Phone (212) 758-2628 Fax Contacts: Randall Lambert Steven Strom PRICEWATERHOUSECOOPERS Dorchester House 7 Church Street West Hamilton HM 11 Mail Address : PO Box HM 1171 Hamilton HM EX Bermuda Telephone: [1] (441) 295 2000 Telecopier: [1] (441) 295 1242 MUTUAL RISK: S&P Lowers Counterparty Credit Rating to 'CC' ---------------------------------------------------------- Standard & Poor's said Friday it lowered its counterparty credit rating on Bermuda-based Mutual Risk Management Ltd. to double-'C' reflecting the highly vulnerable status of existing obligations to nonpayment. The rating remains on CreditWatch where it was placed on Dec. 12, 2001, with negative implications. The Bermuda Monetary Authority has appointed a review team to monitor Mutual Risk's business on an ongoing basis because the company is in default under the terms of its convertible exchangeable debentures and its bank credit facilities. It is not clear whether further sales of assets will yield sufficient proceeds to satisfy indebtedness. Its shares have been delisted from the NYSE, and it is highly likely that Legion Indemnity Co., Mutual Risk's triple-'C'-rated U.S. insurance subsidiary, which is not yet under regulatory control, will fall under regulatory control prospectively. Management is trying to negotiate a restructuring plan with existing creditors. If the company cannot restructure its debt or reach some accommodation, it may be forced to liquidate through proceedings in Bermuda and in the United States. Legion Indemnity Co. had a policyholder surplus of $35.3 million as of year-end 2001, and has participated in a pooling agreement with its affiliates, Legion Insurance Co. and Villanova Insurance Co. since 1996. CONTACT: Standard and Poors Karole Dill Barkley Phone: +1-212-438-7167 =========== B R A Z I L =========== BCP: BellSouth Set to Purchase Safra's Stake --------------------------------------------- BellSouth Corp. plans to buy Safra Group's stake in the Brazilian wireless unit BCP Telecomunicacoes SA for about US$300 million, reports Bloomberg. BellSouth and Safra each own 44.5 percent in the money-losing BCP. Last month, the Company defaulted on a US$375 million bond payment, triggering early repayment of the unit's debt because of cross default clauses. Citigroup Inc.'s Citibank, ABN Amro Holding NV and FleetBoston Financial Corp. were among the creditors most affected by the default. Under an agreement reached this week, the unit's 41 lender banks agreed to cut BCP's US$1.7 billion in debt by US$110 million. CONTACT: BELLSOUTH CORPORATION 1155 Peachtree St. NE Atlanta, GA 30309-3610 Phone: 404-249-2000 Fax: 404-249-5599 Home Page: http://www.bellsouth.com Contacts: Investor Relations Phone (US): 800.241.3419 Fax: 404.249.2060 E-mail: investor@bellsouth.com BCP TELECOMUNICACOES Rua Florida, 1970 4o andar Sao Paulo - SP Tel: 55 11 5509-6428 Fax: 55 11 5509-6257 Home Page: http://www.bcp.com.br ENRON: Restructuring Plans To Focus On Brazilian Markets -------------------------------------------------------- Speaking to more than 1,000 employees gathered in a Houston hotel auditorium, and others listening from satellite offices, Stephen F. Cooper, Enron interim CEO and chief restructuring officer, laid out plans for restructuring as a smaller firm, relates Dow Jones. Cooper walked employees through his plan for reorganizing the Company as a far smaller producer and distributor of energy, elaborating on a plan first presented to creditors in skeleton form in December, says Dow Jones. According to Cooper, the new company -- whatever it is called -- would reach from Canada to South America, but focus primarily on markets in California, Florida and Brazil. He warned there would be more layoffs ahead -- that would be "not insubstantial." Worldwide employment has already dropped from about 31,000 prior to its December 2 bankruptcy-law filing to about 23,000 today. He also warned that Enron's existing stock would likely end up worthless, buried under claims by creditors and shareholders that he estimated at between US$60 billion and US$70 billion, but said could go as high as US$100 billion. The Company has reported about US$40 billion of debt, including off-balance-sheet project financing. CONTACTS: ENRON CORP., +1-713-853-4738 Mark Palmer, 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 TRANSBRASIL: Court Prevents Infraero From Assuming Control ---------------------------------------------------------- A Brazilian court ruling prevented state airport management company Infraero from taking over check-in terminals, desks and other sites in several Brazilian airports held by Transbrasil. According to the court, Transbrasil should remain in possession of the sites pending a final judgment on an action lodged against it by Infraero. The legal action relates to a BRL115-million debt the airline owes to the airport operator. Moreover, the court also demanded that Infraero return the sites it has already taken over. Transbrasil discontinued operations over the past four months and is currently facing an involuntary bankruptcy process started by General Electric (GE). A hearing on GE's bankruptcy claim is set for mid-April. The two companies are expected to come to an agreement regarding the US$20 million Transbrasil owes to GE. The deal will likely be based on the sale of tax credits the airline owns to a GE subsidiary in Brazil. Transbrasil still owes BRL35 million in salaries to employees and is overdue on paying this portion of its liabilities. In order to cover this debt, the Company will initiate the process of selling one of its Boeing 767s. 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 VARIG: Accountant Says Company Desperate For Cash -------------------------------------------------- Viacao Aerea Rio-Grandense SA (Varig), which ended 2001 with BRL480.87 million in losses, more than doubling the BRL178.54 million posted a year earlier, must raise cash to continue operating, according to an accountant in a Bloomberg report. "The projections for its cash flow indicate the need to obtain funds in the short term to make possible the maintenance of its operations," wrote Samuel de Paula Matos, a partner at the Brazilian business of Arthur Andersen LLP, who signed off on Varig's accounts. Carlos Albano, an analyst at Uniao de Bancos Brasileiros SA in Sao Paulo says a "reasonable" estimate would be US$400 million for the amount the airline to reduce its debt and fund its business. "It's significant if the Company accountant is saying this kind of thing," said Albano. "Most people in the market have already taken this into account." Varig, which is Brazil's biggest airline, said it plans to sell shares to raise funds to pay down part of its US$900-million debt. Under Brazilian law, a foreign airline could acquire a maximum of 20 percent of Varig. The Ruben Berta Foundation, which is controlled by Varig's employees, has 87 percent of the airline's common, or voting, shares. 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 ========= C H I L E ========= TELEX-CHILE: Redes Opticas Completes Equity Tender Offer -------------------------------------------------------- According to an official company press release, Redes Opticas (Cayman) Corp. ("Redes Cayman") completed the U.S. tender offer and Redes Opticas S.A. ("Redes") completed the concurrent Chilean tender offer, each initiated on March 7, 2002, for 28.69% of the outstanding "Class A" shares and 28.69% of the outstanding "Class B" shares (including American Depositary Shares (the "ADSs")), totaling 65,392,249 shares, of Telex-Chile S.A. (the "Shares") (NYSE:TL). Redes Cayman made the tender offer in the United States (the "U.S. Offer") for Shares held by U.S. holders and for the ADSs, and Redes, the parent and sole shareholder of Redes Cayman, made a concurrent tender offer in Chile (the "Chilean Offer," and together with the U.S. Offer, the "Offers") for Shares but not for the ADSs. Redes Cayman offered Ch$18 per Share and Ch$180 per ADS in the U.S. Offer, payable, in each case, in U.S. dollars. Redes offered Ch$18 per Share in the Chilean Offer, payable in Chilean pesos. Only 28.69% of the outstanding Shares, including Shares represented by the ADSs, equal to an aggregate of 65,392,249 Shares, will be purchased in the Offers. Approximately 77,775,857 Class A shares and 1,384,376 Class B shares (including Class B shares represented by the ADSs), for a total of 79,160,233 Shares, were validly tendered in the Offers. As a result, the proration rules described in the U.S. Offer to Purchase, dated as of March 7, 2002, will apply to the Offers. Redes Cayman and Redes expect to announce on or about Monday, April 15, 2002, by press release the results of such proration calculations. MacKenzie Partners, Inc. is the information agent. MacKenzie Partners, Inc. may be contacted for questions regarding the U.S. Offer at, toll free, (800) 322-2885, or in writing at 105 Madison Avenue, New York, New York 10016. Additional Information Redes Cayman is a newly incorporated Cayman Islands company and a wholly owned subsidiary of Redes. Redes is a newly formed company, organized under the laws of The Republic of Chile, and an indirect majority owned subsidiary of Southern Cross Latin America Private Equity Fund, L.P. ("Southern Cross"). Southern Cross is a Cayman Islands partnership created in 1998 with the purpose of making direct, control investments in companies located in Latin America. Telex-Chile S.A. is a Chilean telecommunications holding company principally engaged, through its subsidiaries, in the provision of long distance services within Chile as well as in other selected Latin American countries and the United States. It is one of the leading facilities-based providers of public long distance services within Chile through Chilesat S.A., its long distance carrier and principal subsidiary. CONTACT: MacKenzie Partners, Inc., New York 800/322-2885 =============== C O L O M B I A =============== VALORES BAVARIA: To Set Up Radio Holding Co. With A Spanish Firm ---------------------------------------------------------------- Struggling Colombian conglomerate Valores Bavaria SA reached an agreement with Spain's largest traded media group Grupo Prisa SA (Promotora de Informaciones) to set up a joint radio holding company to help expand in the Americas, reports Bloomberg. Accordingly, the Colombian group will own 40 percent of the venture while Prisa will own 60 percent. "We consider this consolidation another step forward in the strategic alliance that Valores Bavaria and Grupo Prisa began three years ago," said Javier Aguirre, executive president of Valores. "Thanks to this alliance we can develop our business in the communications sector and we will have a clear competitive advantage in the region." The new company will be comprised of all the shares in Valores Bavaria's Caracol Radio and in the Grupo Latino de Radiodifusion, or GLR, in which Caracol and Prisa each have a 50-percent stake. Valores Bavaria has been seeking to build alliances to cut losses, which last year, leapt more than 20-fold to US$415 million. About 65 percent of those losses were due to capital injections into Avianca, the Colombian airline in which Valores Bavaria has a majority stake. It is one of the most high-profile firms in Valores Bavaria's portfolio, which includes major television and radio networks, auto assembly plants, a mobile telephone company and other firms -- some of which the conglomerate plans, and indeed needs, to shed. Avianca won a crucial lifeline late last year when the government approved its proposed merger with Colombia's No. 2 airline, Aces. After the merger is completed, Avianca-Aces will have a fleet of 56 aircraft and combined assets of US$700 million. =========== M E X I C O =========== HYLSA: Noteholders Consent to Indenture Amendments, Waiver ---------------------------------------------------------- Hylsamex, S.A. de C.V. and its subsidiary Hylsa, S.A. de C.V. (the "Company" or "Hylsa") announced Friday that Hylsa has received the consent of a majority in principal amount of its outstanding 91/4% Notes due 2007 (the "2007 Notes") to the proposed amendments to the indenture governing the 2007 Notes and the waiver of past defaults under the indenture. Hylsa also announced that it will pay the full consent and exchange payment to all holders whose 2007 Notes are tendered prior to the expiration of the exchange offer. Each holder that tenders 2007 Notes at or prior to 11:59 p.m., New York time, on April 19, 2002 will receive a $10 consent and exchange payment for each $1,000 principal amount of 2007 Notes tendered and not withdrawn. Holders that previously consented to the proposed amendments and waiver, but did not tender their 2007 Notes, may tender their 2007 Notes at or prior to 11:59 p.m., New York time, on April 19, 2002 and receive the full $10 consent and exchange payment for each $1,000 principal amount of 2007 Notes tendered and not withdrawn (rather than the $5 consent payment). The exchange offer is scheduled to expire at 11:59 p.m., New York time, on April 19, 2002. All other terms and conditions to the exchange offer and consent solicitation remain unchanged. Notes tendered and consents delivered at or prior to 5:00 p.m., New York time, on April 11, 2002 may not be withdrawn or revoked. The new notes offered in the exchange offer will not be registered under the Securities Act of 1933, as amended, and will only be offered in the United States to qualified institutional buyers in a private transaction, and outside the United States in offshore transactions. CONTACT: MacKenzie Partners, Inc. Steven Balet E-mail: proxy@mackenziepartners.com Phone: 800/322-2885 212/929-5500 (collect) MAXCOM TELECOMUNICACIONES: Extends Sr. Note Exchange Period ----------------------------------------------------------- Maxcom Telecomunicaciones, S.A. de C.V., announced the extension of the exchange offer period for its Series B Senior Notes, which was originally due to expire last Thursday, until April 16, 2002 at 17:00 EST. On March 14, 2002, the Company commenced an offer to exchange any and all of its 13-3/4% Series B Senior Notes due 2007 for up to $175 million aggregate principal amount of New Senior Notes and up to an aggregate of 28,050,000 ordinary participation certificates (CPOs), each representing one share of Series N2 Convertible Preferred Stock with limited voting rights, upon the terms and conditions set forth in the Offering Circular dated March 14, 2002 and accompanying Letter of Transmittal. The $175 million New Senior Notes will bear 0% (zero) interest through March 1, 2006 and will accrue interest thereafter at an annual interest rate of 10%. Interest will be payable in cash on September 1st, 2006 and March 1st, 2007. The Series N2 Convertible Preferred Stock, which would represent 15.9% of the total capital stock of Maxcom, will have an initial liquidation preference of U.S.$0.4927 per share, and limited voting rights. As part of the exchange offer, the Company is soliciting the consent of its holders to amend the indenture governing the 13- 3/4% Series B Senior Notes to eliminate all of the restrictive covenants and certain events of default. The exchange offer is conditioned, among other things, on the tender of 13-3/4% Series B Senior Notes representing at least 95% of the total notes outstanding and the obtainment of certain Mexican regulatory approvals. As of the close of business today, The Bank of New York, the exchange agent, has received tenders representing 93.7% of the total notes outstanding. Maxcom also announced that the Mexican Foreign Investment Bureau authorized the increase of non-Mexican ownership to up to 95% of its total capital stock, which was a condition to the exchange offer. Maxcom Telecomunicaciones, S.A. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to small- and medium-sized businesses and residential customers in the Mexican territory. Maxcom launched commercial operations in May 1999 and is currently offering local, long distance and data services IN Mexico City and the City of Puebla. Additional information, is available through Jose-Antonio Solbes, Director of Investor Relations of Maxcom, at (5255) 5147-1125, or Lucia Domville, of Citigate Dewe Rogerson, the information agent, at (212) 419-4166. CONTACT: MAXCOM TELECOMUNICACIONES, S.A. DE C.V. Jose-Antonio Solbes, +5255-5147-1125, Email: investor.relations@maxcom.com CITIGATE DEWE ROGERSON, Lucia Domville, +1-212-419-4166 Email: lucia.domville@citigatedr-ny.com PEMEX PETROQUIMICA: Energy Secretary Sees Hard Times, Low Output ---------------------------------------------------------------- Pemex Petroqu｡mica (PPQ), an affiliate of Mexican state-owned petroleum firm Petroleos Mexicanos (PEMEX), is going through a very difficult time, according to an analysis done by the Secretary of Energy. El Financiero relates that the analysis showed only half of the subsidiary's 61 plants are in operation and its administration is disjointed. In addition, PPQ lost a lot of ground in the second half of 2001 due to "a break in the productive chains, weakening in the operating possibilities and increasing operation costs," officials said. The production chain began deteriorating after each of the PPQ complexes was made to work independently, a decision made in 1997. The Company's goal is now to return to 1996 revenue levels, when domestic sales totaled about US$2.4 billion. In 2001, the sales reached MXN7.9 billion (US$871.6 million), plus 4 billion (US$441.2 million) in sales to its subsidiaries. =============== P A R A G U A Y =============== COPACO: Base Price Set At US$400 Million ---------------------------------------- The April 30 auction of Paraguayan telephone operator Copaco will carry a minimum bid of US$400 million, reports Business News Americas. Market observers and analysts believe that early market liberalization would jeopardize the Copaco sale. However, if the sale is successful, half of the proceeds will go to government coffers, leaving the balance to be invested in the Company. The five companies pre-qualified to bid for Copaco are: Brasil Telecom; Paraguayan mobile operator Telecel (Millicom); Compania de Telecomunicaciones, a consortium composed of Paraguay's Citsa (Rieder Group) and Germany's Detecon; Telefonica Internacional (TISA), a subsidiary of Spain's Telefonica; and Telecom Argentina. COPACO: Starting Sales Drive Ahead of Upcoming Auction ------------------------------------------------------ Paraguay's state-run telco Copaco will launch a sales drive this week to activate idle lines in the capital Asuncion, according to a report released by Business News Americas. Copaco chairman Hermes Calonga revealed that the Company has 29,100 idle lines out of a total installed infrastructure of some 320,000 lines, and it has lowered the activation fee to PYG750,000 (US$153) to attract subscribers. Most of the idle lines correspond to outlying areas of the capital, with just 4,700 available in the Asuncion metropolitan area. *********** 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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