/raid1/www/Hosts/bankrupt/TCRLA_Public/020425.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
Thursday, April 25, 2002, Vol. 3, Issue 81
Headlines
A R G E N T I N A
ARGENTINE BANKS: System-Wide Closure To End Friday
CIESA: Misses Payment On US$220-Mln Corporate Bond
FINANCIAL SYSTEM: Could Fold Up Under Massive Fund Withdrawals
HSBC: Analyst Expects Further Provisions For Argentine Exposure
HSBC: Declares No Immediate Counter-Measures For Argentine Woes
SCOTIABANK QUILMES: Capital Trust's Preferred Rated 'P-1 (Low)'
TRANSENER: S&P Drops Ratings To Default
B R A Z I L
BELL CANADA: 1Q02 Numbers Include Telecom Reorganization
EMBRATEL: Execs Reiterate Positive Guidance For This Year
EMBRATEL: Merrill, UBS Cut Recommendation After Dismal 1Q02
C H I L E
HSBC: Chilean Bank Stake Sale Unrelated To Argentine Crisis
M E X I C O
ALFA: Posts Brilliant First-Quarter Results
EMPRESAS ICA: Posts MXN$4 Billion Net Loss In 4Q01
GRUPO BITAL: Signs Housing Credit Deal With Infonavit
TRIBASA: Awaits Government Decision Regarding Equity
VITRO: 1Q02 Results In Line With Expectations; Improving
- - - - - - - - - -
=================
A R G E N T I N A
=================
ARGENTINE BANKS: System-Wide Closure To End Friday
--------------------------------------------------
The Argentine Central Bank said the indefinite bank closure that
began last week to prevent the collapse of the country's
financial system will end Friday, relates Bloomberg. The Central
Bank also reached an accord with banks to replenish some of the
country's cash machines that were depleted over the weekend, the
report adds, citing Banco Credicoop Ltd. president Carlos Heller.
According to Heller, depositors will be limited to a one-time
withdrawal of ARS200 (US$64).
Faced with the flood of withdrawals, the government on Friday
ordered banks to close indefinitely and had indicated they would
not reopen until the legislature passed a bill to convert savings
into dollar-denominated bonds that would mature in 10 years or
into peso-denominated bonds with five-year maturities.
However, the government's hopes that the Congress would debate
the bill on Monday fell through due to the multiple objections to
the draft raised by legislators, with many saying banks - rather
than the government - should guarantee the bonds issued in
exchange for deposits.
CIESA: Misses Payment On US$220-Mln Corporate Bond
--------------------------------------------------
Compania de Inversiones de Energia SA, or Ciesa, which controls
the gas pipeline company Transportadora de Gas del Sur SA (TGS),
said it did not make its final interest and principal payment due
April 22 on a US$220-million corporate bond.
Ciesa, a joint venture of Argentine oil and natural gas giant
Perez Companc SA and the collapsed Enron Corp., said in a
statement that it had begun debt restructuring talks with all its
creditors.
In a filing with the Buenos Aires Stock Exchange, Ciesa blamed
Argentina's currency devaluation and the Duhalde administration's
refusal to let local utility companies raise their rates for its
inability to repay bondholders.
Argentina's energy companies are in talks with the government to
renegotiate the operating concessions they won in the 1990s. The
first round of those talks, which began in March, are expected to
end in June.
However, a final decision by Argentina's Economy Ministry could
be delayed until much later this year.
FINANCIAL SYSTEM: Could Fold Up Under Massive Fund Withdrawals
--------------------------------------------------------------
The move by the Argentine Supreme Court to authorize extensive
fund withdrawals could lead to a collapse in the country's
financial system, according to two of Argentina's largest banking
associations.
In a statement delivered to the court, the Argentine Banking
Association (ABA) and Association of Public and Private Banks
(ABAPRA) said that banks are in no condition to withstand these
withdrawals. According to them, bank liquidity could suffer and
several institutions could go under if the courts continued to
allow the withdrawals.
The bankers noted that some 200,000 lawsuits had been filed
against the bank-asset freeze imposed by the government in
December, forcing banks to release close to ARS20 billion
(US$6.34 billion) deposits, or twice the amount they currently
hold in their vaults and six times the amount of money the
government plans to print in 2002.
ABA and ABAPRA presented their arguments in an effort to convince
the Supreme Court to stop releasing frozen bank deposits and
prevent a run on banks that would force many to go under.
HSBC: Analyst Expects Further Provisions For Argentine Exposure
---------------------------------------------------------------
HSBC Holdings, after making total provisions of US$804 million
last year for its exposure to Argentina, is likely to include
further provisions of US$150-200 million this year if it
continues its operations there, reports AFX, citing Dao Heng
analyst Joanna Ng.
To reflect the extra possible provisioning, Ng has downgraded her
2002 net profit forecast for the group by 1.2 percent to US$6.327
billion.
However, the analyst does not expect that the significant charges
on Argentina in 2002 will weigh on overall earnings recovery for
HSBC, particularly given that management has shown reluctance to
commit more money to the South American country.
"As the exposure in Argentina is relatively small, about 0.5 pct
of the group's total assets, its impact on the long-term earnings
prospects of the group will be immaterial," she said.
"We believe it is increasingly likely that the bank will
eventually close down its business in Argentina in view of a
worsening Argentine economy and the ever-changing rules imposed
by the central bank (there)," Ng said.
"Although management stated that HSBC is a long-term player in
the country, they also reiterated they would consider winding up
the business there in case the environment becomes unsuitable,"
Ng said.
CONTACT: HSBC HOLDINGS PLC
10 Lower Thames St.
London EC3R 6AE, United Kingdom
Phone: +44-020-7260-0500
Fax: +44-020-7260-0501
Home Page: http://www.hsbc.com
Contacts:
Sir John R. H. Bond, Group Chairman / Exec. Dir.
Sir Brian Moffat, Deputy Chairman / Sr. Non-Exec. Dir.
Keith R. Whitson, Group Chief Executive
HSBC: Declares No Immediate Counter-Measures For Argentine Woes
--------------------------------------------------------------
"We are not going to react to the financial crisis in Argentina
on a day-to-day basis," said David Eldon, chief executive officer
of Hongkong and Shanghai Banking Corp.
He reiterated, however, that the corporation is not going to put
in additional investment in Argentina, which is now struggling
with widespread protests over the freeze on deposits.
"At this stage we know well enough that we made provisions
conservatively," Eldon said.
The bank's provisions for loans to Argentina last year accounted
for more than half of the US$2.04 billion it set aside for
potential bad loans.
SCOTIABANK QUILMES: Capital Trust's Preferred Rated 'P-1 (Low)'
---------------------------------------------------------------
Rationale
Standard & Poor's assigned preferred stock ratings to Scotiabank
Capital Trust's Scotiabank Trust Securities, series 2002-1
(Scotia BaTS II) on April 22, 2002.
The ratings on Bank of Nova Scotia (Scotiabank) reflect its
market position as one of the five dominant universal banks in
Canada, its broad business mix, geographic diversification, and
the efficiency of its operations. This is offset by its higher
risk lending profile and Latin American investments.
In contrast to the Scotia BaTS I that were funded in March 2000,
the Scotia BaTS II will be a loan-based structure, rather than an
asset-based structure that has historically been used by the
Canadian banks. The loan-based structure will hold bank deposit
notes in the trust, instead of NHA mortgages as seen with the
asset-based structure, and mirrors what has been done in the
Canadian life insurance sector. The change in structure has no
ratings implications, as the trust holders have no rights to the
trust assets if a loss absorption event were ever to occur.
As the BaTS are expected to be a less expensive form of Tier 1
capital than preferred stock (narrower spread on a tax-equivalent
basis as compared with preferred stock, and no capital tax),
Standard & Poor's expects the proceeds will be used to replace a
portion of Scotiabank's outstanding preferred shares. Subject to
regulatory approval, C$200 million of the bank's preferred shares
could be redeemed on or after July 29, 2002, and C$300 million on
or after Oct. 29, 2002.
Standard & Poor's considers Scotiabank's Tier 1 capital ratio to
be above average compared with its Canadian peer group, but
appropriate given the bank's higher risk profile from its higher
proportion of commercial and corporate loans and emerging markets
exposure in Latin America and Asia. To a certain extent, this
reflects the lower level of goodwill and intangibles held on
Scotiabank's balance sheet. The bank continues to make the most
moderate use of hybrids and preferred shares within its capital
structure. Scotiabank's hybrids and preferred shares as a percent
of adjusted total equity were about 15% as of Jan. 31, 2001, and
remain well within Standard & Poor's threshold of 25%.
Operating Profile
Based on the past three years' results, about 45% of Scotiabank's
earnings were derived from its domestic banking operations, 35%
from global wholesale or corporate and investment banking, and
20% from its international banking operations. As of Jan. 31,
2002, the bank had total balance-sheet assets of C$295 billion.
Standard & Poor's expects Scotiabank will continue to exhibit
consistent earnings performance on a risk-adjusted basis. This is
supported by the bank's strong cost control discipline and solid
business franchises in Canada, the U.S., and the Caribbean, which
make up about 90% of its earning assets. Given the continued
economic softness in North and South America, specific provisions
in 2002 are expected to be above 2001 levels. Losses in Argentina
have already been discounted in the ratings on the bank, which
are lower than those on the other major Canadian banks.
Analyst: Donald H Chu, CFA, Toronto (1) 416-507-2506; Lidia
Parfeniuk, Toronto (1) 416-507-2517; Tanya Azarchs, New York (1)
212-438-7365
CONTACTS: SCOTIABANK QUILMES
Alan Macdonald
Chief Executive Officer
Phone: (54-11) 4338-8000
Fax: (54-11) 4338-8033
Mail: 6th Floor
Gral. J.D. Peron 564
(C1038AAL) Buenos Aires
Roy D. Scott
Vice-President and Managing Director, Latin America
Phone: (54-11) 4394-8726
Fax: (54-11) 4328-1901
Mail: P.O. Box 3955
C1000WBN Correo Central
Buenos Aires, Argentina
E-mail: scotiarep@sinectis.com.ar
TRANSENER: S&P Drops Ratings To Default
---------------------------------------
Argentine electric power company Transener, which announced a
suspension of debt payments Monday, had its ratings downgraded
further by international credit rating agency Standard & Poor's
(S&P).
According to a report by Business News Americas, S&P cut
Transener's local and foreign currency corporate credit ratings
to D from the SD (selective default) rating.
In addition, the agency also downgraded Transener's US$100-
million fixed-rate series A notes (maturing April 2003) and
US$150-million fixed-rate notes series B (maturing April 2008) to
D from CC.
"The Company's decision reflects the large and increasing
imbalance between its peso-denominated cash generation, which
followed the pesofication of tariffs and the evolution of its
mostly dollar-denominated debt during 2002 in an unsettled
devaluation scenario," S&P said in reference to the suspension of
debt payments.
"The prolonged period announced by the government to renegotiate
the concession contracts introduces additional uncertainty
regarding the Company's cash flow going forward," analyst Sergio
Fuentes said.
Transener, which is majority-owned by Britain's National Grid
Group PLC (NGG) and local energy giant Perez Companc SA (PC),
suspended all current and future loan payments, pending the
renegotiation of US$470 million in debts.
The Company has selected Morgan Stanley as financial advisor to
help in developing a restructuring plan for all its debts.
Carlos A. Gonzalez, Transener's finance and administration
manager, revealed that about US$250 million of Transener's debt
is corporate bonds. About US$100 million of the bonds mature in
2003 and US$150 million mature in 2008, Gonzalez said.
The Company has US$180 million in bank debt due this year and
US$40 million worth of bank debt due in 2003, Gonzalez added.
CONTACT: COMPANIA DE TRANSPORTE DE ENERGIA ELECTRICA EN ALTA
TENSION (Transener S.A.)
Av. Paseo Colon 728, 6"Piso - (1063)
Buenos Aires, Argentina
Tel. (5411) 4342-6925
Business Development:
Carlos A. Jeifetz (jeifecar@transx.com.ar)
Gerardo Baseotto (baseoger@transx.com.ar)
Tel.: (54-11) 4334-0182 / 4342-6925
Fax: (54-11) 4342-4861
MORGAN STANLEY, DEAN WITTER & COMPANY
1585 Broadway
New York, New York 10036
United States
Phone: +1 212 761-4000
Home Page http://www.msdw.com
===========
B R A Z I L
===========
BELL CANADA: 1Q02 Numbers Include Telecom Reorganization
--------------------------------------------------------
-- Telecom Americas reaches 4.5 million mobile subscribers
-- EBITDA margin increases from 18% to 30%
-- $440 million Rights Offering closed
-- Telecom Americas Reorganization closed
Bell Canada International Inc. released results for the first
quarter ending March 31, 2002.
Chairman and CEO Bill Anderson stated, "During the quarter, BCI
completed two major transactions announced in the fourth quarter,
one to raise equity to meet short-term obligations and the second
to reorganize Telecom Americas into a pure-play Brazilian mobile
company. First quarter results are beginning to reflect the
benefits from the Telecom Americas reorganization as we saw a
strong performance on the cost side contributing to an
improvement in the EBITDA(1) margin."
Mr. Anderson added, "Despite the promising operating performance,
capital market conditions continue to be challenging for Latin
American telecommunication companies such as BCI and Telecom
Americas which have significant short term debt levels."
RESULTS REVIEW
Basis of Presentation
Following the reorganization of Telecom Americas and the adoption
by the corporation of a plan of disposition for Canbras and
Genesis, BCI is now treating Canbras, Genesis and Axtel as
discontinued operations. BCI's continuing operations are now the
Brazilian mobile operations of Telecom Americas. Prior periods
have been restated to reflect this treatment.
In accordance with new accounting recommendations of the Canadian
Institute of Chartered Accountants ("CICA") effective on January
1, 2002, the first quarter results of 2002 exclude goodwill
amortization and reflect the change in accounting policy for
foreign currency translation.
In addition, in the results review that follows, prior period
results have been normalized to provide more meaningful
comparison. Normalized results of prior quarters reflect, on a
pro-forma basis, the same effective ownership of BCI in each of
the operating companies of Telecom Americas that actually existed
in the first quarter of 2002. This eliminates variances in
comparing results with prior quarters that are due solely to
differences in ownership. In addition, the normalized results of
prior quarters exclude the amortization of goodwill. Such
normalization is not prescribed by Generally Accepted Accounting
Principles ("GAAP").
First Quarter 2002 versus Fourth Quarter 2001
Total subscribers served by Telecom Americas increased 4% from
4.3 million on a normalized basis at the end of the previous
quarter to 4.5 million at March 31, 2002. The increase in total
subscribers was achieved in the context of the reduced activity
associated with the summer holiday period in Brazil and the
absence of any major special promotion.
Consolidated revenues for the first quarter of 2002 were $137
million compared to normalized revenues of $133 million in the
fourth quarter of 2001. This 3% revenue increase was primarily a
result of the favourable translation impact of a 7% appreciation
in the Brazilian real compared to the Canadian dollar and an
increase in the interconnection rates during the quarter,
partially offset by lower handset revenues.
Consolidated EBITDA increased to $41 million in the first quarter
of 2002 compared to normalized EBITDA of $24 million for the
previous quarter, improving the EBITDA margin by 12 percentage
points to reach 30%. The higher margin was driven by higher
revenues, lower handset subsidies and cost reductions associated
with the streamlining of operating costs in the Brazilian mobile
companies.
BCI's net loss from continuing operations applicable to common
shares was $70 million for the quarter, compared to a normalized
net gain of $22 million in the fourth quarter of 2001. This
unfavourable variance is attributable mainly to foreign exchange
losses on U.S. dollar-denominated debt recognized in the first
quarter, as compared to foreign exchange gains recognized in the
fourth quarter, partially offset by lower interest expense.
Taking into account both continuing and discontinued operations,
BCI recorded net earnings applicable to common shares of $603
million in the first quarter of 2002 relative to normalized net
earnings of $5 million in the fourth quarter of 2001. This
increase is mainly attributable to a net gain recognized on the
Telecom Americas reorganization transactions, principally from
the disposition of Comcel, partially offset by higher losses from
continuing operations.
First Quarter 2002 versus First Quarter 2001
Total subscribers at March 31, 2002 were up 25% from normalized
total subscribers at March 31, 2001 of 3.6 million.
Consolidated revenues for the first quarter increased by $5
million from normalized revenues of $132 million in the first
quarter of 2001. The increase in revenues is mainly attributable
to subscriber growth, which was partially offset by the
unfavourable translation impact of a 13% devaluation of the
Brazilian real against the Canadian dollar compared to a year ago
and a decline in average revenue per subscriber. Excluding the
devaluation impact, revenues increased by $22 million or 17%.
Consolidated EBITDA in the first quarter of 2002 improved by $16
million, compared to normalized EBITDA of $24 million in the
first quarter of 2001. The increase in EBITDA reflects
significant reductions in general and administrative expenses and
the realization of economies of scale resulting from the growth
in the subscriber base, partially offset by a translation
devaluation impact of $6 million.
BCI's net loss from continuing operations applicable to common
shares was $70 million for the first quarter of 2002, compared to
a normalized net loss of $221 million in the first quarter of
2001. The reduced loss is attributable primarily to the lower
foreign exchange loss on US dollar denominated debt of the
Brazilian companies resulting from a lower devaluation of the
real against the US dollar in the first quarter of 2002 compared
to the first quarter of 2001. In addition, in the first quarter
of 2001, BCI reported a loss on SK Telecom Co. Ltd. shares of $56
million. These factors were partially offset by higher interest
expenses incurred at the corporate levels of BCI and Telecom
Americas in 2002.
Taking into account both continuing and discontinued operations,
BCI recorded net earnings applicable to common shares of $603
million in the first quarter of 2002 relative to normalized net
earnings of $84 million in the first quarter of 2001. Results in
the first quarter of 2001 included a $502 million gain from the
sale of BCI's interest in KG Telecom partially offset by
operating losses from BCI's discontinued operations.
OPERATING AND FINANCING HIGHLIGHTS
-- On February 8, BCI completed the reorganization of Telecom
Americas into a company focused on the Brazilian mobile
wireless market. As part of the reorganization, Telecom
Americas secured capital contributions of US$240 million from
BCI and America Movil, an additional US$120 million in the
form of a convertible shareholder loan and US$80 million in
cash from America Movil. Some of the existing debt was also
refinanced to extend maturities.
-- On February 12, BCI announced that a private investor had
agreed to invest US$300 million in Telecom Americas. The
purchase of convertible preferred shares closed on April 19.
If converted, this would dilute BCI's ownership in Telecom
Americas by approximately 3 percentage points
-- On February 15, BCI issued new common shares under the
recapitalization plan announced on December 3, 2001 pursuant
to the $440 million Rights Offering; to settle the principal
amount of $400 million owing under BCI's subordinated
convertible debentures; and with respect to the conversion of
the principal and interest of approximately $78 million owing
under a convertible loan from BCE Inc. Additional shares may
be issued in satisfaction of the put option held by American
International Group, Inc. or any of its affiliates and the
secondary warrants issued in connection with the Rights
Offering.
-- On March 8, BCI closed the amendment of its Credit Facility
in
a reduced amount of $230 million with an extended maturity of
March 8, 2003, replacing a $400 million facility that was to
mature on March 8, 2002.
-- BCI's cash and unused availability under its credit facility
should be sufficient to enable the corporation to meet its
financial obligations to March 2003. The corporation's
significant remaining financial obligations thereafter as well
as any investment requirements will have to be settled with
the proceeds from asset sales or new financings.
-- At the Telecom Americas operating company level, 2002
financing requirements will have to be fulfilled through
available cash balances, committed shareholder's contributions
and additional borrowings. There can be no assurance that
these companies will be successful in securing additional
financing. In the event that such operating companies default
on debt which leads to the acceleration of the repayment of
that debt, this could lead to an acceleration of the amounts
outstanding under BCI's credit facility.
BCI, through Telecom Americas, owns and operates 4 Brazilian B
Band cellular companies serving more than 4.5 million subscribers
in territories of Brazil with a population of approximately 60
million. A subsidiary of BCE Inc., Canada's largest
communications company, BCI is listed on the Toronto Stock
Exchange under the symbol BI and on the NASDAQ National Market
under the symbol BCICF. Visit our web site at www.bci.ca.
NOTES
(1) Consistent with reporting in prior periods, EBITDA means
operating earnings (loss) from continuing operations before
depreciation and amortization. This is a widely-used measure of
cash operating earnings before financing charges and income
taxes. EBITDA does not have any standardized meaning prescribed
by GAAP
To see financial statements: http://bankrupt.com/misc/BCI.txt
CONTACT: BELL CANADA INTERNATIONAL INC., Montreal
Marie-Lise Gauthier, 514/392-2318
marie-lise.gauthier@bci.ca
EMBRATEL: Execs Reiterate Positive Guidance For This Year
---------------------------------------------------------
Executives at Brazilian long-distance carrier Embratel
Participacoes SA backed their guidance that the margin for
earnings before taxes, interest, depreciation and amortization
would end 2002 in the 20 - 25 percent range, reports Dow Jones.
The move comes amid weak first-quarter results and falling prices
and after recording an EBITDA margin of just 18.6 percent for the
first quarter. The Company reported a net loss of BRL36.4
million, compared with BRL33.7 million a year ago.
According to Chief Financial Officer Jose M. Zubiria, margin
should improve "because we expect interconnection fees to fall."
Meanwhile, Embratel reiterated calls for regulator Anatel to
crack down on anti-competitive behavior by entrenched local
carriers, says Dow Jones.
Anatel's high interconnection fees and what Embratel views as
predatory behavior by local carriers have caused the Worldcom
Inc. unit to issue frequent calls for Anatel to tighten its rules
and step up enforcement efforts, especially of illicit
international calling firms that carry up to 25 percent of
international traffic to and from Brazil.
Chief Executive Jorge Rodriquez said "local operators charge
tariffs for their long distance divisions that are cheaper than
what they charge us," -- a practice prohibited under Brazil's
laws.
He said local carriers like Telefonica SA's Telesp unit and Tele
Norte Leste Participacoes SA, or Telemar, shouldn't be allowed to
compete nationwide here until Anatel forces them to unbundle
their networks.
The executives also said they see provisions for bad debts - a
lingering source of trouble at the Company - to decline as
Embratel works to have its bills included with those of local
carriers, Dow Jones adds.
Bad debts from uncollected bills totaled BRL174 million in the
first quarter, or 9.7 percent of net revenue. In the first
quarter of 2001, doubtful accounts were 8.7 percent of net
revenue but climbed throughout the year, hitting 15.5 percent for
2001 as a whole.
To see financial statements:
http://bankrupt.com/misc/Embratel.txt
CONTACT: EMBRATEL PARTICIPACOES S.A.
Investor Relations
Silvia Pereira
Tel. (55 21) 2519-9662
Fax: (55 21) 2519-6388
Email: Silvia.Pereira@embratel.com.br
invest@embratel.com.br
or
Press Relations:
Helena Duncan/Mariana Palmeira
Tel: (55 21) 2519-3653/3654
Fax: (55 21) 2519-8010
Email: hduncan@embratel.com.br
mpalm@embratel.com.br
EMBRATEL: Merrill, UBS Cut Recommendation After Dismal 1Q02
-----------------------------------------------------------
Merrill Lynch slashed its recommendation on Embratel
Participacoes SA (EMT) to reduce/sell from neutral after the
Brazilian telecom's EBITDA fell 21 percent in the first quarter,
to BRL333.465 million.
Analysts said Embratel, whose data services business stopped
growing in the first quarter, is dependent on its "declining,
bread-and-butter long distance" business.
"We expect EMT's long distance revenues to be negatively impacted
(at some unspecified point in the future) by increasing
competition," Merrill said in a research note.
Meanwhile, UBS Warburg also cut its recommendation on EMT citing
recently reported disappointing quarterly earnings.
"Embratel once again reported disappointing quarterly earnings,
with EBITDA US$50 million short of our expectations and doubtful
accounts higher than promised," UBS said in a research note
released Tuesday.
The company continues to shoulder a high debt burden and looming
dollar expenses.
"When we lay out reasonable scenarios for the next few years, we
see Embratel's viability as a business in question, even if its
short-term solvency isn't," UBS said.
=========
C H I L E
=========
HSBC: Chilean Bank Stake Sale Unrelated To Argentine Crisis
-----------------------------------------------------------
HSBC Holdings Plc, Europe's biggest bank by market value, plans
to auction its 7 percent stake in Chile's Banco Santiago SA in
the Santiago bourse, reports Bloomberg. However, the decision to
sell the position doesn't mean HSBC is reviewing its Latin
American investments because of problems in Argentina, where the
bank lost US$1.1 billion.
"I just want to reaffirm that this has not come about from a
review of our strategies in Latin America," said David Eldon,
chairman of HSBC's two Hong Kong units. "This is not related at
all to Argentina."
Celfin SA, which is handling the sale, revealed that the move
comes after Spain's Banco Santander Central Hispano SA backed out
of an option to buy it for US$131 million.
===========
M E X I C O
===========
ALFA: Posts Brilliant First-Quarter Results
-------------------------------------------
Alfa SA, Mexico's second-largest industrial group, managed to
reverse a loss of MXN387 million in the first quarter last year
to a net profit of MXN523 million in the same period this year,
reports Bloomberg.
Alfa attributed its good performance to a 43.6 percent reduction
in financing expenses to MXN512 million from MXN908 million a
year earlier and MXN291 million in foreign exchange gains.
Operating income rose 0.3 percent to MXN785 million from MXN782
million a year ago, while earnings before taxes, interest,
depreciation and amortization (EBITDA) fell 2 percent to MXN1.47
billion from MXN1.5 billion a year ago.
Revenue declined 2 percent to MXN10.3 billion from MXN10.5
billion, below analysts' expectations for a 1.5 percent increase.
Sales dropped due to a 20-percent decline in average prices of
Alfa's products that was offset partially by a 14-percent
increase in volume sales.
EMPRESAS ICA: Posts MXN$4 Billion Net Loss In 4Q01
--------------------------------------------------
A net loss of MXN$4 billion (US$432 million) in the fourth
quarter of 2001 nearly triples Mexican construction company ICA's
MXN1.41-billion (US$152 million) posted in the same period in the
previous year.
Net sales during the period dropped 16.4 percent to MXN9.13
billion (US$985 million) from the previous year's MXN10.92
billion (US$1.18 billion).
The firm also registered a 39.4-percent drop in its operating
profits to MXN723 million (US$78 million), as the firm's total
assets declined 30.7 percent, to MXN17.30 billion (US$1.87
billion) from MXN24.95 billion (US$2.69 billion).
Total liabilities during the quarter stood at MXN12.29 billion
(US$1.33 billion), slightly below MXN14.73 billion (US$1.59
billion) that was recorded at the end of the final quarter of
2000.
CONTACTS: EMPRESAS ICA SOCIEDAD CONTROLADORA S.A. DE C.V.
Bernardo Quintana Isaac, Chairman/Pres/CEO
Jos, L. Guerrero Alvarez, EVP Finance and CFO
THEIR ADDRESS:
Mineria No. 145, Colonia Escand>n
11800 Mexico, D.F., Mexico
Phone: +52-55-5272-9991
Fax: +52-55-5227-5012
URL: http://www.ica.com.mx
GRUPO BITAL: Signs Housing Credit Deal With Infonavit
-----------------------------------------------------
Eduardo Berrondo, general manager of credit at Grupo Financiero
Bital, and Victor Manuel Borras Setien, director of the National
Workers' Housing Fund (Infonavit), signed an agreement over a new
housing credit program, which Bital will offer to Infonavit
members.
According to a Mexico City daily El Universal report, Infonavit
members with monthly income exceeding MXN6,263 (US$675) are
eligible for the program.
The maximum value of the homes that can be purchased could be
MXN499,730 (US$53,922) with an amount to be financed of
MXN349,811 (US$37,745).
The credit line can be used for new or used houses. The resources
will be supported by a constitutional guarantee.
CONTACT: GRUPO FINANCIERO BITAL
Paseo De La Reforma
No. 243, Cuauhtemoc,
06500, Mexico ,D.F.
Phone: 57.21.52.86
Fax: 57.21.57.83
Home Page: www.bital.com.mx
Contact:
Investor Relations
Act. Ricardo Garza Galindo Salazar
Phone: 57.21.26.40
Fax:57.21.26.26
E-mail: ricaggs@bital.com.mx
TRIBASA: Awaits Government Decision Regarding Equity
----------------------------------------------------
Struggling to stay afloat amid financial difficulties, Mexican
construction and engineering company Grupo Tribasa awaits the
decision of the federal government regarding the fate of its
shares that are still being held by Nacional Financiera (Nafin).
According to a report by Mexico City daily el Economista, Tribasa
is still part-owner of Grupo Aeroportuario del Sureste (Asur)
with 25.5 percent of its equity, despite its tight financial
condition.
The Secretariat of Communications and Transport (SCT) noted that
Tribasa and Nafin have a legal agreement regarding the payment of
the stake - 25.5 percent that is equivalent to 3.75 percent of
Asur - that Tribasa held.
"Once the package is sold to a third party, the transaction must
have the authorization of the SCT," sources say.
Last year, SCT Undersecretary of Transport Aaron Dychter, said
that Tribasa's financial problems were "practically unrelated" to
the union formed with Asur.
CONTACT: GRUPO TRIBASA, S.A. DE C.V.
Bosque de Cidros No. 173,
Bosques de las Lomas
05120 Mexico, D.F., Mexico
Phone: +52-55-5229-7400
Fax: +52-55-5229-7430
E-mail: tribasa@tribasa.com.mx
Home Page: http://www.tribasa.com.mx
Contacts:
David Sandoval, Chairman and President
Salvador Linares, Chief Executive Officer
Adriana De Penaloza, Vice Chairman
Fernando Ochoa, Corp. Director of Construction
Gustavo Carbajal, Corp. Director of Admin. and Control
VITRO: 1Q02 Results In Line With Expectations; Improving
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-- Consolidated net sales maintained a positive trend in
dollar terms reaching US$719 million, rising YoY by 7.1
percent for the quarter, driven by the performance of
Glass Containers and the construction segment of Flat
Glass
-- EBITDA remained strong; increasing 5.1 percent in dollar
terms over the previous quarter to US$123 million.
However, EBITDA decreased YoY in dollar terms by 4.8
percent as compared to the first quarter of last year, due
principally to an extraordinary benefit registered in the
IQ'01 and the revaluation of the peso against the U.S.
dollar
-- Net income increased by 23.7 percent YoY for the quarter,
in dollar terms, from US$29 million to US$36 million in
2002
-- Total outstanding debt remained at the same level of
IVQ'01 at US$1,586 million
-- Consolidated net sales for the quarter reached US$719
million, representing an increase of 7.1 percent in dollar terms,
compared with US$672 million for the first quarter of 2001.
Glass Containers, the construction segment of Flat Glass and
Acros Whirlpool were the main drivers of the Company's sales
performance for the quarter.
-- EBITDA remained strong; increasing 5.1 percent in dollar
terms over the previous quarter to US$123 million. However, for
the quarter EBITDA declined YoY by 4.8 percent in dollar terms.
The decrease arises primarily from an extraordinary gain from
energy hedges contracted by the company during 2001, that was
recognized in IQ'01 and that affects comparisons YoY. EBITDA
has been further impacted by the strength of the peso, which
continued to affect the competitiveness of the Company's
exports while favoring imports and reducing margins in the
domestic market. In addition, the slowdown of the Mexican and
U.S. economies has impacted pricing to some extent.
-- The Company posted net income of US$36 million for the
quarter, which reflects extraordinary charges, for
approximately US$39 million, related mainly to the write-off
of certain assets of the former Glass Containers' Mexicali
facility (assets that will not be used in the agreed J-V with
Asahi Glass), a benefit arising from deferred taxes, and a
total financing gain of US$5 million due mainly to a non-cash
exchange gain. Net majority income reached US$19 million
during the quarter rising YoY by 23.7 percent.
-- Due to the seasonality of the business, a cash flow
deficiency was filled by increasing debt in US$10 million as
compared to the previous quarter. Aggregate debt stands at
US$1,586 million.
DETAILED FINANCIAL INFORMATION FOLLOWS:
Consolidated Results
Sales
The positive YoY sales performance for the first quarter in U.S.
dollar terms was mainly driven by Glass Containers, the
construction segment of Flat Glass and Acros Whirlpool. Glass
Containers showed an increase in sales, arising from a stronger
performance in the domestic market, with additional revenues
mainly to beer and cosmetic producers and a general increase in
sales of niche products. Similarly to last quarter, sales by the
Flat Glass business unit remained at the same level YoY,
overcoming the pressure that a strong peso puts on prices,
imports and the decline in demand, especially in the OEM auto
segment. At Acros Whirlpool, volume increases in the export
markets and added sales of recently launched products, were the
main drivers for the growth in sales, partially offsetting price
pressures. For Glassware, sales, for the quarter decreased YoY,
as result of a decline in demand and pressure from Asian imports
in the low-end segments. YoY comparisons in sales were affected
by this year's Easter Week, which occurred in March and resulted
in less sales' days for the quarter.
EBITDA and EBIT
EBITDA remained strong, increasing QoQ 5.1 percent in dollar
terms to US$123 million. However, for the quarter EBITDA declined
YoY by 4.8 percent in dollar terms. The decrease arises primarily
from an extraordinary gain from energy hedges contracted by the
Company during 2001, that was recognized in IQ'01 and that
affects comparisons YoY. EBITDA has been further impacted by the
strength of the peso, which continued to affect the
competitiveness of the Company's exports while favoring imports
thus reducing margins in the domestic market. In addition, the
slowdown of the Mexican and U.S. economies has impacted pricing
to some extent. Also, lower production levels, in the Glassware
business unit, as a result of a decline in demand, resulted in a
lower fixed cost absorption. For the same reasons above, EBIT
increased by 19.2 percent QoQ, and decreased YoY by 14.2 percent
in dollar terms. Compared to the previous quarter, the
consolidated EBIT and EBITDA margins have begun to show signs of
stabilization, and are now at levels of 8.6 percent and 17.1
percent respectively.
Total Financing Cost
Interest expense for the quarter decreased YoY, due to a lower
weighted average cost of debt, which declined to 8.6 percent from
9.9 percent for IQ'01. This is the result, primarily, of lower
market interest rates, a decrease in the aggregate amount of debt
and the Company's liability management strategies. As has been
disclosed, the Company has locked-in fixed rates for certain of
its floating rate liabilities, through various interest rate cap
and swap transactions, that applied to a notional principal
amount approximately equal to US$700 million. These transactions
are intended to improve the predictability of the Company's
future debt service requirements. Currently, 52 percent of the
Company's aggregate debt accrues at a fix rate.
Due to the appreciation of the peso during IQ'02, the Company
recorded a non-cash foreign exchange gain for the period.
Overall, the Company recorded a total financing gain for the
quarter of Ps$45 million (US$5 million), compared with a total
financing cost of Ps$210 million (US$20 million) for the first
quarter of last year.
Taxes
Income tax accrued increased YoY, as a result of an increase in
the Foreign Exchange Gain mentioned above, increases in the
operating income of certain subsidiaries and the additional taxes
accrued by Cristalglass, our Spanish operation that began
consolidating during IIQ'01. Deferred taxes reduced due mainly to
the decrease of the corporate rate approved in connection with
the recent Tax Reform passed by the Mexican Congress and the
write-off of certain of the Mexicali facility's assets.
Net Income
Net income for the quarter was Ps$333 mill. (US$36 mill.),
compared with Ps$283 mill. (US$29 mill.) during IQ'01, mainly as
a result of a lower net financing cost and a negative tax & PSW,
which was offset partly by an extraordinary charge arising from
the write-off of the Mexicali facility's assets, (assets that
will not be used in the agreed J-V with Asahi Glass). Other
expenses include severance payments made in connection with an
ongoing reorganization program. Net majority income for the
quarter was Ps$177 mill. (US$19 mill.), compared with Ps$140
mill. (US$15 mill.) for IQ'01.
Capital Expenditures
Total capital expenditures for IQ'02 were US$26 million, in line
with management's budgeted CAPEX for the year of US$150 million.
A large proportion of the expenditures for the quarter are
related with the start-up of two Glass Containers' furnaces, to
fulfill the increased demand of our customers, and maintenance of
certain Glassware's furnaces.
Financial Position
Due to the seasonality of the business, a cash flow deficiency
was filled by increasing debt in US$10 million as compared to the
previous quarter. Aggregate debt stands at US$1,586 million.
Financial leverage (Total Debt/EBITDA) stood at 3.0 times.
Interest coverage was equal to 3.6 times for the period.
Debt Profile as of March 31, 2002
-- 55% of debt was long-term.
-- Average life of debt was 2.7 years.
-- 50% of debt maturing in the period April `02 - March '03, or
approximately US$352 million is related to trade finance,
which the Company regularly renews.
-- Current maturities of long-term debt include a maturity of
US$175 million on May '02 of a bond placed in the
international capital markets.
-- Rate composition of Company's debt: fixed rate = 52 percent;
floating rate plus fixed spread = 22 percent; short-term debt
subject to market conditions = 24 percent.
Cash Flow
Net free cash flow for the quarter was negative in US$17 million
as a result mainly of the increase in working capital
requirements, due partly to higher sales that have resulted in
higher account receivables over sales. However, as a percentage
of sales, working capital requirements for IQ'02 were reduced to
10.5 percent from 13.4 percent for IQ'01. Other factors affecting
cash flow include an increase in maintenance CAPEX on a YoY
basis. On the positive side, net interest expense and dividends
paid to minority interest partners were lower YoY. The Company's
negative cash flow position was fulfilled by using internal cash
flow on hand.
Flat Glass
(37 percent of Sales)
Sales
Sales of the business unit during the quarter increased 1.6
percent in dollar terms and decreased 4.4 percent in peso terms
as a significant percentage of the business' revenues are
denominated in U.S. dollars. On the domestic front, the slowdown
of the OEM auto segment impacted sales, which were partially
compensated with an increase YoY in the auto replacement market,
as part of the strategy to grow into a more profitable sales mix.
The construction segment remained stable YoY despite pricing
pressures from Asian imports, and sales were down YoY on
fiberglass due to a decline in demand. Overall, YoY comparisons
in sales within the domestic market were affected by this year's
Easter Week, which occurred in March and resulted in less sales'
days for the quarter. Export sales increased in both the auto and
construction segments primarily as a result of higher sales to
our foreign subsidiaries. Foreign subsidiaries increased sales
YoY by 5.4 percent mainly driven by the Spanish operations, which
were not consolidated until IIQ'01; such increase was offset by
reduced sales of our U.S. subsidiary, resulting from the slow
recovery in the United States of the commercial construction
market, and the mild winter, which generated lower demand in the
auto glass after market. YoY volume sales for the quarter
increased in both the construction and auto segments. Fiberglass
volumes sales were down 4.4 percent due mainly to lesser demand.
Fiberglass represented 5 percent of the business' consolidated
sales.
EBITDA and EBIT
EBITDA and EBIT margins for the quarter in respect of domestic
operations continued to be impacted, on a YoY basis, by a strong
peso that affects the business' cost and expense structure. The
decrease of volume sales in the U.S. and a weak Euro affected
margins of the business' foreign subsidiaries. Compared to the
previous quarter, EBITDA and EBIT margins have begun to show
signs of stabilization, and are now at levels of 9.3 percent and
15.4 percent respectively. Reduced demand in the domestic OEM
auto segment and the slowdown of the U.S. economy continued to
impact prices, resulting in reduced margins. Prices remain flat
in the rest of the segments, not allowing at least part of the
inflation to be compensated, which induced cost increases. As
with the Company's other businesses, EBITDA is further impacted
by an increase in labor expenses arising from an agreed upon
administrative restructure. Further efforts are being made to
increase productivity, focus more emphatically on value added
products and lower SG&A. The recently integrated fiberglass
segment represented approximately 12 percent of EBIT and 10
percent of EBITDA for the quarter.
Glass Containers
(32 percent of Sales)
Sales
Aggregate YoY sales of Glass Containers increased by 6.3 percent
in dollar terms. In the domestic front, the beer and cosmetic
segments, as well as niche products, contributed to most of the
improvement. In general terms, focusing in more profitable niche
segments coupled with more effective marketing to the end
consumer has yielded better results. The export market decreased
mainly as a result of the still perceivable slowdown of the U.S.
economy. Sales from foreign subsidiaries increased as a result of
the global strategy of the unit to assist in covering unattended
demand in the south of Mexico and north of Central America, due
to lack of capacity of the Mexican plants. Alcali (raw materials)
was able to improve prices despite lower volume sales that
resulted in flat sales YoY. Vancan (aluminum cans) showed an
increase in volumes but excess market capacity continuous to
pressure prices, thus resulting in flat sales YoY. Fama (capital
goods) and Ampolletas (ampoules) continued to be affected by
reduced demand. YoY comparisons in sales were affected by this
year's Easter Week, which occurred in March and resulted in less
sales' days for the quarter. Results of the Glass Containers
business unit for the quarter included the results of the
ampoules, capital goods, raw materials and aluminum can segments.
During the IQ'02, these segments represented 19.8 percent of net
sales.
EBITDA and EBIT
EBITDA and EBIT improved YoY by 11.4 percent and 23.3 percent
respectively. The business has continued to show an improvement
in EBITDA margins from 17.7 percent in the IIIQ'01 to 23.2
percent for this quarter. The improvements are attributable to
cost efficiency measures and better sales mix on the glass and
raw materials segments. The rest of the non-glass segments were
negatively affected by the strong peso and pressures on prices
due to over-supply for the aluminum can segment, imports that
have affected the ampoules segment and reduced demand in the
domestic markets that affected both the ampoules and capital
goods segment. On a YoY basis, as with the Company's other
businesses, EBITDA is further impacted by an increase in labor
expenses arising from an agreed upon administrative restructure.
For the quarter, the recently integrated non-glass units,
including ampoules, represented approximately 15 percent of EBIT
and 16 percent of EBITDA.
Glassware
(9 percent of Vitro's Sales)
Sales
The decrease in consolidated net sales on a YoY basis continues
to be attributable to the decline in demand, both in the U.S. and
Mexican economies. The decline in sales is also attributable to
an increase in imported products, especially from European and
Asian competitors, as a result of a strong peso and the continued
decline in import tariffs. Such decline was partially compensated
by an increase in domestic sales attributable to promotional
products. In the export market, sales continued to decline as a
result of a slowdown in demand, which was aggravated as a result
of the September 11 events for the hotel and restaurant markets,
and industrial products (coffee carafes, blenders, etc.). The
recently integrated plastic segment, which represented
approximately 22 percent of Glassware sales for the quarter,
remained stable in revenue terms on a YoY basis. YoY comparisons
in sales were affected by this year's Easter Week, which occurred
in March and resulted in less sales' days for the quarter.
Glassware's management is focusing on improving returns by
renewing and maintaining a constant commitment to improve its
line of offered products through innovation and marketing,
improving the sales mix toward niche markets and better service
to clients.
EBITDA and EBIT
YoY, IQ'02 EBITDA decreased by 20.6 percent in dollar terms,
mainly as a result of lower sales, an important reduction on
capacity utilization on a YoY basis and thus lower fixed cost
absorption. The less profitable sales mix due to a decline in
demand and imports into Mexico that pressure prices, also
affected both EBITDA and EBIT margins. The recently integrated
plastics segment, which represented approximately 30 percent of
EBIT and 19 percent of EBITDA for IQ'02, remained stable on a YoY
basis.
Acros Whirlpool
(22 percent of Sales)
Sales
During the quarter, sales increased YoY by 24.1 percent in dollar
terms, both in the domestic and export markets. The domestic
market grew by 11 percent, and, in the case of Acros Whirlpool,
sales were driven mainly by the new range platform and low to
medium-end refrigerators, with increases in volume and a better
product mix. In the export front, sales of this business unit
increased, especially to the U.S., driven by the new range
platform and in a lower scale by medium-end refrigerators. YoY,
volumes increased by 21 percent, due again mainly to the
introduction of the new range platform (49 percent YoY increase)
and to certain models within the refrigerator segment (19 percent
increase on a YoY basis). Ranges represented 25 percent of total
sales, while refrigerators 46 percent of total sales and washers
an additional 24 percent. The rest of the business is comprised
of sales of small appliances.
EBITDA and EBIT
EBITDA margins improved QoQ notwithstanding that IQ'02 is weaker
in sales, because of seasonality reasons. On a YoY basis,
profitability increased by 13.3 percent in dollar terms due to
higher sales, even though margins continued to be affected mainly
by pricing pressures, mostly from Korean imports into the
domestic market as a result of the strong peso that favors
imports and increases in SG&A.
Recent Key Developments
DEBT REFINANCING
The Company has obtained financings in aggregate amounts
sufficient to repay principal and interest in respect of the
US$175 million Yankee Bond facility maturing in May of 2002. The
Company expects to repay such financing with the proceeds of
expected divestitures, cash in hand and new longer term
financing. The Company has suspended expected capital markets
transactions until a later part of this year, after evaluating
the convenience of available alternatives.
AMPOLLETAS' DIVESTITURE
At the beginning of April, the Company completed the sale of its
51 percent controlling interest in Ampolletas, to its former
partner Gerresheimer Glas AG. The transaction was closed at a
multiple exceeding 6.0x times 2001 EBITDA. The Company received
US$13.4 million in cash and reduced debt by an amount equal to
US$7.8 million. Cash proceeds will be used to repay debt.
ACROS WHIRLPOOL
At the end of last quarter, the Company announced that it had
reached an agreement in principle with Whirlpool Corporation, to
sell its 51 percent stake in it subsidiary Vitromatic. The
transaction has been approved by Whirlpool's and Vitro's boards,
by Vitro's stockholders, but it is still subject to Competition
Commission approval. The transaction is expected to be completed
during the second quarter of this year and is consistent with
Vitro's efforts to concentrate in its core businesses.
Vitro, S.A. de C.V., through its subsidiary companies, is a major
participant in four distinct businesses: flat glass, glass
containers, glassware and household products. Vitro's
subsidiaries serve multiple product markets, including
construction and automotive glass, wine, liquor, cosmetics,
pharmaceutical, food and beverage glass containers, fiberglass,
plastic and aluminum containers, glassware for commercial,
industrial and consumer uses and household appliances. Founded in
1909, Monterrey, Mexico-based Vitro has joint ventures with major
world-class manufacturers that provide its subsidiaries with
access to international markets, distribution channels and state-
of-the-art technology. Vitro's subsidiaries do business
throughout the Americas and Europe, with facilities and
distribution centers in seven countries, and export products to
more than 70 countries.
To see financial statements: http://bankrupt.com/misc/Vitro.txt
CONTACT: Vitro S.A. de C.V.
Investor Relations:
Beatriz Martinez
011 (52 81) 8863-1258
bemartinez@vitro.com
or
Vitro, S. A. de C.V.
Media Relations:
Albert Chico
011 (52 81) 8863-1335
achico@vitro.com
or
Breakstone & Ruth International
U.S. agency:
Luca Biondolillo / Susan Borinelli
646/536-7012 / 7018
Lbiondolillo@breakstoneruth.com
Sborinelli@breakstoneruth.com
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S U B S C R I P T I O N I N F O R M A T I O N
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co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ,
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Copyright 2002. All rights reserved. ISSN 1529-2746.
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