/raid1/www/Hosts/bankrupt/TCRLA_Public/020520.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, May 20, 2002, Vol. 3, Issue 98
Headlines
A R G E N T I N A
AGUAS ARGENTINAS: S&P Lowers IADB B Loan Rating To `D'
MASTELLONE HERMANOS: Reports Net Loss of ARS152.04 Mln In 1Q02
REPSOL-YPF: S&P Affirms Ratings After Divestment Plan Disclosure
REPSOL YPF: Moody's Places Ratings Under Review For Possible Cut
REPSOL YPF: 1Q02 Results Show YOY Net Income Down Nearly 50%
TELEFONICA ARGENTINA: Argentine Crisis Pinches Parent's Earnings
B R A Z I L
GLOBO CABO: 1Q02 Financial Results Flat
GLOBO CABO: Weak 1Q02 Results May Hamper Planned Share Offering
INDUSTRIAS KLABIN: Plans Bond Re-Fi With US$100M, 3-4Yr. Loan
TELEGLOBE: Fitch Downgrades Senior Unsecured Notes To 'D'
TELEGLOBE: Considering Sale Of Latin American Assets
TELEGLOBE INC.: Company Profile
C H I L E
AES GENER: Posts Healthy Profits For 1Q02
MADECO: Commences Formal Debt Restructuring Talks With Creditors
M E X I C O
AEROMEXICO/MEXICANA: Continental Eyes Stake In Either Airline
FAR-BEN: Soros Provides Short-Term Funding, Talks of Control
GRUPO MEXICO: Regulators Dump Proposed Merger Over Monopoly
U R U G U A Y
ANCAP: S&P Cuts Ratings; Accerlation Negotiations Under Way
- - - - - - - - - -
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A R G E N T I N A
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AGUAS ARGENTINAS: S&P Lowers IADB B Loan Rating To `D'
------------------------------------------------------
Standard & Poor's lowered Thursday its rating on Aguas Argentinas
S.A.'s (Aguas) $140 million fixed-rate Inter-American Development
Bank (IADB) B loan participations to 'D' from double-'C'. The
move comes following the nonpayment by the underlying obligor,
Aguas, of the semiannual interest payment due on May 15, 2002.
Of the total financing granted to Aguas, US$40 million (the A
loan) was financed from funds of the IADB, US$18 million of which
was funded concurrently with the B loan funding. The A loan was
not rated by Standard & Poor's. The full B loan amount of US$140
million was sold as participations to institutional investors and
commercial lenders. The financing has a maturity of 12 years.
The payment default reflects the strong negative impact that the
changes in the tariff-setting mechanism, which followed the
Argentine peso devaluation, had on Aguas' cash flow. Aguas'
financial and economic performance has been negatively affected
by the pesification of tariffs and the unsettling devaluation of
the Argentine peso during 2002. This caused Aguas' debt repayment
capacity to weaken dramatically due to the mismatch between the
now peso-denominated generated cash and the mostly U.S. dollar-
denominated debt. Additionally, the local and foreign currency
corporate credit ratings on Aguas were lowered to 'D' from
selective default on April 10, 2002, after the company's
announcement of the suspension of the payment of debt service as
a result of its altered economic and financial equilibrium caused
by government measures in 2002.
Aguas has a 30-year exclusive concession, which was granted in
1993, to operate the largest water and sewage system in
Argentina, serving a densely populated area of approximately 9.5
million people in the city of Buenos Aires and 17 districts of
the metropolitan area of Buenos Aires.
Aguas' $140 million fixed-rate IADB B loan transaction benefits
from IADB's preferred creditor status umbrella. The default on
interest was not triggered by government payment restrictions on
convertibility, transfer, and debt payments, as those payments
relating to preferred creditor institutions have been allowed by
the Central Bank through Comunicacion "A" 3471. This regulation
clears up past ambiguities involving company payment transfers to
multilateral agencies and allows private companies to make
foreign currency-denominated debt payments to those agencies
without previous authorization from the Central Bank.
Aguas' $140 million fixed-rate IADB B loan transaction was issued
in August 1999. Although the original interest payment due on May
15 was US$10.2 million, on March 15 Aguas paid in advance US$2.6
million, but failed to pay the remaining US$7.6 million by the
due date. The transaction was structured to make interest and
principal payments semiannually (May 15 and Nov. 15), and
principal payments will begin on the eighth anniversary of the
loan.
CONTACT: STANDARD & POOR'S
Juan Pablo De Mollein, Buenos Aires (54) 114-891-2113
Diane Audino, New York (1) 212-438-2388
Lidia Polakovic, Buenos Aires (54) 114-891-2130
Sergio Fuentes, Buenos Aires (54) 114-891-2131
Larry Hays, Ph.D., New York (1) 212-438-7347
MASTELLONE HERMANOS: Reports Net Loss of ARS152.04 Mln In 1Q02
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The first-quarter 2002 net loss of Argentina's leading dairy
company Mastellone Hermanos SA ballooned to ARS152.04 million
(US$1=ARS3.24) from ARS20.2 million in the first quarter of 2001,
according to a Dow Jones report.
The Company's losses widened even as sales rose to ARS208.15
million from ARS202.3 million and its expenses during the quarter
fell to about ARS46 million from ARS49 million.
Domestically, Mastellone posted a 4.1 percent increase in its
sales during the first quarter to ARS138 million from ARS132.6
million. Exports more than tripled to ARS47.7 million from
ARS13.4 million.
Mastellone is just one of the several Argentine companies whose
earnings have been hit by the heavy foreign exchange losses in
the wake of the January peso devaluation and the government's
decision to revalue all former dollar-denominated assets at a
rate 30 percent less than dollar-denominated debts.
Mastellone ended 2001 with US$366.5 million in debt, almost all
of it denominated in dollars, Standard & Poor's Corp. said.
CONTACT: MASTELLONE HNOS. S.A.
Av. Leandro N. Alem 720
(1001) - Buenos Aires
Argentina
Phone: 54 1 318-5000
Fax: 54 1 313-6822
E-mail:
Contacts:
Pascual Mastellone, President
Marcelo Markous, Vicepresident and General Manager
REPSOL-YPF: S&P Affirms Ratings After Divestment Plan Disclosure
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Following the announcement of Repsol YPF's plan to reduce its
stake in Gas Natural SDG, SA, international credit ratings agency
Standard & Poor's affirmed its BBB long-term rating and A3 short-
term rating on the Spanish oil group.
The outlook is negative.
"The affirmation reflects the considerable strengthening of
Repsol's liquidity, partially offset by the reduction of its
involvement in the steadily cash-flow-generative domestic gas
industry. The rating impact is therefore slightly positive," said
S&P Director Emmanuel Dubois-Pelerin.
"The negative outlook on Repsol reflects the possibility of
additional sharply negative actions by the Argentine government,"
said Dubois-Pelerin.
On Thursday, Repsol disclosed plans to sell 23 percent of its Gas
Natural unit through a private placement with institutional
investors, reducing its stake in the gas company to 24 percent.
In a statement, Repsol said the sale of 102.988 million shares
will be through an accelerated bookbuilding offer, which is
expected to be completed within less than two working days.
Based on Gas Natural's average share price on May 14, Repsol said
it would generate net one-time gains of EUR1.060 billion from the
disposal, and reduce its goodwill figure by 52 million.
Accounting changes as to how the stake is consolidated will allow
Repsol to reduce its debt by EUR2.890 billion and payments to
minority interests by a further EUR2.335 billion.
With the funds raised from the sale earmarked for debt reduction,
the total impact on the group's borrowings is estimated at EUR4.9
billion, reducing gearing to about 37 percent from 43.4
currently.
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: Moody's Places Ratings Under Review For Possible Cut
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Moody's Investors Service announced that it is maintaining its
review for possible downgrade of the Baa2-rated long-term debt,
Ba1-rated preferred stock and Prime-2 short-term ratings of
Repsol YPF.
The announcement came after Repsol YPF said it is disposing of 23
percent of its 47 percent stake in Gas Natural, which according
to Moody's, would place further pressure on Repsol YPF's ratings.
Moody's recently placed the ratings under review for possible
downgrade as a result of the ongoing deterioration of the
economic situation in Argentina.
Moody's is concerned at the Company's intermediate-term ability
to access cash flow streams from its Argentine unit YPF to help
service its own debt obligations.
The Gas Natural disposal increases Repsol YPF's need to regain
access to YPF's cashflow streams, it added.
The group's current ratings encompass the expectation that cash
flow streams from YPF will resume at some stage in the
intermediate term.
Moody's said it is maintaining its negative outlook on the long-
term A1 rating of Gas Natural.
Repsol YPF S.A., headquartered in Madrid, Spain, is one of the
world's largest publicly-owned oil and gas companies in terms of
reserves and production. YPF S.A., headquartered in Buenos Aires,
Argentina, is an integrated oil company and a wholly owned
subsidiary of Repsol YPF. Repsol YPF owns 47 percent of Gas
Natural, headquartered in Barcelona, Spain, which is that
country's largest gas company. It is selling 23 percent of that
interest.
REPSOL YPF: 1Q02 Results Show YOY Net Income Down Nearly 50%
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- Recurring net income was 442 million euros
- Total production level on equivalent terms was sustained at
nearly 1 million barrels per day, rising 7.9% on equivalent
terms.
In the first quarter 2002, Repsol YPF reported net income was 302
million euros, showing a year-over-year fall of 49.2% against
first quarter 2001. Recurring net income for the quarter, before
extraordinary and non-recurring items, goodwill amortization and
adjustments and write-offs relating to the economic crisis in
Argentina, was 442 million euros, showing a fall of 36.5% against
first quarter 2001.
Net cash flow for the quarter reached 1,154 million euros,
showing a year-over-year decrease of 26.8%, and operating income,
at 889 million euros was 40.8% down on the same period a year
earlier.
The Company defends its performance saying it was achieved in a
scenario of low benchmark oil prices, falling refining margins
that reached a 15-year low, and a crisis in Argentina. The number
compare very favorably with that of other major international
companies in the sector, according to YPF's management, which
registered an average drop of over 60% in reported net income,
and more than 55% in operating income.
In the first quarter of 2002, international oil benchmark prices
began to rise, especially from March onwards, but on average,
were much lower than in the first quarter 2001. International
refining margins continued to drop, whilst marketing margins
maintained normal levels. In chemicals, performance was affected
by weak international margins, but showed a slight improvement
towards the end of the quarter. In gas & power, Repsol YPF
results continued the growth trend of recent times.
As a result of the economic crisis in Argentina and the peso
devaluation, for which an exchange rate of 2.95 pesos to the
dollar has been applied, the company allotted a series of
provisions and write-offs in addition to those made last year
against results, and as exchange rate translation adjustments.
There has been a provision of 178 million euros against financial
expenses, and 66 million euros for unconsolidated affiliates,
plus 1,011 million euros as exchange rate translation adjustments
on the Consolidated Balance Sheet. Following these provisions
and write-offs, Repsol YPF has made provisions of 2,461 million
euros, covering over two-thirds of its assets susceptible any
devaluation, which amount to 3,571 million euros. The company' s
total assets, following the adjustments made in December and
March, total 50,157 million euros.
YPF Mangement says it is worth mentioning that, despite these
difficult conditions in Argentina, and thanks to the strength of
its businesses outside that country and the favorable evolution
of oil prices, Repsol YPF has retained its capacity to generate
income, posting a net cash flow of 1,154 million euros during
this quarter.
Investments in this first quarter 2002 were 720 million euros,
showing a 32.3% fall in comparison to the first quarter of 2001,
and in line with the contention policy announced for 2002.
Expenditure was mainly for the development of fields, projects
for the integration of the gas and power chain, and for raising
the company's participation in gas distribution companies in
Brazil and Colombia.
Divestments amounted to 417 million euros and were greater than
initially estimated. On March 1st last, the selling partners
signed an agreement for the sale of a 25% stake in CLH to the
Canadian company Enbridge, 18.55% on the part of the Repsol YPF
Group, producing a capital gain of 175 million euros. In
addition, Gas Natural SDG sold 13.25% of Gas Natural Mexico to
Iberdrola for 159 million euros.
Net financial debt at the end of this quarter was 16,669 million
euros, registering a rise of 113 million euros over the quarter.
Despite 214 million euros of free cash flow generated over the
quarter, the appreciation of the dollar against the euro, with a
368 million euros impact on debt, prevented debt reduction over
the period.
Results by business areas
By areas of activity, these are the highlights for the first
quarter of 2002:
In Exploration & Production, operating income was 256 million
euros, showing a 68% drop against the first quarter of 2001,
reflecting the low oil price scenario on international markets.
In the first quarter 2002, the average price of Brent oil was
$21.1 per barrel, as against $25.8 per barrel in first quarter
2001, and the $19.4 per barrel registered in the fourth quarter
2001. The Repsol YPF crude realisation price averaged $15.4 per
barrel, in comparison to $24.5 per barrel in the first quarter
2001, and $16.87 per barrel in the fourth quarter 2001. The
increase in the differential regarding reference crude during the
first quarter 2002 had two main causes: firstly, a discount
applied on the Argentine peso/dollar exchange rate in internal
oil sales in Argentina and, secondly, the larger percentage of
heavy crude in the Repsol YPF basket following the sale of assets
in Indonesia.
Average gas prices over the quarter were 43.4% lower than the
2001 equivalent. The Decrees issued by the Argentine
government "pesifying" gas tariffs have meant that the company
has operated with gas prices in pesos in Argentina during this
quarter, without there having been any adjustment following
devaluation.
Overall production during the quarter was 945,600 boepd, similar
to the level in the first quarter 2001, despite the sale of
assets in Indonesia. On equivalent terms, discounting the effect
of asset sales and acquisitions, total production in the first
quarter 2002 was 7.9% higher than a year earlier.
The company made seven discoveries, the largest of which were at
the A1 well, the first to be drilled in the NC 190 block of the
Murzuk Basin, Libya, the Red Mango 2 well in Trinidad & Tobago,
and the Rinc¢n Chico xp-101 and Cerro Negro x-1 wells in the
Neuqu‚n Basin, Argentina.
Operating income from the Refining & Marketing area was 17.3%
down on the equivalent figure the year before, at 296 million
euros. Performance this quarter showed the effect of the
deconsolidation of CLH, low international refining margins, and a
worsening of the situation in Argentina. These effects were
partially offset by the transfer prices applied in Argentina,
higher marketing margins in Spain and improved performance from
the LPG division. At $1.22 per barrel, the company's refining
margin index was lower than the $3.70 per barrel a year earlier.
In Spain, overall Repsol YPF sales showed a year-on-year rise of
14.2% as the result of more than double the fuel oil sales
because of higher power consumption and low rainfall. Gasoline
and gas-oil sales to our own network fell 3.5%, but this was more
than counteracted by higher sales to other operators. In
Argentina, the country's economic situation caused sales of
gasoline and gas-oil to our own network to drop 9.8%.
LPG sales in Spain fell 2.7% with respect to first quarter 2001,
because of competition from natural gas and power and despite low
temperatures, which favored consumption. Sales in Latin America
posted a year-on-year growth of 9.4%, partly resulting from the
incorporation of Repsol Gas de Bolivia (October 2001) and more
than compensated for lower sales in Argentina. Margins narrowed
under the effect of the aforementioned crisis.
The Company posted a negative operating result of 17 million
euros in Chemicals this quarter, compared to income of 17 million
euros in the equivalent period 2001. The year-over-year drop in
income was mainly the result of a general narrowing of
international margins, especially on base chemicals, and low
demand growth. These first quarter 2002 results are considerably
better than those for the fourth quarter 2001, and there are
clear signs of a recovery in international margins, which have
already shown an upturn from April onwards.
Overall sales of petrochemical products were 775 Kt, showing a
drop of 8.6% in comparison to 2001.
In Natural Gas & Power, operating income registered a 4.4% rise
against the first quarter of 2001, at 355 million euros.
Sales from Repsol YPF natural gas activity totalled 105,463 GWh,
and were 16.7% higher than in the first quarter 2001, as a result
of higher sales to residential and commercial customers and to
Spanish thermal plants, and higher income from operations in
Mexico, Colombia and Brazil.
As for the sale of electricity, the company held an approximately
4% share of the liberalized power market, having obtained 1,394
contracts since it began selling electricity on the Spanish
market at the end of 2000. Its customers currently consume an
annualized 2,605 GWh, and sales in this first quarter 2002
reached 543 GWh.
TELEFONICA ARGENTINA: Argentine Crisis Pinches Parent's Earnings
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The Argentine crisis has noticabley affected the financial
results of the Telefonica Group corresponding to the first
quarter of the year. The impact on Telefonica during the first
three months of the year was felt in consolidated revenues of
7,418.6 million euros and EBITDA of 3,044.7 million euros, a
decrease of 2.4% and 2.7%, respectively. Net income totaled 121.1
million euros, down 72% in comparison with first quarter 2001. If
the impact of the depreciation of the peso and the evolution of
the businesses in Argentina were eliminated, Telefonica revenues
would have grown 5.8% compared to March 2001, EBITDA would be 5%
higher, and net income would be 10.1% higher than what was
obtained in first quarter 2001.
Moreover, the provisions made during this first quarter have
meant that the maximum exposure of the Telefonica Group to its
different Argentine companies totaled 1,668.3 million euros,
compared to the US$6,000 million dollars registered before
devaluation of the peso.
Customer base
The Group's operating performance can be considered positive as
its customer base at the end of March reached 74.6 million
customers (79.8 million customers in total), up 11.7% (8.3
million customers added) from the same period last year.
This growth mainly comes from the year-over-year increase of 5.4
million subscribers (21.4%) in Telefonica Moviles' managed
customer base, which totaled 30.8 million at the end of the
quarter. In the last quarter alone, Telefonica Moviles' managed
customer base grew by more than 965,000 subscribers, more than
54% of these from Spain.
Financial results
The Company cautions that, when analyzing the financial results
for this first quarter, various circumstances which have had a
noticeable impact should be taken into account, such as:
* The complicated economic situation that Argentina continues to
experience. This has significantly affected the development of
the Group's businesses in the country, despite the Group's
implementation of all measures within its reach: to preserve, to
the extent possible, the generation of cash flow coming from the
country. This situation affected the 2001 financial results of
Telefonica Group in 2001 in both the profit and loss account and
in lower reserves of translation differences in consolidation of
369.0 million euros and 1,424.1 million euros, respectively.
* The positive balance of 179.1 million euros in the corporate
tax provision, as a result of posting under this heading credits
from deductions and contributions pending application for tax
purposes. Because these were carried out under a criterion of
prudence, there is no doubt as to their future use. The amount
totals 257.9 million euros and has been accounted in accordance
with the stipulations set forth in the March 15, 2002 Resolution
issued by the Spanish Accounting Regulator responsible for these
matters (ICAC), and in accordance with international accounting
standards.
Revenues
Consolidated revenues for the Group reached 7,418.6 million
euros, down 2.4% from the same period last year. This decrease in
revenues is conditioned, firstly, by the negative evolution of
the Latin American exchange rates and by the changes in the
Group's consolidation perimeter, which, together, mainly affect
Telefonica Latinoamerica and Admira Media, and secondly, on the
revenues evolution of Telefonica de Espana.
EBITDA
As a result of the evolution of revenues and expenses,
consolidated EBITDA at the end of the first quarter reached
3,044.7 million euros, down 2.7% from the same period last year.
This figure, as with figures for revenues and expenses, was
influenced by exchange rate variations in Latin American
currencies and in the consolidation perimeter. Excluding both
effects, the EBITDA reported would have grown by 4.1%. (The
exchange rate deducts 8 percentage points from EBITDA growth,
while the consolidation perimeter contributes 1.2 percentage
points).
The company that contributed the most to the Group's EBITDA
growth was Telefonica Moviles (5.8 percentage points), totaling
916.6 million euros, up 22.0% from the same period last year and
5.4 percentage points above the revenue growth rate for the
period, which demonstrates the Company's effort in reducing costs
Terra Lycos contributed 1.1 percentage points to the consolidated
EBITDA growth of the Group. Similarly, Telefonica Data
contributed 0.3 percentage points to growth.
On the other hand, Telefonica Latinoamerica's EBITDA totaled
1,050.0 million euros, down 18.7% from first quarter 2001
(deducting 7.7 percentage points from the Group's consolidated
EBITDA growth). These evolutions were mainly due to Telefonica de
Argentina, whose EBITDA in local currency fell 7.0% (January-
March 2002 vs. January-March 2001), as well as the negative
evolution of the exchange rates. If we exclude the depreciation
of Latinamerican currencies and adjust TASA's 2001 EBITDA to the
current year, Telefonica Latinoamerica's EBITDA would have grown
by 2.8%.
Telefonica de Espana, subtracted 4.1 percentage points from the
Group's consolidated EBITDA growth, totaling 1,126.9 million
euros. The Company hopes to continue improving in comparative
terms throughout the year, and by the end of the year hopes to
reach similar levels to those reported in 2001. This drop, as was
anticipated in the fourth quarter 2001 financial results, was
significantly determined by tariff decreases stemming from the
implementation of the Price Cap system throughout 2001 and the
first quarter of 2002, the evolution of market share, and the
increase in costs related to the launch of retail ADSL service.
Financial expenses
The Group's financial expenses totaled 856.1 million euros, up
75.6% from the first quarter 2001. This growth, however, was due
to the impact the devaluation of the Argentine peso had during
the quarter, which was 418 million euros. Outside of the peso
problems, financial costs for the quarter would have been 438
million euros, 10% less than the same period last year, due to
the 0.67% average cost reduction of the debt.
Net debt and Capex
As for the Group's net debt, the increased generation of free
cash flow (EBITDA minus Capex) allowed a continued reduction of
the group's net debt, which totaled 28,684.0 million euros at the
end of March, down 0.9% from the end of fiscal 2001 (28,941.6
million euros). Capex for the period totaled 951.6 million euros,
40.3% lower compared to the same period last year. This is a
generalized decrease in all of the Group's lines of business,
except for Telefonica de Espana, which remained at the same level
due to the investments needed to lead the broadband development
in Spain.
GRUPO TELEFONICA SELECTED FINANCIAL DATA
Unaudited data
(Millions of euros) January-March
2002 2001 % Var.
Operating revenues 7,418.6 7,603.3 (2.4)
EBITDA 3,044.7 3,128.2 (2.7)
Operating profit 1,208.0 1,355.6 (10.9)
Income before taxes (143.0) 523.9 c.s.
Net income 121.1 431.8 (72.0)
Net income per share 0.03 0.09 (72.8)
Average number of shares, millions (1) 4,765.4 4,621.5 3.1
(1) Average number of shares for the period. It includes capital
increases in to fund the acquisition of cellular companies from
Motorola, as well as the issuance of new shares coming from
convertible bonds, weighted for the number of days listed. Bonus
capital increases charged to reserves, which do not involve any
change in the ownership structure, as considered as of January 1.
Number of shares at the end of the period is 4,7651,354,202
CONTACT: TELEFONICA GROUP,
Tel. +34-91-584-08-44
Fax, +34-91-532-71-18,
Email: prensa@telefonica.es
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B R A Z I L
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GLOBO CABO: 1Q02 Financial Results Flat
----------------------------------------
Net Servicos de Comunicacao S.A., the largest Pay-TV multi-
service operator in Latin America and provider of bi-directional
broadband Internet access (Virtua) and multimedia and data
communication services for corporate networks, announced
Wednesday its earnings results for the first quarter of 2002
(1Q02). Net Servicos de Comunicacao S.A. is the new denomination
of Globo Cabo S.A. The following financial highlights are
presented in U.S. GAAP.
* Net revenues for 1Q02 was US$ 120.1 million, a 5.7% percent
increase when compared to US$ 113.6 million in 4Q01, primarily
driven by the Real appreciation, which was partially offset by
the reduction in the subscriber base in the quarter.
* EBITDA reached US$ 31.4 million in 1Q02, a 13.9% increase from
US$ 27.5 million in the previous quarter. This was due primarily
to lower expenses in the quarter, especially programming, third-
party services and bad debt expenses.
* Net debt reached US$ 651.1 million in the quarter, remaining
fairly stable, with a slight decrease of 4.3% compared to the US$
680.0 million of 4Q01. The subtle Real devaluation of 0.14%
compared to the dollar and the lack of significant amortizations
or loans account for such stability.
* Net loss totaled US$ 23.7 million in the quarter, a 12.5%
decrease from US$ 27.0 million in 4Q01. In addition to the Real
appreciation effect on top line growth, lower financial expenses
and depreciation & amortization during 1Q02 more than offset the
exchange rate gains recorded in 4Q01.
* Pay-TV ARPU reached US$ 31.11 in the quarter, an increase of
8.7% compared to US$ 28.61 in 4Q01. This increase is a result of
higher PPV revenues due to sales of Interstate Soccer
Championships.
CONTACT: Luis Henrique Martinez, Investor Relations
Phone: +5511-5186-2684,
E-mail: lmartinez@globocabo.com.br
Marcio Minoru, Investor Relations
Phone: +5511-5186-2811,
E-mail: minoru@globocabo.com.br
Home Page: http://www.globocabo.com.br
GLOBO CABO: Weak 1Q02 Results May Hamper Planned Share Offering
---------------------------------------------------------------
Brazilian cable television provider Globo Cabo SA is preparing
for a BRL1.0-billion ($1=BRL2.5) equity share offering that aims
to pay down debt.
However, according to a report by Dow Jones, the Company's weak
first-quarter 2002 financial result is likely to negatively
impact the pricing of its upcoming share offering.
But analysts say Globo Cabo is too large for either the Brazilian
government or parent company Organizacoes Globo to walk away from
the deal. Brazil's national development bank has firmly committed
to backstopping the transaction, and Globo has said it will
participate in its unit's offering.
"I really believe that Globo Cabo is too big too fail," said Bear
Stearns analyst Christopher Recouso.
And despite Globo Cabo's struggles, part of BNDES' operating
guidelines include helping out troubled companies in an attempt
to improve the country's broader economic development.
"Where you have a company like Globo Cabo, the Company needed a
recapitalization and the markets weren't there for them," BNDES
capital markets director Eduardo Gentil recently told Dow Jones
Newswires when explaining the backstopping commitment.
BNDES will be supporting the underwriting even though Globo
Cabo's subscriber growth is viewed as highly dependent on the
rate of economic expansion.
Until strong economic growth materializes, analysts say Globo
Cabo's struggles may continue as they have in recent quarters,
when 2001 economic growth of just 1.5 percent hurt the Company's
results.
INDUSTRIAS KLABIN: Plans Bond Re-Fi With US$100M, 3-4Yr. Loan
-------------------------------------------------------------
Industrias Klabin SA, Brazil's largest pulp and paper producer,
plans to get a three to four-year loan totaling US$100 million
from a group led by Bank of America Corp. and J.P. Morgan Chase &
Co., according to a Gazeta Mercantil article. The loan will be
used to refinance bonds maturing in June.
Klabin has BRL2.4-billion (US$1 billion) in debt, approximately
BRL1.13 billion of which will mature this year.
In March, the Company revealed it was considering a sale of its
pulp or tissue businesses in order to reduce its debts. Among the
options being considered were: sell one of the two businesses
entirely, or sell a minority stake to a partner
"Our debt is bigger than what we would like it to be," chief
executive Miguel Sampol Pou said at that time. "We can reduce
that by increasing revenue from our existing business, being more
selective about our investments, or selling some of assets."
At that time, Pou also disclosed plans by Klabin to slash
spending this year by 22 percent to BRL250 million, from BRL320
million last year to make more cash available for debt payments.
CONTACT: Industrias Klabin de Papel e Celulose S.A. (IKPC)
Rua Formosa, 367, 12 Andar
01049-000 Sao Paulo, Brazil
Phone: +55-11-3225-4000
Fax: +55-11-3255-4067
Home Page: http://www.klabin.com.br
Contact:
Israel Klabin, Chairman
Miguel Sampol, CEO
Ronald Seckelmann, Investor Relations CFO and Director
TELEGLOBE: Fitch Downgrades Senior Unsecured Notes To 'D'
---------------------------------------------------------
Fitch Ratings has downgraded its rating of BCE Teleglobe's senior
unsecured notes to 'D' from 'CCC-'. Likewise, the rating was
removed from Rating Watch Negative. This action follows the
company's announcement that it has applied to the Ontario
Superior Court of Justice for protection from creditors. It is
expected that the company will also file for bankruptcy
protection in the United States and United Kingdom.
The rating action effects approximately $1.3 billion of unsecured
notes. This rating was initiated by Fitch on March 25, 2002 as a
service to users of its ratings. The rating is based on public
information.
TELEGLOBE: Considering Sale Of Latin American Assets
----------------------------------------------------
John Brunette, CEO of Teleglobe, said that the international
network operator's assets in Latin American could be put on the
block as part of the bankruptcy-related restructuring plans the
company announced recently, reports Business News Americas.
"The majority of the network and operations in Latin America
probably will not be essential [to Teleglobe] in the future,"
Brunette said.
According to Brunette, Teleglobe will look to "obtain the
greatest value" for its assets in Argentina, Brasil, Chile,
Colombia, El Salvador, Guatemala, Mexico and Panama.
The Canada-based company would either look to sell the operations
completely or take on new investment partners, Brunette said.
Teleglobe is applying to the Ontario Superior Court of Justice
for protection from creditors and plans to initiate ancillary
filings in the US and UK. Meanwhile, Teleglobe has secured US$100
million of debtor-in-possession financing from parent company
Bell Canada Enterprises.
In April, BCE said it would no longer provide long-term financing
to its money-losing, debt-laden Teleglobe unit. BCE said it
expects to take an impairment charge of US$7.5 billion to 8.5
billion in 2Q02, mainly due to Teleglobe.
Teleglobe operates throughout Latin America and has offices in
Mexico, Argentina, Brazil and Colombia.
TELEGLOBE INC.: Company Profile
-------------------------------
NAME: Teleglobe Inc.
MAILING ADDRESS:
Secretariat
1000 de la GauchetiŠre Street West
41st Floor
Montr‚al, Qu‚bec
H3B 5H8
HEAD OFFICE ADDRESS:
Secretariat
1000 de la GauchetiŠre Street West
41st Floor
Montr‚al, Qu‚bec
H3B 5H8
CONTACT NAME: David G. Masse
LATIN AMERICAN OFFICES:
ARGENTINA
Carlos Pellegrini 1163 Piso 4
Buenos Aires, Argentina C1009ABW
Telephone: 54.11.6310.0100
Facsimile: 54.11.6310.0101
www.teleglobe.net.ar
BRAZIL
Rua Matias Aires, 402 9* Andar
Consolacao
Sao Paulo, S.P. Brazil 01309-020
Telephone: 55.113.156.5400
Facsimile: 55.113.156.5410
www.teleglobe.com.br
CHILE
World Trade Center
Ave. Nueva Tajamar 481
Torre Sur - Ofic. 1002 - Las Condes
Santiago, Chile
Telephone: 562.350.4260
COLOMBIA
Calle 114 N*9-45 torre B, Of. 1008
Teleport Business Park
Santa Fe de Bogota
Telephone: 571.657.9000
Facsimile: 571.629.2897
www.teleglobe.com.co
EL SALVADOR
91 Ave Norte #626
Colonia Escalon
San Salvador, El Salvador
Telephone: 503.263.4836
Facsimile: 503.263.2466
GUATEMALA
12 Calle / 1-25 / Zona 10
Edificio Geminis 10
Torre Norte - Oficina 611
Guatemala City, Guatemala 01010
Telephone: 502.335.3217
Facsimile: 502.335.3221
MEXICO
Blvd. Manuel A. Camacho 36, 21st floor
Torre Esmeralda II
Col. Lomas de Chapultepec
11000 M‚xico, D.F.
Telephone: 52.55.5095.5900
Facsimile: 52.55.5095.5928
www.teleglobe.com.mx
PANAMA
Edif. Plaza Obarrio - Of. 302
Av. Samuel Lewis
Panama City
Telephone: 507.265.1329
Facsimile: 507.265.7913
TYPE OF BUSINESS: Teleglobe transmits a web of communications
around the world. The global "carrier's carrier" is a subsidiary
of Canadian telecom giant BCE, but lagging demand for services
has forced BCE to discontinue funding Teleglobe, and the company
has sought protection from creditors while it restructures its
debt. Teleglobe is discontinuing its hosting business and some of
its data operations to concentrate on its core business:
traditional wholesale voice services. Teleglobe's international
network reaches more than 110 countries, providing global
connectivity for broadcasters, content providers, ISPs, and
telecom carriers. The company has cut nearly 50% of its
workforce.
SIC: Telecommunications - Long-Distance Carriers
AUDITOR: Deloitte & Touche Llp - Canada
Home Page: http://www.deloitte.ca/en/ourfirm/
TRANSFER AGENT: Computershare Trust Company of Canada
=========
C H I L E
=========
AES GENER: Posts Healthy Profits For 1Q02
-----------------------------------------
Chilean generator AES Gener informed the country's securities
regulator that it posted profits of CLP 9.53 billion (US$14.6
million) in the first-quarter of 2002.
The profits, according to the Company were brought about by the
15 percent increase in operating income, re-liquidation of
capacity payments in the northern grid (SING) in 2000 and 2001,
and the reduction of operating costs by BRL4.76 billion and of
administration and sales spending by CLP4.67 billion.
Consolidated operating income during the quarter stood at CLP98.3
billion (US$150.8 million) while operating costs totaled CLP61.4
billion (US$94.1 million).
Consolidated operating profit was at CLP32.8 billion. The non-
operating loss was CLP23.9 billion (US$36.6 million). This was
attributed to the reduction in profits due to investments in
related companies due to the process of asset sales in 2001
involving Central Puerto, Puerto Ventanas, Hidroneuquen, CCNI,
Agunsa and Portuaria Cabo Froward, among others.
AES Gener is 98.7-percent controlled by the embattled U.S.
company AES Corp. through Inversiones Cachagua.
CONTACT: AES GENER S.A.
Mariano Sanchez Fontecilla 310 Piso 3
Santiago de Chile
Phone: (56-2) 6868900
Fax: (56-2) 6868991
Home Page: www.gener.com
Contact:
Robert Morgan, Chief Executive
Laurence Golborne Riveros, Chief Financial Officer
MADECO: Commences Formal Debt Restructuring Talks With Creditors
----------------------------------------------------------------
Formal negotiations between Chilean industrial conglomerate
Madeco SA (MAD) and its creditors over the restructuring of its
short- and medium-term debt is now ongoing. According to an El
Diario report, Madeco carries US$325 million in consolidated
debt, US$231 million of which is held locally.
Of the Chile-held debt, banks own most of the US$126 million that
matures in the short- and medium-term. Chilean holding company
and Madeco's controlling shareholder, Quinenco SA (LQ), is owed
US$8.5 million in short-term obligations.
The remaining US$105 million is in longer-term bonds, held
principally by Chile's private pension funds, the AFPs.
Last week, Madeco's adviser, investment bank Salomon Smith
Barney, sent terms to financial institutions for a long-term
credit.
Madeco's restructuring plan involves paying off about half of the
short-term debt via a capital increase of approximately US$63
million. The remainder would be restructured by taking on a
longer-term loan.
Banks are expected to respond to the terms on the longer-term
loan within two weeks and sign the credit agreement by the end of
June.
Madeco posted a first quarter loss of US$15.3 million after the
already financially-trouble company closed down part of its
Argentina-based operations in an attempt to minimize further
damage from the deepening of that country's economic crisis.
To see financial statements and exhibits:
http://bankrupt.com/misc/Madeco.doc
CONTANCT: Marisol Fern ndez
Investor Relations
Voice: (56 2) 520-1380
Fax: (56 2) 520-1545
E-mail : mfl@madeco.cl
Web Site: www.madeco.cl
ADVISER: SALOMON SMITH BARNEY
In New York:
767 Fifth Avenue
New York City
New York
Phone: 212-230-3500
Home Page: http://www.salomonsmithbarney.com/
===========
M E X I C O
===========
AEROMEXICO/MEXICANA: Continental Eyes Stake In Either Airline
-------------------------------------------------------------
Continental Airlines Inc. is considering a bid for a stake in
either Grupo Aeromexico SA or Grupo Mexicana de Aviacion when
these two airlines are put up for sale, according to Gordon
Bethune, chairman and chief executive of the fifth-largest U.S.
airline.
"They've been talking about divestiture since I've been around,"
Bethune said. "If they ever decide, we would be very much
interested. We would be a better partner than a competitor to
them."
Aeromexico and Mexicana account for three-quarters of air travel
in Mexico. The government shelved plans to sell the companies
after the terrorist attacks in the U.S. last year. Finance
Minister Francisco Gil Diaz has said the government will wait for
the airline industry to recover before selling the airlines.
The two airlines are controlled by the country's state-owned
airline company Cintra SA, which was formed when the government
rescued two bankrupt airlines in 1996.
To see Cintra's financial statements:
http://bankrupt.com/misc/Cintra.pdf
CONTACT: 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
MEXICANA DE AVIACION
Jenny Jenks, Marketing Director, International
Division of Mexicana Airlines, +1-210-491-9764, or
ennyjenks@mexicana.com
FAR-BEN: Soros Provides Short-Term Funding, Talks of Control
------------------------------------------------------------
Far-Ben SA, Mexico's largest pharmacy chain, will get a shot in
the arm from a venture capital fund partly owned by Hungarian-
born billionaire financier George Soros.
Soros, who is now in talks to take control of Far-Ben, will
contribute an undisclosed amount to the pharmacy chain through
Promecap, a fund consisting of mainly U.S. investors including
Soros's Quantum Fund, and then gain control of it.
Far-Ben has MXN702 million in debt maturing next month, and the
new capital, according to Jaime Benavides, a board member and
former chairman at the family-owned chain, will keep Far-Ben from
defaulting on that debt.
Far-Ben must pay 225 million units of investment, known as udis,
on June 13. Udis rise with the official rate of inflation and are
worth MXN3.12 each now.
CONTACT: BENAVIDES (FAR-BEN S.A. DE C.V.)
Benavides (Far-Ben S.A. De C.V.)
602 Pino Suarez South Central
Monterrey Nuevo Leon
Mexico
Phone: +52 50 77 00
Fax: +52 89 99 31
Home Page: http://www.benavides.com.mx/
Contact:
Investor Relations
E-mail: inversionistas@benavides.com.mx
or
Enrique Javier Villarreal Bacco, CFO
Guillermo Benavides Arredondo, COO
Miguel Carlos Peinado Gonz lez, Purchasing and
Merchandising VP
Fernando Benavides Sauceda, Chief Information Officer
GRUPO MEXICO: Regulators Dump Proposed Merger Over Monopoly
-----------------------------------------------------------
The proposed plan to merge the railway companies controlled by
cash-strapped Grupo Mexico SA and Grupo Carso SA was ditched by
the Mexican antitrust regulators.
A member of Mexico's Federal Competition Commission said it ruled
that joining Ferrocarril Mexicano (Ferromex), which operates in
the northwest and is owned by Grupo Mexico, with Ferrocarril del
Sureste (Ferrosur), which operates in the southeast and is owned
by Mr. Slim, would create a virtual monopoly.
The latest ruling will deal a severe blow to Grupo Mexico, which
has seen its earnings, as well as its ability to pay a US$2.7-
billion debt, weakened due to falling copper prices. Analysts say
Grupo Mexico wanted to use profits from a merged railroad
business that would control 60 percent of the nation's rail
system to service debt, as it waits for copper prices to rebound.
At some point, analysts say, Grupo Mexico may consider selling a
larger stake of Ferromex to its partner, Omaha, Neb.-based Union
Pacific Corp. The U.S. giant, which controls most rail traffic
between Mexico and the U.S., has long wanted to extend its reach
into Mexico.
CONTACTS: GRUPO MEXICO S.A. DE C.V
Avenida Baja California 200,
Colonia Roma Sur
06760 Mexico, D.F.
Mexico
Phone: +52-55-5264-7775
Fax: +52-55-5264-7769
http://www.gmexico.com
Contacts:
German Larrea Mota-Velasco, Chairman & CEO
Xavier Garcia de Quevedo Topete, President & COO
=============
U R U G U A Y
=============
ANCAP: S&P Cuts Ratings; Accerlation Negotiations Under Way
-----------------------------------------------------------
International credit rating agency Standard and Poor's (S&P)
lowered the local currency rating of Uruguay's state oil company
Ancap to 'BB-' from 'BBB-', and its foreign currency rating to
'BB-' from 'BB+.' The ratings have a negative outlook.
The rating actions follow a downgrade of the country's sovereign
rating, S&P said in a statement.
Ancap ended 2001 with US$70 million in debt, representing 16
percent of the Company's capitalization.
Ancap ratings are constrained because it only has one refining
asset, and limited upstream presence.
Currently, the Company is upgrading its La Teja refinery for
US$160 million and in order to finance the project, Ancap entered
into a US$115-million credit facility, of which US$50 million has
already been drawn.
The drop from investment grade status on Ancap and Uruguay's
sovereign rating allows creditors to ask for the acceleration of
the facility.
Ancap is currently negotiating with its lenders for a waiver.
S&P expects Ancap to reach an agreement with its lenders in the
near future, and for the Uruguayan government to continue
supporting the Company. However, Ancap's growing fiscal deficit
and Uruguay's contracting economy could hurt the Company's
future.
***********
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. Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are $25 each. For subscription information,
contact Christopher Beard at 240/629-3300.
* * * End of Transmission * * *