/raid1/www/Hosts/bankrupt/TCRLA_Public/020527.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 27, 2002, Vol. 3, Issue 103
Headlines
*********
A R G E N T I N A
AGUAS ARGENTINAS: Tariff Hike Request Dismissed
IMPSAT: Admits Likelihood of Chapter 11 Bankruptcy Filing in US
IMPSAT: Delisted from Nasdaq; Foreign Exchanges to Follow
METRO: Carrefour Buys Mendoza Chain Out of Receivership
METRORED TELECOM: Files Bankruptcy as Argentine Crisis Deepens
PATAGON AMERICA: Founders Buy Back for Pennies on the Dollar
REPSOL YPF: No CEO Appointed; Won't Name One Any Time Soon
SCOTIABANK QUILMES: Canadian Parent Wants Local Unit Liquidated
TELEFONICA DE ARGENTINA: Replacing Maturing Debts with New Bonds
B R A Z I L
AES CORP: AES Sul Challenges Brazilian Regulator's Order
BELL CANADA: Disputes Nasdaq Delisting Opinion, Requests Hearing
M E X I C O
GRUPO TMM: SVP Confident EBITDA Will Grow to MXN700 MM in 5 yrs.
IMPSA: Completes Exchange Offer for 9-1/2% Notes Due 2002
NII HOLDINGS INC.: Files Chapter 11 for Debt Restructuring
NII HOLDINGS: To Be Separated from Nextel Communications -- CEO
SL INDUSTRIES: Q1 Revenues Slip Slightly; NYSE Agrees to Listing
P E R U
EDELNOR: High Demand Fuels Government's Quick Sale
- - - - - - - - - -
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A R G E N T I N A
=================
AGUAS ARGENTINAS: Tariff Hike Request Dismissed
-----------------------------------------------
Aguas Argentinas petition to either raise tariffs or cut planned
investments in the current year has been rebuffed by the
government commission handling the renegotiation of pricing
structures of public utilities.
The decision deals a serious blow to company, a unit of Sociedad
General de Aguas de Barcelona SA, which has lobbied for either
measure to offset losses resulting from the government's decision
to sever the one-to-one peg peso to U.S. dollar peg.
Aguas has already defaulted on some debt interest payments.
Recently, Fitch Ratings downgraded the IDB 'B' loan participation
certificates of Aguas Argentinas to 'DD' from 'C' and placed it
on Rating Watch Negative. The action was for non-payment of
interest in an amount of US$10.2 million due on May 15, 2002.
Standard & Poor's made a similar cut a week before Fitch did,
rating the loan participation 'D' from double-'C'.
IMPSAT: Admits Likelihood of Chapter 11 Bankruptcy Filing in US
---------------------------------------------------------------
IMPSAT Fiber Networks, Inc., a leading provider of integrated
broadband data, Internet and voice telecommunications services in
Latin America, admitted in its latest SEC filing in the United
States that it is not generating sufficient revenue to fund its
operations and to repay its principal and interest obligations.
IMPSAT's debts include its vendor financing obligations with
Nortel Networks Limited and Lucent Technologies Inc.
(collectively the "Broadband Network Vendor Financing
Agreements").
With the assistance of the investment bank, Houlihan Lokey Howard
& Zukin Capital ("Houlihan Lokey"), the Company is currently
negotiating with Senior Note holders and with the creditors under
the Broadband Network Vendor Financing Agreements and with other
principal creditors, according to the official filing.
Below is an excerpt from the company's recent disclosure with the
U.S. Securities and Exchange Commission, explaining its various
debt obligations and financial restructuring plan, among others.
Nortel Networks Agreements
On September 6, 1999, the company executed two turnkey agreements
with Nortel Networks Limited ("Nortel") relating to Nortel's
design and construction of segments of the Broadband Network in
Argentina and Brazil for approximately US$265 million.
On October 25, 1999, each of IMPSAT Argentina and IMPSAT Brazil
signed definitive agreements with Nortel to borrow an aggregate
of up to approximately US$149.1 million and US$148.3 million,
respectively, of long-term vendor financing. The financing,
which has a final maturity in 2006, was used to finance Nortel's
construction of the segments of the Broadband Network in
Argentina and Brazil as well as additional purchases of
telecommunications equipment. The Company has guaranteed the
obligations of each of IMPSAT Argentina and IMPSAT Brazil under
the Nortel financing agreements. At March 31, 2002, a total of
US$245.4 million was outstanding.
The Company's subsidiaries have obtained additional vendor
financing from Lucent Technologies, Ericsson, Tellabs OY, DMC and
Harris Canada, Inc. for the acquisition of fiber optic cable and
other telecommunications equipment for the Broadband Network,
with respect to which an aggregate of US$30.1 million was
disbursed and outstanding as of March 31, 2002, which are
guaranteed by the Company.
IRU Agreements
The Company has entered into several framework agreements
granting IRUs of up to 25 years on the Company's Broadband
Network, including network maintenance services and telehousing
space. The Company has received advance payments related to these
agreements. These advance payments are recorded as deferred
revenue in the accompanying condensed consolidated balance
sheets. During the three months ended March 31, 2002, the
Company recognized approximately US$0.9 million from these
agreements, which are reflected as services to carriers in the
accompanying condensed consolidated statement of operations.
Financial Restructuring
On March 11, 2002, the Company's management, who have been
advised by Houlihan Lokey, concluded negotiations with an ad hoc
committee (the "Committee") representing certain holders of the
debt under its Broadband Network Vendor Financing Agreements, and
certain holders of the US$125.0 million outstanding principal
amount of the 12.125% Senior Guaranteed Notes due 2003, the
US$300.0 million 13.75% Senior Notes due 2005 and the holders of
the US$225.0 million 12.375% Senior Notes due 2008 of a non-
binding term sheet agreement in principle (the "Restructuring
Term Sheet") relating to the terms of a proposed restructuring of
these long-term obligations, as part of a comprehensive financial
restructuring of the Company. The Restructuring Term Sheet,
contemplates the following principal components of the proposed
restructuring plan:
(1) all of the shares of the Company's existing common
stock, options granted under the Company's stock option
plans, and any other equity interests would be
cancelled, retired and eliminated with no consideration
paid therefore, and the Company would issue "new common
stock" in accordance with the proposed restructuring
plan;
(2) creditors under the Broadband Network Vendor Financing
Agreements would receive US$140.7 million senior
secured debt issued by IMPSAT Argentina and IMPSAT
Brazil and guaranteed by the Company;
(3) US$22.5 million of new senior convertible notes
guaranteed by IMPSAT Argentina and convertible into 5%
of the Company's new common stock on a fully-diluted
basis; and
(4) warrants to acquire up to 15% of the Company's new
common stock on a fully-diluted basis.
(5) holders of the Notes due 2003 would receive US$67.5
million of new senior convertible notes guaranteed by
IMPSAT Argentina and convertible into 23% of the
Company's new common stock on a fully diluted basis
(6) holders of the Notes due 2005 and the Notes due 2008
would exchange those securities for 98% of the
Company's new common stock, subject to certain dilutive
events
(7) the Company's guarantees of certain indebtedness owed
by the Company's operating subsidiaries to certain of
their respective creditors will either be restructured
in exchange for new senior convertible notes and
warrants consistent with and proportionate to the
restructuring treatment of analogous indebtedness under
the Broadband Network Vendor Financing Agreements, or
canceled in exchange for equity in the Company
(8) no distribution to existing stockholders of the Company
(9) management would receive 2% of the Company's new common
stock plus stock options representing 8% of the
Company's new common stock.
The term sheet agreement in principle provides that completion of
the proposed restructuring plan would be subject to certain
conditions, including the plan's acceptance by affected classes
of the Company's securities holders in accordance with the U.S.
Bankruptcy Code.
Currently, the Company has not filed a Chapter 11 plan of
reorganization under the U.S. Bankruptcy Code. There can be no
assurances that the Company will be able to complete this filing
or, if the Company does, that any plan of reorganization will be
approved by the Bankruptcy Court.
If the Company is unable to timely file for protection under
Chapter 11 or obtain confirmation of a plan of reorganization,
the creditors may seek other alternatives for the Company,
including accepting bids for the Company or parts thereof through
an auction process or forcing the Company into a liquidation
proceeding under the federal bankruptcy laws.
The Company's investments consist of the following at December
31, 2001 and March 31, 2002:
December 31, March 31,
2001 2002
Trading investments, at fair value $ 29,319 $ 29,637
Investments in common stock $ 3,307 $ 2,440
The Company's trading investments consist of high-quality, short-
term investments with maturities of less than 360 days.
Trade Accounts Receivable
Trade accounts receivable, by operating subsidiaries, at December
31, 2001 and March 31, 2002, are summarized as follows:
December 31, March 31,
2001 2002
IMPSAT Argentina $ 51,037 $ 37,229
IMPSAT Brasil 6,714 7,702
IMPSAT Colombia 5,033 4,949
IMPSAT Venezuela 6,637 8,658
All other countries 12,772 14,200
Total 82,193 72,738
Less: allowance for doubtful accounts (23,782) (19,245)
Trade accounts receivable, net $ 58,411 $ 53,493
Other Receivables
Other receivables consist primarily of refunds or credits pending
from local governments for taxes other than income, advances to
suppliers, and other miscellaneous amounts due to the Company and
its operating subsidiaries and are as follows at December 31,
2001 and March 31, 2002:
December 31, March 31,
2001 2002
IMPSAT Argentina $ 22,155 $ 12,805
IMPSAT Brazil 3,209 4,088
IMPSAT Colombia 3,777 4,710
IMPSAT Venezuela 2,667 1,926
All other countries 7,195 7,088
Total $ 39,003 $ 30,617
Broadband Network And Agreements
Broadband network and related equipment consists of the following
at December 31, 2001 and March 31, 2002:
December 31, March 31,
2001 2002
Network infrastructure $ 168,301 $ 166,975
Equipment and materials 132,494 136,238
Right of ways 16,056 16,859
IRU investments 46,913 49,180
Total 363,764 369,252
Less: accumulated depreciation (83,373 ) (91,102 )
Total 280,391 278,150
Under construction -
Network infrastructure 30,207 29,995
Total $ 310,598 $ 308,145
The recap of accumulated depreciation for the year ended December
31, 2001 and for the three months ended March 31, 2002 is as
follows:
December 31, March 31,
2001 2002
Beginning balance $ 46,433 $ 83,373
Depreciation expense 41,173 8,221
Disposals and retirements (4,233 ) (492 )
Ending balance
At December 31, 2001 and March 31, 2002, the fair value of the
Company's financial instruments was as follows:
December 31, March 31,
2001 2002
12.125% Senior Guaranteed Notes
due 2003 $ 6,250 $ 6,250
13.75% Senior Notes
due 2005 12,000 9,000
12.375% Senior Notes
due 2008 9,000 6,750
Trading Investments 29,319 29,637
Available for sale investments 3,307 2,440
Property, Plant And Equipment
Property, plant and equipment at December 31, 2001 and March 31,
2002, consisted of:
December 31, March 31,
2001 2002
Land $ 11,223 $ 11,185
Building and improvements 68,350 67,974
Operating communications equipment 424,428 418,889
Furniture, fixtures and other equipment 36,376 38,718
Total 540,377 536,766
Less: accumulated depreciation (332,345) (344,591)
Total 208,032 192,175
Equipment in transit 3,413 2,570
Works in process 3,014 1,796
Property, plant and equipment, net $ 214,459 $ 196,541
The recap of accumulated depreciation for the year ended December
31, 2001 and for the three months ended March 31, 2002, is as
follows:
December 31, March 31,
2001 2002
Beginning balance $ 265,354 $ 332,345
Depreciation expense 76,465 15,545
Disposals and retirements (9,474) (3,299)
Ending balance $ 332,345 $ 344,591
Long-Term Debt
The Company's long-term debt at December 31, 2001 and March 31,
2002, is detailed as follows:
December 31, March 31,
2001 2002
Senior Notes:
12.125% Senior Guaranteed Notes
due 2003 $ 125,000 $ 125,000
13.75% Senior Notes
due 2005 300,000 300,000
12.375% Senior Notes
due 2008 225,000 225,000
Term notes, maturing from 2001 through 2004; collateralized by
buildings and equipment, the assignment of customer contracts and
investment; denominated in:
U.S. dollars
(interest rates 5.75%-38.37%) 16,325 14,253
Local currency
(interest rates 14.79-22.32%) 21,904 21,742
Eximbank notes
(interest rates 2.27%-5.31%),
maturing semiannually
through 2002 and 2004 18,585 18,551
Vendor financing (3.59%-14.30%),
maturing 2004 to 2008 275,451 275,451
Total long-term debt 982,265 979,997
Less: current portion including
defaulted indebtedness (959,076) (959,852)
Long-term debt, net $ 23,189 $ 20,145
The Senior Notes, the vendor financing and some of the term notes
contain certain covenants requiring the Company to maintain
certain financial ratios, limiting the incurrence of additional
indebtedness and capital expenditures, and restricting the
ability to pay dividends.
The Company's liquidity difficulties described in Note 1 have led
to non-compliance with certain covenant requirements and payment
provisions under the Company's Broadband Network Vendor Financing
Agreements. On October 25, 2001, the Company obtained a waiver of
covenant defaults and an extension from these lenders for
scheduled principal and interest payments under the Broadband
Network Vendor Financing Agreements totaling approximately $36.3
million that were due on that date. The waiver expired on
November 25, 2001 and the Broadband Network Vendor Financing
Agreements became due and payable, and the Company is in default,
see Note 1. The Company is also in default under the Senior
Notes. The Company did not make the semi-annual interest payment
on the Senior Notes due 2003 (which was due on January 15, 2002),
on the Senior Notes due 2005 (which was due on February 15,
2002), or on the Senior Notes due 2008 (which was due on December
15, 2001). As a result of the Company's default under the Senior
Notes and the Broadband Network Vendor Financing Agreements, an
aggregate of $865,1 million and $862,5 million of the defaulted
amounts have been reclassified the current portion of long-term
debts as of December 31, 2001 and March 31, 2002, respectively.
IMPSAT: Delisted from Nasdaq; Foreign Exchanges to Follow
---------------------------------------------------------
IMPSAT Fiber Networks, Inc. (NASDAQ: IMPT), a leading provider of
integrated telecommunications services in Latin America,
announced Thursday that it had received notice from NASDAQ
concerning the delisting of the Company's common stock.
Impsat's shares were delisted from the Nasdaq Stock Market,
effective May 24, 2002, due to the Company's failure to meet
Nasdaq's maintenance requirement for continued listing of its
common stock with respect to minimum bid price and minimum market
value of public float. Impsat is currently focusing its efforts
on implementing a plan to restructure its financial obligations
and balance sheet and, accordingly has determined not to appeal
Nasdaq's decision. The Company expects that its common stock will
be immediately eligible to trade on Nasdaq's OTC Bulletin Board.
As a result of the primary market's de-listing, the certificates
of deposit quoted in the Buenos Aires Stock Exchange and the
common stock quoted in Latibex, the Latin American Equities
Market of the Madrid Stock Exchange, are also expected to be de-
listed.
As recently announced, Impsat has reached an agreement in
principle with several of its largest creditors in support of a
restructuring plan to reduce the Company's overall indebtedness.
The Company is currently involved in obtaining additional
creditor support to formalize its financial restructuring plan
under Chapter 11.
In compliance with Marketplace Rule 4310 (c)(13), Impsat informs
that it did not pay its annual listing fee.
Impsat Fiber Networks, Inc. is a leading provider of fully
integrated broadband data, Internet and voice telecommunications
services in Latin America. Impsat has recently launched an
extensive pan-Latin American high capacity broadband network in
Brazil, Argentina, Chile and Colombia using advanced
technologies, including IP/ATM switching, DWDM, and non-zero
dispersion fiber optics. The Company has also deployed fourteen
facilities to provide hosting services. Impsat currently provides
services to 3,000 national and multinational companies,
government entities and wholesale services to carriers, ISPs and
other service providers throughout the region. The Company has
local operations in Argentina, Colombia, Venezuela, Ecuador,
Mexico, Brazil, the United States, Chile and Peru.
To see Financial Statement: http://bankrupt.com/misc/IMPSAT.htm
CONTACT: IMPSAT Fiber Networks, Inc.
Investor Relations:
Hector Alonso / Gonzalo Alende Serra
Tel: 54.11.5170.3700
Home Page: www.impsat.com
or
Citigate Dewe Rogerson Inc.
John McInerney / Robin Weinberg
Tel: 212.688.6840
METRO: Carrefour Buys Mendoza Chain Out of Receivership
-------------------------------------------------------
Supermarket chain Carrefour is going to assume the branches of
rival Metro in Mendoza province, after the Lopez family-owned
company called in the receivers recently, says El Cronista.
According to the report, both sides had recently signed a pre-
agreement deal that will be finalized at the end of May. The
deal will have to be approved by the company's creditors within
the next six months.
Sources say Carrefour is paying ARS200 million for the branches.
The acquirer forecasts turnovers of ARS200 million annually in
the Cuyo Provinces (Mendoza, San Juan and San Luis), which is
dominated by rival supermarket chain Disco-Ahold. These
provinces, however, generate almost ARS450 million a year.
The Company owes creditors a total of ARS110 million. Its five
operating branches generate just ARS20 million only, says the
report.
METRORED TELECOM: Files Bankruptcy as Argentine Crisis Deepens
--------------------------------------------------------------
MetroRed Telecom Ltd., a high-speed telecommunications provider
majority-owned by Fidelity Investments, has filed for bankruptcy
and will close its office in Buenos Aires in 90 days, says
Bloomberg.
"We have no other option. We'll focus our efforts in other areas
of Latin America," President and CEO Paul Mucci said in a
statement released last week.
The company has operations in Brazil and Mexico. In Argentina,
the company employs 190 workers. Fidelity Investments, the U.S.
mutual fund company, bankrolled the startup in the 1990s, betting
on surging demand for high-speed lines. Since 1996, the company
has poured a total of US$170 million in Argentina, where it
claims to have 400 corporate clients.
MetroRed blames the government default on some US$95 billon of
debt in December for its financial problems, claiming that this
cut all its financing sources. The currency devaluation in
January also left it saddled with debts in U.S. dollars and
revenue in pesos.
Bloomberg says slowing demand for telecommunications services has
also hurt the company, as a recession in its fourth year cut
corporate revenue.
PATAGON AMERICA: Founders Buy Back for Pennies on the Dollar
------------------------------------------------------------
The sale of Patagon America back to founders Wenceslao Casares
and Guillermo Kirchner was confirmed Friday by Santander Central
Hispano, who said that the transaction netted only US$9.8
million.
The Spanish bank originally paid EUR548 million for a 75% stake
in Patagon in March 2000. Following the acquisition of the
business, the bank grouped its online and telephone banking
operations in Spain (Open Bank) and Germany (Santander Direkt)
under the Patagon name and created the Patagon Euro SL holding
company.
Santander says it will retain the Patagon brand, while Patagon
America will be renamed in 30 days. In addition to selling back
the Latin American unit, the bank will also pay US$22.2 million
for the 11.41% stake Mr. Casares holds in Patagon Euro SL, the
holding company for the Patagon operations in Europe and Latin
America.
According to Dow Jones Newswires, the bank will now focus on
bringing its Spanish and German online banking business
operations to profitability. The business restructuring will
result in a second-quarter charge of EUR700 million, including
the EUR616 million remaining to be amortized from the bank's 2000
purchase of Patagon.
A bank spokesman declined to comment on any restructuring plans
for Patagon America, saying the unit's new owners were now
responsible for the business.
The bank first hinted about selling back the Latin American
business to Mr. Casares early this year. The deal comes after
the unit suffered heavy losses that forced Santander to inject
EUR242 million to keep the troubled unit afloat in the second
half of 2001.
An Argentine newspaper reported last week that Patagon's
Argentine operations would be closed at the end of May.
REPSOL YPF: No CEO Appointed; Won't Name One Any Time Soon
-----------------------------------------------------------
Spanish-Argentine oil and energy group Repsol-YPF SA says it is
not going to name a new chief executive officer in the near term,
dismissing reports that it is about to appoint one. A company
spokeswoman said last week that Chairman Alfonso Cortina will
continue to act as the company's CEO, aside from heading the
boardroom.
But, according to Dow Jones Newswires, a board decision on the
naming of a chief executive was postponed because of a lack of
agreement among board members, particularly those representing
bank BBVA.
The decision to appoint a CEO is part of the group's efforts to
strengthen its management team to combat a very difficult year.
Since its founding in 1985, the company never had one.
Investors have hurled criticisms at management after Repsol's
shares fell 19 percent this year as the oil producer shed assets
to offset a drop in earnings from its Argentine business.
Critics say the difficulties facing the oil and gas group in
Argentina require greater efforts at management level.
One of the candidates being considered for the post is former
Banco Santander Central Hispano SA deputy chairman and CEO Angel
Corcostegui. The post could also go to one of Repsol YPF's
existing top managers, said Troubled Company Reporter-Latin
America recently.
CONTACT: REPSOL YPF
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
Contacts:
Alfonso Cortina De Alcocer, Chairman
Ramon Blanco Balin, Vice Chairman
Carmelo De Las Morenas Lopez, CFO
SCOTIABANK QUILMES: Canadian Parent Wants Local Unit Liquidated
---------------------------------------------------------------
Bank of Nova Scotia, the parent of Scotiabank Quilmes, won't sit
still for any more bad news out of Argentina. In a 23-page
proposal, the bank recently asked the Argentine central bank to
put in a trust all the assets of its local unit and liquidate it.
According to Bloomberg, the proposal was sent two weeks ago, but
details only began coming out last week. Under the plan, the
Canadian bank wants as much as three quarters of Scotiabank's
ARS3.7 billion assets, including corporate loans, mortgages and
government debt, transferred to a trust.
Depositors and the central bank would be given priority access to
the trust's proceeds. The other creditors, such as banks and
holders of US$152 million of bonds, will be next in line.
The remaining assets of the local unit -- those not included in
the trust -- will be sold to a new owner. To make this remnant
viable, the parent will forgive as much as CA$105 million of
loans to the subsidiary and payback CA$77 million of subordinated
bonds. In addition, the new bank will also be handed the
personal and credit card loan portfolios of the old bank.
According to Bloomberg, the Canadian parent has included in its
proposal a request for the central bank to lend the new bank
ARS290 million following the liquidation of the old bank. The
new owner is also expected to put forward an unspecified amount
of additional funds to ensure the survival of this new entity.
There are still no takers for the newly-structured bank, but
Banco Hipotecario SA, Argentina's biggest mortgage lender,
recently said it may buy some banks based in Buenos Aires, mainly
to expand its branch network, says Bloomberg.
Scotiabank has 91 branches in the country. The bank has already
defaulted on about two-thirds of its bonds. The Canadian parent
claims it had lost a total of CA$707 million (US$458 million) in
Argentina.
The bank was the first foreign-owned bank to be suspended amid
Argentina's four-year recession that has pushed the entire
banking system to the brink of bankruptcy after last year's bank
run drained 20 percent of all deposits. The central bank
suspended the bank's operations on April 18.
Scotiabank owes depositors, the Central bank, and private
creditors ARS3.7 billion. The obligation to the Central Bank
consists of ARS200 million in repurchase agreements and ARS170
million in rediscount loans, says Reuters.
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
BANCO HIPOTECARIO SA
Reconquista 101
(1005) - Capital Federal
Buenos Aires
Argentina
Phone: 0800-999-4476
Fax: (54-11) 4347-5278
E-mail: ri@hipotecario.com.ar
Home Page: http://www.e-hipotecario.com.ar
Contact:
Miguel A. Kiguel, Chairman
TELEFONICA DE ARGENTINA: Replacing Maturing Debts with New Bonds
----------------------------------------------------------------
Telefonica de Argentina will offer US$100 million new bonds to
roll over its current outstanding debts, as the company struggles
to maintain sufficient liquidity amid the present recession in
Argentina, says Bloomberg.
According to a recent Standard & Poor's research, the company has
US$100 million worth of bonds maturing in July, part of the
US$1.1 billion in debts to be retired this year. About US$900
million of this obligation is owed to parent Telefonica SA,
Spain's telecom incumbent. S&P rates the Argentine unit
"selective default."
But a La Nacion report claims that, instead of bonds, the company
is offering US$150 per each 1,000 of capital in exchange for
postponing the maturity to 2006, with the option to sell by 2004.
The rate of interest, though, remains at 9.87%.
Telefonica is still reeling from the decision by President
Eduardo Duhalde early this year to drop the peg that tied the
peso one-to-one to the dollar and the government's move to scrap
the dollar-based tariffs for phone services.
The monetary policy actions took a heavy toll on the company,
which reported first-quarter losses of ARS2.48 billion compared
with a profit of US$44 million a year ago.
The Company's total debt hovers at US$1.8 billion, of which
US$800 million are in bonds. About US$400 million of debts will
come due later this year and another US$400 million on May 7,
2008.
CONTACTS: TELEFONICA DE ARGENTINA
Tucuman 1, 18th Floor, 1049
Buenos Aires, Argentina
Phone: (212) 688-6840
Home Page: http://www.telefonica.com.ar
Contacts:
Carlos Fernandez-Prida Mendez Nunez, Chairman
Paul Burton Savoldelli, Vice Chairman
Fernando Raul Borio, Secretary
===========
B R A Z I L
===========
AES CORP: AES Sul Challenges Brazilian Regulator's Order
--------------------------------------------------------
The AES Corporation (NYSE:AES - News) said last week that a
subsidiary of the Company, AES Sul Distribuidora Gaucha de
Energia S.A., has filed a request for injunction in Brazilian
federal court against the order announced by the Brazilian
National Electric Power Agency ("ANEEL") on May 16, 2002.
The action states that the latest ANEEL order purporting to
retroactively change the calculation methods of the Wholesale
Energy Market violates Brazilian law and practice on both
procedural and substantive grounds. The net amount, after income
taxes, related to sales by AES Sul that is affected by ANEEL's
retroactive order is approximately US$120 million.
Contact: AES Corporation
Home Page: www.aes.com
or
Kenneth R. Woodcock
Phone: 703/522-1315
or
Investor relations
E-mail: investing@aes.com.
BELL CANADA: Disputes Nasdaq Delisting Opinion, Requests Hearing
----------------------------------------------------------------
Bell Canada International Inc. (NASDAQ:BCICF)(TSE:BI.) announced
last week that it had received a NASDAQ staff determination on
May 17, 2002 indicating that BCI fails to comply with the Minimum
Bid Price requirement for continued listing set forth in
Marketplace Rule 4450(b)(4), and that its common shares are,
therefore, subject to delisting from the NASDAQ National Market.
BCI has requested a hearing before a NASDAQ Listing
Qualifications Panel to review the staff determination. The
hearing request will stay the delisting of BCI's common shares
pending the Panel's decision. The Company says tbere can be no
assurance that the Panel will grant BCI's request for continued
listing. The listing of BCI's common shares on the Toronto Stock
Exchange is unaffected.
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. BCI is 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.
CONTACT: Bell Canada International Inc.
Marie-Lise Gauthier
Phone: 514/392-2318
E-mail: marie-lise.gauthier@bci.ca
===========
M E X I C O
===========
GRUPO TMM: SVP Confident EBITDA Will Grow to MXN700 MM in 5 yrs.
----------------------------------------------------------------
The Wall Street Transcript recently released an in-depth
interview with Brad Skinner, SVP of Investor Relations of Grupo
TMM (NYSE:TMM), in which he talks at length about the company's
future.
Skinner gives an overview of the company. "The company started in
1956 as a shipping company, evolving into container shipping up
through the 1990s. It was up to the 1980s a quasi-governmental
entity and then moved toward privitization in 1990 when Mr.
Serrano's family took control. They took it public in 1992 with
Bear, Sterns in the lead. It has evolved since that time with the
international trading pattern of Mexico. As the trading pattern
became more and more dominated by the NAFTA corridor, the company
sold its ships and acquired the primary industrial railroad of
Mexico, port franchises and activities, grew logistics
capabilities, expanded into trucking and maintained a strong
presence in the distribution and servicing of petroleum and
chemical products. Grupo TMM has become the Logistics Company of
Mexico."
Skinner explains, "We believe that EBITDA will grow dramatically
probably more than doubling from about 303 million where we are
today to about 700 million five years from now. We see the
company growing in all of these aspects because Mexico will
continue to link with the United States and because of tremendous
truck to rail conversion, which I think is growing somewhere in
the neighborhood of 7% per year."
The entire 3,000-word interview is available online at
http://www.twst.com/ceos.htm
CONTACT: Grupo TFM
Jacinto Marina
Phone: 011-525-55-629-8790
E-mail: jacinto.marina@tmm.com.mx
Leon Ortiz
Phone: 011-525-55-447-5800
E-mail: lortiz@gtfm.com
Dresner Corporate Services
(general investors, analysts and media)
Kristine Walczak
Phone: 312/726-3600
E-mail: kwalczak@dresnerco.com
IMPSA: Completes Exchange Offer for 9-1/2% Notes Due 2002
---------------------------------------------------------
Industrias Metalurgicas Pescarmona S.A.I.C. y F. announced that
it has completed the exchange offer for its outstanding U.S.
US$137.6 million 9-1/2% Notes due May 31, 2002, (144A - CUSIP No.
45647WAB9, and Reg S - ISIN No. US45647XAB73). The Offer expired
as of 5:00 p.m. New York City time on May 22, 2002.
The Company said that it received tenders from holders of U.S.
US$124.6 million or 90.5% in aggregate principal amount of the
outstanding Notes. The foregoing amount represented tenders of
approximately 95% of the Notes held by holders who were eligible
to participate in the Offer in accordance with applicable U.S.
securities laws. Pursuant to the Offer and the elections of
participating noteholders, the Company will issue U.S. $122.2
million of its new 5.75% Guaranteed Senior Notes due 2011 (the
step-up option) and U.S. $4.1 million of its new 11.50%
Guaranteed Senior Notes due 2007 (the discount option).
"We appreciate the support of our noteholders in the successful
reprofiling of our debt. This success will significantly enhance
our ability to win new business contracts going forward," said
Chief Financial Officer Rodolfo Hearne.
Banc of America Securities LLC served as the exclusive dealer
manager for the Offer.
The Exchange Notes have not been and will not be registered under
the United States Securities Act of 1933, as amended (the "Act")
and may not be offered or sold in the United States or to any
U.S. persons absent registration or an applicable exemption from
the registration requirements of the Act. The Exchange Notes will
be authorized by the Argentine Comision Nacional de Valores for
their public offering in Argentina.
CONTACT: Rodolfo Hearne of IMPSA
Phone: 54-11-5077-0838
or
Jonah Hirsch of Banc of America Securities LLC,
Phone: +1-704-388-4807, for IMPSA
NII HOLDINGS INC.: Files Chapter 11 for Debt Restructuring
----------------------------------------------------------
NII Holdings, Inc., previously known as Nextel International,
announced that it has reached an agreement in principle with its
main creditors, Motorola Credit Corporation, Nextel
Communications and a consortium of bondholders for a
restructuring of its outstanding debt. The contemplated
restructuring would reduce the Company's total indebtedness by
about 80%, from its current level of $2.7 billion to less than
US$500 million.
The agreement in principle contemplates new capital of US$190
million, US$140 million of which will be in the form of a rights
offering of new senior secured notes and warrants to bondholders.
A consortium of NII bondholders will backstop at least US$75
million, with Nextel Communications backstopping up to US$65
million of the rights offering to NII bondholders. Nextel
Communications has also agreed to provide US$50 million of
additional funding in return for a cross border spectrum sharing
arrangement. The agreement also incorporates a deferral of the
principal payments associated with the secured indebtedness owed
to Motorola Credit Corporation.
"We are pleased to see that both our creditors and other
stakeholders realize the value proposition of NII and its
operating subsidiaries throughout Latin America," said Steve
Shindler, CEO of NII. "Over the past several years we have grown
from no customers to over 1 million subscribers currently
generating the best wireless financial metrics in Latin America."
NII also announced that it filed today for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in Delaware. None of NII's
foreign subsidiaries have filed for Chapter 11 reorganization.
NII's foreign subsidiaries will continue operating in the
ordinary course of business during the Chapter 11 process,
providing wireless communication services to existing and new
customers.
The restructuring plan is expected to provide for conversion of
all unsecured claims into equity of reorganized NII, with the
majority of equity being owned by the new noteholders. All
current equity interests in NII will be extinguished and Nextel
Communications will no longer own a majority interest in NII.
"Our collective team of 3,500 employees have built this business
with their talent, energy and experience for long-term success.
The agreement reached with our creditors is a critical step in
recapitalizing our business and ensuring that we can continue
executing on our plans focusing on creating value for our
customers, employees and financial sponsors." Shindler continued,
"Our objective is to move through this reorganization process as
quickly as possible without disruption to our operations or
inconvenience to our subscribers. We remain committed to
providing the highest quality service to our customers, who
depend on reliable mobile communications in their business."
About NII Holdings, Inc.
NII Holdings, Inc., formerly known as Nextel International, is a
substantially wholly owned subsidiary of Nextel Communications
(Nasdaq: NXTL). NII has operations in Mexico, Brazil, Peru,
Argentina, Chile and the Philippines. NII offers a fully
integrated wireless communications tool with digital cellular,
text/numeric paging, wireless Internet access and Nextel Direct
Connect(R), a digital two-way radio feature.
CONTACT: Claudia Restrepo, NII Holdings Inc.
Phone: +1-305-779-3086
E-mail: claudia.restrepo@nextel.com
NII HOLDINGS: To Be Separated from Nextel Communications -- CEO
---------------------------------------------------------------
Commenting on NII Holdings' recent Chapter 11 filing and other
corporate events, Tim Donahue, president and CEO of Nextel
Communications, Inc. released the following statement:
"Nextel Communications is pleased that NII Holdings has reached a
positive agreement in principal with its key stakeholders. This
agreement will allow high value wireless customers to continue to
enjoy the Nextel value proposition in key Latin American markets
and allow NII Holdings to grow beyond today's market-related
challenges as a stand-alone company. Nextel Communications'
financial contribution of up to $65 million will result in an
equity ownership position in NII Holdings of up to 45 percent and
result in a deconsolidation of NII Holdings from Nextel
Communications.
"In addition, Nextel will provide $50 million to NII Holdings for
the expansion of a U.S.-Mexico cross border spectrum sharing
arrangement. This arrangement will allow Nextel to further reduce
our domestic capital expenditures and generate greater capital
efficiencies."
CONTACT: Nextel Communications, Inc., Reston
Investors:
Paul Blalock
Phone: (703) 433-4300
SL INDUSTRIES: Q1 Revenues Slip Slightly; NYSE Agrees to Listing
----------------------------------------------------------------
SL INDUSTRIES, INC. (NYSE & PHLX:SL) announced Thursday that
revenue for the first quarter ended March 31, 2002 was
$32,947,000, compared to $37,582,000 for the first quarter last
year. Net loss from continuing operations was $689,000, or $0.12
per diluted share, compared to net income of $511,000, or $0.09
per diluted share, for the same period in 2001. Discontinued
operations added $0.05 per diluted share to income in the current
quarter and had a $0.01 per share negative impact in the first
quarter of 2001. The loss for the period ended March 31, 2002
included $1,825,000 for special charges ($1,631,000 of change-in-
control payments and $194,000 of proxy costs), $225,000 for
restructuring charges and an increase to the Company's
environmental reserve of $500,000 ($1,514,000 net of taxes).
These charges had a $0.26 negative effect on net income for the
period. The Company had net income from continuing operations of
$825,000, or $0.14 per diluted share, excluding the above charges
for the current quarter.
The Company reported net new orders of $33,310,000 in the first
quarter of 2002, compared to net new orders of $39,614,000 in the
first quarter of 2001. Backlog at March 31, 2002 was $55.9
million, as compared to $61 million a year earlier.
Commenting on the results, Warren Lichtenstein, Chairman and
Chief Executive Officer of SL Industries, said, "The operating
results demonstrate that the Company has turned the corner in its
restructuring plan. Without including the special charges,
earnings from continuing operations before interest, taxes,
depreciation and amortization ("EBITDA") for the quarter ended
March 31, 2002 was $1,887,000, an increase of $1,957,000 from the
fourth quarter of 2001. EBITDA was $3,136,000 for the first
quarter of 2001.
"Unfortunately, as previously forecasted, the special charges
incurred as a result of the contested election of directors in
January caused the Company to miss the net income financial
covenant under its Revolving Credit Facility for the first
quarter of 2002. The Company and its lenders have reached an
agreement to waive current events of default and to otherwise
amend the Revolving Credit Facility so that the Company will be
in full compliance with all covenants and conditions."
Lichtenstein further stated, "There have been other encouraging
developments as well. On April 16, the New York Stock Exchange
agreed to continue listing SL Industries in connection with its
acceptance of the Company's business plan and the Company's
meeting the stated objectives under the business plan over the
next 18 months. Additionally, the Company has accepted an offer
to sell its unoccupied industrial facility in Auburn, New York
for $250,000 in cash. This sale will provide cash benefits to the
Company in the form of the purchase price and tax deductions."
Lichtenstein concluded, "While we are never satisfied to report a
loss to our shareholders, the Board of Directors is encouraged by
the performance of the Company and is excited about its
prospects. SL Industries is in its best financial condition of
the past two years. Over the past 12 months it has reduced its
indebtedness by approximately $15 million, and expected cash
flows this year should further reduce the Company's debt and
other liabilities. More importantly, managers and employees
throughout the organization are moving forward on corporate and
divisional initiatives designed to further increase shareholder
value. I note that each non-employee member of the Board of
Directors has elected to receive his director's fee in stock
options instead of cash. This action will save the Company some
cash payments, but it is particularly significant as a real vote
of confidence by the Board members in the Company's personnel and
future results.
"We are making progress on a number of corporate strategies. The
Company's investment bankers, Credit Suisse First Boston, should
start distributing confidential offering memoranda to prospective
purchasers. I look forward to reporting to the shareholders on
the progress of the sales process and the execution of the
Company's strategy in the months ahead."
ABOUT SL INDUSTRIES
SL Industries, Inc. designs, manufactures and markets Power and
Data Quality (PDQ) equipment and systems for industrial, medical,
aerospace and consumer applications. For more information about
SL Industries, Inc. and its products, please visit the Company's
web site at www.slpdq.com.
To see Financial Statement:
http://bankrupt.com/misc/SLindustries.htm
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P E R U
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EDELNOR: High Demand Fuels Government's Quick Sale
--------------------------------------------------
The government is now completely out of Edelnor after it
completed its retreat from the power firm ahead of schedule last
week, says Business News Americas.
Privatization body Proinversion was forced to offer all the
remaining 318 million shares the government held in the company,
after the first tranche floated on May 21 attracted much interest
and became 400% over-subscribed. The second tranche immediately
followed the next day.
"It has been a successful operation with shares being
oversubscribed, which allowed us to put all the shares on sale.
This proves the market's keen interest, as we had thought of
selling Edelnor's shares in three operations ending in July, but
we did it in two batches and ahead of schedule," Proinversion
capitals market manager Alberto Rojas told Business News
Americas.
Citibank and Directora Citicorp Peru coordinated the transaction,
with the help of Continental Bolsa, Credibolsa, Interfip Bolsa,
Inversion y Desarrollo, Investa, Juan Magot & Asociados,
Provalor, Cartisa Peru, Santander Central Hispano Investment,
Seminario, Surinevest, and Wiese Sudameris.
The PEN242 million (US$69.7 million) proceeds will be directed to
the national public savings fund to pay pensions, Proinversion
said.
In March, Proinversion (then called Copri) sold 110 million
shares (9.3%) for US$24 million. Edelnor is Peru's largest
private generator and serves about four million people in Lima
and Callao. Spain's Endesa acquired a controlling 60% stake in
1994, and operates the company, says the paper.
***********
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.
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