/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020531.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 Friday, May 31, 2002, Vol. 3, Issue 107 Headlines A R G E N T I N A IMPSA: Successfully Swaps Debt For New Bonds SIDERAR: Exports Help Business Stay Afloat TELEFONICA DE ARGENTINA: Fitch May Deem Exchange As Default B E R M U D A GLOBAL CROSSING: Cohen, Milstein Suit Fingers Grubman, SSB GLOBAL CROSSING: Excludes Latin American Assets From Sell-off B R A Z I L BAND B OPERATORS: Regulations Deny Access To Shareholders' Funds BCP: BellSouth Frustrates Creditor Banks on Revised Plan COPENE: To Pay Off $132-Mln Eurobond Issue EMBRATEL: Losing Luster Over Bill Collection Troubles TELEGLOBE: Parent Rules Out More Funding For Latin American Ops C O L O M B I A CMS ENERGY: Oil, Gas Exploration & Production Unit To Be Sold D O M I N I C A N R E P U B L I C SMITH-ENRON: Letter Shows U.S. Govermemt, Enron Ownership E C U A D O R EMELEC: Conelec To Hold Meeting To Decide Assets, Concession M E X I C O AHMSA/HYLSAMEX: Taking Action Stem Upsurge Of EU Steel Imports BOBS CANDIES: Unlikely To Rehire Mexican Workers GRUPO BITAL: Government Role Crucial In Battle For Bank NII HOLDINGS: Judge To Hear Retention Plan June 18 - - - - - - - - - - ================= A R G E N T I N A ================= IMPSA: Successfully Swaps Debt For New Bonds -------------------------------------------- Industrias Metalurgicas Pescarmona SA, or IMPSA, became the first company in Argentina to renegotiate its defaulted securities since the government devalued the currency after it swapped debt Wednesday for US$126.3 million in new bonds. Citing Rodolfo Hearne, IMPSA's chief financial officer, Bloomberg reports that investors exchanged US$124.6 million of 9.5 percent bonds due this month for US$122.2 million of new 5.75 percent bonds maturing in 2011 and US$4.1 million of 11.5 percent bonds due in 2007. The Company, Argentina's biggest overseas power plant builder, stopped making debt payments in December but will increase its 5.75 percent coupon to 8.75 percent after two years. "IMPSA had a serious viability problem," said Daniel Lerner, a corporate bond analyst at Bear Stearns & Co, which holds IMPSA debt. "If it didn't cure the default it may not have been viable as a business. It depends on winning new contracts." According to analysts, IMPSA's bond exchange and its plans to bid on US$300 million in power projects during the second half of the year underscore the benefits of moving fast in negotiating new terms with creditors after default. "No one would want to give a long-term contract to a company that may go bankrupt in a year, and that's what default can lead to," Hearne said. Owned by Argentine businessman Enrique Pescarmona, IMPSA operates in 20 countries across Asia, Europe and Latin America and employs as many as 6,000 workers worldwide. The Company makes products from hydro-mechanical equipment to auto parts to wine. IMPSA also sells auto parts to Ford Motor Co., Renault SA and Volkswagen AG. In addition to building power plants, it generates electricity and handles waste management. About 97 percent of IMPSA's revenue comes from overseas operations. CONTACT: INDUSTRIAS METALURGICAS PESCARMONA SA (IMPSA) Rodriguez Pena 2451 Godoy Cruz, Mendoza Argentina Phone: 54 1 315 2400 Fax: 54 1 315 2388 Home Page: http://www.impsa.com.ar/index.html Contact: Roberto Arancibia Tel: +54-261 4131300 Fax. +54-261 4131416 - 4131423 E-mail: arancibi@impsa.com.ar SIDERAR: Exports Help Business Stay Afloat ------------------------------------------ Argentine steel maker Siderar SA, which has been in the red since the country entered recession, managed to shore up its business through strong exports, El Cronista reports. According to Siderar Director Fredy Cameo, the devaluation of the peso is has helped the Company, which is owned by Organizacion Techint, to balance reductions in the internal market with exports. The firm reportedly has US$550 million in debts, of which, only 12 percent was converted into pesos. Siderar posted US$19 million in losses in the first quarter of 2002. Domestic consumption used to concentrate 80 percent of its production in flat steel. The drop in the automotive and construction industries negatively affected the Company's internal sales. To see Siderar's latest financial statements: http://bankrupt.com/misc/Siderar.pdf CONTACTS: SIDERAR Guillermo Etchepareborda, Investor Relation Manager Avenida Leandro N. Alem 1067 (C1001AAF) Buenos Aires, Argentina Tel. (54-011) 4318-2514 Fax: (54-011) 4313-6417 Home Page: http://www.siderar.com.ar TELEFONICA DE ARGENTINA: Fitch May Deem Exchange As Default ----------------------------------------------------------- Telefonica de Argentina S.A.'s has recently announced an exchange offer for its US$100 million issuance due July 1, 2002. The exchange offer may include the payment of up to US$15 million and an exchange of US$85 million in new bonds for the balance. The new bonds would have similar terms as the original issuance, including a 9.875% coupon; final terms have not been disclosed. Depending on the final terms and conditions of the exchange offer, Fitch Ratings will view the exchange offer as an event of default to the extent that the replacement issue creates a loss to the original holder of the note. An unsuccessful exchange offer, forced or otherwise, would also likely lead to cross- defaults not only at TAR but also at Compania Internacional de Telecomunicaciones (Cointel) and at Telefonica Holding de Argentina S.A. (Telefonica Holding). Any missed payments on issuances of over US$20 million would trigger cross-defaults at Cointel and at Telefonica Holding. Cointel holds a 64.8% stake in TAR and Telefonica Holding controls 50% of Cointel. Telefonica Holding's outstanding debt in the capital market was substantially reduced to US$7.6 million in 2001 while Cointel has two issuances due in 2004 - US$225 million and Argentine Peso $175 million. The company's refinancing difficulties reflect the deepening Argentine recession, the effect of devaluation on TAR's debt burden, the volatility associated with the peso exchange rate, the suspension of tariff adjustments and the tariff's 'pesofication'. The aforementioned items have dramatically affected the financial condition of TAR given the currency mismatch between debt obligations and peso revenues. TAR is renegotiating tariffs with the government but the timing for a resolution is uncertain. Fitch does not believe the negotiations will offset the combined effects of devaluation and pesofication of tariffs. During 2001, Telefonica S.A. provided US$2.0 billion of intercompany loans to its Argentine affiliates, which demonstrated shareholder support. However, the heightened sovereign and regulatory risks may hinder shareholder support going forward. At 3/30/2002, total debt was - Argentine Peso $5.5 billion - (converted using the 2.85 prevailing exchange rate). Approximately, 58% of TAR's debt was short-term and intercompany loans with Telefonica Internacional represented 81% or US$898 million of short-term debt. TAR's cash balances were Argentine Peso $164 million at 3/31/02. A successful exchange offer would strengthen TAR's debt profile. Absent the US$100 million maturity, TAR's next maturities in the capital market are a US$300 million issuance due in 2004 and a US$368.5 million issuance due in 2008. ============= B E R M U D A ============= GLOBAL CROSSING: Cohen, Milstein Suit Fingers Grubman, SSB ---------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has commenced a class action lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of Global Crossing, Ltd. ("Global Crossing" or the "Company") (OTCBB:GBLXE.OB) common stock between May 24, 1999, and Oct. 4, 2001, (the "Class Period"), inclusive, against Salomon Smith Barney, Inc. ("Salomon") and its well known telecommunications analyst Jack Grubman ("Grubman") for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. is involved in five similar suits against Merrill Lynch and its internet analyst Henry Blodget, as well as a case against Salomon Smith Barney and Jack Grubman on behalf of purchasers of WorldCom. The Complaint alleges that defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, by the issurance of analyst reports regarding Global Crossing which recommended the purchase of Global Crossing common stock and which set price targets for Global Crossing common stock without any reasonable factual basis. When issuing their Global Crossing reports, defendants failed to disclose significant, material conflicts of interest which they had, in light of their use of Grubman's reputation and his Global Crossing analyst reports, to obtain investment banking business for Salomon. Plaintiffs seek to recover damages on behalf of all those who purchased shares of Global Crossing common stock during the Class Period (the "Class"). Members of the Class, may wish to join in the action to serve as lead plaintiff by requesting that the Court appoint them as lead plaintiff. Such requests must be made by July 23, 2002. CONTACTS: Steven J. Toll, Esq., stoll@cmht.com Robert Smits, rsmits@cmht.com COHEN, MILSTEIN, HAUSFELD & TOLL, P.L.L.C. 1100 New York Avenue, NW West Tower, Suite 500 Washington, DC 20005 Telephone: 888-240-0775 or 202-408-4600 Website: www.cmht.com GLOBAL CROSSING: Excludes Latin American Assets From Sell-off ------------------------------------------------------------- Global Crossing ruled out putting its Latin America assets on the block as part of the Company's sale of non-core assets. In a Business News Americas report, Global Crossing International president Juan Antonio Rios said that the Company views all of its Latin American assets as core assets. Global Crossing serves the region through its 18,000km South America Crossing (SAC) and 10,000km Pan American Crossing (PAC) fiber optic networks. The announcement came after Global Crossing's creditors' committee said in a statement on Tuesday they had broken off negotiations to sell the Company to Hong Kong-based conglomerate Hutchison Whampoa and Singapore Technologies Telemedia (STT). The committee sees improving prospects for a successful reorganization as a better option than Hutchison/STT's original offer. Global Crossing filed for bankruptcy on January 28 of this year. Earlier this month, the company said it had met the targets contained in the Chapter 11 business plan presented to creditors. Cost cutting measures are expected to reduce operating expenses by 42 percent to about US$900 million in 2002, as compared to US$1.55 billion last year. "At this point, all of the numbers strongly suggest that creditors may maximize their recoveries by selling non-core assets, retaining the company's global network, and recapitalizing," Russell Belinsky, senior managing director of Chanin Capital Partners, the committee's financial advisors, stated. CONTACT: GLOBAL CROSSING Press Contacts Cynthia Artin +1 973-410-8820 Cynthia.Artin@globalcrossing.com Becky Yeamans + 1 973-410-5857 Rebecca.Yeamans@globalcrossing.com Tisha Kresler + 1 973-410-8666 Tisha.Kresler@globalcrossing.com Kevin Burgoyne Latin America + 1 305-808-5947 Kevin.Burgoyne@globalcrossing.com Mish Desmidt Europe +44 (0) 7771-668438 Mish.Desmidt@globalcrossing.com Analysts/Investors: Ken Simril + 1 310-385-3838 investors@globalcrossing.com =========== B R A Z I L =========== BAND B OPERATORS: Regulations Deny Access To Shareholders' Funds ---------------------------------------------------------------- Brazil's telecommunications regulations are preventing the country's debt-ridden Band B cellular operators from gaining access to funds set aside by their shareholders. According to a Business News Americas report, the regulations forbid any changes in the companies' shareholder structure until 2003. For example, Latin American mobile and broadband provider Telecom Americas, which controls four Band B operators, has earmarked BRL1.66 billion (US$660 million) for its subsidiary ATL and BRL534 million for Tess as funds for future capital injections. Similarly, Maxitel has BRL954 million available but out of reach in the form of loans from its principal shareholder Telecom Italia. Band B operators added 1.4 million new subscribers in 2001, but lost BRL7 billion while revenues grew 17.4 percent to BRL4.1 billion. Operator debt grew 13 percent during the year to BRL11.9 billion. Three of Brazil's seven major Band B operators closed 2001 with negative equity. Some operators have already begun renegotiating their debts. Americel reduced its BRL105-million debt with vendor Nortel Networks by BRL52.4 million last December. ATL rolled over BRL361 million of debt that came due last year to October 30, 2005. Tess and Telet are in the midst of debt renegotiations with Swedish vendor Ericsson. However, according to Business News Americas, regulations could be changed this year as the new president of telecoms regulator Anatel, Luiz Schymura de Oliveira, is said to be in favor of industry consolidation. BCP: BellSouth Frustrates Creditor Banks on Revised Plan -------------------------------------------------------- Some 30 percent of the creditor banks of BellSouth Corp.'s BCP unit are expected to shun a meeting at BellSouth's headquarters next week. Citing a report by Valor Economico, AFX says that BCP's creditor banks were infuriated by BellSouth's amended proposal seeking forgiveness of a larger part of its Brazilian unit's debt than initially planned under a refinancing program. BellSouth is said to have called for US$194 million out of BCP's US$1.7 billion debt to be written off, an increase of US$84 million from the previous draft. Additionally, the BCP shareholder seeks to scrap a political risk insurance cover, costing about US$20 million per year, which would have to be assumed by each of the creditor banks. Overall, forgiveness is being sought for liabilities totalling US$315 million. The banks are also angered to learn through the market that the Safra brothers reached an agreement with BellSouth to sell their stake in BCP at a discount that is now being extended to the lending banks. Bellsouth and Safra share control of BCP through respective 44.5 percent stakes. The two decided in late March to allow the Brazilian operator to default on a US$375-million debt. The default caused international credit rating agency Standard & Poor's to lower BCP's credit rating from BrCC to brD. The Safra brothers may also have accepted a 36-percent discount on a credit of US460 million they granted to BCP. The banks are studying the possibility, and the feasibility from a legal point of view, of exercising the share options they own as collateral securities. Some banks met with telecommunications regulator Anatel Wednesday to discuss the issue. CONTACT: BCP TELECOMMUNICACOES, S.A. Rua Florida, 1970 Sao Paulo, SP, Brasil CEP 04565-001 Tel. 55-11-5509-6555 Fax 55-11-5509-6257 Home Page: http://www.bcp.com.br BELLSOUTH CORPORATION 1155 Peachtree St. NE Atlanta, GA 30309-3610 Phone: 404-249-2000 Fax: 404-249-5599 Home Page: http://www.bellsouth.com Contacts: Investor Relations Phone (US): 800.241.3419 Fax: 404.249.2060 E-mail: investor@bellsouth.com BANCO SAFRA Av. Paulista, 2100 - Sao Paulo Brazil - 01310-930 Phone: (11) 3175-7575 Home Page: http://www.safra.com.br/ingles/index.asp Contact: Carlos Alberto Vieira, President CREDITORS: FLEETBOSTON FINANCIAL CORPORATION 100 Federal St. Boston, MA 02110 Phone: 617-434-2200 Fax: 617-434-6943 Home Page: http://www.fleetboston.com Contact: Investor Relations Phone: 617-434-2200 Terrence Murray, Chairman Charles K. (Chad) Gifford, President/CEO/Director Eugene M. McQuade, Vice Chairman and CFO CITIBANK Avenida Paulista, 1111 13th floor - room 5 Sao Paulo 01311- 920 Brazil Home Page: http://www.citibank.com.br Contact: Fernando Tafner Phone: 55-11-5576-2004 E-mail: fernando.tafner@citicorp.com ABN AMRO HOLDING N.V. Foppingadreef 22 1102 BS Amsterdam, The Netherlands Phone: +31-20-628-9393 Fax: +31-20-629-9111 Home Page: http://www.abnamro.com Contact: Investor Relations(HQ1191) Gustav Mahlerlaan 10 PO Box 283 1000 EA Amsterdam The Netherlands Tel. +31 (0) 20 628 78 35 Phone: +31 (0) 20 628 78 37 E-mail: investorrelations@nl.abnamro.com COPENE: To Pay Off $132-Mln Eurobond Issue ------------------------------------------ Brazil's largest petrochemical company, Copene (Companhia Petroquimica do Nordeste) decided to pay off a US$132-million eurobond issue, which comes due at the end of June. The move follows a decision by 90 percent of the investors in the issue to opt out of continuing with the investment, the final term of which extends to 2007. Speculation has it that Copene had anticipated this outcome and has designated resources to make the payment. In addition, Copene also has to pay off short-term loans of BRL600 million this year. Analysts are debating whether the Company will pay off other debts coming due this year or will opt to roll over all or some of it. Copene's gross debt on March 31, 2002 stood at BRL2.9 billion, or BRL2.6 billion on a consolidated basis. In the first quarter of the year, Copene netted a loss of BRL45.6 million, against a net income of BRL2.6 million in the same quarter of the previous year. The loss was brought about by the difficulties in passing on the year-over-year increases in the price of naphtha and the one- month shutdown in March of Pyrolysis Unit 1 for the previously announced expansion of the Company's ethylene capacity COPENE produces and sells basic petrochemicals and utilities. With ethylene production capacity of 1,200,000 tons per year, the Company is Latin America's largest basic petrochemical producer and ranks among the ten largest plants in the world. Most of Copene's output is consumed by downstream companies located at the Northeast Petrochemical Complex in Camacari, which produce "second generation" petrochemicals. Copene is listed on the Sao Paulo stock exchange and its ADRs (American Depositary Receipts) are traded in the U.S. on the New York Stock Exchange under the ticker symbol PNE. One ADR represents 50 class A preferred shares. The Company's Depositary Bank is Citibank, N.A. On March 31, 2002, COPENE had 1,792,416,435 shares outstanding. To see financial statements: http://bankrupt.com/misc/Copene.txt CONTACT: COPENE PETROQUIMICA DO NORDESTE S.A. Carlos Augusto de Oliveira Freitas Tel: +55-71-632-5847 Fax: +55-71-632-5047 E-mail: caof@copene.com.br or Breakstone & Ruth International Luca Biondolillo Tel: 646-536-7012 Fax: 646-536-7100 E-mail: Lbiondolillo@breakstoneruth.com EMBRATEL: Losing Luster Over Bill Collection Troubles ------------------------------------------------------ Embratel Participacoes SA, Brazil's No. 1 long-distance carrier, is rapidly falling out of favor as the darling asset of its embattled parent WorldCom Inc.. The Company is struggling to collect phone bills from its customers. Some 2.5 million customers are behind on their phone bills causing Embratel, which has lost money for five straight quarters, to write off BRL1.79 billion (US$710 million) as bad debt. The difficulties explain why the former state-owned monopoly may fetch WorldCom only a tenth of the US$2.27 billion it paid for a 19 percent stake four years ago, investors said. Since then, the Rio-based company's shares have fallen 69 percent. According to these investors, WorldCom has about US$30 billion in debt and US$3.4 billion in obligations to pay in the next 18 months. Selling Embratel may not provide much relief: the unit has BRL3.75 billion in debt, aside from the mountain of uncollected bills. "It will be very hard finding a buyer for Embratel in a depressed stock market for phone companies," said Deborah Morsch, who manages BRL150 million in securities, including Embratel shares, at Solidus brokerage in Porto Alegre. "The price for Embratel would come down significantly if WorldCom had to sell it in a rush." To see Embratel's latest financial statements: http://bankrupt.com/misc/Embratel.txt CONTACT: EMBRATEL PARTICIPACOES S.A. Investor Relations Silvia Pereira Tel. (55 21) 2519-9662 Fax: (55 21) 2519-6388 Email: Silvia.Pereira@embratel.com.br invest@embratel.com.br or Press Relations: Helena Duncan/Mariana Palmeira Tel: (55 21) 2519-3653/3654 Fax: (55 21) 2519-8010 Email: hduncan@embratel.com.br mpalm@embratel.com.br TELEGLOBE: Parent Rules Out More Funding For Latin American Ops --------------------------------------------------------------- Michael Sabia, BCE Inc.'s new chief executive, admitted that buying Teleglobe Inc. was a mistake. According to a Reuters report, Sabia went on to say that BCE, Canada's largest communications group, stumbled when it bought Teleglobe just as the overbuilt global telecom market was set to collapse. "With the clear vision of hindsight, BCE should not have gone down that path. But we did, and now reality obliges us to close that chapter and to move on," Sabia, who took over the top post at BCE in April after Jean Monty resigned, promised to "reduce the risks and uncertainties" the Company is facing in the near term. That means the firm will not put one penny more into its Latin America wireless operations, grouped under unit Bell Canada International Inc. Now insolvent, Teleglobe is under bankruptcy protection in Canada and is seeking that status for its U.S. unit as it tries to restructure US$2.6 billion of debt and continue operating its core voice business, after slashing its work force of 1,850 by almost half. Although BCE did not guarantee Teleglobe's debt, it expects to write down the value of the unit by up to CAD8.5 billion in the second quarter. BCE has also come under attack from Teleglobe debt holders who fear they will be offered only pennies on the dollar. Big Canadian banks and financial institutions have already written off hundreds of millions of dollars of Teleglobe debt. 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 =============== C O L O M B I A =============== CMS ENERGY: Oil, Gas Exploration & Production Unit To Be Sold ------------------------------------------------------------- Ailing finances are compelling CMS Energy Corporation to sell its oil and gas exploration and production unit, CMS Oil and Gas Company. The Company announced plans Wednesday to exit the exploration and production business as it seeks to bolster its balance sheet. Under attack by an inquiry into its trading practices, CMS Energy said it expects to conduct a competitive auction process for its oil and gas company, and will provide details to interested parties in the near future to begin the sale process. CMS has engaged Randall & Dewey, Inc., a Houston-based oil and gas merger and acquisition consulting firm, to advise it in connection with the planned sale. Proceeds from the sale will be additive to CMS Energy's current total of US$2.4 billion of cash proceeds from asset sales, securitization proceeds and LNG monetization toward its US$2.9 billion asset optimization goal by year-end 2002. Regulators, including the Federal Energy Regulatory Commission, the Securities and Exchange Commission and the Commodity Futures Trading Commission, are looking into a round-trip trading in the wholesale energy markets. CMS said earlier this month that the trades, in which two companies swap the same amount of energy for the same price, accounted for more than 70 percent of its electricity-trading volume last year and almost 80 percent of its volume in 2000. CMS also said last week it would reissue its financial statements for 2000 and 2001 to eliminate revenue reported from the trades. The company had previously reclassified $4.2 billion in revenue and expenses from the trades in 2001, including about $900 million in revenue from a previously undisclosed, incomplete natural-gas trade. The company said it expects the restatements to eliminate an additional $5 million in revenue from last year and about $1 billion in revenue from 2000. The restatements aren't expected to affect earnings and cash flow from either year. CMS has received a subpoena from the U.S. Attorney's Office in Manhattan and has said it expects another subpoena from the U.S. Attorney's Office in Houston regarding the trades. CMS Oil and Gas Co. is a developer of oil and natural gas supplies in the Permian Basin of west Texas and internationally in Cameroon, the Republic of Congo, Colombia, Eritrea, Tunisia and Venezuela. CMS Energy Corporation is an integrated energy company, which has as its primary business operations an electric and natural gas utility, natural gas pipeline systems, independent power generation, oil and gas exploration and production, and energy marketing, services and trading. CONTACT: CMS Energy Corporation Media Contacts: Kelly M. Farr, +1-313-436-9253 John P. Barnett, +1-713-989-7556 Daniel C. Bishop, +1-517-788-2395 Investment Analyst Contact: CMS Energy Investor Relations, +1-517-788-2590 Web site: www.cmsenergy.com/ RANDALL & DEWEY, INC., 16800 Greenspoint Park Drive Suite 380S, Houston, TX, USA, 77060 Phone: (281) 774-2000 Fax: (281) 774-2100 Home Page: http://www.randew.com/bodyx.htm Contact: Jack Randall and Ken Dewey, Owner Warren Keyes, Marketing Phone: 281-774-2022 Fax: 281-774-2050 =================================== D O M I N I C A N R E P U B L I C =================================== SMITH-ENRON: Letter Shows U.S. Govermemt, Enron Ownership --------------------------------------------------------- The U.S. Maritime Administration revealed in a letter that the U.S. government and Enron Corp. each own a stake in a cash- strapped power plant in the Dominican Republic. The federally guaranteed Smith Enron project in the Dominican Republic has debts of US$27 million and has "significant operational, profitability and debt service problems," wrote Bruce J. Carlton, the acting deputy director of the administration. According to Carlton's letter dated May 22, the project near Puerto Plata in the Dominican Republic suffered from power plant defects and from an unreliable payment history with its primary customer, a government-owned utility. The letter also revealed that there are two other Enron-related projects with federally guaranteed loans through the Maritime Administration located in Corinto, Nicaragua, and off the coast of Guatemala. All three projects involve power plants mounted on barges. The facilities in Nicaragua and off Guatemala "appear to be in good financial health from a debt perspective," Carlton stated. All three projects are in technical default because of Enron's bankruptcy. The most expensive of the three federally guaranteed projects is the plant operating off the coast of Guatemala, with a debt of nearly US$67 million. The debt of the barge-mounted power plant in Corinto is US$41 million. Two other U.S. agencies provided Enron with US$1.2 billion in government-backed loans. The Overseas Private Investment Corp. still is owed US$453 million from Enron-related projects, and the Export-Import Bank is due US$512 million. ============= E C U A D O R ============= EMELEC: Conelec To Hold Meeting To Decide Assets, Concession ------------------------------------------------------------ The fate of the assets of former power distribution company Emelec and the distribution concession for the city of Guayaquil will be known next week after Ecuador's electricity regulator Conelec holds its board meeting. "The board meeting will be held late this week or early next so we'll have a clearer position of which option Conelec will adopt with respect to Emelec's assets and the awarding of the concession," Conelec advisor Andres Chavez said. Chavez said there were several reasons behind the auction's failure, although he declined to mention any specifics. But the head of Ecuador's national electricity council, Jorge Trujillo, suggested that the base price of US$130 million may have been very high. In March 2001, Ecuadorian electricity council Conelec canceled Emelec's concession to distribute electricity in Guayaquil after the Company broke its contract with the state, having accumulated US$97 million in debts and failing to maintain service standards. Emelec owner, Fernando Aspiazu was arrested, and the then- government decided to sell the Company to reimburse clients of Banco del Progreso, also owned by Aspiazu, and which was declared bankrupt. CONTACT: Electrica del Ecuador (EMELEC) Tel,fonos: (593-4) 248000 - 248003 Fax: (593-4) 248051 E-mail: asalcedo@teconet.net =========== M E X I C O =========== AHMSA/HYLSAMEX: Taking Action Stem Upsurge Of EU Steel Imports -------------------------------------------------------------- European flat steel imports more than tripled to 162,502 metric tons during the first four months of this year from 46,219 tons during the same period last year, or 10 percent more than European sales in Mexico for all of 2001, says Bloomberg. As a result, Mexican steelmakers, such as Hylsamex SA and Altos Hornos de Mexico SA (AHMSA), are expected to seek protective measures in order to curtail the flow. The surge of flat steel imports at lower prices comes more than two months after the U.S. raised tariffs as much as 30 percent on foreign steel. The move probably prompted European companies to divert their sales to Mexico. Mexico, which the U.S. excluded from higher tariffs, matched the tariff increases to keep countries from switching steel sales to Mexico, but exempted the European Union because of their 1999 free trade agreement. "It's possible this is an effect of the U.S. market being closed," said Eduviges Baro, trade manager for the National Steel Chamber, which represents Mexican steelmakers. Under the Mexican-European Union free trade accord, tariffs on flat steel imports have fallen to 5 percent from 10 percent and are scheduled to be eliminated in the second half of 2003, Baro said. "We want to send a message for them not to come here and dump massively," Baro said. Hylsamex is currently trying to restructure a large part of its US$1.3 billion debt load. In mid-April, the Company got the majority consent needed to restructure its 2007 Eurobonds, avoiding a formal default on the US$300 million debt. Hylsamex had missed a US$13.8-million coupon payment on the bonds March 15. The steelmaker extended the maturity on the bonds by three years, and also worked out a deal to restructure US$627 million in bank debt. AHMSA, on the other hand, is also scheduled to present to creditors on June 30 a new restructuring plan involving some US$1.85 billion in bank debts. AHMSA, which ran into trouble following a drop in world steel prices resulting from the 1998 Asian crisis, suspended debt payments in 1999, and for three years has been in negotiations with lenders regarding debt restructuring. CONTACT: HYLSAMEX Investor Relations Margarita Gutierrez E-Mail: mgutierrez@hylsamex.com.mx Ricardo Sada E-Mail: rsada@hylsamex.com.mx Phone: (52) 81 8865 1224 (52) 81 8865 1201 Munich 101, San Nicolas de los Garza N.L., 66452 Mexico AHMSA Prolongacion B. Juarez s/n, Monclova , Coahuila 25770 Mexico http://www.ahmsa.com Phone: +52 86 33 81 72 Fax: +52 86 33 65 66 Contacts: Alonso Ancira Elizondo, CEO, Vice Chairman, Pres./CEO Jorge Ancira Elizondo, Chief Financial Officer Manuel Ancira Elizondo, Chief Operating Officer BOBS CANDIES: Unlikely To Rehire Mexican Workers ------------------------------------------------ Bobs Candies, the Albany-based candy cane maker which shut down earlier this month, reopened Tuesday to ship existing orders and to prepare for a resumption of production, the AP reports. Accordingly, the Company brought in a small number of shift and production managers to plan for a larger reopening. "We met with a skeleton supervisory crew to begin working toward starting production on Monday," company Vice President Julie Roth said. Reopening came a week after Security Bank, through its parent company Synovus Financial, committed to refinance the US$15.2 million debt the 83-year-old candy maker owes to Bank of America. Negotiations between the two banks are continuing, Roth said. "We're proceeding and are optimistic about a positive outcome," she said. About 350 workers in Albany and another 300 from the Company's plant in Reynosa, Mexico, lost their jobs when Bobs closed May 10. Still unclear is how many workers would be re-employed, but the Company is not expected to recall all of the laid-off employees. CONTACT: BOBS CANDIES, INC. 1315 Oakridge Drive, P. O. Box 3170 Albany, Georgia, USA Phone: 800-841-3602 Fax: 912-430-8331 E-mail: info@bobscandies.com Home Page: http://www.bobscandies.com/ BANK OF AMERICA CORPORATION Bank of America Corporate Ctr. 100 North Tryon St., 18th Fl. Charlotte, NC 28255 Phone: (800) 299-2265 Fax: (704) 386-8486 Home Page: http://www.bankofamerica.com Contact: Hugh L. McColl Jr., Chairman Emeritus Kenneth D. Lewis, Chairman, President, and CEO James H. Hance Jr., Vice Chairman and CFO GRUPO BITAL: Government Role Crucial In Battle For Bank -------------------------------------------------------- Mexico plays a very critical role in the battle for Grupo Financiero Bital, according to a report released by Mexico City daily Mexico City daily el Economista. The government must ensure that Bital fulfills its obligation to strengthen itself financially, approve any movements within the bank, as well as take the view of the owner who has to maintain and raise the aggregated value of its investments in the group. The government currently owns around 7 percent of the accountable capital of the group, below the 8.3 percent that it held from the privatization until the start of this year when it did not take part in a US$107-million capitalization carried out by other Bital shareholders. Analysts say that the government's shareholding could be crucial in negotiations between the controlling parties - currently the Berrondo brothers, Esteve family, and Banco Santander Central Hispano (BSCH) - for total control of the bank. The government position becomes even more important when considering that BSCH has still not carried out the share purchase of Banco Comercial Portugues (BCP), which it announced last year. If the government approves this transaction, BSCH would raise its share in Bital to 26.6 percent of the stock and 30.0 percent of the voting rights. BSCH was originally limited to a holding of 19 percent in Bital, but that has increased with the capitalization and the purchase of BCP. CONTACT: GRUPO FINANCIERO BITAL Paseo De La Reforma No. 243, Cuauhtemoc, 06500, Mexico ,D.F. Phone: 57.21.52.86 Fax: 57.21.57.83 Home Page: www.bital.com.mx Contact: Investor Relations Act. Ricardo Garza Galindo Salazar Phone: 57.21.26.40 Fax:57.21.26.26 E-mail: ricaggs@bital.com.mx SANTANDER CENTRAL HISPANO S.A. (BSCH) Plaza de Canalejas,1 28014 Madrid, Spain Phone: +34-91-558-10-31 Fax: +34-91-552-66-70 Email: investor@grupo.bsch.es Home Page: http://www.bsch.es Contacts: Ana P. Botn, Chairman, Banesto Emilio Botn-Sanz, Chairman Francisco G. Rold n, Financial Division General Manager Investor Relations: Phone: + 34.91.558.13.69 + 34.91.558.10.05 Fax: + 34.91. 558.14.53 + 34.91.522.66.70 NII HOLDINGS: Judge To Hear Retention Plan June 18 -------------------------------------------------- A bankruptcy judge is to consider a motion filed by NII Holdings Inc. seeking authority to implement a US$9.6-million retention bonus plan to persuade employees to remain with the Company as it reorganizes its finances under Chapter 11 bankruptcy cloak, reports Dow Jones. Judge Mary F. Walrath of the U.S. Bankruptcy Court in Wilmington is to consider by June 18 the retention plan formulated by NII Holdings with the aid of Houlihan Lokey Howard & Zukin, the Company's financial adviser. NII Holdings said that without the plan, the Company is likely to lose its key employees to competitors. Such attrition would decrease morale and make it harder for NII Holdings to reorganize. Under the terms of the proposed plan, 61 employees would be eligible to receive retention bonuses. The employees are split into four groups. Bonuses range from 50 percent of base salary for 37 field workers to 75 percent of base salary for NII Holdings' chief executive and president and chief operating officer. The total cost of the proposed bonuses is projected to be US$9.6 million. The Company is also asking for authority to issue up to an additional US$1 million in discretionary bonuses to employees who aren't participants in the retention bonus plan. NII Holdings has roughly 130 employees. The Company, the international unit of the cell phone company Nextel Communications, filed for bankruptcy court protection last week listing assets of US$1.24 billion and liabilities of US$3.26 billion as of Dec. 31, 2001. On Wednesday, the Nextel unit that provides services to Mexico, Brazil and Argentina, won authority from Judge Walrath to continue using its cash management system, hire Bankruptcy Services Inc. as claims and noticing agent, and pay employee wages and salaries due prior to its Chapter 11 filing. The Company expects to file a disclosure statement and reorganization plan within two weeks, said Daniel J. DeFranceschi, an attorney with Richards Layton & Finger, the firm representing NII Holdings. CONTACT: NII Holdings Inc. Claudia Restrepo Phone: +1-305-779-3086 E-mail: claudia.restrepo@nextel.com HOULIHAN LOKEY HOWARD $ ZUKIN CAPITAL, INC. 1930 Century Park West Los Angeles, CA 90067 Phone: 310-553-8871 Fax: 310-553-2173 Home Page: http://www.hlhz.com/rd.asp Contact: Alan Fragen, Managing Director Phone: + 1 310 553 8871 RICHARDS, LAYTON & FINGER, P.A. One Rodney Square P. O. Box 551 Wilmington, Delaware 19899 Phone: (302) 651-7700 Fax: (302) 651-7701 Home Page: http://www.rlf.com/welcome2.htm Contact: Daniel J DeFranceschi Phone: (302) 651-7816 Fax: (302) 784-7090 E-mail: defranceschi@rlf.com *********** 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. 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