/raid1/www/Hosts/bankrupt/TCRLA_Public/020619.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
Wednesday, June 19, 2002, Vol. 3, Issue 120
Headlines
A R G E N T I N A
BANCO GALICIA: Interest Payment Missed, S&P Lowers To Default
REPSOL YPF: Government Drops Export Curbs; Stock Hits 2-yr High
B A H A M A S
SURETY BANK: Notice to Creditors Extends Claim Period
B E R M U D A
GLOBAL CROSSING: Extends Bidding Deadline
TYCO INTERNATIONAL: Sues Former Chief Corporate Counsel
TYCO INTERNATIONAL: Belnick's Counsel Comments On Lawsuit
TYCO INTERNATIONAL: Declares Regular Quarterly Dividend
TYCO INTERNATIONAL: DBRS Drops to BB (high); Still Under Review
TYCO INTERNATIONAL: Downgrade Bumps Raychem 7.20% Notes to 8.20%
B R A Z I L
EDF: Staying Put in Latin America Despite Economic Woes
EMBRATEL: BES Analyst Upgrades Stock to Neutral on Valuation
M E X I C O
AEROMEXICO/MEXICANA: Continental Head Urges Sale Plan Approval
BANRURAL: Problems Continue for Cash Starved Bank
CORPORACION DURANGO: Fitch Affirms; Changes Outlook To Positive
GRUPO DINA: Forfeits Two Branches To Hidalgo State
PAN AMERICAN: Completes Loan; Starts La Colorada Expansion
T R I N I D A D & T O B A G O
VINTAGE PETROLEUM: Selling Trinidad Holdings; Ecuador Assets
V E N E Z U E L A
COSTA NORTE: Contracts Move Forward After Debt Restructuring
SUDAMTEX: Seeks Authorization To Dissolve, Sell Assets
SUDAMTEX: Company Profile
- - - - - - - - - -
=================
A R G E N T I N A
=================
BANCO GALICIA: Interest Payment Missed, S&P Lowers To Default
-------------------------------------------------------------
Standard & Poor's lowered all its outstanding ratings on Banco de
Galicia y Buenos Aires S.A. to 'D', following the announcement by
the bank that it will not pay the interest on its $200 million,
9% senior unsecured notes maturing Nov. 1, 2003.
Although the interest payment was missed on June 1, 2002, the
issue had a grace period of 30 business days, ending on June 12,
2002. The decision to lower all outstanding ratings on the bank
to 'D' is supported in the announced debt restructuring plan,
which began with an offer to exchange securities issued by the
New York branch of Banco de Galicia. The bank entered into this
debt exchange with other securities in default, clearly pointing
to the distressed nature of the restructuring plan. In addition,
the bank's CDs continue in default and Banco Galicia Uruguay
S.A., the bank's wholly owned subsidiary in Uruguay, remains
intervened and suspended by the central bank. The bank is
analyzing alternatives to restructure its obligations with
depositors.
Although the financial condition of Argentine banks is generally
terrible with deposits remaining in default, some institutions
followed different strategies to restructure cross-border debt. A
noteworthy case is that of Banco Hipotecario S.A., which also
proposed a debt exchange, but decided to remain outstanding on
debt payments until the beginning of the tender offer. "We expect
that other Argentine banks will eventually restructure their
foreign-currency debt, given that the dramatic changes in the
operating environment for financial institutions in the country
have made the bulk of their cross-border debt almost impossible
to repay under the original conditions," said Standard & Poor's
credit analyst Gabriel Caracciolo.
Analyst: Gabriel Caracciolo, Buenos Aires (54) 114-891-2100
CONTACT: BANCO DE GALICIA Y BUENOS AIRES S.A., HEAD OFFICE
Tte. Gral Juan D. Peron 407
1038 Buenos Aires, Argentina
Phone: +54-11-6329-0000
Fax: +54-11-6329-6100
Home Page: http://www.bancogalicia.com.ar
Corporate Communications
Phone: (54 11) 6329 6439
Fax:(54 11) 6329 6000 ext.: 2041
Representative Office: Buenos Aires
Reconquista 144, piso 17
(1003) Buenos Aires, Argentina
Phone: (54-11) 4343-5200/5303/5162
Fax: (54-11) 4343-6576
New York Branch
300 Park Avenue, 20th Floor
New York, NY 10022
Phone: (1-212) 906-3700
Fax: (1-212) 906-3777
REPSOL YPF: Government Drops Export Curbs; Stock Hits 2-yr High
-----------------------------------------------------------------
Repsol YPF SA saw its shares rise as much as EUR1.14, or 11%, to
EUR11.89, the Spanish oil group's biggest gain in two years,
reports Bloomberg.
The boost in the stock price came after Argentina reversed a
decision to cap at 36% the amount of Argentine output that
drillers can export. The government made the agreeent in exchange
for pledges that companies like Repsol YPF would keep supplying
the Argentine market. The government imposed the export cap in
May to guarantee its fuel supply and stem price increases.
Argentina accounts for two-thirds of fuels production for
Europe's fifth-biggest oil company.
"The Argentine government has opened its borders to oil exporting
and Repsol is the company that stands to benefit the most from
this change," said Daniel Sanchez, who helps manage EUR220
million at BCN Finances in Barcelona and owns shares in Repsol.
Simultaneously, Repsol Vice Chairman Ramon Blanco announced that
Argentine President Eduardo Duhalde also ruled out a proposal
from parliament member Arturo Lafalla to force exporters to keep
100% of their export proceeds in Argentina, compared with 30%
currently.
Repsol's exposure to Argentina has reduced its earnings and share
price in recent months because of the currency devaluation and
the country's four-year economic slump. Repsol paid US$15 billion
for YPF in 1999.
The Company is the worst performer in the Bloomberg Europe Oil
Index this year, sinking 28 percent. Repsol has had to erase
EUR2.7 billion from earnings because of Argentina.
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
=============
B A H A M A S
=============
SURETY BANK: Notice to Creditors Extends Claim Period
-----------------------------------------------------
Creditors of the SURETY BANK AND TRUST COMPANY LIMITED were given
notice of an extension to file claims. The bank is being wound-up
voluntarily but subject to the supervision of the Court.
Attorneys for the bank, McKinney, Bancroft & Hughe, announced the
time within which the Creditors were to submit names, addresses
and the particulars of their debts or claims expired on the 16th
day of March 2002 has been extended to the 22nd July 2002. All
pertinent claims information, including creditors' counsel (if
any), are to be submitted to the Liquidators in this case: Mrs.
Lucia E. Broughton and Mrs. Maurcen Taylor, the Liquidators of
the said Company at P.O. Box SS-5857, Nassau, Bahamas.
In addition, proofs of claims filed will be required without
which, the Liquidators warn, claims may be excluded from the
benefit of any distribution made before such debts are proved.
McKinney, Bancroft & Hughe
Attorneys of the Liquidators
CONTACT: SURETY BANK AND TRUST COMPANY LIMITED
PO Box SS-5857,
San Salvador, Bahamas
Phone: +1 242 3634276
Fax: +1 242 3634344
=============
B E R M U D A
=============
GLOBAL CROSSING: Extends Bidding Deadline
-----------------------------------------
In accordance with the bidding procedures order originally
approved by the United States Bankruptcy Court for the Southern
District of New York, Global Crossing announced the deadline for
receipt of bids from potential investors is set for 3:00 P.M.
(Eastern Daylight Time) on July 11, 2002. The date and time for
the auction to determine the winning bidder will take place at
10:00 A.M. (Eastern Daylight Time) on July 24, 2002. The auction
will take place at the offices of Weil, Gotshal & Manges LLP, 767
Fifth Avenue, New York, New York 10153.
"We are extending the deadline in order to allow the company to
coordinate potential sales of its non-core businesses with the
auction process for the entire company," said John Legere, chief
executive officer of Global Crossing.
ABOUT GLOBAL CROSSING
Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the globe.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services. Global Crossing operates throughout the Americas and
Europe, and provides services in Asia through its subsidiary,
Asia Global Crossing.
On January 28, 2002, certain companies in the Global Crossing
Group (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated proceedings
in the Supreme Court of Bermuda.
CONTACT GLOBAL CROSSING:
Press Contacts
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 Contact
Ken Simril
+ 1 310-385-3838
investors@globalcrossing.com
TYCO INTERNATIONAL: Sues Former Chief Corporate Counsel
-------------------------------------------------------
Tyco International Ltd. announced Monday that it has filed suit
against its former Chief Corporate Counsel, Mark A. Belnick,
charging that he engaged in a broad pattern of misconduct for
personal gain, including receiving $35 million in compensation
that was not approved by either the Tyco Board or its
Compensation Committee, as well as an ongoing cover-up that
repeatedly breached his duties of care and loyalty to Tyco.
The alleged cover-up included concealing Belnick's compensation
and benefits from Tyco's Board of Directors and the Board's
Compensation Committee, which Belnick knew were charged with
compensation oversight for the company's senior executives;
failing to disclose information on his compensation and loans in
required public filings with the Securities and Exchange
Commission; concealing the criminal investigation of Tyco's then-
Chief Executive Officer, Dennis Kozlowski, from Tyco's Board; and
Belnick's deletion of computer files and attempt to remove files
when he knew an internal investigation of these and other matters
was under way.
In a statement, Tyco said: "As the Company's Chief Corporate
Counsel, and as a member of the Bar, Mark Belnick owed Tyco the
highest standards of ethical and legal conduct. The broad and
systematic pattern of misconduct detailed in the complaint is
inexcusable and Belnick failed in his duties to the Board and the
Company. Mr. Belnick abused the trust and confidence placed in
him, and we want not only full repayment of funds he
misappropriated, but punitive damages for the serious harm he did
to Tyco and its shareholders."
Mr. Belnick served as Tyco's Chief Corporate Counsel from
September 1998 until June 10, 2002. The complaint outlines the
standards Belnick was expected to uphold: "More than any other
person, Belnick was obligated to ensure that the Company and its
personnel fulfilled their legal and ethical duties, and to ensure
that any conflict of interest, self-dealing, or other potentially
serious legal or ethical problem was promptly brought to the
attention of the Company's Board of Directors."
The suit, filed in the U.S. District Court for the Southern
District of New York, details how Belnick abused the confidence
and trust placed in him, "repeatedly breaching his duties of care
and loyalty to the Company." It seeks the recovery of the
compensation and profits Belnick received as a result of his
employment at Tyco, with interest, as well as damages for the
harm caused Tyco as a result of Belnick's conduct, and punitive
damages, among other forms of relief.
Among the specific actions through which Belnick breached his
fiduciary duties to the company, according to the complaint, are:
* Soliciting and accepting large cash and restricted stock
bonuses from the Company's Chief Executive Officer Dennis
Kozlowski (valued at approximately $20 million in calendar year
2000 alone) without the approval or knowledge of the Board or its
Compensation Committee. In total, Belnick made over $35 million,
including over $25 million on sales of Tyco stock given him,
under agreements that were not approved by the Board and its
Compensation Committee. The complaint points out that although
the original and subsequent grants of stocks and options to
Belnick were to enable him to build significant equity in Tyco,
"Belnick regularly abandoned his investment in the Company and
sold his shares (or converted options and sold the underlying
shares) within days after they vested, earning him millions of
dollars";
* "From the inception of his employment, Belnick failed in his
responsibilities and betrayed the Board's trust, choosing instead
to conspire with Kozlowski to evade the Board's policies
regarding compensation and conceal the extent of Belnick's
compensation and benefits, as secretly agreed to by Belnick and
Kozlowski, from the Company and the Board";
* Borrowing $14 million, interest-free, under the company's
Relocation Program. This program was authorized by the
Compensation Committee in 1995 to assist employees who were then
relocating from Tyco's headquarters in New Hampshire to its then-
new offices in New York; in about 1997, the Committee authorized
a second program for employees asked to relocate to Tyco's
facilities in Florida. When Belnick began work at Tyco in
September 1998, he moved from another law firm a short walk from
Tyco's New York offices, and he already lived in the Westchester
County suburb of Harrison. Belnick therefore did not qualify for
Tyco's New York relocation program. Nevertheless, Belnick, in
clear violation of the policies of the loan program, solicited
and accepted a "relocation loan," and used that loan, plus
another Company loan, to pay $2.75 million for an apartment on
Central Park West. Belnick's total improper borrowing for his New
York residence now exceeds $4 million, all of which he still owes
Tyco. Belnick also used $10 million in interest-free loans to
finance a new resort home near the Deer Valley ski resort in
Utah. Tyco never adopted a relocation program to Utah, and Tyco
has no corporate offices in Utah to which Belnick could be said
to be relocating;
* Drafting and executing a new "Retention Agreement" for himself
that provided for Belnick to receive a further payment (in
addition to all of his other compensation and stock, and his
existing options) by October 1, 2003 of approximately $20
million, which was structured to assure him of $10.6 million
after-tax. The agreement purported to pay him this additional
compensation even if he was terminated for violating his duties
to the Company. Belnick failed to seek prior Board or
Compensation Committee approval for the agreement;
* Failing to disclose his compensation in required SEC filings,
and fabricating documents after the fact to re-characterize
components of his compensation so that he could argue that he was
not one of the four highest-paid officers other than the
Company's CEO, each of whose compensation is required to be
disclosed in proxy statements by SEC Regulation S-K Item 402;
* Failing to advise the Board that $20 million in payments made
without Board approval to Frank Walsh, a now-former Tyco
director, in connection with his role in the company's
acquisition of The CIT Group, were improper, and that the company
had a right to recover those payments. Earlier today, Tyco sued
to recover those payments;
* Failing to advise the Board of the improper conduct of Dennis
Kozlowski of which Belnick was aware, and failing to take any
action to remedy or even stop the continuation of such conduct,
thereby facilitating, aiding and abetting Kozlowski's breach of
his own duties to Tyco; and
* Failing to advise the Board on May 3, 2002 that the company had
received a subpoena in connection with a criminal investigation
of CEO Kozlowski and concealing from the Board the fact of the
investigation until the evening of May 31, 2002, when Kozlowski
began informing the Board. "As the nature of Belnick's
relationship with Kozlowksi, and his own lack of disclosures
regarding his compensation indicate, Belnick chose to conceal the
criminal investigation of Tyco's CEO from the Board for weeks,
and until he had no choice but to do so, because Belnick was
seeking to protect Kozlowski, and Belnick's own position with the
company, rather than acting in good faith with regard to Tyco's
interests."
The complaint also details Belnick's refusing to cooperate with
the company's outside counsel on the internal investigation
ordered by the Board related to Kozlowski's conduct, in spite of
repeated instructions to cooperate, as well as his efforts to
obstruct the investigation.
Further, the complaint states that early in the morning of
Monday, June 10, "Belnick entered the New York offices of Tyco
and directed Tyco and other personnel to commence packing boxes
with numerous files maintained in the vicinity of his office." It
notes: "Belnick also deleted folders, files and numerous
documents from his computer relating to his compensation and
employment matters, memoranda to Kozlowski, and other
confidential Tyco documents." This occurred immediately prior to
Belnick's termination as Tyco's chief legal officer.
In addition, on June 12, Belnick's legal counsel demanded that
Tyco's counsel "delete the Quicken program and all of Belnick's
financial data on the computer in his office." The complaint
points out that at the time of this demand, Belnick and his
counsel knew that authorities were conducting inquiries and had
issued subpoenas demanding documents from Tyco.
"The Chief Corporate Counsel must be the principal protector of
the Board and the Company against the kind of misconduct engaged
in by the Company's former Chief Executive Officer. For a lawyer
of Belnick's position and reputation to facilitate and conceal
such conduct, and to engage in such conduct himself for personal
gain, is inexplicable and inexcusable. Belnick failed in his
duties to the Board and to the Company," the Complaint states.
The law firm of Boies, Schiller & Flexner LLP is representing
Tyco.
About Tyco International Ltd.
Tyco International Ltd. is a diversified manufacturing and
service company. Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services; and the world's largest
manufacturer of specialty valves. Tyco also holds strong
leadership positions in disposable medical products, financing
and leasing capital, plastics and adhesives. Tyco operates in
more than 100 countries and had fiscal 2001 revenues in excess of
$36 billion.
CONTACT: TYCO INTERNATIONAL LTD.
Gary Holmes of Robinson Lerer & Montgomery
Tel. +1-212-424-1314, or +1-212-424-1307
BOIES, SCHILLER & FLEXNER LLP
Home Page: http://www.boies-schiller.com/
Armonk NY Office
80 Business Park
Suite 110
Armonk NY 10504
Phone: 914 273 9800
Fax: 914 273 9810
Washinton DC Office
5301 Wisconsin Avenue, N.W.
Suite 800
Washington DC 20015
Phone: 202 237 2727
Fax: 202 237 6131
New York NY Office
570 Lexington Avenue
16th Floor
New York NY 10022
Phone: 212 446 2300
Fax: 212 446 2350
Akbany NY Office
100 State Street
Suite 900
Albany NY 12207
Phone: 518 434 0600
Fax: 518 434 0665
Hollywood FL Office
2345 Hollywood Blvd
Hollywood FL 33020-6629
Phone: 954 929 1190
Fax: 954 929 1185
Hanover NH Office
26 South Main Street
Hanover NH 03755
Phone: 603 643 9090 or 9092
Fax: 603 643 912 or 9009
Palm Beach Gardens FL Office
11380 Prosperity Farms Road
Suite 110A
Palm Beach Gardens FL 33410
Phone: 561 622 9700
Fax: 561 622 4400
Orlando FL Office
255 South Orange Avenue
Suite 905
Orlando FL 32801-3456
Phone: 407 425 7118
Fax: 407 425 7047
Fort Lauderdale FL Office
South Trust Tower
One East Broward Blvd
Suite 620
Fort Lauderdale FL 33319
Phone: 954 356 0011
Fax: 954 356 0022
Oakland CA Office
1999 Harrison Street
Suite 900
Oakland CA 94612
Phone: 510 874 1000
Fax: 510 874 1460
Miami FL Office
100 Southeast Second Street
Suite 2800
Miami FL 33131
Phone: 305 539 8400
Fax: 305 539 1307
TYCO INTERNATIONAL: Belnick's Counsel Comments On Lawsuit
---------------------------------------------------------
Stanley S. Arkin said this about the lawsuit filed today by Tyco
International against Mark Belnick:
"This lawsuit is a shabby and transparent tactic by individuals
at Tyco with a personal animus against Mr. Belnick to divert
focus from their own gross breaches of trust. Mr. Belnick
conducted himself during his tenure as Tyco's General Counsel in
an exceptional and worthy manner, and entirely in accordance with
his professional and fiduciary obligations. Moreover, all of Mr.
Belnick's compensation was disclosed to and approved by the
appropriate corporate authorities at Tyco. The lawsuit is as
offensive as it is baseless."
CONTACT: Stanley S. Arkin at 212-333-0208
TYCO INTERNATIONAL: Declares Regular Quarterly Dividend
-------------------------------------------------------
The Board of Directors of Tyco International Ltd. has declared a
regular quarterly cash dividend of 1.25 cents per common share.
The Board of Directors of CIT Exchangeco, a subsidiary of CIT
Group Inc. and Tyco International Ltd., has declared a quarterly
cash dividend of U.S. $0.0086 per exchangeable share. The U.S.
$0.0086 dividend represents 0.6907 of Tyco's regular quarterly
dividend payable to holders of Tyco common shares. Each CIT
Exchangeco exchangeable share is exchangeable for 0.6907 of a
Tyco common share. The dividends are payable on August 1, 2002 to
shareholders of record on July 1, 2002.
TYCO INTERNATIONAL: DBRS Drops to BB (high); Still Under Review
---------------------------------------------------------------
Debt Rated Rating Action Rating Trend
Corporate Rating Continues Under Review - D/G BB (high) Neg
DBRS is downgrading Tyco International Ltd. from BBB (high) to BB
(high) with a Negative trend and the rating is still Under Review
with Negative Implications. The downgrade reflects increasing
uncertainties surrounding the operations and the liquidity
position of the Company: (1) Increasing risks of customers losing
confidence in the Company's viability and stability due to
negative developments regarding management and accounting issues.
(2) Reduced access to the capital market due to negative
development regarding the Company's credit rating. (3) Possible
delay in the monetization of its wholly owned subsidiary, the CIT
Group, which the Company intends to sell either through an
initial public offering or to a buyer. In addition, the proceeds
from selling the CIT Group could be less than anticipated. (4)
The $4.5 billion goodwill impairment charges related to its
wholly owned subsidiary, the CIT Group Inc., which has eroded the
equity basis and is impinging on the debt to equity ratio
covenant of its bank facilities.
CONTACT: TEL: 416-593-5577 ext.2243 Kam Hon
TEL: 416-593-5577 ext.2245 Linda Scott
EMAIL: khon@dbrs.com
TYCO INTERNATIONAL: Downgrade Bumps Raychem 7.20% Notes to 8.20%
----------------------------------------------------------------
Tyco International Ltd., a diversified manufacturing and service
company, announced that effective June 7, 2002, the rating on the
Raychem Corporation 7.20% Notes Due 2008 (CUSIP: 754603 AB 4) has
been decreased to below Investment Grade (as defined in the
Notes). Accordingly, the interest rate on the Notes has been
automatically increased from 7.20% per annum to 8.20% per annum
from June 7, 2002 until such time, if any, as the rating on the
Notes shall be increased so that the Notes are rated Investment
Grade by both Standard and Poor's and Moody's.
The par value of the Notes outstanding is $389.5 million.
CONTACT: RAYCHEM CORP
300 Constitution Drive - Building H
Menlo Park, CA 94025
Phone: (650) 361-6900
Fax: (800) 457-5995
Home Page: http://www.raychem.com
Contact: Scott Wylie
Corporate Communications
Phone: (650) 361-7855
===========
B R A Z I L
===========
EDF: Staying Put in Latin America Despite Economic Woes
-------------------------------------------------------
Despite the recent economic difficulties plaguing Latin America,
Electricite de France (EDF), Europe's largest power company, said
it will keep its investments in the region.
In a report released by Bloomberg, Jean-Remy Cauquil, director of
the Iberian business, said that the Company plans to remain in
Latin America even as the region's currencies have fallen by as
much as 72% this year.
"We plan to stay in Latin America despite the difficulties in
Argentina and Brazil," said Cauquil, who spoke at a press
conference to discuss the Company's plans in the Iberian
Peninsula.
EDF controls Edenor, an electricity distributor for the greater
Buenos Aires region. In April, the unit sought an increase in
power tariffs to stave off a threatening bankruptcy.
Electricity tariffs were pesified and frozen under emergency
legislation introduced after Argentina dropped its peso/dollar
peg, eliminating Edenor's 5% profit margin in one fell
swoop.
"The pesification of tariffs destroyed the balance between
revenues and costs," managing director Henri Ducre said at that
time.
"Demand has fallen 10% and bad debts (among customers) risen from
ARS28 - 38 million in the past three months. As far as our debt
levels are concerned, the impact of the devaluation has been
greater than all the profits we have obtained during our
concession period," Ducre then added.
In ten years of concession, Edenor made US$450 million in profits
on US$1.165 billion in investments. The Company's debt now totals
US$515 million.
In Brazil, French state-owned controls electricity distributor
Light Servicos de Eletricidade SA, which recently returned to the
black after posting a BRL23.6-million net profit for the first-
quarter of the year, compared to a BRL166.6-million net loss in
the same quarter a year ago. EDF injected US$1 billion into the
Brazilian unit in March to pay off debt.
CONTACT: ELECTRICITE DE FRANCE (EDF)
Rue Louis-Murat
75384 Paris Cedex 08,
France
Phone: +33-1-40-42-54-30
Fax: +33-1-40-42-79-40
Home Page: http://www.edf.fr
Contacts:
Francois Roussely, Chairman and CEO
Yannick d'Escatha, COO, Industry Branch
Jacques Chauvin, Chief Financial Officer
ELECTRICITE DE FRANCE (INTERNATIONAL)
30, Rue Jacques Ibert
75017 Paris
Phone: 33 (0) 1 40 42 22 22
Fax : 33 (0) 1 40 42 31 83
Home Page : http://www.edf.fr
Contact :
M. Fang Deyi
Phone: 33 (0) 1 40 42 18 68
Fax : 33 (0) 1 40 42 18 89
E-mail : deyi.fang@edf.fr
EDENOR S.A.
Azopardo Building
Azopardo 1025 (1107) Capital Federal
Phone: (54-11) 4346-5000
Fax: (54-11) 4346-5300
E-mai: to ofitel@edenor.com.ar
Home Page: http://www.edenor.com.ar
Contact:
Riuttort Marc, Treasurer
Fax: (54 1) 348-2149
LIGHT SERVICOS DE ELETRICIDADE S.A.
Avenida Marechal Floriano, 168
20080-002 Rio de Janeiro, Brazil
Phone: +55-21-2211-2794
Fax: +55-21-2211-2993
Home Page: http://www.lightrio.com.br
Contact:
Bo Gosta Kallstrand, Chairman
Michel Gaillard, President and CEO
Joel Nicolas, Executive Director, Operation
Paulo Roberto Ribeiro Pinto, Executive Director,
Investor Relations and CFO
EMBRATEL: BES Analyst Upgrades Stock to Neutral on Valuation
------------------------------------------------------------
Shares of Embratel Participacoes SA, the country's largest long-
distance telephone company, rose 1.6% to BRL3.7, reports
Bloomberg.
Carolina Gava, an analyst with BES Securities, upgraded Embratel
shares to ``neutral'' from ``sell'' considering the recent
decline in stock price, the analyst said in a report. Embratel's
shares have fallen 19% this month, the worst performing stock in
the index in the period.
Embratel was bought by embattled U.S.-based WorldCom Inc. through
its unit MCI for US$2.3 billion in the privatization of Brazil's
telecommunications system in 1997. The Company was once the jewel
of WorldCom's international properties. But, like other long-
distance carriers around the world, Embratel has suffered from a
decline in revenue as competitors gnawed at its once monopolistic
domination of the market.
Embratel posted a US$16-million loss, or 5 cents a share, in the
first quarter of the year, an 8% increase compared to BRL33.7
million in the year-ago period. The Company's total debt
currently stands at BRL3.75 billion.
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
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M E X I C O
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AEROMEXICO/MEXICANA: Continental Head Urges Sale Plan Approval
--------------------------------------------------------------
Gordon M. Bethune, the president of Continental Airlines, Inc.
claimed that the Mexican government has shown no real interest in
selling Aeromexico and Mexicana.
Continental Airlines, the fifth-largest airline in the U.S., is
one of the firms reportedly considering a bid for a stake in the
two Mexican airlines, which account for three-quarters of air
travel in the country.
The Mexican government has been reported as saying that it would
sell the companies, however, Bethune said that, so far, this is
just "pure talk."
When asked what sort of confirmation he would like to see of the
Fox administration's willingness to sell the two airlines,
Bethune replied that a simple ad in the newspaper, stating
"airlines for sale" and the conditions thereof, would suffice.
CONTACT: 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
BANRURAL: Problems Continue for Cash Starved Bank
-------------------------------------------------
Mexico's Banrural, which was reorganized by the government last
year, is again strapped of capital and plagued by growing losses.
The bank needs MXN5 billion (US$520 million), according to data
from National Securities and Banking Commission (CNBV).
The government has two choices: it can cover the amount in case
the bank closes, or it could recapitalize the bank properly,
which however, would entail an even greater amount.
Banrural has half of its assets -- MXN15 billion (US$1.56
billion)-in as an expired loan portfolio. It also has a liability
of MXN13-15 billion (US$1.35-1.56 billion) to employees. The
liability includes future pension payments to 11,000 pensioned
workers.
The bank cut 500 workers and closed 12 branches last year.
CONTACT: BANRURAL
Agrarianism No. 227
Col. Escand˘n
Deleg. Miguel Hidalgo
11800 Mexico, D.F.
Lada 01
Phone: 57-23-13-00
Home Page: www.banrural.gob.mx/
Contact:
Dr. Jose Antonio Meade Kuribre¤a, Main Directorate
Agrarianism no. 227 7ř floor
Ext. 2000
Fax Dir. 5230-1639
Fax 1639
CNBV
Insurgentes Sur 1971,
Piso 10 Sur, Col.
Guadalupe Inn,
C.P. 01020 Mexico, D.F.
Phone: 5724.66.94
5724.66.95
5724.66.96
5661.31.05
E-mail: jdavis@cnbv.gob.mx
Contact: Lic. Jonathan Davis Arzac, President
CORPORACION DURANGO: Fitch Affirms; Changes Outlook To Positive
---------------------------------------------------------------
Fitch Ratings has affirmed its 'B+' ratings of Corporacion
Durango's (Durango) senior unsecured notes due in 2003, 2006, and
2008. The outstanding amount of debt for these notes is $121.7
million, $301.8 million, and $10.4 million, respectively. The
Rating Outlook for these notes has been changed to Positive from
Stable. In conjunction with this rating action, Fitch has
assigned a 'B+' rating, with a Rating Outlook of Stable, to the
company's proposed issuance of $175 million of senior unsecured
notes, which are expected to mature in 2009. Proceeds from this
issuance will be used to retire the 2003 notes and to repay
additional short-term debt that is coming due in 2002.
The 'B+' ratings reflect the high level of debt at Durango and
its subsidiaries, relative to cash flow from operations (EBITDA).
Durango ended 2001 with $803 million of debt and $49 million of
cash and marketable securities. During the year, the company
generated $158 million of EBITDA, a decline from $191 million in
2000. These figures translated into a total debt-to-EBITDA ratio
of 5.1 times (x) for 2001. Similar to other Mexican companies,
Durango includes items in interest expense other than interest
expense paid on its debt. During 2001, the company included $16
million of such expenses. Excluding these miscellaneous expenses,
the company had an EBITDA-to-interest expense coverage ratio of
1.8x. Including these expenses in interest expenses, this ratio
would have been 1.5x.
The 'B+' rating of Durango's obligations also reflects concern
about the company's supplier-financing of small manufacturers in
Mexico. At the end of 2001, Durango had $221 million of accounts
receivable outstanding. The average number of days receivables
were outstanding during 2001 was 79, a jump from 65 days in 2000.
This figure is high for the paper and packaging industry.
Durango's 2001 EBITDA dropped for a variety of reasons. The most
important ones were a recession in Mexico (-0.3 % real GDP
growth) and a stagnant U.S. economy (1.0% real GDP growth). This
economic sluggishness in North America led to a drop in demand
and prices for newsprint and containerboard in the company's key
markets. During 2001, the average price Durango received for its
products declined 9%. Market related downtime taken by the
company further intensified the fall in the company's operating
profits, as Durango's capacity utilization ratio dropped from 91%
in 2000 to 75% in 2001.
During the first quarter of 2002, the company's markets remained
sluggish. Durango operated at 78% of capacity and prices were 11%
lower on average than those obtained during the first quarter of
2001. As a result, the company's credit protection measures were
weak. Interest coverage was 1.4x and leverage, as measured by
total debt-to-EBITDA, was 5.8x.
The change in the Rating Outlook to Positive from Stable reflects
Fitch's belief that several factors will contribute to a marked
improvement of the company's credit protection measures during
the next 12 to 18 months.
First, it is likely that the company will sell approximately $50
million of assets in the next few months, and an additional $50
million of assets within the next year. The proceeds of these
sales are expected to be used for debt reduction. The assets most
likely to be sold by the company are its molded egg carton
business and its wood products business. The EBITDA generated by
these two businesses was approximately $12 million in 2001, or 8%
of EBITDA.
Second, Durango's operating profits would improve substantially
if the Mexican peso weakens versus the dollar, as a considerable
portion of the company's costs is denominated in pesos while most
of its revenues are in dollars or are indexed to the dollar. The
international competitiveness of Durango's largest customers,
Mexican exporters, also improves with a weak peso. Furthermore, a
weak peso makes the Mexican market less attractive to
international companies that wish to export products to Mexico.
During the past three years, the Mexican peso has been among the
strongest currencies in the world, averaging 9.56 pesos per
dollar in 1999, 9.48 in 2000 and 9.34 in 2001. During this time
period, inflation in Mexico was 12.3%, 8.9% and 4.4%,
respectively, while inflation in the U.S. was 2.7%, 3.4% and
1.6%, respectively. Since the end of March 2001, the peso has
weakened from 9.0 pesos per dollar to approximately 9.6. This
bodes well for the company's performance in the second half of
2002.
Third, during March, one of the company's U.S. subsidiaries
entered into a five-year supply agreement with Sweetheart Cup
Company Inc. This contract calls for Durango's subsidiary to
deliver a minimum of 75,000 tons of solid bleached sulfate board
per year to Sweetheart Cup Company Inc. This agreement has
contributed to an increase in the company's capacity utilization
from 77% in January 2002 to 84% during June.
Like other companies in the industry, Durango has high operating
leverage. As a result, the company's EBITDA is strongly affected
by volumes and prices. The company is also exposed to the
relationship between the peso and the dollar. If volumes and
prices are strong and the peso is weak vis-a-vis the dollar,
Durango should be able generate approximately $240 million of
EBITDA. If prices are weak, volumes are light and the peso is
strong versus the dollar, EBITDA should be about $160 million. If
the company sells non-core assets and uses the proceeds for debt
reduction, as is its publicly stated intention, its future
indebtedness should be approximately $725 million. On a pro forma
basis this would give the company a forward looking total debt-
to-EBITDA range between 4.5x and 3.0x and an interest coverage
range between 2.0x and 3.0x.
Durango is forecasting $32 million of capital expenditures in
2002 and $30 million in 2003. The company's tax obligations are
minimal due to approximately 2 billion pesos of tax loss carry
forwards (TLCF). Most of the TLCFs were obtained when the company
purchased Pipsamex in 1998.
Durango is Mexico's leading producer of corrugated boxes and
newsprint with estimated market shares of 40% and 70%,
respectively. The company was created in 1998 to act as a holding
company for the pulp and paper investments of the Rincon family.
During 2001, Durango was merged with its largest subsidiary Grupo
Industrial Durango (GID). The Rincon family owns 93% of Durango.
The other 7% is publicly held.
CONTACT: Fitch Ratings
Joe Bormann, 1-312-368-3349
Roberto Guerro, 1-312-368-3343
Adriana Beltran or Victor Villarreal,
011-52-818-335-7239
James Jockle, 1-212-908-0547 (Media Relations)
GRUPO DINA: Forfeits Two Branches To Hidalgo State
--------------------------------------------------
The bankruptcy process of the insolvent Mexican truck-maker Grupo
Dina closed with the abdication of two of its branches in Ciudad
Sahagun to Hidalgo state, reports Mexico City daily el
Economista, citing Grupo Dina legal director, Mauricio Germ n
Mendoza.
Originally shut down in February 2000, the facilities, namely
Dina Camiones and Composites de Sahagun, were given to Hidalgo
state as payment for collective and individual compensations.
Grupo Dina's debts in terms of contracts were estimated at MXN156
million (US$16.21 million).
The truck-maker had until May to find a buyer for its truck
assembly plant of 500,000 square meters and infrastructure to
operate immediately.
The secretary of Economic Development, Alberto Melendez Apodaca
also recently announced that state authorities had also reached
an agreement with National Casting, located in the same
industrial complex, to hand over company stock as payment to
union workers and providers.
CONTACT: CONSORCIO G GRUPO DINA SA DE C.V.
Tlacoquemecatl de Valle
No 41 Tlacoquemecatl
Mexico
Tel. +52 5 420 3900
+52 5 420 3987
Home Page: http://www.dina.com.mx/
PAN AMERICAN: Completes Loan; Starts La Colorada Expansion
----------------------------------------------------------
Pan American Silver Corp. announced the start of construction to
quadruple production at its La Colorada silver mine in Mexico in
an official company news item. The move comes after signing a $10
million project debt facility with International Finance
Corporation (IFC), the private sector lending arm of the World
Bank.
The project's total capital costs are estimated at about $20
million and Pan American will fund the remaining capital from its
cash on hand, currently totaling $18.7 million. Pan American will
provide a corporate guarantee for the loan until financial
completion, expected by mid 2004, and will repay the loan with
semi-annual $1 million installments starting in November 2004.
The loan agreement does not require Pan American to hedge any
silver production. The increase in La Colorada's production
should begin early in the third quarter of 2003, raising Pan
American's consolidated silver output from all three mines to
about 11 million ounces per year.
Pan American acquired La Colorada in March 1998. The bankable
feasibility study, completed in late 2000, defines total proven
and probable reserves of 2.7 million tonnes of ore grading 458
grams of silver per tonne and 0.53 grams of gold per tonne. In
early 2001, a small-scale mine was started at La Colorada and has
produced over 1.1 million ounces of silver to date. This mine
uses the existing mill to produce concentrates from sulfide ore
and is currently operating at a rate of 200 tonnes per day. The
expansion project will add a 600 tonne per day leach circuit to
process oxide ore and will bring the mine's total production rate
to 800 tonnes per day. Production from the expanded operation is
expected to average 3.2 million ounces of silver per year at a
total cash cost of less than $2.70 per ounce for a 13 year mine
life. Pan American acquired ground covering a surface extension
of the known oxide ore in 2001 and plans to drill test the zone
in the second half of 2002. The Company believes this zone and
other targets on La Colorada provide excellent opportunities to
extend the mine's life.
To see financial statements:
http://bankrupt.com/misc/Pan_American_Silver.txt
CONTACT: Ross J. Beaty, Chairman
Rosie Moore, VP Corporate Relations
Tel. 604-684-1175
=================================
T R I N I D A D & T O B A G O
=================================
VINTAGE PETROLEUM: Selling Trinidad Holdings; Ecuador Assets
------------------------------------------------------------
Vintage Petroleum, Inc. announced Monday it has signed a
definitive agreement to sell all its holdings in Trinidad and
Tobago to Vermilion Resources Ltd. for approximately US$40
million. The sale is subject to customary conditions precedent to
closing, working capital and other post-closing adjustments.
Closing is anticipated to occur by the end of June.
Proceeds from the sale of its Trinidad oil and gas interest will
be applied toward meeting a previously announced plan to reduce
the company's long-term debt by $200 million and to rebalance its
portfolio toward North America through a combination of the sale
of non-strategic assets in Trinidad and Ecuador and the
application of cash flow in excess of capital expenditures. In
addition, Vintage plans to open data rooms in the U.S. and U.K.
within a week, initiating the sale process for its oil and gas
assets in Ecuador.
"We are pleased with the rapid progress made to date toward our
plan to reduce debt by $200 million by year-end 2002 and the high
level of interest in our announced asset divestitures," said S.
Craig George, CEO of Vintage.
Vintage's Trinidad assets are located onshore in the Central
Block portion of the southern basin. At year-end 2001 proved
reserves were 64.4 Bcf of gas and over one million barrels of
condensate or 11.9 million BOE. "We are successfully capturing
asset value from the discoveries made during 2001, allowing the
company to meet its debt reduction goals and to intensify its
focus on other growth opportunities in its inventory. The long-
term benefits associated with the development of the gas markets
in Trinidad are a better strategic fit for other companies,"
indicated Mr. George.
Vintage Petroleum is an independent energy company engaged in the
acquisition, exploitation, exploration and development of oil and
gas properties and the marketing of natural gas and crude oil.
Company headquarters are in Tulsa, Oklahoma, and its common
shares are traded on the New York Stock Exchange under the symbol
VPI.
CONTACT: VINTAGE PETROLEUM, INC.
Robert E. Phaneuf, Vice President - Corporate Dev.
Tel. +1-918-592-0101
=================
V E N E Z U E L A
=================
COSTA NORTE: Contracts Move Forward After Debt Restructuring
------------------------------------------------------------
Costa Norte Construcciones, a sub contractor for the Venezuelan
oil industry, believes it now has solid basis to sign new
contracts following its April debt restructuring. The assembler
of metal scaffoldings and structures to oil companies has already
signed contracts worth VEB50 billion for 2001 and VEB15 billion
for 2002.
In April, Costa Norte concluded the restructuring of its finances
hindered by VEB10 billion in debts with the banks Occidental de
Descuento, Provincial, Venezuela, del Cribe, Corpbanca, Exterior
and Venezolano de Credito.
SUDAMTEX: Seeks Authorization To Dissolve, Sell Assets
------------------------------------------------------
Venezuelan textile company Sudamtex de Venezuela SACA, which
recently succumbed to the opening of the country's domestic
market and the lowering of import tariffs, will seek approval to
shut down and put its assets on the block, informs Bloomberg,
citing a Caracas Stock Exchange statement.
According to the statement, Sudamtex plans to hold a shareholder
meeting July 16 to vote on a proposal to dissolve the Company and
appoint liquidators.
Two months ago, Sudamtex defaulted on its debt payments, and
sought to renegotiate US$45 million in bank loans for the second
time in a year.
"They could never get any sales volume," said Alex Dalmady,
managing director of research firm InvestAnalysis. "They made
some bad moves, like moving to modernize their equipment when
there was no need to."
In 2000, the Caracas-based company, which makes cotton and
synthetic yarns as well as fiberglass, renegotiated its
borrowings with eight banks, including the Andean Development
Corp., a regional lending agency.
The company had a market capitalization of as much as US$200
million in the early 1990s, according to Dalmady.
"They should be able to sell some of the weavers and other
equipment," Dalmady said.
Sudamtex shares last traded Wednesday, with the Class A shares
falling 18% to 74 centavos, down from a high of VEB31.82 in
August 1997.
CONTACT: SUDAMTEX DE VENEZUELA, C.A., S.A.C.A.
Edificio Karam, Piso 2,
Ibarras a Pelotas,
Avenida Urdaneta, Apartado 3025
Caracas, Venezuela
Phone: +58-2-562-9222
Fax: +58-2-562-9411
Home Page: http://www.sudamtex.com/home.htm
Contact:
Alexander J. Furth, President
Carlos F. Van Maanen, VP, Finance and Administration,
Fiberglass
ANDEAN DEVELOPMENT CORPORATION
1224 Washington Avenue
Miami Beach, Florida 33139
Phone: (305) 866-3360
Contact:
Pedro P. Errazuriz, Chairman and CEO
Jose Luis Yrarrazaval, Vice Chairman/CFO/Secretary
SUDAMTEX: Company Profile
-------------------------
NAME: Sudamtex de Venezuela, C.A., S.A.C.A.
Edificio Karam, Piso 2,
Ibarras a Pelotas,
Avenida Urdaneta, Apartado 3025
Caracas, Venezuela
PHONE: +58-(0)2-562-9222
FAX: +58-(0)2-562-4332
WEBSITE: http://www.sudamtex.com/home.htm
EXECUTIVE MANAGEMENT TEAM:
Alexander J. Furth, President
Carlos F. Van Maanen, Vice Pres., and CFO
INVESTOR RELATIONS: Carlos F. Van Maanen, Chief Financial Officer
TYPE OF BUSINESS: Sudamtex de Venezuela produces and markets
natural textiles and synthetic fabrics for the garment industry,
as well as fiberglass products for the oil, marine, construction,
and automotive industries. Sudamtex's textile products include
cotton, polyester, nylon, and greige fabrics and yarns. The
company's Fibratank UST subsidiary makes fiberglass underground
storage tanks that hold gasoline and water. Sudamtex has
operations in Colombia, Uruguay, and Venezuela. The company
markets its products globally, with a focus on the Andean Pact
and Mercosur trading blocks in Latin America. George Soros
controls about 15% of the company.
SIC:
Primary Industry: Manufacturing - Textile Manufacturing
Secondary Industry: Chemicals - Plastics & Fibres
SIC Codes:
2221 - Broadwoven fabric mills, manmade
2281 - Yarn spinning mills
2823 - Cellulosic manmade fibers
EMPLOYEES: 2,212
SALES: US$30,251,914 (year ended June 2001)
MARKET CAPITALIZATION: US$2,061,926 (year ended June 2001)
PUBLIC SECURITIES: 2,737,191,625 shares outstanding (year ended
June 2001)
***********
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
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Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is $575 per half-year,
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