/raid1/www/Hosts/bankrupt/TCRLA_Public/020702.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
Tuesday, July 2, 2002, Vol. 3, Issue 129
Headlines
A R G E N T I N A
ARGENTINE BANKS: Central Bank Unveils New Banking Regulation
BANCO VELOX: Central Bank Orders Suspension To Protect Clients
FARGO: Seeks Debt Deal Under Bankruptcy Protection
MASTELLONE HERMANOS: Seeks Bank to Restructure $350M Debt
B E R M U D A
TYCO INTERNATIONAL: Hires Ex-Senate Majority Leader As Lobbyist
B O L I V I A
BANCO BISA: Moody's Lowers BSFR On Steep Profitability Decline
B R A Z I L
NET SERVICOS: S&P Lowers Ratings to ``CCC+''
C O L O M B I A
COLOMSAT: Finalizes Debt Agreement In Creditor Meeting
E C U A D O R
ECUATORIANA DE AVIACION: To Restructure $50M In Debt
M E X I C O
AEROMEXICO: To Entertain Airbus, Boeing Offers This Week
EXCELSIOR: Employees Urge Sale After Wages Go Unpaid
GRUPO NKS: Future Hangs In The Balance
GRUPO TMM: Paying Cash for Convertible Notes Initial Repayment
HYLSAMEX: Extends Hylsa's Exchange Offer Expiration Date
HYLSAMEX: Shareholders Agree On Rights Offering To Boost Capital
ISPAT INTERNATIONAL: Imexsa Extends Exchange Offer, Consent Date
MINERA AUTLAN: Reactivates Production Of Silicon Manganese
XEROX CORP.: Arranges Third-Party Financings in Brazil, Mexico
V E N E Z U E L A
FERTINITRO FINANCE: Moody's Downs $250M Secured Bonds To Ba3
- - - - - - - - - -
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A R G E N T I N A
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ARGENTINE BANKS: Central Bank Unveils New Banking Regulation
-------------------------------------------------------------
The Argentine central bank has announced a new requirement that
would fix bankers to a maximum legal limit of dollar holdings,
reports local daily La Nacion. The regulation entails banks to
include forward dollar contracts when calculating their maximum
legal limit of dollar holdings in order to adhere to the current
value pegged at 5% of total equity. Forward dollar contracts
used to be allowed to exceed access to more than the 5% limit.
Lehman Brothers, director of Latin American equity research
viewed the move as "understandable" considering conditions in the
country's foreign exchange market. Banks that had loans with the
central bank will have their dollar holding limit cut to 2.5% of
total equity. Whereas, foreign banks that have injected capital
to their local operations can keep up to 40% of their dollar-
denominated investment.
State-owned and private banks have debts with the central
government, and only very few have provided enough capital.
Roberto Dimer, banking analyst for local consultancy Argentine
Research relates two conditions that would happen depending on
the balance of the dollar against the peso. According to Dimer,
the banks stand to lose as a result of the compulsory reduction
holdings if the dollar remains strong, but will benefit from it
if the peso recovers. He confirmed, however, the unlikely
possibility of the peso recovering.
Argentina's currency had devalued from 1.7 to the dollar in
January to about 3.91 to the dollar Friday.
CONTACT: LEHMAN BROTHERS
World Headquarters
745 Seventh Avenue
New York, NY 10019
USA
Home Page: http://www.lehman.com/
Phone: 212-526-7000
Richard S. Fuld, Jr.
Chairman and Chief Executive Officer
David Goldfarb, Chief Financial Officer
Institutional Office
Torre Alem Plaza
Av. Leandro N. Alem 855
1001 Buenos Aires
Argentina
Phone: 54-11-4319-3400
BANCO VELOX: Central Bank Orders Suspension To Protect Clients
--------------------------------------------------------------
Argentina's Central Bank issued a decree suspending the
operations of Banco Velox, owned by the Uruguayan-Argentine Velox
group, for 30 days beginning Friday in a move to protect the
bank's customers and to give time to resolve liquidity issues,
reports EFE.
Banco Velox actually requested the intervention from the Central
bank because of the country's poor economic condition and "the
critical financial situation" in the Mercosur trade region.
According to a Central Bank official, the decision was made
"based on the situation of affiliated banks in Paraguay and
Uruguay and problems on the local market."
The decision, EFE reports, was announced shortly after a
Paraguayan judge issued an arrest warrant for Uruguayan brothers
Juan and Jose Peirano in connection with alleged irregularities
at Banco Aleman, a Velox group subsidiary in Asuncion that was
recently taken over by Paraguay's Central Bank.
The Peirano brothers have been accused of taking US$20 million in
Banco Aleman funds to cover losses at other Velox operations in
the region.
Juan Peirano is also the president of Banco Velox, in which he
holds 78% of the corporate capital. His brother holds a 22% stake
in Banco Velox, which employs 400 people and has 14 branch
offices in Argentina.
As of December 2001, Banco Velox was ranked 35th among Argentine
banks in terms of deposits and 36th in total assets.
CONTACT: BANCO VELOX S.A
Sarmiento 532 (1041) Capital Federal
Buenos Aires
Phone: 4321-1800
Fax: 4321-1820
E-mail: mailto:servicioalcliente@velox.com.ar
Home Page: http://www.bancovelox.com.ar/
Contacts:
Juan Peirano, President
Carlos Peterson, Representative
FARGO: Seeks Debt Deal Under Bankruptcy Protection
---------------------------------------------------
Argentina's currency devaluation, which led to the country's
financial downfall, claims another victim. Argentina's largest
bread-baker Fargo, filed for bankruptcy protection Friday,
seeking an agreement with creditors to restructure its reported
US$150 million of debt.
"We want to preserve our operating capacity at any cost," company
finance director Daniel Elizalde said.
Fargo, which employs 1,280 workers at five plants, began to
report losses earlier this year, following the devaluation of the
peso, which sent prices of raw materials soaring.
According to Elizalde, while wholesale prices of flour, yeast and
vegetable oils skyrocketed by as much as 300%, retail bread
prices rose only 50%.
Fargo is Argentina's leading packaged bread manufacturer with 54%
of the market, down from 62% last year.
CONTACT: COMPANIA DE ALIMENTOS FARGO S.A.
Panamericana Y Marcos Sastre
1617 General Pacheco
Buenos Aires, Argentina
Phone: 541-14-736-6500
Fax: 541-14-736-6540
Contacts:
Carlos Barbero
E-mail: vbullrich@fargo.com.ar
MASTELLONE HERMANOS: Seeks Bank to Restructure $350M Debt
---------------------------------------------------------
Leading dairy producer Mastellone Hermanos has stopped paying its
bills and is currently looking for a bank to help restructure its
US$350- million debt, says Dow Jones Newswires.
The Company has already commissioned Greenwich Investments to
help it select a suitable bank. It claims to have a shortlist of
five international banks at the moment.
"We've halted payments on our debt to free up working capital for
operations. An investment bank should be chosen (to manage the
restructuring) around mid-July," confirms CFO Rodolfo Gonzalez in
an interview with Dow Jones Newswires.
Of the US$350 million outstanding debts of the Company, US$225
million are in bonds. The balance consists of bank loans, the
report says.
"Preliminarily we are looking at exchanging the current bonds for
new securities. But we won't make a decision on that until we
hire an investment bank to handle the restructuring," Mr.
Gonzalez said when asked about the Company's plans.
Considered the top dairy producer in Argentina, the Company's
tailspin began after banks refused to renew credit lines during
the first quarter, following the government's default in
December.
But even if the Company finds a willing banker to restructure its
debts, Argentina's worsening economy can dampen its efforts.
Economy Minister Roberto Lavagna does not expect consumer
spending to improve any time soon. For a country, whose GDP is
80% consumer spending, a drop in consumer demand means disaster.
During the first quarter, the economy contracted by 16.3%,
largely because average Argentine families cut back on
expenditures due to the imposition of a banking freeze, following
the government's default.
The devaluation of the peso also shuttered the economy, as prices
of commodities jumped 23.5% from last year's level. This
hyperinflation severely limited spending, as shown by the 19.2%
drop in volume of goods sold in Argentine supermarkets during the
last five months.
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B E R M U D A
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TYCO INTERNATIONAL: Hires Ex-Senate Majority Leader As Lobbyist
---------------------------------------------------------------
Tyco International, Ltd., which has been grilled since January
about its aggressive accounting practices and its hefty debt,
quietly hired Robert J. Dole as a Washington lobbyist, reports
the Chicago Sun Times. Dole is formerly the Senate majority
leader and a 1996 Republican presidential nominee. On June 20,
Bob Dole Enterprises registered with the government to lobby for
Tyco. JoAnne Coe, secretary of the Senate when Dole was majority
leader, is listed as the principal contact. The "specific
lobbying issues" stated in the registration are "general
corporate tax issues."
CONTACT: TYCO INTERNATIONAL
Gary Holmes
Tel. +1-212-424-1314
+1-212-424-1307
Web site: http://www.tyco.com
=============
B O L I V I A
=============
BANCO BISA: Moody's Lowers BSFR On Steep Profitability Decline
--------------------------------------------------------------
Moody's Investors Service lowered the bank financial strength
rating (BSFR) of Bolivian bank Banco BISA S.A. to E+, from D. The
rating outlook is stable.
BFSR represents Moody's opinion of a bank's intrinsic
creditworthiness and may be understood as a measure of the
likelihood that a bank may require assistance from third parties.
The cut in Banco Bisa's BSFR reflects the sharp deterioration in
its profitability and asset quality and the expectation of
continued pressure on both these indicators in the midst of
Bolivia's deepening recession.
Simultaneously, Moody's affirmed the bank's B2 long term foreign
currency deposit rating at the country ceiling for Bolivia. The
rating outlook remains stable.
As of December 31, 2001, Banco BISA was Bolivia's largest bank
with $759 million in assets and $639 million in deposits.
New York
Gregory W. Bauer
Managing Director
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Jeanne Del Casino
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
===========
B R A Z I L
===========
NET SERVICOS: S&P Lowers Ratings to ``CCC+''
--------------------------------------------
Brazil's largest cable television network, Net Servicos de
Comunicacao SA (formerly Globo Cabo S.A.), is now assigned a junk
rating in Standard & Poor's ratings bulletin, says Bloomberg. The
Company suffered a three-notch downgrade last week by Standard &
Poor's on doubts shareholders will be willing to put any more
money into Brazil's biggest cable television company.
Standard & Poor's cut the rating for Net Servicos to ``CCC+''
from ``B+'', the ratings company said. The outlook for the rating
is negative, Standard & Poor's said. Net's preferred shares
plunged 17% to BRL1.68 on the Sao Paulo Stock Exchange.
Net's shareholders, who earlier agreed to put BRL1 billion
($352 million) into the Company, are now making that conditional
on its ability to lengthen out maturities of its short-term debt.
That raises doubts about whether the shareholders are committed
to give the money needed for Net to pay debts coming due in 2002,
said Milena Zaniboni, director of corporate ratings at Standard &
Poor's in Sao Paulo.
"This rating says there's a risk of default," said Zaniboni.
"It's not imminent but the Company's ability to pay depends on
certain favorable scenarios."
Net has as much as US$200 million in debt repayments coming due
this year, said the Company's Finance Director Leonardo Pereira.
Events will move quickly as the Company completes negotiations
with shareholders and banks over the next two weeks, said
Zaniboni.
The share offering being used by Net to put money into Net is due
to start on July 9 and by then the Company should have extended
maturities on its loans, she said. Failure to reach agreement on
extending maturities would lead to a further downgrade of more
than one notch, she said.
Net's Pereira said there was "no scenario" under which the
Company would fail to line up new capital. "We are saying there
is no way this capitalization will not occur," he said in an
interview. "We continue to enjoy the support of our banks."
Brazilian companies are finding it harder and more expensive to
line up financing as the country's bonds and currency suffered a
two-month plunge led by concerns about the outcome of
presidential elections in October. Workers' Party candidate Luiz
Inacio Lula da Silva, who is leading the polls, has recommended
in the past rescheduling the nation's US$326 billion debt.
Brazil's 8% bond due 2014 on Friday rose 1.75 cents on the dollar
to 63.38 offered to yield 18.3%.
===============
C O L O M B I A
===============
COLOMSAT: Finalizes Debt Agreement In Creditor Meeting
------------------------------------------------------
Bankrupt Colombian ISP Colomsat and its creditors were due to
meet Friday to finalize a debt restructuring agreement, reports
Business News Americas. The agreement, which includes a debt-for-
equity swap, will allow the Company to reemerge from bankruptcy
with greater liquidity.
Colomsat, a subsidiary of Chilean long distance operator Telex
Chile, was declared bankrupt in October 2001 listing debts of
COP38.2 billion (US$15.9 million). Creditors include Colombian
tax agency Dian, along with a number of financial institutions
and equipment suppliers.
Colomsat's parent Telex Chile also restructured debts and
received a substantial capital injection from US-based venture
capital firm Southern Cross.
At the end of 2001, Colomsat registered COP11 billion in
revenues, down 17.9% from the COP13.4 billion reported in 2000.
It also had 20,000 Internet users, of which 8,000 had contracts
with the Company.
=============
E C U A D O R
=============
ECUATORIANA DE AVIACION: To Restructure $50M In Debt
----------------------------------------------------
Trying to keep its corporate wings spread, Ecuadorian airline
Ecuatoriana de Aviacion announced it will restructure debts
totaling US$50 million, El Universo reports.
In addition to the debt restructuring, the Company will also pass
on 80% of its labor force to LanChile, which has been operating
Ecuatoriana's flight to the US since mid-December 2001. It will
not renew its routes sharing contract with LanChile ending June
30th.
The Ecuadorian civil aviation authority DAC recently issued a
ruling blocking Ecuatoriana to operate flights to the US. The
regulator issued the ruling on Ecuatoriana's failure to settle a
US$3.68-million debt, which corresponds to airport taxes, renting
of airport facilities, landing tax, flight protection, and air
services.
In May this year, AeroContinente SA, Peru's largest airline,
offered US$42 million in payments plus assumption of debt in
exchange for a 70% stake in Ecuatoriana. Carlos Morales,
AeroContinente executive director, at that time, revealed that
the airline offered to pay the Ecuadorian government US$2.3
million in cash, make monthly installments totaling US$4.8
million over two years and assume about US$35 million in debt for
a controlling stake. According to Morales, the Ecuadorian
government would retain a 25% stake and Ecuadorian investors the
remaining 5%. Ecuatoriana could report sales of between US$40
million and US$50 million in its first year once it resumes
operations, Morales had said.
CONTACT: ECUATORIANA DE AVIACION
Colon Y Reina Victoria Edf, Quito, Ecuador
Phone: +593 (2) 563 003
Fax: +593 (2) 563 920.
Home Page: Website: www.ecuatoriana.com.ar/
AEROCONTINENTE AIRLINES
Jr. Moyobamba 101
Tarapoto, Peru
Phone: (094) 524332
Fax: (094) 523704
Home Page: http://www.aerocontinente.com/
Contact: Sr. Zad Desm,, Vice President
===========
M E X I C O
===========
AEROMEXICO: To Entertain Airbus, Boeing Offers This Week
---------------------------------------------------------
Airbus and Boeing are due to present this week to Aeromexico,
Mexico's largest airline, their bids as part of the airline's
fleet renewal program. Aeromexico is looking to renew its 19 DC-9
planes, in a program valued at US$510 million.
Each company will have two hours to present their bids. The
decision will be announced in late July.
Aeromexico and its subsidiary Servicios Aereos Litoral
(Aerolitoral) recently froze their investment plans and non-
fundamental projects because of dwindling cash flow. Aeromexico
blamed part of the problem on the lack of credit for the payment
of terrorist insurance policies.
AeroMexico, is one of the two main units of airline holding
company Cintra SA, which is 65%-owned by the Mexican government.
The airline is scheduled to be sold-off this year.
CONTACT: AEROMEXICO
Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or
mweitzman@aeromexico.com
EXCELSIOR: Employees Urge Sale After Wages Go Unpaid
----------------------------------------------------
Financially struggling Mexico City daily Excelsior, formerly one
of Mexico's most respected and independent dailies, is to be
sold, reports Dow Jones Newswires.
The sale comes after the newspaper's employees, who, according to
company spokesman Miguel Barba, have been frustrated "with not
receiving a salary" for the past four months, voted 584-42 on the
decision. Exactly when, how or for how much the newspaper would
be sold was unclear. Barba said officials so far had no serious
offers.
The paper's financial problems began surfacing in October 2000,
when members of Excelsior's cooperative revolted and ousted
director Regino Diaz Redondo because of a plan to sell the
newspaper.
In December, workers voted to fire the leader of the employee
cooperative that runs the daily, but agreed to put off discussion
of whether to sell the paper.
In March, dozens of disgruntled former workers stormed the
landmark building, beating some employees and telling others they
had come to "rescue" them from the paper's current
administration.
The occupation ended after some 40 people were arrested,
including several police officers from the neighboring state of
Mexico. Police said the detained officers told them they were
hired to help seize the building.
CONTACT: DIARIO EXCELSIOR (MEXICO)
Ecuador 3650, Of. 804
Ciudad Santiago
Zona Region Metropolitana
Phone: 7787583
Fax: 7791110, 2753169
E-mail: juribe@lauca.usach.cl
Contact:
Sir Jorge Uribe Navarrete, Credited Correspondent
GRUPO NKS: Future Hangs In The Balance
--------------------------------------
The employees of Grupo Industrial NKS expressed skepticism about
the Company's future after its imminent sale. NKS is scheduled to
go on the block on July 11 in a transaction worth MXN3.16 billion
pesos after it lost a case lodged against it by Banco Union.
According to NKS union leader Martin Jacinto Galeano, there was
not enough information in the case since the union had only just
been informed about the issue. Galeano also speculated that NKS
seems to have a debt with the financial organization.
The Company's leader, David Gomez Arnau, made no comment
regarding the matter. But Sergio Cortes Moreno, NKS Human
Resources Manager, revealed, "Gomez and the Company's owners are
in Mexico City to negotiate an agreement with the bank."
NKS is an essential Latin American manufacturing complex for
heavy forged and cast steel parts and components. Among the
industrial areas served by NKS, the most representative sectors
include: generation of electrical power, steel manufacture,
mining and metallurgy, cement manufacture, sugar refining, the
petroleum industry, and commercial shapes of steel (smooth and
premachined in different types of special steels).
CONTACT: GRUPO INDUSTRIAL NKS, S.A. DE C.V
Interior Isla del Cayacal s/n
Lazaro Cardenas, MIch. M‚xico
C.P. 60950
Phone: 52+753-31900
Fax: 52+753+31925
Home Page: http://nks.com.mx/
Contact:
David Gomez, General Director
E-mail: d.gomez@nks.com.mx
Javier Herrera, Business Director
E-mail: j.herrera@nks.com.mx
Hector Arizpe, Corporate Sales Director
E-mail: h.arizpe@nks.com.mx
GRUPO TMM: Paying Cash for Convertible Notes Initial Repayment
--------------------------------------------------------------
Grupo TMM, announced it will begin repayment of its convertible
notes in weekly installments commencing July 5, 2002, in
accordance with the terms of the $32.5 million issue. Under the
terms of the convertible notes, which will be fully amortized by
May 5, 2003, the company has the option to make the weekly
payments of principal and related interest in the form of cash or
stock or a combination thereof.
Javier Segovia, president of TMM said, "Since the current stock
price is well below what management believes is fair value for
the company's stock, the initial weekly payment on the
convertible notes will be made in cash. The company will make the
decision on the form of future payments based upon business
factors including but not limited to, the market value of our
stock and other issues that impact shareholder value."
The company is not obligated and does not intend to issue weekly
press releases with respect to the manor of repayment of the
installments of the convertible notes.
Headquartered in Mexico City, Grupo TMM is the premier Mexican
multimodal transportation company and logistics provider. Through
its branch offices and network of subsidiary companies, Grupo TMM
provides a dynamic combination of ocean and land transportation
services within Mexico. Grupo TMM also has the controlling
interest in Transportacion Ferroviaria Mexicana (TFM), which
operates Mexico's Northeast railway and carries over 40 percent
of the country's rail cargo. Visit Grupo TMM's web site at
http://www.grupotmm.com.mx,TFM's web site at
http://www.gtfm.com.mx.
CONTACT: GRUPO TMM COMPANY
Jacinto Marina
Phone: 011-525-629-8790
E-mail: jacinto.marina@tmm.com.mx
or
Brad Skinner
Phone: 011-525-629-8725 (Investor Relations)
E-mail: brad.skinner@tmm.com.mx
or
Luis Calvillo
Phone: 011-525-629-8758 (Media Relations)
E-mail: luis.calvillo@tmm.com.mx
or
AT DRESNER CORPORATE SERVICES
(general investors, analysts and media)
Kristine Walczak
Phone: 312/726-3600
E-mail: kwalczak@dresnerco.com
HYLSAMEX: Extends Hylsa's Exchange Offer Expiration Date
--------------------------------------------------------
Hylsamex, S.A. de C.V. and its subsidiary Hylsa, S.A. de C.V.
("Hylsa") announced Friday that Hylsa is extending the expiration
date for the exchange offer for its 9 1/4% Notes due 2007 (the
"2007 Notes") until 5:00 p.m., New York time, on July 19, 2002.
Hylsa is extending the expiration date to allow it to finalize
the proposed restructuring of its outstanding debt. Hylsa has
reached an agreement in principle with the steering committee
representing its bank lenders with respect to the restructuring,
and has agreed with the lenders on the documentation for the
restructured debt. Hylsa continues to make significant progress
toward satisfying the conditions precedent for the effectiveness
of the restructuring.
The terms of the exchange offer originally provided that the
first interest payment date for the 10 1/2% Notes due 2010 (the
"2010 Notes") would be June 15, 2002. Because the 2010 Notes were
not issued as of that date, Hylsa will instead pay accrued and
unpaid interest on the closing date of the exchange offer on all
2007 Notes that are tendered and accepted for exchange at the
rate of 9 1/4% per annum through June 14, 2002 and at the rate of
10 1/2% per annum from June 15, 2002 through the closing date of
the exchange offer. On the closing date of the exchange offer,
Hylsa will pay accrued and unpaid interest at the rate of 9 1/4%
per annum through March 15, 2002 on all 2007 Notes not tendered
for exchange.
Hylsa will continue to offer the exchange payment for all 2007
Notes tendered prior to the expiration of the exchange offer.
Each holder that tenders 2007 Notes at or prior to 5:00 p.m., New
York time, on July 19, 2002 will receive a $10 exchange payment
for each US$1,000 principal amount of 2007 Notes tendered.
Holders that previously consented to the proposed amendments and
waiver under the indenture governing the 2007 Notes, but did not
tender their 2007 Notes, may tender their 2007 Notes at or prior
to 5:00 p.m., New York time, on July 19, 2002 and receive the
full US$10 consent and exchange payment for each US$1,000
principal amount of 2007 Notes tendered (rather than the US$5
consent payment).
Hylsa has received tenders of approximately US$160 million in
principal amount of its 2007 Notes in exchange for new 2010
Notes. Hylsa has satisfied the condition that it receive tenders
of at least 50% in principal amount of its outstanding 2007 Notes
and the consent of a majority in principal amount of its
outstanding 2007 Notes to the proposed amendments to the
indenture governing the 2007 Notes and the waiver of past
defaults under the indenture. 2007 Notes tendered and consents
delivered may not be withdrawn or revoked.
All other terms and conditions to the exchange offer and consent
solicitation remain unchanged.
The exchange offer continues to be subject to the consummation by
Hylsa of the overall restructuring of its outstanding debt, as
well as other customary conditions.
The new notes offered in the exchange offer will not be
registered under the Securities Act of 1933, as amended, and will
only be offered in the United States to qualified institutional
buyers in a private transaction, and outside the United States in
offshore transactions.
For further information (including requests for offer
documentation by eligible offerees), contact the information
agent for the Company:
MacKenzie Partners, Inc.
E-mail: proxy@mackenziepartners.com
Steven Balet
Phone: 800-322-2885
212-929-5500 (collect)
HYLSAMEX: Shareholders Agree On Rights Offering To Boost Capital
----------------------------------------------------------------
Hylsamex shareholders approved Friday a rights offering of 356.1
million B class shares at MXN9.83 per share as part of an effort
to boost the Mexican steelmaker's capital by MXN3.5 billion, Dow
Jones Newswires reports, citing a Mexican Stock Exchange filing.
On Friday, Hylsamex B shares trading on the Mexican Stock
Exchange closed up 5.1%, or 45 centavos, to MXN9.25. Shares not
bought by existing shareholders will be offered to creditors
involved in its debt restructuring, the Company said.
Hylsamex is in the middle of an extensive restructuring involving
US$627 million in bank debt and US$300 million in bonds. In mid-
April, the Company got the majority consent needed to restructure
its 2007 Eurobonds, which was required to complete the bank debt
deal.
Hylsamex said Alfa SA, its biggest shareholder, will buy Hylsamex
shares for the equivalent of about US$190 million.
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
ISPAT INTERNATIONAL: Imexsa Extends Exchange Offer, Consent Date
----------------------------------------------------------------
Ispat International N.V. ("Ispat"), announced Friday that Ispat
Mexicana, S.A. de C.V. ("Imexsa"), Ispat's Mexican operating
subsidiary, has extended its exchange offer for all outstanding
10-1/8% Senior Structured Export Certificates due 2003 of Imexsa
Export Trust No. 96-1 (the "Senior Certificates"). The exchange
offer will now expire at 5:00 p.m., New York City time, on July
12, 2002, unless otherwise extended or terminated by Imexsa (the
"Expiration Date"). The exchange offer had been scheduled to
expire at 5:00 p.m., New York City time, on June 28, 2002. The
exchange offer is being extended to allow for additional time to
complete documentation required under the agreed upon terms of
the exchange. Under the terms of the exchange offer, Imexsa will
offer to exchange 10-5/8% Senior Structured Export Certificates
due 2005 to be issued by Imexsa Export Trust No. 96-1 (the "New
Senior Certificates") for Senior Certificates validly tendered
and accepted for exchange. The New Senior Certificates will be
fully and unconditionally guaranteed by Ispat, Grupo Ispat
International S.A. de C.V. ("Grupo") and certain of the
subsidiaries of Imexsa on a senior basis. The New Senior
Certificates will also be secured on a pro rata basis with
Imexsa's bank loans by liens on certain assets of Imexsa and by a
pledge of the stock of Imexsa and Grupo.
The exchange offer is conditioned upon the holders of not less
than 96% of the outstanding principal amount of Senior
Certificates having validly tendered and not withdrawn their
Senior Certificates prior to the Expiration Date and upon the
other terms and conditions set forth in Imexsa's Supplemental
Offering Memorandum and Consent Solicitation Statement dated June
17, 2002, which is supplemental to the Offering Memorandum and
Consent Solicitation Statement dated January 24, 2002.
In connection with the exchange offer, Imexsa is also soliciting
consents from holders of Senior Certificates to, among other
things, amend certain agreements governing the Senior
Certificates. Holders tendering their Senior Certificates in the
exchange offer must also deliver consents. Consents may not be
following the Expiration Date, unless the exchange offer is
terminated.
Requests for documentation should be made to the Information
Agent for the exchange offer, D.K. King & Co., Inc., at (800)
847-4870. Questions regarding the transaction should be directed
to financial advisor to Imexsa, Dresdner Kleinwort Wasserstein at
(212) 969-2700.
CONTACT: Ispat International N.V.
Annanya Sarin, Head of Communications
Tel. +44-20-7543-1162 or +31-10-404-6738
T.N Ramaswamy, Director, Finance
Tel. +44-20-7543-1147
John McInerney of Citigate Dewe Rogerson,
Investor Relations
Tel. +1-212-419-4219
MINERA AUTLAN: Reactivates Production Of Silicon Manganese
----------------------------------------------------------
Cash-strapped Minera Autlan has resumed production of Silicon
Manganese, estimated at 50,000 tons per year in three ovens,
after 14 months of non-operation, reports Business News Americas.
Subsequently, Autlan, which mines manganese ore and produces
manganese alloys and pellets used in specialty steels, would be
calling back those 200 employees, who were sacked due to market
recession, Autlan General Manager Miguel Angel Espinosa Ramirez
said. The three shifts have been reestablished.
Autlan saw its net sales plummet more than 30% in 2001 due to
world steel crisis, as well as a shrinking of the local and US
markets. Due to weakening net sales, the Company had to
temporarily mothball operations at its mines in western Mexico
and cut production at its Gomez Palacio and Tezuitlan pellet
plants.
Autlan's debts have ballooned to US$82.5 million and its stock
was suspended from trading on the Mexico City Bourse in February
this year after it failed to make good on its debt obligations.
With the concurrence of its creditor banks, led by BBVA Bancomer,
ABN Amro and Bank of America, the Company is looking to sell its
corporate headquarters in Mexico City, which could bring in some
US$10 million.
CREDITOR BANKS: GRUPO FINANCIERO BBVA BANCOMER
Av. Universidad 1200,
Col. Xoco, Mexico, D.F.
Tel: (52) (55) 5621-4938
(52) (55) 5621-4966
Fax: (52) (55) 5621-7912
Email: investor.relations@bbva.bancomer.com
Contacts: David S nchez-Tembleque
ABN AMRO
Investor Relations(HQ1191)
Gustav Mahlerlaan 10
PO Box 283
1000 EA Amsterdam
The Netherlands
Tel. +31 (0) 20 628 78 35
Tel. +31 (0) 20 628 78 37
Email: investorrelations@nl.abnamro.com
BANK OF AMERICA - Corporate Headquarters
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
www.BankofAmerica.com
Contacts: Ken Lewis, Chairman & CEO
BNP PARIBAS
16, Boulevard des Italiens
75009 Paris Cedex 09, France
Phone: +33-1-40-14-45-46
Fax: +33-1-40-14-75-46
Home Page: http://www.bnpparibas.com
Contacts:
Michel Pebereau, Chairman and CEO
Baudouin Prot, President and COO
Investor Relations and Financial Information
3 Rue d'Antin
75078 Paris Cedex 02
Phone : 33 1 40 14 63 58
Fax : 33 1 42 98 21 22
E-mail: Investor.relations@bnpparibas.com
BNP Paribas Representative Office
Av. Paseo de la Reforma 300 piso 13
Colonia Juarez
06600 Mexico D.F., Mexico
Phone: (525) 241 94 00
XEROX CORP.: Arranges Third-Party Financings in Brazil, Mexico
--------------------------------------------------------------
Ratings agency Fitch says Xerox Corp.'s announced restatement of
its financial results for the 1997-2001 periods were within
expectations and already factored into the company's existing
ratings. Although over $6 billion of equipment revenue, on a
cumulative basis will be restated during this period, the issue
is strictly the timing of revenue recognition in this period. Of
the $6 billion, $5.1 billion has been reallocated to other
revenue components over this period. Further, reported net income
for the historical period will be lower.
The financial restatement arose from a disagreement between the
Securities and Exchange Commission in terms of revenue
recognition for sales-type finance leases and operating leases.
Separately, Fitch Ratings expects to downgrade Xerox Corp. and
its subsidiaries' 'BB' senior unsecured and 'B+' convertible
trust preferred ratings at least one notch to reflect the
structural subordination due to the security granted under the
company's new $4.2 billion Amended and Restated Credit Agreement
dated as of June 21, 2002. A final rating action, which we expect
to release next week, is pending a detailed review of the
company's 10K and 10Q statements, which are anticipated to be
filed shortly.
The Rating Outlook remains Negative reflecting the company's
weakened credit protection measures, significant debt maturities
for the next three years, and the company's impaired financial
flexibility and reduced access to the capital markets. The
ratings also incorporate the competitive nature of the printing
industry, the necessity for constant new product introductions,
and overall weak economic conditions. As revenues are forecasted
flat to down, it is crucial that Xerox continues executing its
cost cutting programs in order to return the core operations to
consistent profitability levels. Cash flow will have to increase
significantly in order to support its debt obligations. Fitch
anticipates core credit protection measures will continue to be
challenged for the near term, despite continued anticipated cost
reductions from the company's ongoing restructuring programs.
Fitch continues to recognize the company's improving operational
performance, strong, technologically competitive product line and
business position, completed asset sales, execution of the cost
restructuring program. In addition, Fitch recognizes the progress
the company has made in exiting the financing business with GECC
eventually being the primary source of customer financing in the
U.S., Canada, Germany, and France, and De Lage Landen
International BV managing equipment financing for Xerox customers
in the Netherlands. The company has also made arrangements for
third-party financings in Nordic Region, Italy, Mexico, and
Brazil. In addition, Xerox has made significant progress with its
turnaround strategy as the previously announced $1 billion cost
cutting program was achieved ahead of schedule and larger than
anticipated, including a more than 10% headcount reduction from
year-end 2000. Asset sales have totaled more than $2.0 billion,
including an agreement to outsource approximately half of its
manufacturing, the common stock dividend has been eliminated, and
the company exited the ink-jet market, which was a significant
cash drain.
In addition to Xerox Corp., the ratings affected are: Xerox
Credit Corp. and Xerox Capital (Europe) plc's rated senior debt.
CONTACT: FITCH RATINGS
Nick P. Nilarp, 1-212-908-0649
Brendan Buckley, 1-212-908-0640 (Xerox Corp.)
Philip S. Walker, Jr., 1-212-908-0624 (Xerox Credit
Corp.)
James Jockle, 1-212-908-0547 (Media Relations)
=================
V E N E Z U E L A
=================
FERTINITRO FINANCE: Moody's Downs $250M Secured Bonds To Ba3
------------------------------------------------------------
Moody's Investors Service lowered the rating of FertiNitro
Finance Inc.'s U.S. $250 million secured bonds to Ba3. The rating
had been placed under review for downgrade on June 21, 2002, and
it remains on review for possible further downgrade.
The action reflects significantly weakened cash flow caused by
poor operating performance, product prices that are below
original expectations, and higher debt levels resulting from cost
overruns in the construction of the project. Excluding a one-time
payment from the EPC contractor for liquidated damages, pre-
completion cash flow for 2001 was negative.
Moreover, based on current fertilizer pricing expectations,
Moody's expects FertiNitro to show negative operating cash flow
after debt service in 2002 even if operating at 100% of capacity
for the remainder of the year. If feedstock gas supplies continue
to come under pressure from PDVSA Gas, which reduced gas supplies
in the first half of 2002 due to OPEC adherence and PDVSA
delivery problems, cash flow could be further diminished.
For the first quarter of 2002, urea production was 26% below
Offering Circular projections and ammonia production was down
18%. Product prices for urea and ammonia were off 43% and 38%
respectively. Both ammonia plants required contingency repairs on
their waste heat boilers while the urea facilities continue to
encounter a variety of problems. The expiration of the cost
overrun facilities and a sizeable portion of the contingent
shareholder obligations has weakened the project's liquidity
position.
Excluding the minimal cash balance currently held by FertiNitro,
debt service is supported by a $60 million revolving line of
credit, which currently expires in April, 2003, and $20 million
of shareholder commitments for debt service, which expire in
October, 2003, but are cancelable at any time by the
shareholders. Should the project fail to meet the six-month
Second Reliability Test, which must be completed by October 2003,
contingent shareholder obligations of $50 million may be used to
pay down debt.
FertiNitro Finance Inc. is a financing vehicle whose debt is
guaranteed by Fertilizantes Nitrogenados de Venezuela,
FertiNitro, C.E.C ("FertiNitro"). FertiNitro is 35%-owned
indirectly by Koch Jose Cayman Limited, which is ultimately
majority-owned by Koch Industries Inc. through other Koch
subsidiaries; 35%-owned by Petroquimica de Venezuela, S.A., a
wholly-owned subsidiary of PDVSA; 20%-owned by Snamprogetti, a
wholly-owned subsidiary of Snamprogetti S.p.A., and 10%-owned by
Polar Jose Investments, Limited, which is ultimately owned
directly and indirectly by the Polar Group.
CONTACT: New York
Daniel Gates
Managing Director
Corporate Finance
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Stephen G. Moore
VP - Senior Credit Officer
Corporate Finance
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
***********
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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