/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020717.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, July 17, 2002, Vol. 3, Issue 140 Headlines B E R M U D A TYCO INTERNATIONAL: Shares Up As Icahn Rumors Circulate B R A Z I L CSN: Metalic Acquisition Approved for BRL108.5 million EMBRAER: Airplane Deliveries Shrink During 2Q02 ELETROPAULO METROPOLITANA: Moody's Downgrades Debt To B1 EMBRATEL: Competition Threatens Survival EMBRATEL: Awards Contract To Israeli Firm NET SERVICOS: Debt Renegotiation Enables BRL1 B Capital Increase TELEGLOBE: Creditors Sue Parent For US$1.19B C H I L E TELEFONICA CTC: Ongoing Strike Disrupts Service C O L O M B I A CHIVOR SA: Court Grants Extension to Oct. 21 for Schedules CHIVOR SA: Gets Authority to Hire Ordinary Course Professionals CHIVOR SA: Plan Confirmation Hearing Set for August 13 M E X I C O AEROVOX: Sells Mexican Unit to NGM; Shareholders Wiped Out GRUPO BITAL: Goes On The Block Amid Mounting Pressure GUILFORD MILLS: Reorg Plan Keeps Mexican Operations Intact NII HOLDINGS: Restructuring Plan Seeks To Slash Debts 80% P E R U TELEFONICA DEL PERU: Fitch Reviews WorldCom Exposure, Watch Neg - - - - - - - - - - ============= B E R M U D A ============= TYCO INTERNATIONAL: Shares Up As Icahn Rumors Circulate ------------------------------------------------------- Shares of Tyco International Inc. rose Monday amid speculation that financier Carl Icahn is in the running for the embattled Bermuda-based conglomerate, the AP suggests. Tyco shares closed up 75 cents, or 5.5%, at $14.48 on the New York Stock Exchange. The buzz ignited on reports that Icahn has received clearance from the Federal Trade Commission to buy up to 15% of Tyco's shares. The action doesn't mean however that Icahn owns the shares or plans to take a stake in Tyco. Meanwhile, a recent research note from Merrill Lynch, which said that Tyco's parts are worth significantly more than the current market value, was also credited with possibly pushing the stock higher. CONTACT: Tyco International Ltd. The Zurich Centre, Second Floor 90 Pitts Bay Road Pembroke HM 08, Bermuda Phone: 441-292-8674 Headquarters Tyco International (U.S.) Inc. One Tyco Park Exeter, NH 03833 Phone: 603-778-9700 Home Page: http://www.tyco.com =========== B R A Z I L =========== CSN: Metalic Acquisition Approved for BRL108.5 million ------------------------------------------------------ The board of directors of Brazil's Companhia Siderurgica Nacional (CSN) approved Monday the Company's purchase of fellow Brazilian firm soda can maker Metalic as part of its strategy to expand markets for its products. According to Dow Jones Newswires, the acquisition worth BRL108.5 million included CSN's assumption of Metalic's total financial obligations of BRL107 million. Metalic is Brazil's only beverage-can maker. It uses products made exclusively by CSN in the country. Meanwhile, CSN is currently in negotiations with English-Dutch company Corus. The negotiations, according to market sources, involve a share swap between the companies. CSN would have 10% less than the 20% stake that Corus would have in the Brazilian company and Corus would take over part of CSN debt. Corus would also have access to CSN raw material and would compete with the European group Arcelor, which owns Acesita in Brazil and makes part of controller group of CST (Companhia Siderurgica de Tubarao). CSN, which production reaches 5mil m tons of steel per year, would penetrate Europe easier through the agreement. However, state-owned national development bank BNDES, is unsure whether to allow the Vincunha group swap its shares in CSN for Corus shares. BNDES and other creditors lent US$600 million to Vincunha group, which used its 46.5% stake in CSN as collateral. According to a BNDES source, the bank and the other lenders want to make sure they do not lose out in the exchange. CONTACT: CIA SIDERURGICA NACIONAL (CSN) Rua Lauro Muller 116-36 Andar, PO Box 2736 Rio De Janeiro, Brazil, 22299-900 Phone: 55 21 5451707 Fax: 5521 5451529 Home Page: http://www.csn.com.br/english/index.htm Contact: Benjamin Steinbruch, CEO (interim basis) Antonio Mary Ulrich, Exec. Officer - Investors Relations EMBRAER: Airplane Deliveries Shrink During 2Q02 ----------------------------------------------- Brazil's Embraer, the world's No. 4 maker of civilian aircraft, disclosed Monday that commercial and corporate deliveries declined in the second quarter of the year. In a report by Reuters, Embraer said it only delivered 30 commercial and corporate airplanes in the second quarter compared to 44 jets in the same period a year ago. The deliveries, however, fell in line with the first quarter of 2002 as shown in Embraer's 2001 and first quarter earnings reports. In a statement, Embraer said in the first six months of 2002 it delivered a total of 60 airplanes from its ERJ 135, 140, and 145 commercial line, and its EMB 145 and Legacy corporate jets. Embraer delivered 86 jets in the first six months of 2001. The Company has said it will deliver a total of 135 planes in 2002, a forecast it had to cut from 205 after the Sept. 11 attacks on the United States cut into demand for air travel and plunged the airline industry into a steep crisis. CONTACTS: EMBRAER Press office: Phone +55 12 3927 1311 Fax + 55 12 3927 2411 Press office mgr. Bob Sharp Email: bob.sharp@embraer.com.br OR Press officer Wagner Gonzalez Email: wagner.gonzalez@embraer.com.br ELETROPAULO METROPOLITANA: Moody's Downgrades Debt To B1 -------------------------------------------------------- For the second time this year, Moody's Investors Service downgraded Brazil's Eletropaulo Metropolitana Eletricidade de Sao Paulo SA's debt. Eletropaulo, a unit of AES Corp., had its local currency issuer rating lowered to B1 from Ba2 by Moody's on concern that it may not be able to refinance US$740 million in debt. Moody's said it was keeping the utility under review for a possible further downgrade on its local and foreign currency ratings. "The rating action reflects Moody's concern about Eletropaulo's financial flexibility and its significant need to execute near term financing, during a period of significantly diminished market access in Brazil," Moody's said. Moody's believes that Eletropaulo, which has US$1.6 billion in debt, does not have enough cash to pay off the US$740 million in debt coming due through December. The Company may have trouble rolling over debt as investors dump Brazilian securities on concern opposition candidate Luiz Inacio Lula da Silva may win the country's October presidential election. The real has weakened 19% this year against the U.S. dollar and the country's 8% benchmark bond maturing in 2014 has lost 24% of its value in the past three months. Moody's first downgraded Eletropaulo's ratings last month, when it cut the Company's local currency ratings by one level. Eletropaulo is the largest electric distribution company in Brazil serving 42% of the state of Sao Paulo, with the highest GDP per capital, population density and electricity consumption per customer of any South American distribution company. CONTACT: ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes Gonzalves Jr., VP Finance/Investor Relations MOODY'S INVESTORS SERVICE (New York) Daniel Gates, Managing Director - Corporate Finance JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Robert Johnson, VP - Senior Credit Officer Corporate Finance JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 EMBRATEL: Competition Threatens Survival ---------------------------------------- The head of one of Embratel Participacoes SA's units predicted Brazil's largest phone company won't survive six months once other companies offer competing service. Citing Folha de S. Paulo newspaper, Bloomberg reports that Eduardo Levy, president of Embratel Empresas, Embratel's corporate accounts unit, said that the Company won't last six months because it can't offer competitive prices due to the high connection rate it pays to use the network of other operators. Telefonica's subscribers pay 15 centavos to call inside the Sao Paulo state, Levy said, according to the newspaper. Embratel has to pay 11 centavos to use Telefonica's network, Folha said. Following Levy's announcement, Embratel's shares, which are the worst performing at the Bovespa this year, fell another 16% to BRL1.63. "With more negative news about Embratel, investors prefer to sell the shares," said Fabio Motta, who manages at BRL160 million (US$56 million) in equities at Sul America Investimentos SA in Sao Paulo. 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 EMBRATEL: Awards Contract To Israeli Firm ----------------------------------------- Embratel Participacoes SA, the Brazil's biggest long-distance company controlled by WorldCom Inc., awarded a contract to Nice Systems Ltd., an Israeli maker of digital-archiving equipment, says Bloomberg. The terms of the contract were not disclosed. But Nice revealed in a statement to the Tel Aviv Stock Exchange that the contract will see Rio de Janeiro-based Embratel using Nice's equipment to let managers monitor calls to its customer-call centers. WorldCom Inc., which was charged with fraud by the U.S. Securities and Exchange Commission for hiding $3.9 billion of costs, wants to sell Embratel as part of its effort to raise money to avoid bankruptcy, analysts said. NET SERVICOS: Debt Renegotiation Enables BRL1 B Capital Increase ---------------------------------------------------------------- Struggling Brazilian cable television provider Net Servicos de Comunicacao SA, formerly known as Globo Cabo, has restructured debts maturing in 2002 and 2003. According to company president Luiz Antonio Viana, Net was able to reschedule payments on US$200 million in debts owed in 2002 and 2003. Meanwhile, the Company also paid US$52 million in commercial paper due Monday. The restructuring paves the way for a BRL1- billion (R$ 2.86 = $1.00) expansion of capital, Viana said. "With the debt restructuring, shareholders have approved the expansion in capital, which will occur by the end of the month." Viana said, adding that the Company's management was already working on underwriting terms for the issue of new stock. To see financial statements: http://bankrupt.com/misc/globo_cabo.pdf CONTACT: NET SERVICOS DE COMUNICACAO S.A. Leonardo P. Gomes Pereira, Investor Relations & CFO CNPJ/MF n 00.108.786/0001-65 NIRE n 35.300.177.240 Companhia Aberta Rua Verbo Divino n 1.356 - 1 a., Sao Paulo-SP TELEGLOBE: Creditors Sue Parent For US$1.19B -------------------------------------------- Canadian and international banks filed a suit Friday against BCE Inc., Canada's biggest communications group, in the Ontario Superior Court of Justice. According to Reuters, the US$1.19- billion suit corresponds to the US$1.25-billion amount, which the creditors advanced to BCE's insolvent former international carrier, Teleglobe Inc. Teleglobe lending syndicate includes Canada's biggest banks, such as Bank of Montreal, Canadian Imperial Bank of Commerce, Toronto- Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia, Laurentian Bank and National Bank of Canada. Other lenders listed as creditors in the lawsuit include Citibank NA, Credit Suisse First Boston Canada, Merrill Lynch Capital (Canada) Inc., JPMorgan Chase Bank and Export Development Canada. Denying any liability to the creditors, BCE said the "claims contained in the lawsuit are without merit or foundation." BCE added it intended to "vigorously defend" its position. Teleglobe was forced to obtain bankruptcy protection in Canada earlier this year and seek the same status in the United States after BCE cut its funding ties to the Company. Including the banking credit facility, Teleglobe had some US$2.7 billion of debt outstanding. Last Wednesday, SkyOnline, Inc., a telecommunications/value-added services provider with headquarters in the United States, agreed to acquire Teleglobe Inc.'s Data and Internet Operations in Latin America. Teleglobe has operations in Argentina, Brazil, Chile, Colombia, El Salvador, Mexico and Panama. BCE bought Teleglobe in 2000 for CAD7.4 billion ($4.8 billion) and poured another CAD1.3 billion into the Company in a failed attempt to shore it up. CONTACT: 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 CREDITORS: CANADIAN IMPERIAL BANK OF COMMERCE (CIBC) 199 Bay Street, Commerce Court West Toronto, Ontario M5L 1A2, Canada Phone: (416) 980-2211 Fax: (416) 980-5028 (416) 980-5026 Home Page: http://www.cibc.com/ Contacts: Corporate Secretary Phone: (416) 980-3096 Fax: (416) 980-7012 Investor Relations Phone: (416) 980-6657 Fax: (416) 980-5028 Corporate Communications and Public Affairs Phone: (416) 980-4523 Fax: (416) 363-5347 Office of the Ombudsman Phone: 1 800 308-6859 Fax: 1 800 308-6861 (416) 861-3313 (Toronto) (416) 980-3754 (Toronto) TORONTO DOMINION BANK Toronto-Dominion Centre,, King St. West and Bay St. Toronto, Ontario M5K 1A2, Canada Phone: 416-982-8222 Fax: 416-982-5671 Home Page: http://www.tdbank.ca/ Contact: Anderson, M. Norman N., Director Baille, A. Charles, Chairman Bell, Allen W., Executive Vice President EXPORT DEVELOPMENT CORP 151 O'Connor Ottawa, Canada K1A 1K3 Phone: (613) 598-2500 Fax: (613) 237-2690 Home Page: http://www.edc.ca/ Contact: Investor Relations E-mail: investor.relations@edc.ca Fax: 613) 563-8834 Alex Watson, Portfolio Manager Phone: (613)598-2800 E-mail: awatson@edc.ca Nancy Kyte, Investor Relations Manager Phone: (613)598-3522 E-mail: nkyte@edc.ca WILLIAMS COMMUNICATIONS One Technology Center Tulsa, OK 74103 Phone: 918-547-6000 Fax: 918-547-7134 Home Page: http://www.williamscommunications.com Contact: Howard E. Janzen, Chairman, President and CEO Scott E. Schubert, EVP and CFO Investor Relations Phone: 1.866.468.6924 E-mail: wcg.ir@wcg.com BAYERISCHE LANDESBANK Home Page: http://www.baylbny.com/ New York Branch North & Latin American Region 560 Lexington Avenue New York, NY 10022 Tel (212)310-9800 Fax (212)310-9841 Toronto Branch BCE Place / Suite 3210 181 Bay Street Toronto, Ontario M5J2T3 Tel (416)862-8840 Fax (416)862-2381 Representative Office for Mexico Edificio Forum Adres Bello No.10 Piso 16 Chapultepec Morales 11560 Mexico, D.F Tel (0052-5)282-9111/14 Fax (0052-5)232-9115 Montreal Branch 1501 McGill College Avenue / Suite 2060 Montreal, Quebec H3A 3M8 Tel (514)985-0047 Fax (514)985-2610 BANK OF MONTREAL Bank of Montreal Tower, 55 Bloor Street West, 8th Floor Toronto, Ontario M4W 3N5 E-mail: feedback@bmo.com Home Page: http://www.bmo.com/ Contact: John Graham, Ombudsman Tel: 1-800-371-2541 Fax: 1-800-766-8029 BANK OF NOVA SCOTIA Scotia Plaza, 44 King Street West Toronto, Ontario M5H 1H1 Home Page: http://www.scotiabank.com/ Contact: Scotia INFOLINE (416) 750-FUND (3863) (Greater Toronto Area) 1-800-268-9269 (Other Areas In Canada) Bill Bailey, Ombudsman Tel: 1-800-785-8772/(416) 933-3299 Fax: (416) 933-3276 NATIONAL BANK OF CANADA Head Office National Bank Tower 600 de La GauchetiSre West Montreal, Quebec H3B 4L2 Telephone: (514) 394-5000 Telex: 0525181 Home Page: www.nbc.ca Contact: Elaine Carr Director - Investor Relations Telephone: (514) 394-0296 Fax : (514) 394-6196 Email : elaine.carr@bnc.ca LAURENTIAN BANK OF CANADA Tour Banque Laurentienne 1981, McGill College Avenue Montreal (Quebec) H3A 3K3 Telephone: (514) 284-4500 ext. 5996 Fax: (514) 284-3396 Telex: 05-24217 Swift Code: LBCMCAMM Customer services: (514) 522-1846 1 800 LBC-1846 Home Page: http://www.laurentianbank.ca Contact: Michael Murray Telephone: (514) 284-4500 ext. 5907 E-mail: murraym@banquelaurentienne.ca ROYAL BANK OF CANADA P.O. Box 1 Royal Bank Plaza Toronto, ON M5J 2J5 Phone: 416-974-5151 Home Page: http://www.royalbank.com/ Contact: Investor Relations Royal Bank of Canada 123 Front St West, Suite 600 Toronto, ON M5J 2M2 Phone: 416-955-7802 Fax: 416-955-7800 HSBC BANK CANADA 1188 West Georgia Street, 2nd Floor Vancouver, BC V6E 4A2 Toll free number: 1-866-8mlhsbc (1-866-865-4722) E-mail: info@hsbc.ca Home Page: http://www.hsbc.ca/english/ Contact: James H. Cleave, Chairman of the Board Martin J.G. Glynn, President and Chief Executive Officer J. Lindsay Gordon, Chief Operating Office CAISSE CENTRALE DESJARDINS DU QUEBEC La #815 GC 1 Desjardins Complex Montreal, QC H5B 1B3 E-mail: confed07@desjardins.com Home Page: http://www.desjardins.com/ BNP PARIBAS CANADA BNP Tower 1981 McGill College avenue Montreal, (Qc) H3A 2W8 Tel: (514) 285-6000 Fax: (514) 285-6278 Home Page: http://www.bnpparibas.ca/ SUN LIFE ASSURANCE CO. CANADA Toronto, ON M5H 1J9, Canada Phone: 416-204-3835 Fax: 416-595-0346 THE BANK OF TOKYO-MITSUBISHI, LTD., Headquarters for the Americas: 1251 Avenue of the Americas, New York, NY 10020-1104 Tel: (212) 782-4000 Fax: (212) 782-6415 E-mail: nahq@btmna.com Home Page: http://btmna.com MORGAN STANLEY SENIOR FUNDING INC. Contact: Morgan Stanley, Dean Witter & Company 1585 Broadway New York, New York 10036 United States Phone: +1 212 761-4000 Fax: (212) 761-0086 Home Page http://www.msdw.com ========= C H I L E ========= TELEFONICA CTC: Ongoing Strike Disrupts Service ----------------------------------------------- About 23,000 Telefonica CTC Chile clients were left without service on Friday after the Company's telephone lines were cut with saws and axes, as unions entered their third week of strike. Unions are striking to protest plans to reduce wages at the country's biggest telephone company. Telefonica CTC had revealed plans that it would freeze some salaries and make adjustments to others to bolster earnings. Additionally, the Company would reduce severance pay for a fired worker to 30 days per year worked, from 40 days, and eliminate the severance pay for workers who leave the Company. Talks between the two sides are non existent. The unions won't negotiate until the Company scraps the plan, union spokesman, Daniel Droguett, said. According to Droguett, the strike has reduced maintenance work and halted service to some clients. He said the union hasn't sabotaged lines. "It's impossible for them to keep up service with most of their employees on strike," said Droguett. However, Telefonica CTC believes that savings from a plan to reduce workers' pay and benefits would be greater than the cost of disruptions in service from the strike. Telefonica CTC Chief Executive Officer Claudio Munoz has said that the Company needs to reduce costs to bolster earnings, which tumbled after government-imposed reduction in its calling rates in 1999. Telefonica CTC, which is 43.6% controlled by Spain's Telefonica, posted net income of CLP4.1 billion ($6.5 million) last year, compared with CLP130.1 billion in 1998, prior to the rate reductions. CONTACT: Telefonica CTC (Corporacion Telefonica Chilena S.A.) V. Providencia 111 Providencia - Santiago (56)-Chile Phone: (2) 2320511 (2) 6912020 Home Page: http://www.telefonicadechile.cl/ Contacts: Mr. Bruno Philippi, President Mr. Jacinto Daz, Vice President Gisela Escobar, Head of Investor Relations =============== C O L O M B I A =============== CHIVOR SA: Court Grants Extension to Oct. 21 for Schedules ---------------------------------------------------------- Chivor S.A. E.S.P. sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of New York to extend its time period to file with the Court its Schedules and Statements. The Court allwed the Debtor until October 21, 2002 to file its official Schedules and Statement of Financial Affairs. In the event that the Debtor's Prepackaged Plan is confirmed before October 21, 2002, the Court ruled that the requirement to files its Schedules would also be waived permanently. The Debtor is a corporation (sociedad an�nima) and public services enterprise organized and existing under the laws of the Republic of Colombia and is the fourth largest electric power generator in Colombia. The Company, which owns the third largest hydroelectric power generator station, located in east central Colombia filed for chapter 11 protection on July 6, 2002. Howard Seife, Esq. and N. Theodore Zink, Jr., Esq. at Chadbourne & Parke LLP represent the Debtor in its restructuring efforts. As of May 30, 2002, the Debtor listed $588,624,000 in assets and $349,376,000 in debts. CONTACT: CHIVOR S.A. E.S.P. Bogota, Distrito Capital Cl 98 22-64 Of 518 Tel: (57) (1) 6236660 - Fax: (57) (1) 6236837 Email: chivorbo@cable.net.co CHIVOR SA: Gets Authority to Hire Ordinary Course Professionals --------------------------------------------------------------- Chivor S.A. E.S.P. sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ professionals utilized in the ordinary course of business without the submission of separate employment applications, affidavits, and the issuance of separate orders for each individual professional. The services to be rendered by these ordinary course professionals are not connected to the Debtor's chapter 11 case, but include legal services with regard to specialized areas of the law. The Court likewise authorized the Debtor to employ other professionals in the ordinary course of business such as real estate appraisers, brokers, auditors, actuaries and leasing agents. The Debtor believes that the fees payable to the Ordinary Course Professionals will not exceed in the aggregate $18,000 per month. CHIVOR SA: Plan Confirmation Hearing Set for August 13 ------------------------------------------------------ The United States Bankruptcy Court for the Southern District of New York fixed the confirmation hearing to consider the adequacy of the Disclosure Statement and the Solicitation Procedures and to confirm the Plan of Chivor S.A. E.S.P. The Confirmation Hearing will be held before the Honorable Burton R. Lifland in Room 623 of the United States Bankruptcy Court for the Southern District of New York, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004, on August 13, 2002 at 10:00 a.m. The Plan provides: i) that Existing Credit Agreement will be amended and holders of claims of indebtedness under the Existing Credit Agreement will be given all the rights and benefits of a "Lender" under the Amended Credit Agreement; ii) that in respect of all other claims against he Debtor, they will be reinstated; and iii) that holders of authorized common stock of the Debtor (Equity Interests) will retain their interests. Prior to the Petition Date, votes on the Plan were solicited from holders of the Class 2 Senior Secured Claims, as the only impaired class of creditors entitled to vote under the Plan. The holders of the Class 2 Senior Secured Claims voted to accept the Plan. The Debtor clarifies that it will not solicit further votes on the Plan. =========== M E X I C O =========== AEROVOX: Sells Mexican Unit to NGM; Shareholders Wiped Out ---------------------------------------------------------- On June 28, 2002, pursuant to an auction held in the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division on June 4, 2002, Aerovox Incorporated ("the Company") sold the Mexico City operation of its Aerovox de Mexico subsidiary to Nueva Generacion Manufacturas S.A. de C.V. ("NGM"). The winning bid awarded to NGM totaled $2.6 million, which was paid in cash. The assets sold included all inventory, machinery, equipment, accounts receivable, prepaid expenses, information technology systems, agreements, intellectual property, customer data and marketing materials pertaining to the Mexico City operation. The cash proceeds from the sale will be used to satisfy a portion of the amounts owed to the Company's creditors. Aerovox management believes the proceeds from this sale of assets combined with the proceeds from the completed sale of the shares of BHC Aerovox Ltd. on May 3, 2002 will not satisfy the Company's debts owed to its secured and unsecured creditors; therefore, a return of proceeds to the Company's shareholders is not anticipated. On June 6, 2001, Aerovox, which manufactures AC capacitors, DC film capacitors, aluminum electrolytic capacitors, power factor correction capacitors, and EMI filters, filed a voluntary petition for bankruptcy protection, on behalf of its U.S. operation under Chapter 11 of the U.S. Bankruptcy Code. CONTACT: AEROVOX INC. 167 John Vertente Boulevard New Bedford, MA 02745-1221 PHONE: 508-994-9661 FAX: 508-995-3000 EMAIL: lbelliveau@aerovox.com WEB SITE: www.aerovox.com Investor Relations Contact Lauren Belliveau Phone: 508-994-9661 FAX: 508-910-3123 Email: lbelliveau@aerovox.com GRUPO BITAL: Goes On The Block Amid Mounting Pressure ----------------------------------------------------- Mexico's Grupo Financiero Bital finally considered negotiating on its own behalf with possible bidders as pressure from Mexican regulators mounts, the Wall Street Journal reports. The bank had earlier agreed to raise more than US$400 million to gain control of Banco Atlantico. It was able to secure US$107 million through rights offering in March, and was hoping to acquire an additional US$100 million in fresh capital from foreign institutional investors. It also anticipates selling 17.5% stake for US$200 million to ING Groep NV. The National Banking and Securities Commission (CNBV), however, after revising Bital's commercial credits portfolio, determined the bank needing as much as US$550 million. Now a long-resisted possibility of selling itself to a foreign partner is finally being considered. The regulator is urging Mexico's fourth-largest bank to increase capital to keep up with stricter banking regulations next year. According to the Journal, bidders for the bank include UK's banking group HSBC Holdings PLC, and Spain's Santander Central Hispano SA, who already owns 30% of Bital's voting rights. Although Santander has recently concluded its evaluation of the Mexican bank's loan portfolio, the Spanish group is still undecided about what to do with its stake in the bank. Santander already owns Mexico's third biggest bank group, Grupo Financiero Santander Serfin SA, along with its independent unit Santander Mexicano SA. Acquisition of Bital is seen to cut cost in Santander and to add 7.5% more in its 14% share of total assets in the Mexican banking system. Bital has 1,400 branches and six million clients nationwide. Resisting foreign acquisition, it remains the biggest Mexican bank under local control. 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. Botin, Chairman, Banesto Emilio Botin-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 ING GROEP N.V. Strawinskylaan 2631 1077 ZZ Amsterdam, The Netherlands Phone: +31-20-541-54-11 Fax: +31-20-541-54-44 Home Page: http://www.ing.com Contacts: Ewald Kist, Chairman Cees Maas, Chief Financial Officer HSBC HOLDINGS PLC 10 Lower Thames St. London EC3R 6AE, United Kingdom Phone: +44-020-7260-0500 Fax: +44-020-7260-0501 Home Page: http://www.hsbc.com Contacts: Sir John R. H. Bond, Group Chairman/Executive Director Sir Brian Moffat, Deputy Chairman/Senior Non-Executive Director Keith R. Whitson, Group Chief Executive GUILFORD MILLS: Reorg Plan Keeps Mexican Operations Intact ---------------------------------------------------------- Guilford Mills, Inc. said Friday it resented a plan to emerge from bankruptcy proceedings. The plan represents the agreement reached in cooperation with its major lenders. The process requires approvals from the bankruptcy court, several creditors' groups, and others. But the Company expects to emerge from bankruptcy by Sept. 30 -- the end of its fiscal year. "I'm very pleased to announce that in accordance with a term sheet agreed to in March with our senior lenders, we filed with the bankruptcy court Thursday a plan of reorganization that will significantly reduce our senior debt, allowing us to focus on our core operations," said John A. Emrich, Guilford Mills' President and Chief Executive Officer. "Quite simply, we are moving toward a swift and successful reorganization." The plan's major provisions include: * Based on claims filed, the Company's suppliers will be paid in full. * Ownership of the Company will change: Guilford Mills' senior lenders will own 90% of the Company, while its existing shareholders will own the remaining 10%. * Senior debt facilities, which will consist of a three-year revolving credit facility and a three-year term loan, will total approximately $150 million -- down from $270 million before entering bankruptcy court. Certain differences between the plan filed Thursday evening and the term sheet signed in March include two trusts instead of one to dispose of non-core assets, and elimination of a unanimous board vote requirement to approve a business combination transaction in the first year after emergence. The Company plans to ask the U.S. Bankruptcy Court in New York on August 15 for permission to submit the reorganization plan to creditors. Sales and operating profits continue to exceed Guilford Mills' expectations. Because of this strong performance and its solid relations with its suppliers, the Company is not borrowing on its court-approved, $30 million debtor-in-possession financing. The sale of its non-core assets is proceeding according to schedule. "We have many people to thank for helping us get to this point: our suppliers and customers, our lenders and many others," Emrich said. "I'm particularly proud of the extraordinary efforts of our associates, who have served our customers so well as demand has accelerated these past few months." Guilford Mills is an integrated designer and producer of value- added fabrics using a broad range of technologies. Its core operations are automotive, technical textiles and its operations in Mexico City, which participate in automotive and some apparel- fabric manufacturing. The Company, which was founded in 1946, has abandoned some of its unprofitable businesses over the past several years as part of an operations-restructuring plan, which included laying off more than 2,000 employees. In its bankruptcy filing, Guilford Mills listed $551 million in assets and $409.5 million in debts. CONTACT: Guilford Mills John A. Emrich, Chief Executive Officer Tel.: +1-336-316-4000 NII HOLDINGS: Restructuring Plan Seeks To Slash Debts 80% --------------------------------------------------------- NII Holdings Inc., a unit of Nextel Communications Inc. (NXTL) has filed disclosure statement and reorganization plan that is expected to bail the Company our of Chapter 11 bankruptcy, Dow Jones reports. The restructuring plan proposes to reduce the Company's total debt by about 80%, from US$2.7 billion to less than US$500 million. According to its second amended reorganization plan, the Company will restructure secured debts through various financing agreements with creditors, including Motorola Credit Corp., some bondholders, and parent Nextel Communications. For Motorola affiliates, NII considers paying 100% of US$73 million for handset financing deals. The Company will also issue new common stock and cancel existing stock without payments to equity holders. The financing agreement is anticipated to bring in US$190 million of new capital, US$140 million of which would be in the form of a rights offering of new senior secured notes and warrants to bondholders. Although expecting a net loss of US$286.8 million in 2002, under the new business plan, the Company expects to steadily increase its net income: US$955,000 in 2003, US$68.2 million in 2004, US$107.5 million in 2005 and US$147.4 million in 2006. It also sees earnings before interest, tax, depreciation and amortization, increasing from US$84.8 million in 2002 to US$160.3 million in 2003; and its EBITDA increasing each year through 2006, when it anticipates EBITDA of US$449.9 million. According to the plan, general unsecured creditors would receive their pro-rata share of 4 million shares of new common stock. Unsecured creditors would also be granted rights to purchase their pro-rata share of up to US$140 million of new NII senior notes and up to an additional 16 million shares of new common stock, constituting 80% of the ownership in the reorganized company. Unsecured creditors have claims totaling an estimated US$2.36 billion. The Nextel unit expects to pay 100% of its about US$281.7 million in secured claims. The secured creditors would receive US$56.65 million in cash plus interest on any outstanding loans and preferred stock after the reorganization. The international wireless communications services provider filed for Chapter 11 bankruptcy protection May 24 listing assets of US$1.24 billion and liabilities of US$3.26 billion as of Dec. 31, 2001. NII Holdings, Inc., formerly known as Nextel International, is a substantially wholly owned subsidiary of Nextel Communications. NII has operations in Mexico, Brazil, Peru, Argentina, Chile and the Philippines. It offers a fully integrated wireless communications tool with digital cellular, text/numeric paging, wireless Internet access and Nextel Direct Connectr, a digital two-way radio feature. CONTACT: NII Holdings Inc. Claudia Restrepo Phone: +1-305-779-3086 E-mail: claudia.restrepo@nextel.com LEGAL REPRESENTATIVE: 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 MOTOROLA, INC. 1303 East Algonquin Road Schaumburg, IL 60196 Investor Relations Contacts: Ed Gams Senior Vice President/Director of Investor Relations Phone: 847-576-6873 Bob Hubberts, Manager, Investor Relations Phone: 847-576-4995 Email: Invest1@email.mot.com NEXTEL COMMUNICATIONS 2001 Edmund Halley Dr. Reston, Virginia 20191 Corporate Communications Phone: 703-433-4700 Contact: William E. Conway, Jr., Chairman of the Board Timothy M. Donahue, President/Chief Executive Officer ======= P E R U ======= TELEFONICA DEL PERU: Fitch Reviews WorldCom Exposure, Watch Neg --------------------------------------------------------------- Fitch Ratings has placed the rating of Telefonica del Peru (TDP) Grantor Trust, the company's international net-settlement securitization, on Rating Watch Negative. The 'BBB+' rating has been placed on Rating Watch primarily because of exposure to WorldCom. Fitch downgraded WorldCom's senior unsecured ratings to 'CC' from 'B' on June 26, 2002. WorldCom contributes approximately 25% of the securitization's cash flows. As of June 30, 2002, WorldCom has had no delinquent payment on net settlement obligations to TDP. However, the potential for an interruption of payments by WorldCom to TDP Grantor Trust creates uncertainty for the transaction. Most recent coverage levels for the securitization are approximately 2.2 times (x). These coverage levels have significantly improved with respect to the end of last year (coverage ratio of 1.2x) after TDP voluntarily paid down half of the transaction's outstanding balance. In addition, to paying down debt, the company increased the reserve account, which currently stands at US$8.6 million. The company has consistently shown a strong willingness to support the securitization and continues to take proactive measures to protect investor interests. While Fitch believes the insolvency of WorldCom would not have a lasting effect on call volume between the U.S. and Peru, the short-term cash flow loss and resulting uncertainty over who would win competition for replacement traffic causes concern for the securitization. Fitch continues to monitor the transaction closely and will take appropriate rating action as necessary. CONTACT: FITCH RATINGS Sam Fox, 1-312-606-2307 Randy Alvarado, 1-312-368-3117 James Jockle, 1-212-908-0547 (Media Relations) *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Ma. Cristina Canson, Editors. Copyright 2002. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. 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