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/raid1/www/Hosts/bankrupt/TCRLA_Public/020821.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, August 21, 2002, Vol. 3, Issue 165 Headlines A R G E N T I N A ARGENTINE BANKS: Sees Rise In Bank Deposits B E R M U D A TYCO INTERNATIONAL: Provides Historical Segment Results TYCO INTERNATIONAL: New Chief Braces For First Challenge TYCO INTERNATIONAL: Directors Recommend Board Shakeup TYCO INTERNATIONAL: Restructuring Reports Boost Shares TYCO INTERNATIONAL: Unit Wins $400M Contract from Consorta TYCO ELECTRONICS: Announces AMP NETCONNECT Fiber Optic Cable B R A Z I L AES SUL: S&P Cuts Ratings; Rating Outlook Negative CEMIG: Releases First Half 2002 Financial Results COPENE: Fitch Ratings Withdraws Rating COSIPA: Reports Red Due to the Increasing Value of the Dollar ELETROPAULO METROPOLITANA: Fitch Downgrades Ratings To 'C' NII HOLDINGS: Committee Hires Kilpatrick Stockton as Counsel NII HOLDINGS: Committee Turns to Crossroads for Advice TELESP CELULAR: Increases Capital Through Shares Subscription C H I L E EDELNOR: Seeks Bankruptcy Protection For Certain U.S. Assets EDELNOR: Inversiones Buying Holding Company Stake MANQUEHUE NET: Shareholders Turn Down Binding Offers M E X I C O VITRO: Salomon Smith Downgrades Recommendation To "Neutral" N I C A R A G U A INTERNATIONAL THUNDERBIRD: Announces 2Q02 Results T R I N I D A D & T O B A G O BWIA: Management Strains to Meet Mandate Compliance BWIA: Adds More Flights Amid Financial Battle - - - - - - - - ================= A R G E N T I N A ================= ARGENTINE BANKS: Sees Rise In Bank Deposits ------------------------------------------- Bank deposits in Argentina's financial system have risen in recent weeks, based on a Buenos Aires Bank report. According to the report, the bank registered a difference of US$58.3 million in deposits versus withdrawals during July 14 through August 6. The amount includes US418.3 million deposited in peso-denominated accounts, and some US$40 million in dollar-denominated accounts, according to La Nacion and Clarin. The news is a rare development in the country's troubled financial system. And although it promises a flicker of hope to a country in crisis, analysts are wary of expressing the opinion that a definite turnaround is coming. "We can't speak of a long-term trend, but there is an [indication] that...the financial system is enjoying some breathing space," financial consultant Miguel Bein told Argentine daily La Nacion. The country's crisis is a result of a four-year recession, which culminated in a debt default on its $141 billion public debt and to currency devaluation. A banking freeze was instituted to prevent a major breakdown of the country's financial system. Despite the restriction, however, Argentine was able to withdraw US$6.19 billion from peso-denominated accounts, which constituted 30% of total deposits at the end of last year. A gap of some US$20 million was created by withdrawals in 2001. Argentina's unemployment has risen to 21%, pushing one in two Argentines below the poverty line. In addition to the factors that tone down enthusiasm for the country's survival is the forecast that the country's economy is likely to encounter a downturn of between 12% to 18% in 2002. ============= B E R M U D A ============= TYCO INTERNATIONAL: Provides Historical Segment Results ------------------------------------------------------- Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI), a diversified manufacturing and service company, announced Monday that the historical results of its business segments based on the current internal reporting structure are now available at the Company's website. The presentation reflects three items: -- The historical results of CIT Group Inc. as a "discontinued operation"; -- The Engineered Products and Services group (formerly Tyco Flow Control) was broken out as a separate segment to reflect the current internal reporting structure. Previously the businesses underlying this new segment were included in the Electronics and Fire and Security Services segments; -- The telecommunications business TyCom Ltd., which had in the past been reported as its own segment, has been integrated into the Electronics business and is being reported as part of the Electronics segment for all periods presented. 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 medical device products, and plastics and adhesives. Tyco operates in more than 100 countries and had fiscal 2001 revenues from continuing operations of approximately $34 billion. CONTACT: TYCO INTERNATIONAL LTD. Kathy Manning Phone: +1-603-778-9700 Home Page: http://www.tyco.com TYCO INTERNATIONAL: New Chief Braces For First Challenge -------------------------------------------------------- Tyco's new chief executive, Edward Breen, faces a tough task of face-lifting the Company's corporate governance amidst other issues marring the Company's image. The pressure to shake-up directors of the old regime is mounting, says Financial Times. According to the report, shareholders are convinced the change is needed to restore investor confidence. Even board member Lord Aschroft, the British entrepreneur and former treasurer of the UK Conservative party, says the nine directors belonging to the old line-up of the 11-person board during ex-CEO Dennis Kozlowski's term, should step down. Mark Swartz, ex-CFO and Kozlowski's right-hand, resigned within the days of Breen's assumption of office. According to Financial Times, people close to the Company are saying, it's likely Mr. Breen may consider a boardroom clear-out. So far, Mr. Breen installed other executives such as John Krol, former head of Dupont as new independent director, asked Michael Useem, management professor at the Universtiy of Pennsylvania's Warton School to review the Company's governance practices, and recruited a senior vice-president of corporate governance. The new Tyco CEO however, has still to convince investors his moves can buoy the company's stock, which dipped from $60 to $13.30 since December. Mr. Breen must maintain the Company's financial stability, which is still deriving strong cashflow from its manufacturing operations. This, Mr. Breen is challenged to do amidst internal investigations, and lawsuits related to the conglomerate's former executives. Tyco is suing former general counsel, Frank Walsh for improper payments of US$55 million. The Company is also pursuing investigations on lucrative deals made by board member, Dennis Kozlowski, involving company funds. CONTACT: TYCO INTERNATIONAL LTD. (Corporate Offices) The Zurich Centre, Second Floor 90 Pitts Bay Road Pembroke HM 08, Bermuda 441-292-8674 URL: http://www.tyco.com/main/index.jsp TYCO INTERNATIONAL: Directors Recommend Board Shakeup ----------------------------------------------------- Directors of troubled conglomerate Tyco International Ltd. believe a radical shake-up in the Company's board can help restore investor confidence, Financial Times reports. The plan, if implemented is likely to follow new chief executive officer Edward Breen's plan to focus on the issue of the board structure. Lately, the independence of the board members has been an issue following the departure of ex-CEO Dennis Kozlowski, who was indicted for tax evasion. Shareholders believe the board of the old regime failed to control Dennis Kozlowski's questionable deals. The directors concerned, on the other hand, deny any lapse, saying Mr. Kozlowki deliberately kept his activities hidden. One director dragged into the board-shakeup's limelight is Lord Ashcroft, a British entrepreneur who proposed his resignation and that of eight others from the 11-person board last week. He told the board members that nine of the 11 should decide to resign during the Company's next annual meeting, early next year. Lord Aschroft was also involved in the sale of his ADT security systems business to the Company in 1997. The two board members who will remain are Mr. Breen and newly appointed member John Krol, former head of DuPont. TYCO INTERNATIONAL: Restructuring Reports Boost Shares ------------------------------------------------------ The shares of Tyco International Ltd. rose 9% Monday after a report came out that the Company may restructure its board and that it has obtained a US$400-million deal to supply medical equipment, Associated Press reports. Some members of the Company's board are calling for the shake-up of the Company's governance in order to restore investor confidence. Lord Ashcroft, British entrepreneur and Tyco director moved for his resignation as well as that of eight others. According to AP, Morningstar analyst Jonathan Schrader said, the Financial Times report suggests the new chief executive officer, Edward Breen, is "serious about making changes." Breen succeeded Dennis Kozlowski after the latter was indicted for tax evasion in June. The new CEO is under pressure from shareholders to initiate the much-needed change in the Company's corporate governance. The Company's spokesman Gary Holmes declined to comment on the report, but admitted Mr. Breen had already looked into the Company's management and changes in the 11-member board may be possible. Tyco shares rose $1.20 to close Monday at $14.50 on the New York Stock Exchange. Meanwhile, Tyco Healthcare entered a US$400 million contract with Consorta Inc., a health care resource management and group- purchasing company near Chicago. The subsidiary will solely supply surgical sutures and endoscopic devices for five years to the health care company. Based in Bermuda but with U.S. headquarters in Exeter, N.H., Tyco makes everything from fence posts to trash bags to fiberoptic cable. CONTACT: TYCO INTERNATIONAL LTD. (Corporate Offices) The Zurich Centre, Second Floor 90 Pitts Bay Road Pembroke HM 08, Bermuda 441-292-8674 URL: http://www.tyco.com/main/index.jsp TYCO INTERNATIONAL: Unit Wins $400M Contract from Consorta ---------------------------------------------------------- Tyco Healthcare and Consorta have agreed to 5-year sole source agreements covering both surgical sutures and endo-mechanical devices worth an estimated $400 million. These agreements become effective November 1, 2002. "United States Surgical is committed to making this a very successful agreement. Our strategic plan is based on organic growth and this new contract gives us the platform to build our business while reinvesting in new technologies. In addition, we view this as a significant shift in our domestic U.S. marketplace and a demonstration of the significant improvements we have made in our surgical suture products," said Alan Panzer, United States Surgical President. Tyco Healthcare's United States Surgical division is a world leader in sutures and endo-mechanical devices. Brands in this agreement include Surgipro II, Biosyn, Endo GIA Stapling, Step Access, GIA/TA/EEA Staplers and Endo-Clip Ligation. Mike Frazzette, President of Tyco's Health Systems group stated "This agreement is the culmination of many things starting with a well implemented integration of United States Surgical and Davis & Geck, an improvement of our surgical suture line, motivated employees and committed customers. We are thrilled at Consorta's choice and look forward to building upon this agreement by providing value to their entire membership." About Consorta Consorta, Inc., based in suburban Chicago, is a leading healthcare resource management and group purchasing organization, whose shareholders are Catholic-sponsored, faith-based or non- profit health systems. As a cooperative Consorta's shareholders and participants share fully in the organization's bottom-line performance, as well as receiving significant discounts through scale purchasing economies. Consorta's shareholder health care systems operate more than half of all Catholic hospitals in the United States, own many extended and alternate care sites and have affiliate relationships with other non-profit hospitals and alternate care facilities as well. The Consorta membership encompasses over 400 acute care facilities, representing 55,944 beds, and more than 1700 non- acute care sites. For more information go to www.consorta.com About Tyco Healthcare Tyco Healthcare is one of the major business units of Tyco International Ltd. Tyco Healthcare is a leading manufacturer, distributor and servicer of medical devices and disposable medical products; the world's leader in bulk analgesic pharmaceuticals; and a global leader in respiratory care, wound care, surgical instrumentation, adult incontinence and imaging products. Tyco Healthcare's brand names include Kendall, United States Surgical, Auto Suture, Sherwood, Davis & Geck, Valleylab, Radionics, Graphic Controls, Surgical Dynamics, Shiley, Nellcor, Puritan Bennett, and Mallinckrodt. About Tyco International 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 and plastics and adhesives. Tyco operates in more than 100 countries and had fiscal 2001 revenues from continuing operations of approximately $34 billion. CONTACT: TYCO HEALTHCARE Peter Ferris Phone: +1-212-424-1366 CONSORTA Home Page: http://www.consorta.com TYCO ELECTRONICS: Announces AMP NETCONNECT Fiber Optic Cable ------------------------------------------------------------ Tyco Electronics will now provide fiber optic cable to support AMP NETCONNECT end-to-end cabling system solutions. Tyco Electronics announced Monday that it will provide a line of fiber optic cable to support its AMP NETCONNECT end-to-end cabling system solutions. The fiber optic cable, branded under the AMP NETCONNECT label, is manufactured to industry specifications and Standard requirements. The AMP NETCONNECT cables are also fully interoperable with all AMP NETCONNECT components. Tyco Electronics has been making optical fiber cable globally for many years. These Tyco Electronics private network fiber cables are now available in North America to support AMP NETCONNECT end- to-end cabling system solutions. "The inherent advantages of the all-fiber network are well-known. What's lesser known is that the cost effectiveness of an all- fiber network, even at first installation, rivals that of traditional copper networks," says Herb Congdon, global fiber product manager with Tyco Electronics. "Combining the quality, cost and availability of the AMP NETCONNECT fiber cable and connector technology with the complete line of AMP NETCONNECT copper products provides a true one-source supply for all premises cabling networks." The AMP NETCONNECT Fiber Optic cable will be backed by the standard AMP NETCONNECT 25-year warranty. The 25-year System Performance warranty will be applied to all AMP NETCONNECT fiber- based systems and its 25-year Component Warranty to all AMP NETCONNECT fiber cable products installed by a Tyco Electronics' authorized AMP NETCONNECT contractor. The AMP NETCONNECT cable is being offered at a competitive price not only as part of the system but also as a component. AMP NETCONNECT Optical Fiber Cabling can be ordered through authorized AMP NETCONNECT distributors. For more information about AMP NETCONNECT Fiber Optic Cable or to locate a distributor near you, please contact the AMP NETCONNECT customer service department at 800-553-0938 or visit the web site at www.ampnetconnect.com. About AMP NETCONNECT AMP NETCONNECT, a strategic part of Tyco Electronics, develops, manufactures, and supplies a comprehensive range of communications infrastructure products and systems for customers in government, education, healthcare, finance, manufacturing and technology markets. Having established itself as the preeminent provider of commercial premises structured cabling systems for optical fiber and twisted-pair copper technologies, Tyco Electronics has broadened its AMP NETCONNECT product portfolio to include a complete line of residential cabling solutions. Coupling this spectrum of industry-standard offerings with its superior customer service, the AMP NETCONNECT group is well positioned as a single-source system provider to meet the disparate communications infrastructure needs of commercial and residential customers. For more information, please call our customer service department at 800-553-0938 or visit the AMP NETCONNECT web site at www.ampnetconnect.com. About Tyco Electronics Tyco Electronics is one of the major business units of Tyco International Ltd. Headquartered in Harrisburg, Pennsylvania, USA, Tyco Electronics is the world's largest passive electronic components manufacturer; a world leader in cutting-edge wireless, active fiber optic and complete power systems technologies; and is also rapidly developing extensive networking and building technology installation services. The company has facilities located in 51 countries serving customers in the aerospace, automotive, computer, communications, consumer electronics, industrial and power industries. Tyco Electronics provides advanced technology products from over forty well-known and respected brands, including Agastat, Alcoswitch, AMP, AMP NETCONNECT, Buchanan, CII, CoEv, Critchley, Elcon, Elo TouchSystems, M/A-COM, Madison Cable, OEG, OneSource Building Technologies, Potter & Brumfield, Raychem, Schrack, Simel and TDI Batteries. CONTACT: TYCO ELECTRONICS CORPORATION Jeff Sommer Phone: +1-717-985-2097, E-mail: jeff.sommer@tycoelectronics.com Peter Ferris of Tyco International (US) Inc. Phone: +1-212-424-1366 E-mail: pferris@tyco.com Home Page: http://www.tyco.com =========== B R A Z I L =========== AES SUL: S&P Cuts Ratings; Rating Outlook Negative -------------------------------------------------- Standard & Poor's downgraded the national scale ratings for AES Sul Distribuidora Gaucha de Energia on concern the Rio Grande do Sul-based distributor will have difficulty rolling over its debt as liquidity in the Brazilian banking and capital markets has reduced considerably in the last months. The rating outlook is negative. Business News Americas reports that S&P analysts Marcelo Costa and Milena Zaniboni cut AES Sul's issuer rating to 'brBB' from 'brBBB-' and the debentures rating to 'brBB-' from 'brBB+'. "The downgrade reflects AES Sul's growing difficulties to rollover debt in the near term due to the current credit crunch affecting Brazilian companies. AES Sul is facing about US$115 million (syndicated loan and debentures) of debt coming due in the next 12 months," they said. S&P said AES Sul needs to roll over at least some of this debt as expected cash generation will be around US$68 million in this timeframe. "If the company seeks to access alternative types of funding in local currency, the profile of the debt would worsen, as these lines are shorter and more expensive than the debentures and the syndicated loan," the two analysts said. AES Sul is yet to define its final refinancing strategy. Despite tougher liquidity and credit scenario, AES Sul continues to meet covenants established with creditors in the syndicated loan. AES Sul is 96.7% owned by AES Corp. The U.S.-based parent has reiterated its determination not to pump any more cash into its Brazilian subsidiaries. To see financial statements: http://bankrupt.com/misc/AES_Corp.htm CONTACT: The AES Corporation, Arlington Investor Relations Contact Person: Kenneth R. Woodcock (703) 522 1315 CEMIG: Releases First Half 2002 Financial Results ------------------------------------------------- Companhia Energetica de Minas Gerais - CEMIG (NYSE: CIG; BOVESPA: CMIG3, CMIG4; LATIBEX: XCMIG) reported Monday net income for the first half 2002 of R$174 million, corresponding to R$1.08 per 1000 shares, compared to net income of R$14 million, or R$0.09 per 1000 shares in the first half 2001. The favorable results were due to higher average electricity rates in 2002 and non-recurring special items from an industry agreement with the federal government to recover the losses incurred during the rationing period, which was imposed on many drought-stricken regions of the country from June 2001 to February 2002. The 22.58% depreciation of the real was higher than in the first half 2001 and significantly reduced the Company's net income. Foreign exchange losses went up 42% to R$327 million. Creation of the CVA tracking account to accommodate exchange rate volatility losses and other non- expected regulatory charges resulted in significant savings in operating expenses, partly offsetting negative impacts from unfavorable economic conditions prevalent in 2002. Mr. Djalma Morais, Chairman and CEO of CEMIG, said, "The turbulence seen in the global markets over the last few months indeed affected our performance as a result of a more volatile real, the Brazilian currency, and accordingly, sales volume has grown at a slower pace than we imagined. However, we are still positive on 2002 growth, which we estimate at 2.3%. And because of management's prompt actions to reduce operating costs, the Company's financial situation will allow us to maintain R$1 billion capex for 2002, despite adjusting to lower consumption growth outlook." Mr. Cristiano Barros, CFO of CEMIG, also said, "Last year's strategy to secure funds for 2002 capex proved to be prudent given current market conditions that do not support raising funds, due to high costs and short-term maturities. As a preventative measure, the Company had accumulated funds to meet its debt repayment, dividend and capex requirements. With incoming funds from the industry agreement, the Company's cash position is likely to strengthen even further. Thus we can assure that CEMIG's fundamentals -- which are the basis for its sustained growth -- are preserved." Net operating revenues rose 14.0% to R$2,204 million from R$1,933 million in June 2001. This was due to higher average electricity rates, which were readjusted in April 2001 by 16.5%, and in April 2002 by 10.5%, and in greater measure to the non-recurring revenue loss recovery provided by the industry agreement signed with the federal government. Operating expenses increased 7.1% to R$1,835 million from R$1,713 million, due mainly to increased electricity purchase expenses. Due to lower electricity output from CEMIG's power plants, electricity purchase expenses were 29% higher than in 2001. As of June 30, 2002, the total CRC Account balance was R$1,627 million, including monetary restatement. The Company is negotiating payment of the aforementioned past due amounts with the state government. The Company believes that the state government intends to make payment prior to the end of its present term, and intends to enter into a payment schedule for future installments. The Company does not believe that there will be any loss on realization of this asset. CONTACT: COMPANHIA ENERGETICA DE MINAS GERAIS Luiz Fernando Rolla, Investor Relations Phone: + 011-5531-299-3930 Fax: + 011-5531-299-3933 E-mail: lrolla@cemig.com.br; or THE ANNE MCBRIDE COMPANY Vicky Osorio Phone: +1-212-983-1702 Fax: +1-212-983-1736 E-mail: vicky@annemcbride.com Home Page: http://www.cemig.com.br COPENE: Fitch Ratings Withdraws Rating -------------------------------------- Fitch Ratings withdrew the national scale rating of 'A-'(bra) for Copene - Petroquimica do Nordeste S.A. (Copene), following the creation of Braskem S.A. (Braskem). From this date as Braskem has been effectively constituted, its advisory rating of 'A+(bra)' will become the company's effective rating. A corporate reorganization involving Copene, OPP PP, and the special-purpose company 52.114 resulted in the creation of Braskem. Copene is the major shareholder of Polialden Petroquimica S.A. and Politeno S.A.; OPP PP is shareholder of OPP Quimica S.A., Trikem S.A. and Copesul; and the special-purpose company 52.114 is shareholder of Nitrocarbono S.A. The Braskem project involves the combination of all petrochemical interests held by the Odebrecht and Mariani groups. The entity will be the South America's largest integrated petrochemical company, encompassing six first- and second-generation companies. Braskem's production capacity will represent approximately 39% of the region's (Southern Cone) polypropylene output, 51% of its PVC and 31% of its polyethylene. Estimated revenues should exceed BRL8.0 billion, and EBITDA shall reach BRL3.0 billion through 2004. CONTACT: FITCH RATINGS Alejandro Bertuol Phone: 212/908-0393 (New York) Anabella Colombo Phone: 55 11 287-3177 (Brazil) Rafael Guedes Phone: 55 11 287-3177 (Brazil) COSIPA: Reports Red Due to the Increasing Value of the Dollar ------------------------------------------------------------- Sao Paulo-based flat steel maker Companhia Siderurgica Paulista (Cosipa) swung to red in the second-quarter this year after the value of the dollar rose by 22.4% versus the local currency, the real, between April and June. In a Business News Americas report, the Company revealed it had a net loss of BRL345 million (currently US$111 million) for the second-quarter this year, compared to a net profit of BRL4 million for the same-period 2001. Financial losses jumped six fold to BRL594 million (US$192 million) for the second quarter 2002 against the figure posted in the same year-ago period. Ebitda inched up less than 2% to BR120 million (US$39 million) in the same quarterly comparison, but ebitda margins fell from 25.8% to 21.2%. Net operating revenues during the quarter grew 23% to just over BRL566 million (US$183 million) from the same period in the previous year. With new equipment increasing capacity, sales volumes rose 30% to 871,000t in the same period. Cosipa's production capacity has jumped from 2.5Mt/y to 4.5Mt/y this year. With the completion of a US$1.1-billion investment program, Cosipa expects to be operating at full capacity from 4Q02 onward. Fabio Zagatti, a steel analyst with HSBC bank, told Business News Americas that he predicts Cosipa will end this year with an accumulated loss of BRL185 million (US$60 million). The steel mill, with the backing of its controller, Belo Horizonte-based Usiminas, has asked Brazil's stock market watchdog CVM for permission to sell BRL100 million (currently US$32 million) in promissory notes. The paper would mature in 180 days and pay a return of 15 basis points on top of the CDI interbank deposit certificates. Proceeds of the issue will be used to boost its working capital and buy time to launch debentures when market conditions improve. Cosipa is Brazil's third-largest steelmaker, behind Companhia Siderurgica Nacional and Usinas Sider�rgicas de Minas Gerais (Usiminas). The Company manufactures cold- and hot-rolled steel sheets, as well as heavy plates and slabs. Cosipa sells its products internationally to auto, home appliance, and pipe manufacturers, with most exports going to North and Central America, South American countries, Europe, and Asia and Oceania. The Company also runs its own domestic port terminal for receiving raw materials used in steel production and for exporting steel products. Usiminas owns 49.8% of Cosipa's voting shares. CONTACT: Avenida do Cafe, 277 Torre B, 8� e 9� andar Vila Guarani 04311-000 Sao Paulo, Brazil Phone: +55-11-5070-8800 Fax: +55-11-5070-8863 URL: http://www.cosipa.com.br ELETROPAULO METROPOLITANA: Fitch Downgrades Ratings To 'C' ---------------------------------------------------------- Fitch Ratings downgraded the local and foreign currency ratings of Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A.'s (Eletropaulo) to 'C' from 'B-' and the national scale rating to 'C(bra)' from 'BB-(bra)'. The ratings remain on Rating Watch Negative. Eletropaulo's credit rating has been lowered to reflect the company's likely default on upcoming debt maturities due to a further delay in receiving BNDES cash, a continued slide in the Brazilian real, lack of refinancing alternatives in Brazil and overall poor credit market conditions facing Brazilian issuers despite the recent loan to Brazil from the IMF. The company faces a US$120 million local commercial paper maturity on August 22 and the US$225 million syndicated bank loan maturity on August 26. Refinancing options available to the company are limited to rolling over existing local and international bank transactions and commercial paper. Should debt be exchanged on terms that represent a loss of net present value, it would be viewed by Fitch as a distressed debt exchange and would result in a downgrade to a default level. Last week, Eletropaulo extended for 2 days its proposal to rollover the CP, which requires approval of 80% of the CP holders. The company has already successfully rolled over its US$60 million working capital facility. Eletropaulo is due to receive its remaining cash recovery related to the BNDES margin compensation (R$560 million net proceeds). Disbursement of these funds by BNDES has been delayed several times, most recently due to a disagreement between the government and the distributors about low income subsidies. This issue appears to have been resolved, which should allow the release of the BNDES funds, possibly this week. Even so, the cash would be too late and insufficient to cover all maturing debt. To the extent the company applies the proceeds to cover CP maturities and rollover the near term bank maturities it may be able to avoid a general forced restructuring. Eletropaulo's debt maturity schedule is significant, with approximately US$753 million maturing during the remainder of 2002. Since January 2002, the company has repaid more than US$200 million of maturities with cash generated from operations and US$119 million in BNDES proceeds as part of the revenue recovery agreement for 2001. The balance of 2002 maturities are concentrated in August (US$422 million), September (US$99 million) and December (US$116 million). Eletropaulo is the largest electricity distributor in Latin America in terms of revenues, with a sales volume of 32,563 GWh in 2001. Since privatization on April 15, 1998, Eletropaulo had been owned by LightGas, now known as AES ELPA. AES ELPA is 88.21% owned and controlled by AES. AES ELPA owns 77.81% of Eletropaulo's voting shares and 30.97% of total capital. CONTACT: FITCH RATINGS Jason Todd Phone: 312/368-3217 (Chicago) Daniel Kastholm Phone: 312/368-2070 (Chicago) Jayme Bartling Phone: 5511-287-3177 (Sao Paulo) 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 NII HOLDINGS: Committee Hires Kilpatrick Stockton as Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved the requested authority of the Official Unsecured Creditors Committee of NII Holdings, Inc. to employ Kilpatrick Stockton LLP as its counsel, nunc pro tunc to June 7, 2002. The Committee related to the Court that Kilpatrick Stockton is well suited for the type of representation they needed in these chapter 11 cases. Kilpatrick Stockton has both national and international practice and has experience in all aspects of the law that may arise in these cases. Kilpatrick Stockton will: i) prepare and review all necessary and appropriate applications, motions, draft orders, other legal pleadings, notices, responses and other documents in these Chapter 11 cases and review and analyze various documents prepared by the Debtors and other parties in the bankruptcy cases; ii) counsel the Committee in connection with the formulation, negotiation and promulgation of a plan or plans of reorganization which the Debtors or others may seek to propose; and iii) perform all other necessary or appropriate legal services in connection with these Chapter 11 cases in behalf of the Committee consistent with the role of counsel. Kilpatrick Stockton Professionals likely to render significant services in these cases are: Dennis S. Mier Partner $485 per hour Alfred S. Lurey Partner $485 per hour Joel B. Piassick Partner $485 per hour Todd C. Meyers Partner $375 per hour Melinda A. Marbes Partner $395 per hour Michael D. Langford Counsel $310 per hour Paul M. Rosenblatt Associate $295 per hour Mathew A. Schuh Associate $275 per hour David M. Fass Associate $215 per hour Kathleen M. O'Connell Associate $175 per hour NII Holdings, Inc., along with its wholly-owned non-debtor subsidiaries, provides wireless communication services targeted at meeting the needs of business customers in selected international markets, including Mexico, Brazil, Argentina and Peru. The Company filed for chapter 11 bankruptcy protection on May 24, 2002. Daniel J. DeFranceschi, Esq., Michael Joseph Merchant, Esq. and Paul Noble Heath, Esq. at Richards, Layton & Finger represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,244,420,000 in total assets and $3,266,570,000 in total debts. To see financial statement: http://bankrupt.com/misc/NIIHOLDINGS.htm 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 KILPATRICK STOCKTON LLP 1100 Peachtree St., Ste. 2800 Atlanta, GA 30309-4530 Phone: 404-815-6500 Fax: 404-815-6555 http://www.kilstock.com Contacts: William H. Brewster, Managing Partner Paul Bellows, COO Brooke Sey, Director of Finance NII HOLDINGS: Committee Turns to Crossroads for Advice ------------------------------------------------------ The Official Committee of Unsecured Creditors of the chapter 11 cases of NII Holdings Inc. asks authority from the U.S. Bankruptcy Court for the District of Delaware to employ Crossroads LLC as Financial Advisors in these bankruptcy cases. The Committee tells the Court that they need a financial advisor urgently to assist it in the critical tasks associated with analyzing the Debtors' pre-negotiated plan or reorganization and evaluating other critical restructuring alternatives which may be available to maximize the recovery to unsecured creditors. As the financial advisor to the Committee, Crossroads is expected to: i) advise the Official Committee of capital restructuring and financing alternatives available to the Debtors, including evaluating the Debtors' pre-negotiated plan of reorganization and other specific courses of action that may be proposed and assist the Official Committee with the review of all alternative structures to maximize value for unsecured creditors; ii) assist the Official Committee in its discussions with the Ad Hoc Bondholders Committee, Nextel Communications, Inc. and Motorola, Inc. and other interested parties regarding the Debtors' operations, prospects and potential reorganization and restructuring alternatives; iii) assist the Official Committee in valuing the Debtors' business operations as well as the Debtors' assets on a liquidation basis; iv) provide expert advice and testimony, if necessary, relating to financial matters which arise during the pendency of these cases, including the feasibility of any plan or transaction and the valuation of any securities issued in connection with such a plan or transaction; v) advise the Official Committee as to potential merger or acquisition opportunities, and the sale or other disposition of any or all of the Debtors' assets or businesses; vi) prepare proposals and counter proposals to the Debtors, the Ad Hoc Committee, NCI, Motorola and any other parties-in-interest in connection with any plan or plans of reorganization or any other transaction; vii) assist the Official Committee with presentations regarding any plan of reorganization or other potential transactions and other related issues; and viii) render such other restructuring services as mutually agreed upon by Crossroads and the Official Committee. As compensation for its services, Crossroads will charge the Official Committee fees on its hourly basis: Principals $495 to $550 per hour Managing Directors $430 to $495 per hour Directors $350 to $425 per hour Senior Consultants $300 to $350 per hour Consultants $190 to $295 per hour Associate/Accountants $150 to $185 per hour Administrators $110 per hour The Committee maintains that Crossroads is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. NII Holdings, Inc., along with its wholly-owned non-debtor subsidiaries, provides wireless communication services targeted at meeting the needs of business customers in selected international markets, including Mexico, Brazil, Argentina and Peru. The Company filed for chapter 11 bankruptcy protection on May 24, 2002. Daniel J. DeFranceschi, Esq., Michael Joseph Merchant, Esq. and Paul Noble Heath, Esq. at Richards, Layton & Finger represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,244,420,000 in total assets and $3,266,570,000 in total debts. TELESP CELULAR: Increases Capital Through Shares Subscription ------------------------------------------------------------- Telesp Celular Participacoes S.A ("TCP") (NYSE:TCP) (BOVESPA:TSPP3 (Common), TSPP4 (Preferred)), the Brazilian holding company that owns 100% of Telesp Celular S.A., the leading mobile operator in the state of Sao Paulo in Brazil, and an 83% indirect economic interest in Global Telecom S.A., a B- band mobile operator in the Brazilian states of Santa Catarina and Parana, announced Monday, based on information provided by Banco ABN Amro Real S.A., the registrar for the Company's shares, (i) the number of new TCP preferred shares (PN), common shares (ON) and American depositary shares (ADSs) subscribed for in the Brazilian and U.S. markets during the initial rights exercise period, which closed on Aug. 14, 2002, by TCP's shareholders in connection with TCP's pre-emptive rights offering, which was approved by TCP's Board of Directors on June 28, 2002 and (ii) the number of remaining unsubscribed shares that are available for subscription in the first reoffering round by TCP shareholders who indicated an interest during the initial rights exercise period in subscribing for additional shares. --------------------------------------------------------------- Shares Subscribed - Brazilian Market --------------------------------------------------------------- Common Shares (%)(1) Preferred Shares (%)(2) --------------------------------------------------------------- Portugal 212,014,334,394 85.06 49,075,664,204 10.57 Telecom --------------------------------------------------------------- Other 1,971,356,250 0.79 68,524,971,059 14.76 Shareholders --------------------------------------------------------------- Total 213,985,690,644 85.85 117,600,635,263 25.33 --------------------------------------------------------------- TOTAL (%)(3) --------------------------------------------------------------- Portugal 261,089,998,598 36.60 Telecom --------------------------------------------------------------- Other 70,496,327,309 9.88 Shareholders --------------------------------------------------------------- Total 331,586,325,907 46.48 --------------------------------------------------------------- --------------------------------------------------------------- ADSs Subscribed - U.S. Market --------------------------------------------------------------- ADSs (%)(2) TOTAL (%)(3) --------------------------------------------------------------- Portugal 13,232,115 7.13 13,232,115 4.64 Telecom --------------------------------------------------------------- Other 312,413 0.17 312,413 0.11 Shareholders --------------------------------------------------------------- Total 13,544,528 7.30 13,544,528 4.75 --------------------------------------------------------------- Total Subscribed During Exercise of Pre-emptive Rights --------------------------------------------------------------- Common Shares (%)(1) Preferred Shares (%)(2) TOTAL (%)(3) --------------------------------------------------------------- 213,985,690,644 85.85 151,461,955,263 32.63 365,447,645,907 51.23% --------------------------------------------------------------- Remaining Unsubscribed Shares --------------------------------------------------------------- Common Shares (%)(1) Preferred Shares (%)(2) TOTAL (%)(3) (including preferred shares underlying ADSs) --------------------------------------------------------------- 35,259,177,615 14.15 312,709,756,538 67.37 347,968,934,153 48.77% --------------------------------------------------------------- (1) Percentage of common shares offered (2) Percentage of preferred shares offered (3) Percentage of total shares offered TCP shareholders who subscribed for shares during the initial rights exercise period and indicated an interest in purchasing additional shares in the first reoffering round will have the right to subscribe for 0.16477360501355 of a common share and 2.06474370406429 preferred shares for each common and preferred share subscribed, respectively, in the initial rights exercise period. The period for subscription of remaining unsubscribed shares in the first reoffering round, by preferred and common shareholders who indicated an interest in purchasing additional shares in the first reoffering round, ends on Aug. 21, 2002. After that date, if there are any unsubscribed shares remaining, a second reoffering round will take place from Aug. 26, 2002 through Aug. 28, 2002 for preferred and common shareholders who subscribed for shares in the first reoffering round and indicated an interest in purchasing additional shares in the second reoffering round. CONTACT: TELESP CELULAR PARTICIPACOES S.A, SAO PAULO Investor Relations: Edson Alves Menini, (55 11) 3059-7531 emenini@telespcelular.com.br ========= C H I L E ========= EDELNOR: Seeks Bankruptcy Protection For Certain U.S. Assets ------------------------------------------------------------ Empresa Electrica del Norte Grande SA (Edelnor), a unit of Spanish utility company Endesa S.A. revealed a plan to seek bankruptcy protection for certain U.S. assets, reports Dow Jones Newswires. The plan, according to the Chilean generator, already has the board's approval. Dow Jones relates that the filing affects holders of US$340 million in unsecured loans from Bank of America N.A. and the New York branch of Switzerland's Union Bank. Affected holders can receive new 15-year certificates equal to just over 92% of the original principal, a cash payment equal to 38% of the principal, or a combination of the two. Two-thirds of the affected holders must accept or reject the plan by Sept. 16, Edelnor said, noting that 74% have already pledged their support. Obligations to all other creditors will be met through "the ordinary course of business," Edelnor said. CONTACT: Empresa Electrica Del Norte Grande SA (EDELNOR) Avenida Grecia 750 Antofagsta, Chile Phone: +56 55 248500 +56 55 248094 Contact: Fernando del Sol, Chairman EDELNOR: Inversiones Buying Holding Company Stake ------------------------------------------------- Inversiones Mejillones SA, a holding company controlled by Tractebel and Codelco, agreed to buy the 82.3% stake of F.S. Inversiones Ltda. in Chilean generator Edelnor for an undisclosed amount, says Bloomberg. In a statement to the Chilean securities regulators, Edelnor also said that Mejillones plans to buy part of Edelnor's debt for as much as US$58.1 million. Ivan Badilla, spokesman for the world's biggest copper producer Codelco, confirmed the purchase but declined to elaborate. Mario Alessi, chief executive of Tractebel's Chilean unit, wasn't available for comment. Edelnor, which will seek bankruptcy protection in the U.S., said the sale is part of a plan to restructure debt that the Company is unable to pay after energy prices slumped. MANQUEHUE NET: Shareholders Turn Down Binding Offers ---------------------------------------------------- Manquehue Net's shareholders shunned binding offers made for the Santiago-based local exchange provider by local operators Entel, Telex-Chile and Grupo GTD, Business News Americas reports, citing Chilean papers. This after the Company's directors found the offers unsatisfactory. Manquehue recently reached an agreement to extend the maturities on its US$30 million debts with local banks. But according to GTD chairman Juan Manuel Casanueva, Manquehue's debts remain too high, even after the recent restructuring program. Meanwhile, Manquehue's local shareholders are also expected to boost the Company's cash position with a CLP2 billion (US$2.87 million) subordinated loan. Fitch Ratings recently downgraded Manquehue's foreign currency and the international scale local currency ratings to 'CCC+' Rating Outlook Negative from 'B+' Rating Outlook Negative, and put the Company's ratings on negative outlook. The downgrade, according to Fitch, reflected Manquehue's continued weak financial performance, debt restructuring uncertainties and uncertain shareholder commitments as the Company is up for sale. Manquehue's four shareholders are Chilean gas company Metrogas (25.6%), local group Rabat (21.2%), bankrupt US carrier Williams Communications (16.4%), and UK energy utility National Grid (30%). The company has 96,000 lines in service across 22 boroughs of the capital city Santiago. CONTACT: MANQUEHUE NET S.A. Av. Condor 796, Enterprise City, Huechuraba Santiago Chile Phone: 00 562 243 8800 Fax: 00 562 248 7292 EMAIL: info@manquehue.netl Home Page: http://www.manquehue.net/ http://www.manquehue.cl Contact: Mr. Miller Williams, President Sr.Jos, Luis Rabat Vilaplana, Vice President =========== M E X I C O =========== VITRO: Salomon Smith Downgrades Recommendation To "Neutral" ----------------------------------------------------------- Luis Nicolau' abrupt departure as chief financial officer at Grupo Vitro SA prompted Salomon Smith Barney to downgraded its investment recommendation on the Mexican glassmaker's shares to "Neutral" from "Outperform," says Dow Jones Newswires. In a research note, Salomon Smith said that Nicolau's exit sends a troubling signal, considering "how important it is for a high- leveraged company like Vitro to maintain its focus on debt repayment." According to analyst Pablo Burbridge, the lack of proper explanation for the resignation "increases the chances it resulted from conflicts regarding the future direction of the group." "This could have easily been avoided by Luis Nicolau explaining the reasons for his abrupt departure; explanation we expected on Monday 19. Unfortunately this will not happen, and as a result the significant cash flow reinvestment risk of the Company has in our opinion increased," Burbridge added. Burbridge also cut Vitro's price target to 11.7 pesos ($1=MXN9.8080) a share from MXN14.5. Nicolau has been replaced by former comptroller Claudio del Valle. Vitro, S.A. de C.V. (NYSE: VTO; BMV: VITROA), through its subsidiary companies, is one of the world's leading glass producers. Vitro is a major participant in three principal businesses: flat glass, glass containers, and glassware. Its subsidiaries serve multiple product markets, including construction and automotive glass; fiberglass; food and beverage, wine, liquor, cosmetics and pharmaceutical glass containers; glassware for commercial, industrial and retail uses; plastic and aluminum containers. Vitro also produces raw materials, and equipment and capital goods for industrial use. Founded in 1909 in Monterrey, Mexico-based Vitro has joint ventures with major world-class partners and industry leaders that provide its subsidiaries with access to international markets, distribution channels and state-of-the-art technology. Vitro's subsidiaries have facilities and distribution centers in seven countries, located in North, Central and South America, and Europe, and export to more than 70 countries worldwide. For further information, please visit our website at: http://www.vitro.com To see financial statements: http://bankrupt.com/misc/Vitro.htm CONTRACT: VITRO, S.A. DE C.V. Investor Relations: Rodrigo Collada, +52-81-8863-1240 Email: rcollada@vitro.com Media Relations: Albert Chico, +52-81-8863-1335 Email: achico@vitro.com BREAKSTONE & RUTH INTERNATIONAL for Vitro Luca Biondolillo, +1-646-536-7012 Email: Lbiondolillo@breakstoneruth.com OR Susan Borinelli, +1-646-536-7018 Email: Sborinelli@breakstoneruth.com ================= N I C A R A G U A ================= INTERNATIONAL THUNDERBIRD: Announces 2Q02 Results ------------------------------------------------- International Thunderbird Gaming Corporation (TSX:INB) announced its financial results for the second quarter ended June 30, 2002. All figures are in US dollars. For the three months ended June 30, 2002, gaming revenues reached $4,511,000 an increase of 19.4% compared to 2001 revenues of $3,777,000. The Company's 50% stake in Panama's revenues improved from $3,043,000 in 2001 to $3,663,000 for the same period in 2002. Nicaragua's revenues improved from $354,000 in 2001 to $485,000 for the same period in 2002. The Company's equity interests in its skill machine locations in Mexico, which are not consolidated for financial statement reporting purposes, achieved revenue of $244,000 in the second quarter of 2001 compared to $nil in the second quarter of 2002. The Company's 30% stake in Venezuela, which is not consolidated for financial statement reporting purposes, achieved revenue of $nil in 2001 compared to $419,000 in the second quarter of 2002. Thunderbird recorded a loss in the quarter of $121,000 or $0.01 per share compared with a loss of $1,054,000 or $0.04 per share in the second quarter of 2001. The 2001 financial statements for the period were adversely affected by $385,000 of non-recurring expenses, including $88,000 of termination fees to Provident Group, $70,000 to our lawyers who acted against the California tribe from whom the Company collected $500,000, $120,000 in non- cash machine write offs and $107,000 of other non-recurring General and Administrative expenses. In addition, the Company incurred a $396,000 equity loss in equity investments. The breakdown of this loss was $298,000 associated with Venezuela and $98,000 associated with Mexico. The Company achieved EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the three-month period ended June 30 of $803,000 compared to ($208,000) for the same period in 2001. For the six months ended June 30, 2002, gaming revenues reached $8,961,000 an increase of 15.8% compared to 2001 revenues of $7,736,000. The Company's 50% stake in Panama's revenues improved from $6,490,000 in 2001 to $7,200,000 for the same period in 2002. Nicaragua's revenues improved from $398,000 in 2001 to $1,001,000 for the same period in 2002. The Company's equity interests in its skill machine locations in Mexico, which are not consolidated for financial statement reporting purposes, achieved revenue of $429,000 for the period in 2001 compared to $19,000 for the same period in 2002. The Company's 30% stake in Venezuela, which is not consolidated for financial statement reporting purposes, achieved revenue of $nil in 2001 compared to $997,000 for the same period in 2002. Thunderbird recorded a loss for the six months of $71,000 or $nil per share compared with a loss of $1,503,000 or $0.06 per share in the first six months of 2001. The 2001 financial statements for the period were adversely affected by $385,000 of non- recurring expenses, including $88,000 of termination fees to Provident Group, $70,000 to our lawyers who acted against the California tribe from whom the Company collected $500,000, $120,000 in non-cash machine write offs and $107,000 of other non-recurring General and Administrative expenses. In addition, the Company incurred a $513,000 equity loss in equity investments. The breakdown of this loss was $401,000 associated with Venezuela and $112,000 associated with Mexico. The first six months of 2001 were also adversely affected by $283,000 of development expense incurred in association with the opening of the casino in Nicaragua. Year to date the Company has achieved EBITDA of $1,826,000 compare to $273,000 for the same period in 2001. The Company previously reported that its 2001 year end financial statements, as well as its 1st quarter financial statements, were prepared on the basis of accounting principles applicable to a going concern, which assumes the realization of assets and liabilities in the normal course of business, and that the application of the going concern concept is dependent on the Company's ability to generate future profitable operations. The Company's continued losses from its investments in Venezuela and Nicaragua, as well as the lack of recovery of certain receivables, continues to be the Company's major challenges. The unstable political climate and devaluation have seriously affected our revenue. Ironically, our business in Venezuela is relatively stable with some decline in activity due to the political unrest, but when we convert Bolivares to U.S. dollars, we lose approximately 50% on the exchange rate. The exchange rate at December 2001 was 769 Bolivares to 1 U.S. dollar and the current exchange rate is 1,375 Bolivares to 1 U.S. dollar. These challenges can be overcome if (a) the Company's major creditors are willing to enter into "work-outs" with the company; (b) the company succeeds in renewing its concession in Guatemala; and (c) the Company is successful in recovering various receivables. Workout With Certain Creditors: The Company has not been able to meet its debt obligations. Prime Receivables, one of two major creditors, has served the Company with a default notice. The balance owing on the Prime loan is approximately $700,000. Although the Company has remained current with its payments to MRG Entertainment, the default on the Prime loan has placed the Company in a "cross-default" position with respect to its $2,200,000 in loans owed to MRG Entertainment. These loans are now reflected as current liabilities on the company's consolidated balance sheet, which has an adverse effect on the company's working capital deficiency. The Company has been successful in negotiating work-outs with various creditors (including Prime Receivables) in the past. Guatemala Arbitration: In Guatemala, the Company continues to wait for the arbitrator's ruling stemming from the claim that ILAC owes the Company approximately $620,000. In addition, the proceeding includes a claim that Thunderbird's contract should be extended past the 5-year contract date (October 1997) because operations did not commence until February 1998. The Company remains confident that the arbitrator will render a fair reward. The Company believes the results of the arbitration will have an effect on the renewal of the contract. The Company expects a decision from the arbitrator within the next 30 days, although there have been several delays in the rendering of an award. Recovery of Various Receivables. The Company previously reported that it had entered into a $750,000 settlement with a California tribe. That tribe began making payments of approximately $25,000 per month for 36 months. The Company continues to pursue a lump sum payment from the tribe in lieu of the monthly payments. The Company is also pursuing several other receivables stemming from discontinued operations, the most significant of which is the NAFTA claim against the Mexico government. The Company intends to file and serve the Mexican Government with its "NAFTA Claim" by August 23, 2002. International Thunderbird Gaming Corporation is an owner and manager of international gaming facilities. Additional information about the Company is available on its World Wide Web site at www.thunderbirdgaming.com. On behalf of the Board of Directors, Jack R. Mitchell, President and CEO CONTACT: INTERNATIONAL THUNDERBIRD GAMING CORPORATION Albert Atallah, 858/451-3637 858/451-1169 (FAX) Email: info@thunderbirdgaming.com Website: www.thunderbirdgaming.com ================================= T R I N I D A D & T O B A G O ================================= BWIA: Management Strains to Meet Mandate Compliance --------------------------------------------------- The management of BWIA, mandated to restructure the airline's business, is struggling to find realistic solutions to its problems. "No real viable solutions have been found," the BWIA management team admitted Saturday, days after it received a mandate to restructure the airline to ensure creditors can be paid and to reasonably reassure shareholders of profit and increased investment. An issue is the need to not only assure stability in the weakened and unpredictable airline market, but the mandate to both pay off the debt burden of the Company while finding profitable operating parameters within the reach of the current resources. Speaking for the team, Vice-President, Employee Service, Frank Sampson revealed that the normal mechanisms of airline restructuring were not all available to the national carrier. "BWIA will still find itself in need of significant funding, in order to achieve the mandated targets," he said, implying that a bailout from the Trinidad and Tobago Government may be required. BWIA's year so far has been dogged with internal problems that have had a negative impact on the attempts to assure stability in the weakened market. Last month, there was an impasse between pilots and the Company, which led to cancellations, delays and losses. The delays have cost the airline TT$8 million (US$1.3 million) from the middle of July to the first four days in August. It follows the US$8.4 million first half of the year loss, attributed to declining travel after the September 11 terrorist attack on the United States. CONTACTS: BWIA West Indies Airways Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, Chief Financial Officer (Trinidad) BWIA: Adds More Flights Amid Financial Battle --------------------------------------------- The deadlock between BWIA and its pilots did not stop its flights from soaring to new heights. According to a report by the Barbados Nation, management began putting more flights on the roster without leaving any flexibility in the system. Additionally, pilots were being sent to train on the new A340 Airbus, leaving the airline short-staffed. Chairman of the Trinidad and Tobago Airline Pilots Association, Edward Goddard, said in doing so a number of pilots and flight attendants had to be withdrawn from the system. "Eighteen pilots were taken out of the system to be trained on this new airbus," Edwards said. Clint Williams, director of corporate communications, revealed that a new contract, which is still under scrutiny, was offered to the pilots. *********** 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. 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