/raid1/www/Hosts/bankrupt/TCRLA_Public/020829.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
Thursday, August 29, 2002, Vol. 3, Issue 171
Headlines
A R G E N T I N A
ACINDAR: Devaluation Hampers First Semester Results
AMERICA ONLINE: Nasdaq Delisting Likely, Other Options Limited
IMPSA: Subsidiary Reassures Deal with Philippine Government
SCOTIABANK QUILMES: Parent To Exit Virtually Unscathed
TURBINE POWER: US$20 Million Corporate Bond Rated "D"
B E R M U D A
GLOBAL CROSSING: Top Executive Reassures Jobs for LatAm Division
B R A Z I L
ELETROPAULO: S&P Cuts Currency Ratings To 'SD' From 'CC'
EMBRATEL: To Settle Debt Payment Dispute with Telemar
ENRON CORPORATION: Moves to Maximize Value of Core Assets
C H I L E
ENAMI: ExxonMobil Files Suit, Adds Color to Disputada Sale Row
E C U A D O R
ECUATORIANA DE AVIACION: Plans To Resume Flights In Ecuador
TRANSELECTRIC: Needs US$15 MM to Finish Interconnection Project
E L S A L V A D O R
BANCO CUSCATLAN: Fitch Affirms Foreign Currency Ratings
M E X I C O
GRUPO BITAL: HSBC Sets Two Conditions on its US$1.14 Billion Bid
GRUPO MEXICO: Parent Financing Prompts ING Rating Increase
SANLUIS CORPORACION: Mexican Bourse Lifts Trading Suspension
U R U G U A Y
ANCAP: Chilean Oil Firm Responds to Partnership Invitation
V E N E Z U E L A
SIDOR: Far Wider Strike to Hit Sidor, Venezuela in October
SUDAMTEX: Opts for Liquidation to Pay Financial Obligations
- - - - - - - - - -
=================
A R G E N T I N A
=================
ACINDAR: Devaluation Hampers First Semester Results
---------------------------------------------------
Acindar S.A. on Tuesday announced a net loss for the period of
ARS 581.1 million, as a result of Negative Financial and Holding
Results of ARS 624.1 million. The Financial and Holding Results
mainly reflect the exchange losses arose in the devaluation of
the Argentine Peso occurred during the semester.
To counter both the high inflation rates brought about by the end
of the convertibility monetary system in Argentina at the
beginning of 2002 and the distortion this caused in the Argentine
companies' financial statements, the Argentine Government issued
Decree Number 1269/02 on July 17, 2002. This decree, among other
things, provided for the restoration of inflation accounting.
Consequently, on July 25, 2002 the CNV issued Resolution Number
415/2002 which establishes the application of inflation
accounting procedures starting January 1st, 2002 for any
financial statements filed subsequent to the date of the
resolution.
As a result, amounts for the first half ended June 30, 2001,
presented for comparative purposes, have been restated to June
30, 2002 using a conversion factor of 1.9562, which represents
the rate of inflation during the first half of the year.
Furthermore, amounts for each of the six months of the first half
of 2002 have been restated to June 30, 2002, using the
corresponding inflation rates.
The company's performance during the period was the consequence
of very unusual conditions that affected both sides of the
profitability equation. Revenues were positively affected by
sales to foreign market and, to a lesser extent, by the behavior
of local demand. While export revenues grew at the pace of the
exchange rate devaluation (and higher volume as well), domestic
prices grew to reflect almost entirely the increase in the
Company's production costs.
At the same time production costs didn't reflect the deep
misalignments in relative prices that took place in Argentina
during the period. Local costs haven't risen as much as
devaluation and particularly electricity and natural gas are even
well below inflation increase.
Acindar believes that, in coming months, local costs (including
electricity and gas) increases could exceed significantly the
rates of devaluation and inflation. At the same time, the
Company estimates that it will not be able to rise its prices at
the same rate than the expected increases in costs. The Company
believes that the combination of those forces will diminish the
Company's current margins, returning to lower levels according to
the argentine crisis.
Operating Results
Net sales decreased 7%, to ARS 419.4 million for first semester
of year 2002 ("1SY02"), as compared with ARS 449.5 million for
the same period of Y01.
Domestic shipments posted a decrease of 30.4% in comparison with
the same period of year 2001. During the semester the Company was
able to increase domestic prices to almost entirely compensate
higher production costs. Domestic net sales were ARS 238.6
million for the period ended June 30, 2002, compared with ARS
348.4 million for the first semester of Year 2001 ("1SY01").
Exports net sales increased 78.7%, from ARS 101.1 million in
1SY01 to ARS 180.8 million in 1SY02. Export volume rose 22.1%,
reaching 172.2 thousand tons in 1SY02.
The Company production costs per ton decreased by 10.9% respect
to the same period of the previous year. Considering that
amounts for the first half of 2002 and 2001 were adjusted for
inflation, this decrease implies that the Company's costs
increased at a lower rate than the general rate of inflation as
measured by the wholesale internal price index.
Gross profits for 1SY02 amounted to ARS 158.1 million, compared
with Ps. 98.2 million for the same period of Y01.
As a consequence of this performance EBITDA for the first
semester of year 2002 was Ps. 99.9 million, in comparison with
Ps. 36.0 million for the same period of the previous year.
Financial income (expenses) and holding gains (losses)
represented a net loss of ARS 624.1 million, compared to a net
loss of ARS 63.0 million in the same period of 2001. Foreign
exchange losses were ARS 1065.6 million, ARS 91.3 million of
which was related to capital expenditure financing and as such
was capitalized in fixed assets according to accounting standards
and CNV Resolution # 398/02 (the Argentine securities and
exchange commission). Effect of exposure to inflation results of
assets and liabilities were ARS 373.8 millions.
Balance Sheet and Cash Flow Statement
As of June 30, 2001, the Company's shareholders' equity amounted
to Ps. 424.9 million, while as a consequence of the reported
loss, the Company reported a negative shareholder's equity of ARS
324.1 million.
At the end of June 2002 the Company had a cash position amounting
to ARS 40.6 million.
To protect the continuity of its operations, on December 19,
2001, Acindar announced that it had discontinued payments of
interest and principal on certain of its financial debt.
Since that date, in consultation with its financial advisor,
Credit Suisse First Boston, Acindar has been developing a
proposal to restructure its financial debt based on realistic
economic possibilities given the extremely volatile economic
conditions in Argentina.
Acindar initiated negotiations with its bank creditors at a
meeting on June 13, 2002. It established a steering committee to
represent the creditors of the company. Acindar will continue to
consult with this steering committee to develop a proposal for
the restructuring of its financial debt.
Simultaneously, Acindar has begun to identify the beneficial
holders of the 11.25% Notes Due 2004, a process it expects to be
completed shortly.
Acindar believes that the establishment of a Steering Committee,
the identification of the of the holders of the 11.25% Notes Due
2004 and the stabilization of the macroeconomic perspective of
the company will permit Acindar to advance more quickly in
finalizing the proposal of the restructuring of its financial
debt.
On July 30, 2002, the Company agreed to sell its interest in its
wholly-owned subsidiary, Comercial Acindar Chile Ltda., to
Corporaci˘n Aceros del Pacˇfico and Gerdau AZA S.A. for U$S 4.8
million. The transaction will be finalized within forty-five
days from July 30, 2002.
To see Financial Statements:
http://bankrupt.com/misc/Acindar.doc
CONTACTS: ACINDAR SA
Jose I. Giraudo, Investor Relations Manager
Phone: (5411) 4719 8674
Andrea Dala, Investor Relations Officer
Phone: (5411) 4719 8672
AMERICA ONLINE: Nasdaq Delisting Likely, Other Options Limited
--------------------------------------------------------------
Nasdaq was widely expected yesterday to send America Online Latin
America a delisting letter for failing to meet the capitalization
requirements for firms listed in its SmallCap index. According to
Dow Jones Newswires, it is highly unlikely that the company has
been able to meet the US$35 billion market capitalization
requirement because the company has not even held a share buyback
or a cash injection. In late July, Nasdaq gave the company a
month to raise its capitalization to US$0.52 cents a share to
remain in the index.
The report says the company intends to appeal any delisting
letter. Under Nasdaq's rules, the unit of AOL Time Warner Inc.
would have seven days to appeal the delisting warning. If it
fails to overturn the warning, the company could suffer its
second delisting, since sliding from the Nasdaq National Market
early this year.
But the company's alternatives are limited. Analysts believe the
firm can no longer hope for a cash injection from its key
shareholders -- banking giant Banco Itau SA (ITU) and Venezuela's
Cisneros Group. They say the two appear to be shying away from
the money-losing venture.
The company provides Internet access and content in Argentina,
Brazil and Mexico.
IMPSA: Subsidiary Reassures Deal with Philippine Government
-----------------------------------------------------------
CBK Power Co. Ltd., a joint venture of Argentine IMPSA and US-
based Edison Mission Energy (EME) affirms a commitment to go
ahead with its build-rehabilitate-operate-transfer project with
the Philippine government, The Philippine Star reports.
Several issues that erupted in the media have bothered the
company, says the report citing Tony C. Hsun, Edison Mission
director for Business Development Asia Pacific. While
acknowledging the right of the government to review CBK's
contracts with the independent power producers (IPPs), Hsun said
the review sends "wrong signals" to some investors.
Still the director is confident of the contract since it had gone
through a thorough review, confirming it will not affect
investment in the region.
A previous issue of TCR-LA reported the approval of the contract
between CBK and EME, after an investigation on possible
irregularities in the deal was concluded.
The company's investment involved $486-million in the Caliraya-
Botocan-Kalayaan (CBK) build-rehabilitate-operate-transfer
project (BROT).
CBK chief executive officer Gerald L. Katz also dismissed issues
on "over-charging," adding that they are complying with the rate
specified in the BROT contract. He also assured the company is
going with the project under BROT. Some US365 million to date has
been poured into the deal he said.
Providing updates, Katz also disclosed that the entire CBK
project is now 76 percent complete: Kalayaan I project of CBK had
become fully operational, the remaining unit such as the Caliraya
is now 96 percent complete, the Botocan project is 88 percent
complete, Kalayaan II is 59 percent complete, and civil
structures are 62 percent complete.
The Philippine Star report also cited CBK project director John
Harrison referring to the project as "not only the pumping
storage facility in the Philippines but also the closest to the
demand centers." Added to the prominence of the project is the
black-start capabilities of the plant, which when complete will
have an increased capacity of over 728 MW from an initial
capacity of 367 MW.
The TCR-LA report in July also said that international financing
of the contract is seen to help IMPSA renegotiate its debt by
generating a profit in the equity percentage of nearly 18% of the
levy to be paid by the Philippine's National Power Corporation
(Nacopor) in dollars. The levy is to be paid by Napocor at a
fixed rate for 25 years.
The contract between CBK and EME is also expected to generate an
income of US$200 million in turbo-pump exports from Impsa's plant
in Mendoza province, Argentina.
CONTACT: INDUSTRIAS METALURGICAS PESCARMONA SA (IMPSA)
Rodriguez Pena 2451
Godoy Cruz, Mendoza Argentina
Phone: 54 1 315 2400
Fax: 54 1 315 2388
Home Page: http://www.impsa.com.ar/index.html
Contact:
Roberto Arancibia
Tel: +54-261 4131300
Fax. +54-261 4131416 - 4131423
E-mail: arancibi@impsa.com.ar
SCOTIABANK QUILMES: Parent To Exit Virtually Unscathed
------------------------------------------------------
Bank of Nova Scotia, which recently posted results for the last
three months, expects to finally transact its interest in local
unit Scotiabank-Quilmes without severely affecting earnings,
Globe and Mail reports. The Toronto-based Scotiabank has net
income of $564-million or $1.05 a share, up marginally from last
year's $554-million or $1.04 a share.
The bank's turnover of its Argentine unit is expected to be
completed early in September. Canada's fourth largest bank
obtained clearance from Argentine authorities to exit the region
after its local unit was turned over to Banco Macro SA and Banco
Comafi SA. Majority of its employees and all of its branches will
be transferred to the local financial institutions.
The Central Bank earlier this year suspended Scotiabank Quilmes
after shareholders decided to abandon the troubled financial
sector. The turnover plan will require ARS190 million from the
nation's Deposit Insurance Fund and ARS50 million from another
government fund earmarked for failed banks, Bloomberg reports,
citing Buenos Aires daily InfoBAE. The reports didn't say how
Scotiabank Quilmes would repay its remaining liabilities, such as
its bonds and inter-bank loans.
Scotiabank Quilmes was Argentina's 12th-largest bank, with some
ARS2.7 billion (US$733.7 million) in assets.
CONTACT: SCOTIABANK QUILMES
Alan Macdonald
Chief Executive Officer
Phone: (54-11) 4338-8000
Fax: (54-11) 4338-8033
Mail: 6th Floor
Gral. J.D. Peron 564
(C1038AAL) Buenos Aires
Roy D. Scott
Vice-President and Managing Director, Latin America
Phone: (54-11) 4394-8726
Fax: (54-11) 4328-1901
Mail: P.O. Box 3955
C1000WBN Correo Central
Buenos Aires, Argentina
E-mail: scotiarep@sinectis.com.ar
TURBINE POWER: US$20 Million Corporate Bond Rated "D"
-----------------------------------------------------
Argentine rating agency Magister/Bankwatch Calificadora de Riesgo
S.A. assigned a "D" rating to US$20 million simple issue
corporate bond issued by Turbine Power Co. S.A. The rating on the
bond, which matures November 30, 2002 is based on the company's
financial standing for the first half of the year.
The company defaulted on its last installments on dollar-
denominated debts according to an August TCR-LA report citing
Ambito Financiero. The payments are the three last 6-month
installments on the company's US$39.9 million debt from a group
of French banks in 1994.
According to the report, the company has not posted significant
profit for years. In 2001, after registering a profit of almost
ARG 1.8 million (US$ 497,237), the company had to reduce by 50%
its tariffs because of a court ruling.
TPC is owner of the Rock thermal power station.
To see the company's financial statements:
http://bankrupt.com/misc/TurbinePower.htm
CONTACT: TURBINE POWER CO. S.A.
Avda. del Libertador 602, Piso 4
Ciudad Aut›noma de Buenos Aires
=============
B E R M U D A
=============
GLOBAL CROSSING: Top Executive Reassures Jobs for LatAm Division
----------------------------------------------------------------
Global Crossing's chief executive, John Legere extended
assurances to employees in the company's Latin American division
that jobs are safe and business will again flourish, Knight
Ridder Business News reports. The company has reduced its work
force from around 14,000 early last year to 6,800 at its
bankruptcy filing in January and about 4,700 today.
The number of employees in the Latin America division is down to
120 from 240, says Jose Antonio Rios, in-charge of the Latin
American division from Miami.
The cutbacks are almost complete, says Legere. Those pending are
in units that are consolidating between the United Kingdom and
Europe.
According to the report, the announcement is part of the top
executive's campaign to boost morale while the company is
undergoing restructuring, and after it dealt its telecom pioneer
Global Crossing Ltd for US$250 million with Asian investors.
Singapore Technologies Telemedia Pte. Ltd and Hong Kong-based
Hutchison Whampoa Ltd.- has agreed to buy 61.5 percent of Global
Crossing. The price was a third of the planned bid in January,
when the company sought Chapter 11 protection in U.S. bankruptcy
court in New York.
On January 28, 2002, Global Crossing and certain of its
affiliates (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated proceedings
in the Supreme Court of Bermuda.
On the same date, the Bermuda Court granted an order appointing
joint provisional liquidators with the power to oversee the
continuation and reorganization of the Bermuda-incorporated
companies' businesses under the control of their boards of
directors and under the supervision of the U.S. Bankruptcy Court
and the Supreme Court of Bermuda.
On April 23, 2002, Global Crossing commenced a Chapter 11 case in
the United States Bankruptcy Court for the Southern District of
New York for its affiliate, GT UK, Ltd. Global Crossing does not
expect that any plan of reorganization, if and when approved by
the Bankruptcy Court, would include a capital structure in which
existing common or preferred equity would retain any value.
CONTACT: GLOBAL CROSSING
Press Contacts
Becky Yeamans
+ 1 973-410-5857
Rebecca.Yeamans@globalcrossing.com
Tisha Kresler
+ 1 973-410-8666
Tisha.Kresler@globalcrossing.com
Kevin Burgoyne
Latin America
+ 1 305-808-5925
Kevin.Burgoyne@globalcrossing.com
Mish Desmidt
Tel: +44 (0) 118 908 6788
Mobile: +44 (0) 7771 66 84 38
mish.desmidt@globalcrossing.com
Analysts/Investors Contact
Ken Simril
+ 1 310-385-3838
investors@globalcrossing.com
===========
B R A Z I L
===========
ELETROPAULO: S&P Cuts Currency Ratings To 'SD' From 'CC'
--------------------------------------------------------
Standard & Poor's Ratings Services on Tuesday lowered its global
scale foreign currency and local currency corporate credit
ratings on Brazilian utility Eletropaulo Metropolitana
Eletricidade de Sao Paulo S.A. to 'SD' (selective default) from
double-'C' and removed the ratings from CreditWatch, where they
were placed with negative implications on July 25, 2002.
The ratings assigned to Eletropaulo in the Brazil National Scale
were also lowered to 'SD' from 'brCC'.
At the same time, the national scale rating on the company's
seventh debentures issue remains 'brCC' on CreditWatch with
negative implications.
The downgrade highlights Eletropaulo's inability to repay US$225
million of a syndicated loan that came due yesterday. Although
the company has made an 15% upfront payment of principal and
interest and is currently under a standstill agreement until
Sept. 9, 2002, Standard & Poor's views the renegotiation of the
terms of the syndicated loan (including the present standstill
agreement) as tantamount to default, as creditors have no
practical alternative other than accepting the restructuring of
the initial terms and conditions.
An 'SD' rating is assigned when Standard & Poor's believes that
the obligor has selectively defaulted on a specific issue or
class of obligations but will continue to meet payment
obligations on other issues or classes of obligations in a timely
manner.
During the standstill agreement period, Eletropaulo will be
negotiating with creditors a new amortization schedule, as well
as new covenants and other conditions for the syndicated loan.
Even if the company successfully reaches a solution for this
debt, the company still faces US$286 million of other debts
coming due until the end of the year; financial sources to meet
them are still uncertain. Standard & Poor's will follow the
developments related to the negotiation of the syndicated loan,
as well as Eletropaulo's initiatives to refinance other
maturities.
CONTACT: Marcelo Costa, Sao Paulo
Phone: (55) 11-5501-8955
Reginaldo Takara, Sao Paulo
Phone: (55) 11-5501-8932
Milena Zaniboni, Sao Paulo
Phone: (55) 11-5501-8945
EMBRATEL: To Settle Debt Payment Dispute with Telemar
-----------------------------------------------------
Emratel and Telemar is scheduled to meet with Brazilian telecom
agency regulator, Anatel (Agencia Nacional de Telecomunicacoes)
to settle a squabble over debt payments, O Estado reports.
According to the report, long distance provider Embratel failed
to pay local service provider Telemar of its BRL180 million debt
concerning draft and issue of Account Settlement statements
between operators. The account was for August 2001 and February
2002, which Anatel has determined in July.
The companies have been involved in legal battles concerning
competition in domestic long distance, with Embratel filing the
case against Telemar.
Embratel also blocked Telesp, a unit of Spanish giant Telefonica,
from launching a domestic long-distance service with a separte
legal case. Anatel has authorized Embratel, country's largest
long distance provider to operate in the local calls sector this
month.
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
TELEMAR
Investor Relations
E-mail: invest@telemar.com.br
Phone: 55 (21) 3131 1314/1315/1316/1110
ENRON CORPORATION: Moves to Maximize Value of Core Assets
---------------------------------------------------------
Consistent with a plan outlined in May to maximize the value of
its core assets, Enron Corp. announced Tuesday that it has
commenced a formal sales process for its interests in certain
major assets. The company is extending invitations to visit
electronic data rooms containing information on 12 of Enron's
most valuable businesses to a broad universe of potential bidders
with whom the company has executed confidentiality agreements.
"This process continues our efforts to maximize value and enhance
recovery for our creditors," said Stephen Cooper, Enron's interim
CEO and chief restructuring officer. "Enron and its advisors, in
consultation with the Unsecured Creditors' Committee and its
advisors, will evaluate all offers received to determine the
combination of bids that maximizes the value of all assets."
The company has established a timetable that would result in
reaching final decisions and making necessary Bankruptcy Court
filings on such asset dispositions in December 2002. Consistent
with that timetable, Enron and its advisors envision initial
indications of interest will be due in October, with final bids
due in November 2002. Enron reserves the right not to sell any of
its assets if the bids received are not deemed fully reflective
of the assets' value.
The 12 assets, or interests in assets, include:
Portland General Electric
Portland General Electric is a fully integrated electric utility
serving more than 740,000 retail customers in northwest Oregon.
Contrary to local political concerns raised in the past weeks,
Enron will only sell the entity in its current structure as a
fully integrated electric utility.
Transwestern
Transwestern Pipeline Company is principally comprised of a
2,600-mile natural gas pipeline extending from west Texas to
California.
Citrus
Enron owns a 50 percent interest in Citrus Corp., which is the
holding company for Florida Gas Transmission Company, comprised
principally of a 5,000-mile natural gas pipeline system extending
from south Texas to south Florida.
Northern Plains
Enron's wholly-owned subsidiary Northern Plains Natural Gas
Company owns a 1.65 percent general partner interest, and
approximately 500,000 limited partner units, in Northern Border
Partners, L.P., a limited partnership publicly traded on the
NYSE. Northern Border's principal business segment is interstate
natural gas pipelines, which include a 70 percent interest in
Northern Border Pipeline, an approximately 1,250-mile natural gas
pipeline extending from Canada to the midwestern United States,
and Midwestern Gas Transmission Company.
Elektro
Elektro Electricidade e Servicos S.A. is a local electricity
distribution company in Sao Paulo state, Brazil that serves more
than 1.7 million customers.
Cuiaba
Cuiaba is an integrated energy project comprised of a 480-
megawatt natural gas-fired power plant in the State of Mato
Grosso, Brazil, two natural gas pipelines that transport natural
gas from eastern Bolivia through western Brazil directly to the
plant, and two gas supply companies that supply natural gas to
the power plant. Enron owns various controlling or co-controlling
interests in the project companies.
Bolivia to Brazil Pipeline/Transredes
The Bolivia to Brazil Pipeline system is comprised of Gas
TransBoliviano, S.A. and Transportadora Brasileira Gasoduto
Bolivia-Brazil S.A., South America's longest intercountry natural
gas pipeline. Transredes owns more than 3,400 miles of liquid
hydrocarbon and natural gas pipelines that gather and transport
products within Bolivia.
Sithe
Enron owns a 40 percent equity interest in and a subordinated
note from Sithe/Independence Power Partners, LP, the principal
asset of which is a 1,042-megawatt cogeneration power plant
located in Scriba, N.Y.
Eco-Electrica
Enron owns an indirect 47.5 percent interest the Eco-Electrica
Project, a 542-megawatt cogeneration power plant, a 1 million
barrel liquified natural gas terminal, and a 2 million gallon per
day water desalination facility located in Penuelas, Puerto Rico.
Mariner
Enron indirectly owns 96 percent of Mariner, a domestic
exploration and production company primarily focused on the Gulf
of Mexico, as well as the Permian Basin. Mariner had proved
reserves of 237 billion cubic feet equivalent at year-end 2001,
of which approximately 75 percent were natural gas.
Stadacona
Compagnie Papiers Stadacona owns a 500,000 tons per year
newsprint and directory paper mill in Quebec City, Quebec. The
company also owns timberland assets in the vicinity of the plant
and in Maine.
Trakya
Enron owns a 50 percent interest in the Trakya Project, a 478-
megawatt natural gas-fired power plant in Marmara Ereglisi,
Turkey.
Enron may expand the group of assets included in this process
under the appropriate circumstances.
Enron has retained The Blackstone Group L.P. as its lead advisor
with respect to these sales and, for the Mariner asset, has
retained Batchelder & Partners Inc. as co-advisor. Interested
parties may contact Michael Hoffman, Raffiq Nathoo, or Steve
Zelin at The Blackstone Group L.P. at 212/583-5000, or, in the
case of the Mariner asset, Joel Reed at Batchelder & Partners
Inc. at 858/704-3302.
Enron has significant electricity and natural gas assets in North
and South America. Enron's Internet address is www.enron.com.
CONTACT: Enron, Houston
Mark A. Palmer
Phone: 713/853-4738
=========
C H I L E
=========
ENAMI: ExxonMobil Files Suit, Adds Color to Disputada Sale Row
--------------------------------------------------------------
The dispute between ExxonMobil and Enami over the sale of
Disputada de Las Condes copper mining company is getting
interesting. According to Business News Americas, the U.S. oil
giant sued the Chilean state minerals company last week, accusing
it of deliberately trying to hold up the sale to South Africa's
Anglo American, which was supposed to be closed by end of June.
The case now pending in a Santiago civil court is considered a
"counter-suit" to Enami's earlier legal action aimed at
protecting its option to acquire 49% of Disputada. Enami
maintains the option is valid until 2028, thus the sale could not
possibly push through without its consent or without paying
adequate compensation.
But ExxonMobil claims that the 1998 restructuring that converted
Disputada into a limited company from a corporation with issued
capital effectively voided Enami's option. The Chilean firm
acquired the option in 1978 as part of the concessions for
selling Disputada to ExxonMobil for US$92 million.
Citing local newspaper reports, Business News Americas says
ExxonMobil Minerals International is demanding CLP5 billion in
"moral damages," plus an unspecified amount in "incidental and
consequential" damages. The deal with Anglo American is worth
US$1.3 billion.
Exxon Spokesperson Ed Glab disclosed, though, that both sides are
still in talks about a possible out of court settlement. The
only hitch is: The parties can't decide what formula to use in
calculating the value of the option. Exxon says the figure
should be determined by the 1978 contract of sale, which would
value Disputada at around US$1.8 billion, while Enami says the
amount should depend on the market value.
Meanwhile, sources of Business News Americas say the real reason
why the sale remains unconsummated is the pending bill in
Congress seeking to impose capital gains tax on deals involving
Chilean-registered companies, but sealed outside Chilean
jurisdiction.
According to one industry source, ultimately the government's
objective is to scupper the deal so state copper corporation
Codelco can obtain Disputada. Mining Minister Alfonso Dulanto
vehemently denies that the pending tax reform is aimed towards
this end, but stressed that the government is not pleased with
the terms of sale.
Codelco bid for the assets, which went on sale in August last
year, but Exxon rejected its final offer in February. Codelco
had wanted to combine operations at Los Bronces with the Rio
Blanco deposit, part of its 250,000t/y Andina division in Chile's
Region V, as the two share the same ore body.
Business News Americas estimates the tax measure to charge the
Disputada sale with an estimated US$300 million tax or 35% of the
difference between the book value of Disputada (some US$500
million) and the price agreed.
Disputada President Stephen Terni says the tax changes would
"complicate" the agreement with London-based Anglo American,
which also agreed to pay another US$120 million to Exxon for the
assets depending on the performance of copper prices over the
next three years.
The government's displeasure over the sale is also partly due to
ExxonMobil's notoriety of evading paying taxes. The report says
Disputada has not paid income taxes since Exxon acquired the
assets from Enami 24 years ago. Mr. Terni, however, argues that
Disputada has accumulated losses since Exxon took it over,
justifying the non-payment of income taxes. Exxon says it has
yet to recover any of its US$1.8 billion-investment in the
company.
=============
E C U A D O R
=============
ECUATORIANA DE AVIACION: Plans To Resume Flights In Ecuador
-----------------------------------------------------------
Ecuatorian de Aviacion plans to fly over Ecuadorian skies again,
El Comercio reports. The airline is applying for a license to the
civil aviation council CNAC to operate flights connecting Quito,
Guayaquil, and Galapagos. As part of the plan, the Ecuadorian
airline will lease two Boeing 737 aircraft.
The airline is also set to strike an international flight
agreement with Peru's Aero Continente. In May, Peru's largest
airline is reported looking to acquire 70 percent of Ecuatoriana
de Aviacion for US$42 million plus assumption of debt.
Ecuatoriana could report sales of between US$40 million and US$50
million in its first year once it resumes operations, Carlos
Morales, AeroContinente executive director at that time, said.
In June, the Ecuadorian civil aviation authority DAC blocked
Ecuatoriana from operating flights to the US. The regulator
issued the ruling on Ecuatoriana's failure to settle a US$3.68-
million debt, which corresponds to airport taxes, renting of
airport facilities, landing tax, flight protection, and air
services.
In July, El Universo reported the airline announced it would
restructure debts totaling US$50 million. The airline's creditors
include the government, airports, fuel providers and back
payroll.
As part of the restructuring, the airline would pass on 80% of
its labor force to LanChile, which has been operating
Ecuatoriana's flight to the US since mid-December 2001. It will
not renew its routes sharing contract with LanChile ending June
30th.
CONTACT: ECUATORIANA DE AVIACION
Colon Y Reina Victoria Edf, Quito, Ecuador
Phone: +593 (2) 563 003
Fax: +593 (2) 563 920.
Home Page: Website: www.ecuatoriana.com.ar/
AEROCONTINENTE AIRLINES
Jr. Moyobamba 101
Tarapoto, Peru
Phone: (094) 524332
Fax: (094) 523704
Home Page: http://www.aerocontinente.com/
Contact: Sr. Zad Desm,, Vice President
TRANSELECTRIC: Needs US$15 MM to Finish Interconnection Project
---------------------------------------------------------------
State-owned transmission company Transelectric expects its
application for a US$15 million loan from the Andean Development
Corporation to be approved October, says Business News Americas.
The company will use the money to finance an interconnection
project with Colombian transmission company ISA, the report says.
The project includes 136km of 300MW transmission cables
stretching from Colombia's border to the new substation currently
in construction at Pomasqui. Total project cost is US$34
million, but Transelectric will source the US$19 million from its
own pocket.
For its part, ISA will invest US$20 million in a project that
will connect 78-kilometers of transmission cables from Pasto, in
Colombia and Quito in Ecuador. The project is currently under
construction with operations set to begin in December, the paper
says. Colombian credit agency Findeter will finance this
undertaking.
Meanwhile, there is still no progress in the plan by the
Ecuadorian government to transfer the rights to operate
Transelectric to another company.
Last Monday, Troubled Company Reporter-Latin America said that
Canadian power company Hydro Quebec, Spain's REE and Italian
energy company Enel are among those interested in bidding for the
rights. Alfredo Mena, coordinator of Ecuador's state
privatization agency CONAM, confirmed this recently and added
that other companies will also be invited to take part.
The Ecuadorian government is looking for a new operator that will
increase the Company's revenues and reduce its liabilities.
Transelectric has a negative cash flow due primarily to
distributors not making payments.
The new operator will be tasked with completing a US$300-million
recapitalization plan at Transelectric. In additions, the new
owner will have to assume the Company's planned investment of
US$57 million in 2002. Some US$29 million of the amount is set to
cover the cost of transmission fees and other operations.
However, the operator will not have to put up the resources for
the investments.
CONTACT: TRANSELECTRIC
A. Quito - Ecuador
Phone: 593-2-2555570/2556461
Fax: 593-2-2529695
E-mail: lruales@transelectric.com.ec
=====================
E L S A L V A D O R
=====================
BANCO CUSCATLAN: Fitch Affirms Foreign Currency Ratings
-------------------------------------------------------
Fitch Ratings has affirmed Banco Cuscatlan de El Salvador's
ratings at Foreign currency long-term 'BB+'(Outlook Negative),
short-term 'B', Individual 'D' and Support '5T' ratings. Banco
Cuscatlan de El Salvador's (BC) ratings reflect the bank's well
established domestic franchise and its ability to generate
consistent earnings in a troubled operating environment, but they
also take into account its exposure to the construction sector,
underlying asset quality loss, and growing appetite for Central
American risk. In addition, a significant proportion of equity is
tied up in non-earning assets. The bank's significance to the
local banking industry and access to local market and foreign
funds also support the long-term credit rating.
BC is El Salvador's second largest bank, controlling an asset and
deposit market share of 25% and 24%, respectively, at end-June
2002. Around 95% of BC's shares are controlled by Corporacion
UBCI, itself predominantly owned by Central American investors.
Corporacion UBCI, registered in Panama in 2001, is the holding
company for the shares of BC and also holds stakes in small banks
in Guatemala and Costa Rica, which operate under the same name
but do not consolidate the results into BC. BC is the largest of
the regional group companies with 75.5% of their published assets
at end-2001. BC's strategy is to further broaden its Central
American franchise. Salvadorian regulators have authorized UBCI
as the country's first financial conglomerate.
CONTACT: FITCH RATINGS
Akiko Kudo
Phone: 212/908-0819
Agatha Pontiki
Phone: 212/908-0306
Gustavo Lopez-Cortes
Phone: 212/908-0819 (New York)
===========
M E X I C O
===========
GRUPO BITAL: HSBC Sets Two Conditions on its US$1.14 Billion Bid
----------------------------------------------------------------
HSBC Mexico Director Luis Miguel Vilatela says the successful
acquisition of Grupo Financiero Bital SA de CV will now depend on
two principal conditions: the acquisition of Banco Atlantico and
the granting of official permission on the deal.
HSBC recently tendered US$1.14 billion for 100% of Grupo
Financiero Bital. The offer has already received approval from
Bital's board, which had in turn endorsed it to shareholders for
approval.
The acquisition of Banco del Atlantico was supposed to be
finished Monday, but the transaction was not executed. HSBC
executives said the deal must be carried out by the current
stockholders of Bital without HSBC's participation.
Bital shareholders will have to contribute between MXN1.5 billion
(US$152 million) and MXN3 billion (US$304 million) to seal the
acquisition of Atlantico, apart from fulfilling other
commitments, says local newspaper Cronica.
As to the issue of permission from the proper authorities,
Troubled Company Reporter-Latin America said that the government
is bound to accept the sale of its 4% stake in Bital, as is Banco
Santander Central Hispano SA, which holds a 26.6% stake.
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
HSBC HOLDING PLC
10 Lower Thames St.
London, EC3R 6Ae
Phone: 44-20-7260-0500
Home Page: http://www.hsbc.com
Contact:
Keith R.Whitson, CEO
GRUPO MEXICO: Parent Financing Prompts ING Rating Increase
----------------------------------------------------------
New York-based investment bank ING raised its ratings on 2008 and
2028 secured notes of Grupo Minero Mexico (GMM) from speculative
"hold" to "buy" Business News Americas reports. The action
follows the approval of US$256 million financing for its parent
company Grupo Mexico (G-Mex) from Banco Inbursa and on GMM's
improved operating results.
ING believes the new source of fund as well as two quarters of
improved operating results will help GMM realign its debt
schedule with creditors. The investment bank expects that at
least US$100 million of the fund will be allocated to refinance a
portion of GMM's bonds and bank debts.
Standard & Poors also recently lowered its ratings on Grupo GMM's
guaranteed senior notes, series A and B, from triple-'C'-plus to
double-'C'.
The downgrade stem directly from the downgrade of GMM's corporate
credit rating to 'SD' (selective default) from triple-'C'-plus.
The downgrade of the corporate credit rating follows the
company's public announcement of its default on principal payment
of approximately $26 million on two syndicated loans.
GMM decided to suspend principal payments on loans due to its
parent's deteriorating liquidity position.
Grupo Mexico's financial position prompted its subsidiaries to
begin restructuring negotiations with creditors. A part of the
US$256 million fund will also be used to facilitate debt
restructuring of Asarco, Grupo Mexico's other mining subsidiary,
the report says.
Mexican conglomerate Grupo Mexico, including its subsidiary
Southern Peru Copper, is the world's third largest copper
producer.
CONTACTS: GRUPO MEXICO S.A. DE C.V
Avenida Baja California 200,
Colonia Roma Sur
06760 Mexico, D.F.
Mexico
Phone: +52-55-5264-7775
Fax: +52-55-5264-7769
http://www.gmexico.com
Contacts:
German Larrea Mota-Velasco, Chairman & CEO
Xavier Garcia de Quevedo Topete, President & COO
SANLUIS CORPORACION: Mexican Bourse Lifts Trading Suspension
------------------------------------------------------------
Mexican autoparts manufacturer SanLuis Corporacion resumed
trading Monday after being suspended Thursday last week due to a
wide discrepancy in its "ask and bid" prices. The Bolsa Mexicana
de Valores cited "extraordinary price fluctuations," in
suspending SanLuis' shares, noting the difference between the
share's bid price of MXN3.00 and ask price of MXN4.98 (US$0.31
and US$0.52).
A SanLuis spokesperson, however, said the share price discrepancy
could be explained by the Company's delay in releasing its second
quarter results, which were due on August 2. Ongoing
negotiations with creditor banks to restructure US$234 million of
the Company's debts were also cited as factors.
Meanwhile, the company last week announced that an agreement in
principle had been reached with a steering committee representing
banks. Aside from these bank loans, SanLuis also has US$291
million in debt in the form of commercial paper due 2008.
CONTACT: SANLUIS CORPORACION, S.A. DE C.V.
Hector Amador, Investor Relations
Phone: +5255-5-229-58-38
Fax: +5255-5-202-66-04
E-mail: hamador@sanluiscorp.com.mx
Home Page: http://www.sanluiscorp.com
=============
U R U G U A Y
=============
ANCAP: Chilean Oil Firm Responds to Partnership Invitation
----------------------------------------------------------
Uruguay's state-owned oil company ANCAP continues to receive
expressions of interest from potential partners with Chilean
counterpart Enap becoming the latest to be added to the list,
says ANCAP Director Pablo Abdala.
Already in the list of potential partners are Spain's Repsol-YPF,
Brazil's Petrobras, English-Dutch conglomerate Shell, US'
ChevronTexaco, Spain's Cepsa and Venezuela's PDVSA, says Business
News Americas.
For more than a year ago, the company sent invitations to
international companies to help ANCAP's vertical integration in
the crude market, but the company will continue to accept tenders
up to the first quarter of 2003.
"It will be very difficult to choose a partner because all theses
companies have great reputations and proven presence in the
international market," Mr. Abdala says.
The company, which has a local monopoly in the refining and
importation of crude, plans to use this strategic alliance to
become more competitive and efficient.
"This regional agreement will improve Uruguay's generation
capacity from 37,000 barrels/day to 50,000 barrels/day, and allow
us to regulate prices in the local market, achieving parity with
international prices," Mr. Abdala told Business News Americas.
Moody's recently downgraded ANCAP's foreign currency issuer
rating to B3 from B1. This latest downgrade is the second this
year and was caused primarily by the deterioration of Uruguay's
long-term foreign currency ceiling to B1 from Ba2. Its rating
outlook is negative.
ANCAP is currently upgrading its La Teja refinery, a move
requiring US$120 million, of which approximately 75% had been
incurred as of June 30. ANCAP is looking to raise some US$62
million from the securitization of future sales from the
refinery, to complete the upgrading project. The initial
response has been very positive, according to local reports.
ANCAP had drawn US$50 million from a US$115 million committed
credit facility, which was cancelled following the country's
ratings downgrade to junk status.
Headquartered in Montevideo, Uruguay, the state-owned oil,
alcohol and cement company ended 2001 with US$70 million in debt,
representing 16% of the Company's capitalization.
CONTACT: ANCAP
Central Administration Paysando
s/n esq. Avenida del Libertador
Montevideo, 11100 Uruguay
P.O. Box 1090
Phones: +598(2) 902 0608
902 3892
902 4192
Fax +598(2) 902 1136 902 1642
Telex ANCAP UY 23168
E-mail: info@ancap.com.uy
Home Page: www.ancap.com.uy
Contact:
Benito E. Pi eiro, Chief Executive Officer
Phone +598(2) 900 2945
+598(2) 902 0608 Ext. 2253
Fax +598(2) 908 9188
=================
V E N E Z U E L A
=================
SIDOR: Far Wider Strike to Hit Sidor, Venezuela in October
----------------------------------------------------------
A much wider and more devistating strike may yet follow Tuesday's
5-hour work stoppage at Sidor's plant, as several workers union
will try to stage a national strike in October, says Dow Jones
Newswires.
Various groups, including members of CTV -- a federation of
public sector workers' unions with members numbering about one
million -- are currently planning the general strike. The last
time CTV co-led a similar strike in April, it resulted in
President Hugo Chavez's brief ouster. He, however, was returned
to power by loyalist troops two days later.
Some 8,000 Sidor workers participated in the strike Tuesday,
which lasted from 7:00 am local time to 12 pm, said Steel
Workers' Union President Ramon Machuca over local radio.
"We launched this action because we haven't had an answer from
the company after seven or eight months of negotiation," Mr.
Machuca said in explaining the brief strike.
In May last year, the company was also hit by a three-week
strike. Sutis represents 5,400 Sidor employees plus nearly 6,000
sub-contracted workers.
At the end of July, President Hugo Chavez said a financial rescue
package for the company is currently in the works. The company
also obtained preliminary agreement with bank creditors to have a
60-day period to restructure US$1.7 billion in debt, Troubled
Company Reporter-Latin America reported earlier this month.
The preliminary agreement includes writing off up to half of the
Company's debt and capitalization from the government through
share increase. Sidor suspended US$31.3 million interest payment
on debt last December. Sidor's ability to pay its obligations
has been hampered by low international steel prices and a
slumping economy.
The company is 70% owned by the Amazonia consortium made up of
Mexico's Hylsamex, Argentina's Techint group, Venezuela's Sivensa
and Brazil's Usiminas. State heavy industry holding CVG owns the
other 30% of Sidor. Based in southeastern Bolivar state, Sidor
is Venezuela's largest private sector exporter.
CONTACT: SIDERURGICA DEL ORINOCO, C.A. (SIDOR)
Edificio General, Piso 9
Avda. La Estancia
Chuao, Caracas 1060
Venezuela
Tel: (582) 902 3800/3917/3955
Fax: (582) 993 2930
Home Page: www.sidor.com.ve/
SUDAMTEX: Opts for Liquidation to Pay Financial Obligations
-----------------------------------------------------------
Leading textile firm Sudamtex de Venezuela finally filed for
legal liquidation Monday, ending months of trying to meet debt
repayments, says Reuters. An unnamed Sudamtex spokesperson told
the news agency that the move would afford the company legal
protection while it sells assets within a year's time to meet
financial obligations. The company first applied for protection
on August 7 after a second debt-restructuring plan announced in
April failed to take off.
Last year, the company also entered into a debt restructuring, as
it tried to cope with sales eroded by a domestic recession and
growing competition from imported textiles. Trading in its
shares had been suspended since April.
The company has been considered liquidating and selling its
assets for quite a while, but several shareholder meetings to
approve the plan lacked the required quorum of 75%.
Sudamtex is the largest of several Venezuelan textile companies
to close in recent years after coming under pressure from cheaper
Asian imports. The Company, which lost US$38 million for the
year ended June 30, said early this year that it had not been
able to meet debt payments and hoped to renegotiate US$45 million
in bank loans for the second time in a year.
CONTACT: SUDAMTEX DE VENEZUELA, C.A., S.A.C.A.
Edificio Karam, Piso 2,
Ibarras a Pelotas,
Avenida Urdaneta, Apartado 3025
Caracas, Venezuela
Phone: +58-2-562-9222
Fax: +58-2-562-9411
Home Page: http://www.sudamtex.com/home.htm
Contact:
Alexander J. Furth, President
Carlos F. Van Maanen, VP, Finance and Administration,
Fiberglass
* * * * * *
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. Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are $25 each. For subscription information,
contact Christopher Beard at 240/629-3300.
* * * End of Transmission * * *