/raid1/www/Hosts/bankrupt/TCRLA_Public/020902.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
Monday, September 2, 2002, Vol. 3, Issue 173
Headlines
A R G E N T I N A
BANCO SUQUIA: Judge Says French Parent Liable to Cover Deposits
AMERICA ONLINE: Wants Telmex to Absorb Existing Subscribers
CENTRAL PUERTO: Loses US$59.2 Million Due to Peso Devaluation
EDENOR SA: Suffers Through Delay Until Hikes, Set for Year End
B E R M U D A
GLOBAL CROSSING: House May Summon Top Executive on Stock Deal
B R A Z I L
ALCOA: Currency Drop Drags Down Value Below Bond Requirement
BESC: Four Banks Expected to Participate in Mid-November Auction
ELETROPAULO: Wants Two-year Extension on BRL700 Million Bonds
TELESP CELULAR: Portuguese Investor Wrests Majority Control
C H I L E
ENAMI: Government Only Willing to Act as Guarantor, Not Savior
MADECO SA: 1st Half Net Losses Balloon 88% to CLP17.1 Billion
QUI¥ENCO S.A.: Announces Consolidated Results For 2Q02
E C U A D O R
PACIFICTEL: Sets Central Ring of Guayaquil Fiber-optic Network
M E X I C O
CFE: Annual Tax Bill as Burdensome as Structural Flaws in Sector
CFE: Extends Deadline for Bids to Install Combustion Units
GRUPO TMM: Announces Exchange Offer for Existing Debt
GRUPO TMM: Shareholder Approves Reclassification of Shares
GUILFORD MILLS: Bankruptcy Court Approves Reorganization Plan
V E N E Z U E L A
GRAFITTI: Creditor Banks Lift Moratorium, Debt Collection Begins
- - - - - - - - - -
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A R G E N T I N A
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BANCO SUQUIA: Judge Says French Parent Liable to Cover Deposits
---------------------------------------------------------------
French bank Credit Agricole will be obligated to return clients'
deposits should Banco Suquia SA, a subsidiary until May this
year, fail to do so, a federal judge in Argentina ruled recently.
In a case filed by a Banco Suquia SA client, the judge said
foreign parents of Argentine banks must assume responsibility for
returning deposits that were frozen following the currency
devaluation, should their local units fail to release the money
within 15 days.
To protect foreign banks from massive withdrawals at the height
of the peso devaluation, the government imposed a freeze on some
deposits. Big banks like Banco Bilbao Vizcaya Argentaria SA,
FleetBoston Financial Corp, including Credit Agricole were among
those that benefited from the emergency measure, says Bloomberg.
The report did not say if the ruling would have any effect on
other banks. Representatives of foreign banks, however, have
asked Congress to withdraw proposals forcing foreign banks to
cover deposits.
Credit Agricole pulled out of Argentina in May citing
uncertainties in the country's economic situation. The bank's
subsidiaries, Banco Bisel, Suquia and Banco de Entre Rios
(Bersa), which had about 6,000 employees and 355 branches, were
responsible for financing the bulk of Argentina's grain and
oilseeds industry. The two industries accounted for US$9 billion
of exports last year, 40% of the country's total.
Credit Agricole was among the foreign banks that stopped funding
Argentine units after a run on deposits late last year that was
followed by a US$95-billion government debt default and currency
devaluation.
CONTACT: BANCO SUQUIA S.A
25 de Mayo 160 Cordoba
5000 Cordoba
Argentina
Phone: 0351-422-2048
Fax: 0351-420-0279
E-mail: relacioninversores@bancosuquia.com.ar
Home Page: http://www.bancosuquia.com.ar/
Contact:
Bernard Pierre Jean Brousse, Vice-President
Nestor Jose Belgrano, Director
BANCO DE ENTRE RIOS S.A. (BERSA)
Monte Caseros 128
Parana
3100 Entre Rios
Argentina
Phone: 0343-4201200
Fax: 0343-4213869
Contact: Alberto Roque Ferrero, Vice-President
BANCO BISEL S.A.
Mitre 602 Rosario
2000 Santa Fe
Argentina
Phone: 0341-4200300
Home Page: http://www.bancobisel.com.ar/
Contact:
Guillermo Harteneck, President
Jean Luc Perron, Vice President
Bernard Brousse, Vice President
AMERICA ONLINE: Wants Telmex to Absorb Existing Subscribers
-----------------------------------------------------------
Ailing America Online Latin America is now in advance talks with
Tel‚fonos de M‚xico (Telmex) owner Carlos Slim Helu over the
transfer of its clients to Telmex unit Prodigy, so that the
American firm can begin withdrawing operations from the region.
Local paper Economista did not state details of the talks, save
for the fact that America Online wants Telmex to assume its
present accounts, apparently to lessen the cost of ending
operations in Latin America. Telmex could not be reached for
comment.
America Online admits its finances are already unsustainable,
proof of which is its likely delisting from Nasdaq's SmallCap
market status. The stock exchange was widely expected to send
the company a delisting letter last week, a month after reminding
America Online of the minimum US$35 million market capitalization
requirement. The company's shares have been trading less than a
dollar for three months now.
AOL Latin America provides Internet access and content in
Argentina, Brazil and Mexico.
CENTRAL PUERTO: Loses US$59.2 Million Due to Peso Devaluation
--------------------------------------------------------------
Argentina's Central Puerto Sociedad Anonima lost ARS$216 million
(US$59.2 million) in the first half of the year due to the effect
of peso devaluation on its US-dollar-denominated debts. In
comparison with the same period last year, the company's figures,
re-adjusted for inflation, registered profits of ARS13.2 million
(US3.6 million).
According to Business News Americas, the company's operating
losses were ARS24.4 million (US$6.7 million) versus profits of
ARS49.7 million(US$13.7 million) in the first half of 2001. The
company posted sales falling 49.6 percent to ARS116.8 million
(US$32.3 million) as energy demand fell. Central Puerto's
operating losses were part offset by lower production costs.
The thermo generator's non-operating losses reached ARS245
(US$67.8 million), an increase of 786%, attributed to the
company's exchange rate exposure. The loss was partly offset by
ARS58 million (US15.7 million) paid by US' General Electric as a
penalty for a delay in the operation of Central Puerto's 770MW
combined cycle plant.
As of May the Company's debts total US$300 million, including the
amount owed to Sofax, which is 100-percent owned by Central
Puerto's majority owner TotalfinaElf; US$110 million with the
Bank of America with guarantees from US-based Exim Bank; US$11.5
million with Bankboston; and US$60 million with a syndicate of
banks. Of the smallest loan, US$50 million is in dollars and
US$10 million is a peso-denominated loan from Banco de la
Provincia de Buenos Aires.
The Argentine generator suspended payment of US$125.4 million in
capital and interest on a loan with French bank Sofax Banque in
May. The Company also suspended payments on all financial
obligations in February as a result of the economic downturn in
Argentina.
Central Puerto Sociedad Anonima is in the generation,
transportation, distribution, production, marketing,
commercialization, import and block sales of electric energy and
provision of technical and consultancy services.
To see Summary of Financial Results:
http://bankrupt.com/misc/CentralPuerto.htm
CONTACTS: CENTRAL PUERTO
Jacques Chambert Loir, CEO
2701 Avenida Tomas A Edison
Buenos Aires, Argentina
Phone +54 1 317 5074
Home Page http://www.centralpuerto.com
CREDITORS: BANCO DE LA PROVINCIA DE BUENOS AIRES
San Martin 137 (C1004AAC)
Buenos Aires, Repoblica Argentina
Tel. 054 (011) 4347-0000
BANK OF AMERICA - Corporate Headquarters
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
www.BankofAmerica.com
Contacts: Ken Lewis, Chairman & CEO
EDENOR SA: Suffers Through Delay Until Hikes, Set for Year End
--------------------------------------------------------------
Edenor SA, the struggling power firm that generates and
distributes electricity in greater Buenos Aires, will have to
wait until the end of the year before it can hike power rates,
says Bloomberg.
Citing local daily El Clarin, Bloomberg says public hearings and
parliamentary debates will take about two months to wrap up.
Hearings for the power sector will start September 25.
"We believe that hearings are a step forward, but they're not
going to resolve the grave problems we're facing since the start
of the year because of the decrease in income," Carlos Serrano,
head of institutional relations at Edenor, said in Clarin's
report.
Edenor has missed a number of interest payments this year after
the government imposed a freeze on any rate increases, which
affected all utility sectors. The move was intended to
counterbalance the effects of the currency devaluation and the
country's severe recession that followed the government's default
on public debts late last year.
Just last week, Troubled Company Reporter-Latin America received
reports that Edenor's parent Electricidad Argentina SA was
planning to suspend payment on a US$91.2 million debt due that
week. The default was apparently understood by creditors, who
agreed on a 90-day extension of the due date.
"We can't do anything until the government makes a decision about
raising tariffs," said Spokesperson Yves Desrousseaux, who
admitted that the company's debts were mostly US-dollar
denominated.
Edenor has been seeking to raise power tariffs to stave off an
impending bankruptcy. The company's managing director, Henri
Ducre, has admitted Edenor could go bankrupt unless it is allowed
to hike power tariffs to offset the effects of inflation and the
depreciation of the peso.
Edenor, whose full name is Empresa Distribuidora y
Comercializadora Norte, is 81 percent owned by Electricite de
France.
To see latest financial info:
http://bankrupt.com/misc/Electricidad_Argentina.htm
CONTACT: EDENOR S.A.
Azopardo Building
Azopardo 1025 (1107) Capital Federal
Phone: (54-11) 4346-5000
Fax: (54-11) 4346-5300
E-mai: to ofitel@edenor.com.ar
Home Page: http://www.edenor.com.ar
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B E R M U D A
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GLOBAL CROSSING: House May Summon Top Executive on Stock Deal
-------------------------------------------------------------
A congressional panel may issue a subpoena for Global Crossing
Ltd. Chairman, Gary Winnick, to clarify his involvement in
questionable stock trading before the company's bankruptcy
filing.
The action may be prompted by Winnick's refusal to "meet with
legislators without conditions," a Bloomberg report says citing
House Energy and Commerce Committee spokesman Ken Johnson.
Investigators are probing Mr. Winnick's position as it relates to
his involvement in the US$123 million stock deal in May 2001.
According to the spokesman, Winnick denied discussions with the
Securities and Exchange Commission, which is investigating the
company's accounting issues and possible charges of insider
trading.
Winnick's lawyer, Gary Naftalis of Kramer Levin Naftalis &
Frankel, maintained the legality of the trades, saying there is
no evidence of wrongdoing, the report says.
Johnson suggested the possibility that Winnick may have prior
knowledge of the troubles the company is facing basing on the
admittance of Tom Casey, Global Crossing's former chief executive
officer, that in April 2001, Joseph Perrone, executive president
of finance, told Casey that future revenue may be US$300 million
less than forecast.
Naftalis denied his client has prior knowledge of "any
information that would have prevented him from legally and
properly trading," the report says.
Bloomberg said it was not able to reach Perrone for comment.
Failing to make a comment on the investigation, a statement from
Global Crossing said the Company will continue in its willingness
to provide requested information to the House Committee on Energy
and Commerce.
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.
CONTACT: GLOBAL CROSSING
Press:
Becky Yeamans, +1-974-410-5857,
Email: Rebecca.Yeamans@globalcrossing.com
Tisha Kresler, +1-973-410-8666
Email: Tisha.Kresler@globalcrossing.com
Analysts/Investors:
Ken Simril, +1-310-385-5200
Email: investors@globalcrossing.com
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B R A Z I L
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ALCOA: Currency Drop Drags Down Value Below Bond Requirement
------------------------------------------------------------
Brazil's drop in currency pushed the value of Alco Aluminio SA
below the US$650 minimum requirement provided in the covenants of
its US$400 million asset-backed bonds issued in 1996, Bloomberg
reports. The event may pressure bondholders to collect payments
on the company's debts if the currency weakens further. The
company wants to subject the minimum requirement item for review
to avoid the possible threat.
Fitch Ratings has placed the 'B+' foreign currency ratings of the
Company on Rating Watch Negative together with similar action on
Brazil's foreign and local currency ratings this month.
The action was based on concern about the increased country risk
and unfavorable market conditions for the Company as it faces
tighter liquidity and greater refinancing risk under the current
volatile environment.
The country's real dropped to BRL3.47 per U.S. dollar on July 31.
The country's currency has fallen 26 percent this year against
the U.S. dollar.
BESC: Four Banks Expected to Participate in Mid-November Auction
----------------------------------------------------------------
The Brazilian government is now ready to privatize BESC bank,
setting a mid-November deadline for the completion of the
process, reports Gazeta Mercantil. Already, the government is
earmarking BRL381 million to capitalize the employee pension fund
and another BRL350 million to capitalize the bank's real estate
credit. Among the prospective bidders are Unibanco, Itau,
Bradesco and ANB, the report says.
In the second quarter this year, the bank posted a profit of
BRL11.2 million or a net worth of 707,425 reais. Between January
and July, however, the bank registered profits of BRL38.97
million, a marked improvement from last year's BRL12.87 million
in the same period.
Also to be privatized this year are BEC (Banco do Estado do
Ceara), BEP (Banco do Estado do Piaui) and BEM (Banco do Estado
do Maranhao).
ELETROPAULO: Wants Two-year Extension on BRL700 Million Bonds
-------------------------------------------------------------
Struggling power distributor Eletropaulo Metropolitana SA will
meet bondholders on September 13 to ask them to extend the
maturity of some BRL700 million bonds for another two years,
Bloomberg learned late last week. The move follows this week's
negotiations that extended by two weeks the maturity of some
US$225 million syndicated loan. The debt's original maturity was
early last week. The week before, the company barely managed to
repay US$120 million of commercial paper that came due August 21.
A separate report by Dow Jones Newswires said that Eletropaulo
only paid 15% of the syndicated loan and is now negotiating for
the 85% to be rolled over with a 24-month term and possibly be
converted, in large part, into reais.
In October, BRL350 million in bonds will mature, part of the
BRL700 million that the company wants to be extended for two
years. In April next year, another BRL350 million will mature.
In exchange for extending the maturity of the two tranches, the
company is offering an annual interest of 14.5%, slightly higher
than the 12.3% in the original contract.
The company blames the 26% plunge in Brazil's currency and
decline in corporate lending for its difficulties.
TELESP CELULAR: Portuguese Investor Wrests Majority Control
-----------------------------------------------------------
Portugal Telecom, which until recently only had 41.2% of Brazil's
Telesp Celular, now holds two thirds of the local mobile phone
carrier following its participation in the affiliate's BRL2.5
billion rights issue. According to analysts interviewed by
Reuters, the Portuguese shareholder earmarked BRL2 billion for
the transaction and subscribed to 80.5% of the issue. Following
the deal, the Portugal Telecom will own 68% of Telesp.
"We were expecting it (Portugal Telecom) to subscribe to all the
leftovers even though it didn't state that it would," Bank Itau
analyst Roberta Kosaka told Reuters in an interview. "It's a
cheap price for it to get into Telesp Celular."
The issue was priced at 3.5 reais ($1) per lot of 1,000 shares,
says Reuters. The foreign shareholder has promised to buy more
than 574 billion shares in Telesp Celular after two offers of the
leftovers from the initial issue, the Brazilian firm said in a
statement.
Telesp Celular controls about two thirds of the market in Sao
Paulo, Brazil's richest and most populous state. Other
shareholders subscribed to 18.4% of the new issue, leaving 1.2%
of the leftovers for auction today.
Proceeds from this rights issue will be used to pay part of
Telesp Celular Participacoes's BRL5.7 billion debts.
Meanwhile, as a result of Portugal Telecom's acquisition of
Telesp's majority stake, a source inside the mobile phone company
says it can now resurrect plans to pair its Brazilian mobile
units with those of Spanish giant Telefonica.
"There was talk that PT's stake in Telesp was not worth enough
for a 50-50 joint venture with Telefonica in Brazil," Jacqueline
Lison, an analyst at Fator Doria Atherino brokerage, told
Reuters.
No Portugal Telecom officials could be reach to confirm the
assumed plan.
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C H I L E
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ENAMI: Government Only Willing to Act as Guarantor, Not Savior
--------------------------------------------------------------
Mining minister Alfonso Dulanto was expected Friday last week to
deliver the bad news to Enami's board: The government will not
bail the company out from its US$480 million liabilities.
Business News Americas says the government is only willing to act
as guarantor for US$100 million of the debts. The report did not
state other details of the official government position on the
matter. However, the report did confirm the government's backing
of Enami's legal action to have an option to buy 49% of Disputada
validated.
The status of this option is currently the source of a legal
battle between Enami and Exxon, which has agreed to sell
Disputada to South Africa's Anglo American (LSE: AAL) for US$1.3
billion. The government is allegedly angling to sell the option
once validated and raise money to help pay Enami's debts.
The paper says Enami's dire financial situation has sparked
speculations that it will layoff 500 of its 1,900 workers.
Speculation abounds that the government will privatize the
company.
Previously, the government considered offloading Enami's Ventanas
smelter-refinery in central Chile's Region V to state copper
corporation Codelco as a way to pay off debts. This idea was
dropped following a lack of real interest on the part of Codelco
and the opposition of Enami workers.
Enami's debts ballooned in the nineties when it paid US$164
million to the state as "advanced profits" payment -- earnings
Enami never actually posted. These payments were supplied with
loans from Lyonnaise and Dresdner banks. Another US$200 million
of the debt was a result of heavy investment in cleanup programs
at Ventanas and its Paipote smelter in northern Chile's Region
III, the report says.
MADECO SA: 1st Half Net Losses Balloon 88% to CLP17.1 Billion
-------------------------------------------------------------
First half net losses of Chilean copper and aluminum products
manufacturer Madeco SA increased by 88% relative to figures for
the same period last year, says Business News Americas. For the
first six months this year, the company registered net losses of
CLP17.1 billion (US$24.9 million), a huge jump from last year's
CLP9.1 billion.
The company blamed the slump in telecom investments, which
"severely affected" sales of copper cable and fiber optics. Add
to that the devaluation of the Argentine peso, and it's not
surprising that losses are that huge, said a document filed by
the company with Chile's securities regulator, SVS.
The same company disclosure statement says it has already scaled
down investments in Argentina, as part of its restructuring plan.
Madeco, controlled by Chile's Luksic group via its Quinenco
holding, registered sales revenues of CLP128 billion (US$186
million) for the first six months, down from last year's CLP195
billion sales.
Fitch analyst Mariana Sepulveda believes, however, that the
results were "within the expected range" given the situation in
Argentina and Brazil. She told Business News Americas, in an
interview recently, that the company is in line for a loss this
year just like in 1999 when it posted negative earnings of CLP56
billion.
Madeco hired investment bank Salomon Smith Barney late last year
to help it restructure its US$325 million in debts. The debt
consists of roughly US$100 million in long-term bonds, US$120
million in bank loans and US$100 million related to Madeco's
subsidiaries.
Shareholders this month agreed to a US$90 million equity issue as
part of the company's debt restructuring, US$60 million of which
will be used to pay bank debts. The remaining balance of these
bank debts will be paid over the next seven years with three
years' grace period. The offer equity issue will be completed by
September 30, Business News Americas says.
QUI¥ENCO S.A.: Announces Consolidated Results For 2Q02
------------------------------------------------------
Qui¤enco S.A. (NYSE:LQ), a leading Chilean business conglomerate,
announced Thursday its consolidated financial results in Chilean
GAAP, for the second quarter ended June 30, 2002.
Consolidated financial results are presented in accordance with
Chilean GAAP. All figures are presented in constant Chilean pesos
and have been adjusted to reflect the effects of inflation (2.1%
year-over-year). Figures in US$ have been converted from Chilean
pesos (Ch$) at the observed exchange rate on June 30, 2002
(Ch$688.05 = US$1.00) and are only provided for the reader's
convenience.
2Q 2002 HIGHLIGHTS
(i) Consolidated revenues fell by 28.1% to Ch$100,506
million (US$146.1 million) in 2Q2002.
(ii) Operating profit declined by 42.1% to Ch$4,332 million
US$6.3 million), almost entirely attributable to Madeco's
operations which have been severely impacted by the economic
recession in Argentina and slowdown in Brazil and the region.
Madeco reported a net loss of Ch$6,821 million (US$9.9 million)
in 2Q 2002 of which Ch$3,827 million (US$5.6 million)
corresponded to Qui¤enco's proportionate share of 56.1%.
(iii) Non-operating losses reached Ch$16,986 million
(US$24.7 million), compared to non-operating profit of Ch$4,134
million (US$6.0 million) in 2Q 2001. 2Q 2001 non-operating
results included the extraordinary gain on sale of shares of
Entel of Ch$24,025 (US$34.9 million), which mainly explains the
variation in non-operating results between the two periods.
(iv) Qui¤enco reported a net loss for the second quarter of
2002 of Ch$9,198 million (US$13.4 million).
To see Qui¤enco S.A.'s Complete Consolidated 2Q02 Results:
http://bankrupt.com/misc/Quinenco.pdf
CONTACT: Qui¤enco S.A.
Cindi Freeman-IRO
Phone: (56-2) 750-7221
E-mail: cfreeman@lq.cl
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E C U A D O R
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PACIFICTEL: Sets Central Ring of Guayaquil Fiber-optic Network
--------------------------------------------------------------
Ecuador's state-owned Pacifictel launched the central ring of its
Guayaquil metropolitan fiber-optic network that would connect
switching centers in the Central, North, North Kennedy, Urdesa
and Bellavista boroughs, Business News Americas reports.
The US$4.68 million facility, built by China-based Huawei
Technologies, is scheduled to have 164 kilometers of cables
spanning 24 switching centers. Five interlaced rings will
protect the network from accidents and impairment. China Exim
Bank finances the project.
The telecom, which has 575,000 lines in service, has recently
announced efforts to keep the company afloat. A previous TCR-LA
issue also reported the Company is at risk of being intervened by
telecom council, Conatel, for not fulfilling expansion plans and
improving service quality.
Measures outlined to keep the company in operation include labor
force reduction, cutting unnecessary costs, improving bill
collection and reviewing contracts to outsource international
calls. Pacifictel has receivables totaling US$86.7mn, the report
says.
The company's sole shareholder is Ecudorian fund Fondo de
Solidariedad.
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M E X I C O
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CFE: Annual Tax Bill as Burdensome as Structural Flaws in Sector
----------------------------------------------------------------
The Federal Electricity Commission is not only banking on the
pending electricity reform agenda of the government to improve
its finances, but also on the successful negotiations for the
reduction of the taxes it pays to the Treasury.According to El
Universal, the company's financial woes are made even worse by
the huge taxes it pays annually.
A breakdown of the company's annual tax bill include these items:
(a) "Exploitation tax" equivalent to 9% of assets, estimated at
MXN37 billion pesos (US$3.73 billion);
(b) Labor Obligation Fund equivalent to MXN9 billion (US$907
million);
(c) "Depreciation" -- never paid directly by the company because
it is covered by the investment and maintenance budgets,
which cost the firm MXN62 billion (US$6.25 billion), without
considering subsidies that add another MXN21 billion
(US$2.12 billion) to the company's budget;
(d) Interest payments on Pidiregas (Deferred Investment Projects
in Spending Registers) projects costing another MXN3.29
billion (US$331.7 million). An additional MXN2.13 billion
(US$214.7 million) also has to be paid to pay off part of
this debt.
Meanwhile, El Economista reported recently that the Central-South
of the Federal Electricity Commission registered losses of 20% in
the electricity distributed last year.
Regional manager Victor Javier Felix Beltran said, of these
losses, 50% were due to technical faults in transmission and
distribution, while the remainder was due to illegal usage.
He acknowledged that the percentage of losses in the region was
high, as the international standard runs at 7-10%, with another
3% lost to thefts. The executive claims that electricity thefts
were deep-rooted in the region because of the high number of
poor.
The Central-South region of the company has 1.29 million clients
and had a turnover of MXN3.69 billion (US$371.7 million) in 2001.
CFE: Extends Deadline for Bids to Install Combustion Units
----------------------------------------------------------
Mexico's state power company CFE has postponed the deadline for
the auction of a contract to install three internal combustion
units that would increase capacity of its Baja California Sur 1
plant by 37.5 MW, Business News Americas reports.
The project, which should be completed by July, is at the
company's San Francisco site, 19km from the city of La Paz.
Successful bidders will be named on November 14 after technical
and economic proposals are presented on September 19 and November
14. Bidding rules are provided through September 13.
The Company is currently on track to carry out its investment
program in 2011. Industry-wide upgrade is said to be required in
order for the company to meet the MXN560 million (US$57.6
billion) it needs in the coming decade.
GRUPO TMM: Announces Exchange Offer for Existing Debt
-----------------------------------------------------
Grupo TMM (NYSE: TMM and TMM/L), made an official announced that,
consistent with its previously announced plan to extend the
company's debt profile, it intends to offer to exchange new debt
securities for all of the outstanding 9 1/2 percent Senior Notes
due 2003 and 10 1/4 percent Senior Notes due 2006. The largest
Latin American multi-modal transportation and logistics company,
and owner of the controlling interest in Grupo Transportacion
Ferroviaria Mexicana, S.A. de C.V. is pursuing the exchange to
restructure its massive debts.
The terms, including the interest rate of the new debt
securities, have not been finalized, but are expected to be
senior unsecured debt of Grupo TMM maturing in 2009. In addition,
the new debt securities will be guaranteed on a senior unsecured
basis by TMM Holdings, S.A. de C.V., a newly-formed, wholly-owned
subsidiary of Grupo TMM, which will indirectly hold all of the
approximately 51 percent voting and 38.4 percent effective
economic interest of Grupo TMM in Grupo TFM S.A. de C.V., through
which Grupo TMM conducts its rail operations.
In connection with the exchange offers, the company also expects
to solicit consents from the holders of the outstanding 9 1/2
percent Senior Notes due 2003 and 10 1/4 percent Senior Notes due
2006, to amend or eliminate certain of the covenants contained in
indentures governing those notes. Holders who tender notes and
give their consents prior to the deadline established for the
consent solicitation will be entitled to receive a cash consent
fee. The amendments will only become effective upon completion of
the exchange offers. The exchange offers and consent
solicitations will be described in the offering material.
"I am pleased that we have formulated a plan to extend the
maturities of our outstanding debt and to provide the company
with additional financial flexibility to execute its business
plan," said Javier Segovia, Grupo TMM's president. "Once we have
completed our regulatory filings and obtained all necessary
governmental authorizations, we will commence our exchange
offers, which we expect to complete early in the fourth quarter
of 2002."
Grupo TMM has filed a registration statement relating to the
exchange offers with the United States Securities and Exchange
Commission, and expects to commence the offers as soon as
practicable after the registration statement is declared
effective and it has obtained the necessary authorizations from
the Comision Nacional Bancaria y de Valores de Mexico.
The announcement is not an offer to sell or the solicitation of
an offer to buy any of the Notes to be issued in the exchange
offers described above. Such an offer is only made by the Consent
Solicitation Statement.
Headquartered in Mexico City, Grupo TMM is Latin America's
largest multimodal transportation company. Through its branch
offices and network of subsidiary companies, Grupo TMM provides a
dynamic combination of ocean and land transportation services.
Grupo TMM also has a significant interest in Transportacion
Ferroviaria Mexicana (TFM), which operates Mexico's Northeast
railway and carries over 40 percent of the country's rail cargo.
Visit Grupo TMM's web site at www.grupotmm.com.mx and TFM's web
site at www.gtfm.com.mx. Both sites offer Spanish/English
language options.
CONTACT: GRUPO TMM
Jacinto Marina
Phone: 011-525-55-629-8790
E-mail: jacinto.marina@tmm.com.mx
or
Brad Skinner, Investor Relations
Phone: 011-525-55-629-8725
E-mail: brad.skinner@tmm.com.mx
or
DRESNER CORPORATE SERVICES
Kristine Walczak
Phone: 312/726-3600
E-mail: kwalczak@dresnerco.com
GRUPO TMM: Shareholder Approves Reclassification of Shares
----------------------------------------------------------
Grupo TMM (NYSE:TMM) (NYSE:TMM/L), announced that its
shareholders have approved a reclassification of the company's
shares at a special meeting held on August 28, 2002. At a date to
be determined in early September, each of the company's Series
"L" shares will be exchanged for Series "A" shares on a one-for-
one basis, and all shares of the company will then trade as
"TMM".
Javier Segovia, president of Grupo TMM, commented, "With only one
class of stock, Grupo TMM's capital structure is now more
transparent and puts the company more closely in line with
international corporate governance practice and capital market
expectations."
In filings with the Securities and Exchange Commission, the
company has stated that the reclassification of the company's
shares is part of a broader company-wide restructuring plan
launched by Grupo TMM's management in 1998 with the strategic
objective of (1) divesting underperforming businesses and
continuing expansion of historically higher-margin businesses;
(2) continuing the development of Grupo TMM as the largest
Mexican provider of an integrated array of transportation and
logistics services; (3) streamlining Grupo TMM's corporate
structure to realize corporate governance efficiencies; and (4)
aligning the interests of all shareholders more closely.
Headquartered in Mexico City, Grupo TMM is Latin America's
largest multimodal transportation company. Through its branch
offices and network of subsidiary companies, Grupo TMM provides a
dynamic combination of ocean and land transportation services.
Grupo TMM also has a significant interest in Transportacion
Ferroviaria Mexicana (TFM), which operates Mexico's Northeast
railway and carries over 40 percent of the country's rail cargo.
Visit Grupo TMM's web site at www.grupotmm.com.mx and TFM's web
site at www.gtfm.com.mx. Both sites offer Spanish/English
language options.
CONTACT: GRUPO TMM
Jacinto Marina
Phone: 011-525-55-629-8790
E-mail: Jacinto.marina@tmm.com.mx
or
Brad Skinner, 011-525-55-629-8725, Investor Relations
E-mail: brad.skinner@tmm.com.mx
At DRESNER CORPORATE SERVICES
Kristine Walczak
Phone: 312/726-3600
E-mail: kwalczak@dresnerco.com
GUILFORD MILLS: Bankruptcy Court Approves Reorganization Plan
-------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York has approved the Debtor's Amended Joint Plan of
Reorganization and related Amended Joint Disclosure Statement of
Guilford Mills Inc., the company disclosed in a Securities and
Exchange Commission filing.
The plan, which was filed with the SEC in July, intends to
restructure the company's operations by focusing on core
automotive and specialty textile businesses.
The Company and its subsidiaries, whose businesses were affected
in 1998 by the influx of low priced Asian products in the US,
filed voluntary petitions under Chapter 11 of the US Bankruptcy
Code in March. The Company presently continues to operate the
business as debtors-in-possession.
GMI, a publicly held company, is a leading worldwide producer and
seller of warp knit, circular knit, flat-woven and woven velour
fabric. Its non-debtor foreign subsidiaries own or lease
production and related facilities in Mexico, Brazil, the United
Kingdom, Portugal, Spain and Germany.
To see complete copy of Guilford Mills' Reorganization Plan:
http://bankrupt.com/misc/GuilfordMills_Inc.pdf
CONTACT: GUILFORD MILLS, INC.
4925 West Market Street, Greensboro, NC
Phone: (336) 316-4000
Home Page: http://www.guilfordmills.com
Contact:
David H. Taylor, Interim Chief Financial Officer
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GRAFITTI: Creditor Banks Lift Moratorium, Debt Collection Begins
----------------------------------------------------------------
Distribuidora Al Galope, owner of troubled department store chain
Grafitti, should expect within days a long line of creditors
outside its doors after its truce with bank creditors ended last
week. Business News Americas says Banco Provincial would likely
be first in the line.
The bank, according to the report, recently filed for the
judicial payment of debts worth BRL9.7 billion. Other banks are
expected to follow suit. The report says Al Galope's debts are
secured by three real estate properties.
In a report in May last year, Troubled Company Reporter-Latin
America pegged the value of the Grafitti's assets at more than
BRL120 billion (more than its debts). That report also listed
Banco de Venezuela as among its creditor banks, with BRL3 billion
in exposure.
Its current financial woes have reduced Grafitti to a 15-outlet
group manned by 3,500 employees. The company's current profile is
a far cry from its hay days when stores numbered 300 and
employees totaled as many as 10,000.
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 * * *