/raid1/www/Hosts/bankrupt/TCRLA_Public/020903.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, September 3, 2002, Vol. 3, Issue 174
Headlines
A R G E N T I N A
AMERICA ONLINE: Receives Delisting Notice, Intends to Appeal
BANCO BISEL: Interested Cooperatives Present Takeover Plans
BANCO SUQUIA: Investors Claim Fraud, Threaten To File Suit
CABLEVISION SA: Huge Losses, Customer Drop Slashes 1H02 Numbers
CAPEX SA: 2001 Losses, Debts Swell Due to Currency Devaluation
GLOBAL CROSSING: GC SAC Argentina Chapter 11 Case Summary
IMPSAT: Reduces Net Loss for the Same Quarter Last Year
B E R M U D A
GLOBAL CROSSING: Intellectual Property Chapter 11 Case Summary
LOBAL CROSSING: PAC Panama Chapter 11 Case Summary & Creditors
GLOBAL CROSSING: Portfolio Holdings Chapter 11 Case Summary
GLOBAL CROSSING: Operating Results for 7/02 Meet Expectation
GLOBAL CROSSING: South American Crossing Chap. 11 Case Summary
B O L I V I A
COTEL: Government Seeks World Bank Insight on Detecon Management
B R A Z I L
AES CORP: DOJ Seeks Additional Information on CILCOPP Sale
EMBRATEL: Plans to Launch 122 Points of Presence This Year
EMBRATEL/VESPER: Calls for Anatel to Uphold Interconnection Fees
ENERGY SECTOR: Regulator Raises Rates, Subsidizes Sector
ENRON CORPORATION: Faces Tough Time Selling Assets in Brazil
GLOBAL CROSSING: SAC Brasil Chapter 11 Case Summary, Creditors
XEROX DO BRASIL: Aims to Match 01 Numbers Despite Less Workers
C H I L E
ESSAM: Blames Transfer of Operating Rights for 1st-Half Losses
C O L O M B I A
GLOBAL CROSSING: SAC Colombia Summary; Unsecured Creditors
M E X I C O
GRUPO MEXICO: Asarco Submits Environmental Proposal to DOJ
GRUPO TRIBASA: Fugitive Chair Caught in Spain, To Be Extradited
HYLSAMEX SA: Pays Unnamed Bank Owed US$7 Million with Shares
U R U G U A Y
URUGUAYAN BANKS: Government Channels Funds Between State Banks
V E N E Z U E L A
SIDOR: Labor Unions Still Mulling Indefinite Strike
GLOBAL CROSSING: Venezuela B.V. Chapter 11 Case Summary
* * * * *
=================
A R G E N T I N A
=================
AMERICA ONLINE: Receives Delisting Notice, Intends to Appeal
------------------------------------------------------------
America Online Latin America, Inc. (NASDAQ-SCM:AOLA), a leading
interactive services provider in Latin America, on Friday
announced that it had received a letter from NASDAQ stating that
the Company has not met the $35 million market capitalization
requirement for continued listing of its Class A Common Stock on
the NASDAQ SmallCap Market (Marketplace Rule 4310(c)(2)(B)(ii)).
America Online Latin America's official stance is that it intends
to request a hearing before the NASDAQ Listing Qualifications
Panel to appeal the ruling by NASDAQ. During the appeals process,
which the Company expects will take between 30 and 60 days, the
Company's class A common stock will continue to trade on the
NASDAQ SmallCap Market. There can be no assurance that the Panel
will grant the Company's request for continued listing. In the
event that the Panel does not grant continued listing, the
Company expects that its class A common stock would trade on the
Over-the-Counter Bulletin Board (OTCBB). The OTCBB is a regulated
quotation service that displays real-time quotes, last-sales
prices, and volume information for more than 3,600 equity
securities.
Charles Herington, President and CEO of AOL Latin America, said:
"We remain committed to our shareholders and to maintaining our
position as a leading ISP in Latin America, one of the fastest
growing Internet markets in the world. We will continue to
operate under normal conditions and continue to implement
initiatives aimed at strengthening our business fundamentals,
including targeting higher value members and streamlining
operations. In addition, as previously announced, we anticipate
that our cash on hand as well as cash available under our
financing agreement with AOL Time Warner will be sufficient to
fund operations into early 2003."
About AOL Latin America
America Online Latin America, Inc. (NASDAQ-SCM: AOLA) is the
exclusive provider of AOL-branded services in Latin America and
has become one of the leading Internet and interactive services
providers in the region. AOL Latin America launched its first
service, America Online Brazil, in November 1999, and began as a
joint venture of America Online, Inc., a wholly owned subsidiary
of AOL Time Warner Inc. (NYSE:AOL), and the Cisneros Group of
Companies. Banco Itau, a leading Brazilian bank, is also a
minority stockholder of AOL Latin America. The Company combines
the technology, brand name, infrastructure and relationships of
America Online, the world's leader in branded interactive
services, with the relationships, regional experience and
extensive media assets of the Cisneros Group of Companies, one of
the leading media groups in the Americas. The Company currently
operates services in Brazil, Mexico and Argentina and serves
members of the AOL-branded service in Puerto Rico. It also
operates a regional portal accessible at www.aola.com. America
Online's 35 million members worldwide can access content and
offerings from AOL Latin America through the International
Channels on their local AOL services.
CONTACT: AMERICA ONLINE LATIN AMERICA, INC.
Monique Skruzny
Phone: 954/689-3000
E-mail: AOLAIRR@aol.com
BANCO BISEL: Interested Cooperatives Present Takeover Plans
-----------------------------------------------------------
Argentine cooperatives interested in buying Banco Bisel presented
to the government a takeover plan for the intervened bank. The
cooperatives which signed intention of acquiring the bank left by
French bank Credit Agricole includes Carlos Pellegrini, Integral
de las Comunidades, Integral Independencia, Integral Nucleo and
De los Arroyos.
Bisel's parent company Credit Agricole pulled out of Argentina in
May citing uncertainties in the country's economic situation.
Bisel with other subsidiaries, 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.
Hector Pericoli, president of state-owned Banco de la Nacion that
now controls Banco Bisel, Banco Suquia and Nuevo Banco Bersa
announced his sale of the units in June. He aims to conclude the
deal by October.
CONTACT: 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
BANCO SUQUIA: Investors Claim Fraud, Threaten To File Suit
----------------------------------------------------------
Local investors are taking their action against French bank
Credit Agricole to the criminal courts. Plaintiffs are alleging
that the financial woes of Banco Suquia SA were not due to the
country's financial crisis, but by mismanagement.
Banco Suquia, a unit of Credit Agricole, was among local banks
intervened by state-owned Banco de la Nacion Argentina early this
year. Two other affiliates of the French group -- Banco Bisel
and Banco Bersa -- were similarly taken over.
Investors claim Banco Suquia did not suffer from a severe
liquidity crunch at the beginning of the year because of the
local financial crisis, but because of irregularities committed
by Banco Suquia management and credits granted to other Credit
Agricole units. The alleged complications include Banco de Entre
Rios (Bersa) and Banco Bisel in Argentina and Banco ACAC SA in
Uruguay.
According to an Infobae report, Credit Agricole had a direct hand
in these irregularities. It even approved the progressive
transfer of Banco Suquia's assets.
Just last week, a federal judge ruled that Credit Agricole is
obligated to return clients' deposits should Banco Suquia fail to
do so. 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, Troubled Company
Reporter-Latin America said last week.
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 have 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
CABLEVISION SA: Huge Losses, Customer Drop Slashes 1H02 Numbers
---------------------------------------------------------------
Argentina's leading cable-TV operator, Cablevision SA, reported
net losses of ARS2.93 billion for the first half, which caused
the company a negative equity of ARS2.1 billion, La Nacion said
last week.
Income through services only reached ARS355.3 million, a sharp
decline from last year's ARS516.5 million. The company also lost
approximately 120,000 customers (9% of the total subscribers).
To see financial statements:
http://bankrupt.com/misc/Cablevision.pdf
CAPEX SA: 2001 Losses, Debts Swell Due to Currency Devaluation
--------------------------------------------------------------
Heavily indebted oil and gas company, Capex SA, blames the
currency devaluation in January for its poor financial showing in
its last fiscal year that ended April 30. The company, in a
statement last week, said its losses ballooned to ARS225 million
from only ARS19 million last year.
"The losses reflect the inflation adjustment and the devaluation
of the peso in January which has negatively affected our US
dollar denominated debts," a Capex spokesperson, who preferred
not to be identified, told Business News Americas.
The peso devaluation also dealt the company a debilitating blow,
as it caused its dollar-denominated debts to shoot up 84.5% to
ARS928 million. The company, however, says cashflow remains
positive, although not enough to pay debts.
Sales for the year fell 15.9% to BRL177.3 million due to a drop
in energy prices and a fall in gasoline sales on the local
market. This slide was partly offset, though, by higher oil
exports. Gasoline sales were hit by lower domestic demand,
falling 75.6% to BRL1.46 million, as opposed to oil sales, which
increased 8% to BRL28.9 million due to higher exports.
Business News Americas says Capex has some US$280 million of debt
with Deutsche bank, Boston bank and others. Equity now stands at
BRL192.6 million. The report says the company's capital received
a boost from the sale of its Atalaya Energy stakes.
The report says Capex is optimistic that it will be able to
restructure its existing debts, and achieve the cash flow
necessary to meet interest payments. The company generates
electricity in the Comahue region in southwest Argentina, with
six gas-fired units and one steam unit.
In March, the company's foreign currency rating slipped to "D"
from "SD" and its local currency rating to "D" from "CC" in
Standard and Poor's rating boards. S&P said the action resulted
from the company's failure to meet a US$2.5 million principal
debt payment on March 11. The company also failed to make
payment on its US$450 million long-term senior unsecured notes,
Troubled Company Reporter-Latin America said in a March 18 issue.
Capex generates electricity in the Comahue region in southwest
Argentina, with six gas-fired units and one steam unit.
CONTACTS: Enrique Gotz, Chairman
Alejandro Gotz, Vice Chairman
948/950 Av Cordoba Dept 5
Buenos Aires, Argentina
Phone +54 110 4322 4884
URL: http//www.capex.com.ar
GLOBAL CROSSING: GC SAC Argentina Chapter 11 Case Summary
---------------------------------------------------------
Debtor: GC SAC Argentina S.R.L.
Elvira Rawson de Dellepiane 150, 10th Floor
Buenos Aires Argentina
Bankruptcy Case No.: 02-14287
Type of Business: The Debtor is an affiliate of Global Crossing
Ltd.
Chapter 11 Petition Date: August 30, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtors' Counsel: Michael F. Walsh, Esq.
Paul M. Basta, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8197
Fax : (212) 310-8007
Estimated Assets: More than $100 million
Estimated Debts: More than $100 million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Lucent Trade Debt $23,752,222
55 Esmeralda, 1035
Capital, Argentina 1000
Tel. 54-11-4340-6357
Alcatel Trade Debt $17,034,174
72 Avenue De La Liberte
Nanterre. France 92723
Tel. 33-(0)1555 15151
Impsat SA Trade Debt $3,302,257
256 Pareja
Capital Federal,
Argentina 1107
Tel. 54-11-4229-6000
Comsat Trade Debt $967,463
Carlos Pellegrini 1363
Piso 6
Buenos Aires, Argentina
C1011AAA
Juniper Trade Debt $122,019
Anritsu Anritsu Trade Debt $84,384
Metrored Trade Debt $60,568
Telecomunicaciones SRL
Estudio Ortiz & Trade Debt $53,056
Asociados S.A.
Segrup Argentina SRL Trade Debt $52,699
Application Software S A Trade Debt $46,478
Sisten SA Trade Debt $44,646
TYCO Trade Debt $42,939
Corning Trade Debt $40,952
Pistrelli, Diaz y Trade Debt $23,543
Asociados
CV SRL Trade Debt $13,026
Techint Compania Trade Debt $12,617
Tecnica Internaci
American Poliwater Trade Debt $12,299
Corporation
Acterna Trade Debt $7,848
Telecom Arg. Stet Trade Debt $7,737
France Telecom S
PricewaterhouseCoopers Trade Debt $4,640
IMPSAT: Reduces Net Loss for the Same Quarter Last Year
-------------------------------------------------------
Argentina-based Impsat Fiber Networks posted a reduced net loss
of US$85.6 million for 2Q02 versus US$99.7 million in the same
period last year. The result however is 46.3% worse than that of
the previous quarter.
Operating loss of the company also dropped from US$30.2 million
in the second quarter last year to US$13.2 million in the second
quarter this year. The reduction was attributed to the slashed in
costs and expenses from US$109 million to US$72.5 million.
Impsat had losses of US$8.62 million from Argentina and Brazil.
Revenues on the other hand, is down to US$59.3 million from
US$62.4 million last quarter, with Argentina accounting for
US$14.3 million.
The company expects its revenues for the remaining quarters to be
slightly below US$122 million posted for the recent quarter. As
such, total revenue for the year is projected to be US$220 to 240
million.
Impsat cut capex to a minimum in anticipation that fixed costs
will constitute approximately 35% of total revenues for full-year
2002. The Company plans to invest only US$20 million for the
year.
The company expects to file a disclosure statement and a plan of
reorganization with the aim of reducing its debt by around US$680
million or 70%, says BNAmericas. Commitments scheduled to be
restructured include the company's Senior Notes due 2003, 2005
and 2008, its broadband network vendor financing agreements.
Impsat Fiber, a provider of broadband Internet, data, and voice
services in Latin America, filed for chapter 11 protection on
June 11, 2002. Anthony D. Boccanfuso, Esq., and Michael J.
Canning, Esq. at Arnold & Porter represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $667,189,368 in total assets and
$1,334,732,793 in total debts.
To see Financial Statements:
http://bankrupt.com/misc/Impsat.htm
=============
B E R M U D A
=============
GLOBAL CROSSING: Intellectual Property Chapter 11 Case Summary
--------------------------------------------------------------
Debtor: Global Crossing Intellectual Property Ltd.
Wessex House, 1st floor
45 Reid Street
Hamilton HM12
Bermuda
Bankruptcy Case No.: 02-14275
Type of Business: The Debtor is an affiliate of Global Crossing
Ltd.
Chapter 11 Petition Date: August 30, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtors' Counsel: Michael F. Walsh, Esq.
Paul M. Basta, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8197
Fax : (212) 310-8007
Estimated Assets: More than $100 million
Estimated Debts: More than $100 million
GLOBAL CROSSING: PAC Panama Chapter 11 Case Summary & Creditors
---------------------------------------------------------------
Debtor: PAC Panama Ltd.
Wessex House, 1st Floor
45 Reid Street
Hamilton HM12
Bermuda
Bankruptcy Case No.: 02-14283
Type of Business: The Debtor is an affiliate of Global Crossing
Ltd.
Chapter 11 Petition Date: August 30, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtors' Counsel: Michael F. Walsh, Esq.
Paul M. Basta, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8197
Fax : (212) 310-8007
Estimated Assets: More than $100 million
Estimated Debts: More than $100 million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
SI Isthmus Crossing Trade Debt $8,760,000
Edificio Afra
Piso 8, Av. SA
Ciudad Panama
TYCO Trade Debt $2,584,787
Mellon Bank Center
Pittsburgh, PA 15259
United States
ALCATEL Trade Debt $2,270,414
L'Octant - 4
Avenue Andre MA
Levallois-Perret Cedex
France 92309
Tel. 33 (0)1 41 49 86
Tycom US Inc. Trade Debt $1,578,439
Mellon Bank Center
Pittsburgh, PA 15259
United States
Juniper Trade Debt $478,360
385 Ravendale Drive
Mountain View, CA 94043
United States
Tel. 650-526-8000
Lucent Trade Debt $169,350
Techlink Trade Debt $112,800
Edemet Trade Debt $100,267
Anritsu Trade Debt $98,860
Autoridad Apartado Trade Debt $80,818
Cable And Wireless Trade Debt $60,000
Quality Trade Debt $20,726
Electra Apartado Trade Debt $16,490
UPS Trade Debt $13,925
Westrex Trade Debt $9,900
Cardoze Trade Debt $3,654
Star Trade Debt $2,136
Cormar Logistics Trade Debt $3,500
Panama S.A.
PriceWaterhouseCoopers Trade Debt $1,423
Celmec SA Trade Debt $2,500
GLOBAL CROSSING: Portfolio Holdings Chapter 11 Case Summary
-----------------------------------------------------------
Debtor: Global Crossing Portfolio Holdings Ltd.
Wessex House
45 Reid Street
Hamilton HM12
Bermuda
fka Global Crossing Landing Holdings Ltd.
Bankruptcy Case No.: 02-14286
Type of Business: The Debtor is an affiliate of Global Crossing
Ltd.
Chapter 11 Petition Date: August 30, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtors' Counsel: Michael F. Walsh, Esq.
Paul M. Basta, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8197
Fax : (212) 310-8007
Estimated Assets: More than $100 million
Estimated Debts: More than $100 million
GLOBAL CROSSING: Operating Results for 7/02 Meet Expectations
-------------------------------------------------------------
Global Crossing on Friday reported that its financial performance
remains on-track, and that it continues to meet year-to-date
targets outlined in its operating plan for service revenue, cash
in bank accounts, operating expenses, third-party maintenance and
service EBITDA (earnings before interest, taxes, depreciation,
and amortization). The performance targets were established for
Global Crossing (excluding Asia Global Crossing) in the operating
plan presented to its creditors in March.
Consolidated results for the month of July that include Asia
Global Crossing and that are reported in the Monthly Operating
Report (MOR) filed with the U.S. Bankruptcy Court in the Southern
District of New York are summarized later in this press release.
OPERATING RESULTS (excluding Asia Global Crossing)
In July 2002, Global Crossing reported $231 million in service
revenue, $6 million above the service revenue target set forth in
the operating plan. Service EBITDA was reported at a loss of $12
million, a loss $6 million greater than the July 2002 operating
plan target. Year-to-date Service EBITDA continues to exceed the
target in the operating plan.
"In July 2002, our team continued to work towards the goals we
have outlined for ourselves and our creditors in the operating
plan," said John Legere, CEO of Global Crossing. "Now that our
future has been defined with our new investors, Hutchison
Telecommunications and Singapore Technologies Telemedia, we can
turn our complete attention to emerging from Chapter 11 as a
strong, healthy competitor - one that attracts new customers in
addition to retaining its current customer base."
Total cash in bank accounts beat targets set forth in the
operating plan, with $797 million as of July 31, 2002, compared
to a plan of $676 million. Operating expenses were $63 million in
July 2002, $3 million higher than the target in the operating
plan, while third-party maintenance costs were reported at $12
million, beating the operating plan target by $3 million.
OPERATING RESULTS (excluding Asia Global Crossing)
THROUGH JULY 2002
METRIC YTD RESULT YTD OPERATING PLAN
YTD IMPROVEMENT
TARGET
ON TARGETS
Recurring
Service
Revenue $1,695 million $1,661 million
$34 million
Service
EBITDA $(216) million $(219) million
$3 million
Cash in Bank $797 million $676 million
$121 million
Operating
Expenses $597 million $599 million
$2 million
MOR RESULTS FOR JULY 2002
Global Crossing today filed a Monthly Operating Report (MOR) for
the month of July with the U.S. Bankruptcy Court for the Southern
District of New York, as required by its Chapter 11
reorganization process. These consolidated results in this MOR
include Asia Global Crossing and revenue from sales of capacity
in the form of IRUs (indefeasible rights of use) that occurred in
prior periods, recognized ratably over the life of the relevant
contracts.
Results reported in the July MOR include the following:
For continuing operations in July 2002, Global Crossing reported
consolidated revenue of approximately $249 million. Consolidated
operating expenses were $75 million, while access and maintenance
costs were reported at $193 million in June 2002.
In addition, Global Crossing reported a consolidated GAAP
(Generally Accepted Accounting Principles) cash balance of
approximately $1,125 million as of July 31, 2002, including $366
million of cash held by Asia Global Crossing. Global Crossing's
$759 million GAAP cash balance (excluding Asia) is comprised of
$376 million unrestricted cash, $333 million in restricted cash
and $50 million of cash held by Global Marine.
Global Crossing reported a consolidated net loss of $145 million
for July 2002. Consolidated EBITDA was reported at a loss of $19
million.
Definitions and Notes
"Service Revenue" refers to revenue less (i) any revenue
recognized immediately for circuit activations that qualified as
sales-type leases and (ii) revenue recognized due to the
amortization of IRUs sold in prior periods and not recognized as
sales-type leases.
"Service EBITDA" refers to EBITDA (earnings before interest,
taxes, depreciation, and amortization) but excludes the
contribution of (i) any revenue recognized immediately for
circuit activations that qualified as sales-type leases and (ii)
revenue recognized due to the amortization of IRUs sold in prior
periods and not recognized as sales-type leases.
The results for Global Crossing (excluding Asia Global Crossing)
discussed in the "Operating Results (excluding Asia Global
Crossing)" section of this release have been prepared on a basis
consistent with targets presented to the creditors of Global
Crossing in March 2002, and include the results previously
reported in Monthly Operating Reports (MORs) prepared for the
months of February through June. No such MOR was prepared for the
month of January. These operating results exclude Global Marine
(which is a discontinued operation), exclude any revenue
contribution of sales of capacity in the form of IRUs
(indefeasible rights of use), and reflect certain eliminations
and adjustments not detailed in the MORs for the months of
February through July. Cash balances reported in this section are
bank balances, not reflecting the estimated impact of outstanding
checks and other adjustments as required by GAAP.
The information contained in this press release is qualified in
its entirety by reference to the MORs for the months of February
through July, including the footnotes to the financial statements
contained therein, copies of which are available through the U.S.
Bankruptcy Court for the Southern District of New York and on
Global Crossing's Web site. The July MOR is available at
http://www.globalcrossing.com/pdf/investors/inv--mor--july.pdf
These MORs have been prepared pursuant to the requirements of the
Bankruptcy Code and the unaudited consolidated financial
statements contained in these MORs do not include all footnotes
and certain financial presentations normally required under GAAP.
In addition, any revenues, expenses, realized gains and losses,
and provisions resulting from the reorganization and
restructuring of Global Crossing are reported separately as
reorganization items in these MORs.
As discussed more fully in these MORs, Global Crossing has not
yet filed its Annual Report on Form 10-K for the year ended
December 31, 2001. Global Crossing has agreed with the Creditors'
Committee in its Bankruptcy proceeding and with the United States
Trustee to the appointment of an examiner in the Chapter 11
cases, whose role will consist of an examination of the financial
statements of Global Crossing and companies within its control.
The examination will include, (i) issuing an audit opinion on
Global Crossing's financial statements for the year ended
December 31, 2001, (ii) determining if any restatements or
adjustments of previously filed financial statements are required
(including those that may be required in light of the August 2,
2002 notification by the staff of the Office of the Chief
Accountant of the SEC regarding accounting for exchanges of
telecommunications capacity under APB Opinion No. 29, Accounting
for Non Monetary Transactions) and (iii) issuing a report
regarding its findings. Global Crossing's Board of Directors is
currently seeking to retain a new independent public accounting
firm to act as its new auditor, and it is expected that the new
accounting firm would also act as the examiner in the Bankruptcy
proceeding.
In addition, certain matters relating to Global Crossing's
accounting for, and disclosure of, concurrent transactions for
the purchase and sale of telecommunications capacity between
Global Crossing and its carrier customers are being investigated
by the U.S. Securities and Exchange Commission (SEC), the U.S.
Attorney's Office for the Central District of California, the
House of Representatives Financial Services Committee and the
House of Representatives Energy & Commerce Committee. Global
Crossing is also cooperating with a similar inquiry being
conducted by the Denver office of the SEC regarding another
telecommunications company, and has provided documents in
response to a subpoena it received from the New York Attorney
General Office's relating to an investigation of Salomon Smith
Barney. The U.S. Department of Labor is conducting an
investigation into the administration of Global Crossing's
benefit plans. These investigations are described more fully in
the July MOR.
Any changes to the financial statements resulting from any of
these investigations and the completion of the 2001 financial
statement audit could materially affect the unaudited
consolidated financial statements contained in these MORs and the
information presented in this press release.
As previously announced, Global Crossing's net loss for the three
months ended December 31, 2001 is expected to reflect the write-
off of the remaining goodwill and other intangible assets, which
total approximately $8 billion. Furthermore, in light of the
terms contained in the previously announced agreement with
Hutchison Telecommunications and Singapore Technologies
Telemedia, Global Crossing has determined that it will write down
its tangible assets by at least $10 billion. The financial
information included within this press release and the MORs
reflect the write-off of all of the goodwill and other
identifiable intangible assets of $8 billion, but does not
reflect any write-down of tangible asset value. Global Crossing
is currently in the process of evaluating its financial forecasts
to determine the impairment of its long-lived assets. In
addition, Global Crossing will write down Asia Global Crossing's
interest in Hutchison Global Crossing by $450 million,
representing the difference between the proceeds received and the
carrying value of Asia Global Crossing's interest in Hutchison
Global Crossing, which was sold on April 30, 2002. The write-off
of the intangible assets, and the write-downs of tangible assets
are described more fully in the July MOR.
About Global Crossing
Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the globe.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services. Global Crossing operates throughout the Americas and
Europe, and provides services in Asia through its subsidiary,
Asia Global Crossing.
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 (Bankruptcy Court) 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 Bankruptcy Court for
its affiliate, GT UK, Ltd. On August 4, 2002, Global Crossing
commenced a Chapter 11 case in the United States Bankruptcy Court
for the Southern District of New York for its affiliate, SAC Peru
Ltd. On August 30, 2002, Global Crossing commenced Chapter 11
cases in the Bankruptcy Court for an additional 23 of its
affiliates (as specified in the July MOR) in order to coordinate
the restructuring of those companies with its restructuring.
Global Crossing expects to file coordinated insolvency
proceedings in the Bermuda Court for those affiliates that are
incorporated in Bermuda. These cases are expected to be
consolidated with the existing cases commenced in Bankruptcy
Court on January 28, 2002. Global Crossing does not expect that
the plan of reorganization, which it expects to file with the
Bankruptcy Court on or about September 16, 2002, would include a
capital structure in which existing common or preferred equity
would retain any value.
CONTACT: GLOBAL CROSSING
Ken Simril
Phone: +1 310-385-3838
E-mail: investors@globalcrossing.com
Home Page: http://www.globalcrossing
GLOBAL CROSSING: South American Crossing Chap. 11 Case Summary
--------------------------------------------------------------
Debtor: South American Crossing Ltd.
Wessex House, 1st floor
45 Reid Street
Hamilton HM12
Bermuda
Bankruptcy Case No.: 02-14270
Type of Business: The Debtor is an affiliate of Global Crossing
Ltd.
Chapter 11 Petition Date: August 30, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtors' Counsel: Michael F. Walsh, Esq.
Paul M. Basta, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8197
Fax : (212) 310-8007
Estimated Assets: More than $100 million
Estimated Debts: More than $100 million
Debtor's 5 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Alcatel Trade Debt $57,421,660
72 Avenue De La Liberte
Nanterre 92723
France
Tel. 33-(0)155515151
Cisco Trade Debt $358,007
Department 1659
P.O. Box 61000
San Francisco, CA 94161
United States
Sonix Limited Trade Debt $101,651
Dectra Corporation Trade Debt $42,627
Manuel Nieto Trade Debt $12,424
=============
B O L I V I A
=============
COTEL: Government Seeks World Bank Insight on Detecon Management
----------------------------------------------------------------
The Bolivian government plans to ask the World Bank to assess the
management of La Paz telecoms cooperative Cotel under the German
telecom consultancy Detecon, Business News Americas report. The
move was aimed at giving the government guidance about how to
resolve the issues confronting the cooperative.
The management of Deutsche Telekom (NYSE: DK) consulting unit
Detecon, which operated the cooperative over a year ago, has been
confronted with labor and legal disputes.
La Paz-based Cotel was intervened by Bolivia's telecoms regulator
Sittel in August 2000 after service was jeopardized by a nine-day
strike by employees protesting corruption and staff cuts. Sittel
began the search for an administrator after an unsuccessful
international auction on February 7 2001 for a 51 percent stake
in Cotel.
In a previous TCR-LA report, Cotel sources were reported saying
the contract signed with Detecom is illegal. Detecon signed a
five-year contract in May to administer Cotel in return for
US$138,000 in monthly management fees.
Bolivian labor minister Jamie Navarro believes that a respected
third party will be "objective, transparent and impartial,"
Business News Americas reports. He also banks on the findings of
the institution to give directions to the telco's future.
Navarro also said that the issues to be addressed would concern
technical, legal and financial points of Cotel's management under
Detecon.
CONTACT: COOPERATIVA DE TELEFONOS DE LA PAZ-COTEL
Avenida Mariscal Santa Cruz 980
La Paz
Bolivia
Phone: 591 2373432
Fax: 591 2310331
Home Page: Homepage: http://www.cotel-bo.net/
Contact: Jurgen Kurz
DETECON
Germaniastra? 18 - 20
D-12099 Berlin
Telephone : (+49-30) 7508-1100
Fax : (+49-30) 7508-1444
Home page: http://www.detecon.com/
Contact:
Karen Litters
Phone: (0049) (0)6196-903-131
Fax: (0049) (0)6196-903-465
E-Mail: info@detecon.com
===========
B R A Z I L
===========
AES CORP: DOJ Seeks Additional Information on CILCOPP Sale
----------------------------------------------------------
The AES Corporation (NYSE:AES) and the Ameren Corporation
(NYSE:AEE) announced on Friday that they have received from the
U.S. Department of Justice a Request for Additional Information
(Second Request) under the Hart-Scott-Rodino Antitrust
Improvements Act pertaining to the pending sale of CILCORP to
Ameren.
The waiting period applicable to the pending sales under the
Hart-Scott-Rodino Antitrust Improvements Act will expire 30 days
after substantial compliance with the Second Request, unless
terminated earlier by the DOJ. Issuance of a Second Request is
not unusual for transactions of this size, and the companies
intend to cooperate fully and respond promptly.
As previously announced, the transaction is subject to regulatory
approvals by the Illinois Commerce Commission, the Federal Energy
Regulatory Commission, the Securities and Exchange Commission and
expiration of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act. AES expects the sale of CILCORP to
close in the first quarter of 2003.
AES is a leading global power company comprised of competitive
generation, distribution and retail supply businesses in
Argentina, Australia, Bangladesh, Brazil, Cameroon, Canada,
Chile, China, Colombia, Czech. Republic, Dominican Republic, El
Salvador, Georgia, Germany, Hungary, India, Italy, Kazakhstan,
the Netherlands, Nigeria, Mexico, Oman, Pakistan, Panama, Qatar,
South Africa, Sri Lanka, Tanzania, Uganda, Ukraine, the United
Kingdom, the United States and Venezuela.
The company's generating assets include interests in 177
facilities totaling over 59 gigawatts of capacity. AES's
electricity distribution network has over 727,000 km of conductor
and associated rights of way and sells over 108,000 gigawatt
hours per year to over 16 million end-use customers.
AES is dedicated to providing electricity worldwide in a socially
responsible way.
For more general information visit our web site at www.aes.com or
contact investor relations at investing@aes.com.
CONTACT: AES CORP.
Kenneth R. Woodcock
Phone: 703/522-1315
EMBRATEL: Plans to Launch 122 Points of Presence This Year
----------------------------------------------------------
Brazilian long distance operator Embratel (NYSE: EMT) plans to
install 122 points of presence (POPs) worth BRL140 million by
year-end, Business News Americas reports.
The project is expected to cut interconnection fees by BRL7.5
million per month (US$2.44 million), says Embratel projects &
investment manager Ricardo Rezende. Embratel used to account
between 40-50% of total revenues from interconnection services of
local telephony incumbents.
Embratel previously planned to install 150 POPs, but a 50%
discount on interconnection fees granted by local operator Brasil
Telecom (NYSE: BRP) eliminated the need for more POPs in Brasil
Telecom's concession region, BNAmericas reports citing Rezende.
The POPs will allow the operator to use its own network for last-
mile connection to subscribers in its local and long distance
service. As a complement, Embratel will offer additional
corporative services, which will be activated quicker using its
own network.
Embratel had been involved in legal dispute over interconnection
fees with fixed line imcumbent Telesp and Telemar. The Company
has argued that the other companies were excessively charging
long distance operators. Both actions however, failed.
CONTACT: EMBRATEL PARTICIPACOES S.A.
Investor Relations
Silvia Pereira
Tel. (55 21) 2519-9662
Fax: (55 21) 2519-6388
Email: Silvia.Pereira@embratel.com.br
invest@embratel.com.br
or
Press Relations:
Helena Duncan/Mariana Palmeira
Tel: (55 21) 2519-3653/3654
Fax: (55 21) 2519-8010
Email: hduncan@embratel.com.br
mpalm@embratel.com.br
EMBRATEL/VESPER: Calls for Anatel to Uphold Interconnection Fees
----------------------------------------------------------------
Brazilian fixed line operators GVT, Vesper, Embratel (NYSE: EMT)
and Intelig have asked local regulator Anatel to rule against
eliminating interconnection charges that dominant local telephony
providers pay to access ISPs, Business News Americas reports. The
ISPs frequently require access through the operators' networks,
and dominant telephony providers had asked to scrap users fee.
The operators, which entered the local telephony markets only
recently, met with communications minister Juarez Quadros and
Luiz Guilherme Schymura, president of local regulator Anatel to
push the matter.
The interconnection charges are "one of the few mechanisms new
local telephony providers have to create compensatory competitive
conditions," the report says citing a statement of the company.
As an alternative, Vesper chairman Luiz Kaufmann suggested that
the government puts a "bill-and-keep mechanism," says the report.
Under the proposed scheme, users will pay their operator for the
entire route of the call.
The companies also requested for a portability that would help
users shift to their services, an unbundling guarantee, unified
billion and expansion of local areas to serve smaller cities,
says Intelig chairman Jose Carlos Cunha.
ENERGY SECTOR: Regulator Raises Rates, Subsidizes Sector
--------------------------------------------------------
Brazilian power generators and distributors heaved a collective
sigh of relief late last week after energy regulator, Aneel,
decided to hike rates and provide the sector considerable
subsidy. Dow Jones Newswires has learned that the hike will be
2.9% for residential customers, while industrial and commercial
users will be levied a 7.9% increase. The report did not state
when the hikes will take effect.
The country's energy sector has been pushing for these tariff
adjustments for a while now, as their debts, particularly dollar-
denominated obligations take its toll on their finances. The
unstable economy and currency have brought many power generators
and distributors closer to financial ruin.
Aside from these rate hikes, the regulator also pledged a BRL10.2
billion subsidy for the sector. This fund will be used to
compensate power distributors for losses absorbed during the
country's 2001 energy-rationing program. The report did not
state how this money will be distributed among the industry
players.
ENRON CORPORATION: Faces Tough Time Selling Assets in Brazil
------------------------------------------------------------
Analysts believe bankrupt U.S. energy giant Enron Corp. will have
difficulty selling its electricity assets in Brazil due to
uncertainties in the sector and the growing uneasiness among
investors over the outcome of the October presidential elections.
Industry observers interviewed by Reuters recently believe there
is too much ambiguity as to the government's plans for the
electricity sector. It does not help that the incumbent
administration has left it to the next government to solve the
sector's problems.
Plagued by price controls, an absence of clear market rules and
tough energy rationing, the sector is too unattractive to major
investors, say analysts. The environment spells bad news for
Enron, which is selling assets to raise money to pay creditors.
Reuters says Enron hopes to sell its Elektro distributor in
Brazil's industrial heartland of Sao Paulo. The company has 1.6
million clients and was bought for US$1.3 billion just four years
ago. It is also offering the Cuiaba and Electrobolt generating
plants.
Monica Araujo of BES Securities told Reuters the generating part
should be easier to sell than the distribution, as it did not
face as many pricing problems. Another analyst said Elektro
price would have to be below US$400 million to attract buyers.
There is little hope that traditional power investors in Brazil
like Tractebel, the energy arm of French utility Suez, state-
owned Electricite de France (EDF), Electricidade de Portugal
(EDP), Spain's Endesa as well as Duke Energy and AES Corp. of the
United States will buy Enron's assets. Their shares have been
punished of late for their exposure to Brazil's risks. EDP has
already said it is not interested, while EDF faces part-
privatization soon and media reports say the French government is
pressuring it to sell unprofitable foreign assets.
Rumors abound that AES wants to sell its southern AES Sul
utility, which makes it an unlikely candidate for Enron's assets.
The only company that can be considered a potential candidate is
Brazil's upstart private electricity holding CPFL Energia SA,
which wants to expand. CPFL is controlled by powerful VBC
conglomerate made up of industrial group Votorantim, top private
bank Bradesco and construction firm Camargo Correa.
Enron hopes to raise about US$10 billion globally by December.
Analysts, however, say Enron's natural gas business are saleable.
This makes the company's stake in a pipeline that connects gas-
rich Bolivia to Brazil a "juicy bit," says Reuters.
So far, only BG Group and Enron, both co-owners of the gas route,
have managed to get access to the pipeline from former oil and
gas monopoly, state-run Petrobras, after tough talking from the
market regulators. Analysts say Royal Dutch/Shell, BG and El
Paso may want to raise their stakes in the pipeline.
Petrobras, on the other hand, is expected to take forward its
long-running plan to buy two Rio de Janeiro gas distributors --
CEG and CEG Rio -- from Enron, once Enron's sale scheme is fully
defined.
GLOBAL CROSSING: SAC Brasil Chapter 11 Case Summary, Creditors
--------------------------------------------------------------
Debtor: SAC Brasil Ltda.
Av. Dr. Dchcri Zaidan, 920
9th floor, Suite 21A
Sao Paola SP
Brasil
Bankruptcy Case No.: 02-14288
Type of Business: The Debtor is an affiliate of Global Crossing
Ltd.
Chapter 11 Petition Date: August 30, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtors' Counsel: Michael F. Walsh, Esq.
Paul M. Basta, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8197
Fax : (212) 310-8007
Estimated Assets: More than $100 million
Estimated Debts: More than $100 million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Alcatel Trade Debt $16,640,981
72 Avenue De La Liberte
Nanterre 92723
France
Tel. 33-(0)155515151
Lucent Trade Debt $8,731,006
Rodovia Cinira Fonseca
Oliveir s/n
Campinas SP
13097-660
France
Nortel Trade Debt $1,704,517
1500 Concord Terrace
Sunrise, FL 33323-2815
United States
Pegasus Telecom SA Trade Debt $737,010
Av Rio Branco 01, cj
1610
Rio De Janeiro RJ
20090-003
Brazil
NCR Trade Debt $555,935
Rua Da Figueira 649/4AN
649/4an
Sao Paulo SP 03003-000
Brazil
Juniper Trade Debt $413,052
1194 N. Matilda Av
Sunnyvale CA
94089-1206
United States
Anritsu Trade Debt $213,038
Siemens Trade Debt $183,903
Schahin Engenharia Ltda Trade Debt $147,106
Roth Bros. Trade Debt $119,800
Figwal Transportes Trade Debt $108,782
Internacion
ATT Trade Debt $82,549
Mattos Filho Veiiga Trade Debt $81,456
Filho Advo
Cisco Trade Debt $66,178
PriceWaterhouseCoopers Trade Debt $60,612
ITL Empreendimentos Trade Debt $39,000
e Construcoes Ltda
Amtore Trade Debt $38,719
Agencia Nacional De Trade Debt $28,900
Telecom
Arthur Anderson Trade Debt $26,241
Fischer & Foster Trade Debt $26,036
Advogados
XEROX DO BRASIL: Aims to Match 01 Numbers Despite Less Workers
--------------------------------------------------------------
Xerox do Brasil intends to maintain last year's US$1 billion
turnover despite plans by the U.S.-based parent to cut 600 of its
3,200 employees, Gazeta Mercantil says.
To make this happen, the Brazilian subsidiary is investing US$1
million (BRL2.99 million) in infrastructure and 500,000 U.S.
dollars (BRL1.49 million) in marketing and staff training. The
company will kick-off this month a road show as part of its
promotional efforts.
Last month, Troubled Company Reporter-Latin America learned that
the US$1 billion global restructuring of Xerox Corp. will cost
8,600 jobs. Of this number, 600 will come from the Brazilian
operations.
The American parent has been struggling to make ends meet. In
April, the company, hobbled by sluggish sales and a precipitous
drop in its stock price, said it was considering moving out of
its current headquarters by year-end. According to the Troubled
Company Reporter-Latin America, Xerox is considering two options
-- either to a smaller site in Stamford or another Fairfield
County town.
"We are changing our mix of business, our offerings, the way we
go to market, our culture and our cost base. It's time we had a
new home for a new Xerox," said Anne Mulcahy, Xerox president and
chief operating officer.
The copier maker employs 350 people at its headquarters. The
building, which was completed late in 1978, can hold 630 people
and has a 630-car parking garage. Xerox owns the land and leases
the building in a long-term sale-leaseback agreement. The company
said it plans to divest its interest in the site and expects a
deal with an interested company to happen soon.
CONTACT: Xerox Corporation, Rochester
Media Contact:
Christa Carone, 585/423-5074
Email: christa.carone@usa.xerox.com
=========
C H I L E
=========
ESSAM: Blames Transfer of Operating Rights for 1st-Half Losses
--------------------------------------------------------------
Struggling water utility Essam recently posted net losses of
CLP228 million in the first half this year, a complete reversal
from last year's CLP1.12 billion profit, says Business News
Americas.
The company attributed the losses to workers' indemnity payments
and infrastructure donations when it handed operating rights to
UK-based Thames Water. The 30-year concession contract was
awarded last year and is actually exercised by local subsidiary
Aguas Nuevo Sur Maule.
Essam, which operates in Chile's Region VII, serves 604,000
concessionaires, giving 99.6% drinking water coverage and 93.6%
sewerage coverage. The company has pledged to raise its current
23.8% wastewater treatment rate to 99.9% in 2005 and to 100% in
2010. It also plans to invest US$130 million over the next 10
years to build eight new potable water plants and 22 wastewater
treatment plants, and consolidate its sewerage network.
===============
C O L O M B I A
===============
GLOBAL CROSSING: SAC Colombia Summary; Unsecured Creditors
----------------------------------------------------------
Debtor: SAC Colombia Ltda.
Calle 72 No. 5-83 6th floor
P.O. Box 12304
Bogota, Colombia
Bankruptcy Case No.: 02-14289
Type of Business: The Debtor is an affiliate of Global Crossing
Ltd.
Chapter 11 Petition Date: August 30, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtors' Counsel: Michael F. Walsh, Esq.
Paul M. Basta, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8197
Fax : (212) 310-8007
Estimated Assets: More than $100 million
Estimated Debts: More than $100 million
Debtor's 13 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Interconexion Electrica Trade Debt $7,825,354
SA
Calle 12 Sur #18-
168Medellin, Colombia
Tel. 574-315-7396
PriceWaterhouseCoopers Trade Debt $60,674
Jose Lloreda Trade Debt $18,295
Camacho & Co. S.A.
Arbelaez, Jaime H Trade Debt $7,402
Emintel Trade Debt $3,615
Andersen Legal Ltda Trade Debt $2,145
Sanchez Castilla El Trade Debt $1,865
Antojo SCS
Emcali-E.I.C.E E.S.P Trade Debt $1,078
Cam.-Torre Emcali
Unitel Trade Debt $407
Omnitempus Ltda Trade Debt $257
Holguines Trade Center Trade Debt $143
Comsel S.A. Trade Debt $111
Dicel S.A. Trade Debt $103
===========
M E X I C O
===========
GRUPO MEXICO: Asarco Submits Environmental Proposal to DOJ
----------------------------------------------------------
Asarco, Inc. submitted early yesterday to the U.S. Dept. of
Justice (DOJ) a comprehensive proposal for environmental
remediation at its closed plants and other sites where the
company historically operated.
The proposal represents a forthright response to the concerns
raised by the DOJ in connection with the potential transfer of
Asarco's shares in Southern Peru Copper Corp. to its U.S. parent
company, Americas Mining Corporation (AMC). Through this
transaction, Asarco aims to become strong and economically viable
by reducing $550 million of short-term debt, leaving only $350
million of long-term debt, with the next maturity of $100 million
due in the year 2013.
For the past year, Asarco has been in active dialogue with the
federal government and various states in order to establish a
flexible remediation program to responsibly address its
environmental obligations, confronted with the reality of
extremely low copper prices, the lowest in a century at constant
value. As a 103-year old company, Asarco has a long history of
meeting its environmental obligations. Copper revenues account
for more than 80 percent of Asarco's income. Consequently, the
company's ability to fund such remediation is a result of the
international copper price, which is established by the world
market. Since the early 1970s, Asarco has spent hundreds of
millions of dollars on environmental controls and remediation.
Asarco has incorporated major technological advances to achieve
efficient operations, with its industrial units having state-of-
the-art environmental controls.
"The proposal submitted today by Asarco seeks to be comprehensive
and feasible for all parties," Asarco's spokesperson stated. "Its
objective is to reinvigorate Asarco's present financial
condition, maintaining the company as an important regional
employer which annually produces approximately 25 percent of the
primary copper and 15 percent of total copper consumption in the
United States."
Asarco's proposal seeks to foster a cooperative relationship
between the company and the government to promote effective
management of environmental work. "The proposal provides
certainty that the remediation work will get done," Asarco's
representative indicated.
Asarco expects the DOJ will give a favorable consideration to the
proposal and enter serious discussions with the company to reach
a mutually acceptable agreement, allowing a successful
remediation program through the financial strengthening of
Asarco, particularly during low copper price cycles.
CONTACT: ASARCO
Clay Allen
Phone: 602/977-6515
GRUPO TRIBASA: Fugitive Chair Caught in Spain, To Be Extradited
---------------------------------------------------------------
The law finally caught up with David Penaloza, the rogue chairman
of the once-mighty Grupo Tribasa SA.
Mr. Penaloza, who has been subject of an international warrant
since December last year, was caught by Spanish authorities
Thursday last week trying to cross into France in a luxury
vehicle. The Mexican Attorney's General Office says it is now
working on Mr. Penaloza's extradition.
The ex-chair of Grupo Tribasa faces fraud charges back in Mexico
over the guarantees issued by the company for its US$29.5 million
medium-term notes. The Attorney's General Office accuses Mr.
Penaloza of simulating "a stock transaction" with a third company
linked to firms controlled by him, as part of an "attempt to
deliberately avoid the payment of the US$29.5 million plus
interest."
The notes are currently held by the federal development bank,
Nacional Financiera, whose financial damage is estimated to
exceed US$20 million, a statement from the Attorney's General
Office says.
The notes were backed by shares that Tribasa held in ITA, a
consortium that had managerial control of airport operator ASUR
SA (ASR). The airport group was privatized in the late 1990s,
Dow Jones Newswires says.
In late March this year, a Mexican judge allowed the construction
group to suspend debt repayments, save for those indispensable
for ordinary operations like payroll, taxes, and social security
contributions. In a recent report, Troubled Company Reporter-
Latin America pegged the company's debts at MXN11 billion, owed
to creditors numbering 2,000.
The suspension of payments is valid for 185 days, the period to
be counted from March 26. Failure to come up with a compromise
with creditors or meet obligations after the lapse of this period
will result in bankruptcy proceedings, said TCR-Latin America.
The company specializes in building large-scale public works and
industrial plants. It is one of the beneficiaries of the
government's so-called "highway bailout" plan, which aimed at
saving companies that had built and operated toll roads that
turned out to be unprofitable.
At the end of February, Tribasa's principal subsidiary,
Triturados Basalticos y Derivados, was declared bankrupt with
liabilities totaling MXN6.4 billion (US$709.0 million), TCR-Latin
America said in a previous report.
CONTACT: GRUPO TRIBASA, S.A. DE C.V.
Bosque de Cidros No. 173,
Bosques de las Lomas
05120 Mexico, D.F., Mexico
Phone: +52-55-5229-7400
Fax: +52-55-5229-7430
E-mail: tribasa@tribasa.com.mx
Home Page: http://www.tribasa.com.mx
Contacts:
David Sandoval, Chairman and President
Salvador Linares, Chief Executive Officer
Adriana De Penaloza, Vice Chairman
Fernando Ochoa, Corp. Director of Construction
Gustavo Carbajal, Corp. Director of Admin. and Control
HYLSAMEX SA: Pays Unnamed Bank Owed US$7 Million with Shares
------------------------------------------------------------
An unnamed creditor bank accepted last week 7,012,888 Hylsamex
shares to pay for US$7 million in loans to the ailing steel-
maker, says Reuters.
"This reduction in debt will be reflected on the company's
balance sheets in the next quarterly report," Hylsamex said in a
statement.
Monterrey-based Hylsamex, a unit of conglomerate Alfa, is
currently undergoing a restructuring of some US$1.3 billion
debts. These debts were primarily caused by low international
prices for steel in recent years. A strong Mexican peso last
year also added to its woes by making its exports more expensive
in dollar terms and less competitive on world markets.
=============
U R U G U A Y
=============
URUGUAYAN BANKS: Government Channels Funds Between State Banks
--------------------------------------------------------------
Uruguayan state bank Banco Hipotecario del Uruguay will begin
transferring funds to state bank Banco de la Republica to help
the government strengthen its financial system, Business News
Americas reports.
The US$750 million worth of checking accounts, saving accounts
and time deposits, which will be transferred next week will be
transferred in two stages: the checking and savings accounts
first, followed by the dollar-denominated deposits, says Banco
Hipotecario Vice President Jorge Conde.
Uruguay authorities plan to operate Banco Hipotecario to operate
purely as a mortgage bank for individuals to lessen its risk
profile, the report says.
Crisis in Uruguay's financial system has clearly been shown by
the 4-day banking holiday that the government declared following
panicked withdrawals late in July.
According to the central bank, those withdrawals could have
drained US$2 billion of the US$34 billion of the state banks
Banco de la Republica and Banco Hipotecario del Uruguay this
month.
Banco de la Republica was reported to have lost US$70 million of
the estimated US$100 million total withdrawals after the banks
opened. The two banks had already shed US$1 billion since
January. Some US$2 billion in the form of time deposits are also
scheduled to come due between July 23 and August 20.
As a solution to the drain on deposits, Uruguay's Congress passed
an emergency legislation that analysts estimate would freeze
approximately US$2.2 billion in the country's two state banks,
Banco de la Republica and Banco Hipotecario del Uruguay.
=================
V E N E Z U E L A
=================
SIDOR: Labor Unions Still Mulling Indefinite Strike
---------------------------------------------------
Despite signs of improving relations with management, unions at
Sidor still considered Sunday filing a petition for an indefinite
strike before the Puerto Ordaz labor board yesterday.
Business News Americas says details were still hazy as to whether
the unions had indeed filed the petition 10 am Monday. If the
petition was filed, management and the unions have 120 hours to
resolve their differences; otherwise the strike will become
legally authorized.
Last week, Sutis, one of the influential labor unions, said
negotiations with management was progressing. Sutis leader Ramon
Machuca said, "It seems the company is accepting all the unions
demands on how wages are calculated."
Based in southeastern Bolivar state, Sidor is Venezuela's largest
privately owned exporter and has installed capacity of some
3.5Mt. A 22-day strike in May last year cost the company around
US$60 million. Workers also held a five-hour strike on August 27
this year, claiming their rights and "human values" were being
infringed by management practices.
GLOBAL CROSSING: Venezuela B.V. Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Global Crossing Venezuela B.V.
P.O. Box 33
Hilversum 1200 AA
Netherland
fka PAC Landing B.V.
fka Pan American Crossing Landing B.V.
fka PAC Landing B.V.
fka Pan American Crossing Landing B.V.
Bankruptcy Case No.: 02-14280
Type of Business: The Debtor is an affiliate of Global Crossing
Ltd.
Chapter 11 Petition Date: August 30, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtors' Counsel: Michael F. Walsh, Esq.
Paul M. Basta, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8197
Fax : (212) 310-8007
Estimated Assets: More than $100 million
Estimated Debts: More than $100 million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Tyco Trade Debt $19,215,835
Mellon Bank Centre
Pittsburgh, PA 15259
United States
Lucent Trade Debt $7,569,294
Av. Ppal Las Mercedes
Torre S
Caracas DF, Venezuela
Alcatel Trade Debt $6,802,765
4ta. Ave. Los Palos Grandes
Caracas, Venezuela
Tycom US Inc. Trade Debt $1,054,515
Mellon Bank Centre
Pittsburgh, PA 15259
United States
Anritsu Trade Debt $1,033,744
490 Jarvis Drive
Morgan Hill, CA 95037
United States
Tel. 800-267-4878
ORG Comware De Trade Debt $358,321
Venezuela C A
La Urbina
Edif. Mulinar P-1
Caracas, Venezuela
Telecomunicaciones Impsat Trade Debt $235,671
SA
Sintel Trade Debt $205,645
Grana y Montero Trade Debt $115,694
Modusistemas Trade Debt $95,067
CANTV Trade Debt $86,718
NET UNO, C.A. Trade Debt $80,660
D Empaire Reyna Trade Debt $68,540
Bermudez & ASO
Avaya World Services Trade Debt $56,125
International
Nortel Trade Debt $20,057
Fondo de Valores Trade Debt $10,585
Inmobiliarios
Arthur Andersen Trade Debt $10,200
Administradora Serdeco CA Trade Debt $5,331
Amg Proyectos Trade Debt $5,000
Tesoreria Nacional Trade Debt $4,770
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter Latin American is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ,
and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
Psamathe P. Alfeche and Ma. Cristina Canson, Editors.
Copyright 2002. All rights reserved. ISSN 1529-2746.
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