/raid1/www/Hosts/bankrupt/TCRLA_Public/020918.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, September 18, 2002, Vol. 3, Issue 185
Headlines
A R G E N T I N A
AEROLINEAS ARGENTINAS: Plans Debt Proposal Talks With Creditors
ARGENTINE BANKS: Scores of Branches Close, Jobs Eliminated
BANCO NACION/BANCO PROVINCIA: Survey Reveals Public's Dislike
COMPANIA DE RADIOCOMUNICACIONES: US$350MM Bond Rated "raCC"
COMPANIA MEGA: Local S&P Rates US$700 MM Corporate Bond "raCCC"
SOCIEDAD COMERCIAL: Issues Economic, Financial Information
TELECOM ARGENTINA: Reports Financial Results For 1H02
B E R M U D A
GLOBAL CROSSING: Files Bankruptcy Recovery Plan
TYCO INTERNATIONAL: Intends to File Form 8-K This Week
B R A Z I L
MINERACAO CARAIBA: Studying Ways To Avoid Closure
TAM: Plans To Cut Staff, Passenger Capacity
VARIG: Likely Receiving Largest Chunk BRL1B Rescue Plan
C H I L E
MADECO: Reveals Management's New Profitability Strategy
C O L O M B I A
CMS ENERGY: Closes Initial $167 Million Oil and Gas Sale
TELECOM: Hopes To Draw Up Rescue Plan
J A M A I C A
AIR JAMAICA: May Require Government Aid To Stay Aloft
M E X I C O
PEGASO: QUALCOMM Announces Transaction Closing
V E N E Z U E L A
SIDOR: Union Heads Vow To Cooperate To Help Resolve Conflict
* * * * * * * * * *
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A R G E N T I N A
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AEROLINEAS ARGENTINAS: Plans Debt Proposal Talks With Creditors
---------------------------------------------------------------
Aerolineas Argentinas SA, currently in bankruptcy, will meet with
its creditors on October 28 to discuss its debt proposal,
according to a report by Cinco Dias.
Aerolineas' creditors include Repsol YPF SA, Iberia Lineas Aereas
de Espana SA, Banco Bilbao Vizcaya Argentaria SA and Santander
Central Hispano SA, according to Cinco Dias.
The newspaper reveals that Air Comet, the new owner of
Aerolineas, is proposing to the creditors that they forgive 60%
of the debt held by the Argentine airline. It is also proposing
paying the remaining 40% of the debt in Argentine pesos, though
the debt is in dollars. The payment would be made in three stages
between 2002 and 2004, adds the newspaper.
Aerolineas will be represented by law firm Farlosi & Asociados in
the meeting.
The Spanish government sold Aerolineas Argentinas SA to Air Comet
for US$615 million in debt. Sepi, the Spanish government holding
company that owned Aerolineas since 1990, kept the other half of
the airline's US$1.2 billion debt.
CONTACT: AEROLINEAS ARGENTINAS
Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA
Phone: (54-11) 4310-3000
Fax: (54-11) 4310-3585
E-mail: volar@aerolineas.com.ar
Home Page: www.aerolineas.com.ar
Contact:
Patricio Zabalia Lagos, President
AIR COMET
Baha de Pollensa, 21-23
Edificio Airplus
28042 Madrid
Phone: 913 993 674
Fax: 913 291 146
E-mail: airplusops@jet.es
Contact:
Antonio Mata, presidente de Air Comet
ARGENTINE BANKS: Scores of Branches Close, Jobs Eliminated
----------------------------------------------------------
Argentina has shuttered a total of 185 bank branches and
eliminated approximately 6,200 jobs since its debt default and
currency devaluation eight months ago, according to Bloomberg
Monday.
La Nacion newspaper quoted Bank Workers Association President
Juan Jose Zanola as saying Banco Rio de la Plata SA closed the
greatest number of branches and ended about 1,300 jobs. The bank
is a unit of Spain-based Banco Santander Central Hispano SA.
FleetBoston Financial Corp.'s local unit also reduced staff by
600, according to the association.
Zanola further said that between 30 to 50 percent of the 104,000
bank workers at the end of last year could lose their jobs.
An executive from Banco Rio disagreed with these reports, saying
the bank reduced no more than 405 jobs through early retirement
plans. FleetBoston likewise refuted the association's figures.
International banks have lost at least $11 billion from
Argentina's default, devaluation and four-year recession. Other
banks such as Bank Of Nova Scotia and Credit Agricole SA have
abandoned their Argentine businesses to limit losses.
BANCO NACION/BANCO PROVINCIA: Survey Reveals Public's Dislike
-------------------------------------------------------------
A survey conducted from Sept. 1 to Sept. 14 showed that more than
70% of Argentines said they don't agree with Economy Minister
Roberto Lavagna's plan to sell shares in state-run banks on the
local stock exchange.
The survey of 600 people, according to Dow Jones, has a margin of
error of plus or minus 4.0 percentage points.
Lavagna, Argentina's top economic manager who has been tasked to
overhaul the country's lumbering financial sector, revealed a
plan to float a portion of Banco de La Nacion Argentina and Banco
de La Provincia Buenos Aires on the bourse. According to him,
selling bank shares would improve their business and make them
more transparent.
Both banks provide low-cost loans to domestic entrepreneurs,
farmers and businesspeople in the troubled South American nation.
The survey revealed that 10.9% of those polled said they believe
that part of Banco de la Nacion should be privatized, while 13.8%
of those sampled said the government also should sell part of
Banco de La Provincia to investors. Just above 14% had no opinion
on Lavagna's proposal for Banco de la Nacion, while 12.8% had no
opinion on Banco de La Provincia.
Lavagna is trying to refine economic policy to win an agreement
with the International Monetary Fund.
COMPANIA DE RADIOCOMUNICACIONES: US$350MM Bond Rated "raCC"
-----------------------------------------------------------
The local affiliate of Standard & Poor's recently rated the
corporate bond of Compania de Radiocomunicaciones Moviles S.A.
"raCC," the National Securities Commission of Argentina said.
The bond, described by Standard & Poor's International Ratings,
Ltd. Sucursal Argentina as "Programa Global de ONs simpleas,
autorizado por AGE de fecha 26.6.97 y 23.9.97," is due to mature
on March 3, 2003. Total value of the securities is US$350
million.
The S&P affiliate did not state the reason for the "junk" rating.
COMPANIA MEGA: Local S&P Rates US$700MM Corporate Bond "raCCC"
--------------------------------------------------------------
The US$700 million corporate bond of Compania Mega S.A. is now
rated "raCCC" in Standard & Poor's ratings board, says the
National Securities Commission of Argentina.
Described as "Programa de ONs autorizado por AGOyE de fecha
15.12.97" by Standard & Poor's International Ratings, Ltd.
Sucursal Argentina, the bond is set to mature on June 3, 2004.
The local affiliate of S&P did not notify the Commission of its
reason for the latest rating.
SOCIEDAD COMERCIAL: Issues Economic, Financial Information
----------------------------------------------------------
Sociedad Comercial del Plata S.A. ("the Company" or "SCP") has
traditionally had ready access to the renewal and expansion of
its financing, both in local and international markets. This
situation allowed the Company to comply with investment
requirements of its different projects, and to pay its
obligations at maturity. Furthermore, external financing sources
were continuously supplemented with the proceeds from sale of
assets that had reached their maturity.
In view of the difficulties, the Company was undergoing to
continue financing in local and international markets and in
order to sell assets in satisfactory economic conditions, in
April 1999 the Board of Directors decided to suspend the payment
of any outstanding amounts owed both as capital and interest, and
take steps with the advise of Merchant Bankers Asociados S.A.
("MBA S.A.") to renegotiate the debt with all its financial
creditors.
Several meetings were held afterwards with financial creditors
and/or their representatives, which resulted in preliminary
restructuring agreements for the Company, Compa¤Ħa General de
Combustibles S.A. ("CGC") and Tren de la Costa S.A. ("TDC"), all
subsidiaries of SCP.
The preliminary agreements referred to above were supported by a
sales schedule of principal assets and subject to the formal and
final approval of all pertinent instances. Another condition was
that the Company had to obtain from creditors a minimum cash
commitment to assure a cash flow allowing it to meet all its
liabilities, including labor and tax debts, which would accrue
during the restructuring process.
Together with the above-mentioned negotiations, the companies
commenced the search for strategic partners and/or potential
buyers of its main assets, especially in the case of CGC. At the
same time, major restructuring of operations was again carried
out in order to reduce the deficit. However, the general
conditions of the country worsened and the financial difficulties
of the companies did not facilitate the achievement of
associations or sales, and the recession did not permit profits
to recover or the financial situation to improve.
Reef Exploration Inc. filed an action against CGC, CGC
Internacional Corp. and SCP. This circumstance damaged undergoing
negotiations with financial creditors as resulting uncertainties
affected the CGC sale process. In addition, if judicial's
precautionary measures were to be passed they would have had a
negative impact on the normal activities, and worsened the
existing financial situation.
On September 8, 2000, due to the difficulties encountered to
reach a successful private agreement to restructure its
liabilities and to the existence of requests for bankruptcy
proceedings, the Company and its subsidiaries CGC and TDC filed a
petition for a Court protected creditors' meetings ("convocatoria
de acreedores") with the National Commercial Court. The
Extraordinary Shareholders' Meetings of SCP, CGC and TDC (the
companies) held during October 2000, ratified such requests for
creditors' meetings which are being processed before the National
Commercial Court No. 15, Secretary No. 29.
On November 2, 2000, the Court declared the opening of creditors'
meetings for Sociedad Comercial del Plata S.A., Tren de la Costa
S.A., Compa¤Ħa General de Combustibles S.A. and Solfina S.A.
(shareholder of Sociedad Comercial del Plata S.A.) -the latter
being guarantor of certain financial obligations. The Court
decided that the action would be an associated meeting of
creditors ("concurso de agrupamiento") and determined that six
class "A" accounting firms listed with such Court would be
receivers ("sĦndicos"). Each one of such firms will be
responsible for the control and verification functions. The Court
also issued a restraining order preventing the companies from
selling their assets.
The dates related to the process of verification of credits, and
already complied with, were:
- Up to April 3, 2001: creditors, with cause or title prior to
the filing for the creditors' meeting, and its guarantors,
requested the receivers to verify their credits.
- Up to April 19, 2001: the companies and creditors met with the
verifying receivers in order to review their files and submitted
refutations and objections regarding requests made. Also, such
date was the deadline established for creditors to reject and
object the verifying requests filed by other creditors.
- On June 13, 2001: the receivers submitted their individual
report.
- On October 11, 2001: the receivers jointly submitted the
general report ("informe general"), which was challenged by the
companies on October 25, 2001.
An Interim Creditors' Committee ("Comit, Provisorio de
Acreedores") was created with four unguaranteed creditors. This
Committee will work until its replacement, as established in
article 42 of Law No. 24,522.
On August 13, 2001 the judge in charge of the creditors' meeting
issued a resolution concerning the merit and scope of each
request for credit submitted by creditors. Under the provisions
of the Law referred to above, the resolution of the judge is
final for the purpose of computing the evaluation of majorities
and bases of the agreement. A summary of such resolution is shown
in Note 11.
However, additional creditors, with cause or title prior to the
filing for the creditors' meetings, are entitled to request the
verification of their credits within two years since the filing
for creditors' meeting. After that period, the statute of
limitation takes place for creditors or third parties related to
the agreement, with the exception of causes with a shorter
statute of limitation period.
On November 22, 2001, SCP, CGC and TDC filed in Court the payment
proposals for verified unsecured creditors already declared
admissible. No arrangement proposals were submitted in respect of
preferred creditors since they will receive the amounts owed in
conformity with the debt securities that they hold, and/or the
individual agreements to be entered into with each one of them.
The companies are currently analyzing a reformulation of the
proposals referred to above as a consequence of the recent events
occurred in the country.
During the first fortnight of December 2001 and due to a request
by the companies, certain creditors and receivership officers,
the judge of the creditors' meeting decided to postpone to July
3, 2002 the exclusivity term (originally scheduled to December
21, 2001) and to leave without effect the information hearing
that had been called for December 13, 2001, re-scheduling it for
June 25, 2002.
On February 21, 2002 as requested by the companies under the
terms of Section 8 of Law No. 25,563 promulgated by the Executive
Power on February 14, 2002, the judge of the creditors' meeting
extended the exclusivity term to May 8, 2003 and scheduled a new
information hearing for April 29, 2003.
CLAIMS FILED IN THE USA
Reef Exploration Inc.:
During 1999, CGC and CGC Internacional Corp. (companies which are
directly or indirectly held by Sociedad Comercial del Plata S.A.,
respectively) were notified that an arbitration process was filed
by Reef Exploration Inc. before the American Arbitration
Association. The matter of such arbitration refers to an alleged
infringement of the trustees' duties concerning the
purchase/selling of the shares of Reef Argentina S.A. and
subsequent sale to Shell CAPSA in August 1998.
CGC and CGC Internacional Corp. understand that the acts
indicated in the arbitration claim were performed within the
legal relationship that linked CGC with Reef in Argentina under
the contract agreed by such parties, which stated that the
legislation and jurisdiction applicable to said relationship was
governed by Argentine Law.
Based on such assumption, a restraining claim on jurisdiction was
filed with the courts of the City of Buenos Aires. Once such
claim was approved it was notified to the American Arbitration
Association, in order that the Association suspend the
arbitration process.
In June 2000, CGC (who was not part in the arbitral process), was
notified of an arbitral award against CGC for approximately US$
137.5 million, plus interest and judicial costs. In September
2000, the Court of the North District of Texas confirmed the
arbitral decision in favour of Reef.
As a consequence of the pronouncement obtained in Argentine
jurisdiction, the above-mentioned award cannot be enforced
against CGC in the Argentine territory, in which most of this
Company's assets are located.
SCP was informed in July 2000 that an action had been brought
against it and against Shell CAPSA and Shell Oil as well, by Reef
Exploration Inc. before the Court of the County of Harris, Texas,
USA. Such claim is identical to the one filed by Reef Exploration
Inc. against CGC. To such extent, both Shell CAPSA and Shell Oil
have informed the Company that, under the shares purchase/selling
contract, SCP should hold both companies harmless from any damage
arising from the above-mentioned claim. In turn, SCP responded to
Shell CAPSA indicating that the above-mentioned indemnity
agreement is not applicable to this situation.
With respect to Reef's action, based on the opinion of its legal
advisors, the Company decided not to reply to the claim filed
against it in a foreign jurisdiction. However, it started an
action in Argentina in order to obtain a restraining jurisdiction
order to be submitted to the foreign court involved, so that
actions against SCP are suspended.
In August 2000, a final judicial decision on restraining
jurisdiction was issued in favor of SCP ordering a diplomatic
letter rogatory to be reported to the American Court involved.
Consequently, any sentence pronounced against SCP as a result of
this claim, will not be enforceable against it.
On January 24, 2002, the Court of the Harris County District -
Texas -, allowed the request of Reef in order to bring an action
against SCP amounting US$ 55 millions for legal fees.
Consequently, the Court decided that damages on favour of Reef
amount to US$ 192.5 millions plus accrued interest.
Hess Energy Trading Company LLC:
On September 2, 1999 CGC entered into a hedge contract with Hess
Energy Trading Company LLC ("HESS"), concerning a portion of its
crude oil production. A sales price for crude was specified in
such contract for the period from January 2000 through December
2000.
On September 26, 2000 HESS informed CGC by means of a notary's
certificate dated September 14, 2000, that HESS terminated such
contract as a result of CGC's creditors' meeting.
On November 2, 2000 CGC received an official notice of a judicial
claim brought by HESS before the Supreme Court of the State of
New York, United States of America, claiming approximately US$ 17
million in respect of debt and damages.
CGC understands that, as a consequence of the judicial process
described in Note 2 to the financial statements, all debt
incurred prior to the date in which the creditors' meeting was
filed cannot be paid by CGC.
Favorable pronouncement of the United States Bankruptcy Court,
Southern District of New York:
On December 29, 2000, SCP and CGC filed a secondary petition with
the United States Bankruptcy Court, Southern District of New York
(the "Court") pursuant to Section 304 of the United States
Bankruptcy Law, to request in the United States an order for a
preliminary injunction similar to the one effective in Argentina
as a result of the creditors' meeting.
On January 17, 2001, the Court approved the petition restraining
American creditors from, among other, commencing or continuing
any action or proceeding against SCP or CGC or the taking of any
action against the property of SCP or CGC in the United States.
With respect to Reef Exploration Inc. ("Reef"), the Court ordered
that the preliminary injunction order should be interpreted as
having extraterritorial effect and would restrain Reef from
commencing any action to enforce the pronouncement outside
Argentina.
The Bank of New York, as trustee and payment agent in the Unites
States for the program of medium and short term securities, in
representation of the holders consented to the order of the
preliminary injunction, provided that individual note holders had
an extension of time up to January 30, 2001 to object to such
relief and that they reserved their rights with respect to the
next hearing of the Court in order to continue the injunction.
SCP accepted said conditions.
On October 11, 2001, in an audience held in New York in relation
to petitions of Reef and HESS, the Court of New York ordered the
maintenance of the preliminary injuction order already decided in
similar conditions to the initial decision. In addition, the
Court established a new hearing which took place on July 10,
2002, when it was decided to maintain the preliminary injuction
up to January 15, 2003, although Reef and HESS objected such
decision.
Pronouncement of the Court on the merit and scope of the
requirements for credits filed by the above-mentioned creditors:
In August 2001, the Court decided that: 1) until the action filed
by Reef is not completed, the alleged credit cannot be currently
recognized, and is declared inadmissible within the framework of
the creditors' meeting; 2) the debt with HESS included in the
creditors' meeting amounting to US$ 8 million and recorded by CGC
is declared admissible, and the rest of the amount claimed by the
latter is declared inadmissible.
TREN DE LA COSTA S.A. - BUSINESS SITUATION
The concession contract between the Ministry of Economy and
Public Works and the company was entered into on October 7, 1992.
Such contract provides for the operation of the railroad
transportation system in the branch line from the Maip£ to Delta
stations, as well as the operation of the surrounding shopping
area. The life of the concession contract is 30 years and all
land property rights remain with the Argentine Government. On
February 11, 1993, the Government approved the contract by means
of Decree
No. 204/93.
In accordance with the terms of the bid specifications, the
rendering of the railroad services between the Maip£ to Delta
stations commenced on April 25, 1995. From May to June 1995 the
stores of the surrounding shopping area and corresponding parking
lots were inaugurated by stages, with the exception of the Parque
de la Costa amusement park.
Also during the above-mentioned period, the railroad service was
adjusted in line with the expected number of passengers which did
not increase until the final start of Parque de la Costa.
Based on the issues referred to above, the Board of Directors of
TDC considered that the period from April 25, 1995 through June
30, 1995 represents a start-up process, and that all costs and
expenses incurred during such period (including financial
results) were part of the project. Such items are thus recorded
as assets in fixed assets allocated to the concession and revenue
for such period was deducted from such caption.
Although the Parque de la Costa amusement park was partially
inaugurated during 1997, towards the end of December 31, 1997
certain significant installations were still in the process of
construction, technical adjustments and/or replacement. The
company's Board of Directors considered that the amusement park
was in a start-up process up to December 15, 1997, and that all
costs and expenses related to the amusement park (including
financial results) were part of the cost of such park. Such items
are thus recorded as assets in the Parque de la Costa property
caption, and revenue generated as from the park's inauguration
through December 15, 1997, was deducted from the Parque de la
Costa property caption.
In addition to the situations described in b) and c), and as the
level of income and the use of the capacity of the Park continued
to be low up to the start-up (December 15, 1997), the Board of
Directors of TDC capitalized under "Other assets", certain
expenses and financial results not covered by revenue generated
during the period.
As from the definitive start-up of the Parque de la Costa
amusement park, December 15, 1997, all revenue, costs and
expenses are recorded in the income accounts.
TDC had operating losses since the definitive start-up,
indicating that the consolidation of the business would take
longer than originally expected and will not conform with initial
projections prepared during the planning, development and start
up-stages. Consequently, and due to: a) the special
characteristics and the size of the project Tren de la Costa,
including real estate, railway and amusement park; b) there being
no prior similar projects in the country; c) international
experience and the reports of external advisors indicating that a
period for the project to mature is required, mainly as it refers
to the entertainment business and d) the constant recession of
the Argentine economy, originating a decrease in concurred levels
to the shopping areas and to the "Parque de la Costa", the Board
of Directors of Sociedad Comercial del Plata S.A. decided to
guarantee certain loans of TDC and to reimburse certain costs and
expenses of that company, either directly or by applying a
specific fund during 1998, 1999 and 2000, as well as giving
financial contributions.
Up to the end of 1998, TDC management expected that, as from
1999, the improvements to be implemented would benefit the
results and also that a strategic partner (an international
player in the entertainment business) would be incorporated,
resulting in the operative consolidation of the business.
However, as a consequence of the Argentine recession there was a
decrease of public in the Park and train, as well as in the rents
of commercial areas, with relation to the original projections.
Furthermore, the negotiations with potential strategic partners
and the sale of certain areas fell through, mainly due to the
financial situation of Sociedad Comercial del Plata S.A. (Note
2), and the situations described above.
Due to the operating losses, the Board of Directors of TDC is
continuously evaluating the entertainment, commercial and
transportation operations, as well as the public response. In
addition, TDC has carried out new investments (acquisitions
and/or modifications), participating in projects in order to
improve the synergy, and the operating results.
In this context, TDC is a partner in Trilenium S.A. This company
is in the entertainment and casino business.
Simultaneously, TDC has carried out improvements in the
administrative, systems and human resources areas in order to
reduce operating costs, increase efficiency and reach a financial
break even situation.
As part of this activity, TDC has submitted presentations to the
Government, requesting an extension of the concession term, in
order to obtain better use of investments made.
The Board of Directors of TDC and its advisors analyzed different
alternatives for the business plan, and designed a proposal to
the creditors' meeting consistent with the company's economic-
financial capability and the continuation of the company as a
going-concern. Currently, TDC is analyzing a reformulation of the
proposal as a consequence of the new economic situation in the
country and its impact on TDC's business.
TELECOM ARGENTINA: Reports Financial Results For 1H02
-----------------------------------------------------
CONSOLIDATED NET REVENUES
Consolidated net revenues for 1H02 totaled 1,914, a decrease of
1,077 or 36%, compared with 2,991 for 1H01 as a result of the re-
expression of figures as of June, 30, 2001 and the rates that
were frozen after the "pesification" enforced by the Government.
In the basic telephony business, the main component of revenues,
measured service, decreased by 265 or 34% to 510 during 1H02, as
compared to 1H01 (775). The decrease was evidenced both in local
and DLD traffic as the rates were frozen after the "pesification"
enforced by the Government and the deterioration of the
macroeconomic conditions in the country had a negative impact on
consumption patterns.
Total traffic volume measured in minutes decreased by 7% for 1H02
when compared to 1H01. Furthermore, for 1H02 urban traffic
measured in minutes decreased by 7% and DLD traffic decreased by
6% when compared to 1H01.
Monthly basic charges decreased by 189 or 35%, to 353 for 1H02
when compared to 1H01 mainly due to the fact that rates were
frozen after the "pesification" enforced by the Government and
the lower average number of lines in service of approximately
325,000 lines.
Supplementary services revenues decreased by 53 or 45% to 66 for
1H02 when compared to 1H01 mainly due to the fact that rates were
frozen after the "pesification" enforced by the Government and to
the discounts applied by the Company to the different services.
Installation fees paid by new customers decreased by 15 or 60% to
10 for 1H02, as compared to 1H01 largely due to a lower number of
lines connected (approximately 69,600 lines connected in 1H02 as
compared to 164,600 lines connected in 1H01) and to a lower
average installation prices ($121 to $105 per line) due to the
fact that prices grew at lower rate than the rate of inflation.
Revenues from public telephony decreased by 72 or 42% to 98,
during 1H02 when compared to 1H01. The main reasons for this
decrease were that rates were frozen after the "pesification"
enforced by the Government, the lower traffic generated by public
telephony telecommunication centers ("Telecentros") and the lower
revenues received from public telephones.
Revenues generated by interconnection services during 1H02,
mainly access and termination and long distance transport of
calls charged to fixed line operators, decreased by 8 or 10% to
70. Meanwhile, during the same period revenues generated by
interconnection services provided to cellular operators decreased
by 2 or 9% to 21.
Regarding the international telephony business, during 1H02,
revenues decreased by 47 or 37% to 80 when compared to 1H01
primarily due to the fact that rates were frozen after the
"pesification" enforced by the Government, lower outgoing traffic
of approximately 7% and lower settlement revenues.
The revenues generated by the cellular business during the 1H02
decreased by 307 or 37% to 523 when compared to the same period
of fiscal year 2001. The revenues of Telecom Personal in
Argentina decreased by 344 or 45% when compared to 1H01. The
decrease was due to a lower number of subscribers (approximately
3% or 64.000 lines), lower levels of traffic and lower sales of
handsets. Furthermore, the average revenue per user decreased by
44% (to $32 per customer per month as of June 30, 2002). The
customer base reached as of June 30, 2002 approximately 790,300,
1,270,000 and 56,000 for the Multiple Area of Buenos Aires
(AMBA), Northern and Southern regions, respectively. Total
cellular subscribers of Telecom Personal in Argentina reached
approximately 2,116,000.
N£cleo, the subsidiary that provides cellular and PCS services in
Paraguay, generated 96 in revenues during 1H02, which are
consolidated into the revenues of Telecom Personal. This
represented a decrease of 37, or 63%, as compared to 1H01. The
decrease can be attributed to the inflation adjustment of 1H01
figures but was partially offset by the increase in the customer
base and exchange differences. As of June 30, 2002, N£cleo had
approximately 545,000 cellular and PCS customers, an increase of
approximately 112,000 customers, or 26%, as compared to June 30,
2001.
Revenues generated by the data transmission business totaled 160,
representing a decrease of 83 or 34%. The decrease was a
consequence of lower revenues generated by the terrestrial
networks and the leasing of data circuits to other operators.
Additionally, the increase of monthly charges and Internet dial-
up measured services as a consequence of the increase of Internet
subscribers that use the special prefix 0610 and local numbers
with 4004 numbering and similar, was lower than the rate of
inflation. As of June 30, 2002 Internet minutes represented 32%
of total traffic measured in minutes transported over the fixed-
line network.
Internet revenues decreased by 4 or 10% to 35 during the 1H02. As
of June 30, 2002, the number of subscribers to high-speed
Internet access services (ADSL) has reached approximately 25,000.
Furthermore, Internet dial-up customers reached approximately
156,000.
In the directories edition business, revenues from the subsidiary
Publicom decreased by 29 due to the delay in the publication of
directories.
OPERATING COSTS
The cost of services provided, administrative expenses, and
selling expenses for 1H02 decreased by 604 or 24% to 1,953 when
compared 1H01, mainly as a result of the inflationary adjustment
of 1H01 figures. The specific variations for each line are
explained below.
Salaries and social security contributions decreased by 204 or
40% to 311 for 1H02 primarily due to the reduction in salaries of
unionized and non-unionized employees, which was part of the cost
reduction plan launched during the previous fiscal year. The
increase in headcount in the basic telephony activity reflects
the migration of call centers and 110 information system workers
from Publicom to Telecom Argentina. Furthermore, a decrease in
labor cost was registered in Publicom due to the delay in the
publication of directories.
The main component of operating costs, fixed asset depreciation,
increased by 147 or 20%, to 888 during 1H02 as consequence of the
effects of capitalized foreign currency exchange differences
originated by debt and the incorporation of new assets into
cellular and data transmission activities during last fiscal
year.
Amortization of intangible assets decreased by 4 or 6% to 59 for
1H02 mainly due to re-expression of the figures as of June 30,
2001.
Expenses related to taxes decreased by 7 or 9% to 75, as a result
of the inflationary adjustment of 1H01 figures.
Materials and supplies charges decreased by 67 or 44% to 86
mainly due to lower expenses associated with reduced installation
of new lines in the basic telephony activity and to maintenance
of the network and buildings. Furthermore, savings were
registered as some materials were recuperated from third parties.
These effects were partially offset by higher provisions made for
scrap materials.
The allowance for doubtful accounts decreased by 36 or 20% to
144. The decrease can be largely attributed to re-expression of
the figures as of June 30, 2001 in spite of the deterioration of
the level of collections, particularly evident in the residential
segment.
Commissions paid to cellular vendors decreased by 45 or 78% to 12
during 1H02 as consequence of the lower number of new subscribers
incorporated during the period, deductions related to early
disconnection, and to a lower average commission paid per new
customer. Additionally, expenses related to sales commissions for
pre-subscription and call centers in the basic telephony business
decreased as these tasks are now performed internally by Telecom
Argentina.
Interconnection costs decreased by 20 or 22% to 72 for 1H02, as
these costs increased less than the rate of inflation.
Service fees decreased by 42, or 42%, to 58 principally due to
lower fees related to information services (call centers and 110
information service) in the basic telephony activity. Fees paid
to the data base manager and agents related to the pre-
subscription process also decreased.
Management fees decreased by 102, or 84%, to 19 for 1H02 due to a
temporary decrease in the management fee from 3% of net revenues
to 1.25% for the period comprised between October 1, 2001 and
March 31, 2002. Furthermore, the Company and the Operators have
agreed to suspend certain rights and duties of both parties of
the management contract, from April 1, 2002 until December 31,
2002, whereby the management fee has been suspended.
Costs related to advertising decreased by 63 or 79% to 17 for
1H02 mainly due to lower expenses related to media advertising
and promotional campaigns resulting from the cost control actions
enforced by the Company.
Regarding costs of other activities, the cost of cellular
handsets decreased by 43 or 84% to 8 and can be largely
attributed to the lower number of cellular handsets sold.
Finally, other expenses decreased by 86 or 35%. The decrease was
largely due to lower bonuses paid to cellular agents, lower
roaming charges and lower commissions paid in the cellular
activity.
FINANCIAL AND HOLDING RESULTS
The loss resulting from financial and holding results increased
by 5,884 to 6,101 for 1H02, as compared to the loss in 1H01
(217). This increase can be largely attributed to a loss of 5,215
from currency exchange differences that arose from the Peso
devaluation which affected the net foreign currency monetary
position but was only partially offset by the higher capitalized
foreign currency exchange differences by debt for fixed assets
acquisitions by 1,137. Furthermore, the interest on foreign
currency liabilities increased by 148 due to the continuing
deterioration of the peso. Finally, a loss of 1,193 was
registered for the inflation effect on monetary assets and
liabilities.
OTHER EXPENSES, NET
Increased by 24 or 47% to 75 for 1H02 compared with 1H01. The
increase was mainly due to higher reserves for lawsuits and
contingencies and results from the sales of fixed assets and
other income and expenses (net), partially offset by lower
severance payments in the basic telephony activity.
STATEMENTS OF CASH FLOW
Cash flow from operating activities for 1H02 decreased by 24 as
compared to 1H01.
Meanwhile, cash flow used for investing activities for 1H02
decreased by 538 as compared to 1H01.
Funds used for financing activities decreased by 38 for 1H02.
This was a result of lower dividends paid (417), lower debt
payments (460), lower payments of interest and related costs
(68), partially offset by lower debt proceeds (907).
INVESTMENT PLAN
Since the start of operations on November 8, 1990, Telecom Group
has invested 19,608 in fixed assets, of which 1,313 corresponds
to 1H02 (including capitalized foreign currency exchange
differences by debt of 1,144).
Of the total amount invested for 1H02, excluding the
capitalization mentioned above, 131 or 77.5% corresponds to basic
telephony, data transmission and internet (information systems
32%, switching 10%, outside plant 16%, transmission 36%,
infrastructure 2% and others 4%), 37 or 21.9% to cellular
telephony, and 1 or 0.6% to directories edition.
RECENT DEVELOPMENTS
Suspension of interest payments
On June 24, 2002, Telecom Argentina and its controlled
subsidiaries Telecom Personal and Publicom (collectively "the
Companies") resolved to suspend interest payments on all their
financial debt obligations, as a consequence of the continuing
devaluation and volatility of the peso, lower net cash flows
being generated in the current macroeconomic environment in
Argentina and the uncertain timetable for resolving discussions
with the Argentine Government concerning adjustment of regulated
tariffs. Telecom Argentina previously announced the suspension of
principal payments by the Companies on such indebtedness as of
April 2, 2002.
The Companies will continue meeting their obligations related to
commercial activity in the ordinary course of business.
Appointment of the new C.E.O.
On July 16, 2002, the Board of Directors appointed Mr. Carlos
Alberto Felices as new Chief Executive Officer ("C.E.O."). Mr.
Felices took charge of his new duties on August 1, 2002.
NYSE Notification
Telecom has been notified by the New York Stock Exchange ("NYSE")
that it has fallen below the NYSE's continued listing criteria
relating to the minimum share price. The NYSE requires that the
average closing price of a security not be less than $1.00 over a
30-day trading period.
Under NYSE rules, once notified of its failure to meet the
minimum share price criteria, a company must bring its share
price and average share price back above $1.00 within six months
of receipt of the notification or if deemed necessary have until
its next shareholders meeting if approval from its shareholders
is necessary to implement a corporate action that will cure the
price deficiency. Telecom is currently in discussions with the
NYSE with respect to this issue and is reviewing its options in
order to cure this deficiency.
OUTLOOK
The present fiscal year is developed in a social, political and
economical adverse context, characterized by a high level of
uncertainty, where the recession was transformed into a serious
depression. Additionally, the economic changes imposed by the
National Government put the telecommunications industry in
general into a critical situation, affected by the "pesification"
of the tariffs at the rate of US$1 =$1, among other matters.
As a consequence of the current macroeconomic environment in
Argentina, the devaluation and volatility of the peso, the above
mentioned "pesification" of the tariffs and the timeframe defined
by the Argentine Government for the discussions related to the
adjustment of the regulated tariffs, on April 2, 2002, the
Company announced the suspension of principal payments on all
Telecom Group's financial debt obligations. Afterwards, on June
24, 2002 the Board of Directors also announced the suspension of
interest payments on all Telecom Group's financial debt
obligations. The Company is in process to find a definitive
solution to its working capital structure.
In this uncertain and critical context, Telecom maintains and
reinforces a clear mission shared by all the members of the
Group: to foresee solutions to high quality telecommunications
for all clients, complying with or exceeding its shareholders
expectations, assuming responsibilities with the community and
maintaining a high consideration for the employees. This mission
is sustained by values in which all the organization is
committed: permanent innovation, client information services, and
excellence in services, ethics and mutual respect.
Telecom works in the construction of the solid position as
integrator, by the unification of the offer channels, the
convergence of the operation of the clients and services and
organization synergy. In addition, the Company shall continue
operating within the current cost structure, which produce a
substantial reduction of the expenditures in order to sustain the
profitability.
Telecom is still committed to the country and it is capable of
carrying out with success the challenge to continue growing in an
environment of great complexity. The Company is motivated by a
great ambition: being the leading company in integrated solutions
to telecommunications in Argentina, the reference for services to
our clients, with a competitive profitability and highly
motivated collaborators.
In this way, we make wishes for the Republic of Argentina to
overcome rapidly the present critic institutional and economic
situation, and recover the social peace and the path for the
growth and welfare for its citizens.
To see financial statements and accompanying notes:
http://bankrupt.com/misc/Telecom_Argentina.doc
=============
B E R M U D A
=============
GLOBAL CROSSING: Files Bankruptcy Recovery Plan
-----------------------------------------------
Global Crossing Ltd. filed a plan in the U.S. Bankruptcy Court in
Manhattan to emerge from bankruptcy, reports Bloomberg. The
recovery proposal is based on the sale of a 61.5 percent stake to
Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte
for US$250 million.
The transaction, announced August 9, values the reorganized
company's equity at US$407 million.
The plan gives new investors the opportunity to top the
Hutchison-ST Telemedia offer. It also prevents Global Crossing
from soliciting buyout offers. However, the company will pay
Hutchison Whampoa and Singapore Technologies a US$30 million to
US$50 million penalty, plus certain costs, if it accepts an
unsolicited buyout offer.
The proposal provides for the creditors to divide about US$300
million in cash, US$200 million in notes and the remaining 38.5
percent of Global Crossing's reshuffled shares. The cash to be
distributed to creditors includes US$250 million from Hong Kong-
based Hutchison and ST Telemedia and US$50 million from Global
Crossing.
It also calls for bondholders owed more than US$4.54 billion and
other unsecured creditors to divide 32.5 percent of the
reorganized company's shares and US$25 million of notes. Global
Crossing bonds sell for less than 2 cents.
Global Crossing's bank lenders get US$300 million in cash, US$175
million of the notes and 6 percent of the company's reshuffled
shares, according to the plan.
Shareholders will get nothing. Global Crossing shares fell less
than a cent to 2.2 cents in over-the-counter trading, down from a
high of US$64.25 in May 1999. The company's market value has
plunged to about US$18 million from US$38.9 billion in December
1999.
Under the recovery proposal, John Legere will remain Global
Crossing's chief executive officer. It also sets aside 8 percent
of the shares in the reorganized company to pay management
bonuses, at the discretion of Legere and the company's new board.
Operations would be financed in part with a new US$150 million
loan after the bankruptcy.
The recovery plan is to be reviewed by U.S. Bankruptcy Judge
Robert Gerber in Manhattan on Oct. 21. It must be approved by
Jan. 6 for the buyout proposal to take effect.
The company, based in Hamilton, Bermuda sought Chapter 11
protection in January after amassing US$12.4 billion in debt
building a 100,000-mile fiber-optic network in 27 countries. It
declared its assets at US$22.4 billion then.
The Securities and Exchange Commission and Justice Department are
investigating whether Global Crossing, like rivals WorldCom Inc.
and Qwest Communications International Ltd., misreported costs
and revenue.
TYCO INTERNATIONAL: Intends to File Form 8-K This Week
------------------------------------------------------
Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI) said
Monday that because of the Yom Kippur holiday, it would file the
Form 8-K report referred to in its 10-Q report for the period
ending June 30, 2002 before the New York Stock Exchange begins
trading on Tuesday, September 17, 2002.
ABOUT TYCO INTERNATIONAL LTD.
Tyco International Ltd. is a diversified manufacturing and
service company. Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services and the world's largest
manufacturer of specialty valves. Tyco also holds strong
leadership positions in medical device products, and plastics and
adhesives. Tyco operates in more than 100 countries and had
fiscal 2001 revenues from continuing operations of approximately
$34 billion.
===========
B R A Z I L
===========
MINERACAO CARAIBA: Studying Ways To Avoid Closure
-------------------------------------------------
Brazilian copper miner Mineracao Caraiba, which is predicted to
end operations in 2006, is trying to extend its life by
establishing partnerships with other copper producers, says
Business News Americas.
"We have a lot of know-how, so we approached [Rio-based mining
giant] CVRD but they were not interested," company manager Edson
Macedo said.
Macedo said talks with Chile's state copper corporation Codelco
have been more successful.
"We plan to swap information and join forces in a number of
areas," he said, without revealing more details.
At the same time, the copper miner, located in the northeast
Brazilian state of Bahia, is also looking at ways to increase
reserves at its open pit mine to avoid closing its doors.
"We are studying deepening the mine and contiguous areas as well
as the possibility of mining other minerals such as graphite,"
Macedo said.
The mine's plant processes 1.2Mt/y of ore, resulting in average
output of 92,000t/y of concentrates with an average copper
content of 35%. Last year, the mine produced 30,000t of fine
copper equivalent.
"We closed our underground mine in 1998, and the tendency is for
production to fall until the open pit mine is closed too," Macedo
said.
Currently, all of Mineracao Caraiba's production goes to supply
around 60% of the concentrate needs of copper smelting company
Caraiba Metais. The smelter imports the rest of its minerals from
Chile and Peru.
TAM: Plans To Cut Staff, Passenger Capacity
-------------------------------------------
Following its decision to halt flights to nine cities due to
slumping passenger demand, TAM (Transportes Aereos Aereos
Regionais SA), Brazil's second-biggest airline, plans to fire 524
staff, reports Bloomberg.
In a statement, the carrier, which ended the first half of this
year with a loss of BRL223 million ($70 million), revealed plans
to reduce its passenger capacity by 12% this year.
Brazilian airlines like TAM and Varig are now reducing their
fleets to cut losses triggered by a slump in demand after U.S.
terrorist attacks last year and a weakening currency that
increased their leasing and fuel costs.
"With those measures, TAM is adjusting to the current domestic
and international markets," TAM said in the statement.
VARIG: Likely Receiving Largest Chunk BRL1B Rescue Plan
-------------------------------------------------------
Varig, which has US$900 million in debt and is currently
negotiating with its creditors, is to become the main beneficiary
of a BRL1-billion (US$320 million) rescue plan from the Brazilian
government directed at the loss-making airline sector, according
to the Financial Times.
"I believe that the measure is going to help the restructuring of
the airlines, especially Varig, which has also been negotiating
with its creditors," said Sergio Amaral, Brazil's minister of
development, industry and foreign trade.
The government also issued a series of tax breaks and a debt
pardon for the country's airlines, which have been hit by the
depreciation of the Real and the slowdown in traffic following
the September 11 attacks in the US. Some import taxes will also
be lifted and the state will assume the additional cost of higher
insurance premiums imposed on airlines.
The government has conditioned further aid, including capital
injection from the state-owned National development bank (BNDES),
to more efficient management.
CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.)
Rua 18 de Novembro No. 800, Sao Joao
90240-040 Porto Alegre,
Rio Grande do Sul, Brazil
Phone: (51) 358-7039/7040
(51) 358-7010/7042
Fax: +55-51-358-7001
Home Page: www.varig.com.br/english/
Contacts:
Dorival Ramos Schultz, EVP Finance and CFO
E-mail: dorival.schultz@varig.com.br
Investor Relations:
Av. Almirante Silvio de Noronha,
n 365-Bloco "B" - s/458 / Centro
Rio de Janeiro, Brazil
=========
C H I L E
=========
MADECO: Reveals Management's New Profitability Strategy
-------------------------------------------------------
The senior management of Chilean copper cable company Madeco
revealed in a conference call Monday a scheme aimed at steering
the Company back on track, relates Dow Jones.
According to outgoing Chief Executive Albert Cussen, the new
management would focus on streamlining production and commercial
activities, but beyond that, the new board will concentrate on a
turnaround in its Brazilian Ficap unit and production of
specialized cables in an effort to "return to historic sales
levels." Two executives of Madeco's new board will be based in
Brazil, he added.
Cussen will be succeeded by Tiberio Dall'Ollio Oct. 1.
Madeco, after being hit hard by woes in Argentina and Brazil,
making payment on its US$330 million in debt difficult, began a
financial restructuring, which includes a capital increase of up
to US$90 million announced July 11. The capitalization includes
the issuance of 1.8 billion new shares, or approximately 4.66
shares per old share at CLP35.00 ($1=CLP726.50) each.
If Madeco fails to raise the planned US$90 million, international
credit rating agency Fitch, which recently lowered Madeco's local
currency rating to BBB-from BBB+, warned it would downgrade the
rating even further.
The capital increase is critical for Madeco because proceeds of
that transaction will help it pay 50% its US$120 million in bank
debts up front as part of a deal with its creditors. The
agreement gives Madeco seven years to pay the remainder, with a
three-year grace period, said Jorge Tagle, Madeco's future Chief
Financial Officer
Through October 8, shareholders will be able to subscribe or sell
their rights in the Chilean market, he added.
The new shares won't be available for holders of American
Depository Receipts under a clause that allows Madeco to rule out
ADR holders if that offer is impractical or unduly expensive for
the company.
"We expect ADR holders to sell their rights in the market," Tagle
said.
In a second round of offers Oct. 9-15, all remaining shares will
be offered to bondholders willing to capitalize bonds, to other
debtholders and to shareholders who seek to buy additional
shares, Tagle said.
Carrying out the capital increase will allow it to reduce the
ration of debt to earnings before taxes, depreciation, interest,
and amortization to under six, he added.
Controlling shareholder, financial holding Quinenco, which owns
56.12% of Madeco, will put up $50 million, Tagle added.
To see latest financial statements:
http://bankrupt.com/misc/Madeco.doc
CONTACT: MADECO S.A.
Ureta Cox, 930
San Miguel, Santiago, Chile
Phone: 56-2 5201461
Fax: 56-2 5516413
E-mail: mfl@madeco.cl
Home Page: http://www.madeco.cl
Contacts:
Oscar Ruiz-Tagle Humeres, Chairman
Albert Cussen Mackenna, Chief Executive Officer
Investor Relations
Phone: 56-2 5201380
Fax: 56-2 5201545
E-mail: ir@madeco.cl
RESTRUCTURING ADVISER:
SALOMON SMITH BARNEY HOLDINGS INC.
388 Greenwich St.
New York, NY 10013
Phone: 212-816-6000
Fax: 212-793-9086
Home Page: http://www.smithbarney.com
Contact:
Michael A. Carpenter, Chairman and CEO
Michael J. Day, EVP and Controller
===============
C O L O M B I A
===============
CMS ENERGY: Closes Initial $167 Million Oil and Gas Sale
--------------------------------------------------------
CMS Energy Corporation (NYSE: CMS) announced Monday it has closed
a sale of the stock of CMS Oil and Gas Company and its affiliate,
CMS Oil and Gas (International), for $167 million. The
transaction is part of a previously announced sale of all of CMS
Energy's exploration and production business for $232 million.
Definitive agreements for sale of the $65 million balance cover
stock and assets of CMS Oil and Gas affiliates with properties in
Colombia and Venezuela. Closings of those sales, which are
pending government approvals, are expected by early October.
"Net proceeds from this sale were used to retire the remaining
balance on a $150 million CMS Enterprises term loan due in
December 2002," said CMS Energy executive vice president and
chief financial officer Tom Webb. "With this sale, CMS Energy has
achieved $2.6 billion of asset optimization cash proceeds toward
our $2.9 billion goal."
CMS Energy Corporation is an integrated energy company, which has
as its primary business operations an electric and natural gas
utility, natural gas pipeline systems, independent power
generation, and energy marketing, services and trading.
CONTACT: CMS ENERGY CORPORATION
Media Contacts: Kelly M. Farr, +1-313-436-9253
John P. Barnett, +1-713-989-7556
Daniel C. Bishop, +1-517-788-2395
CMS Energy Investor Relations: +1-517-788-2590
URL: http://www.cmsenergy.com
TELECOM: Hopes To Draw Up Rescue Plan
-------------------------------------
Alfonso Gomez Palacio, the new president of Colombia's Telecom,
revealed that the state-run telco is hoping to draft a rescue
plan that would allow it to become cash flow positive before
year-end, relates Business News Americas.
Gomez said he would place particular emphasis on improving the
Company's operating margin.
"Clearly the firm has substantial financial difficulties," he
said, describing Telecom's main problems as pension liabilities,
joint venture disputes and negative operating margins. "Moving to
profitability is the most pressing," he added.
Wally Swain, an analyst at Yankee/Focus Group, told Business News
Americas that Gomez was right to target profitability. According
to Swain, Telecom ran a 2001 operating loss in the neighborhood
of US$200 million. Addressing the joint venture disputes or the
pension liabilities would be very difficult for Telecom to manage
by itself, and the only issue that can be addressed in the short-
term is the operating margin, he said.
The pension liabilities total more than US$900 million, while
various international equipment vendors, including Canada's
Nortel Networks, claim Telecom owes them as much as US$1.56
billion from joint ventures dating back to the 1990s. Telecom
recognizes only US$800 million in debt to vendors.
CONTACT: EMPRESA NACIONAL DE TELECOMUNICACIONES (TELECOM)
Calle 23 No 13-49, Bogot
Colombia
Phone: 286-0077
282-8280
Home Page: http://www.telecom.com.co/
=============
J A M A I C A
=============
AIR JAMAICA: May Require Government Aid To Stay Aloft
-----------------------------------------------------
Air Jamaica sustained losses of approximately US$70 million as a
result of last year's September 11 terrorist attacks against the
United States.
Air Jamaica's deputy chairman, Christopher Zacca implied in the
Jamaica Gleaner report that the airline may need financial
assistance to keep up with competition.
"A year on from the events of September 11th, 2001, we estimate
that during that period we have lost US$70 million. It has also
cost us an additional US$6 million in insurance and US$25 million
in security. We will now be requiring bridge financing but as yet
haven't placed a figure on that sum. If the disaster of September
11 last year did not occur, Air Jamaica would have broken even
this year."
Air Jamaica's chairman, Gordon "Butch" Stewart said that the
airline may well need Government assistance but that it had not
yet sought that route choosing instead to fight on. He said that
the question of whether Air Jamaica should go public and thereby
raise adequate funds to address its plight though mooted was not
feasible at this point in time.
"We need to ensure that our balance sheet is healthy and that we
are able to pay a dividend before we can even consider that
possibility and we are some way from that."
===========
M E X I C O
===========
PEGASO: QUALCOMM Announces Transaction Closing
----------------------------------------------
QUALCOMM Incorporated (Nasdaq: QCOM), pioneer and world leader of
Code Division Multiple Access (CDMA) digital wireless technology,
announced Tuesday the closing of the transaction in which
Telefonica Moviles, S.A. acquired 65 percent of Pegaso
Telecommunicaciones, S.A. de C.V., with the Burillo Group
continuing to own 35 percent.
As further announced by Telefonica, Telefonica and the Burillo
Group have contributed their respective interests in Pegaso to a
new entity that is owned 92 percent by Telefonica and 8 percent
by the Burillo Group. This new entity now owns Pegaso and the
four Mexican mobile telephony operators acquired by Telefonica
during 2001, making this new entity Mexico's second largest
mobile telephony operator covering the whole of Mexico.
As a result of this transaction, QUALCOMM will receive
approximately $525 million in cash within 60 days, of which
QUALCOMM will use approximately $140 million to acquire existing
secured debt in Pegaso, upon which QUALCOMM will then own secured
debt in Pegaso amounting to approximately $480 million.
QUALCOMM Incorporated ( www.qualcomm.com ) is a leader in
developing and delivering innovative digital wireless
communications products and services based on the Company's CDMA
digital technology. Headquartered in San Diego, Calif., QUALCOMM
is included in the S&P 500 Index and traded on The Nasdaq Stock
Market(R) under the ticker symbol QCOM.
CONTACT: QUALCOMM Incorporated
Christine Trimble, Corporate Public Relations
Tel: +1-858-651-3628,
Fax: +1-858-651-5873
Email: publicrelations@qualcomm.com
Julie Cunningham, Investor Relations
Tel: +1-858-658-4224
Fax: +1-858-651-9303,
Email: jcunningham@qualcomm.com
URL: http://www.qualcomm.com
=================
V E N E Z U E L A
=================
SIDOR: Union Heads Vow To Cooperate To Help Resolve Conflict
------------------------------------------------------------
Union leaders at Venezuelan steel maker Siderurgica del Orinoco
(Sidor) vowed to attend a meeting with the labor ministry
officials Monday in Caracas to discuss a conflict over alleged
wage discrepancies, reports Business News Americas.
"We are making an effort to avoid a general strike. We are going
to show up [to the meeting] and we hope there are favorable
results to the workers demands," he said.
The workers union has threatened to stage an indefinite general
strike if social problems at the plant are not resolved before
the government signs a debt restructuring agreement with
management.
Sutiss union boss, Ramon Machuca, revealed that the problem is no
longer just about money, rather "it's a struggle against an
unjust work culture that goes against social, cultural,
democratic and human rights of the workers."
After Monday's meeting, the union will evaluate the situation and
"make the decisions that need to be made," he added.
The protracted labor dispute comes as the steel maker is
negotiating the refinancing of much of its US$1.45 billion debt
with a group of banks and the Venezuelan state.
Sidor, which has been battered by the sharp slide in steel prices
and the shrinking domestic economy, had failed to meet the terms
of an earlier 2000 debt restructuring deal.
Sidor, a former state operation, was privatized in 1997 when the
Consorcio Amazonia acquired a majority stake. Shareholders are
Mexican companies Hylsamex and Tamsa, Brazil's Usiminas,
Argentina's Siderar and Venezuela's Sivensa.
CONTACT: SIDERURGICA DEL ORINOCO, C.A. (SIDOR)
Edificio General, Piso 9
Avda. La Estancia
Chuao, Caracas 1060
Venezuela
Tel: (582) 902 3800/3917/3955
Fax: (582) 993 2930
Home Page: www.sidor.com.ve/
***********
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
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or balance thereof are $25 each. For subscription information,
contact Christopher Beard at 240/629-3300.
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