/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/021014.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, October 14, 2002, Vol. 3, Issue 203 Headlines A R G E N T I N A ARGENTINE BANKS: Relationships Sour With Foreign Banks BANCO FRANCES: Parent Forecasts No Profit In The Next Two Years DINAR: Investors Save Grounded Carrier; Initiate Turnaround IRSA: Issuing Bonds To Raise Capital B E R M U D A FLAG TELECOM: Emerges From Chapter 11 With Network Intact GLOBAL CROSSING: Upset With GAO Ruling on Defense Contract TYCO INTERNATIONAL: Headquarters to Remain In Bermuda B R A Z I L CENTRAL BANK: Refinances Part of $3.67B Near Term Debt CHESF/LIGHT: May Owe the Most When MAE Settles Pending Deals USIMINAS: Liquidity Improves From Better Sales USIMINAS: Difficulty Looms Despite Improving Conditions C O L O M B I A CHEC: Plans Job Cuts to Offset Losses SEVEN SEAS: Misses $1.1 Million Mortgage Escrow Payment TELECOM: New Head Faces Legal, Pension, Financial Troubles M E X I C O AHMSA: Prometeo Mine Produces Its First Million Tons of Iron P E R U WIESE SUDAMERIS: Auction Likely in 1H03 T R I N I D A D & T O B A G O BWIA: President Optimistic on BWIA's Recovery BWIA: Maintains Unions' Support in Turnaround Plans U R U G U A Y BANCO COMERCIAL: Attracts Brazilian Investor - - - - - - - - - - ================= A R G E N T I N A ================= ARGENTINE BANKS: Relationships Sour With Foreign Banks ------------------------------------------------------ An attack from nationalist politicians on three foreign banks made the future of Argentina's financial system even bleaker, reports the New York Times. Legislators had come up with a few proposals, to the dismay of the bankers. One proposal would reinstate a tax meant to replenish a bankrupt union-run health plan for workers; another would make foreign parent banks legally responsible for any new deposits taken by their Argentine subsidiaries. Relations between foreign banks and nationalist factions did not turn for better when the Senate had prepared to vote on the health-plan tax, drafted by Jose Luis Barrionuevo. In May, Barrionuevo was quoted urging savers to "go and destroy the banks." More damage was inflicted when a judicial investigation was launched due to accusations that legislators had received bribes from foreign bank executives to halt potential legislation. Bank offices were raided and the Senate demanded that three leading bankers - Emilio C rdenas of HSBC, Carlos Giovanelli of Citibank and Manuel Sacerdote of Bank Boston - be prosecuted for treason. After it was pointed out that the treason laws apply only during wartime, the senators then accused the bankers of "sponsoring economic sanctions against Argentina," a violation of a 1951 law. The accused bankers have made no public statements on the issue. Argentina is seeking emergency aid from the International Monetary Fund, but the most recent issues could seriously hamper the country's chances. BANCO FRANCES: Parent Forecasts No Profit In The Next Two Years --------------------------------------------------------------- Even though BBVA Banco Frances' liquidity level is the best it has been in the last 12 months, its parent, Spanish financial group BBVA, does not expect the Argentine subsidiary to turn a profit for the next two years. News of the prediction comes by way of Spanish financial daily Cinco Dias reports, citing BBVA CEO Jose Ignacio Goirigolzarri. BBVA Banco Frances no longer grants loans to individuals in Argentina, but still lends to large corporations. Events in recent weeks indicate Argentina is slowly recovering, Goirigolzarri said, noting the return of savings to Argentine banks, even if the high interest offered on deposits seems to be the main reason. But the executive indicated that recovery could be negatively affected by the upcoming presidential elections in March 2003. In mid-June, the Spanish parent said it would help Banco Frances by increasing the ailing unit's capital by converting US$209.3 million in debt to equity. A source, at that time, said that about US$130 million of Banco Frances' subordinated negotiable bonds held by BBVA would be swapped for shares in the Argentine bank as would US$79.3 million of a US$150 million loan BBVA previously made to the unit. In return, BBVA will increase its stake in Banco Frances to around 75% from 67%. However, in the weeks following the restructuring announcement, the Spanish parent threatened to pull out of Argentina if the economic situation in the country goes unchanged. CONTACT: BANCO FRANCES Maria Elena Siburu de Lopez Oliva Investor Relations Manager, in Argentina Tel. 5411-4341-5035 E-mail: mesiburu@bancofrances.com.ar Maria Adriana Arbelbide Investor Relations Tel. 5411-4341-5036 E-mail: marbelbide@bancofrances.com.ar DINAR: Investors Save Grounded Carrier; Initiate Turnaround ----------------------------------------------------------- A group of private investors, headed by Argentine entrepreneur Antonio Martinez Lopez, stepped in to rescue the ailing Argentine airline, Dinar Lineas Aereas SA, reports Dow Jones. Gustavo Maradini Drago, the new president of the Company, confirmed the takeover late Wednesday, saying that the new owners, known as Sagaya, will assume the airline's debts and promised to get it back in the air later this month. Dinar has been under bankruptcy protection for months and is carrying debts of about ARS100 million. Its fleet has been grounded for the past 11 days after the previous owner, American Falcon, fell behind on debt payments. The recent sale is the second time in three months that the Company has changed hands. In early August, American Falcon took over, promising to pay off the debts and get the company back on its feet. That investment, however, ended in disaster eight weeks later, with American Falcon owner Fatez Chehab saying his U.S. shareholders decided to discontinue funding the airline and that the company couldn't keep up with its debts. Despite Chehab's experience, Drago said the new owners were confident in Dinar's future. He promised that the fleet will be back in the air between October 18 and 25 and that the Company would resume flights to Brazil early next year. "We believe in the gradual recovery of the market and of the country and we will seek to re-establish out leadership in the northwest," he said. Drago said the Company's creditors were prepared to give the new owners some breathing space during the next few months, and he indicated the new management would look for ways to optimize cooperation and cost-sharing between Dinar and LAER, another domestic airline, which Sagaya also manages. Drago promised there would be no job shedding at Dinar, saying the Company employees will be management's "No. 1 priority." In return, however, Drago said the new owners expect the Company's 300 workers to hold at least 10% of the Company shares. IRSA: Issuing Bonds To Raise Capital ------------------------------------ Real estate firm IRSA joins other Argentine companies turning to the capital markets for new financing in the wake of the downfall of the country's financial system. According to Reuters, IRSA, which controls several local shopping centers, said it would issue US$100 million in five-year convertible bonds to refinance its debt and obtain working capital. The bond issue will be its first since 2000. In a letter to the Buenos Aires bourse, the Company said that the terms of the issuance, which already has the authorization of the exchange and the regulators, will be explained to stockholders in a meeting yet to be scheduled. "The main objective is to refinance the debt; to pay part of it and refinance the rest, and to obtain working capital," said a company official. As of March 31, 2002, IRSA had a debt of ARS475.6 million (US$126.8 million). CONTACT: IRSA INVERSIONES Y REPRESENTACIONES SOCIEDAD ANONIMA Bolivar 108, 1st Fl. C1066AAD Buenos Aires, Argentina Phone: +54-11-4323-7555 Fax: +54-11-4323-7597 http://www.irsa.com.ar Eduardo S. Elsztain, Chairman and CEO Ricardo A. Torees, CFO ============= B E R M U D A ============= FLAG TELECOM: Emerges From Chapter 11 With Network Intact --------------------------------------------------------- FLAG Telecom Holdings Limited announced Thursday that it has successfully emerged from Chapter 11 proceedings in the United States. Accordingly, FLAG Telecom's ongoing business operations are no longer subject to the restrictions imposed by the Chapter 11 process or the U.S. Bankruptcy Court. The Company, which commenced Chapter 11 proceedings on April 12, 2002, has been reorganized as FLAG Telecom Group Limited and will initially trade over the counter under the symbol FLHLQ. Concurrently, FLAG Telecom announced that it has appointed Mark Spagnolo, a member of the Company's newly constituted Board of Directors, to serve as its new interim Chief Executive Officer, and that it has commenced a search for a permanent CEO. Mr. Spagnolo, an industry veteran who served as the President and CEO of Metromedia Fiber Network, Inc. from 2001 to 2002 and of UUNet from 1997 to 2000, will replace Andres Bande, who has resigned as Chairman and CEO after five years with FLAG. Mr. Bande will act as an advisor to the CEO and the Board for the remainder of this year. Mr. Bande stated "Mark and the new Board bring a wealth of knowledge and experience to FLAG. I wish Mark, the Board members and FLAG the utmost success." "I am pleased to accept this position with FLAG," stated Mr. Spagnolo. "On behalf of the Board, I'd like to wish Mr. Bande well in his future endeavours. I'd also like to thank him and each of the Company's employees, for their dedication and hard work, which has led to the successful restructuring of the Company. The Company, with the overwhelming support of its creditors, has emerged from bankruptcy with a financially sound capital structure and can now concentrate 100% of its energies on implementing its business plan. We greatly appreciate the tremendous support of our customers and vendors during the Chapter 11 proceedings and look forward to continuing to regain their confidence." Mr. Spagnolo also acknowledged the strengths that the other members of FLAG Telecom's new Board will provide to the Company, "The depth of their experiences and their collective knowledge of the telecommunications and financial industry will be invaluable to FLAG Telecom as it looks to the future and builds upon its long-standing commitment to its customers, vendors and employees." FLAG Telecom's developed global fiber-optic network, which has been built with network segments and through collaboration with third parties, remains intact. The FLAG network reaches key high- volume destinations in Europe and the United States, as well as a number of countries in Asia and the Middle East, and enables the Company to service its established customer base of over 130 worldwide customers. The Company's principal customers are incumbent national operators, international licensed telecommunications companies, emerging telecommunications companies and ISPs. FLAG Telecom's goal is to establish itself as a leading independent global transport and network services provider. To meet this end, the Company intends to continue to enhance the connectivity between its own network and other networks to enable new customers to readily move traffic onto the FLAG Telecom global network, to deepen and broaden relationships with its current customers and to expand the range of its products and services. About FLAG Telecom FLAG Telecom is a leading global network services provider and independent carriers' carrier providing an innovative range of products and services to the international carrier community, ASPs and ISPs across an international network platform designed to support the next generation of IP over optical data networks. Recent news releases and further information are on FLAG Telecom's website at: www.flagtelecom.com. Forward-looking Statements Statements contained in this Press Release that are not historical facts may be "forward-looking" statements as the term is defined in the Private Securities Litigation Reform Act of 1995. To identify these forward-looking statements look for words like "believes", "expects", "may", "will", "should", "seeks", "intends", "plans", "projects", "estimates", or "anticipates" and similar words and phrases. These, and all forward-looking statements, are based on current expectations and necessarily are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to: our ability to achieve the objectives laid out in the Third Amended and Restated Joint Plan of Plan of Reorganization, as modified, dated August 8, 2002 (the "Plan of Reorganization"). More detailed information about these risks is contained in our Plan of Reorganization. Flag Telecom undertakes no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future developments or otherwise. CONTACTS: FLAG Telecom John Draheim, +44 20 7317 0826 Jdraheim@flagtelecom.com Investor Relations: David Morales, +44 20 7317 0837 Dmorales@flagtelecom.com or Sloane & Company Dan O'Connor, 212/446-1865 doconnor@sloanepr.com GLOBAL CROSSING: Upset With GAO Ruling on Defense Contract ---------------------------------------------------------- Sprint Corp. and Global Crossing Ltd. were dealt a harsh blow after the General Accounting office rejected Wednesday their protests on the selection of WorldCom Inc. to receive a $450 million Defense Department contract. Telecommunications companies Sprint Corp. and bankrupt carrier Global Crossing Ltd. challenged the contract, under which WorldCom will build a network for Defense Department scientists and researchers, because WorldCom admitted this summer it improperly accounted for almost US$7.7 billion, raising questions about its credibility. The GAO, the congressional watchdog agency that rules on such protests, said it had qualms about intervening since the project was already well under way and the Defense Department "has authority to address the alleged impropriety" if it so chooses. While the Defense Department relied on "grossly inaccurate financial information in making a determination that WorldCom was a responsible contractor," the GAO also said it was inappropriate for it to intervene and dismissed the protests. WorldCom, the No. 2 U.S. long-distance telephone carrier and one of the world's biggest movers of Internet traffic, filed for bankruptcy in late July. While some have questioned its survival, company executives have said the plan is for WorldCom to emerge from bankruptcy next year. The Defense Department told the GAO that the whole telecommunications industry is in turmoil so WorldCom's predicament is not uncommon and a review of the financial information by the agency would not necessarily affect its determination that it was a responsible contractor. "The real issue in this matter has always been provider performance and capabilities," said WorldCom spokeswoman Natasha Houbold. "The record shows that WorldCom has met or exceeded expectations in both categories to date and Worldcom will continue to do so in the future." Global Crossing was originally awarded the contract, but it was canceled after protests by WorldCom's MCI unit and Sprint. The government selected Global Crossing again but the company went bankrupt, leading the government to re-evaluate the award and determine that the company's poor financial performance, unfavorable trends and legal consequences of its bankruptcy proceedings posed unacceptable risks. Global Crossing and Sprint officials said they were disappointed by the decision. "We continue to maintain that our financial stability is superior to that of the awardee, as we are well along in the process of emerging from Chapter 11 protection," Catherine Berthier, a Global Crossing spokeswoman, said in a statement. "We are reviewing the decision and evaluating the possibility for further action on our part." TYCO INTERNATIONAL: Headquarters to Remain In Bermuda ----------------------------------------------------- Tyco International Ltd. Spokesman Gary Holmes announced that the Company is not planning to move its headquarters to the United States. According to the Bermuda Sun, Holmes said that the Company is reviewing many factors, including its place of incorporation, but have not made any decision to move. Earlier, a report from the Financial Times said Jack Krol, one of Tyco's lead directors said that reincorporating somewhere else would improve the Company's image with regard to its accountability. The United States is a likely candidate as to where the Company should reincorporate. However, Krol added that if the cost of reincorporating somewhere else would be too expensive, Tyco would remain in Bermuda. In Bermuda, Tyco would enjoy a lower effective tax rate. Earlier, Breen had said that they are conducting a "top-to- bottom" review of the tax structure. The Company had expected the tax rate for the recent fiscal year to be 22 percent, rather than 18.5 percent. Because of this, the Company had cut its earnings projection for this year's final quarter. CONTACT: Tyco International Ltd. Corporate Office The Zurich Centre, Second Floor 90 Pitts Bay Road Pembroke HM 08, Bermuda Phone: 441-292-8674 Home Page: http://www.tyco.com =========== B R A Z I L =========== CENTRAL BANK: Refinances Part of $3.67B Near Term Debt ------------------------------------------------------ The Brazilian central bank continues to refinance part of US$3.67 billion in government paper coming due on October 17. Reuters reports that on Thursday, the central bank rolled over about US$80 million of US$200 million in dollar-linked domestic debt on offer in an auction. Of that total, the bank bought back US$70 million of the debt notes and replaced the remaining US$10 million with fresh government paper. Early last week, the central bank managed to roll over another US$600 million. However, it had to pay sky-high interest rates reflecting investors' concerns about Brazil's economic outlook following a presidential runoff vote on October 27. Investors have been wary of buying government paper coming due after the election, fearing a victory by leftist front-runner Luiz Inacio Lula da Silva could complicate the country's ability to service its US$260 billion public debt. The local currency, the real, has come under heavy pressure in recent days as investors fret over whether the bank will be able to roll over the debt maturing next week. CHESF/LIGHT: May Owe the Most When MAE Settles Pending Deals ------------------------------------------------------------ Brazilian utilities Chesf and Light are likely to be the largest debtors when the country's wholesale power market MAE settles all transactions accumulated over the 25 months of its existence on November 22. According to Business News Americas, the full amounts to be settled will be published on November 15 and the total amount is estimated at BRL13 billion (US$3.28 billion). Brazilian federal power company Chesf, which owes MAE BRL8 billion, should in theory be in line to receive cash. But the lack of rainfall last year meant the Company could not produce enough power to meet its supply contract commitments and was forced to buy power through MAE to pass on to its customers. Light, a distributor, owes BRL1 billion. But according to the utility, it is owed almost as much as it must pay, so it did not expect to have to foot a large bill. MAE has been mired with problems ever since it was launched. Meanwhile, the Workers Party candidate, Luiz Inacio Lula da Silva, who leads in the polls, has threatened to close it down in favor of a more collegiate settlement system, in the same way the National System Operator (ONS) is run. Because of this, MAE is keen to make the settlement and try to get operations back to normal in order to present the new government, which takes over January 1, with a body that can operate properly. However, the country's power regulator Aneel must first publish a set of regulations for settlement to take place. CONTACT: LIGHT SERVICOS DE ELETRICIDADE S.A. Avenida Marechal Floriano, 168 20080-002 Rio de Janeiro, Brazil Phone: +55-21-2211-2794 Fax: +55-21-2211-2993 Home Page: http://www.lightrio.com.br Contact: Bo Gosta Kallstrand, Chairman Michel Gaillard, President and CEO Joel Nicolas, Executive Director, Operation Paulo Roberto Ribeiro Pinto, Executive Director, Investor Relations and CFO USIMINAS: Liquidity Improves From Better Sales ---------------------------------------------- Brazil's Usinas Siderurgicas de Minas Gerais SA, or Usiminas, is now in a better cash position, indicates Dow Jones Newswires. According to Chief Financial Officer Paulo Penido Marques, the steel maker, despite having to wrestle with a heavy debt load, has been generating increasing amounts of cash in recent weeks, and continues to trim down high debt. In late June, Usiminas had around US$3.1 billion of total consolidated debt, representing around five times the Company's EBITDA. Around a third of this debt comes due in the next twelve months, during what's likely to be a turbulent period for financial markets as a new government takes over. However, according to Marques, Usiminas, in recent months, has managed to exceed its earlier goal of slashing US$150 million of its total debt during the second half of the year. Usiminas still continues to refinance its debts coming due on a regular basis, using credit from both local and foreign banks. Only weeks ago, Companhia Siderurgica Paulista (Cosipa), an Usiminas' subsidiary, sold US$100 million of commercial paper in a deal with local financial group Banco Votorantim. Usiminas' next major payment is on a US$120 million loan coming due in mid-December. Besides having a better cash position, Usiminas is managing to raise additional money. On Sept. 30, the Company sold its 12.5% stake in the cement company Camargo Correa Cimentos back to Camargo Correa for US$46 million. CONTACT: Rua Prof. Jos� Vieira de Mendon�a 3011 Engenheiro Nogueira 31310-260 Belo Horizonte Minas Gerais, Brazil Phone: +55-31-3499-8000 Fax: +55-31-3499-8899 http://www.usiminas.com.br USIMINAS: Difficulty Looms Despite Improving Conditions ------------------------------------------------------- Analysts believe that Usiminas, even though it has improved its cash position, could encounter difficulties in the coming months, relates Dow Jones. Reginaldo Takara, an analyst at Standard & Poor's in Brazil, said Usiminas is in a "fragile situation because of the high debt." He noted, however, that the Company's margins are holding steady. Usiminas has seen the costs of its debts increase due to Brazil's onerous debt, as well as the plunging value of the country's currency amid ongoing fears about the global economy and the outcome of Brazilian presidential elections later this month. The local currency, the Real, has declined against the dollar by about 40% so far this year. Market players can only guess what will happen to the currency in the coming months, but more depreciation remains a possibility. Usiminas has more than half its debt denominated in dollars, which means that a lot of the Company's costs are becoming expensive to pay in local currency terms. Around 60% of Usiminas' dollar debt is protected against foreign exchange related losses. =============== C O L O M B I A =============== CHEC: Plans Job Cuts to Offset Losses ------------------------------------- Chec, a power utility serving Caldas, and parts of Tolima and Cundinamarca in Colombia plans to reduce its workforce, to trim down losses, according to the Company's chief executive officer Hugo Velez Melguizo. The Company's losses totaled CLP29 billion (US$10.1 million) in the first eight months of this year, reports Business News Americas. Chec's client-employee ratio is the lowest among Colombia's state power companies with 343 clients per employee. The average is around 500 clients per employee. The Company has about 1,000 employees in total. Velez has plans of hiring a private sector consultant to create a personnel optimization scheme. Chec worker's union president Oscar Arturo Orozco said that the union will oppose any plans to cut jobs, but will ask for "wide participation" in any analysis of the plant's future staffing levels. SEVEN SEAS: Misses $1.1 Million Mortgage Escrow Payment ------------------------------------------------------- Seven Seas Petroleum Inc. (Amex: SEV) announced Thursday that the Company did not make the $1.1 million monthly escrow payment required under its Note Purchase and Loan Agreement with Chesapeake Energy Corporation ("Chesapeake"). Under this agreement, the Company is required to make monthly escrow payments equal to one-sixth of the semiannual $6.9 million interest payment on the 12 1/2% $110 Million Senior Subordinated Notes. Seven Seas has 20 days from October 10, 2002 to cure the default. The Company and Chesapeake are in discussions concerning the escrow payment and other matters relating to the Company's current financial circumstances. As previously reported, there continues to be uncertainty over whether the Company will make the $6.9 million semiannual interest payment on November 15, 2002 as well. Escuela 2 Update The Escuela 2 reached a total depth of 20,250 feet on September 19, 2002. All electric logs and formation pressure tests have been completed. The Company believes the well should produce hydrocarbons from the lower Cretaceous Utica formation. Independent analyses by industry experts agree that the well should be tested. Management believes that hydrocarbon shows encountered during drilling operations, log analyses, and formation pressure tests all support the conclusion that the well should be production tested. To date, Seven Seas has incurred approximately $23 million in costs on the Escuela 2 and is presently performing remedial operations to repair a leak in the 9 5/8 inch casing. An estimated $1.2 million in additional costs will be required to safely restore the Escuela 2 well bore to a condition that allows for production testing or temporary abandonment. After restoring the integrity of the well bore, the Company may suspend operations in order to secure additional financing or to find a partner to participate in the completion and testing and any future operations on the Deep Dindal prospect. Guaduas Oil Field Update Production from the Guaduas Oil Field averaged approximately 5,800 barrels of oil per day, (2,680 net to Seven Seas) during the month of September compared to 6,100 barrels of oil per day (2,800 net to Seven Seas) during the month of August. The reduction resulted from the loss of production while workover operations were conducted on certain wells. During the first 10 days of October, with all producing wells online, production has averaged approximately 6,200 barrels of oil per day (2,860 net to Seven Seas). The Company plans to continue with its operations to maximize production from existing wells. Seven Seas Petroleum Inc. is an independent oil and gas exploration and production company operating in Colombia, South America. Statements regarding anticipated oil and gas production and other oil and gas operating activities, including the costs and timing of those activities, are "forward looking statements" within the meaning of the Securities Litigation Reform Act. The statements involve risks that could significantly impact Seven Seas Petroleum Inc. These risks include, but are not limited to, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geologic data, competition, reduced availability of drilling and other well services, fluctuations in oil and gas prices and prices for drilling and other well services and government regulation and foreign political risks, as well as other risks discussed in detail in the Seven Seas Petroleum Inc.'s filings with the U.S. Securities and Exchange Commission. CONTACT: SEVEN SEAS PETROLEUM INC. Daniel Drum, Investor Relations, +1-713-622-8218 TELECOM: New Head Faces Legal, Pension, Financial Troubles ---------------------------------------------------------- The new president of Empresa Nacional de Telecomunicaciones (Telecom) is taking the reins of a company that is close to buckling under the strain of financial difficulties. Alfonso Gomez, who took over the top spot at Telecom in late August, admitted that Telecom, which has US$1.9 billion in pension liabilities, legal troubles with six multinational firms that could cost up to US$800 million, and expected 2002 losses of US$176 million, is at its worst time. "We've got various problems, legally, financially, etc. But the one that preoccupies us the most is how to create worth. Right now, the company is destroying its worth," Gomez told Dow Jones Newswires in an interview. "Including pension payments, Telecom spends COP1.35 ($1=COP2842) for every peso it brings in." The Colombian government has already ruled out a bailout of the Company. But, according to Gomez, "Whatever the final solution, Telecom's work in Colombia must continue. There is no other option." Telecom controls 40% of the fixed telephone lines in Colombia in 1,200 cities and towns, many of which have no other provider. Analysts say that unless the Colombian economy begins to grow, allowing Telecom to reduce some of its losses, some type of eventual bailout by the government may be necessary. "And this would imply a fiscal cost, a very large fiscal cost," said Alberto Bernal, economist at New York-based think tank IDEAglobal. "This would require the backing of the markets, because it could cost maybe half a billion dollars." 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/ =========== M E X I C O =========== AHMSA: Prometeo Mine Produces Its First Million Tons of Iron ------------------------------------------------------------ Mexican steelmaker Altos Hornos de Mexico SA revealed the results of the underground test phase of its Prometeo mine in northern Mexico. In a Dow Jones Newswires report, AHMSA announced that the operation, which began in January, produced its first million tons of iron. Based on this rate, AHMSA said the mine will guarantee supplies of the metal for an additional 10 years. The Prometeo deposits have been producing iron since 1969 through open pit mining, producing in that time 53 million tons of mineral with 60% iron content. The Company estimated that 22 million tons of iron remain in the deposit, at a depth of 500 meters. With the Prometeo and other deposits, Ahmsa said it has iron reserves for more than 25 years, "which in a country with low availability of iron represents an important strategic advantage for the Company." ======= P E R U ======= WIESE SUDAMERIS: Auction Likely in 1H03 ---------------------------------------- Wiese Sudameris, the second largest bank in Peru in terms of assets, is expected to go on the auction block in the first half of 2003, reports Business News Americas. The Peruvian bank's parent, the Italian financial group IntesaBci, will sell the unit before July next year as part of its decision to pull out of Latin America, according to group CEO Corrado Passera. However, recent reports indicated that IntesaBci might find it hard to sell Wiese Sudameris. Although Peru's banking system has weathered recent storms well, some analysts believe that political and economic concerns could dampen interest in the Andean nation, and some analysts say there could be a shortage of buyers ready to pump money into Peru's limited market. Besides, the bank, which is the spinoof of a 1999 merger of banks Banco Wiese Ltdo and Banco de Lima Sudameris, has had some difficult years and the Italian parent has injected hundreds of millions of dollars to improve its balance sheet. However, one local banking analyst said that Wiese Sudameris is likely to be of interest to international banks with a small or medium-sized presence in Peru. The analyst, who preferred to remain unnamed, said US banks Citibank and BankBoston could be potential suitors. Both US banks are strong in the corporate segment, but lack any significant retail presence. CONTACT: IntesaBci Investor Relations: Piazza della Scala, 6 20121 - Milano Fax: (39) 02 8850 2587 E-mail: investorelations@intesabci.it Contacts: Andrea Tamagnini, Tel: (39) 02 8850 3180 Marco Delfrate, Tel: (39) 02 8850 2622 Cristina Paltrinieri, Tel: (39) 02 8850 3571 Carla De Alberti, Tel: (39) 02 8850 3159 Giorgio Grossi, Tel: (39) 02 8850 3189 Anna Gervasoni, Tel: (39) 02 8850 3466 Maria Vittoria Buscicchio, Tel: (39) 02 8850 7114 Manuela Banfi, Tel: (39) 02 8850 3273 BANCO WIESE SUDAMERIS Dionisio Derteano, 102 Esquina con Miguel Seminario Lima 27, Peru Phone: +51-1-211-6000 Fax: +51-1-440-7945 Website: http://www.bws.com.pe Luis F. Wiese de Osma, Chairman Eugenio Bertini, CEO Carlos Palacios Rey, President, Executive Committee ================================= T R I N I D A D & T O B A G O ================================= BWIA: President Optimistic on BWIA's Recovery --------------------------------------------- BWIA President and Chief Executive Officer Conrad Aleong remains optimistic on the recovery of the airline industry despite his own warning that BWIA may spiral into receivership. However, the graphs the Company had shown to the media reveal that for BWIA, recovery might not be a breeze. The graphs also showed that 60 percent of the Company's expenditure was not under direct management control, according to the Trinidad Express. Competition from other aircraft had lowered the Company's earning's significantly. The months of July and August would usually account for 40 percent of their annual earnings. The Company's profits were also eaten up by the increasing fuel and security costs. Cost cutting had been focused on the other 40 percent of the expenditure that is under the control of the management. This includes passenger services expenses, marketing and employee costs. Earlier, Aleong announced that BWIA's would cease flying all its planes except the Airbus A340s and Boeing 737s, reducing its business in the region by half, and will lay off 40 pilots in January. The executive team had also received cuts in their pay. However, Aleong assured the employees that there will be no other retrenchments and pay cuts. The airline would also reduce the size of the meals and other "extras" on the flights. On being criticized for charging higher fares than most other international carriers, Aleong explained that BWIA depends largely on its regional income making it difficult for the airline to reduce ticket rates. The carrier had also drawn up plans to save at least US$1 million per month until the carrier can make it through the rough times. With the employees, expression of support for the airline, Aleong is confident of BWIA's survival. CONTACTS: BWIA West Indies Airways Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, Chief Financial Officer (Trinidad) BWIA: Maintains Unions' Support in Turnaround Plans --------------------------------------------------- BWIA employees are supporting the stricken company's efforts to save money. The Trinidad Guardian reports that the employees were given a chance to talk with the Company's president and chief executive Conrad Aleong. Many took the chance to offer suggestions on cost cutting measures. While the unions for BWIA have assured airline CEO, Conrad Aleong of their commitment to save the airline, they also expressed some concerns. Paul Schutz, the airline's chief finance officer said, "The response has been tremendous. Ideas are coming in from all departments and the mood of the staff is very encouraging. With the initiatives being actively considered, we are starting to see the light at the end of the tunnel." Earlier, a report from the Caribbean Investor reveals that BWIA was expecting to lose about TT80.7 million (US$13 million) this year. Despite, this show of loyalty, the chairman to the Trinidad and Tobago Airline Pilots Association (TTALPA), Captain Edward Goddard voiced concerns on Aleong's latest statements. Goddard said that Aleong's statements on the Company's troubles may lead to their losing attractiveness in the market. President of the Aviation and Communication Workers Union (ACAWU), Christopher Abraham asked for further particulars on the concessions. TTALPA is also asking for more details on the action plan of the Company to save US$1 million. Both TTALPA and ACAWU pledged loyalty to the airline as long as these concerns are addressed. BWIA had also updated its operational status, continuing to serve its routes. Bookings are still low, continue coming in as many prepare for winter vacation. CONTACTS: BWIA West Indies Airways Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, Chief Financial Officer (Trinidad) ============= U R U G U A Y ============= BANCO COMERCIAL: Attracts Brazilian Investor -------------------------------------------- Brazilian investment company Brasilinvest Emprendimentos e Participacoes is eyeing a stake in Uruguayan Banco Comercial SA. Citing El Pais newspaper, Business News Americas reports that the Brazilian company has already handed a takeover proposal to the Economy Ministry and the central bank. Comercial is owned by international banks J.P. Morgan Chase & Co., Credit Suisse First Boston and Dresdner Bank AG. Brasilinvest's proposal could still see the international banks as well as the Uruguayan government maintaining a small stake in the bank, El Pais said. However, the proposal would require the World Bank's International Financial Corporation to invest as much as US$50 million. Bank depositors and employees would also turn some of their savings and salaries into bank shares, the newspaper said. Comercial, one of Uruguay's largest banks, was intervened together with several other local banks in July and August due to a massive bank run caused by the Uruguayan financial system's vulnerability to Argentina's financial crisis. Comercial's problems were also aggravated by a very public scandal in which some of its owners were accused of illegal capital flight and money laundering. CONTACT: BANCO COMERCIAL Cerrito No. 400, 11100 Montevideo Phone: 960-394/97 Fax: 963-569 Home Page: www.bancocomercial.com.uy *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Ma. Cristina Canson, Editors. Copyright 2002. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *