/raid1/www/Hosts/bankrupt/TCRLA_Public/021106.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, November 6, 2002, Vol. 3, Issue 220
Headlines
A R G E N T I N A
AOL Latin America: 3Q02 Losses Shrink; Cash Outlook Reaffirmed
* World Bank Extends Argentine Debt Payment Deadline
B R A Z I L
AES CORP.: Waives Early Tender Bonus Date
AES CORP.: Latin American Assets Under Moody's Review
BANESTES: Three Banks Qualify to Bid For Sale
CEMAR: Three Companies Pre-Qualify To Join Race For Control
EMBRATEL: Fails NYSE Ongoing Compliance; Negotiating Solution
GLOBOPAR/TV GLOBO: S&P Lowers Ratings to 'D'; Off Watch
KLABIN SA: Debt-Refinancing Agreements To Be Signed This Week
LIGHT: Parent Extends EUR205 Million Loan To Meet Obligations
LIGHT/ELETROPAULO METROPOLITANA: Parents End Crossholdings
TELEMAR: Exec Says Pegasus Buy was "Defensive" Move
* Brazil Plans Major Refinancing of Debt Due This Month
C O L O M B I A
SEVEN SEAS: Will Accept Guaduas Bids Until Month-End
J A M A I C A
AIR JAMAICA: Gilmore Recommends Solution To Keep Airline Flying
M E X I C O
EMPRESAS ICA: Scores $136.6M Contract On Two Cryogenic Plants
SATMEX: Details Debt Amendment Consent Solicitation
T R I N I D A D & T O B A G O
BWIA: Caricom Wants BWIA In The Air
V E N E Z U E L A
CERRO NEGRO: Moody's Lowers Ratings To Ba1
HAMACA HOLDING: Rating On $600M Senior Secured Loans Cut To Ba1
PETROZUATA FINANCE: Moody's Cuts Rating On $1B Sr. Secured Bonds
SINCOR FINANCE: Moody's Reduces Rating On $1.2B Sr. Secured Loans
PDV AMERICA: Moody's Cuts Credit Rating Below Investment Grade
- - - - - - - - - -
=================
A R G E N T I N A
=================
AOL Latin America: 3Q02 Losses Shrink; Cash Outlook Reaffirmed
--------------------------------------------------------------
America Online Latin America, Inc. (NASDAQ-SCM: AOLA) reported
Monday narrowed per-share losses for the third quarter ended
September 30, 2002, and reaffirmed that the Company expects
current funding to allow it to finance operations into the fourth
quarter of 2003. The results mark AOL Latin America's ninth
straight quarter of lowered per-share losses.
The Company's third quarter net loss applicable to common
stockholders shrank by more than 45% to $39.9 million, or $0.59
per class A common share, basic and diluted, compared with a loss
of $73.7 million, or $1.10 per share, for the quarter ended
September 30, 2001, and nearly 11% from a loss of $44.6 million,
or $0.66 per share, in the second quarter ended June 30, 2002.
The Company's third quarter net loss before dividends on
preferred stock was $35.2 million, or $0.10 per share, on a pro
forma fully diluted basis, improving from a loss of $69.1
million, or $0.21 per share, on the same basis a year ago, and a
loss of $39.9 million, or $0.12 per share last quarter.
In line with previous announcements, the Company reported that
its total revenues declined to $17.6 million in the third
quarter, down from $18.7 million in the quarter ended September
30, 2001, and $18.5 million in the second quarter of 2002. The
drop in revenues from the prior year quarter was primarily due to
a decline in advertising and other revenues as well as sharp
currency devaluations. Total revenues measured in local currency
rose approximately 10% over the prior year quarter and
approximately 7% over the second quarter 2002.
Subscriber revenue totaled $15.8 million, up from $13.7 million
in the September 2001 quarter, reflecting an increase in the base
of paying members. However, subscriber revenue fell compared with
$16.2 million in the second quarter of 2002, again as a result of
currency devaluations. Excluding regional currency devaluations,
subscription revenue would have risen approximately 36% year-
over-year and approximately 9% over the second quarter 2002.
Advertising and other revenue totaled $1.8 million, compared with
$5.0 million in the quarter ended September 30, 2001, and $2.3
million in the second quarter of 2002. The reduction in third
quarter advertising and other revenues is attributed primarily to
continued softness in online advertising markets in the region as
well as currency devaluations during the period.
As a result of the Company's continued efforts to target higher
value members and reduce the number of members not paying on a
timely basis, AOL Latin America's membership base declined,
ending the quarter with 1.20 million members, down 8%, or
approximately 107,000 members during the quarter. As with AOL
Latin America's previous member reports, the 1.20 million members
include those participating in the services' free trial
promotional periods, as well as members of the co-branded AOL
Brazil service with Banco Itau, whose time online is subsidized
by the bank. The Company's overall efforts to improve the revenue
contribution of its member base are expected to result in further
declines in membership in the near term.
As the Company implemented and utilized more efficient member
acquisition channels, member acquisition expenses decreased in
the period. For example, AOL Brazil now has more than 200 points
of sale in retailers with onsite member registration and
validation capabilities, while AOL Mexico expanded these
capabilities by almost 100% to more than 200 locations since the
end of the first quarter of 2002. In Mexico, the Company actively
marketed long-term prepaid access packages specifically targeted
at cash payers. This package is a growing method of payment among
Mexican members.
Although currency devaluations in the region had a negative
effect on revenues, they were also the primary contributor to a
decline in operating expenses during the quarter. In addition,
AOL Latin America continued to benefit from network
infrastructure resizing and a call center efficiency drive
executed in earlier quarters. These reduced expenses helped the
Company improve its cash on hand.
AOL Puerto Rico reported its second consecutive quarter of
operating profits in the third quarter. Profits of approximately
$250,000 were slightly below results from the prior quarter.
Unlike AOL Latin America's other services, AOL Puerto Rico is
able to leverage both America Online's US-based billing
infrastructure and software client along with AOL Latin America's
local and culturally-specific content. AOL Puerto Rico's focus on
one-to-one personal membership acquisition through kiosks in
shopping centers and retail outlets is now used as a key
acquisition strategy among other AOL Latin America services.
The Company expects to receive NASDAQ's ruling shortly on its
previously-announced plan proposing to remedy its noncompliance
with the required $35 million market capitalization requirement
for continued listing of its class A common stock on the NASDAQ
SmallCap Market (Marketplace Rule 4310(c)(2)(B)(ii)). AOL Latin
America last month presented a plan to the NASDAQ Listing
Qualifications Panel designed to remedy this noncompliance,
including an agreement by its two largest stockholders, America
Online, Inc. and the Cisneros Group of Companies, to convert a
sufficient number of shares of preferred stock to class A common
stock so that the market capitalization of the class A common
stock exceeds the required $35 million threshold.
Charles Herington, President and Chief Executive Officer, said:
"AOL Latin America continues to make progress in narrowing losses
by streamlining operations and strengthening our base of paying
members. In a difficult economic environment, we narrowed per-
share losses for the ninth consecutive quarter and we now expect
to be able to finance operations into the fourth quarter of 2003.
Our two principal stockholders -- America Online, Inc. and the
Cisneros Group of Companies -- continue to support the business,
as evidenced by their participation in the preferred stock
conversion plan submitted to NASDAQ."
Highlights
Over the past several months, AOL Latin America continued to make
progress on several fronts, including:
-- New Content: AOL Latin America continued to enhance its robust
content offerings with several new partners, including Amar e
Muito Bom, which will provide exclusive content about
relationships and other related topics to AOL Brazil members.
In addition, AOL members in Argentina will enjoy educational
content, interactive games and other kid-friendly offerings
from TodoKids as well as up-to-the-minute lottery information
and other related news from TuJugada.
-- Advertising and Marketing Partners: During the quarter, the
Company continued to attract top-caliber partners, including
General Motors, Hewlett Packard, Banco do Brasil, Coors,
Energizer, American Express, United Airlines and Ford Motor
Company.
-- Marketing Acquisition Partners: AOL Brazil and AOL Mexico now
have agreements with substantially all of the branded PC
manufacturers in the region as well as a growing number of
off-brand PC distributors for membership acquisition through
these lower-priced machines.
-- Executive Appointments: During the quarter, AOL Latin America
appointed two seasoned executives with regional experience to
key roles: Gustavo Rubio as Vice President of Interactive
Marketing and Osvaldo Banos as Executive Vice President and
Chief Financial Officer.
-- Financing: AOL Latin America expects that the March 2002
financing agreement of up to $160 million from AOL Time Warner
Inc., of which $80.8 million has been drawn as of November 4,
2002, together with cash on hand, will be sufficient to fund
its operations into the fourth quarter of 2003.
About AOL Latin America
America Online Latin America, Inc. (NASDAQ-SCM: AOLA) is the
exclusive provider of AOL-branded services in Latin America and
has become one of the leading Internet and interactive services
providers in the region. AOL Latin America launched its first
service, America Online Brazil, in November 1999, and began as a
joint venture of America Online, Inc., a wholly owned subsidiary
of AOL Time Warner Inc. (NYSE:AOL), and the Cisneros Group of
Companies. Banco Itau, a leading Brazilian bank, is also a
minority stockholder of AOL Latin America. The Company combines
the technology, brand name, infrastructure and relationships of
America Online, the world's leader in branded interactive
services, with the relationships, regional experience and
extensive media assets of the Cisneros Group of Companies, one of
the leading media groups in the Americas. The Company currently
operates services in Brazil, Mexico and Argentina and serves
members of the AOL-branded service in Puerto Rico. It also
operates a regional portal accessible at www.aola.com. America
Online's 35 million members worldwide can access content and
offerings from AOL Latin America through the International
Channels on their local AOL services.
The company's press release contains forward-looking statements
within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, including statements
regarding (i) the expected results of recent initiatives to
improve the revenue contribution of our membership base and
further operating efficiencies, (ii) future losses, revenue and
membership levels and (iii) our expectation that current funding
will allow us to continue to finance operations into the fourth
quarter of 2003. These forward-looking statements are subject to
a number of risks and uncertainties, which are described in our
Annual Report on Form 10-K for the period ended December 31,
2001, and from time to time in other reports we file with the
SEC, as well as the following risks and uncertainties: our
limited cash position, the impact our continued losses will have
on our ability to finance our operations, currency exchange
rates, uncertainty relating to our ability to convert our
subscribers into paying subscribers, the success of the co-
branded Banco Itau service, our limited operating history,
uncertainty regarding the success of our targeting marketing
initiatives and technology designed to improve validation,
macroeconomic developments in Brazil and Mexico, the actions of
our competitors and our ability to penetrate our markets. Actual
results could differ materially from those described in the
forward-looking statements.
To see financial statements:
http://bankrupt.com/misc/AOL_LatAm.htm
CONTACT: AMERICA ONLINE LATIN AMERICA, INC., Fort Lauderdale
Financial Community
Monique Skruzny, 954/689-3256
aolairr@aol.com
or
News Media
Fernando Figueredo, 954/689-3200
LatAmPressMail@aol.com
* World Bank Extends Argentine Debt Payment Deadline
----------------------------------------------------
Argentine Economy Minister Roberto Lavagna announced that the
country has received an extension for debt payments due to the
World Bank. Reuters reported the new deadline is Nov. 14, from
the original deadline of Nov. 9.
Mr. Lavagna made the announcement after his return to Argentina
from talks with the IMF, which failed to achieve results for the
country. He stressed that, since the country was not granted a
new loan package from the IMF, it would be very hard for the
country to pay of its debts, as it would not use its Central
Banks reserves to pay off the multilateral lenders.
Lavagna said that the administration would never touch the
reserves in order to maintain stability. The amount needed to pay
the World Bank is roughly 10 percent of the reserves.
Lavagna said the country simply couldn't afford to lose part of
the reserves, as it would further devalue the local currency,
which lost about 70 percent of its value this year. The absence
of an IMF aid and with clear intentions of not touching central
bank reserves, Argentina would have to default on US$800 million
debt payment due to the World Bank this month.
World Bank President James Wolfensohn gave the deadline extension
to give the country time to secure the money needed to make the
payments in question.
Argentine President Duhalde clarified that the country will
continue to pursue talks with the IMF until an agreement that
does not hinder an incipient recovery from depression, and is
acceptable to both sides is reached.
===========
B R A Z I L
===========
AES CORP.: Waives Early Tender Bonus Date
-----------------------------------------
The AES Corporation (NYSE: AES) announced Monday that it had
waived the deadline by which holders of its outstanding
$300,000,000 8.75% Senior Notes due 2002 ("2002 Notes") and
$200,000,000 7.375% Remarketable and Redeemable Securities due
2013, which are puttable in 2003 ("ROARs"), must tender in order
to be eligible to receive the early tender bonus payment.
Holders that tender on or prior to 5:00 p.m., New York City time,
on November 8, 2002, the exchange offer expiration date, and do
not withdraw such securities will, if the exchange offer is
consummated, be entitled to such early tender bonus payment in
the amount of $15 for each $1,000 principal amount of 2002 Notes
tendered and $5 for each $1,000 principal amount of ROARs
tendered. Consummation of the exchange offer is subject to a
number of significant conditions.
The offering of the new senior secured notes in the exchange
offer is being made only to "qualified institutional buyers" and
"persons other than a U.S. person" located outside the United
States, as such terms are defined in accordance with Rule 144A
and Regulation S of the Securities Act of 1933, as amended.
The new senior secured notes will not be registered under the
Securities Act of 1933, or any state securities laws. Therefore,
the new senior secured notes may not be offered or sold in the
United States absent an exemption from the registration
requirements of the Securities Act of 1933 and any applicable
state securities laws. This announcement is neither an offer to
sell nor a solicitation of an offer to buy the new notes.
CONTACT: THE AES CORPORATION
Kenneth R. Woodcock, 703/522-1315
AES CORP.: Latin American Assets Under Moody's Review
-----------------------------------------------------
The Latin American assets of US-based AES Corporation will be
downgraded or reviewed, according to Moody's Investors Service's.
Recently, Moody's downgraded the senior secured BLR250 million
senior notes of AES Sul Distribuidora Gaucha de Energia S.A. (AES
Sul) to Caa1 from B3 (global local currency scale). The credit
rating agency also downgraded the rating of AES Tietj Holdings,
Ltd. (Tietj Certificates Grantor Trust, the issuer) to B2, from
Ba2. The downgrades reflected concerns about cash flow. Moody's
maintains a negative outlook on the ratings.
Meanwhile, Moody's placed the Baa2 senior secured debt rating of
AES Puerto Rico, L.P. (AES PR, the project) on review for
possible downgrade due to repeated delays of the project in
achieving commercial operations.
Moody's also placed AES' Chilean unit AES Gener S.A.'s rating
under review for possible downgrade. Over the weekend, Moody's
downgraded the rating on the senior unsecured notes of AES Gener
S.A. to Ba2 from Baa2. Moody's attributed the downgrade to AES
Gener's weak cash flow relative to cash flow needs including debt
service, failure to meet plans for restructuring of its asset
base, and significant reliance on cash flows from subsidiaries
located in non-investment grade countries.
Trouble at the parent company, which is attempting to restructure
and lighten its own heavy debt burden, underlies the financial
weakness of these subsidiaries. Moody's recently downgraded the
senior unsecured debt rating of AES, reflecting weak cash flow
relative to its substantial debt burden, concerns about liquidity
pressures, and the impact of weak power market conditions on
operations in Brazil, Argentina, Venezuela, the United Kingdom
and the United States.
CONTACT: AES GENER S.A.
Mariano Sanchez Fontecilla 310 Piso 3
Santiago de Chile
Phone: (56-2) 6868900
Fax: (56-2) 6868991
Home Page: www.gener.com
Contact:
Robert Morgan, Chief Executive
Laurence Golborne Riveros, Chief Financial Officer
BANESTES: Three Banks Qualify to Bid For Sale
---------------------------------------------
Three banks have qualified to bid for the sale of Brazil's Banco
Estado do Espirito Santo SA (Banestes), according to a Dow Jones
report. Brazil's central bank named the Banco Safra, Banco
Bradesco SA (BBD) and Banco Itau SA (ITU) as the qualifiers. All
of them are among the top ten retail banks in the country.
The prospective buyers will have the privilege to view Banestes'
books on Nov. 12, when a "data room" for the ledgers will be
opened. Banestes reported a net profit of BRL10.2 million in
2001, up from 2000's BRl7.6 million. The state government of
Espiritu Santo controls Banestes. The Banestes sale coincided
with the sale of four other federal-run state banks before the
year ends.
CONTACT: BANCO ESTADO DO ESPIRITU SANTO, S.A.
Avenida Princesa Isabel, 574, Bloco B/9§ andar - Centro
Ed. Pallas Center - CEP 29019-900.
Vit¢ria - ES - Brasil
Phone: +55 27 3383 1395, 3383 1396
Fax: +55 27 3383 1398
Homepage: http://www.banestes.com.br/
E-mail: decam@banestes.com.br
Contacts:
Joao Luiz de Menezes Tovar, President
Marcos de Oliveira Pereira, Finance Director
BANCO BRADESCO
Pr‚dio Novo - 4§ ANDAR
Cidade de Deus, S/N, Osasco,
CEP.: 06029-900 Sao Paulo, Brasil
Phone: (55-11) 3684-9229 / 9302 / 2086
Fax: (55-11) 3684-9775
Home Page:
http://www.bradesco.com.br/html/banco_bradesco/
Contact:
Investor Relations
E-mail:
4260.jean@bradesco.com.br
4260.bernardo@bradesco.com.br
4260.luciano@bradesco.com.br
4260.andressa@bradesco.com.br
BANCO ITAU S.A.
Rua Boa Vista, 176
01014-919 Sao Paulo, Brazil
Phone: +55-11-237-3000
Fax: +55-11-5582-1133
Home Page: http://www.itau.com.br
Contacts:
Olavo Egydio Setubal, Chairman of the Board
Roberto Egydio Setubal, President and CEO
Geraldo Soares, Investor Relations Superintendent
Pra‡a Alfredo Egydio de Souza Aranha, 100
Torre Concei‡ao - 11§ andar
04344-902 - Sao Paulo - SP
Phone: +5511 5019-1549
Fax: +5511 5019-1133
BANCO SAFRA
Av. Paulista, 2100 - Sao Paulo
Brazil - 01310-930
Phone: (11) 3175-7575
Home Page: http://www.safra.com.br/ingles/index.asp
Contact: Carlos Alberto Vieira, President
CEMAR: Three Companies Pre-Qualify To Join Race For Control
-----------------------------------------------------------
Of the four companies presenting pre-qualification documents to
bid for the insolvent Maranhao state distributor Cemar, three
companies made it to the list of pre-qualified bidders. According
to Business News Americas, the companies are SVM Participacoes e
Empreendimentos, part of the GP Capital group of GP
Investimentos; Docas Investimentos; and Canada's Brascan
Participacoes Financeiras.
Brazil's power regulator Aneel disqualified US-based investment
group Franklin Park Energy and its partner Reservoir Capital
Partners, for failing to comply with the pre-qualification
requirements.
The three successful companies have until November 29 to send
their proposals. Rather than offering cash for the shares, the
companies are being asked to provide the best solution to resolve
Cemar's outstanding debt problem. The successful proposal will be
announced on December 17.
Aneel intervened Cemar on August 21, after its parent company,
US-based PPL Global, forced Cemar to file for protection from
creditors. At the time, PPL said creditors had forced it to
abandon talks to sell the company to Franklin Park.
Cemar, which distributes electricity to about 1 million people in
Maranhao state, has been hurt by declining power demand and
losses triggered by nine months of power rationing that ended in
March. The drop in revenue forced the Company to miss payments on
its BRL560 million (US$180 million) debt and forced PPL Corp. to
write off all of its US$317 million investment in the unit.
CONTACT: COMPANHIA ENERGETICA DO MARANHAO
Av. Colares Moreira, 477
65075-441 - Sao Luiz- MA
PHONE: (98) 217-2119
FAX: (98) 235-3024
WEBSITE: http://www.cemar.com.br/
CREDITORS: CENTRAIS ELETRICAS BRASILEIRAS S.A. - ELETROBRAS
Avenida Presidente Vargas 409, 13 Andar
20071-003 Rio de Janeiro Brazil
Phone: (21) 2514-5151
Fax: +55-21-2242-2697
Home Page: http://www.eletrobras.gov.br
Contacts:
Cladio da Silva avila, President
Jose Alexandre Nogueira de Resende, Director of
Financial and Market Relations
Investor Relations Division
Phone: (0XX21) 2514-6207 / 2514-6333
Av. Presidente Vargas, 409 - 9 andar
20071-003 - Rio de Janeiro - RJ
Email: arlindo@eletrobras.gov.br
CENTRAIS ELETRICAS DO NORTH DO BRAZIL - ELETRONORTE
Av. Presidente Vargas, 489 -13 andar.
20071-003- Rio do Janeiro RJ
Phone: + (55+61) 429 5139
Fax: +(55+61) 328 1373
E-mail: elnweb@eln.gov.br
Home Page: http://www.eln.gov.br/
Contact:
Mr. Arlindo Soares Castanheira, Investor Relations
Phone: 55 21 2514.6331
55 21 2514.6333
Fax: 55 21 2242.2694
E-mail: arlindo@eletrobras.gov.br
FLEETBOSTON FINANCIAL CORP.
100 Federal Street
Boston, MA 02110
Phone: (617) 434-2200
Fax: (617) 434-6943
URL: http://www.fleet.com/home.asp
MAJOR SHAREHOLDERS:
PPL GLOBAL (90%)
11350 Random Hills Road
Suite 400
Fairfax, VA 22030
Phone: 703-293-2600
Fax: 703-293-2659
William F. HechtChairman, President/CEO
John R. Biggar, Executive Vice President/CFO
EMBRATEL: Fails NYSE Ongoing Compliance; Negotiating Solution
-------------------------------------------------------------
Embratel Participacoes S.A. (Embratel Participacoes or the
"Company") (NYSE:EMT; BOVESPA: EBTP3, EBTP4), the Company that
holds 98.8 percent of Empresa Brasileira de Telecomunicacoes S.A.
("Embratel"), announced Monday that it has been notified by the
New York Stock Exchange (NYSE) for not meeting their ongoing
compliance rule of a stock price trading above US$1.00 for a
period exceeding 30 days. Embratel is currently in discussions
with the NYSE with respect to this issue.
Embratel's management is working on the improvement of Embratel's
operating performance. The Company's third quarter earnings
release shows this improvement has been continuous over the past
three quarters. Embratel is also in the process of discussing its
2003 financing program and believes that when this financing
program is completed and the uncertainties regarding the
Brazilian economy are defined there will be more clarity with
respect to the investment in the stock.
Embratel is the premier communications provider in Brazil
offering a wide array of advanced communications services over
its own state of the art network. The Company is the leading
provider of data and Internet services in the country. Service
offerings include: advanced voice, high-speed data communication
services, Internet, satellite data communications and corporate
networks. Embratel is uniquely positioned to be the all-distance
telecommunications network of South America. The Company's
network is has countrywide coverage with 28,868 km of fiber
cables comprising 1,068,657 km of optic fibers.
CONTACT: EMBRATEL PARTICIPACOES
Silvia M.R. Pereira, Investor Relations
Tel: (55 21) 2519-9662
Fax: (55 21) 2519-6388
Email: silvia.pereira@embratel.com.br
or invest@embratel.com.br
EMBRATEL PARTICIPACOES
Helena Duncan, Press Relations
Tel: (55 21) 2519-3653/3654
Fax: (55 21) 2519-8010
Email: hduncan@embratel.com.br
GLOBOPAR/TV GLOBO: S&P Lowers Ratings to 'D'; Off Watch
-------------------------------------------------------
Standard & Poor's Rating Services said Monday it lowered the
corporate credit ratings on Brazilian media companies Globopar
S.A. and TV Globo Ltda. to 'D' from double-'C'. The ratings were
removed from CreditWatch, where they were placed on Oct. 29,
2002.
The rating action follows confirmation that Globopar did not make
an interest payment of approximately $3 million, which was due
Nov. 1 under the syndicated credit facility of Globopar. "While a
legal default will only be effective on Nov. 6, after a five-day
grace period on the payment, Standard & Poor's considers this
missed payment a default as Globopar is not expected to pay
within the grace period. Once the legal default occurs, it will
trigger a cross-default under most of Globopar's debt, forcing
the company into a general default," stated Standard & Poor's
credit analyst Milena Zaniboni.
Globopar has approximately $1.2 million in debt, and guarantees
another $410 million of debt at subsidiaries.
Standard & Poor's expects to revise the ratings after the group
is able to reach an agreement with its creditors, and is able to
present a business plan and a renegotiated debt structure.
ANALYST: Milena Zaniboni, Sao Paulo (55) 11-5501-8945
KLABIN SA: Debt-Refinancing Agreements To Be Signed This Week
--------------------------------------------------------------
Klabin SA, which missed payments on a local debenture of BRL120
million Nov. 1 and a US$50-million Eurobond this Monday,
completed negotiations for a new financing package that will help
the Brazilian pulp and paper maker meet the recently missed
payments. According to Dow Jones, Klabin plans to meet these
obligations before the end of a 30-day grace period following
those deadlines. If the Company meets the payments before the
grace period ends, it avoids defaulting.
Klabin still faces around BRL1.3 billion ($1=BRL3.560) of debt
coming due during the next 12 months, around US$60 million in
Eurobonds come due in December. But the Company, in a conference
call Monday, said it would be able to repay its debt. Klabin has
been working with the Brazilian Development Bank (BNDES), and
major local banks to find a way to meet its refinancing needs
until the second half of 2003.
"The negotiation was concluded...the structured finance operation
will allow the Company to repay its short-term debt," said Klabin
chief executive officer, Miguel Sampol.
The two sides are now analyzing their contracts and expect to
sign an agreement this week, Sampol said, adding that he won't be
able to disclose further details on the deal before this part of
it is done.
Klabin has struggled with its debt burden in recent months, as
investors have been reluctant to spend on Brazil amid concern
over weak pulp and paper prices and a possible government debt
default.
Last month, Standard and Poor's lowered Klabin's ratings to B-
from BB- on concern the Company may not have enough cash to meet
debt payments.
In June, Klabin had BRL43.7 million (US$12.3 million) in cash and
BRL63 billion in short-term investments. But its debt at that
time stood at about BRL2.67 billion
According to Martha Chavez-Parizot, a vice-president at New York-
based Miller Tabak Roberts Securities, about 70% of what Klabin
owes banks and bondholders is linked to the U.S. dollar.
CONTACT: Ronald Seckelmann, Financial and IR Director
Luiz Marciano Candalaft, IR Manager
Tel: (55 11) 3225-4045
E-mail: marciano@klabin.com.br
Paulo Roberto Esteves
Tel: (55 11) 3848-0887 Extension 205
Email: paulo.esteves@thomsonir.com.br
LIGHT: Parent Extends EUR205 Million Loan To Meet Obligations
-------------------------------------------------------------
Light Servicos de Eletricidade S.A. obtained loan from its French
power company EDF, reports Business News Americas. EDF lent its
Brazilian subsidiary EUR205 million at a cost of Euribor - the
Eurozone's interbank interest rate - plus 6.6% a year. The loan
will help meet Light's cash flow requirements for 4Q02.
Late last month, Standard & Poor's downgraded Light's local
currency rating to B/Watch Negative from BB/Negative. The ratings
agency also downgraded Light's foreign currency rating to B/Watch
Negative from B+/Negative.
At that time, S&P believed that even with a substantial
capitalization - almost US$1 billion, out of which US$400 million
were new contributions - from EDF, significant maturities in
2003, including a US$150 million medium-term note coming due in
February, impose significant refinancing risks.
LIGHT's ratings were put on CreditWatch negative until a clear
refinancing strategy is presented.
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
LIGHT/ELETROPAULO METROPOLITANA: Parents End Crossholdings
----------------------------------------------------------
Brazil's securities commission CVM approved the final step in the
process to end the crossholdings between Rio de Janeiro
distributor Light and Sao Paulo distributor Eletropaulo
Metropolitana, which is now controlled by US-based AES, reports
Business News Americas. In 2001, AES and French power EDF, which
controls Light, agreed to buy out each other's shares in
Eletropaulo and Light. The CVM has now approved the final step,
delinking the shares of AES local holding company AES Elpa from
those of Light. As of Wednesday, AES Elpa will trade as a
separate company on Sao Paulo's Bovespa stock exchange.
TELEMAR: Exec Says Pegasus Buy was "Defensive" Move
---------------------------------------------------
The move to buy data transmission provider Pegasus was a
defensive move for the Brazilian fixed line holding company Tele
Norte Leste Participacoes (NYSE: TNE) and its operating
subsidiary Telemar. In a report from Business News Americas,
investor relations director for Telemar, Marcos Grodetzky,
disclosed that the decision aims to counteract expansion plans of
the company's rivals.
One of the company's rivals, Telesp had created its own data
transmission line this year. Another competitor Brasil Telecom is
currently negotiating with Metrored and Globenet for a 19.9
percent stake in both companies. Long distance operator Embratel
is still Brazil's largest, but it lack last-mile connectivity.
The boards of both TNE and Telemar approved the acquisition plans
last Thursday.
CONTACTS: Tele Norte Leste Participacoes
Rua Lauro Miller 116/22 andar-Botafogo
22299-900 Rio de Janeiro, Brazil
Phone: +55-61-327-5544
Fax: +55-61-617-7090
Home Page: http://www.telemar.com.br
Contacts:
S‚rgio Lins de Andrade, Chairman
Jos‚ Fernandes Pauletti, VP Operations and Interim
President
Francisco Tosta Valim, VP Finance
* Brazil Plans Major Refinancing of Debt Due This Month
-------------------------------------------------------
The government of Brail plans to refinance as much as 96 percent
of government fixed-rate and floating-rate debt due this month,
reports Bloomberg. An increase on the demand for Treasury notes
is expected since the elections held on Oct 27.
As much as BRL25 billion (US$7 billion) in local currency,
National Treasury fixed-rate and floating-rate bonds or a
combination of the two is planned for release to refinance the
majority of BRL25.8 billion in debt due this month. The rollover
target excludes dollar denominated debts, also due this month.
Last month, the government refinanced only about 42 percent, or
BRL8.5 billion of the BRL20 million in debts due. The demand for
government debt has declined on concerns that a new
administration would trigger a default on debts. The country has
about US$300 billion in debt.
However, the Treasury said that a demand for inflation indexed-
debt has increased as the inflation rate climbed. The Treasury
also said it has plans to hold auctions to sell and buy back such
debts.
===============
C O L O M B I A
===============
SEVEN SEAS: Will Accept Guaduas Bids Until Month-End
----------------------------------------------------
Seven Seas spokesman Daniel Drum announced the company's
agreement to accept offers, until the end of this month for its
57.7 percent operating stake in the Dindal and Rio Seco
association contracts that make up Colombia's Guaduas field,
reports Business New Americas.
Seven Seas, a U.S.-based oil company owns the said stakes through
its local subsidiary GHK Company Colombia. Chile's Sipetrol owns
32.9% and the US' Cimarrona 9.4%.
The Company's Guadas assets include a 40-mile pipeline from
Guaduas to La Dorada. It also owns the Deep Dindal prospect,
where exploration work had been abandoned, waiting for additional
financing and a potential farm0-out agreement.
In other news, Seven Seas has entered an agreement to amend its
note purchase and loan agreement with Chesapeake Energy,
thwarting a potential default.
According to the report, the amendment waives Chesapeake's right
to monthly escrow payments equal to one-sixth of the semi-annual
US$6.9mn interest payment on Seven Seas' US$110mn of 12.5% senior
subordinated notes, including a payment due on October 10, 2002,
the statement said.
However, the Company may still miss the US$6.9mn semiannual
interest payment due on November 15, 2002, the statement said.
Seven Seas Petroleum Inc. is an independent oil and gas
exploration and production company operating in Colombia, South
America.
CONTACT: SEVEN SEAS PETROLEUM INC.
Daniel Drum, Investor Relations, +1-713-622-8218
=============
J A M A I C A
=============
AIR JAMAICA: Gilmore Recommends Solution To Keep Airline Flying
---------------------------------------------------------------
John Gilmore, a founding member of the Air Jamaica Acquisition
Group, wrote a letter offering a suggestion to save the Caribbean
Airlines from an ultimate collapse. The Caribbean Investor
relates the following contents of the letter:
Re: AIRLINES OF THE CARIBBEAN
Dear Sir,
As a founding member of the Air Jamaica Acquisition Group that
negotiated the purchase of Air Jamaica from the Government of
Jamaica I have watched the development of the airline industry in
the Caribbean region with interest. The present situation is
clearly unsatisfactory - losses all round funded by the taxpayer
with no prospect of profitability. I would like to suggest an
approach towards a solution.
The current problems being experienced by Air Jamaica, BWIA and
LIAT - all requiring immediate and substantial government support
to sustain/extend loss making operations - may present an
opportunity to get those airlines (through pressure from their
government `minority' shareholders) to agree on a first step
towards an integrated airline system for the region, both
internally and externally increasing efficiency, eliminating
duplication and generating profitability.
An umbrella management integration - an "Airlines of the
Caribbean" grouping - a step up from an alliance - involving co-
ordinated planning, scheduling, systems, purchasing etc. while
leaving the operational identities intact could work well. It
would need an experienced CEO, draw on existing management and
function under the direction of a board drawn from the airlines
and governments involved.
It would operate through agreement but would hold the government
direct shareholdings and be able to vote them on commercial lines
in conjunction with other shareholders - it would in effect have
'effective control' through that shareholding and over time bring
a measure of rationalisation and integration to internal and
external air services as well as significant economies from the
enhanced scale and elimination of duplication.
The difficulty as always on these regional matters is that the
opportunity arises because of the problem creating the
opportunity: however the problem is immediate and once the cheque
is issued to fix the immediate problem, the opportunity is lost.
Decision making at the senior level here required generally
involves lengthy and extensive analysis and compromise so that
the eventual decision is too far delayed in time and watered down
by compromise to be effective - thereby tainting the solution
initially proposed and indeed the overall objective in this case
regional airline integration
The opportunity this time is clear: Air Jamaica needs US$70
million - now; BWIA are on the brink and in need of immediate
government funding; LIAT have just received government financial
support but will need more. All the governments in the region
have stated their support for ''integration'. The governments
have the leverage.
The problem in a nutshell. There is a solution on which the
governments agree - integration. There is a mechanism "Airlines
of the Caribbean" that will be politically acceptable and start
the process in motion. There is a chance to make a decision.
The question is how to get an Executive decision out of a non
executive body - the heads of the various governments - while the
opportunity exists through the leverage provided by the current
financial problems.
This problem has confounded better minds than mine. However, all
the ingredients are there for a solution. Absent a solution the
citizens of the region will continue to cover the inevitable
continuing losses and suffer from a fragmented airline system.
My thought would be that the "Airlines of the Caribbean"
management be based in Barbados - which would give it
geographical independence from the airlines involved in a country
with good airline connections, an excellent infrastructure and no
substantial economic interest in the airlines the subject of the
integration process.
I am, Sir,
Yours sincerely,
John Gilmore
===========
M E X I C O
===========
EMPRESAS ICA: Scores $136.6M Contract On Two Cryogenic Plants
--------------------------------------------------------------
ICA Fluor Daniel, the Mexico-based partnership of Fluor
Corporation (NYSE: FLR) and Empresas ICA Sociedad Controladora
(NYSE: ICA), announced Monday that it has been awarded a US$136.6
million contract to provide engineering, procurement,
construction and start-up support services for two plants and one
fuel terminal for Pemex Gas y Petroqu¡mica B sica. Located in
Reynosa, Tamaulipas, Mexico, the two plants will cool feed gas so
that liquid hydrocarbons can be separated out and recovered.
The consortium formed by ICA Fluor Daniel and Linde Process
Plants Inc., with Ortloff technology as licenseor, will develop
the project, which is scheduled to be completed in 550 days.
"This project offers to our client a 98 % propane recovery,
accomplished through a very straightforward process. The design
allows minimizing gas consumption and the use of a compact Liquid
Recovery Unit with low-pressure drops and energy conservation,"
said Jorge Borja, ICA Fluor Daniel general director. "The project
confirms ICA Fluor Daniel`s capacity to provide its clients cost-
effective solutions focused on efficiency and environmental
protection."
Pemex Gas y Petroqu¡mica B sica is a subsidiary of Pemex, the
Mexican state-owned petroleum company.
ICA Fluor Daniel has a wide range of experience in the
engineering, procurement and construction of chemical,
petrochemical, cement, telecommunications, refining, power,
manufacturing and automotive plants. Founded in 1947, ICA has
completed construction and engineering projects in 21 countries.
For more information, visit www.ica.com.mx
Fluor Corporation (NYSE:FLR) provides services on a global basis
in the fields of engineering, procurement, construction,
operations, and maintenance and project management. Headquartered
in Aliso Viejo, California, Fluor is a Fortune 500 company with
revenues of $9 billion in fiscal year 2001. For more information,
visit www.fluor.com.
SATMEX: Details Debt Amendment Consent Solicitation
---------------------------------------------------
Satelites Mexicanos, S.A. de C.V. ("Satmex") announced Monday
that it launched a consent solicitation to the holders of its
101/8% Senior Notes due 2004 (the "Fixed Rate Notes") seeking a
majority of such holders' consent to amend the insurance covenant
contained in the indenture governing the Fixed Rate Notes to
conform the insurance requirements under that indenture to
insurance coverage currently available on commercially reasonable
terms in the space insurance market. Concurrently with the
consent solicitation, Satmex has also launched a solicitation
seeking a waiver from the majority of the holders of its Senior
Secured Floating Rate Notes due 2004 (the "Floating Rate Notes")
of the covenant in the indenture governing the Floating Rate
Notes that restricts Satmex's ability to amend the insurance
covenant in the Fixed Rate Note indenture. As a condition to the
amendment, Satmex will also need to obtain a waiver from the
majority of the lenders under its revolving credit facility.
"Satmex management has been working diligently to obtain the most
attractive terms available in the space insurance market for the
upcoming Solidaridad 2 in-orbit policy renewal. I am confident
that our investors and lenders will recognize the progress that
we have made and will support us with the requisite consents,"
said Lauro Gonzalez, chief executive officer of the company.
Both the consent solicitation and the waiver solicitation will
expire at 5:00 p.m., New York City time, on November 25, 2002,
unless extended by Satmex with respect to one or both
solicitations.
UBS Warburg LLC is acting as Solicitation Agent for both the
consent solicitation and the waiver solicitation. D.F. King &
Co., Inc. is the Information Agent for both solicitations. Each
solicitation is being made pursuant to a solicitation statement
dated November 4, 2002 and the related letter of consent or
waiver and instruction letter, which more fully set forth the
terms and conditions of each solicitation. Additional
information concerning the terms of the solicitations may be
obtained from UBS Warburg LLC at (888) 722-9555 (toll-free),
extension 8035 (Attention: Raffaele Cimmino) or extension 1575
(Attention: David Knutson) or outside the U.S. call collect at
(203) 719-8035 (Attention: Raffaele Cimmino) or (203) 719-1575
(Attention: David Knutson). Copies of the solicitation
statements and the related documents may be obtained by calling
D.F. King & Co., Inc., at (800) 714-3305 (toll-free) or (212)
493-6952 (collect), Attention: Edward McCarthy.
Satmex, a leading satellite operator in the Americas, owns and
operates a satellite system through which it offers broadcast,
telephone and telecommunications services to 39 countries in the
region. The Satmex fleet also helps develop rural areas by
offering distance learning and rural telephony services. And,
through its business partners in the NAFTA region and Latin
America, Satmex provides high-speed connectivity to ISPs and
Digital Broadcast Services (DBS), thus contributing to the
integration of Latin America with the rest of the
Continent. Satmex is ISO 9001 certified.
Satmex is a member of the Loral Global Alliance and offers its
customers the advantages of a worldwide network of satellite
capacity, providing global satellite solutions to the needs and
requirements of the Americas. For more information, please visit
the Satmex website at http://www.satmex.com
CONTACT: SATELITES MEXICANOS, S.A. DE C.V.
Edward McCarthy, D.F. King & Co., Inc.
+1-212-493-6952
Web site: http://www.satmex.com
=================================
T R I N I D A D & T O B A G O
=================================
BWIA: Caricom Wants BWIA In The Air
-----------------------------------
Caricom wants to have BWIA's troubles "resolved quickly", said
the organization's Secretary General Edwin Carrington, Saturday,
at a Caricom meeting in Kingstown, St. Vincent. He admitted that
the troubled company had not asked Caricom for assistance, but
added that the region will only be too eager to help.
"BWIA is a regional institution. I don't know where we will be
without it," he said. "There is one thing to criticize, but think
of the Caribbean without BWIA."
St. Vincent Prime Minister Dr. Ralph Gonsalves called the meeting
to formulate solutions to help LIAT, another troubled airline in
the region. Gonsalves clarified that the meeting was not set out
to destroy the competition, the Caribbean Star Airline, but it
aims to resolve the alleged predatory pricing practice in the
routes LIAT shares with Caribbean Star.
The Trinidad Guardian enumerated other leaders attending the
meeting. This includes Minister of Works and Transport Franklyn
Khan, and Civil Aviation Authority director Ramesh Lutchmedial.
CONTACT: British 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, CFO (Trinidad)
=================
V E N E Z U E L A
=================
CERRO NEGRO: Moody's Lowers Ratings To Ba1
------------------------------------------
In a series of related announcements, Moody's Investors Service
downgraded the rating on US$600 million senior secured bonds of
Cerro Negro Finance, Ltd. to Ba1 from Baa3. The outlook on the
rating is negative.
Cerro Negro is one of the four heavy oil projects located in
Venezuela. The other three are Petrozuata, Hamaca, and Sincor.
(See Moody's' explanation below.)
HAMACA HOLDING: Rating On $600M Senior Secured Loans Cut To Ba1
---------------------------------------------------------------
In a series of related announcements, Moody's Investors Service
slashed the rating on US$600 million senior secured loans of
Hamaca Holding LLC. to Ba1 from Baa3. The outlook on the rating
is negative.
Sincor is one of the four heavy oil projects located in
Venezuela. The other three are Petrozuata, Cerro Negro, and
Sincor. (See Moody's' explanation below.)
PETROZUATA FINANCE: Moody's Cuts Rating On $1B Sr. Secured Bonds
----------------------------------------------------------------
In a series of related announcements, Moody's Investors Service
downgraded the rating on the U.S. US$1.0 billion senior secured
bonds of Petrozuata Finance Inc. to Ba1 from Baa3. The outlook on
the rating is negative.
Petrozuata is one of the four heavy oil projects located in
Venezuela. The other three are Cerro Negro, Hamaca, and Sincor.
(See Moody's' explanation below.)
SINCOR FINANCE: Moody's Reduces Rating On $1.2B Sr. Secured Loans
-----------------------------------------------------------------
In a series of related announcements, Moody's Investors Service
reduced the rating on US$1.2 billion of senior secured loans of
Sincor Finance Inc. to Ba1 from Baa3. The outlook on the rating
is negative.
Sincor is one of the four heavy oil projects located in
Venezuela. The other three are Petrozuata, Cerro Negro, and
Hamaca. (See Moody's' explanation below.)
MOODY'S NOTES: The downgrade on the ratings of the four projects
mirrors increasing volatility and political uncertainties in
Venezuela and the potential impact this could have on the
operation of the projects.
Due to the increasing significance of political and country risk
factors as components of the ratings, the differences in the
fundamental economic characteristics of the projects do not
currently justify a rating differentiation between the four
projects.
The Petrozuata project is the only project to have reached final
completion, as defined, and its several, not joint, sponsor
guarantees for the full repayment of all rated debt for non-
completion have fallen away.
The other three projects are in different stages in reaching
final completion and the resultant removal of sponsor guarantees.
Cerro Negro and Sincor, are physically complete and operating,
and are expected to achieve completion in the fourth quarter,
2002 and the first half, 2003 respectively. Hamaca is only 75%
complete, having achieved that milestone as of September 30,
2002.
State oil company PDVSA is responsible for its share of the
guarantees under each of the projects, raising concerns over the
Venezuelan government's cash transfers from PDVSDA to support a
faltering economy and other actions regarding the governance and
independence of PDVSA.
Moody's is maintaining a negative rating outlook on all the
project ratings as it continues to monitor the current
uncertainties in Venezuela and their potential impact both
directly on the projects and on PDVSA's operating and financial
condition as a sponsor and guarantor.
New York
Daniel Gates
Managing Director
Moody's Investors Service
New York
Stephen G. Moore
VP - Senior Credit Officer
Moody's Investors Service
PDV AMERICA: Moody's Cuts Credit Rating Below Investment Grade
--------------------------------------------------------------
Moody's Investors Service downgraded the credit rating of PDV
America Inc., the holding company for most of the U.S. refining
assets of Venezuela's state oil company PDVSA, to below
investment grade, reports Bloomberg. Citing Venezuelan political
unrest and risk in refinancing notes maturing Aug. 1, Moody's cut
PDV America's debt to Ba1 from Baa3. Moody's said the outlook for
New York-based PDV America is negative.
On Sep. 24, Standard & Poor's also downgraded PDV America to BB-,
three levels below investment grade. S&P said then that PDV
America must refinance US$1.1 billion of maturing debt in the
next 15 months.
***********
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
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Information contained herein is obtained from sources believed to
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