/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/021227.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 Friday, December 27, 2002, Vol. 3, Issue 255 Headlines A R G E N T I N A CTG: Extends $54M Debt Swap Terms Seeking Greater Participation DIAL ARGENTINA: Parent Company Washes Hands of LatAm Subsidiary * Argentina Heeds IMF Admonition to Ease Currency Controls B E R M U D A TRENWICK GROUP: Finalizes Agreement With Lloyd's LoC Providers TYCO INTERNATIONAL: Postpones Announcement of Probe Results B R A Z I L ACESITA: Shares Jump Anticipating Sale Of CST Stake CEMAR: Judge's Ruling Blocks Aneel's Sale Attempt EMBRATEL: Telesp Blocks Local Telephony Service To Clients C H I L E ENDESA CHILE: Defends CNE Bill Aimed At Resolving Sector Woes MADECO: Signs An Amended, Restated Loan Agreement MADECO: Announces The Price Of Shares SUPERMERCADOS UNIMARC: NYSE Notifies of ADR Price Non-Compliance SUPERMERCADOS UNIMARC: CEO Resigns C O L O M B I A MILLICOM INT'L: America Movil Eyeing Colombian Asset SEVEN SEAS: Sr. Note Holders File Involuntary Bankruptcy D O M I N I C A N R E P U B L I C CENTENNIAL COMMUNICATIONS: S&P Cuts Credit Rating To B J A M A I C A CABLE & WIRELESS: Jamaican Supreme Court Says Monopoly Illegal M E X I C O CORPORACION DURANGO: Ratings Lowered to 'CC'; Outlook Negative SATMEX: Ratings Remain on CreditWatch Negative TV AZTECA: ICC Authorizes Option for 51% of CNI Channel 40 T R I N I D A D & T O B A G O BWIA: Pensioners To Get Shares U R U G U A Y GALICIA URUGUAY: Judge Approves Deposits Rescheduling Proposal V E N E Z U E L A CITGO/PDV AMERICA: Fitch Places On Rating Watch Negative PDVSA: Considers Asset Sale; Threatens To Dismiss Workers - - - - - - - - - - ================= A R G E N T I N A ================= CTG: Extends $54M Debt Swap Terms Seeking Greater Participation --------------------------------------------------------------- Argentine thermo generator Guemes (CTG) informed the Buenos Aires stock exchange that it has extended the terms of an offer to exchange an issue of debentures totaling US$54 million to 2013 from 2012. According to Business News Americas, the decision follows a meeting between the Company, which owns and operates a 245MW thermoelectric plant in Argentina's Salta province, and the debentureholders. Under the debt swap offer, which requires approval from the exchange and the national securities regulator, CTG would pay outstanding interest owing on the bonds at 2% annually, and a bonus of US$7.50 for every US$1,000 worth of bonds. The first offer would exchange the US$54 million debentures for US$32.4 million of variable debentures falling due in 2013, plus a maximum of 24.8 million, US$1-nominal value Class D ordinary shares. The exchange would mean the Company would issue US$600 of new debentures plus 460 ordinary shares for each US$1,000 of existing debenture capital. The second offer proposes exchanging the US$54 million debentures for US$54 million of new variable debentures falling due in 2013. Thus, the Company would issue US$1,000 of new debentures for each US$1,000 of existing debenture capital. CONTACT: Central Termica Guemes S.A. Avenida Leandro N Alam 822 Piso 12 Ciudad Autonoma de Buenos Aires C1001AAQ ARGENTINA Tel. +54 4311-6064/6065/6066 DIAL ARGENTINA: Parent Company Washes Hands of LatAm Subsidiary --------------------------------------------------------------- The Dial Corporation (NYSE: DL) announced on Monday that it has reached an agreement to sell its Argentina business to an entity designated by Southern Cross Group, a private equity investor in Argentina. The transaction is structured as a sale of the assets of Dial Argentina, S.A., which includes the stock it holds of its two subsidiaries, Sulfargen, S.A. and The Dial Corporation San Juan, S.A. The sale is subject to satisfaction of negotiated closing conditions and receipt of approvals under Argentina's antitrust and bulk transfer laws. The sale is expected to close late in the first quarter or early in the second quarter of 2003. The after-tax loss from this transaction in the fourth quarter currently is expected to be in the range of $50.0 to $60.0 million or $0.53 to $0.64 per share (diluted). This non-cash loss includes the reversal of the $95.1 million currency translation adjustment that previously had been recorded as a reduction in equity. In the first quarter of 2002, the Company recorded an after-tax impairment charge of $43.3 million for the Argentina business as a result of adopting the Financial Accounting Standards Board (FASB) Statement No. 142, "Goodwill and Other Intangible Assets." The transaction is expected to yield positive cash flow from the sales proceeds of $6.0 million and tax benefits of approximately $55.0 million. Additionally, because Argentina's earnings are being reclassified to a discontinued operation, estimated 2002 earnings per share from continuing operations before special items is expected to decline by $0.04 to $1.18 (diluted). The Company's Argentina business lost $0.03 per share (diluted) in 2001 excluding special items. A reconciliation of the foregoing pro forma earnings per share numbers to earnings per share under generally accepted accounting principles for 2001 and 2002 is attached. "Although our in-country business remained relatively strong, Argentina is not a good fit for us. Our business is primarily a North American business and Argentina has been a management distraction and challenge," said Herbert M. Baum, Dial's chairman, president and CEO. Sales in Argentina, on a dollar basis, declined from $63.0 million in the first nine months of 2001 to $39.4 million in the same period in 2002, largely because of the devaluation of the peso. The Dial Corporation entered the Argentina market in 1997 when it purchased personal care products maker Nuevo Federal, S.A. and several Procter & Gamble soap brands. The Company also purchased the Plusbelle hair care brand from Revlon in 2000. The sale is consistent with the strategy Baum announced shortly after his selection as CEO in 2000 to fix or jettison businesses that were not performing up to expectations. The Dial Corporation, headquartered in Scottsdale, Ariz., is one of America's leading manufacturers of consumer products, including Dial soaps, Purex laundry detergents, Renuzit air fresheners and Armour Star canned meats. Dial products have been in the American marketplace for more than 100 years. For more information about The Dial Corporation, visit the Company's Web site at www.dialcorp.com . Statements in this press release as to the Company's expectations, beliefs, plans or predictions for the future are forward-looking statements within the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). Such forward-looking statements include the Company's expectations that (i) the sale will close late in the first quarter or early in the second quarter of 2003; (ii) the after-tax loss from the sale will be in the range of $50.0 to $60.0 million or $0.53 to $0.64 per share (diluted); (iii) the sale will yield positive cash flow from the sales proceeds of $6.0 million and tax benefits of approximately $55.0 million; and (iv) earnings per share from continuing operations and before special items in fiscal year 2002 will be approximately $1.18 due to Argentina being reclassified as a discontinued operation. Forward-looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and are subject to numerous known and unknown risks and uncertainties that could cause actual events or results to differ materially from those projected. For example, actual events or results could differ materially if (1) either party fails to satisfy the conditions to closing in the purchase agreement resulting in the deal not being completed in a timely manner or at all; (2) the Argentina government objects to the transaction based upon antitrust concerns; (3) the Company does not successfully complete the bulk sales transfer proceedings in Argentina; (4) the Company is denied the $55.0 million of tax benefits currently anticipated from the sale, (5) there is a further devaluation of the Argentine Peso or economic conditions in Argentina continue to deteriorate, (6) economic conditions in the U.S. deteriorate resulting in lower sales, (7) competition in the categories in which the Company competes continues or intensifies, resulting in lower sales or requiring increased expenditures and lower profit margins to preserve or maintain market shares, (8) efforts to reduce costs are unsuccessful or do not yield anticipated savings, (9) new products are unsuccessful or do not produce the sales anticipated, (10) there are increases in raw material, petroleum, natural gas and/or energy prices, (11) the Company does not achieve the benefits anticipated from steps being taken to try to improve operations and financial results, or (12) the Company experiences a loss of or a substantial decrease in purchases by any of its major customers. These and other factors that could cause actual events or results to differ materially from those in the forward-looking statements are described in "Management's Discussion and Analysis of Results of Operations and Financial Condition -- Factors That May Affect Future Results and Financial Condition" in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. Due to these inherent uncertainties, the investment community is urged not to place undue reliance on forward-looking statements. In addition, the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time. Reconciliation of Pro Forma Earnings to GAAP Earnings Estimated Pro Forma Earnings Per Share Income (Loss) 2001 2002 Income (Loss) Under Generally Accepted Accounting Principles ($1.45) $0.19 - $0.30 Adjusted for: Range of Loss on Disposal of Argentina (0.53 - 0.64) Argentina Impairment Charge (0.46) Argentina Operations (0.03) 0.04 SPC Discontinued Operations (2.21) 0.04 Restructuring Charges & Special Items (0.10) 0.03 Estimated Pro Forma Earnings $0.89 $1.18 * Argentina Heeds IMF Admonition to Ease Currency Controls ---------------------------------------------------------- In a bid to obtain a new aid from the International Monetary Fund, the Argentine government may have to weaken its foreign exchange controls, reports local daily Clarin, without specifying its source of information. According to the report, the IMF wants the country to allow companies to freely remit foreign currency abroad to service their new debts. Argentina, in a bid to strengthen central bank reserves, had imposed restrictions on the amount individuals and corporations may send abroad. Argentina had lost its credit line to the IMF after defaulting on US$95 billion of bonds last December. The country had been in negotiations with the lender for almost a year, without positive results. The United States Treasury expects the two parties to reach an agreement by January. The Clarin noted that this agreement would allow Argentina to roll over its debt to multilateral lenders for most of next year. ============= B E R M U D A ============= TRENWICK GROUP: Finalizes Agreement With Lloyd's LoC Providers -------------------------------------------------------------- Trenwick Group Ltd. ("Trenwick") announced Monday that it had entered into definitive final agreements with its Lloyd's letter of credit providers with respect to the renewal of $182 million of letters of credit supporting Trenwick's Lloyd's underwriting operations. With additional capital provided by Trenwick and National Indemnity Company, Trenwick's anticipated Lloyd's underwriting capacity for 2003 is up to $500 million. Background Information Trenwick is a Bermuda-based specialty insurance and reinsurance underwriting organization with two principal businesses operating through its subsidiaries located in the United States, the United Kingdom and Bermuda. Trenwick's reinsurance business provides treaty reinsurance to insurers of property and casualty risks from offices in the United States and Bermuda. Trenwick's international operations underwrite specialty insurance as well as treaty and facultative reinsurance on a worldwide basis through its London operations. Trenwick has identified certain risk factors which could cause actual plans or results to differ substantially from those included in any forward-looking statements. These risk factors are discussed in Trenwick's Securities and Exchange Commission filings, including but not limited to its most recent Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission, and such discussions regarding risk factors are hereby incorporated by reference into this press release. Copies of such Securities and Exchange Commission filings are available from Trenwick or directly from the Securities and Exchange Commission. CONTACT: TRENWICK GROUP LTD. Alan L. Hunte, 441/298-8082 TYCO INTERNATIONAL: Postpones Announcement of Probe Results ----------------------------------------------------------- Bermuda-based company Tyco International Ltd. said that the announcement of the results of an internal investigation would be on or before December 30, according to the Associated Press, without explaining its reasons for the delay. The Company's annual report is also due that same day. The investigation, headed by lawyer David Boies, is focused on the Company's accounting practices and is aimed at gaining investor confidence after news of malfeasance allegedly done by former executives shocked investors. The Associated Press said that the release of the results could complicate the Company's restructuring of US$5.8 billion in debt. The release of the investigation results was initially promised for release by late fall. The investigation was complete by the late-fall deadline, however, a source told the Wall Street Journal that Tyco may need some time to prepare a regulatory filing summarizing the results. Earlier reports reveal that Boies was not expecting to find any major fraud. However, said the Associated Press, the probe could leave open questions on the Company's acquisition accounting. Another investigation by the United States Securities and Exchange Commission looks into the same issues. Tyco reported revenues of US$36 billion last year. Company shares rose 21 cents to close at US$16.23 Monday on the New York Stock Exchange. 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 Contacts: Gary Holmes (Media) Tel +1-212-424-1314 or Kathy Manning (Investors) Tel +1-603-778-9700 =========== B R A Z I L =========== ACESITA: Shares Jump Anticipating Sale Of CST Stake --------------------------------------------------- The market responded positively to news that two companies have made a joint proposal to buy Acesita SA's stake in Cia. Siderurgica de Tubarao (CST) for about BRL715 million (US$204 million). According to Bloomberg, Acesita's shares on Monday closed at their highest level since March last year, gaining 4 centavos, or 4.3%, to 98 centavos at the Sao Paulo Stock Exchange after Cia. Vale do Rio Doce (CVRD) and Arcelor offered to buy Acesita's 50.1% stake in a holding company called Acos Planos do Sul (APS), which in turn holds 37.29% of the total capital of CST. CVRD, the world's largest producer of iron ore, and Arcelor, the world's largest steelmaker, said in a statement released on Friday they plan to pay about US$21.58 per 1,000 shares. "Acesita has a good cash flow but the problem is its debt," said Lucio Graccho, who manages about BRL1 billion in stocks for HSBC Asset Management in Sao Paulo. "The deal would give Acesita a breath to equalize its debt." At the end of September 2002, Acesita's total gross debt was BRL2.8 billion while cash and marketable securities totaled BRL31 million. Approximately 58% or BRL1.6 billion of the total debt was short-term debt. Acesita, whose owners include Luxembourg-based steel group Arcelor, is is Latin America's sole integrated producer of flat- rolled stainless and silicon steels with an annual production capacity of 850,000 tons of liquid steel. Depending on market demand, Acesita has the flexibility to use its plant's entire capacity for stainless steel production. With 800,000 tons of stainless steel capacity, Acesita would rank among the top 10 flat stainless steel producers, representing approximately 4.7% of world flat stainless steel production. Arcelor's total stainless steel production capacity of about 2.6 million tons represents approximately 15% of world stainless steel production. In 2001, Acesita sold 704,000 tons of steel, of which 17% was exported, primarily to Asia, Europe, and the Americas. CONTACT: Acesita SA Registered Office Av Joao Pinheiro, 580 Centro 30130-180 Belo Horizonte - MG Brazil Tel +55 31 3235-4211 Fax +55 31 3235-4300 Web http://www.acesita.com.br Contacts: Valmir Marques Camilo, Chairman Bruno Le Forestier, Vice Chairman CEMAR: Judge's Ruling Blocks Aneel's Sale Attempt ------------------------------------------------- Brazil's power regulator Aneel will not be able to carry out the sale of Maranhao state distributor Cemar after a state judge upheld two injunctions filed by the state's urban utilities workers union Sintuba against the process. Sintuba president Fernando Pereira revealed to Business News Americas that the union secured the backing of Workers' Party (PT) president in Maranhao, Washington Oliveira, for the first injunction and of the federal public ministry for the second. He explained that the union doesn't want to see the Company revert to the private sector, citing a disastrous two-year experience. The union has asked the federal government to take control of the Company. Cemar was privatized in June 2000 and sold to US-based PPL under a 30-year concession. Since then, according to Pereira, the Company's debt has jumped from BRL200 million to BRL800 million, while service has deteriorated. PPL has now written off its investments in Cemar and given up on its own attempts to sell the Company after failing to please creditors. Aneel intervened in August after Cemar filed for protection from creditors and plans to sell PPL's 84% stake for US$1, but would select the bidder that presented the best financial solution for meeting Cemar's debts. Cemar is viable as a company, generating monthly revenues of BRL40 million, Mr. Pereira said. Sintuba wants a full audit to discover what mistakes were made and where the money was spent. Aneel said it would challenge the two injunctions and, if successful, would restart the sale process. 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: Telesp Blocks Local Telephony Service To Clients ---------------------------------------------------------- Sao Paulo-based fixed line operator Telesp blocked local telephony service to Embratel clients saying it doesn't have an interconnection agreement with the long distance operator, reports Business News Americas. The companies' networks are already interconnected to facilitate testing, however, no final interconnection agreement is in place. According to Telesp, it had sent Embratel an interconnection proposal, but Embratel has launched local telephony services before signing the contract. Embratel launched local telephony operations in Recife and Fortaleza in November after securing interconnection with Telemar. But even in the absence of a full agreement, Embratel believes Telesp is legally required to provide interconnection and said that failure to honor that obligation will result to sanctions by the regulator Anatel. CONTACT: EMBRATEL PARTICIPACOES S.A. Investor Relations Silvia Pereira Tel. (55 21) 2519-9662 Fax: (55 21) 2519-6388 Email: Silvia.Pereira@embratel.com.br invest@embratel.com.br or Press Relations: Helena Duncan/Mariana Palmeira Tel: (55 21) 2519-3653/3654 Fax: (55 21) 2519-8010 Email: hduncan@embratel.com.br mpalm@embratel.com.br ========= C H I L E ========= ENDESA CHILE: Defends CNE Bill Aimed At Resolving Sector Woes ------------------------------------------------------------- A spokesperson from Endesa Chile, the country's biggest power producer, defended the national electricity regulator's (CNE) fast-track bill to regulate transmission costs from criticisms from its fellow generators. Generators AES Gener and Colbun have criticized the regulator's bill saying that it would help Endesa Chile save US$40 million a year in transmission costs, while passing the costs on to smaller generators with plants located closer to their clients. In defense, the Endesa spokesperson said, "The CNE has presented clear and solid arguments to defend its proposal, which is a long-term solution to develop Chile's electricity market." "Everyone has the right to give their opinion, but they don't have a technical basis or solid argument, and what's worse is that they don't offer any alternative to the current problems in the sector." CONTACT: EMPRESA NACIONAL DE ELECTRICIDAD SA Santa Rosa 76 Santiago, Chile Phone: +56-2-630-9000 Fax: +56-2-635-4720 http://www.endesa.cl Contacts: Pablo Yrarrazaval Valdes, Chairman Luis Rivera Novo, Chairman Hector Lopez Vilaseco, CEO MADECO: Signs An Amended, Restated Loan Agreement ------------------------------------------------- Madeco S.A. announced agreement on a new loan agreement with its financial debtholders. Since the beginning of the year 2002, Madeco has being negotiating with its local and international bank debtholders a complete debt restructuring of its total bank loans, the financial advisory was in charge of Deutsche Bank and Morales, Noguera, Valdivieso and Besa acted as the legal counsel for this transaction. The Company's Board of Directors on an Extraordinary Session held on December, 20th, 2002 was informed about the complete subscription of the Amended and Restated Contracts signed between Madeco S.A. and twelve of its local debtholders and two international banks. Those three contracts (one local an two international contracts) were finally ratified on December 18th, 2002 and include the same terms and conditions. Rescheduling the Company's bank loans for a total amount of approximately US$120 million entails: an up-front payment of 30% of the total debt before the capital increase is completed and the remaining 70% of the debt will be rescheduled for 7 years, which includes a grace period of 3 years. The interest rates are TAB ("Tasa Activa Bancaria" or Chilean Inter-bank rate) plus 175 basic points for loans denominated in U.F. and LIBOR plus 220 basic points for loans denominated in United Stated dollars. The contract includes some conditions precedent to effectiveness of the agreements to be accomplished before March 31, 2003. The most important condition required that the founds obtained from the capital increase approved at the Extraordinary Shareholders' Meeting held on November 14th, 2002 will be no less than Ch$49,400,491,450 and with part of those funds, the Company pays 30% of the debt to each one of its bank debtholders. Related to the Company's capital increase, the major shareholder and controller of Madeco has committed the subscription of at least Ch$49,400,491,450. Madeco, formerly Manufacturas de Cobre MADECO S.A., was incorporated in 1944 as an open stock corporation under the laws of the Republic of Chile and currently has operations in Chile, Brazil, Peru and Argentina. Madeco is a leading Latin American manufacturer of finished and semi-finished non-ferrous products based on copper, copper alloys and aluminum. The Company is also a leading manufacturer of flexible packaging products for use in the packaging of mass consumer products such as food, snacks and cosmetics. Readers are cautioned not to place undue reliance on the forward- looking statements included in the above text, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward- looking statements, which may be made to reflect events or circumstances after the date hereof, including, without limitation, changes in the Company's business strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events. CONTACT: MARISOL FERNANDEZ Investor Relations Telefono: (56 2) 520-1380 Fax: (56 2) 520-1545 E-mail: mfl@madeco.cl Sitio Web : www.madeco.cl MADECO: Announces The Price Of Shares ------------------------------------- Madeco S.A. ("Madeco") (NYSE ticker: MAD) announced that, in connection with the Company's capital increase approved at the Extraordinary Shareholders' Meeting held on November, 14, 2002, the Board of Directors at an Extraordinary Session held on December, 20, 2002 agreed to initiate the share registration process with the Chilean Superintendencia de Valores y Seguros (Superintendency of Security and Insurance, or SVS). The Company's Board of Directors fixed the price of each share at Ch$24. The Company has decided not to make the Rights Offering available to holders of American Depositary Shares, or "ADSs", based on a New York Stock Exchange exemption which allows an issuer to exclude ADS holders in such an offering where it is impracticable or unduly expensive for that Company to offer those rights to U.S. holders of ADSs. Neither the Rights Offering transaction nor the shares to be offered and sold in that offering are registered under the U.S. Securities Act of 1933 nor under any U.S. state securities laws. The shares will be offered and sold in a transaction outside the United States and will be offered and sold only to Non-U.S. Persons in accordance with Regulation S under the Securities Act. SUPERMERCADOS UNIMARC: NYSE Notifies of ADR Price Non-Compliance ---------------------------------------------------------------- Supermercados Unimarc S.A. ("Unimarc") (NYSE: UNR) announced that it has received notification from the New York Stock Exchange (NYSE) of its non-compliance with the exchange's requirements for continued listing as a consequence of its ADR price falling below the US$1.00 threshold for a consecutive 30-day trading period. The Company informed the NYSE of its intention to cure this issue. Pursuant to NYSE regulations, the Company is required to cure the non-compliance bringing the 30-day trading day average to above US$1.00 within a period of six months from notification. The NYSE may grant the Company until its next General Shareholders' Meeting in the case that shareholder approval is required for the Company to implement its curing measures. Since the beginning of 2002, the Company has been undergoing a financial restructuring. In January 2002, as a consequence of Argentina's deep economic recession and the general economic slowdown throughout the region, Unimarc believed it was necessary to restructure the Company's liabilities and optimize and rationalize the use of funds and working capital. The Company believes it has made significant progress in its restructuring efforts and will continue to review ways to improve its equity and liabilities' structure. Readers are cautioned not to place undue reliance on the forward- looking statements included in the above text, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward- looking statements which may be made to reflect events or circumstances after the date hereof, including, without limitation, changes in the Company's business strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events. CONTACT: Roberto Fuentes Flores, Investor Relations Tel: +011-56-2-678-7050 Fax: +011-56-2-687-7004 Email: rafuentes@unimarc.cl URL: http://www.unimarc.cl SUPERMERCADOS UNIMARC: CEO Resigns ---------------------------------- Complying with articles 9 and 10 of law 18.045 of the Republic of Chile and following "Superintendencia de Valores y Seguros" regulations, Supermercados Unimarc S.A. (NYSE: UNR) states that on December 19, 2002, the company Board of Directors voted in favor of Mr. Alejandro Seymour Zamora's resignation, who up to that date had served as C.E.O. of the company. For the time being, the Board of Directors of Supermercados Unimarc S.A. will assume C.E.O. duties. =============== C O L O M B I A =============== MILLICOM INT'L: America Movil Eyeing Colombian Asset ---------------------------------------------------- Luxembourg-based Millicom International Cellular may find a buyer for its Colombian wireless operator Celcaribe SA in America Movil SA, Latin America's largest mobile phone company. According to a Bloomberg report, Mexico City-based America Movil is planning to purchase a 95% stake in Celcaribe, which operates in seven provinces along the Colombia Caribbean Coast, for an undisclosed amount. The sale of Celcaribe is anticipated to result in Millicom incurring a book write-off of approximately US$125 million. Millicom, whose credit rating was recently cut by Moody's Investors Service two levels to Caa2 from B3, had been selling assets to pay its debt, which it said was "unsustainable in the long term." Millicom has retained Lazard to assist it in reviewing strategic alternatives to address Millicom's ongoing liquidity needs, including other potential asset sales and divestitures, the availability of new debt and equity financing and potential debt restructuring alternatives. CONTACTS: MILLICOM INTERNATIONAL CELLULAR S.A., Luxembourg Marc Beuls Telephone: +352 27 759 101 President and Chief Executive Officer Jim Millstein Telephone: +1 212 632 6000 Peter Warner Telephone: +44 20 7588 2721 LAZARD Andrew Best Telephone: +44 20 7321 5022 Investor Relations Shared Value Ltd., London SEVEN SEAS: Sr. Note Holders File Involuntary Bankruptcy -------------------------------------------------------- Seven Seas Petroleum Inc. (Amex: SEV) announced that the Company has received notice that the holders of a majority of the Company's Senior Subordinated $110 Million Notes ("Senior Notes") have filed an involuntary bankruptcy petition, Chapter 7, with the United States Bankruptcy Court, Southern District of Texas, Houston Division. As previously announced, the Company is in default under its Senior Notes due to a failure to make a scheduled $6,875,000 interest payment on November 15, 2002. Seven Seas will consider various responses and alternatives prior to taking any action with respect to the petition. The Company's subsidiaries intend to continue operations in the ordinary course and proceed with the closing of the previously announced sale of their 57.7% participating interest in the shallow Guaduas Oil Field and related assets. 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 Tel: +1-713-622-8218 URL: http://www.sevenseaspetro.com =================================== D O M I N I C A N R E P U B L I C =================================== CENTENNIAL COMMUNICATIONS: S&P Cuts Credit Rating To B ------------------------------------------------------ US-Caribbean wireless/broadband operator Centennial Communications had its corporate credit rating downgraded by international credit ratings agency Standard & Poor's from B+ to B, reports Business News Americas. S&P attributed the downgrade to the poor operations of the Company's US operations. "The company's domestic markets have been subject to heightened competition from the larger, more national players, such as AT&T Wireless and Cingular," S&P credit analyst Catherine Cosentino said. "The company also lost about 10,000 subscribers in its US wireless market since May 31, 2002, against a backdrop of overall growth for the industry," she said. The agency is also concerned about Centennial's ability to meet financial maintenance covenants under its secured bank loan agreement, especially if operating cash flow from the Caribbean wireless and broadband businesses do not grow materially in the remainder of fiscal 2003. Centennial reported about US$1.7 billion total debt for its fiscal second-quarter ended November 30, 2002. "If the company is not able to obtain additional liquidity cushion and demonstrate its ability to meet bank financial covenants in the near term, the ratings are likely to be lowered by more than one notch," Cosetino said, adding that Centennial's ratings may also be affected by a negative assessment of its business plans and their execution prospects for the second half of fiscal 2003 and fiscal 2004. Centennial's Caribbean operations offer service to a population of approximately 13 million people in Puerto Rico, the Dominican Republic, and the U.S. Virgin Islands using digital wireless and terrestrial broadband telecommunications technologies. The U.S. Wireless operations, on the other hand, serve markets with six million people in six states in two clusters: Indiana, Michigan and Ohio, and Louisiana, Mississippi and Texas. Welsh, Carson, Anderson & Stowe and an affiliate of The Blackstone Group are controlling shareholders of Centennial. Approximately nine percent of Centennial's common stock is publicly traded on Nasdaq under the symbol CYCL. CONTACT: CENTENNIAL COMMUNICATIONS CORP. 3349 Route 138, Bldg A. Wall, NJ 07719 (732) 556 2200 ============= J A M A I C A ============= CABLE & WIRELESS: Jamaican Supreme Court Says Monopoly Illegal -------------------------------------------------------------- The Supreme Court of Jamaica issued a ruling last Thursday that the monopoly of Cable and Wireless Plc over the country's long- distance telephone market is unconstitutional, reports the Sunday Times. The report indicated the decision came by way of three Supreme Court judges saying that the 2000 telecommunications Act had given C&WJ unfair exclusive rights to the Jamaican long-distance market. The Jamaican government plans to appeal the country's decision, while rival companies such as InfoChammel, Ltd. had applauded the ruling. Earlier reports say that C&WJ had lost its dominant share of the Jamaican mobile phone market to Digicel. However, C&WJ officials refuted the reports, saying Digicel had deliberately exaggerated their figures. The differences between the two companies had gone beyond Jamaica after Digicel filed a complaint to the telecommunications regulator in St. Vincent, alleging that C&WJ had intentionally delayed an interconnection agreement between the two providers. The regulator had threatened to enforce an interim agreement if no agreement is reached soon. The report also indicated that London-based Cable & Wireless may exhaust its 3.8 billion pounds (US$6 billion) of cash within a year after the phone and Internet provider repays debt, revamps its biggest unit and is forced to set aside money, investors said this month. CONTACT: Cable & Wireless PLC Head Office 124 Theobalds Road London England WC1X 8RX Tel +44 (0)20 7315 4000 Fax +44 (0)20 7315 5000 Web http://www.cw.com Contacts: Sir Ralph Robins, Non Executive Chairman Sir Winfried W. Bischoff, Non Executive Deputy Chairman Graham M. Wallace, Chief Executive Robert E. Lerwill, Executive Director Finance =========== M E X I C O =========== CORPORACION DURANGO: Ratings Lowered to 'CC'; Outlook Negative -------------------------------------------------------------- Standard & Poor's Ratings Services said Monday that it lowered its foreign and local currency corporate credit ratings on Corporaci�n Durango S.A. de C.V. to 'CC' from 'B'. The downgrade is based on the Mexican privately held paper, packaging and newsprint company's announcement that certain payments owed on financial obligations (non-rated) have not been paid in accordance with their terms. The outlook on the ratings remains negative. "Because of Corporacion Durango's high debt burden, very tight liquidity, uncertainties about asset sales, low prices for its products and the effect that the economic slowdown has had in the maquiladora export activities, the risk that the company will not pay on a timely basis its debt coupons coming due from Jan. 15 through Feb. 1, 2003, has significantly increased," stated Standard & Poor's credit analyst Manuel Guerena. Corporacion Durango is working jointly with Rothschild Inc. and PricewaterhouseCoopers to evaluate debt restructuring alternatives at the holding company. ANALYSTS: Beatriz Coll, Mexico City (52) 55-5279-2016 Manuel Guerena, Mexico City (52) 55-5279-2011 SATMEX: Ratings Remain on CreditWatch Negative ---------------------------------------------- Standard & Poor's Ratings Services said Monday that its 'CCC+' corporate credit rating on Mexican satellite services company, Sat�lites Mexicanos S.A. de C.V. (Satmex) remains on CreditWatch with negative implications where it was placed on Nov. 8, 2002. Satmex's debt totals about US$530 million. "Although Satmex successfully completed its consent and waiver solicitations requested on Nov. 4, 2002, to amend its insurance covenant and the terms of the indenture that restricted Satmex's ability to amend the insurance covenant in the senior notes indenture, Standard & Poor's is still concerned with Satmex's financial profile because of its high debt levels coupled with lower revenues and cash flows, and tight liquidity," said Standard & Poor's credit analyst Patricia Calvo. Interest on Satmex's high-yield bonds (US$32.4 million annually) and US$1 million on the floating-rate notes' (FRNs) repayment, will have to be paid through a combination of a very limited US$4.8 million disposable cash reserve as of Sept. 30, 2002, US$13 million recently drawn from its revolving credit facility to be paid through its debt escrow account, and approximately US$12 million quarterly EBITDA (US$35 million reported for the first nine months of 2002). Standard & Poor's is concerned that the company could exhaust its remaining liquidity in 2003 given the potential for continued industry weakness. However, the company is still waiting for funding approval by various export- related credit agencies, which would alleviate liquidity issues related to its FRNs. As a result of a reduction in capacity utilization (70% in the third quarter 2002) partly because of the loss of Satmex's largest client, Innova S. de R.L. (B-/Stable/--), Satmex's revenues decreased by 36% during the first nine months of 2002 when compared to the same period of 2001, while its EBITDA coverage of interest decreased to 1.2x from 1.6x. EBITDA margin decreased to 55.6% as of September 2002, from 65.1% a year earlier. Satmex collected the insurance proceeds from the loss of the Solidaridad 1 satellite in January 2001, proceeds that are reserved to fund the construction of the powerful Satmex 6 GEO satellite, scheduled to be launched in the second quarter of 2003, and to fund the company's FRNs interest payments. As part of the insurance proceeds, Satmex had US$24.5 million as of September 2002, reserved in an escrow account for the payment of US$16.9 million annual interests from its FRNs, providing for roughly four months of interest service or to pay the revolving credit facility. Standard & Poor's expects that upon the launch of Satmex 6 GEO satellite, the company will improve the revenue growth potential of its footprint. Satmex's fixed-satellite services were expected to benefit from Internet-related signals transmissions, however the future of this evolving market is now uncertain and less promissory. Satmex is now focusing on the video demand and corporate network markets, which are more stable. Satmex's geographic coverage (or footprint) includes the continental U.S., the Caribbean, and all Latin America except for certain regions of Brazil. To resolve the CreditWatch listing, Standard & Poor's will monitor Satmex's progress in obtaining funds from export credit agencies to alleviate pressure on the refinancing of its senior secured FRNs, as well as the restructuring features of its senior unsecured bonds. ANALYST: Patricia Calvo, Mexico City (52) 55-5279-2073 TV AZTECA: ICC Authorizes Option for 51% of CNI Channel 40 ---------------------------------------------------------- TV Azteca, S.A. de C.V. (NYSE: TZA; BMV: TVAZTCA), one of the two largest producers of Spanish language television programming in the world, announced Monday that on December 20, 2002, the International Court of Arbitration (ICC) notified both TV Azteca and Mr. Javier Moreno Valle, Chairman and CEO of CNI Canal 40, of the final resolution authorizing TV Azteca the option to acquire 51% of Televisora del Valle de Mexico, S.A. (TVM), the concessionaire of CNI Channel 40 in Mexico City. The unanimously reached decision was issued by a three-arbitrator panel, presided over by Colombian Rafael Bernal, and also comprised of Carlos Pastrana and Jorge Gaxiola, both of Mexican nationality. The arbitration authorizes TV Azteca the option to acquire 51% of TVM's equity and declares the disputed agreements are valid and enforceable for TVM and Mr. Javier Moreno Valle. According to the decision issued, TV Azteca could exercise its option to acquire 51% equity stake of TVM starting December 2, 2002, at a price at which the amounts owed to TV Azteca by TVM and CNI Channel 40 since the joint venture started can be deducted. Also, the resolution issued declares unfounded TVM's arguments that the alliance was terminated because the Ministry of Communications and Transport (SCT) had denied its authorization. The statement concludes that TVM and Mr. Javier Moreno Valle have to cover 70% of the total expenses and legal fees of the arbitration procedure. The arbitration issued and granted in favor of TV Azteca is unappealable before the ICC. Also, the arbitration resolution has to go through an execution procedure before the Mexican courts. TV Azteca will maintain open this option recognized and authorized by the ICC. Company Profile TV Azteca is one of the two largest producers of Spanish language television programming in the world, operating two national television networks, Azteca 13 and Azteca 7, through more than 300 owned and operated stations across Mexico. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing US Hispanic market; Unefon, a Mexican mobile telephony operator focused on the mass market; and Todito.com, an Internet portal for North American Spanish speakers. INVESTOR RELATIONS: Bruno Rangel 5255 3099 9167 jrangelk@tvazteca.com.mx Rolando Villarreal 5255 3099 0041 rvillarreal@tvazteca.com.mx MEDIA RELATIONS: Tristan Canales 5255 3099 5786 tcanales@tvazteca.com.mx ================================= T R I N I D A D & T O B A G O ================================= BWIA: Pensioners To Get Shares ------------------------------ BWIA pensioners under its 1971 pension plan will be receiving 15.5 percent share of the airline, after the Ministry of Finance stated its wish to complete the transfer, through the T&T Airways Corporation (Old BWIA). Those under 50, those over 50 who accepted the VSEP offered by BWIA and who are still employed there, will be given 500 shares each and a part of the residual shares on the basis of contributions. According to a report from the Trinidad Guardian, the arrangement for the transfer of these shares was supposed to be carried out in 1995 under the Acker agreement signed by government and a number of foreign investors led by Edward Acker, the then chairman of BWIA, to privatize the airline. However, according to Trade and Industry Minister Ken Valley, who was Minister of Finance at the time the agreement was signed, the transfer was postponed due to the change in government. "We started the process in 1995, but with the change in government, it was put on hold. When I came back into office, I wondered why it was never completed. But we are doing everything to get it done," Valley said. 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) ============= U R U G U A Y ============= GALICIA URUGUAY: Judge Approves Deposits Rescheduling Proposal -------------------------------------------------------------- Grupo Financiero Galicia S.A. announced that the rescheduling proposal for 100% of Banco Galicia Uruguay's deposits in dollars that had been accepted by 82% of total depositors, was approved by the intervening judge. This rescheduling will now be applied to 100% of depositors. The first 3% in cash repayment will occur during the first days of January after receiving the Uruguayan Central Bank's instructions. The latest court ruling will release close to US$947 million in deposits and pave the way for the reopening of Banco Galicia Uruguay. The favorable reply of Banco Galicia Uruguay's depositors represents the confidence in the bank as a result of long standing reputation of Banco Galicia in the financial system. Banco Galicia Uruguay was the country's second-largest private financial institution in terms of deposits before it was intervened and suspended by the central bank in mid-February after losing US$500 million in deposits between December last year and January 2002. Today, it has some 13,000 clients, 99% of which are Argentines. CONTACT: Peter Richards Managing Director Telefax: (011) (5411) 4343-7528 Email: prichards@gfgsa.com ================= V E N E Z U E L A ================= CITGO/PDV AMERICA: Fitch Places On Rating Watch Negative -------------------------------------------------------- Fitch Ratings has placed the debt ratings for CITGO Petroleum Corporation (CITGO) and PDV America, Inc. on Rating Watch Negative as a result of the heightened uncertainty related to the prolonged political crisis and national strike in Venezuela. Fitch rates CITGO's senior unsecured debt 'BBB-' and PDV America's senior notes 'BB+'. CITGO is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A. (PDVSA), the national oil company of Venezuela. The Rating Watch Negative status reflects the interruption of crude oil supply from PDVSA and related entities as a result of the general strike in Venezuela, which began on December 2. PDVSA is contractually obligated to supply approximately 50% of CITGO's feedstock requirements under long-term crude oil supply agreements. Fitch believes that the supply interruptions from Venezuela will remain in place at least as long as the national strike continues unabated. The oil sector's overwhelming support for the three-week old strike has effectively shut down Venezuela's hydrocarbon industry, disrupting crude oil and derivative product export flows. The continued sovereign uncertainty may result in shareholder interference with CITGO and PDV America, impairing their financial flexibility. A further deterioration in the credit quality of Venezuela and PDVSA could result in a multiple notch reduction in the ratings of PDV America and CITGO. CITGO is actively acquiring crude to maintain refinery operations. To date, CITGO has been able to secure enough alternate crudes to maintain full operations through the middle of January. CITGO believes that it can secure adequate supply over the longer term. However, the refinery's optimal performance is designed for the Venezuelan crude specifications, and as such, alternative crude slates may adversely impact CITGO's overall economics. Fitch believes CITGO's liquidity position is more than adequate to meet anticipated financial obligations over the near term. CITGO has approximately $400 million in liquidity available through the company's credit facilities and trade accounts receivable program. In mid-December, CITGO entered into a new $520 million credit facility to replace the credit facilities maturing in May 2003. CITGO is one of the largest independent crude oil refiners in the United States, with three modern, highly complex crude oil refineries and two asphalt refineries with a combined capacity of 756,000 barrels per day. The company also owns approximately 41% interest in LYONDELL-CITGO Refining L.P. (LCR), a limited- liability company that owns and operates a 265,000-barrel per day crude oil refinery in Houston, Texas. CITGO markets refined products through approximately 13,400 independently owned and operated retail outlets. Contact: Bryan Caviness 1-312-368-2056, Chicago, or Alejandro Bertuol 1-212-908-0393, New York. Media Relations: James Jockle 1-212-908-0547, New York. PDVSA: Considers Asset Sale; Threatens To Dismiss Workers --------------------------------------------------------- Petroleos de Venezuela SA is contemplating selling unprofitable businesses abroad in an effort to compensate for the US$1.3 billion of losses caused by the general strike that has been crippling the Company's activities since December 2, reveals PDVSA President Ali Rodriguez. PDVSA's international assets include stakes in refineries in Germany and gasoline stations in the U.S. Rodriguez, however, didn't say which businesses the Company would sell. In addition, the executive warned that the state oil producer, whose sole shareholder is the government, would also fire workers. "We are trying to manage a major crisis," Rodriguez said, adding, "Strikers have inflicted grave damages on us." Most of the Company's 40,000 workers are taking part in the strike, curtailing exports from the world's fifth-largest supplier and cutting daily production more than 90%. Crude oil rose to a 23-month high on speculation that U.S. refiners have dipped into reserves to make up for missing oil from Venezuela, which supplies about 9% of crude used in the U.S. In July, the oil company warned that 2002 profit would fall 53% from last year to about US$2 billion because of oil production cuts sanctioned by OPEC. Monthly revenue was forecast at about US$2.5 billion before the strike. *********** 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 Oona G. Oyangoren, 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. 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