/raid1/www/Hosts/bankrupt/TCRLA_Public/030115.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, January 15, 2003, Vol. 4, Issue 10
Headlines
A R G E N T I N A
AOL LATIN AMERICA: Additional Preferred Shares Converted
AT&T LATIN AMERICA: Unable to Meet Requirements, Nasdaq Delists
MULTICANAL: S&P Withdraws 'D' Ratings
* Argentina, IMF Approve Draft LoI on Bailout Funds
B E R M U D A
TYCO INTERNATIONAL: Fitch Rates Convertible Debentures
TYCO INTERNATIONAL: New Chief's Pay Soars On Improved Results
B R A Z I L
ARACRUZ CELULOSE: 4Q02 Results Improve as Pulp Prices Rebound
CERJ/LIGHT: Rio de Janeiro Mulls Lawsuit Over Poor Service
C H I L E
ENAMI: Internal Restructuring Enhances Financial Results
J A M A I C A
AIR-JAMAICA: Counts on Recent Passengers Increase for Turnaround
BANK OF JAMAICA: Huge Losses Raise Concerns
JUTC: Unions Reject 10% Job Cut Proposal
T R I N I D A D & T O B A G O
CARONI LTD: Government Encourages All Workers to Accept VSEP
U R U G U A Y
ANCAP: New Timetable Delays Search For International Partner
BANCO COMERCIAL: CB Liquidates, Fitch Withdraws `DD' Rating
V E N E Z U E L A
PDVSA: Strike Thwarts Potential Nitrogen Project Plans
PDVSA: Threatens to Sue Striking Workers
PDVSA: Chartered Tanker Halts Services Over Unpaid Bills
PDVSA FINANCE: S&P Cuts Note Ratings; CreditWatch Remains
PETROZUATA FINANCE: Strike Prompts Bond Rating Cut to 'B'
- - - - - - - - - -
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A R G E N T I N A
=================
AOL LATIN AMERICA: Additional Preferred Shares Converted
--------------------------------------------------------
America Online Latin America, Inc. (Nasdaq:AOLAC), a leading
interactive services providers in Latin America, announced Monday
that America Online, Inc. and the Cisneros Group of Companies
converted 3,841,044 and 3,387,115 shares, respectively, of
preferred stock to class A common stock. The stock conversion
occurred Monday, January 13, 2003.
AOL Latin America noted that as a result of this conversion there
are now 135,135,137 shares of class A common stock outstanding.
This conversion was effected to support the Company's efforts to
maintain its listing on the NASDAQ SmallCap Market.
AOL Latin America further noted that the stock conversion did not
change the aggregate number of outstanding shares for all classes
of stock; however, the number of shares of class A common stock
increased by the same amount that the shares of preferred stock
decreased. The Company believes that the conversion benefits
class A common stock holders as it includes the forfeiture of
dividends, liquidation preferences, and other preferential rights
associated with the converted preferred stock by the Cisneros
Group of Companies and America Online, Inc.
There can be no assurance that this stock conversion will result
in AOL Latin America's continued listing on the NASDAQ SmallCap
Market beyond January 13, 2003. In the event that the Company is
no longer able to continue trading on the NASDAQ SmallCap Market,
the Company expects that its class A common stock would trade on
the Over-the-Counter Bulletin Board (OTCBB). The OTCBB is a
regulated quotation service that displays real-time quotes, last-
sale prices, and volume information for more than 3,600 equity
securities.
About AOL Latin America
America Online Latin America, Inc. (Nasdaq:AOLAC) 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 http://www.aola.com.
America Online's 35 million members worldwide can access content
and offerings from AOL Latin America through the International
Channels on their local AOL services.
CONTACT: AOL Latin America, Fort Lauderdale
Financial Community:
Monique Skruzny, 954/689-3256
aolairr@aol.com
or
News Media:
Fernando Figueredo, 954/689-3256
LatAmPressMail@aol.com
AT&T LATIN AMERICA: Unable to Meet Requirements, Nasdaq Delists
---------------------------------------------------------------
AT&T Latin America Corp. (Nasdaq: ATTL) announced Monday that it
had received a Nasdaq Staff determination that the company's
shares of Class A common stock will be delisted from the Nasdaq
Small Cap Market as of the opening of business on Friday, January
17, 2003. The determination to delist was a result of the
company's failure to maintain a minimum bid price of $1.00 per
share and failure to maintain either $2,500,000 stockholders'
equity, $35,000,000 market value of listed securities or $500,000
net income from continuing operations. The Company anticipates
that upon delisting its securities will trade on the Over-the-
Counter Bulletin Board (OTCBB). Information regarding the OTCBB
can be found at http://www.otcbb.com.
CONTACT: AT&T Latin America Corp.
(Media)
Lydia Rodriguez, +1-202-689-6323
Lydia.Rodriguez@attla.com
(Investors)
Catherine Castro, +1-202-689-6336
catherine.castro@attla.com
URL: http://www.attla.co
MULTICANAL: S&P Withdraws 'D' Ratings
-------------------------------------
Standard & Poor's Ratings Services said Monday that it withdrew
its 'D' local and foreign currency corporate credit and debt
ratings on Multicanal S.A., at the company's request. Multicanal,
a unit of Grupo Clarin SA, closed the third quarter of 2002 with
US$26 million in cash, but it has an accumulated unpaid debt in
interests of US$62 million and a total debt of US$586 million.
The cable group garnered a "default" rating from Standard &
Poor's after it defaulted on interest payments in February and
April. Multicanal has hired J.P. Morgan Securities Inc. to draft
a debt-restructuring plan.
ANALYSTS: Ivana Recalde, Buenos Aires (54) 114-891-2127
Marta Castelli, Buenos Aires (54) 114-891-2128
* Argentina, IMF Approve Draft LoI on Bailout Funds
---------------------------------------------------
The government of Argentina and the International Monetary Fund
have reached agreement on a draft letter of intent, reports
Bloomberg News. The draft, which will be sent to Washington
today, brings Argentina closer to its first financial infusion
since its default on US$95 billion of debt in December 2001.
Economy Minister Armando Torres revealed that the IMF negotiating
team will remain in the country until Thursday this week make
adjustments to the letter, if necessary.
Fernando Losada, Latin American economist at ABN Amro in New
York, described the loan agreement will be "short-term and will
basically be designed to help Argentina make it through the
elections".
Earlier articles show that the country is trying to provide a
better financial atmosphere for a new administration, schedule to
take over on May 25. Presidential elections will be held on April
28.
Argentina had lost most of its credit lines except the IMF, after
its December 2001 default. The financial crisis in the country
had contributed to the devaluation of the peso by approximately
70 percent. The peso had started recovering, though, gaining 14
percent since the end of September last year.
The new agreement will help the country roll over debt payments
of about US$7 billion coming due within the first half of this
year.
Mr. Torres revealed that the government would make debt payments
of US$680 million due to the Inter-American Development Bank
tomorrow, and US$980 million to the IMF, if a loan from the IMF
were imminent.
Argentina previously said that it will not be using its central
bank reserves to make payments. But a recent news article
indicated that the country may use its reserves to fund upcoming
payments in the even talks with the International Monetary Fund
are not completed by the default date.
To satisfy other IMF requirements, the country had also annulled
the decree requiring dollar-denominated loans to be converted
into the local currency, and lifted the limits on payments for
imports and for the transfer overseas of profits earned by
foreign-owned companies.
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B E R M U D A
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TYCO INTERNATIONAL: Fitch Rates Convertible Debentures
------------------------------------------------------
Fitch rates the $4.5 billion of new Series A and Series B
convertible senior debentures at 'BB' and affirmed, also at 'BB',
the senior unsecured debt of Tyco International Ltd. (Tyco) and
the unconditionally guaranteed debt of its wholly owned direct
subsidiary Tyco International Group S. A. The rating on the
company's commercial paper has been affirmed at 'B'. Fitch has
removed the rating from Rating Watch Negative. The Rating Outlook
is Negative.
The move to a Negative Rating Outlook reflects positive actions
at Tyco that have removed the immediate risk of further
deterioration in the company's liquidity and other concerns such
as corporate governance that were expressed earlier by Fitch.
These actions include the installment of a new executive
management team since July, 2002, the completion of Tyco's
internal investigation that found no significant fraud affecting
the company's financial statements, and the completion of new
financing including $4.5 billion of convertible debt and a $1.5
billion bank facility anticipated near the end of January or
early February. In addition, Tyco's liquidity would benefit from
the cash proceeds of any asset sales although such sales are not
anticipated to involve the company's core operations or to exceed
10% of total revenue.
Despite significant progress addressing short-term maturities,
$3.6 billion of convertible debt that may be put to Tyco next
November, together with cash requirements related to reserves for
purchase accounting and restructuring, could potentially leave
the company with nominally sufficient cash balances by calendar
year-end. In addition, concerns have yet to be fully addressed by
the new management team about Tyco's overall capital structure,
the degree to which Tyco allocates free cash flow to debt
repayment or other uses, its operating performance and ability to
meet internal cash generation forecasts, its long term strategic
direction, and the reestablishment of full access to capital
markets.
Weak market conditions, particularly in the Electronics segment,
and the turmoil surrounding Tyco have contributed to lower
margins and free cash flow. Combined with a heavy debt burden,
this declining operating performance makes debt reduction from
operating cash flow a requirement for any improvement in the
rating. EBITDA/interest incurred fell to 5.5x in 2002, compared
to 9.0x in 2001, and debt/EBITDA has deteriorated as well. Tyco's
higher leverage restricts its flexibility with respect to
acquisitions, capital expenditures and share repurchases and
reinforces the importance of effective and reasonably prompt
action by the new management team to rebuild the company's
financial performance. As further steps are taken in this
direction, Fitch will continue to review the appropriateness of
its ratings.
CONTACT: Eric Ause, CFA 1-312-606-2302
Mark Oline 1-312-368-2073, Chicago
Media Relations: James Jockle 1-212-908-0547, New York
TYCO INTERNATIONAL: New Chief's Pay Soars On Improved Results
-------------------------------------------------------------
The value of the pay package of Tyco International Ltd.'s new
chairman Edward Breen has more than doubled since he was hired.
Compensation research company Equilar Inc. said it is now worth
about US$121 million.
According to a Reuters report, Equilar estimated Mr. Breen's pay
package at US$53.7 million when he was hired. This included 7.35
million options to buy Tyco shares and 1.35 million deferred
stock units.
The report said that the increase in the value of Breen's pay
package is proof of his success in leading Tyco from near-
bankruptcy to a form of financial stability. The Company's market
capitalization has increased by about US$10 billion since Breen
took office. Last week, Breen announced another US$6 billion in
financing for the Company.
The Company's stock was down to US$7 on rumors of Tyco's
bankruptcy. It jumped to US$12.03 the day after Breen was hired
and has steadily increased since then. Shares on the NYSE closed
at US$17.74 Tuesday.
Analysts expect Mr. Breen to consolidate this year Tyco's 126.5
million square feet of floor space, which ballooned 69 percent in
the previous three years. A trimmed payroll and worker
productivity improvements are also on the list of expectations.
Tyco international gained investor confidence after a forensic
audit conducted by lawyer David Boies found no significant fraud
in the Company's books, although they were heavily laden with
mistakes. Another official investigation of the Company's books
is yet to be completed by the Securities and Exchange Commission.
Meanwhile, Tyco has yet to prove it can generate steady earnings
without engaging in additional acquisitions. In its annual
report, Tyco admitted that it is having difficulties in
determining its organic growth due to the rapid pace of
acquisitions and attendant restructurings.
During the tenure of former Tyco chief Dennis Kozlowski, more
than 700 acquisitions were used to boost profits. Mr. Kozlowski
is facing charges of enterprise corruption and grand larceny. The
Company's former finance chief, Mark Swartz, is also under
indictment for the same charges.
===========
B R A Z I L
===========
ARACRUZ CELULOSE: 4Q02 Results Improve as Pulp Prices Rebound
-------------------------------------------------------------
(Results stated in US dollars, according to US GAAP)
HIGHLIGHTS
SALES VOLUME totalled 467,000 tons (1,585,000 tons for the full
year), production totalled 485,000 tons (1,656,000 tons for the
full year) and inventories were 166,000 tons at the end of
December 2002. The Company reported an operating profit of $15.5
million (negatively affected by $41.6 million of ICMS credits
loss provision, with no cash impact) and a net loss of $32.1
million mainly as a consequence of income tax provision of $30.8
with no immediate cash impact. Full year 2002 net income was
$111.9 million. Average list pulp price of $470/ton, in the
quarter, contributed to an adjusted EBITDA of $104.8 million, a
53% margin.
Global Pulp Market Update
Despite the relatively balanced pulp supply scenario, a sluggish
recovery of the main world economies had a negative impact on
global pulp and paper demand with direct impact on prices.
Norscan inventories increased by 77,000 tons during October and
November, well below the seasonal trend over the past 10 years.
At the end of November, Norscan inventories reached 1,680,000
tons, equivalent to 29 days of supply still below the "normal"
level of 1,700,000 tons or 30 days of supply. The beginning of
the restocking in China, influenced by lower pulp prices, was the
main reason for the balanced Norscan inventories, considering
that producers are still operating at high levels.
Eucalyptus pulp prices in general have fallen in December, when
prices in Europe were at US$ 450/ton, approximately $10/ton
premium over NBSK, compared to US$ 30/ton premium at the end of
the third quarter. Increased demand from the Far East, higher
downtime around the holiday period and lower consumer pulp
inventories will help leverage the pulp price recovery in the
first quarter of 2003.
Production and sales
Pulp production totalled 485,000 tons in the fourth quarter of
2002, 43% higher than in the same period of 2001, mainly due to
the additional 166,000 tons produced in Fiberline C in the
period. A total of 340,000 tons of pulp were produced in the new
mill since its start-up date until the end of December. Pulp
sales reached 467,000 tons in the quarter, compared to 349,000
tons in the same period last year. At the end of December,
inventories reached 166,000 tons, or 31 days of production.
In 2002, production was 1,656,000 tons and sales were 1,585,000
tons.
Income Statement - 4 Q 2002
Average list pulp price was $470/ton, compared to $439/ton in the
same period of last year and $503/ton in the third quarter of
2002. Net pulp and sawn wood operating revenues totalled $197.7
million, $56.4 million higher than in the same period of 2001.
Net pulp operating revenues during the fourth quarter of 2002
were $195.5 million compared to $140.2 million in the same period
of last year, mainly as a result of higher pulp prices ($7.8
million) and higher sales volume ($47.5 million).
Total cost of pulp and sawn wood sales was $125.1 million in the
fourth quarter of 2002 compared with $108.5 million in the same
period of last year.
Cost of pulp sales in the fourth quarter was $121.3 million
($260/ton), compared with $105.9 million
($304/ton) in 4Q01. Production cost in the quarter was $208/ton
compared to $262/ton in the same period of last year. Cash
production cost in the quarter was $119/ton compared to $147/ton
in the same period of last year. The fourth quarter 2002 cash
cost figure was impacted by $15/ton related to wood purchases
from Veracel, but was more than offset by the local currency
devaluation, lower fixed costs mainly due to higher volume
produced and lower chemicals consumption in the period.
Approximately 60% of the Company's cash production cost is
correlated to local currency inflation.
Selling and distribution expenses were $7.6 million, or $0.6
million higher than in the same period of last year, mainly due
to higher sales volume.
Administrative expenses were $5.5 million, or $1.6 million lower
than in the same period of 2001, mainly due to lower services
expenses.
Other operating expenses were $44.1 million, or $24.9 million
higher than in the same period of last year, mainly due to a
higher provision for losses on ICMS credits that totalled $41.6
million ($10.8 million 4Q01), partially offset by lower fixed
assets write-off in a total of $0.5 million ($7.0 million 4Q01)
in the period.
Financial Income in the fourth quarter of 2002 was $15.2 million,
compared to $13.7 million in the same period of last year. The
difference was mainly due to higher yield on local instruments,
partially offset by a lower average cash balance.
Financial Expenses were $22.1 million in the fourth quarter of
2002 compared to $12.4 million in the same period of last year.
In the fourth quarter of 2002 there were slightly lower interest
rates and lower average debt balances than in the same period of
last year. However, this did not result in lower financial
expenses because last year's number was reduced by capitalized
interest of $10.2 million.
Currency re-measurement resulted in a net loss of $7.6 million in
the fourth quarter of 2002, lower than the net loss of $13.0
million in the fourth quarter of 2001, reflecting the lower
appreciation of the local currency against the dollar and also a
lower accounting exposure. The closing exchange rate on December
31, 2002 was R$3.5333 per US dollar.
Income tax and social contribution in the fourth quarter of 2002
totalled an expense of $30.8 million, compared to $29.7 million
in the same period of last year, resulting from taxes on income
in the parent company's local currency statements. No income tax
payments were made during the fourth quarter of 2002.
At the end of the quarter, the tax credit balance amounted to $71
million, which will be offset against future tax charges.
Cash investments, at the end of the quarter, totalled $273.9
million, or $35.8 million higher than at the beginning of the
quarter. Out of the total cash balance of $273.9 million, $253.1
million was invested in local currency instruments and $20.8
million was invested abroad, mostly in US dollar time deposits.
Net debt (gross debt less cash holdings) was $519.9 million at
the end of the quarter, or $56.2 million lower than at the end of
the third quarter of 2002, mainly due to the operating cash
generation partially offset by $32.2 million of capital
expenditures and $5.9 million of net translation loss. Net debt
to total capital ratio at the end of December 2002 was 23%,
compared to 24% at the end of September 2002.
EBITDA was US$60.9 million in the fourth quarter of 2002,
compared to US$39.6 million in the same period of 2001 as a
result of higher sales prices, higher sales volume and lower
costs. EBITDA margin was 31%, compared to 28% in the same period
of last year. Fourth quarter 2002 adjusted EBITDA, before other
noncash charges, totalled $104.8 million, compared to $56.1
million in the same period of last year, an adjusted margin of
53%.
The expected capital expenditures for 2003 and 2004 are,
approximately, US$110 million and US$60 million, respectively.
The total accumulated investment in the Fiberline C project
(mill, land, forest and other infrastructure) as of December
31st, 2002, was $655.9 million. Total investment in the mill site
is expected to amount to $500 million, which is $75 million below
budget, mainly as a result of the impact of currency devaluation
on equipment contracted in local currency. The learning curve was
completed in record time of six months on November 2002,
representing an annual capacity of 700,000 tons.
Stock performance, results according to Brazilian GAAP and other
Information
From December 31, 2001 to December 31, 2002, Aracruz's ADR price
increased by 2%, from $18.18 to $18.56. In the same period, the
Dow Jones Industrial Average Index declined 16.76%, while the S&P
Paper and Forest Index declined 16.58%.
Local currency consolidated results under Brazilian GAAP -
Corporate Law totalled a net million ($49.2 million) in the
quarter, affected by an exchange gain of R$ 159.1 million mainly
of exchange variation on foreign currency loans. Aracruz has also
publicly released in Brazil its unconsolidated financial results,
which under Brazilian law are the basis for the calculation of
minimum dividends and income taxes. In the fourth quarter of 2002
Aracruz Celulose S.A. reported an unconsolidated net income of
R$176.9 million (US$50.1 million). 2002 accumulated net income
was R$ 60.5 million (US$ 17.1 million).
On October 21, 2002, the Company announced a share buy-back
program that will last until January 19, 2003. As of December
31st, 2002, 1,374,000 shares (137,400 ADRs) were acquired through
the program.
Based upon the Company's capacity to generate operating cash,
management is proposing to the Shareholders' General Meeting that
a dividend distribution of R$ 247 million ($70 million at the
year-end exchange rate) be made in the second quarter of 2003.
Aracruz Celulose S.A., located in the coastal state of Esp¡rito
Santo, Brazil, is the world's largest producer of bleached
eucalyptus kraft market pulp. All of the high-quality hardwood
pulp and lumber supplied by the company is produced exclusively
from planted eucalyptus forests. The Aracruz pulp is used to
manufacture a wide range of consumer and value-added products,
including premium tissue and top quality printing, writing and
specialty papers. The lumber, produced in a high-tech sawmill
located in the extreme -south of the State of Bahia, is sold
under the brand name Lyptus to the furniture and interior design
industries in Brazil and abroad. Aracruz is listed on the Sao
Paulo Stock Exchange (BOVESPA), on the Latin American Securities
Market (Latibex) in Madrid - Spain and on the New York Stock
Exchange under an ADR level III program (ticker symbol ARA). Each
ADR represents 10 underlying class B preferred shares.
To see financial statements:
http://bankrupt.com/misc/Aracruz_Celulose.pdf
CONTACT: Maur¡cio Werneck (55-21) 3820-8131
invest@aracruz.com.br
Patrick Kilhaney (1-212) 840-0008
Patrick.kilhaney@citigatefi.com
URL: http://www.aracruz.com.br
CERJ/LIGHT: Rio de Janeiro Mulls Lawsuit Over Poor Service
----------------------------------------------------------
Widespread blackouts across the Brazilian state of Rio de Janeiro
on Friday evening and Saturday morning prompted the government to
initiate legal proceedings against power regulator Aneel and
local distributors Cerj and Light, reports Business News
Americas.
According to Seinpe (state energy department) secretary Wagner
Victer, incoming state government officials have been complaining
about Cerj's and Light's poor service for some time. Seinpe has
previously undertaken administrative procedures with Aneel but
got no results, Mr. Victer said.
Seinpe spokesperson Iuri Cardoso revealed that the state of Rio,
together with the federal public ministry, will sue Aneel for
failing to adequately supervise the distributors. Aneel should
have ensured the two distributors provided decent service and
started fining them when they failed to do so, he said.
The state government will join forces with the state public
ministry to file a suit against the two distributors for damages,
Mr. Cardoso said. He added that any fines arising from a
successful prosecution would be returned to end consumers through
compensatory measures.
"Our intention is to resort to the justice system to ensure that
Aneel plays its role as the regulator and supervisor [and]
prevents that abusive price increases, such as those awarded at
the end of last year, are approved without the customer having
the counterpart guarantees on services compatible with the prices
charged," Mr. Victer said in a statement.
Endesa Spain and its Chilean holding Enersis own a combined 79.9%
of Cerj and Portugal's EDP owns 19.5%. Endesa Spain reportedly
asked other shareholders to put up cash equivalent to their
stakes in Cerj to match Endesa's investment.
Light is a subsidiary of French power company Electricite de
France. EdF has been injecting cash into the unit in order to
help it meet its financial obligations.
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
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C H I L E
=========
ENAMI: Internal Restructuring Enhances Financial Results
--------------------------------------------------------
Chile's state-owned National Mining Company (Enami) reported
better results for the year 2002 due to improved operations
results, as well as the reduction plan that helped cuts its
losses. According to an El Diario report, Enami posted losses of
US$25 million in 2002, an 11% decrease from the previous year's
US$28 million. The Company attributed this development to better
operational results, which increased 5%, or US$3.8 million, in
2002.
Also, Enami's non-operational losses results also improved. Non-
operational losses totaled US$30 million, a decrease of US$3
million compared to 2001.
The Company's debt level, which prompted the government's
decision to sell Enami's Ventanas smelting and refinery plant to
the state-owned National Copper Corporation (Codelco), also
decreased by US$10.6 million to a total of US$473 million in
2002.
Jaime Perez de Arce, Enami's executive vice-president, expects
the Company to continue with its good performance this year.
Between March and mid-April, the Company will lay off around 180
workers, or 45% of its total staff of 450 workers.
Improved results at Enami came about despite the fact that the
price of smelted products decreased from US$66.2 per ton on 2001
to US$59.5 per ton in 2002.
CONTACT: ENAMI (Empresa Nacional de Mineria)
MacIver 459,
Santiago, Chile
Phone: 637 52 78
637 50 00
Fax: 637 54 52
Email: webmaster@enami.cl
Home Page: www.enami.cl/
Contact:
Jorge Rodriguez Grossi, President
=============
J A M A I C A
=============
AIR-JAMAICA: Counts on Recent Passengers Increase for Turnaround
----------------------------------------------------------------
Air Jamaica Vacations, the leading provider of air and hotel
vacations to the Caribbean, has seen a 27% increase in passengers
over 2000, in spite of the industry's 2002 lackluster
performance. The in-house vacation division of Air Jamaica
attributes its overall success to the company's expanded Customer
Experience Management strategy, its integrated marketing efforts
and the proximity of its Caribbean destinations to the U.S.
Citing the March 2002 TIA GeoTourism Study, which revealed that
89% of leisure travelers are staying closer to home and 87% are
comfortable with traveling to the Caribbean, Air Jamaica
Vacations President Mark Adams is confident that the Caribbean
will return to the strong performance of previous years. "The
Caribbean is one of the non-U.S. destinations that has grown the
most in popularity since last year. This trend, coupled with our
commitment to service, will be a driving force for growth across
the board," he said.
In fact, contrary to industry trends, Air Jamaica Vacations has
experienced a recent surge in advance bookings for 2003. "Of the
bookings we have on record for the 2003 Winter Season, we're
seeing that 19.7% of those bookings are for travel 90 days out,
and 44% of the bookings are for travel 91 - 120 days out," Mr.
Adams said.
"In just one year we've seen the industry make a dramatic
pendulum swing that has industry stalwarts making significant
cuts in service in order to remain viable. At Air Jamaica and Air
Jamaica Vacations, we believe that service will be a significant
contributor to the industry's recovery," Mr. Adams remarked. "Our
customer satisfaction rating is 98%, and we are focused on moving
the needle to 100% approval rating. We will never cut our
services; that's what we are about," Mr. Adams concluded.
Air Jamaica, the tour operator's parent company, is the fourth
largest international carrier operating in the U.S. and the
second largest airline serving the Caribbean. In 1994, the year
the airline was privatized, the carrier's fleet totaled eight
aircrafts operating a total of 132 flights per week from five
U.S. gateway cities. Today, the airline operates a total of 617
flights per week from 12 U.S. gateway cities to 12 international
destinations.
"The outstanding growth and performance of Air Jamaica and Air
Jamaica Vacations over the past eight years has been the result
of a joint effort and a commitment to putting the customer
first," added Mr. Adams.
According to Mr. Adams, this upturn in business is due in part to
the company's aggressive, integrated marketing efforts. "We've
infiltrated the market from every angle, through our own
extensive marketing and sales efforts as well as through
partnerships with the destinations we serve," Mr. Adams said.
CONTACT: Hill and Knowlton/SAMCOR, Miami
Natalie Saenz
Tel: 305/443-5454
BANK OF JAMAICA: Huge Losses Raise Concerns
-------------------------------------------
The issue regarding Bank of Jamaica's losses must be at the top
of the agenda once more, The Jamaica Gleaner suggests. BOJ's
latest balance sheet revealed that the bank's year-to-date losses
now total US$1.4 billion. Of particular concern is that if the
Central Bank does not have sufficient assets to cover its debts,
the Finance Ministry - that is taxpayers - will ultimately have
to pick up the slack.
But the tale behind the numbers is even worse.
During the December 26, 2001 - December 26, 2002 period, BOJ
reported a US$27.3 billion increase in its borrowings (holdings
of other marketable securities) - from US$26.0 billion to US$53.3
billion. In addition, there was a drawdown on public sector
deposits over the same period from US$26.6 billion to US$10.3
billion - a reduction of $18.3 billion. Taken together then,
government's increased borrowing and drawdown on deposits of
US$46 billion suggest that the bank was busy expanding money
supply.
This increase in money supply occurred at a time when the Central
Bank gave strong assurances that it was keeping money supply
tight consistent with its monetary targets.
Probably the biggest irony of all is that Central Bank Governor
Lattibeaudierre has repeatedly been on record as expressing
concern about the cost to the bank of mopping up liquidity. This
'mopping up' operation occurs when the Bank sells foreign
securities to the market that increases money supply, and then
offers additional instruments, usually at higher rates, to
sterilize these funds that it originally created. In the just
released accounts, these Open Market operations actually had a
negative impact of US$89 billion. In large measure then, the
substantial losses represent the real cost of the circular
monetary policy.
To see balance sheet: http://bankrupt.com/misc/Balance_Sheet.xls
CONTACT: Nethersole Place
PO Box 621
Kingston
Jamaica, West Indies
Tel: (876) 922-0750
Fax: (876) 922-0854
Cable: 'RESERVE' KINGSTON
Telex: 2165/2167/2173
Email: info@boj.org.jm
JUTC: Unions Reject 10% Job Cut Proposal
----------------------------------------
Two unions representing workers of troubled Jamaican Urban
Transit Company (JUTC) said they are not entirely in favor of the
company's proposed layoffs, The Jamaica Gleaner reports. The two
unions had separate meetings with the Company over the weekend to
discuss the planned job cuts.
JUTC reportedly wants to 300 of its 3,300 workers in an attempt
to sustain itself. Although UAWU president Professor Trevor
Munroe admits that reduction of the workforce was necessary, he
said that this should start at the management level. According to
him, JUTC was top-heavy.
The University and Allied Workers Union (UAWU) said they will not
support the company's proposed job cuts unless it consults with
the workers.
Danny Roberts, president of the National Workers' Union, another
union representing JUTC employees said that the job cuts were
"victimization". Mr. Roberts called for an investigation on
JUTC's operations to be conducted by the Auditor-General.
JUTC is considered as technically solvent after an earlier audit
revealed that it is losing US$3.6 million daily. In February last
year, the Company had a negative worth of US$1.13 billion, aside
from an accumulated deficit of US$2.63 billion.
JUTC President Sterling Soares refused to comment.
In a press release Soares and UAWU issued during the weekend, the
Company said, "the restructuring exercise aims, among other
things, to streamline the operation of the service, its depots
and buses.'
Monroe said that workers will be informed of the Company's
financial problems in a series of meetings between Tuesday and
Friday. The workers' suggestions will also be sought out during
the meetings. The AUWU will then meet with the JUTC management on
Jan 20 for further discussions.
Before 2002 ended, Dr. Alton Fletcher, vice-president of human
resources, and John Campbell, vice-president of Engineering
Services quit amid a management review of operations. The Company
denied rumors saying they were forced out.
=================================
T R I N I D A D & T O B A G O
=================================
CARONI LTD: Government Encourages All Workers to Accept VSEP
------------------------------------------------------------
The government of Trinidad and Tobago wants all 9,000 daily paid
workers of state-owned Caroni Ltd to accept the proposed
Voluntary Separation of Employment Plan (VSEP), The Trinidad
Express reports, citing Agriculture Minister John Rahael. The
government would offer the VSEP to daily paid workers and later,
to the Company's staff employee.
Mr. Rahael said that it is best for the workers' interest to
accept the VSEP, as they are assured of their pension and NIS
benefits. They are also given the chance to remain in the
agriculture business as the government plans to lease lands they
can farm.
Earlier reports say that the workers have the option to stay in
the Company, but they will have to face eventual redundancy and
accept a smaller severance package. Minister Rahael disclosed
that in the Cabinet's plans, Caroni will no longer be involved in
the cultivation and harvest of sugarcanes after this year's crop.
Private farmers will then provide the cane for next year.
Mr. Rahael added tha Brechin Castle Factory in Couva will no
longer operate as a sugar mill, after this year's crop. All
milling and harvesting activities will be done at the Usine Ste
Madeleine factory. He said tha the Company will no longer need to
factories, as the target is only 75,000 tonnes of sugar, due to
the restructuring process.
Meanwhile, Rudranath Indarsingh, President General of the All
Trinidad Sugar and General Workers Trade Union claims that the
plan aims to shut Caroni down. Because of this, he had called on
Caroni workers to stay alert for a major protest on the streets
of Port of Spain.
CONTACT: Caroni Limited
Old Southern Main Road, Caroni,
Trinidad & Tobago
Phone: (868) 663-1781 or 662-0879
Fax: (868) 663-1404
All Trinidad Sugar and General Workers' Trade Union
Rienzi Complex
Exchange Village
Southern Main Road, Couva.
President: Mr. Boysie Moore-Jones
General Secretary: Mr. Rudranath Indarsingh
Tel. 868-636-2354
Fax. 868-636-3372
E-mail: atsgwtu@opus.co.tt
=============
U R U G U A Y
=============
ANCAP: New Timetable Delays Search For International Partner
------------------------------------------------------------
Plans to open up Uruguay's oil market and for state oil company
Ancap to seek an international partner may not come to fruition
at all in 2003, company director Pablo Abdala told Business News
Americas. The country's electoral court is still counting
signatures presented by a commission seeking to call a referendum
that would overturn the law ending Ancap's monopoly and allowing
it to seek international partners.
The commission claims that, on January 3, it presented more than
650,000 signatures, representing 26% of Uruguay's total
electorate, and higher than the 607,000, or 25% of the
electorate, required to call the referendum. The electoral court
has 150 days to count and verify the signatures, and has asked
for extra resources to ensure it gets the job done on time.
If the counts are deemed valid it is unlikely that a referendum
could happen before July, and there is no way of speeding up the
process, Abdala explained, adding that as things stand, the year
could be spent completing the bureaucratic process without any
progress being made.
Meanwhile, negotiations among Ancap and seven companies over a
possible strategic partnership are developing, although very
slowly, said Abdala. The data room remains open, companies have
requested information and Ancap is now waiting for companies to
present formal proposals for the association, Abdala said. But
the entire process is subject to the referendum, he added.
The seven participants are: Brazil's federal energy company
Petrobras and its Argentine subsidiary Perez Companc, Venezuela's
state oil company PDVSA, Anglo-Dutch conglomerate Shell, the US'
ChevronTexaco, and Spain's Repsol-YPF and Cepsa.
CONTACT: Administracion Nacional de Combustibles, Alcohol y
Portland (ANCAP)
Central Administration Paysando
s/n esq. Avenida del Libertador
Montevideo, 11100 Uruguay
P.O. Box 1090
Phones: +598(2) 902 0608
902 3892
902 4192
Fax +598(2) 902 1136 902 1642
Telex ANCAP UY 23168
E-mail: info@ancap.com.uy
Home Page: www.ancap.com.uy
Contact:
Benito E. Pi eiro, Chief Executive Officer
Phone +598(2) 900 2945
+598(2) 902 0608 Ext. 2253
Fax +598(2) 908 9188
BANCO COMERCIAL: CB Liquidates, Fitch Withdraws `DD' Rating
-----------------------------------------------------------
Fitch Ratings has withdrawn the 'DD' long-term foreign currency
rating of Uruguay's Banco Comercial, following the bank's
liquidation by the Central Bank on December 31, 2002. At end-
October 2002, the bank had UYP25.7 billion (US$950 million) in
assets, UYP35.2 billion in liabilities and negative capital of
UYP9.5 billion. Comercial's operations had been suspended by
local regulators since July 29, 2002.
Simultaneously, Caja Obrera and Banco de Montevideo, which were
similarly suspended, also underwent liquidation by the banking
authorities. Three recovery trust funds, one for each bank, were
created to manage the assets and liabilities of each. Comercial's
recovery fund (Banco Comercial S.A. Fondo de Recuperacion de
Patrimonio Bancario) will give Comercial's liability holders
shares in the fund proportional to their share of liabilities in
the bank; the Central Bank, given its recent equity contributions
to Comercial, will be the largest holder of the fund. In public
auction to banks currently operating in Uruguay, the funds will
attempt to sell all bank assets. Among the bidders will likely be
Nuevo Banco Comercial, S.A., a bank which has not begun
operations but was created by decree by the Central Bank of
Uruguay at end-2002, intended to fill the void created by the
closure of three of the country's largest private sector banks.
Nuevo Banco Comercial will initially be capitalized by the
government with its collection rights to the funds.
Banco Comercial was the largest privately held bank in Uruguay.
Its controlling shareholders consisted of JPMorgan Chase, Credit
Suisse First Boston, Dresdner Bank Lateinamerika, and since early
2002, the government (through the Corporacion Nacional para el
Desarrollo), following a series of capitalizations in efforts to
normalize the bank's operations.
CONTACT: Peter Shaw 1-212-908-0553, New York
Ricardo Chaves 1-212-908-0606, New York
Ana Gavuzzo 54-11-4327-2444 (x73), Buenos Aires
Media Relations: James Jockle 1-212-908-0547, New York
=================
V E N E Z U E L A
=================
PDVSA: Strike Thwarts Potential Nitrogen Project Plans
------------------------------------------------------
Venezuelan state oil company Petroleos de Venezuela S.A. (PdVSA)
has delayed plans for its nitrogen injection projects
"indefinitely", according to Business News Americas. Combined
investments for the said projects would have been about US$2.7
billion, according to previous reports.
The Company has reportedly organized a technical committee to
review the feasibility of the two projects. However, the report
did not indicate when the committee might make a decision.
The Company had planned a nitrogen injection project in eastern
Venezuela, and combined nitrogen injection and power generation
plant in the west.
According to Business News Americas, the projects would have
produced nitrogen for reinjection to increase hydrocarbons
production, and the western project, at Ciudad Ojeda in Zulia
state, would have included a 1,000MW power plant.
The deadline for bids was this month. Before the nationwide
strike hit the country, the Company had sold about 40 sets of
bidding rules.
The strike, which calling for the resignation of the country's
president Hugo Chavez, is supported by thousands of PdVSA
workers. The Company's production is cut drastically.
Chavez had fired managers and plans to split PdVSA into two
separate entities, in retaliation of the strike.
CONTACT: Petroleos de Venezuela SA
Head Office
Apdo 169
Avenida Libertador La
Campina
Caracas
Venezuela
1010-A
Tel +58 212 708 4111
Fax +58 212 708 4661
Web http://www.pdvsa.com
Contact:
Ali Rodriguez Araque, Chairman
Jorge Kamkoff, Joint Vice Chairman
Jose Rafael Paz, Joint Vice Chairman
PDVSA: Threatens to Sue Striking Workers
----------------------------------------
An executive from Petroleos de Venezuela SA warned that the state
oil company will sue striking oil workers for sabotaging the
Company's operations. PDVSA president Ali Rodriguez accused these
workers of deliberately blocking the Company's ability to restore
production to normal levels (prior to the strike) of 3.1 million
barrels a day (b/d).
"There are criminal and civil cases to answer," Rodriguez said,
adding "We have to take anti-sabotage measures to start up
safely."
According to Opec, Venezuela produced 757,000b/d in December.
Venezuela needs an upturn in production as soon as possible
because "we are importing gasoline at prices far above what we
sell it at, which is creating losses for the company," Rodriguez
said.
PDVSA: Chartered Tanker Halts Services Over Unpaid Bills
--------------------------------------------------------
Oil tanker Astro Canopus discontinued services to Venezuela's
state oil company Petroleos de Venezuela S.A., reports Dow Jones
Newswires on Monday. The transport loss added to PdVSA's problems
after the nationwide strike in the country forced it to close its
wells.
An unnamed executive from the crude oil charter company was cited
saying PdVSA's failure to pay its bills to Astro was the reason
for the service cut-off. The Astro Canopus had been on a three-
year time charter to PdVSA.
PdVSA international crude trading manager Ciro Izarra said the
Company is limited to mostly using its own tankers. This keeps
exports down to about 9 million barrels per month, almost one-
tenth of the original number before the strike began.
The Company's current production is estimated to be about 400,000
barrels per day, which is more or less the same as PdVSA's fleet
capacity, according to Izarra's calculations.
The report said that officials from PdVSA did not return calls
for comment.
PDVSA FINANCE: S&P Cuts Note Ratings; CreditWatch Remains
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
US$3.6 billion and Eur200 million senior unsecured notes of PDVSA
Finance Ltd., a wholly owned subsidiary of Petroleos de Venezuela
S.A. (PDVSA), to 'B-' from 'BB' (see list). The notes remain on
CreditWatch, where they were placed December 10, 2002.
The rating action reflects the heightened risk of default due to
the ongoing strike that has crippled the oil industry in
Venezuela and PDVSA Finance's ability to service its debt. The
current rating on the notes reflects the funded liquidity account
available to protect investors at least through the company's
next debt service payment on Feb. 16, 2003. While the liquidity
account, which is fully funded for the amount of this payment and
under control of the New York Fiscal Agent, is available to cover
that payment and structural enhancements are still in place to
prevent sovereign or corporate interference with that payment,
both the ability to generate and export oil and PDVSA's
willingness to allow much needed export revenues to be trapped
offshore have been severely affected by the strikes.
Standard & Poor's is concerned with the ability and willingness
of PDVSA Finance to make subsequent debt service payments as long
as PDVSA's operations remain hampered by its striking workers.
After the February payment, PDVSA Finance's next debt service
payment is in May 2003. While PDVSA Finance has indicated that is
has adequate funds in its collection account for the February
payment, these funds are not restricted and could be distributed
to PDVSA assuming that various covenants are not breached. PDVSA
Finance currently is in compliance with all covenants, however,
there is still the risk of an eventual event of default due to a
covenant violation, including one triggered by the company's low
export volumes.
If the liquidity account is used to make the February payment and
PDVSA Finance does not replenish the account within seven days,
an event of default will be triggered. Investors have the option
at that time of declaring an acceleration of the notes. If an
acceleration event is declared, 100% of all collection deposited
into the offshore account will be used to pay bondholders. If,
however, funds in the liquidity account are not used to make the
February debt service payment, then a payment default in May
would be unlikely as the liquidity account would remain funded.
Standard & Poor's also is concerned about PDVSA's ability to
restore its operations, which could result in diminished coverage
ratios and strained liquidity for PDVSA Finance. Standard &
Poor's believes that restoring PDVSA's production could require
several months and substantial investment, but precise estimates
are difficult at this time given the operational disarray at
PDVSA.
Standard & Poor's notes that the May 2003 debt service payment
could be serviced with only approximately five to six days of
exports based on prestrike volumes (approximately 1.6 million
barrels per day) and prices (approximately US$23.00 per barrel)
of exports to the U.S. (80% of which must flow through the PDVSA
Finance collection accounts). High political uncertainty in
Venezuela and ramp-up requirements make it difficult to assess
whether there will be even the partial resumption of meaningful
export volumes by April, which would be required to provide
enough cash flow to service the notes. Standard & Poor's also
believes that PDVSA and the sovereign's sharply weakened
financial condition has raised the likelihood that even once
exports begin to resume, there may be cash flow diversion from
the structured arrangements (this risk is exacerbated by the fact
that most of the export volume will initially go to Citgo
Petroeum Corp., the U.S. refiner and marketer that is 100%
controlled by PDVSA, who purchased approximately 25% of prestrike
U.S. export volumes).
To speak to an analyst directly regarding PDVSA Finance, contact
Nancy Gigante Chu, Structured Finance Ratings - Latin America,
New York, (1) 212-438-2429; regarding PDVSA, contact Bruce
Schwartz, Corporate Ratings, New York, (1) 212-438-7809; and
regarding the rating action on the Bolivarian Republic of
Venezuela, contact Richard Francis, Sovereign Ratings, New York,
(1) 212-438-7348.
RATINGS LOWERED AND REMAINING ON CREDITWATCH
PDVSA Finance Ltd.
Class Rating
To From
A 6.45% notes due 2004 B-/Watch Neg BB/Watch Neg
B 6.65% notes due 2006 B-/Watch Neg BB/Watch Neg
C 6.80% notes due 2008 B-/Watch Neg BB/Watch Neg
D 7.40% notes due 2016 B-/Watch Neg BB/Watch Neg
E 7.50% notes due 2028 B-/Watch Neg BB/Watch Neg
F 8.75% notes due 2004 B-/Watch Neg BB/Watch Neg
G 6.25% notes due 2006 B-/Watch Neg BB/Watch Neg
H 9.40% notes due 2007 B-/Watch Neg BB/Watch Neg
I 9.75% notes due 2010 B-/Watch Neg BB/Watch Neg
J 9.95% notes due 2020 B-/Watch Neg BB/Watch Neg
K 8.50% notes due 2012 B-/Watch Neg BB/Watch Neg
PETROZUATA FINANCE: Strike Prompts Bond Rating Cut to 'B'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered Monday its rating on
Petrozuata Finance Inc.'s $1 billion bonds to 'B' from 'B+', due
to a continuing shutdown of operations that result from
continuing strike action in Venezuela's oil and gas sector.
The rating remains on CreditWatch with negative implications
where it was placed on Dec 10, 2002. The bonds are guaranteed by
Petrolera Zuata, Petrozuata C.A.
Petrozuata is a heavy oil upgrading project located in Venezuela
that is owned by Conoco Orinoco (50.1%), a subsidiary of
ConocoPhillips (A-/Stable/A-2), and PDVSA Petroleo Y Gas
(49.9%), a subsidiary of
Petroleos de Venezuela S.A. (PDVSA: CCC+/Negative/--).
Petrozuata shut down production and processing operations in
December 2002 due to a lack of natural gas and hydrogen supplies
at the Jose upgrader complex. PDVSA supplies natural gas to
Petrozuata and supplies feedstocks to third parties who produce
and supply hydrogen to Petrozuata. These developments result from
a continuing national strike that includes some management and
employees of PDVSA against the Chavez government. The strike
action has led to a near shutdown in domestic production and
refining, a large drop in exports of crude oil and refined
products, and growing civil unrest between the government and
opposition groups.
Standard & Poor's expects to resolve the CreditWatch as
developments warrant. The rating could fall further if operations
are not restored in the first quarter, an adverse government
intervention into the sector or the project occurs, or the
creditworthiness of the sovereign further deteriorates.
ANALYSTS: Terry A Pratt, New York (1) 212-438-2080
Bruce Schwartz, CFA, New York (1) 212-438-7809
***********
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 2003. 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
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Information contained herein is obtained from sources believed to
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