/raid1/www/Hosts/bankrupt/TCRLA_Public/030203.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, February 3, 2003, Vol. 4, Issue 23
Headlines
A R G E N T I N A
AOL LATIN AMERICA: Meets Requirements to Keep Trading on NASDAQ
COSTANERA: Reports ARS27.2 Mln 2002 Loss
FARGO SA: Parent Cedes Control To Creditors
B E R M U D A
GLOBAL CROSSING: Former Executives Hide Problems
TRENWICK GROUP: To Increase Reserves For Losses in the 4Q02
B R A Z I L
CEMIG: Moody's Cut Sends Shares Plunging
CEMIG: Seeks To Expedite BNDES Loan Agreement To Avoid Fine
EMBRATEL: Targets 35% Share In Corporate Market
LIGHT SERVICOS: Expects Parent's Assistance In Upcoming Payments
SABESP: 18 Tender Processes Postponed As Budget Crunch Ensues
TELEMAR: Board of Directors Accepts CEO's Resignation
VARIG: Plane Seized For Non-Payment of Lease
C H I L E
COEUR D'ALENE: Reports Success At Cerro Bayo Gold/Silver Mine
GASATACAMA: Shelves Bolivian LNG Export Project
C O L O M B I A
EMCALI: Government Proposes Capitalization As Part of Rescue
M E X I C O
GRUPO MEXICO: Asarco Finalizes Agreement With US Justice Dept
GRUPO MEXICO: Payment Doubtful; Fitch Cuts Asarco's Bonds To 'C'
PETROLEOS MEXICANOS: Sells $750M Worth of 5-Yr. Bonds
T R I N I D A D & T O B A G O
BWIA: Unions May Take Legal Action Against BWIA
BWIA: NATUC Condemns Retrenchments
V E N E Z U E L A
CANTV: Offshore Liquidity Prompts S&P 'CCC+' Affirmation
EDC: S&P Affirms 'CCC+' Ratings
PDVSA: Analysts Question Strike Loss Offset Measures
- - - - - - - - - -
=================
A R G E N T I N A
=================
AOL LATIN AMERICA: Meets Requirements to Keep Trading on NASDAQ
---------------------------------------------------------------
America Online Latin America, Inc. (Nasdaq:AOLA) (formerly
Nasdaq:AOLAC), a leading interactive services provider in Latin
America, reported Thursday that it has received notice from
NASDAQ that the Company's class A common stock has regained
compliance with the required $35 million minimum market
capitalization of listed securities. As a result, the Company is
no longer in a conditional listing period and its class A common
stock will resume trading on the SmallCap Market under the symbol
"AOLA," effective the opening of trading Thursday, January 30,
2003.
Charles Herington, President and CEO of AOL Latin America, said:
"We are pleased that America Online, Inc. and the Cisneros Group
of Companies converted preferred shares to support our continued
listing on the NASDAQ SmallCap Market. By taking these steps to
maintain our listing on NASDAQ, we're moving in the right
direction by keeping a liquid trading profile on a well regulated
and transparent market."
On January 17, 2003, AOL Latin America received a 180-day
extension from NASDAQ to comply with the $1 minimum bid price
requirement for continued listing of its class A common stock on
the NASDAQ SmallCap Market. The Company stated it now must have a
closing bid price of $1.00 or higher for at least ten consecutive
trading days commencing no later than June 30, 2003. As such,
there can be no assurances that the Company will remain listed on
the NASDAQ SmallCap Market after June 30, 2003. The Company noted
that it has obtained stockholder approval to effect a potential
reverse stock split to attempt to achieve the $1.00 minimum bid
price. 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:AOLA) (formerly
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, 954/689-3200
LatAmPressMail@aol.com
COSTANERA: Reports ARS27.2 Mln 2002 Loss
----------------------------------------
Argentine thermo generator Central Costanera posted disappointing
results, including a loss of ARS27.2 million (US$8.1 million)
last year, compared to a profit of ARS600,000 the prior year.
Business News Americas said that last year's loss resulted in a
decline of ARS0.185 per share. A statement from the Company
blamed the losses mainly on exposure to inflation, and the
devaluation of the local currency.
Although the Company had higher revenues from exports to Brazil,
total sales went down 20.7 percent from 2001 to ARS412 million
pesos in 2002. The decline was blamed on lower domestic demand
and the conversion of dollar-linked rates into Argentine pesos.
This raised the Company's non-operating losses to ARS511 pesos.
On the other hand, the Company's operating income went up to
ARS175 million, up by 212 percent from 2001 figures. Business
News Americas said this is due to higher export margins combined
with lower production, administration, and sales costs.
Central Costanera, whose net equity was ARS707 million at the end
of 2002, is majority-owned by Chilean generator Endesa Chile.
FARGO SA: Parent Cedes Control To Creditors
-------------------------------------------
The Exxel Group, once Latin America's biggest buyout firm, is
forfeiting control of Fargo SA to creditors as it continues to
unwind investments due to bankruptcies, reports Bloomberg.
Fargo, Argentina's largest bread maker, filed for bankruptcy in
June last year after defaulting on US$150 million of debts.
Deutsche Bank AG, Europe's biggest bank, is Fargo's largest
creditor holding US$30 million of loans. Being the largest
creditor, Deutsche Bank has an option to buy Fargo within three
years, according to a statement filed with the Buenos Aires Stock
Exchange.
"Exercising the option will depend on the evolution of the
company and that of the Argentine economy," said Luis Caputo,
chief executive of Deutsche Bank in Argentina.
Hernan Gestoso, Fargo Chief Executive, indicated that the
management will be able to restore the Company's health in three
years.
"Over the next three years the management will reorganize the
company's debt to make it more viable," Gestoso said.
CONTACT: COMPANIA DE ALIMENTOS FARGO S.A.
Panamericana Y Marcos Sastre
1617 General Pacheco
Buenos Aires, Argentina
Phone: 541-14-736-6500
Fax: 541-14-736-6540
Contacts:
Carlos Barbero
E-mail: vbullrich@fargo.com.ar
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B E R M U D A
=============
GLOBAL CROSSING: Former Executives Hide Problems
------------------------------------------------
Global Crossing, Ltd.'s senior executives began efforts to veil
the Company's financial difficulties months earlier than
previously disclosed. A report in the International Herald
Tribune cites a lawsuit filed against the Company early last week
that charges the corporate maneuvering gave the said executives
more time to sell their shares.
The lawsuit was filed in the U.S. District Court in Manhattan in
behalf of investors who lost billions of dollars in the Company's
stocks and bonds. It lists more than twenty defendants including
former Global Crossing CEO Gary Winnick, and several investment
banks, such as Salomon Smith Barney, that raised money for Global
Crossing and recommended its securities to their clients.
This time, the claims go beyond what was previously disclosed,
setting the stage for a long legal battle that may take years to
resolve, said the report.
John Coffee Jr., an expert in securities law and a professor at
Columbia University's School of Law, said damages in the case
could reach into the billions of dollars, potentially raising the
bar for awards in corporate securities fraud complaints.
Meanwhile, the defendants continue to refute their claims.
Terry Christensen, a lawyer for Winnick was quoted in the report
saying, "All that has happened is that pursuant to an order of
the court, the various allegations in 70 different complaints
have been consolidated into a single complaint."
"We are familiar with the allegations and believe them to be
without merit, " commented Mary Ellen Hillery, a spokeswoman for
Salomon Smith Barney.
CONTACT: GLOBAL CROSSING
Press Contacts
Fernanda Marques
+55 21-3820- 4712
fernanda.marques@globalcrossing.com
Fabiana Jacomini
Smart ComunicaŘao Inteligente
+55 11-3062-5439
fabiana@smartci.com.br
Analysts/Investors Contact
Ken Simril
+1 310-385-3838
investors@globalcrossing.com
TRENWICK GROUP: To Increase Reserves For Losses in the 4Q02
-----------------------------------------------------------
Trenwick Group Ltd. (NYSE: TWK) announced Thursday that it will
set aside greater amounts to offset losses in the fourth quarter
of 2002 by $107 million, or $2.90 per share. The increases in
Trenwick's reserves are based upon a previously announced study
of the reserving levels and methodology of Trenwick's insurance
subsidiaries by independent actuarial consultants and additional
work performed during the quarter by the Company's internal
actuaries.
The increases in reserves impact Trenwick's United States
operating subsidiaries and Trenwick International Limited, in the
UK. Trenwick's reserves at its Lloyd's operation, while also
analyzed, were not significantly affected by this reserve
increase.
The move reflects a reassessment of Trenwick's loss reserves in
light of recent reported loss activity trends across its major
business groups and principally impacts the 1999 to 2001 accident
years. Included in the reserve increase was $20 million relating
to Trenwick's exposure to asbestos and environmental liabilities.
Following this increase to Trenwick's asbestos and environmental
reserves, Trenwick's three year survival ratio (i.e., number of
years that existing reserves will last if the current level of
average annual payments for the last three years repeats itself
indefinitely) for this type of exposure will be approximately 13
years.
W. Marston Becker, Acting Chairman and Acting Chief Executive
Officer of Trenwick, stated, "Trenwick's operations, other than
its North American reinsurance business and its Lloyd's
businesses, are currently in runoff. The completion of Trenwick's
reserve study and its significant increase in loss reserves for
the fourth quarter of 2002 demonstrates Trenwick's continued
commitment to ensuring that its balance sheet appropriately
reflects ongoing actuarial developments within the Company and
the industry."
The financial results of Trenwick for the fourth quarter of 2002,
including its net reserve increase and a corresponding reduction
of approximately $12 million in outstanding contingent
indebtedness in computing the $107 million charge, will be
presented in Trenwick's year-end earnings release.
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
operations at Lloyd's of London underwrite specialty insurance as
well as treaty and facultative reinsurance on a worldwide basis.
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.
===========
B R A Z I L
===========
CEMIG: Moody's Cut Sends Shares Plunging
----------------------------------------
Moody's Investors Service move to cut the rating of Cia.
Energetica de Minas Gerais (Cemig) three levels to B1 from Ba1,
four levels below investment grade, pulled the value of the
Company's shares to its lowest closing level since mid December.
According to Bloomberg, shares of Brazil's third-largest power
generator dropped 55 centavos, or 2.2%, to BRL24.75 on Thursday
after Moody's cut its rating on concern that the Company won't be
able to service its foreign currency debt following last year's
34% plunge in the Brazilian currency. About 64% of the Company's
BRL3.4 billion ($958 million) of debt is denominated in foreign
currency.
Cemig, controlled by the state of Minas Gerais, restated earnings
less than a week ago for the first nine months of 2002,
accounting for BRL1.05 billion set aside to cover debts owed the
Company by Minas Gerais for power subsidies to consumers in the
1990s.
"It's difficult to believe Minas Gerais will pay what it owes
Cemig in the short run due to the financial fragility of the
state," said Valmir Celestino, who manages about BRL400 million
in equities for Safra Asset Management in Sao Paulo. "It will be
paid sooner or later, but until then investors will punish the
shares," he said. Celestino is ``underweight'' in Cemig.
CONTACT: Cia Energetica de Minas Gerais Cemig
Registered Office
Edificio Julio Soares
Avenida Barbacena, 1200
Sto Agostinho
30123-970 Belo Horizonte - MG
Brazil
Tel +55 31 3349-2111
Fax +55 31 3299-4691
URL: http://www.cemig.com.br
Contact:
Djalma Bastos de Morais, Chairman
Moody's Investor Service
New York
Daniel Gates
Managing Director
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Robert Johnson
VP - Senior Credit Officer
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
CEMIG: Seeks To Expedite BNDES Loan Agreement To Avoid Fine
-----------------------------------------------------------
Minas Gerais state integrated power utility Cemig is seeking to
close a loan agreement with national development bank BNDES as
soon as possible in order to escape a fine for the delay in
settling its debt with the wholesale market, MAE. AE Setorial
recalls that Cemig is trying to secure BRL1 billion (US$282mn) in
loans from BNDES to help it settle its BRL335-million debt with
the MAE.
"The expectation is that we won't have any problem closing the
contract," Cemig CFO Cristiano Correa de Barros said.
Cemig failed to provide the cash during the recent MAE settlement
process. But it is already in negotiations with MAE creditors to
settle the outstanding bills, Mr. Barros said.
Further delay in settling the debt could mean a fine of
equivalent to 5% of the total debts, plus interest rates on the
overdue amount, the CFO added.
EMBRATEL: Targets 35% Share In Corporate Market
-----------------------------------------------
Embratel, Brazil's number one long distance operator, is looking
to serve 35% of the country's 10,000 largest corporations in five
years. The announcement, according to Business News Americas, was
made by the Company's regulatory affairs manager Purificacion
Carpinteyro at a press conference held Thursday to announce the
launch of local telephony in the city of Sao Paulo.
Already, Embratel is serving Brazil's key cities such as Rio de
Janeiro, Brasilia, Salvador and Minas Gerais. But according to
Carpinteyro, the Company plans to offer local services in 28
other cities by February 15, at the latest.
To date 250 corporations are in negotiations to use Embratel for
local services, of which 100 are in Sao Paulo.
A 35% market share is expected to bring in Embratel some BRL6
billion (US$1.69bn) in additional revenues annually. The Company
already offers data and/or long distance services to 80% of its
target market. Of the target market, 35% are based in Sao Paulo.
CONTACT: Embratel Participacoes SA
Registered Office
Rua Regente Feijo, 166 sala 1687-B
Centro 20060-060 Rio de Janeiro
Brazil
Tel +55 21 2519-9622
Fax +55 21 2519-6608
Web http://www.embratel.com.br/
Contact: Daniel Eldon Crawford, Chairman
LIGHT SERVICOS: Expects Parent's Assistance In Upcoming Payments
----------------------------------------------------------------
France's state power company EDF is not going to leave its
Brazilian distribution subsidiary Light in the lurch, an
executive of the unit indicated to Valor Economico in response to
market speculations suggesting the contrary.
Light will face BRL1 billion (about US$288mn) of debt maturities
in both 2003 and 2004 and its main source of liquidity is EDF.
However, recent speculations suggested that the parent company
would not inject any more cash into the debt-laden unit, leading
to a cut on its global scale rating to CCC+ from B by credit
rating agency Standard & Poor's.
But Light CFO Paulo Pinto expressed confidence that EDF will not
allow Light to default on its debt payments.
"EDF won't let Light go into default," said Pinto.
According to Mr. Pinto, Light is preparing to pay off US$150
million in bonds due in February from its own cash resources,
which currently total US$200 million. EDF is discussing a further
capital injection for Light, to help the Rio company pay US$600
million owed to third parties, equivalent to 60% of the US$1
billion in debts due this year, Pinto said.
"I cannot say how much that capitalization will be. The ideas of
restructuring the capital is for the medium term, looking forward
to the next 24 months," Pinto said.
EDF and Light want to pay down the Company's debts to a level
where they can be managed by cash flow, which is estimated to
reach about US$300 million this year, Pinto said.
Light has total debts of about BRL3.8 billion (US$1.07bn),
including a US$200 million loan from EDF, and 80% of the debts
are linked to the US dollar.
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
SABESP: 18 Tender Processes Postponed As Budget Crunch Ensues
-------------------------------------------------------------
Sao Paulo state water utility Sabesp indefinitely shelved 18
tender processes underway reports local paper Folha de Sao Paulo,
citing Sabesp President Mauro Arce. The processes would have been
concluded by the end of January.
The contracts, with a total worth of BRL87.2 million (US$24.5
million), were suspended due limitations in the company's budget,
according to Mr. Arce. Available funds will be dedicated to water
treatment, and sewage collection and treatment.
The contracts would have been for informatics, regional drinking
water connections and water distribution network management
systems, reports Business News Americas. This would have taken up
14.9% of the Company's BRL583 million works and services budget
for this year.
The Company posted a loss of BRL881 million for the first three
quarters of last year.
CONTACT: Sabesp
Helmut Bossert,(5511) 3388-8664
hbossert@sabesp.com.br
Marisa Guimaraes, (5511) 3388-9135
marisag@sabesp.com.br
Website: www.sabesp.com.br
TELEMAR: Board of Directors Accepts CEO's Resignation
-----------------------------------------------------
Tele Norte Leste Participacoes, S.A. (NYSE: TNE) announced that
its Board of Directors received Wednesday the resignation of Mr.
Jose Fernandes Pauletti as the Company's Chief Executive Officer,
effective immediately.
Pauletti, who actively and successfully contributed to Telemar's
restructuring, will continue to be a part of the Company's
Management as a member of the Boards of Directors of TNE and its
subsidiaries (Telemar Norte Leste - TMAR and TNL PCS - Oi). The
Board also recognized that, since October 2002, the Company has
been managed by an Executive Committee (COMEX), which has until
this time been comprised, in addition to Mr. Pauletti, by Mr.
Ronaldo Iabrudi and Mr. Luis Eduardo Falco, both Superintendent
Directors of TNE and, respectively, CEOs of TMAR and Oi. The
Company continues to be managed by the COMEX, currently composed
of Mr. Iabrudi and Mr. Falco, a situation that should prevail
going forward. The Board shall propose to the Company's
shareholders' meeting a change in the Company's Bylaws in
accordance with the new management model being adopted.
CONTACT: TNE - INVESTOR RELATIONS
Roberto Terziani
terziani@telemar.com.br
55 21 3131 1208
Fax: 55 21 3131 1155
Carlos Lacerda
carlosl@telemar.com.br
55 21 3131 1314
Fax: 55 21 3131 1155
GLOBAL CONSULTING GROUP
Rick Huber
richard.huber@tfn.com
Tel: 1 212 807 5026
Fax: 1 212 807 5025
Mariana Crespo
mariana.crespo@tfn.com
Tel: 1 212 807 5026
Fax: 1 212 807 5025
VARIG: Plane Seized For Non-Payment of Lease
--------------------------------------------
Heavily-indebted Brazilian flagship carrier Varig had one of its
planes seized in Paris for failing to make a required payment,
reports Reuters. In a statement, International Lease Finance
Corp. (ILFC), a Los Angeles-based unit of American International
Group Inc., said it seized the jet from the airline after winning
an order from a French court.
The seizure comes in the midst of Varig's struggles to get help
from the government to stave off a default on US$900 million of
debt. Some analysts believe that if other creditors also take a
hard line, they could force the Company into bankruptcy by going
to court and demanding payment.
"They've had some luck with their creditors but in the end, they
were going to annoy someone," said Ricahard Aboulafia, vice
president for analysis at the Teal Group, a Fairfax, Virginia-
based consultancy. "They haven't had much luck cutting costs."
Varig has delayed payments to suppliers such as International
Lease and Petroleo Brasileiro SA, Brazil's state-controlled oil
company. In November Varig's chief executive resigned after an
employee-run foundation that controls the airline rejected a
US$118 million bailout plan from banks and suppliers.
However, Sylvia Leccia, from Varig's press and marketing
department in Paris, recalls that Varig has always honored its
debts.
"As you know Varig is a serious company that has been around for
75 years," she said. "It's clear we are in the storm like all
airlines, but that we have always honored our debts."
She said Varig's head office, whose press department also
confirmed the seizure, was currently negotiating with
representatives of the ILFC over the plane in Charles de Gaulle
airport.
The jet, a 220-passenger Boeing 777, flies the Porto Alegre, Sao
Paulo, Paris, Amsterdam route, and had been leased since 2001,
Varig said.
CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.)
Rua 18 de Novembro No. 800, Sao Joao
90240-040 Porto Alegre,
Rio Grande do Sul, Brazil
Phone: (51) 358-7039/7040
(51) 358-7010/7042
Fax: +55-51-358-7001
Home Page: www.varig.com.br/english/
Contacts:
Dorival Ramos Schultz, EVP Finance and CFO
E-mail: dorival.schultz@varig.com.br
Investor Relations:
Av. Almirante Silvio de Noronha,
n 365-Bloco "B" - s/458 / Centro
Rio de Janeiro, Brazil
KPMG Brazil
Belo Horizonte
Rua Paraba, 1122
13th Floor
30130-918 Belo Horizonte MG
Telephone 55 (31) 3261 5444
Telefax 55 (31) 3261 5151
or
Brasilia
SBS Quadra 2 BL A N 1
Edificio Casa de Sao Paulo SL 502
70078-900 Braslia - DF
Telephone 55 (61) 223 2024
Telefax 55 (61) 224 0473
BAIN & CO
Primary Contact: Wendy Miller
Two Copley Place, Boston, MA 02116
USA
Phone: +1-617-572-2000
Fax: +1-617-572-2461
Email: miles.cook@bain.com
URL: http://www.bain.com
=========
C H I L E
=========
COEUR D'ALENE: Reports Success At Cerro Bayo Gold/Silver Mine
-------------------------------------------------------------
Coeur d'Alene Mines Corporation (NYSE:CDE) announced Thursday
continued exploration success at its 100%-owned Cerro Bayo
gold/silver mining operation in southern Chile. Due to these
positive results, the Company has increased its holding of
prospective ground by 10% to 103 square miles.
Coeur drilled 246 core holes totaling 87,250 feet primarily
during the second half of 2002 with considerable success,
resulting in an increase of 159,000 ounces of measured and
indicated resources and 98,000 ounces of inferred resources.
These new ounces were added at an exceptionally low average
discovery cost of $5.44 per gold equivalent ounce. The Company
plans to convert most of these resources into reserves by the end
of the first quarter. Coeur expects these new resources will add
two years of additional mine life to Cerro Bayo.
During its 2002 drilling campaign, Coeur discovered four new
veins at Cerro Bayo: Javiera, Wendy, Celia, and Marta. Currently,
the most advanced of these new discoveries is the Javiera vein,
which remains open at depth and along strike and presently
contains 128,000 ounces of resources. Javiera is located at the
northern limits of Cerro Bayo's current underground workings and
is mineralized over a 2,600 feet strike length. Javiera
represents a new significant source of ore averaging over 6.5
feet in width and approximately 0.50 gold equivalent ounces per
ton in grade. Select intercepts from drilling on Javiera include
11.0 feet of 0.72 gold equivalent ounces per ton, 13.0 feet of
0.97 gold equivalent ounces per ton, and 8.0 feet of 1.48 gold
equivalent ounces per ton.
At the end of 2002, Coeur also discovered the Wendy vein, which
is located 50 feet west of the Javiera vein. This new vein is
visible from the surface for over 2,600 feet and the Company
expects Wendy to be similar in size and grade to the nearby
Javiera vein. The only drill hole into Wendy returned 7.5 feet of
1.0 gold equivalent ounce per ton. Drilling on the Wendy vein
will be a top priority during 2003.
Dieter Krewedl, Coeur's Senior Vice President of Exploration,
commented, "We are extremely pleased with these exceptional
results from our exploration efforts at Cerro Bayo in 2002. The
Company has increased its exploration budget for Cerro Bayo by
30% for 2003, and we expect to continue finding additional high-
grade gold and silver reserves and resources this year."
Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile and Bolivia.
CONTACT: Coeur d'Alene Mines Corporation
Mitchell J. Krebs, 208/769-8155
GASATACAMA: Shelves Bolivian LNG Export Project
-----------------------------------------------
GasAtacama chief executive Rudolf Araneda said his company's
plans to import gas from Bolivia are put on hold until the
Bolivian government decides on a port for the liquefied petroleum
gas (LNG) exports.
Business News Americas said that the Company has plans to hook up
to the Argentine side of its trans-Andean pipeline with the
Bolivian gas network. The move would also allow GasAtacama to
export electricity to Bolivia's San Cristobal mining project.
"Bolivia's President Gonzalo Sanchez de Lozada is probably going
to have to hold a public referendum to decide this issue, and
that should be soon because there is pressure from the Pacific
LNG consortium to sign a contract with Sempra," Mr. Araneda was
quoted in the report.
He added that the GasAtacama or the Norandino pipelines could be
extended to Bolivia from Argentina without much difficulty. The
lines would then be converted to allow transport of liquids,
which also solves the capacity surplus problems the Company is
facing.
"It would be about US$1.2 billion cheaper for Bolivia to use the
Chilean port of Patillos rather than the Peruvian port of Ilo,
but it's really a political problem and there is a very strong
opposition in Bolivia to using a Chilean port, so I can't say
what will happen until after a referendum is held," Araneda said.
Mr. Araneda admitted that the issue has become "politically
sensitive." The Company was hoping that Bolivia would see the
move as Chile's gesture of goodwill. Chile plans to host the
terminal port, through which Bolivian LNG would be exported to
North America.
"It would be about US$1.2 billion cheaper for Bolivia to use the
Chilean port of Patillos rather than the Peruvian port of Ilo,
but it's really a political problem and there is a very strong
opposition in Bolivia to using a Chilean port, so I can't say
what will happen until after a referendum is held," Araneda said.
Many Bolivians reject any transactions with Chile due to a grudge
dating back to a late 19th century war, when Chile cut off
Bolivia's access to the Pacific Coast.
In the meantime, GasAtacama owned by Chilean generator ,Endesa,
and U.S. power company. CMS, is still able to honor supply
commitments with cheap Argentine gas.
===============
C O L O M B I A
===============
EMCALI: Government Proposes Capitalization As Part of Rescue
------------------------------------------------------------
Colombia's national government is still intent on saving Emcali
even after issuing an order to liquidate the Cali-based utility.
Last week, the national government ordered the country's public
services regulator Superservicios to liquidate Emcali on the
grounds that the utility's accumulated cash flow deficit of
COL560 billion (US$188mn) means its continuation is unfeasible.
But days after the order came out, President Alvaro Uribe Velez
said that his government is still open to capitalizing Emcali.
However, "Emcali must reduce its labor costs to make the company
viable and create an indirect system of social capitalization so
that, for example, all of Emcali's clients can be shareholders,"
Uribe was quoted by the state news agency CNE as saying.
If Emcali fails to comply with these requirements, the national
government will replace it with another state company backed by a
social capitalization fund, the CNE said.
This is the second time that the government offered to capitalize
Emcali, the water, power and telecom utility for the Valle del
Cauca department in the country's southwest, in an attempt to
rescue the Company.
In October, the government offered to inject COL700 billion (some
US$246 million) it has secured from international banks to help
the Company deal with its debts. But at that time, national
planning director Santiago Montenegro warned that the plan would
only be feasible if the other parties concerned - such as users,
the municipality and unions - do their part.
URL: http://www.emcali.com.co/
===========
M E X I C O
===========
GRUPO MEXICO: Asarco Finalizes Agreement With US Justice Dept
-------------------------------------------------------------
Following several months of sharing detailed information and
negotiating terms, Asarco, Inc. and the U.S. Department of
Justice have reached final agreement over a plan to transfer the
company's interest in Southern Peru Copper Corp. (NYSE: PCU) to
the mining division of Asarco.s parent company, Grupo Mexico,
S.A. de C.V.
The agreement was filed in U.S. District Court in Phoenix,
effectively ending a lawsuit brought by the Justice Department
last August which temporarily blocked the sale by Asarco. The
resolution of this matter clears the way for Asarco.s 54.2-
percent interest in SPCC to be transferred at fair-market value
to Americas Mining Corp., a U.S.-based holding company. The value
of the transaction and the terms under which it will occur were
validated in an independent analysis conducted by the
international accounting firm,Ernst & Young.
Through this transaction, Asarco will receive the funds necessary
to pay $550 million in short-term debt. The transaction is
expected to proceed after the presiding judge signs the
agreement, and Asarco.s parent companies receive the
corresponding fresh loans to crystallize it. Asarco has been in
close contact with all its financial creditors about this
transaction.
"This agreement, once fully executed, would provide a structure
under which Asarco can meet near-term financial obligations and
proceed with environmental liabilities at a pace we can afford,"
said Asarco's representative. "We are very pleased to have
cleared this hurdle and we are ready to move forward on a path
that will bring Asarco to a position of financial stability."
Asarco is a longstanding producer of copper and other metals. It
operates as a subsidiary of Americas Mining Corporation (AMC),
which is the mining division of Grupo Mexico, S.A. de C.V. AMC is
among the world's largest integrated mining and refining
companies and is the world's third-largest producer of copper.
CONTACT: GRUPO MEXICO S.A. DE C.V.
Avenida Baja California 200,
Colonia Roma Sur
06760 M,xico, D.F., Mexico
Phone: +52-55-5264-7775
Fax: +52-55-5264-7769
Home Page: http://www.gmexico.com
Contacts:
Germ n Larrea Mota-Velasco, Chairman and CEO
Xavier Garca de Quevedo Topete, President and COO
Alfredo Casar P,rez, COO, Ferrocarril Mexicano
Daniel Ch vez Carre n, COO, Industrial Minera M,xico
Daniel Tellechea Salido, VP and Administration and
Finance President
GRUPO MEXICO: Payment Doubtful; Fitch Cuts Asarco's Bonds To 'C'
----------------------------------------------------------------
Fitch Ratings has downgraded the ratings of Asarco Incorporated's
(Asarco) bonds due in 2003, 2013 and 2025 to 'C' from 'CCC-'.
This rating action signals Fitch's view that the company will
likely not make a $100 million principal payment on February 3
for its 2003 notes. In total, $350 million of debt is affected by
this rating action. The ratings of these bonds remain on Rating
Watch Negative.
Fitch's ratings of Asarco's bonds reflect the company's high debt
leverage, relatively high-cost position in the mining industry
and the restructuring of debt with creditor banks, which is
currently in default. Asarco is currently in negotiation with a
series of parties about the potential sale of its 54% stake in
Southern Peru Copper Company (SPCC) to Americas Mining Company
(AMC), a subsidiary of Grupo Mexico S.A. de C.V. (Grupo Mexico).
A successful sale of SPCC by Asarco to AMC would likely lead to
the repayment of the $100 million due in 2003. At this time, it
looks like the negotiations will not be finalized by the date the
payment on those notes is due.
CONTACTS: Joe Bormann CFA, 1-312-368-3349, Chicago
Anita Saha CFA, 1-312-368-3179, Chicago
Daniel Kastholm CFA, 1-312-368-2070, Chicago
Media Relations: James Jockle 1-212-908-0547, New York
PETROLEOS MEXICANOS: Sells $750M Worth of 5-Yr. Bonds
-----------------------------------------------------
Mexico's state-owned oil company Petroleos Mexicanos, which is
looking to refinance debt and increase spending on infrastructure
projects to boost production, sold US$750-million worth of 5-year
bonds, reports Bloomberg. The 7 1/8% Pemex bonds were priced to
yield 3.20 percentage points over U.S. Treasury with a similar
maturity, or 6.14%.
Morgan Stanley and Lehman Brothers Inc. managed the operation,
which is part of the at least US$1 billion of foreign currency
bonds that Chief Financial Officer Juan Jose Suarez has said the
Company plans to sell this year, taking advantage of growing
investor demand.
Investors are seeking higher returns from Latin American
borrowers as U.S. corporate bond yields fall.
CONTACT: PETROLEOS MEXICANOS
Marina Nacional 329, Colonia Huasteca
11311 M,xico, D.F., Mexico
Phone: +52-55-5531-6061
Fax: +52-55-5531-6321
http://www.pemex.com
OFFICERS:
Raul Munoz Leos, General Director
Jose A. Ceballos Soberanis, Director Corporate
Operations
Jose Juan Suarez Coppel, Director Corporate Finance
=================================
T R I N I D A D & T O B A G O
=================================
BWIA: Unions May Take Legal Action Against BWIA
-----------------------------------------------
Four unions representing workers of troubled Trinidadian airline
BWIA may file a lawsuit against the airline after 617 workers
were retrenched.
"We feel there is violation there and we are waiting on a legal
opinion on it," said Jagdeo Jagroop president of the
Communication Transport and General Workers Trade Union (CATTU),
after the four unions met on Thursday. Law firm Achmeed Ali & Co.
represents CATTU.
He added, "Under the Retrenchment and Severance Benefit Act they
were supposed to treat with us and they did not. We can challenge
them in court."
The Trinidad Guardian mentioned lawyer Douglas Mendes, who
represents the Aviation Communication and Allied Workers Union,
as most likely to represent the retrenched workers in court.
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)
BWIA: NATUC Condemns Retrenchments
----------------------------------
Trinidad and Tobago's umbrella body for all trade unions,
National Trade Union Centre (NATUC) condemned the retrenchment of
617 workers from the country's flag carrier, BWIA. NATUC
secretary general Vincent Cabrera described the retrenchments as
"brutal and sadistic," according to a report by the Trinidad
Guardian.
"We call on all workers in the country to support whatever
actions are taken by BWIA workers to protect their jobs," said
Mr. Cabrera.
According to the secretary, the airline's board of directors and
executive management had blatantly violated the procedure under
the Severance Act, which legislates that "the employer must first
give the union an opportunity to make proposals to mitigate the
effect of retrenchment."
=================
V E N E Z U E L A
=================
CANTV: Offshore Liquidity Prompts S&P 'CCC+' Affirmation
--------------------------------------------------------
Standard & Poor's Ratings Services said Thursday that it affirmed
its 'CCC+' corporate credit ratings on Compania Anonima Nacional
Telefonos de Venezuela (CANTV). The rating affirmation reflects
Standard & Poor's opinion that the impending adoption of exchange
controls in Venezuela will not directly prevent foreign currency
debt service for the Company in the short term, due to its off-
shore liquidity position, which is enough to cover short-term
maturities. The outlook on the rating remains negative,
reflecting the heightened political and economic risk in
Venezuela and the effects these have on corporate performance.
Once the form of the exchange controls, and possibly accompanying
price controls, are announced, Standard & Poor's will review them
for updating the assessment of the risks presented for CANTV.
Foreign currency markets in Venezuela have been suspended until
controls are ready to be put in place, currently expected by the
government for Feb. 5, 2003.
Although its sales and cash flow generation have been negatively
affected by the ongoing demonstrations and strikes, especially
during its seasonally high December sales, CANTV has been able to
weather the situation. CANTV's dollar-denominated cash position
is sufficient to cover its short-term maturities of approximately
US$58 million. The 'CCC+' rating is based on the effect that
further political unrest and economic crisis in Venezuela might
have on CANTV's credit profile.
CANTV is partially owned by Verizon Communications Inc.
(A+/Negative/--) and Telef˘nica S.A. (A/Stable/A-1). Standard &
Poor's does not expect support from the parent company to be a
meaningful credit factor for CANTV.
ANALYST: Santiago Carniado, Mexico City (52) 55-5279-2013
Patricia Calvo, Mexico City (52) 55-5279-2073
EDC: S&P Affirms 'CCC+' Ratings
---------------------------------
Standard & Poor's Ratings Services said Thursday that it reviewed
and would leave unchanged its 'CCC+' corporate credit ratings on
Venezuelan electric utility La Electricidad de Caracas (EDC). The
rating affirmation reflects Standard & Poor's opinion that the
impending adoption of exchange controls in Venezuela will not
directly prevent foreign currency debt service for the Company in
the short term, due to its off-shore liquidity position, which is
enough to cover short-term maturities. The outlook on the rating
remains negative, reflecting the heightened political and
economic risk in Venezuela and the effects these have on
corporate performance.
Once the form of the exchange controls, and possibly accompanying
price controls, are announced, Standard & Poor's will review them
for updating the assessment of the risks presented for EDC.
Foreign currency markets in Venezuela have been suspended until
controls are ready to be put in place, currently expected by the
government for Feb. 5, 2003.
EDC's dollar liquidity position is currently expected to be
sufficient to cover dollar-denominated maturities of US$173
million for the remainder of 2003. Still, the rating reflects the
risk that foreign exchange controls may be prolonged; the rising
level of past due accounts receivables; the limited tariff
increases, which may become subject to formal price controls; and
continued sharp currency weakness, which could further affect
EDC's credit quality.
EDC is a subsidiary of U.S.-based AES Corp. (B+/Watch Negative/--
). Standard & Poor's does not expect support from the parent
company to be a meaningful credit factor for EDC.
ANALYST: Santiago Carniado, Mexico City (52) 55-5279-2013
Patricia Calvo, Mexico City (52) 55-5279-2073
PDVSA: Analysts Question Strike Loss Offset Measures
----------------------------------------------------
Analysts are becoming increasingly dubious as to Petroleos de
Venezuela SA's ability to recover from a nationwide strike that
has slashed exports and revenue. The Venezuelan state oil
company, after reducing its workforce by 16%, is planning to cut
planned expenditures this year by about a third. According to
Finance Minister Tobias Nobrega in a television interview,
spending will be cut by VEB5 trillion ($2.63 billion).
Analysts are now concerned that these measures may hurt the
Company's chances for a quick recovery from the strike, and to
accomplish a 10-year, US$45-billion investment program, aimed at
boosting the Company's production capacity to 5 million barrels a
day, up from 3.8 million barrel barrels a day.
"You can make the case that expenditures should be increased, not
decreased," Tim Evans, senior energy analyst at IFR Pegasus in
New York, said in a telephone interview. "We're looking at a
longer, slower recovery."
PDVSA had been expected to spend about US$8 billion this year.
The strike, which began Dec. 2 and is intended to force President
Hugo Chavez from office, has reduced the Company's oil production
by about two-thirds, and exports by about 80%.
Analysts estimate Petroleos de Venezuela's losses from the strike
so far at about US$3 billion.
***********
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.
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