/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030210.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 10, 2003, Vol. 4, Issue 28 Headlines A R G E N T I N A CRM: Suspends P&I Payments; S&P Drops Ratings to 'D' REPSOL YPF: Ibersecurities Ups Recommendation On Higher Income * Lazard Probable Choice as Argentina's Restructuring Adviser B A H A M A S RESIDENSEA LTD.: Announces Refinancing SEA CONTAINERS: Falling Share Price Raises Inquiries B R A Z I L NET SERVICOS: Announces New CEO TELEMAR: Increases Fixed to Mobile Service Rates USIMINAS: Revamps Cosipa's Debt; Seeks BB Investimentos' Aid VARIG/TAM: Merging Operations To Avert Possible Bankruptcy * Brazil Forecasts US$4 Billion Debt Refinancing in 2003 C H I L E AEROCONTINENTE: To Establish Alliance With Chilean Firm CTR: Parent Brokers Debt Agreement with Lenders MANQUEHUE NET: Debt Ratings Improve on New Development Plan M E X I C O CFE: El Cajon Project Bid Deadline Extended to February 19 GRUPO MEXICO: Cananea Workers End Strike GRUPO TMM: TFM Completes Exchange Offer HAYES LEMMERZ: Reorganization Disclosure Conditionally Approved ISPAT INTERNATIONAL: Fourth Quarter 2002 Results Improve P E R U MINERA VOLCAN: Treatment Plant Operations Suspended Indefinitely V E N E Z U E L A CITGO: Uncertainty Over Liquidity Pulls Down Debt Ratings CITGO/PDV AMERICA: S&P Changes CreditWatch Listing to Developing IBH: To Voluntarily Delist From The Nasdaq Smallcap Market - - - - - - - - - - ================= A R G E N T I N A ================= CRM: Suspends P&I Payments; S&P Drops Ratings to 'D' ---------------------------------------------------- Standard & Poor's Ratings Services said Thursday that it lowered its local and foreign currency corporate credit ratings on Argentine mobile provider Compa¤¡a de Radiocomunicaciones M¢viles S.A. (CRM) to 'D' from 'SD'. The rating on the US$150 million 9.25% senior unsecured notes due 2008 will remain at 'CC' until there is an effective default on that security. The next interest payment on those notes is due in May 2003. The rating action is based on the company's decision to suspend principal and interest payments on its financial obligations in order to preserve liquidity to continue funding its operations, in light of the current economic situation in Argentina and its limited financial flexibility. The company has hired BroadSpan Capital as financial advisor to restructure the terms of the existing debt and align them with CRM's expected cash generation. Although, until now, the company remained current on interest for the majority of the bank and capital market debt, it had missed certain short-term bank maturities in June 2002. As of September 30, 2002, when the latest financial statements were issued, total debt reached approximately US$512 million, including two syndicated loans for a total of US$268 million and the aforementioned rated US$150 million notes. That filing also indicated CRM had past due maturities with banks for US$119.6 million. "CRM's financial flexibility is severely constrained by the contraction of the credit market for Argentine corporates, the mismatch between dollar-denominated debt and peso-denominated revenues after the Argentine currency devaluation in early 2002, the harsh demand conditions in the country, and the relatively onerous debt maturity schedule in comparison with the company's cash generation ability," stated Standard & Poor's credit analyst Ivana Recalde. CRM is 65% owned by BellSouth Corp. (A+/Stable/A-1), 25% by Motorola Inc. (BBB/Stable/A-2), and the remaining 10% is held by other minority shareholders. ANALYSTS: Ivana Recalde, Buenos Aires (54) 114-891-2127 Marta Castelli, Buenos Aires (54) 114-891-2128 REPSOL YPF: Ibersecurities Ups Recommendation On Higher Income -------------------------------------------------------------- Spanish securities rating agency Ibersecurities expects to see a great boost in Spanish oil company Repsol YPF's net income due to the stabilization of the Argentine peso, the increase in oil prices, an increase in production, recovery of operating margins, and the divestment of assets. Citing an Ibersecurities statement, Business News Americas reports that Repsol is likely to up its net income by 114% to about US$2.4 billion from the previous year. In light of this expectation, Ibersecurities changed its recommendation for the oil company from `neutral' to `buy.' In 2001, the economic crisis in Argentina, low oil prices, and a reduction in refining margins, drove Repsol's net income 57% lower to US$1.1 billion. Repsol YPF is scheduled to report its 2002 results on February 25. CONTACT: REPSOL YPF SA Head Office Paseo de la Castellana 278 28046 Madrid Spain Tel +34 91 348 81 00 Fax +34 91 348 28 21 Telex 48162 RESOLE Web http://www.repsol.com Contact: Alfonso Cortina de Alcocer, Chairman Jose Vilarasu Salat, Vice Chairman Antonio Hernandez, Vice Chairman * Lazard Probable Choice as Argentina's Restructuring Adviser ------------------------------------------------------------- Argentine Economy Minister Roberto Lavagna said that Lazard LLC, the world's largest closely held investment bank, will most likely be chosen to advise the country on negotiations for new payment terms on US$95 billion of debt, which the country defaulted on in December 2001. Mr. Lavagna explained that Lazard offer to charge US$190,000 per month was the lowest among the three finalist banks. The other two are UBS Warburg, which offered to charge US$194,000 monthly, while Morgan Stanley asked for a monthly fee of US$1.2 million, said the government. Analysts say that the adviser bank may earn at least US$150 million. The winner would manage the swap of old securities for new bonds, once all 700,000 holders are identified. The deal would be the world's largest debt restructuring in history. The adviser bank's tasks include identifying bondholders and the type of securities they hold, and estimating how much the country could afford to pay, which the government says may take as long as 12 months. Bloomberg said Argentina is also seeking to negotiate new terms with creditors mostly in the U.S., Europe and Japan who hold about 100 different bonds denominated in eight currencies. Investors may have to wait at least another year to receive as little as 20 cents on the dollar, analysts said. Meanwhile, Morgan Stanley said that competitors do not realize the amount of work involved to advise on the debt talks. Francisco Pujol, co-head of global emerging markets at Morgan Stanley in New York said, "It is necessary to dedicate a large amount of resources to do a good job. I think the winners are failing to recognize the amount of work there is, not just by the size of the debt, but the intricacies of the restructuring." UBS declined to comment. Lazard said it expects to hear from the government soon. The bank is looking forward to receiving a confirmation saying it won the competition. At a press conference, the country's Finance Secretary Guillermo Nielsen said that the bids would need further deliberations as UBS's offer included charges for items like communications and transportation instead of fees specifically for advisory work. ============= B A H A M A S ============= RESIDENSEA LTD.: Announces Refinancing -------------------------------------- ResidenSea Ltd., owner and operator of The World, the first mixed-use resort community at sea, has restructured its debt financing. The terms of the new arrangement are an amortizing $91 million term facility, due in 2008 and an increased $50 million revolving facility, due in 2005. According to Robert Riley, president and chief executive officer, the restructured debt financing supports the latest business plan, and assists the company's business strategy. "With these new financial arrangements in place, we are confident that sales velocity will increase, potentially outpacing the $20 million of residences sold since delivery." said Riley. About The World: The World of ResidenSea is the first mixed-use resort community at sea, comprised of 110 two- and three-bedroom, privately owned residences - many of which are available for rental - and 88 studio residences available for the high-end vacation market. The World began its pioneering odyssey in March 2002 on an ever- winding world voyage, featuring extended stays in port that give residents and guests the time to experience all the sights, sounds and flavors of the world's most exciting destinations. Both residents and vacationing guests are offered the flexibility of embarking and disembarking in ports of call of their choice; for guests, vacation stays are booked at daily fares. For more information about The World's residential purchase options, please call +1-305-264-9090; for inquiries regarding vacation stays onboard, call ResidenSea at 800-970-6601 in the U.S. or Canada or +1-305-779-3399 outside the U.S.; or visit ResidenSea's website at www.residensea.com. ResidenSea Ltd., in Nassau, The Bahamas, is the holding company of the Group. Its wholly owned subsidiaries, ResidenSea AS and ResidenSea (U.S.A.), Inc., are both service companies involved in the sales and marketing of the vessel "The World." The World of ResidenSea Ltd. is the ship-owning company. SEA CONTAINERS: Falling Share Price Raises Inquiries ---------------------------------------------------- Sea Containers Ltd., a Bermuda-based leisure and marine cargo company, said Thursday that it has received a number of inquiries about the recent drop in the Company's common share price. Mr. James B. Sherwood, president, said that he was mystified because the Company had an excellent fourth quarter in 2002 and its earnings for the year will be significantly higher than the $27.9 million ($1.40 per common share diluted) reported for the nine months ended September 30, 2002. This will represent a huge improvement over the net income of $4.5 million ($0.24 per common share diluted) reported for the full year 2001. Mr. Sherwood said that the 2002 results were currently under audit and the Company would announce its results late in March as customary. The president also said that the fourth quarter, 2002 results were better than expected because marine container leasing showed improvement and the Company's rail subsidiary, GNER, had achieved important cost savings while revenue was on target. "Shelf" registrations for sale of Sea Containers common shares and those of Orient-Express Hotels Ltd. owned by the Company, as well as the Form 144 filing for sale of his own shares were exhausted late in 2002 and new filings have recently been made. Mr. Sherwood said in his own case he has no present intention of selling any of his shares in the Company at Thursday's distress prices. Last year, Sea Containers revealed a plan to sell part of its stake in Orient-Express Hotels Ltd. in order to meet heavy debt repayments in 2003, including US$158 million of senior notes falling due on July 1. However, the plan became unattractive after a slump in the Company's share price in May to about US$13 from US$20. CONTACT: Sea Containers Ltd 41 Cedar Avenue P.O. Box HM 1179 Hamilton HM EX, Bermuda Phone: + 1 (441) 295 2244 Fax: + 1 (441) 292 8666 Email: investorinfo@seacontainers.com Website: www.seacontainers.com =========== B R A Z I L =========== NET SERVICOS: Announces New CEO ------------------------------- Net Servicos de Comunicacao S.A., former Globo Cabo S.A., (Bovespa:PLIM4) (Bovespa:PLIM3) (Nasdaq:NETC) (Latibex:XNET), the largest Pay-TV multi-service operator in Latin America, an important provider of bi-directional broadband Internet access (Virtua) and multimedia and data communication services for corporate networks, announced that the Company's board of directors elected Francisco Tosta Valim Filho as chief executive officer in its meeting that ended Thursday. The contribution of the new CEO will be particularly valuable to the Company in the ongoing reorientation and strengthening of its operations as well as in the conclusion of the re-equation of the Company's debt. CONTACT: Net Servicos de Comunicacao S.A. Investor Relations: Marcio Minoru, 011/5511-5186-2811 minoru@netservicos.com.br or Lu Yuan Fang, 011/5511-5186-2637 lfang@netservicos.com.br TELEMAR: Increases Fixed to Mobile Service Rates ------------------------------------------------ Tele Norte Leste Participa‡oes, S.A. (NYSE: TNE) announced Thursday that the Brazilian Telecommunications Regulatory Agency - Anatel - approved yesterday the new cap rates charged by Telemar on fixed to mobile calls, as well as the interconnection rates charged by the mobile operators to Telemar for such calls. Unlike previous years, Anatel decided to align the fixed to mobile rates with the interconnection rates charged by the mobile companies: from now on, the wireline customer will have different fixed-to-mobile rates, according to the mobile operator which terminates the call. That means that the higher the interconnection charged by a specific mobile operator, the higher the fixed to mobile rate charged on calls carried by that operator will be. The fixed to mobile rate increase was limited to 27.6%, which was the inflation index (IGP-DI) for the period of 14 months, from November 1st, 2001 - base date for the previous rate increase - through January 1st, 2003, which has been established as the new base date for future rate increases. Also in a change from previous years, Anatel approved an average increase for the fixed to mobile service rates slightly above the rate increase for mobile interconnection charges: 24.82% for the average local fixed to mobile service offered by Telemar (VC-1), net of taxes, and an average of 21.99% for the mobile interconnection charges (TU-M and VU-M), as well as the long distance fixed to mobile service rates (VC-2 and VC-3). The effective value date for the fixed to mobile rate increase by Telemar will be February 08, 2003. Fixed-to-mobile revenues generally account for 20-22% of the gross revenues of Telemar. See the new rates for the fixed to mobile service approved by Anatel to Telemar at: www.telemar.com.br/docs/tarifafixomovel.pdf CONTACT: TNE - INVESTOR RELATIONS Roberto Terziani Email: terziani@telemar.com.br Tel: 55 21 3131 1208 Fax: 55 21 3131 1155 Carlos Lacerda Email: carlosl@telemar.com.br Tel: 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 Email: mariana.crespo@tfn.com Tel: 1 212 807 5026 Fax: 1 212 807 5025 USIMINAS: Revamps Cosipa's Debt; Seeks BB Investimentos' Aid ------------------------------------------------------------- Brazilian flat steelmaker Usiminas undertook a decision to restructure the debt of its subsidiary Cosipa, which totaled US$1.47 at the end of 2002, reports Business News Americas. The restructuring process will likely involve two operations in the short term, according to analysts' expectations. One is a debenture offer of some US$300 million, which is forecast for this month, and the other is a securitized loan. The Belo Horizonte-based, which holds 93% of Cosipa's total capital, has hired BB Investimentos to assist in the debt- restructuring. Together, Usiminas and Cosipa produce some 9.2Mt of crude steel a year. At the end of last year, Usiminas registered a consolidated gross debt of US$2.7 billion. VARIG/TAM: Merging Operations To Avert Possible Bankruptcy ---------------------------------------------------------- Viacao Aerea Rio-Grandense SA, Latin America's largest airline, and TAM Linhas Aereas SA, a family owned competitor about two thirds of Varig's size, announced merger plans Thursday in a move to stave off an impending collapse. According to the two airlines, they will merge their operations into a joint venture to be listed on the stock exchange. The deal, to be detailed by June 30, is subject to regulatory approval and could face some limitations by antitrust authorities in the domestic market, where the two companies have roughly a 70% share. The deal comes after the government, which itself is struggling to reduce costs to keep up debt payments, refused to provide aid to Varig, which has implored its assistance after defaulting on some of its US$900-million debt last year. Tam is generally considered more efficient than Varig. However, the airline is also struggling to recover a net loss of BRL450 million ($125m) in the first nine months of last year. An alliance is "probably the only way that they can be successful," said Patricio Sepulveda, regional director for Latin America at Montreal-based International Air Transport Association. Banco Fator, a local investment bank, has been hired to advise both companies on the process. 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 TAM Daniel Mandelli Martin, President Buenos Aires Tel. (54) (11) 4816-0001 URL: www.tam.com.br * Brazil Forecasts US$4 Billion Debt Refinancing in 2003 -------------------------------------------------------- Brazil plans to sell as much as US$4 billion of international bonds this year, according to Bloomberg. The report did not indicate specific dates when the government might offer new bonds. Brazilian Treasury Secretary Joaquim Levy said the country needs to raise funds to help refinance about 55 percent of the US$7.3 billion in foreign bonds and loans coming due this ear. This is about BRL300 billion of foreign and local government securities. At a press conference, Mr. Levy said that the remaining debt coming due this year may be refinanced through domestic debt sales, or government cash reserves. This is in alignment with Lula's promise to reduce dependence on foreign financing, including loans from the International Monetary Fund, according to some investors. At the time of the presentation of the 2002 financing plan, the treasury said it expects the volume of debt maturing in less than a year, which is currently 40 percent, to be between 16 to 29 percent of total debt. The plan to sell debt indicates the country's confidence that foreign investors would buy the bonds, for the first time in almost one year. But some investors remain unconvinced. Peter Geraghty of Darby Overseas Investment in Washington said that he wants more proof of President Inacio Lula da Silva's commitment to curb spending before he buys the bonds. "They've said they're serious about reform but I don't think the administration has been tested yet," he said. Some economists say Brazil may default on some of its debts within the next three years. Last year, the country sold US$3.93 billion of international bonds by April. At that time, yields on the benchmark 8 percent bond due 2014 increased following investors' concerns of a default, said Bloomberg. The country is not likely to sell international bonds until the benchmark bond yields went down further. According to Muhammad El-Erian of Pacific Management Co., Brazilian bonds yield an average of 13 percentage points more than U.S. treasuries with comparable maturity. He added that the Brazilian bonds have to narrow to about 8 to 8.5 percentage points in order to sell internationally. The cost of debt service in Brazil went up by 4 percentage points last year due to the 35 percent decline in the value of the local currency, said Mr. Levy. About half of the government's debt is tied to the overnight interest rate -- which the central bank has raised 7.5 percentage points to 25.5 percent in the past 12 months - and more than a third of the debt is linked to the dollar, said Bloomberg. Mr. Levy added that this year, he expects the value of outstanding domestic and foreign bonds to rise to as much as BRL1.02 trillion (US$284.8 billion). The government would attempt to steady its debt load through increasing sales of inflation- linked securities and bonds with fixed interest rate, he said. The government will also try to postpone the maturity of its securities to an average of 38 months. At the end of last year, the average maturity was 33 months. ========= C H I L E ========= AEROCONTINENTE: To Establish Alliance With Chilean Firm ------------------------------------------------------- Peruvian airline AeroContinente is hoping operations in Chile will resume promptly. The company's authorization to operate in that country was impounded following an investigation into its alleged involvement in drug trafficking and money laundering. Instead of waiting until its judicial problems in Chilean courts are solved, the Company is seeking an alliance with a Chilean company, making it a majority owner. The Company believes this is the easiest way and fastest solution for allowing the Peruvian airline to resume operations there. According to AeroContinente's president, Lupe Zevallos, although talks with the Chilean helicopter company Nimbu - owned by the former LanChile pilot Diogenes Arredondo - are on stand by, the Company has made progress on negotiations with other Chilean companies. "We never reached any agreement with Nimbu, as we were only exploring new business opportunities. But we are talking to other companies," Zevallos said. CONTACT: AEROCONTINENTE AIRLINES Jr. Moyobamba 101 Tarapoto, Peru Phone: (094) 524332 Fax: (094) 523704 Home Page: http://www.aerocontinente.com/ Contact: Sr. Zad Desm,, Vice President CTR: Parent Brokers Debt Agreement with Lenders ----------------------------------------------- SR Telecom, the telecommunications industry's leading supplier of fixed wireless access solutions, announced Thursday that it has reached an agreement with the lenders of Communicacion y Telefonia Rural, S.A. (CTR), its service provider subsidiary in Chile. "We are pleased with the ongoing support and confidence demonstrated by the lenders in our wireless operations," said David Adams, Vice President, Finance and Chief Financial Officer. "This agreement supports the future performance of our CTR subsidiary based on a business plan that will enable it to meet key financial targets and improved EBITDA." This agreement provides for a restructuring of principle repayments due in 2003 and a deferral of a portion of the originally scheduled payments to 2004. The deferral is similar to arrangements made with the lenders in 2002 for scheduled repayments in support of CTR. This partial restructuring enables CRT to focus on completing its network and introducing marketing initiatives to improve its financial performance. ABOUT SR TELECOM SR Telecom is a world leader and innovator in Point-to-Multipoint Wireless Access solutions, which include equipment, network planning, project management, installation and maintenance services. Its products, which are used in over 110 countries, are among the most advanced and reliable PMP wireless telecommunications systems available today. Serving telecom operators worldwide, SR Telecom's fixed wireless solutions provide high-quality voice and data for applications ranging from carrier class telephone service to high- speed Internet access. CONTACT: David Adams, Vice-President, Finance and CFO, Tel: (514) 335-4035 Email: David--Adams@srtelecom.com Paul Goyette, Director, Communications Tel: (514) 335-2429 ext. 4361, Email: Paul--Goyette@srtelecom.com URL: www.srtelecom.com Scott Lawrence, MAISON BRISON Tel: (514) 731-0000 Email: scott@maisonbrison.com MANQUEHUE NET: Debt Ratings Improve on New Development Plan ----------------------------------------------------------- Fitch Ratings upgraded the debt rating of Chilean competitive local exchange operator Manquehue Net to BB from B-, with a stable outlook, reports Business News Americas. The upgrade on the Company's rating also reflects a positive trend in its operating cash flow. The action follows the Company's successful restructuring of a US$23.4-million syndicated loan through a new development plan, obtaining two years grace for repayment. Moreover, under the new schedule, repayment will now be disbursed over five years, starting in September 2004. The loan was taken out in May 2001 with Corpbanca, BCI, BICE, Dresdner Bank and Banco Security. The development plan now requires liability to exceed EBITDA by a factor no greater than 5.5 from June 2006 onwards, compared to a factor if 9.5 in June 2003. Additionally, total assets are to be no less than 4.6mn UF (Chile's inflation-indexed currency), compared to the current minimum of 6.1mn UF (101.7bn pesos, or US$137mn). Manquehue is now generating annual EBITDA of CLP6.5 billion, covering financial expenses by a factor of 1.5. The Company ended 3Q02 with total debt of CLP56 billion. The Company also got a shot in the arm after shareholders Metrogas and Inversiones el Roble made a capital injection to the tune of CLP2 billion. The new development plan reinforces the Company's efforts to target the high-income sector. Another positive factor, Business News Americas recalls, is the November 2002 arrival of Capital Trust, a new shareholder, which took a 19.4% stake as its share of a 30% stake divested by UK- based power company National Grid. Existing Manquehue shareholders Williams Communications and investment company Xycom took the rest of National Grid's stake to raise theirs to 23.5% and 12 .7%, respectively. Local shareholders, the Rabat Group and gas company Metrogas, hold 19.13% and 25.54% stakes in the Company, respectively. CONTACT: MANQUEHUE NET S.A. Av. Condor 796, Enterprise City, Huechuraba Santiago Chile Phone: 00 562 243 8800 Fax: 00 562 248 7292 EMAIL: info@manquehue.netl Home Page: http://www.manquehue.net/ http://www.manquehue.cl Contact: Mr. Miller Williams, President Sr.Jos, Luis Rabat Vilaplana, Vice President =========== M E X I C O =========== CFE: El Cajon Project Bid Deadline Extended to February 19 ---------------------------------------------------------- CFE, Mexico's state power company said it postponed the deadline for receiving bids on the construction of the El Cajon hydro project to February 19. A company source told Business News Americas that the reason for the deadline extension is to give interested companies to prepare their bids. This is the second time the deadline was postponed. A revised set of bidding rules, which contain more geological and technical data, caused the original deadline to be moved to February 7. The source added that about 30 companies have bought bidding rules so far. He also said that some companies have formed consortiums in order to bid for the project. Bidding rules will be sold until February 13. Business News Americas named a few companies, which reportedly purchased bidding rules. These are Mexico's ICA Group, Sweden's Skanska, Italy's Impregilio, Spain's Dragados, Brazil's Camargo Correa and Argentina's Techint. According to the official company timetable, CFE would make a final decision on March 10, after economic bids are opened on March 3. Work is set to begin on March 26. The US$ 1.04 billion project in Nayarit state is to be completed in August 2007. The plant would have a capacity of 750MW. CONTACT: COMISION FEDERAL DE ELECTRICIDAD Rio Rodano 14, Col. Cuauhtemoc 06598 Mexico, D.F., Mexico Phone: +52-55-5229-4400 Fax: +52-55-5310-4614 http://www.cfe.gob.mx Contacts: Alfredo Elias Ayub, General Director Arturo Hernandez Alvarez, Director of Operations Francisco J. Santoyo Vargas, Director of Finance GRUPO MEXICO: Cananea Workers End Strike ---------------------------------------- The strike at Grupo Mexico SA's Cananea copper mine in northern Mexico's Sonora state ended Thursday after the world's third- largest copper producer reached an agreement with unions on a productivity bonus and other benefits for miners. Union spokeswoman Consuelo Aguilar said that striking workers have returned to work Thursday morning. "We've finally reached an agreement that will help us boost capacity and productivity," said Juan Rebolledo, vice president for international affairs at Grupo Mexico. Under the agreement, Grupo Mexico will pay workers a bonus of 26.5% of their salary if they produce a minimum of 130,000 tons and 32.58% for 160,000 tons for the first three months. From then on, bonuses will range from 32.58% to 68.20%. The Company also agreed to pay half of the workers wages for the duration of the strike. Rebolledo said the company expects to exceed 150,000 tons at the mine this year, but couldn't make an estimate until production figures are revised. 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 TMM: TFM Completes Exchange Offer --------------------------------------- Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM"), announced Thursday that its subsidiary, TFM, S.A. de C.V. ("TFM"), has successfully completed its exchange offer for its outstanding unregistered 12.50 percent Senior Notes due 2012 (the "Outstanding Notes"). Holders of approximately $179,675,000 in principal amount, representing nearly 100 percent of the total principal amount of the Outstanding Notes, tendered their Outstanding Notes for an equal principal amount of new registered notes (the "Exchange Notes"). The Exchange Notes were issued on February 4, 2003. The terms of the Exchange Notes are identical in all material respects to the terms of the Outstanding Notes, except for the transfer restrictions and registration rights relating to the Outstanding Notes. The exchange offer was made upon the terms and subject to the conditions set forth in the prospectus, dated January 3, 2003, and the letter of transmittal related to the exchange offer. The exchange offer commenced on January 3, 2003 and expired on January 31, 2003 (the "Expiration Date"). Tenders may not be withdrawn after the Expiration Date. The exchange offer was made solely by the prospectus dated January 3, 2003, the related letter of transmittal, and any amendments or supplements thereto. This announcement is neither an offer to purchase nor a solicitation of an offer to sell TFM notes. The exchange offer was not made to, nor were tenders accepted from, or on behalf of, holders of Outstanding Notes in any jurisdiction in which the making of the exchange offer or the acceptance thereof was not in compliance with the laws of such jurisdiction. Headquartered in Mexico City, TFM operates Mexico's Northeast railway and carries over forty percent (40%) of the country's rail cargo. Visit TFM's web site at www.tfm.com.mx. The site offers Spanish/English language options. Grupo TMM, S.A. (NYSE:TMM and BMV: TMM A) and Kansas City Southern (NYSE:KSU) are owners of the controlling interest in TFM. CONTACT: Grupo TFM Company Contact: Jacinto Marina, 011-525-55-629-8790 jacinto.marina@tmm.com.mx or Leon Ortiz, 011-525-55-447-5847 lortiz@gtfm.com.mx HAYES LEMMERZ: Reorganization Disclosure Conditionally Approved --------------------------------------------------------------- Hayes Lemmerz International, Inc. (OTC Bulletin Board: HLMMQ) Thursday announced that it has reached an agreement in principle on its Disclosure Statement and Plan of Reorganization with its pre-petition secured lenders and Apollo Management V, L.P., which manages funds owning over 40% of the Company's Senior Notes. The parties believe they are close to reaching agreement with the Official Committee of Unsecured Creditors, the last major constituent in the case. The Disclosure Statement hearing held in the United States Bankruptcy Court for the District of Delaware on February 6, 2003 has been continued until February 20, 2003, after resolving most of the 10 objections before the Court. The Company believes that this brief continuation will allow time for an agreement including the Creditors' Committee to be finalized, which will permit timely confirmation of its Plan of Reorganization on April 9, 2003. "We are pleased with the progress to date and believe that this will enable the Company to emerge timely from Chapter 11 and maximize the value for our constituents," said Curt Clawson, Chairman and CEO. Hayes Lemmerz and its subsidiaries in the United States and one subsidiary in Mexico filed voluntary petitions for reorganization under Chapter 11 of the bankruptcy code in the U.S. Bankruptcy Court for the District of Delaware on December 5, 2001. Hayes Lemmerz International, Inc. is one of the world's leading global suppliers of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company has 44 plants, 3 joint venture facilities and 11,400 employees worldwide. CONTACT: HAYES LEMMERZ INTERNATIONAL, INC. Marika Diamond Tel: +1-734-737-5162 ISPAT INTERNATIONAL: Fourth Quarter 2002 Results Improve -------------------------------------------------------- - Ispat International N.V., (NYSE: IST US; AEX: IST NA), reported Thursday a net income of $51 million or 42 cents per share for the fourth quarter of 2002 as compared to a loss of $86 million or negative 71 cents per share for the fourth quarter of 2001. Consolidated sales(1) and operating income for the fourth quarter were $1.3 billion and $29 million, respectively, as compared to $1.1 billion and an operating loss of $68 million, respectively, for the fourth quarter of 2001. The Company achieved a 16% increase in steel shipments to 3.7 million tons, as compared to 3.2 million tons shipped in the same period last year. Results for the fourth quarter of 2002 were negatively impacted by net amount of $55 million towards certain one-time items such as write-off of investments in Empire mines, write down of 2A Bloomer and 21" Bar Mill at Ispat Inland and gain from sale of assets in Pipe making subsidiary at Mexico. Net debt(2) at the end of fourth quarter was $2.2 billion. Capital expenditure for fourth quarter of 2002 totaled $39 million. At December 31, 2002 the Company's consolidated cash, cash equivalents and short-term liquid investments totaled $77 million. The Company also had approximately $308 million available to it under various undrawn lines of credit and bank credit arrangements(3). During the fourth quarter of 2002, the Company also recorded an after-tax charge of $273 to Other Comprehensive Income towards minimum pension liability adjustment. This charge, which pertained mostly to Ispat Inland, reduced the amount of Shareholders' Equity in the Balance Sheet. Ispat International N.V. is one of the world's largest steel producers, with major steelmaking operations in the United States, Canada, Mexico, Trinidad, Germany and France. The Company produces a broad range of flat and long products with over 90% of sales in North American Free Trade Agreement (NAFTA) participating countries and the European Union (EU) countries. Ispat International is a member of The LNM Group. To see financial statements: http://bankrupt.com/misc/Ispat.htm CONTACT: ISPAT INTERNATIONAL LIMITED T.N. Ramaswamy, Director, Finance Tel: +44-20-7543-1174 or +31-10-282-9471 McInerney, Investor Relations of Citigate Dewe Rogerson Tel: +1-212-419-4219 ======= P E R U ======= MINERA VOLCAN: Treatment Plant Operations Suspended Indefinitely ---------------------------------------------------------------- Compania Minera Volcan ceased operations at its mineral treatment plan Mahr Tunel, the largest zinc miner in Peru revealed in a filing with the Lima Stock Exchange. The Company didn't say when the suspension, which is seen by an analyst as a move to cut costs, would be lifted. According to Luis Bravo, an analyst at Centura SAB brokerage, closing the plant will cut costs without hurting output because Volcan has four other treatment plants with a combined capacity to treat about 15,000 metric tons of mineral daily. "They are moving production from Mahr Tunel to other plants where they have excess capacity to save," Bravo said, adding that the Company's 2002 output was 276,000 metric tons, or about 88% of its capacity of 314,000 metric tons. Meanwhile, an official from the Company told Reuters that the miner is hoping for higher zinc prices to pull itself out of a slump and finance a program of exploration for its vast mining concessions. "I hope to see prices between $800 and $850 a tonne during the year," the official said, adding that higher zinc prices could help Volcan finance an exploration program after several years of lean exploration budgets. Volcan has some 240,000 acres (100,000 hectares) in mining concessions in Cerro de Pasco and Yauli. Volcan is expected to release financial results for 2002 next month, and according to the official, these results were "not going to be good." As of September 30, Volcan had lost PEN49.5 million ($14.1 million) compared with a loss of PEN19.7 million ($5.62 million) a year earlier. Figures published recently by Peru's Energy and Mines Ministry showed that Volcan's zinc production, which accounts for 85% of the Company's income, had declined 13.6% in 2002 compared with a year earlier to 275,935 tonnes of fine zinc in concentrates. The official said a week-long strike in October and a cash-flow problem that led to a scarcity of inputs and lack of spare parts had been responsible for the decline. "We are overcoming this situation but we still need a little more time," the official said. Volcan's goal in 2003 is to bring zinc output back to 2001 levels, when the company produced 319,317 tonnes of fine zinc in concentrates, he said. CONTACT: COMPANIA MINERA VOLCAN Av Gregorio Escobedo 710 Jesus Mara Lima, Peru Tel: +51 1 219-4000 Fax: +51 1 261-9716 Contact: Mr. FMG Sayan (Francisco), Chairperson ================= V E N E Z U E L A ================= CITGO: Uncertainty Over Liquidity Pulls Down Debt Ratings --------------------------------------------------------- Citgo Petroleum had its senior unsecured long-term debt rating downgraded to Ba3 from Ba2 by credit rating agency Moody's. According to Business News Americas, the ratings are being kept under review for further downgrade. Moody's also downgraded Citgo's senior implied rating to Ba3 from Ba1. The downgrades came amid a general strike in Venezuela that has clouded Citgo's liquidity, as well as its financial performance. Moody's suggested the Ba3 rating reflects the expectation that Citgo will become more highly leveraged following a planned sale of US$550 million in new unsecured notes and potential dividend flows to direct parent PDV America. CITGO/PDV AMERICA: S&P Changes CreditWatch Listing to Developing ---------------------------------------------------------------- Standard & Poor's Ratings Services said Thursday it revised its CreditWatch listing on refining and marketing company PDV America Inc. to developing from negative. The ratings on PDV America, including those of its wholly owned CITGO Petroleum Corp. subsidiary, were placed on CreditWatch on Dec. 10, 2002. Tulsa, Okla.-based PDV America, which is indirectly owned by Petroleos de Venezuela S.A., has about $2 billion in debt and capital lease obligations outstanding. "The revision of the CreditWatch listing to developing reflects the potential for a ratings upgrade, downgrade, or affirmation, depending on the success of the efforts to restore liquidity, which is tied to maintenance of improved crude oil shipment volumes from Venezuela and access to external financing," said Standard & Poor's credit analyst Bruce Schwartz. "However, if CITGO is unable to complete a proposed bond offering, ratings on PDV America and CITGO likely will be lowered because PDV America's liquidity could be insufficient to meet 2003 obligations barring financial assistance from PDVSA or access to alternative external financing," he continued. CITGO also announced Thursday that it will sell $550 million in new unsecured notes, which would raise the company's liquid resources to about $800 million. The proceeds of the offering will be retained by CITGO to reduce outstanding bank debt and meet potential calls on the company's resources (i.e., provide for the potential termination letters of credit posted on behalf of CITGO, working capital needs, and maturing debt at PDV America). Following the completion of the debt offering, Standard & Poor's will reevaluate its ratings on PDV America. A ratings upgrade would be contingent on: --PDV America raising at least $200 million of additional external funds to fortify liquidity; --Continued shipments of Venezuelan crude oil at or near crude supply agreement volume minimums with continuing advantageous trade terms, which implies that Venezuelan political conditions will sufficiently stabilize to prevent a reversion to volume disruptions; and --Sufficiently buoyant refining margins that enable CITGO to generate at least $700 million of operating cash flow in 2003. If CITGO does not complete the notes offering, the corporate credit rating and all ratings of PDV America and CITGO likely will be lowered by at least one notch. ANALYST: Bruce Schwartz, CFA, New York (1) 212-438-7809 IBH: To Voluntarily Delist From The Nasdaq Smallcap Market ---------------------------------------------------------- International Briquettes Holding (Nasdaq: "IBHVF") said that the Company will voluntarily delist its shares from The Nasdaq SmallCap Market ("Nasdaq"). The delisting is expected to be effective from the opening of business on February 18, 2003. Trading of the Company's shares on Nasdaq will cease upon delisting. The Company's shares will continue to trade and be listed on the Caracas Stock Exchange. The shareholders of the Company approved the delisting of the Company's shares at the Company's annual shareholder meeting held on January 27, 2003. The delisting of the Company's shares was sought in light of the particular situation of the Company and the need of using efficiently its resources. For these reasons, the Company decided that the administrative costs of maintaining a listing on the Nasdaq SmallCap Market were not justified. Individuals who wish to sell the Company's shares on the Nasdaq SmallCap Market before the close of trading on February 17, 2003 should consult their brokers. CONTACT: International Briquettes Holding, IBH Armando Rond¢n, Investor Relations Telephones: (58-212) 707.62.80 / 61.27 Telefax: (58-212) 707.63.52 E-mail: armando.rondon@sivensa.com *********** 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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