/raid1/www/Hosts/bankrupt/TCRLA_Public/030219.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, February 19, 2003, Vol. 4, Issue 35
Headlines
A R G E N T I N A
COCYF: Financial Trust Rated `raCC' by Local S&P
CTG: Postpones Exchange Offer Deadline Once Again
FONDO AGRICOLA: Evaluadora Latinoamericana Rates Debt Securities
REPSOL YPF: Meets With Brazilian Heads To Discuss Interconnection
TGS: Local S&P Rates Corporate Bonds `raCCC'
* UBS Warburg Complains About Debt Advisor Talks
* Argentine Finance Minister To Meet Disgruntled Creditors in US
B E R M U D A
TYCO INTERNATIONAL: Insurer Backs Out Of Policy Covering Execs
B R A Z I L
AES CORP.: Puts Off Brazilian Investments
BRAZILIAN UTILITIES: Rate Hikes Could Aggravate Inflation
COPEL: Halts Payments To Spanish Firm On Governor's Order
LIGHT SERVICOS: Borrows EUR110M From French Parent
SANEPAR: Vivendi Moves To Retain Control
USIMINAS: Domestic Demands Prompt Export Reduction
C H I L E
ENAMI: Instigates Asset Management Solution Software
ENERSIS: Board To Seek Shareholders' Capitalization Approval
TELEFONICA CTC: ADSL Subscriber Base Increases Nearly Three-Fold
C O S T A R I C A
ICE: Reaches Accord With Union On Budget Cut
J A M A I C A
AIR JAMAICA: Takes Off With VRX
M E X I C O
ALESTRA: SEC Okays Debt-Restructuring Program
BANCO DE SURESTE: Concludes Liquidation
MEXICAN AIRLINES: Rising Fuel Prices Worsen Condition
PEMEX: Commissions Pushing For Fleet Modernization
P A R A G U A Y
BANCO PARANA: Leaves Troubled Paraguay
P E R U
BANCO WIESE: Intesa Decides Against Sale
T R I N I D A D & T O B A G O
CARONI LTD.: Court Issues Injunction Preventing Assets Sale
U R U G U A Y
* Uruguay Advances in IMF Talks, Reports Local Paper
V E N E Z U E L A
CANTV: Shares Fall After Telephone Rate Freeze
- - - - - - - -
=================
A R G E N T I N A
=================
COCYF: Financial Trust Rated `raCC' by Local S&P
------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
on Thursday gave a rating of `raCC' to US$40.55 million of
financial trust issued by Fideicomiso Financiero para la
titulizaci¢n de activos de COCYF S.A. y de Loma Negra S.A.
(COCYF).
The rating, which means that the debt is currently highly
vulnerable to non-payment, affects "Certificados de Participaci¢n
por un monto de US$40.550.212,86".
The National Securities Commission of Argentina classifies the
financial trust, whose maturity date was not indicated, under
"Participation Certificate."
CTG: Postpones Exchange Offer Deadline Once Again
-------------------------------------------------
Argentine electricity company Central Termica Guermes SA extended
until Feb. 26 the deadline for its offer to swap new debts or
shares for US$54 million of existing bonds coming due in 2010,
Dow Jones reports, citing a company statement sent to the
Argentine stock exchange last Friday.
This is the second time CTG has extended the deadline for the
offer. Last month, the Company extended the deadline from Jan. 31
to Feb. 14, saying investors didn't have enough time to analyze
the deal owing to the vacation period at the end of the year.
This time around, the Company put the delay down to "a range of
factors."
In exchange for their holdings, Guemes' investors can receive
equity and up to US$32.4 million of 3% bonds coming due in 2013.
Alternatively, they can receive up to US$54 million of 2% coupon
bonds coming due in 2013 with no equity, the Company said in a
filing with the stock exchange last December.
The exchange deal will give Guemes more time to pay its debts.
CONTACT: Central Termica Guemes S.A.
Avenida Leandro N Alam 822
Piso 12
Ciudad Autonoma de Buenos Aires C1001AAQ
ARGENTINA
Tel. +54 4311-6064/6065/6066
FONDO AGRICOLA: Evaluadora Latinoamericana Rates Debt Securities
----------------------------------------------------------------
Evaluadora Latinoamericana S.A. Calificadora de Riesgo issued
ratings on Wednesday to various financial trusts issued by Fondo
Agr¡cola de Inversi¢n Directa 2007.
According to the National Securities Commission of Argentina,
US$15 million of debt securities described as "T¡tulo de Deuda
Clase B" were rated `BBB', while US$30,000 of Certificados de
Participaci¢n were rated `C'. However, debt securities described
as "T¡tulo de Deuda Clase A" were rated `A'.
The three financial trusts mentioned come due on February 28,
2008. The announcement did not indicate the CUSIP, and the
financial date on which the ratings were based.
REPSOL YPF: Meets With Brazilian Heads To Discuss Interconnection
-----------------------------------------------------------------
Ramon Blanco, Repsol-YPF's operating VP, met with Brazil's
President Luiz Inacio Lula Da Silva and Mines and Energy Minister
Dilma Rousseff Friday to discuss the interconnection of
Argentina, Brazil and Bolivia, reports Business News Americas.
According to Blanco, the idea is to create a unified energy
market to improve efficiencies and reduce costs. Repsol-YPF has
significant interests in those three countries and is eager to
export natural gas from its reserves in Argentina and Bolivia to
Brazil, he said.
In related news, Repsol revealed plans to invest US$200 million
in Brazil this year, and said that the investments would be
applied across all lines of business in Brazil.
The Spanish-Argentine oil group expects Brazil's natural gas
market to keep growing at annual rates of around 17%.
Business News Americas recalls that Repsol YPF is the first
private sector company in 45 years to invest in Brazilian
refineries, through its acquisition of the Manguinhos refinery
and a share in the Refap refinery as part of an asset swap with
Brazil's federal energy company Petrobras.
Through that asset swap, Repsol also acquired 481 service
stations in the center, southeast and south of Brazil, with total
sales of 480 million liters a year and a 10% stake in the
Albacora Leste production field in the Campos basin.
Repsol-YPF owns shares in seven other exploration blocks.
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
TGS: Local S&P Rates Corporate Bonds `raCCC'
--------------------------------------------
Corporate Bonds issued by Transportadora de Gas del Sur S.A.,
were rated `raCCC' by the local branch of rating agency Standard
& Poor's International Rratings, Ltd on Monday, according to the
country's National Securities Commission.
The affected bonds include US$100 million of "Obligaciones
Negociables emitidas bajo el Programa Global de T¡tulos de Corot
y Mediano Plazo por USD 500 Mio, vencido en diciembre de 1998",
due last December.
Bonds described as "Programa global de 2000, worth US$300 million
also received the junk rating, along with US$500 million of
"Programa Global de 1999". The maturity dates of these two bonds
were not indicated in NSC's announcement.
The rating means that the bonds above are currently vulnerable to
non-payment, said S&P in its web site. The rating agency also
said that payment is dependent upon favorable business and
financial conditions.
Meanwhile, the Company's stock described as "Acciones Ordinarias
en Circulaci¢n Clase "B" de 1 voto c/u, V/N $1" was issued a
rating of `3'.
The ratings reflect the Company's financial performance as of the
end of December last year.
* UBS Warburg Complains About Debt Advisor Talks
-------------------------------------------------
UBS Warburg, one of the three finalists for Argentina's debt
talks advisor, filed complaints with the government auditor and
the Economy Ministry, after fellow adviser finalist Lazard
Freres's bid.
Dow Jones Newswires quoted sources close to UBS describing
Lazard's bid as "outrageous", and having "incredible
irregularities." On February 6, Finance Secretary Guillermo
Nielsen announced French bank Lazard as the winner of the bidding
process. Lazard offered to charge US$2.28 million for its
services, lower that UBS' offer of US$2.33 million. The third
finalist, Morgan Stanley offered to charge US$14.6 million.
Mr. Nielsen said that the adviser would be Lazard, but the formal
announcement will be delayed because of the "highly political
environment", as the country's April 27 presidential election
approaches. According to him the process has to be "absolutely
transparent."
However, an offer from UBS prompted the Economy Ministry to
declare a postponement of the declaration of the bid winner. The
Ministry said it would study UBS' proposal to match the lowest
bid first.
UBS also questioned the authenticity of two unnotarized
signatures in the final bid papers submitted by Lazard. Dow Jones
reported that only the signature of Lazard's Michele Charles-
Lamarche was notarized. The report added that UBS may ask for an
independent handwriting verification by an expert under an
Argentine court.
Mr. Nielsen criticized UBS' complains, saying those were
"nonsense". He added that its claims are on shaky legal grounds.
According to him, lawyers from the Ministry had seen the papers
and saw nothing amiss. Mr. Nielsen explained that the inclusion
of a handwritten figure is a common practice in secret bidding
processes. He said that the number is often added at the end by
the one person who is entrusted with knowing it, to minimize the
risk of leaks.
UBS representatives also claimed that their bid was the lowest in
reality; as it included travel and other expenses not covered in
Lazard's offer.
But Mr. Nielsen said that the rules of the tendering process
explicitly instructed bidders to exclude travel expenses, and
other such variables, which means that UBS' inclusion of such
expenses was a contravention.
Officials from Lazard declined to comment, but a bank spokesman
said their bid was undisputedly the lowest.
Adding to the controversy, local paper Ambito Financiero ran
stories suggesting that the deal with Lazard had been arranged
during Economy Minister Roberto Lavagna's visit to Europe last
year.
A person close to UBS said, "The Romans used to say the wife of
the emperor must not only be honest but must also appear to be
honest. There has been a rumor around for many months that
everything was prearranged, now you come to the date when things
are to be opened and a few hours later you have the officer in
charge saying that Lazard won," even though the government said
it had not been finalized.
"UBS can take it to court if they want," said Mr. Nielsen,"The
dossier has been sent to the attorney general for approval, I
would expect a final announcement by mid-week."
* Argentine Finance Minister To Meet Disgruntled Creditors in US
----------------------------------------------------------------
Argentine Finance Minister Guillermo Nielsen will meet
bondholders in the United States, Bloomberg reports, citing local
paper La Nacion. The newspaper reveals that bondholders of the
US$95 billion debt, which the country had defaulted on in
December 2001, are threatening to take legal action against the
Argentine government, for failing to begin debt negotiations.
Bondholders are complaining that Argentina's government hasn't
chosen a financial advisor yet. Mr. Nielsen said that the country
is likely to declare Lazard LLC as the official debt talks
adviser by the end of next week.
Earlier reports indicated that Lazard gained advantage over other
debt adviser bidders after offering to charge the lowest fees.
Other finalists for debt advisor are UBS Warburg, and Morgan
Stanley.
Argentina is expected to appoint an adviser before the end of
this month, in line with the requirements of a debt rollover
agreement with the International Monetary Fund.
The adviser's responsibilities will include providing technical
assistance, establishing a registry of the thousands of
bondholders, facilitating a restructuring of the defaulted debt,
and underwriting the restructuring itself, said Dow Jones
Newswires.
=============
B E R M U D A
=============
TYCO INTERNATIONAL: Insurer Backs Out Of Policy Covering Execs
--------------------------------------------------------------
Tyco International, Ltd. said it would file a legal challenge
against an insurer that called off a policy designed to protect
Tyco's executives from lawsuits.
In a Form 10-Q filed with the U.S. Securities and Exchange
Commission, Tyco said: "We received notice on February 13, 2003
that one such carrier purports to have rescinded its policy with
us on the basis of alleged misrepresentations made by us under
our former senior corporate management."
Tyco conceded that it may end up having no similar insurance
coverage for its current directors and officers, a number of whom
are defendants in some lawsuits. Reuters noted that Tyco did not
disclose the name of the insurance company,
The Company's former top executives are indicted in a Manhattan
Court on charges of grand larceny and enterprise corruption.
Former Chief Executive Dennis Kozlowski, Ex-Finance Head Mark
Swartz, and the company's former chief legal counsel, Mark
Belnick, are all accused of improperly obtaining money from
Tyco's funds. The three all entered pleas of not guilty, and are
out on bail.
In the meantime, Mr. Kozlowski's replacement, Mr. Edward Breen,
seeks to restore investor confidence in the company.
Tyco shares, which went down 70% last year, climbed 75 cents at
US$15.22 on the New York Stock Exchange on Friday. The stock has
traded between US$7 and US$35.83 over the last year, said
Reuters.
CONTACT: TYCO INTERNATIONAL LTD.
Corporate Office
The Zurich Centre, Second Floor
90 Pitts Bay Road
Pembroke HM 08, Bermuda
Phone: 441-292-8674
Home Page: http://www.tyco.com
Contacts:
Gary Holmes (Media)
Tel +1-212-424-1314
or
Kathy Manning (Investors)
Tel +1-603-778-9700
===========
B R A Z I L
===========
AES CORP.: Puts Off Brazilian Investments
-----------------------------------------
US-based power giant AES Corp. decided to suspend investments in
Brazil, where it is facing a difficult time paying the debts of
its local units, amid pressure from creditors.
The Company's creditors believe there is no guarantee of a
Brazilian recovery.
AES controls electric power distributor Eletropaulo, AES Tiete
and AES Sul.
Eletropaulo, which AES bought from the government as part of a
year 2000 privatization program, is now considered technically
bankrupt after failing to pay in January an US$85-million tranche
of loans owed the Brazilian national development bank BNDES.
Speculation is rife that the executives of the US parent may
simply hand Eletropaulo back to the government rather than
attempt to renegotiate debts.
AES is also reportedly planning to unload its 53% stake in AES
Tiete in order to reduce debts. AES acquired the stake for BRL938
million in 1999 during an auction promoted by the Sao Paulo state
government.
AES Sul, in December, narrowly escaped default after it
successfully renegotiated US$53.5 million in debentures. Despite
completion of the negotiations, credit rating agency Standard &
Poor's, which lowered AES Sul's rating to brCC in November,
expressed concern that AES Sul might not be able to meet payments
this year, including a US$64 million syndicated loan due in the
first half.
To see financial statements:
http://bankrupt.com/misc/AES_CORP.htm
CONTACT: AES Corp., Arlington
Kenneth R. Woodcock, 703/522-1315
Web site www.aes.com
Investor relations: investing@aes.com
BRAZILIAN UTILITIES: Rate Hikes Could Aggravate Inflation
---------------------------------------------------------
Brazilian power distributors in four states expect to be allowed
to raise rates, reports Bloomberg.
Brazilian regulators proposed a 27% increase for Cia. Energetica
de Minas Gerais (Cemig), 19% for Cia. Paulista de Forca e Luz,
29% for Empresa Energetica de Mato Grosso do Sul SA, and 25% for
Centrais Eletricas Matogrossenses SA.
These proposals await Aneel's approval that's expected to come in
after public meetings that end in early March.
While these proposals have been raised to compensate for losses
caused by weak demand since a 2001 energy crisis and to lure
investment to avert future shortages, these also threaten to
rouse up inflation that's already running at a six-year high.
"Higher utility rates are going to have an impact on inflation,"
said Eulina Nunes, the government statistic agency's director for
inflation research.
Economists, according to Bloomberg, believe that the prospect of
higher inflation may lead the Brazilian central bank this week to
raise overnight lending rates, which are at the highest since May
1999, crimping economic growth.
The bank raised the rate last month to 25.5%. Annual inflation
reached 14.5% in January.
By allowing utility price increases, Brazilian President Luiz
Inacio Lula da Silva also risks angering voters and some leaders
of his Workers' Party already opposed to the government's
economic policies, political analysts said.
"People are giving Lula the benefit of the doubt, associating the
economic hardships with external events," said Christopher
Garman, a political consultant at Tendencias Consultoria in Sao
Paulo. "But that won't last forever."
COPEL: Halts Payments To Spanish Firm On Governor's Order
---------------------------------------------------------
The newly elected governor of the Brazilian state of Parana, who
recently seized control of a regional water company owned by a
Vivendi Environnement SA-led group, ordered a power utility to
suspend payments to Spain's Endesa SA.
The Governor, Roberto Requiao, explained that his aim is to
"break for good" a contract between state-controlled Cia.
Paranaense de Energia (COPEL) and a unit of Endesa that he says
forces the local company to overpay for power.
Bloomberg recalls that in 1998, Brazilian utilities, including
COPEL, signed with Endesa a US$2.5-billion accord, under which
the Spanish company will supply for 20 years energy produced in
Argentina and transmitted through a power line linking the two
countries.
The agreement forced COPEL to buy energy from Endesa produced in
Argentina and sold by Cia. de Interconexao Energetica (CIEN) even
though it has an oversupply of electricity that it cannot sell in
Brazil, Parana's government said. Copel buys energy from Endesa
at US$28 a megawatt/hour and the price for excess electricity
in the wholesale energy market goes for BRL4 ($1.10), according
to Requiao's office.
The news about the suspension sent COPEL's shares down 2.5% to
close at BRL7.31 on the Sao Paulo stock exchange.
"This type of news is always unsettling," said Cristina Davila,
who helps manage EUR2 billion ($2.1 billion) at Sabadell Banca
Privada in Barcelona. "It sends a very negative message to the
investor in Spanish companies that invest in Latin America."
"He's [Requiao] going against contracts that have already been
signed and of course that sends a negative signal," said Walter
Mendes, who helps manage about BRL1.2 billion ($331.7 million) in
Brazilian equities, including Itau and COPEL shares.
CONTACT: COPEL (in Brazil)
Othon Mader Ribas
Tel. 011-5541-222-2027
Email: othon@copel.com
Solange Maueler
Tel. 011-5541-331-4359
Email: solange@copel.com
(New York)
Richard Huber
Tel. 212-807-5026
Email: richard.huber@tfn.com
Isabel Vieira
Tel. 212-807-5110
Email: isabel.vieira@tfn.com
LIGHT SERVICOS: Borrows EUR110M From French Parent
--------------------------------------------------
Brazilian power distributor Light Servicos, which serves the
metropolitan area of Rio de Janeiro, took a EUR110-million loan
from its controlling shareholder, the French-based Electricite de
France (EDF), Business News Americas reported, citing a statement
published by the company in local newspapers Monday.
In the statement, Light said the loan will be repaid on May 15
and interest on the inter-company credit will be 9.263% annually.
The loan was taken amid speculations that the parent company
would not inject any more cash into the debt-laden unit,
prompting credit rating agency Standard & Poor's to cut the
Light's global scale rating to CCC+ from B.
Light faces BRL1 billion (about US$288mn) worth of debt
maturities in both 2003 and 2004.
In addition to the new credits, Light announced it has postponed
until April 30 the payment of a EUR205-million loan owed to EDF
International.
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
SANEPAR: Vivendi Moves To Retain Control
----------------------------------------
Vivendi Environnement refuses to give in easily to the whims of
the government of the Brazilian state of Parana.
The Parana government said Friday that it would take control of
Sanepar, a local water company, from a consortium led by Vivendi
Water. The consortium, which includes Brazilian investors, bought
a 40% voting share in 1998 but had control over the company
through a shareholders' agreement.
According to a report by the Financial Times, Vivendi was due to
open last-ditch negotiations on Tuesday to recover control of
Sanepar. Olivier Orsini, Vivendi's representative, said it would
seek a new shareholder's agreement, offering among other things
increased technology transfer.
But according to the report, the Parana government intends to
stick to its decision.
USIMINAS: Domestic Demands Prompt Export Reduction
--------------------------------------------------
Usiminas would cut imports to satisfy domestic demands, even if
imports fetch more.
Usiminas sales official Idalino Coelho Ferreira mentioned that
China, the biggest importer of the steelmaker's products, pays
the highest prices in the international market: US$520 per ton
for cold-rolled coils this quarter, about US$100 more than what
the domestic market pays per ton.
Despite this, the Company plans to cut down exports by 4% to
870,000 tons from 905,000 tons last year. According to AE-
Setorial News Services, hot-rolled coil exports are predicted to
decline from 206,000 tons last year to 12,000 tons this year.
"The reduction is happening because demand for this product has
been heating up in the domestic market since September," Mr.
Ferreira explained.
However, exports of cold-rolled coils and coated products are
expected to rise this year. Exports of cold-rolled coils and
coated products are forecast at 175,000t and 160,000t this year,
respectively, compared to the 128,000t of cold-rolled sheets and
57,000t of coated products exported in 2002, said Business News
Americas.
Nevertheless, exports are projected to go down to 870,000 tons
this year, compares to 905,000 sold abroad last year.
But Mr. Ferreira said that Usiminas' subsidiary Cosipa may offset
the Company's export reduction. Cosipa may expect to export some
1.3 million tons this year. Together, the two companies' total
output averages 9.2 million tons of crude steel per annum.
About 60% of the 20-30 million tons exported to China are cold-
rolled products, said the report. Other countries that absorb a
large%age of Usiminas' exports are the United States and South
Korea.
CONTACT: Usinas Siderurgicas de Minas Gerais Usiminas PN A
Rua Prof. Jose Vieira de
Mendonca, 3011
Engenheiro Nogueira
31310-260 Belo Horizonte - MG
Brazil
Tel +55 31 3499-8000
Fax +55 31 3499-8475
Web http://www.usiminas.com.br
Contact:
Jose Augusto Muller de Oliveira Gomes, Chairman
=========
C H I L E
=========
ENAMI: Instigates Asset Management Solution Software
----------------------------------------------------
In a bid to cut costs, increase efficiency and competitiveness
and raise its overall value, Chilean state mining company Enami
will be implementing an asset management solution software.
According to a Business News Americas report, Enami will
incorporate EAM software to upgrade management of its US$100
million estimated assets. The Chilean unit of Datastream Systems
(www.datastream.com) has been chosen to apply the solution in
Enami's offices, near the city of Copiapo in northern Chile.
Datastream's 7i software also aims to boost the availability of
Enami's equipment and product line, raise the productive life of
the Company's assets and reduce inventories.
Enami currently has a tight liquidity, with just US$6 million in
cash. At the end of year 2002, its total bank debt was about
US$375 million Additionally, Enami has about US$100 million in
non-interest bearing bank debt raised by assigning export
contracts to the banks.
In Dec. 31, 2002, the Company closed a three-year US$220 million
syndicated bank loan, the proceeds of which was used to repay two
of its largest bank loans for US$150 million and US$70 million.
Enami expects other banks to rollover its remaining credit lines
of about US$160 million as well as non-interest bearing bank
debt.
Enami, an industrial enterprise that is wholly owned by the
Chilean government, provides copper smelting and refining
services to small to mid-sized mining operations. In addition, it
supports these companies by providing price-stabilization
programs, loans, and technical and marketing assistance. By
performing these functions for companies, Enami helps to create
thousands of jobs in areas of Chile where unemployment would
otherwise be high.
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
ENERSIS: Board To Seek Shareholders' Capitalization Approval
------------------------------------------------------------
The board of directors of Chile-based energy group Enersis will
ask shareholders in a meeting on March 31 to approve a capital
increase of up to US$2 billion, reports Reuters.
Originally, the Company had proposed only a US$1.5 billion
capital increase, but the board agreed to up the amount, citing a
need to increase Enersis' liquidity and improve its risk
classification standing.
The capital increase will be in the form of both cash purchases
and financial credit, Enersis said in a statement.
The increase is part of a strategic plan announced last October
to ease the Company's debt and help it counter declining revenues
in Argentina and Brazil. The plan also includes the sale of
assets worth close to US$1 billion.
Reuters also reports that shareholders will vote March 31 on the
planned sale of Enersis' electrical distribution unit, Rio Maipo.
Meanwhile, Enersis, in a statement issued Monday to Chile's
securities regulator SVS, said it will not make the dividend
payment corresponding to February 2003, as conditions do not meet
those set out in the Company's dividend policy.
CONTACT: ENERSIS
Investor Relations:
Ricardo Alvial
Chief Investments & Risks Officer of Enersis
Email: ram@e.enersis.cl
Phone: (562) 353-4682
Contacts:
Susana Rey, srm@e.enersis.cl
Ximena Rivas, mxra@e.enersis.cl
Pablo Lanyi-Grunfeldt, pll@e.enersis.cl
TELEFONICA CTC: ADSL Subscriber Base Increases Nearly Three-Fold
----------------------------------------------------------------
Chile's largest fixed line operator Telefonica CTC Chile saw its
ADSL subscriber base increased to 54,000 clients at the end of
last year, against that of the previous year, reports Business
News Americas.
The unit of Spain's Telefonica SA, which now has a 30% share of
the market, said that almost 70% of ADSL subscribers are
experienced users who have migrated from dial-up services.
CTC ended 2002 with 2.68 million fixed lines in service and 1.85
million mobile subscribers.
The Company reported a CLP17.7-billion (US$24mn) net loss for
2002, reversing the CLP4.2-billion profit in the previous year.
The country's incumbent telco blamed the loss on a CLP15.2-
billion restructuring charge in the fourth-quarter of 2002 and a
CLP7.57-billion hit from the decline in the value of its stake in
international ISP and content provider Terra Lycos.
CTC sold its residential Internet business to Terra Lycos, a
fellow member of the Telefonica Group, in 1999.
Ebitda was relatively flat at CLP397 billion for 2002, from
CLP392 billion in 2001, with its Ebitda margin climbing to 45.4%
from 43.1%.
Barbara Angerstein, an analyst at brokerage Celfin SA, has
indicated that the former state-run monopoly may have a profit
this year, though it will be smaller than its CLP178 billion of
losses since 1999.
CONTACT: TELEFONICA CTC
Avenida Providencia 111, Piso 2
Santiago, Chile
Phone: +56-2-691-2020
Fax: +56-2-691-2392
Homepage: http://www.ctc.cl
Contacts:
Mr. Bruno Philippi, President
Mr. Jacinto Daz, Vice President
Gisela Escobar, Head of Investor Relations
===================
C O S T A R I C A
===================
ICE: Reaches Accord With Union On Budget Cut
--------------------------------------------
Workers union FIT called off the strike it intended to stage
Tuesday against Costa Rican state-run power company and telecoms
monopoly, ICE after the two parties reached an agreement on a
budget cut.
Citing reports by the local press, Business News Americas reveals
that the two parties have agreed to cut CRC86 billion (US$224mn)
from its 2003 budget proposal.
The adjustment will apply to the CRC638-billion, secondary
proposal the Company submitted on February 7, to take account of
probable electricity price hikes, Fabio Chaves, chairman of the
ICE workers union FIT, said.
At the same time, the Company will ask public services regulator
Aresep to reconsider a 12.2% hike in electricity rates, which was
initially rejected last week.
"If the price hikes do not materialize then ICE and the finance
ministry agreed to look for fresh means of financing to
compensate for the difference," Chaves said.
The CRC86-billion budget cut corresponds to the CRC38-billion
estimated income from the price hike and delayed project payments
that will be put off until 2004, Chaves added.
According to ICE Chairman Pablo Cob, Costa Rica's Banco Nacional
will pay ICE's creditors this year as planned, and the Company
will issue bonds payable to the bank next year.
Furthermore, the government agreed to guarantee US$100 million
and US$70 million loans from Credit Suisse First Boston and the
Central American Bank for Economic Integration (BCIE),
respectively, as well as approving a bond issue of approximately
US$49 million, to enable CRC84 billion in financing.
ICE and the FIT will schedule a major meeting soon to ensure that
all members understand the new budget. All parties agreed that
there was no need for layoffs and finance minister Jorge Walter
Bolanos even said this final budget could cover the creation of
1,300 new posts.
=============
J A M A I C A
=============
AIR JAMAICA: Takes Off With VRX
-------------------------------
VRX Worldwide Inc. (TSX- Venture: VRW) announced on Monday its
subsidiary, VRX Studios Inc. ("VRX") a leading, end-to-end,
content solutions provider, has signed a one year, non-
exclusive, worldwide licensing agreement with Air Jamaica.
As part of the agreement, Air Jamaica will have access to VRX
Studios entire archive of high quality 360-degree virtual tours
and interactive maps featuring the top vacation destinations
throughout the Caribbean, Mexico, and the United States. VRX's
compelling interactive destination content will be integrated
into the existing destination pages on Air Jamaica's website,
www.airjamaica.com. Air Jamaica provides a wealth of information
on its website, promoting travel to a variety of Caribbean, US
and European destinations. VRX's informative, user-friendly,
virtual tours and interactive maps will help Air Jamaica's
customers research future vacation destinations and as a result -
increase customer satisfaction.
Air Jamaica, which has been in operation for over 35 years, is
owned by a business consortium that includes the Jamaican
government. Air Jamaica's objective is simple and
straightforward: to be a productive, efficient and profitable
carrier that offers a quality of service that is second to none.
Air Jamaica is a major contributor to the economy of Jamaica,
flying more people annually to the island from its various
gateways, than any other airline.
"VRX's virtual tours and interactive maps are an exciting new
feature on the Air Jamaica web site which caters to our ever-
growing clientele of web savvy holiday travelers, who will now be
able to virtually explore many of the beaches and attractions of
our 14 Caribbean Destinations, as they plan their itineraries,"
noted Gregg Truman, Marketing & Advertising Director at Air
Jamaica's, U.S. based headquarters in Miami, Florida. "We are
proud to have VRX handling this aspect of our website. We are
constantly looking for new and innovative ways to bring Jamaica,
and our Caribbean, into the homes and offices of our passengers,
before and after their Air Jamaica experience, and VRX does this
very well."
The Air Jamaica website provides detailed flight schedules, route
maps, travel tips, frequent flier information and other
information necessary to help even the most inexperienced
traveler successfully plan a business trip or their next family
vacation.
"VRX has the best Caribbean destination content on the Internet -
end of story," stated David MacLaren, President and CEO of VRX.
"Air Jamaica is intimately familiar with the diverse beauty of
the Caribbean islands and recognizes the importance of high
quality, user-friendly content as a powerful online marketing
tool. We look forward to working with Air Jamaica to extend the
reach and depth of their online marketing initiatives."
About VRX
VRX Studios Inc. owns and operates the largest syndicated archive
of destination specific virtual tours and interactive maps in the
world and counts world-renowned companies such as Expedia, Inc.,
Virgin Holidays, Princess Cruises, Cendant Corporation, Dollar
Rent a Car, and the Bermuda Department of Tourism as customers.
Maintaining a state of the art production facility, teams of
experienced programmers, designers, and photographers, VRX's
Services Division (a leading, end-to-end, content solutions
provider) provides custom content solutions to a wide range of
industries including: Education, Real Estate, Sports,
Entertainment, Manufacturing, and Travel & Tourism. To find out
more about VRX Studios visit www.vrxstudios.com.
About Air Jamaica
The Air Jamaica Fleet is currently the newest fleet of planes to
the Caribbean with a total daily lift of over 9,000 seats. Air
Jamaica has scheduled service with over 360 flights a week to the
Caribbean from New York, Boston, Newark, Chicago, Philadelphia,
Baltimore/Washington, Atlanta, Los Angeles, Orlando, Houston, Ft.
Lauderdale, Miami and The U.K. Recent Gateway openings include
Manchester, England, which joined London as the second U.K.
Gateway across the Atlantic with Barbados, St. Lucia, Grenada,
Antigua, Bonaire, Curacao, Grand Cayman, Bahamas and Cuba in the
Caribbean. Eco- friendly Belize became Air Jamaica's 14th
Tropical Destination in November 2002. The airline has a code-
share alliance with Delta Airlines and Air Canada and Joint-Fare
agreements with United Airlines, US Air, Continental and Virgin.
The airline maintains fully computerized reservations center in
North America and Jamaica, with links to most major Reservations
systems. Air Jamaica's Reservations and Information number in
North America and the Caribbean is (800) 523-5585. In Jamaica
call 1-888-FLY-AIRJ and in the United Kingdom call 0-208-570-
7999. Belize Only 0-800-523-5585.
On behalf of the Board of Directors of VRX Worldwide Inc.
Per: "David MacLaren"
David MacLaren
President and CEO
CONTACT:
For VRX: Public Relations
Steve Connelly
VRX Studios Inc.
TEL: 1-888-605-0059
EMAIL: stevec@vrxstudios.com
Investor Relations
Barry Girling
VRX Worldwide Inc.
TEL: 1-877-688-2321
EMAIL: wbg@vrxworldwide.com
For Air Jamaica: Wayne A. Martin
TEL: (305) 670-3222
EMAIL: WMartin@AirJamaica.com
===========
M E X I C O
===========
ALESTRA: SEC Okays Debt-Restructuring Program
---------------------------------------------
Mexican long distance operator Alestra obtained approval from the
US securities regulator SEC for a US$570-million debt
restructuring program, paving the way for a much-needed capital
injection from its shareholders.
According to a report by Business News Americas, the
restructuring efforts are targeted at the Company's US$270
million in bonds maturing in 2006 and US$300 million in bonds
maturing in 2009.
Alestra offered to buy back senior notes with a 60% discount, or
exchange them for new documents that carry a lower interest rate
and a longer-term maturity. For example, 8% senior notes maturing
in 2006 will be exchanged for 5-7% notes maturing in 2008.
The offer is open until March 13, but can be extended, and
delivery of new notes is subject to approval by Mexico's banking
regulator CNB and stock market regulator CVM.
Alestra needed the SEC's approval because US-based telco AT&T
Corp has a 49% stake. The other 51% is controlled by Mexican
consortium Onexa, a 50:50 joint venture between local bank BBVA
Bancomer and industrial group Alfa.
The success of the restructuring program is vital to the US$80
million in capital that the three shareholders have vowed to
inject into the ailing company. The Company must have 95% of the
bondholders accept the offer in order for it to be considered a
success.
For further information about the exchange offer:
http://www.sec.gov/Archives/edgar/data/1098504/000095013003001186
/d424b3.htm#tx428_06
BANCO DE SURESTE: Concludes Liquidation
---------------------------------------
The liquidation of Mexican bank Banco de Sureste has come to an
end, reports Business News Americas.
The process determined that the bank has a bad loan portfolio of
MXN190 million (US$17.6mn) and MXN2 million in deposits owed to
32,000 account holders.
Deposit insurance agency IPAB official Oswaldo Santin said that
half of the outstanding deposits corresponds to two accounts that
were frozen by the banking and securities regulator CNBV for
irregular transactions. The remaining MXN1 million are held in
very small accounts with an average balance of MXN31, Santin
added.
An additional MXN1 million in funds will be paid out to 100
claimants next month, he added.
The liquidation, which began Nov. 29 last year, will cost IPAB an
estimated MXN2.2 billion, MXN1.8 billion of which constitutes
unpaid loans provided by development banks as part of several
unsuccessful attempts to keep Banco de Sureste afloat.
Sureste had 22 branches and a total of 42,940 clients.
MEXICAN AIRLINES: Rising Fuel Prices Worsen Condition
-----------------------------------------------------
Airlines in Mexico, which are yet to recover losses brought about
by the effects of the Sep. 11, 2001 terrorist attacks in the US,
are facing another problem.
The price of turbosine has risen sharply since the beginning of
2003. Aircraft fuel now sells for US$1.28 per gallon, a 50%
increase from the price registered during the last quarter of
2002.
Aircraft fuel absorbs 30% of operating expenses for Mexico's two
large airlines, Mexicana and Aeromexico. Due to the smaller
number and size of the airplanes in Aeromar's fleet, the company
spends only 4.5% of its budget on turbosine.
The general director of Mexicana, who serves as president of the
National Air Transport Chamber (Canaero), called on the Transport
and Communications Secretariat (SCT) to establish norms to
minimize the impact of the rising costs of fuel. Jorge Luis Moya
has met with authorities from the SCT to discuss possible
solutions to this problem.
Director General of Aeromar, Juan Ignacio Steta said the rise in
turbosine prices was a direct result of the potential military
conflict between the United States and Iraq.
"We have our fingers crossed," he said, expressing hope that
world tensions would subside without first escalating into a war.
In addition to the potential war in the Persian Gulf region, the
Mexican airlines also have to deal with the devaluation of the
peso against the dollar.
PEMEX: Commissions Pushing For Fleet Modernization
--------------------------------------------------
Mexico's Lower House Navy and Environmental Commissions have
asked Pemex to prepare a report laying out costs and deadlines
for modernizing its fleet, reports Business News Americas.
The Commission emphasized the need for modernization, noting that
the Mexican state oil company's tanker fleet is in such poor
condition, it is putting crew members' lives at risk and
threatens a possible environmental disaster.
According to Navy Commission President Cesar Patricio Reyes Roel,
Pemex has not invested in its 19-tanker fleet for 13 years. The
vessels are now 24 years old on average and consist of single-
hull tankers (like the Prestige), rather than the double-hull
vessels required by international treaty.
Lack of investment in new vessels means Pemex now rents six
tankers from abroad, costing the company around US$80,000-100,000
a day, Reyes said.
Pemex is due to present its report by end-March. The Commission
will then prepare a budget plan to be incorporated into state
expenditures for 2004.
===============
P A R A G U A Y
===============
BANCO PARANA: Leaves Troubled Paraguay
--------------------------------------
The depressed local economy and the weak financial system in
Paraguay prompted Brazilian state bank Banco do Estado do Parana
to exit the country.
According to a spokesperson from Paraguay's central bank, Banco
Parana has requested a "voluntary liquidation" from authorities
and the closure process could last between six and 18 months. The
Brazilian bank will close shop and leave rather than selling its
local unit to other Paraguayan banks, the spokesperson added.
Business News Americas recalls that Paraguay's banking industry
suffered a severe blow last year after one of its strongest
banks, Banco Aleman, went under and provoked a deposit flight
that saw one third of all deposits, about US$435 million, leave
the financial system.
Last week's downgrade on the country's long-term foreign currency
credit rating to a selective default rating SD, from B- by
international rating agency Standard & Poor's (S&P) added to
Paraguay's financial woes.
The rating action was prompted by the government's failure to
comply with the "put" option exercised by local bondholders of US
dollar-denominated obligations. The bonds, with US$20 million
currently outstanding, mature in 2005, but the terms and
conditions of the debt allow bondholders to exercise a "put"
option every year until maturity.
The government has not complied with the terms since investors
exercised the option on the bonds in late December 2002 and
although the government is in talks with the local banks that
hold the defaulted bonds "full repayment of this debt seems
unlikely in the coming weeks" given the Paraguayan government's
limited liquidity, S&P sovereign analyst Sebastian Briozzo said.
According to S&P, the government is finding it difficult to
secure alternative sources of financing to cover both the fiscal
deficit, estimated at around 3% of GDP for 2003 or around US$120
million, and the maturing debt, which totals about US$100
million.
=======
P E R U
=======
BANCO WIESE: Intesa Decides Against Sale
----------------------------------------
Contrary to plans announced last year, Italian bank Intesa will
no longer sell its Peruvian subsidiary Banco Wiese Sudameris.
Intesa bank, after completing a review of Wiese's financial
situation, decided to support the bank by investing US$150
million in the Peruvian unit.
"There are no talks under way to sell Banco Wiese Sudameris,"
Intesa's Chief Executive Corrado Passera said in a statement.
"After we've completed the review we decided that a re-launch of
our Peruvian subsidiary is the best solution to create value for
stakeholders in Banco Wiese Sudameris as well as for shareholders
in Intesa," Passera said.
Wiese posted a net gain of PEN31.5 million (about $9 million) in
2002 after a net loss of PEN58.9 million in 2001.
Intesa, Italy's biggest bank by assets, said last year it would
sell its 95% stake in Wiese by mid-2003, as part of its plans to
exit the troubled South American market and boost profitability.
Banco Wiese Sudameris is the result of the September 1999 merger
of Banco Wiese and Banco de Lima-Sudameris. Prior to its
acquisition, Banco Wiese had been experiencing severe liquidity
problems since the second half of 1998.
CONTACT: IntesaBci
Investor Relations:
Piazza della Scala, 6
20121 - Milano
Fax: (39) 02 8850 2587
E-mail: investorelations@intesabci.it
Contacts:
Andrea Tamagnini, Tel: (39) 02 8850 3180
Marco Delfrate, Tel: (39) 02 8850 2622
Cristina Paltrinieri, Tel: (39) 02 8850 3571
Carla De Alberti, Tel: (39) 02 8850 3159
Giorgio Grossi, Tel: (39) 02 8850 3189
Anna Gervasoni, Tel: (39) 02 8850 3466
Maria Vittoria Buscicchio, Tel: (39) 02 8850
7114
Manuela Banfi, Tel: (39) 02 8850 3273
BANCO WIESE SUDAMERIS
Dionisio Derteano, 102 Esquina con Miguel Seminario
Lima 27, Peru
Phone: +51-1-211-6000
Fax: +51-1-440-7945
Website: http://www.bws.com.pe
Luis F. Wiese de Osma, Chairman
Eugenio Bertini, CEO
Carlos Palacios Rey, President, Executive Committee
=================================
T R I N I D A D & T O B A G O
=================================
CARONI LTD.: Court Issues Injunction Preventing Assets Sale
-----------------------------------------------------------
An injunction granted by Justice David Myers on Saturday prevents
Trinidad and Tobago state sugar company, Caroni (1975) Ltd., from
selling or transferring specific assets, the Trinidad Express
recalls.
In the meantime, the Company is only allowed to dispose of its
stock in trade, and sell its sugar and rum products. Sale of
lands, and other like assets is strictly forbidden.
Former Caroni employees, Eric Roberts and Edul Muhammed filed the
application for the injunctions through Senior Counsel Seenath
Jairam, who led Henley Wooding, Gillian Lucky and Derek Ali,
according to the report.
The ex-parte injunction was issued after more than one hour of
hearing Mr. Jairam's arguments.
The Company is expected to appear in court today, to clear
matters up. It will be bound by the injunction until the action
is determined, or until the court decides to lift the
prohibition.
CONTACT: Caroni Limited
Old Southern Main Road, Caroni,
Trinidad & Tobago
Phone: (868) 663-1781 or 662-0879
Fax: (868) 663-1404
=============
U R U G U A Y
=============
* Uruguay Advances in IMF Talks, Reports Local Paper
----------------------------------------------------
Uruguay has established the foundation for a debt accord with the
International Monetary Fund, reports local paper El Pais, citing
the country's Economy Minister, Alejandro Atchugarry.
The agreement set a budget deficit target of equal to 3% of the
country's gross domestic product, said the report, adding that
inflation target will be set between 25% and 27%.
The country hopes to conclude talks with the lender's
representative this week. Uruguay needs a new loan to help avert
a possible default on its US$11.4 billion in debt. This year, a
2% decline in the US$18.8 billion economy is expected.
Mr. Atchugarry, central bank President Julio de Brun, and other
government officials represented the country in the negotiations.
Two months ago, the government failed to financially strengthen
four suspended banks, causing the IMF to suspend the release of a
US$380 million disbursement on a US$2.8 billion loan accord.
=================
V E N E Z U E L A
=================
CANTV: Shares Fall After Telephone Rate Freeze
----------------------------------------------
Shares of CA Nacional Telefonos de Venezuela (CANTV), the
country's largest phone company, fell 0.2% to close at VEB2,285
($1.43) at the Caracas Stock Exchange after the government
decided to freeze telephone rates, reports Bloomberg.
According to a decree appearing in the country's government
newspaper, the telephone freeze only applies to residential fixed
line services.
The government also froze school and health fees, as well as
public transportation tickets, broadening price controls set last
week to accompany foreign exchange restrictions.
Venezuela is trying to reduce the restrictions' impact on dollar
sales' inflation by setting prices for basic goods and services.
Similar price controls were set in 1994 when Venezuela last
introduced dollar restrictions. Venezuela restricted dollar sales
earlier this month in a bid to protect international reserves.
Earlier this month, Standard & Poor's affirmed CANTV's 'CCC+'
corporate credit ratings with a negative outlook.
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.
***********
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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