/raid1/www/Hosts/bankrupt/TCRLA_Public/030220.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
Thursday, February 20, 2003, Vol. 4, Issue 36
Headlines
A R G E N T I N A
GALILEO: Pulling Out of Argentina June 30
* Argentina Selects Lazard as Debt Talks Adviser
B R A Z I L
CERJ: Shareholders Agree to BRL142 Million Capital Increase
ELETROPAULO METROPOLITANA: Denies Allegations of AES Dividend
TELESP CELULAR: Real Decline Prompts Wider 2002 Losses
C H I L E
ENTEL: S&P Affirms Ratings; Upgrades Outlook to Positive
MADECO: Commences New Round of Capitalization
C O S T A R I C A
ICE: President Pacheco To Deliver Revised Draft To Congress
J A M A I C A
BANK OF JAMAICA: Losses Swell To $1.38B In 2002
M E X I C O
GRUPO TMM: Amends Exchange Offers, Solicitation Consent
UNEFON: Parent Announces Improved 4Q02, Full Year Results
N I C A R A G U A
ENITEL: Discloses $20M Mobile Expansion Plans for 2003
ENITEL: Megatel's Government Stake Buyout Officially Affirmed
U R U G U A Y
* IMF Sees Progress in Uruguay Loan Talks
V E N E Z U E L A
PDVSA: Fires More Workers To Halt Strike
* Venezuelan Debt Offer Fails
- - - - - - - - - -
=================
A R G E N T I N A
=================
GALILEO: Pulling Out of Argentina June 30
------------------------------------------
The Galileo airline reservation system, which is owned by U.S.-
based Cendant Corp., will exit Argentina on June 30 citing
"financial and marketing reasons" for the move, reports EFE.
The report reveals that Galileo plans to shut down operations on
expiration of the contract under which the Company uses the
infrastructure of U.S.-based United Airlines in Argentina, Chile,
Uruguay, Costa Rica and Guatemala.
The airline reservation system has 250 customers in Argentina,
including airlines and travel agents. It competes with Amadeus,
with 53% of travel agent bookings; Sabre, with 27% of the market;
and Worldspan, which entered the Argentine market recently and
has 2.5% of the market.
* Argentina Selects Lazard as Debt Talks Adviser
------------------------------------------------
Local news service La Nacion reported that the Argentine
government has chosen French bank Lazard Frefres, citing sources
from the finance ministry. Lazard offered to charge the lowest
rates among the three finalist banks for the Argentine debt talks
advisor. Other finalists include Morgan Stanley, and UBS Warburg,
which filed a complaint to the Finance Ministry.
Apparently, UBS included other expenses in the bidding, insisting
that in reality, it really offered the lowest bid. But Finance
Minister Guillermo Nielsen said that the finalists were
instructed to exclude such charges.
The bank's responsibilities include restructuring US$95 billion
in defaulted debt, keeping track of the numerous bondholders, and
underwriting the debt.
Argentina will first settle up with multilateral lenders before
restructuring US$60bn worth of debt with 700,000 creditors, said
BNAmericas
===========
B R A Z I L
===========
CERJ: Shareholders Agree to BRL142 Million Capital Increase
-----------------------------------------------------------
Rio de Janeiro-based Cerj informed the securities regulator CVM
that the state power distributor's shareholders have pre-approved
a capital increase of up to BRL142 million, Business News
Americas relates. In a statement to the regulator, the Company
said that the shareholders granted board authority to issue
shares equivalent to the amount if deemed necessary.
Currently, Cerj's total capital is BRL915 million. If the board
acts on the authorization, the Company's capital would increase
to BRL1.1bn. Cerj is now 86%-controlled by Chilean power firm,
Enersis, following the latter's recent purchase of additional 771
million ordinary shares in the Brazilian utility via the
capitalization of a BRL370 million loan through Cerj Overseas.
Cerj has 1.69 million customers in its 31,741 sq. km concession
area, according to recent news reports.
ELETROPAULO METROPOLITANA: Denies Allegations of AES Dividend
-------------------------------------------------------------
Carlos Lessa, president of the Brazilian national development
bank BNDES, criticized Eletropaulo Metropolitana for paying
dividends to its US-based parent AES Corp. days before it
defaulted on an US$85-million payment to the bank last month,
relates Dow Jones.
BNDES said that, under the contract for a US$1.02 billion loan
given to AES to acquire Eletropaulo in 1998, the utility wouldn't
be allowed to pay dividends in case of default.
However, Eletropaulo, the country's largest power distributor,
denied it sent any dividends to AES in 2002 or recently.
"We couldn't have done that. And even if we had, we would have
informed the market. It seems Lessa has been misinformed," said a
company spokesman, adding that the company did pay US$318 million
in dividends to its parent company between 2000 and 2001.
CONTACT: ELETROPAULO METROPOLITANA
Avenida Alfredo Egidio de Souza Aranha 100-B,
13 andar 04726-270 San Paulo
Brazil
Phone: +55-11-548-9461, +55 11 5696 3595
Fax: +55-11-546-1933
URL: http://www.eletropaulo.com.br
Contacts:
Luiz D. Travesso, Chairman and President
Orestes Gonzalves Jr., VP Finance/Investor Relations
AES Corp., Arlington
Kenneth R. Woodcock, 703/522-1315
Web site www.aes.com
Investor relations: investing@aes.com
TELESP CELULAR: Real Decline Prompts Wider 2002 Losses
------------------------------------------------------
Telesp Celular Participacoes S.A. - TCP (NYSE: TCP; BOVESPA:
TSPP3 (Common), TSPP4 (Preferred)) announced Tuesday its
consolidated results for the year of 2002. TCP is the holding
company that owns 100% of Telesp Celular S.A., the largest
cellular operator in Brazil, and Global Telecom S.A., the B Band
cellular operator in the states of Santa Catarina and Parana.
Market Position
Market share increased to 67% in 2002 in comparison to 65% in
2001, despite the entrance of a new competitor, which reflects
the strengthening of marketing initiatives that benefiting the
leader.
Client base increased 18.7% in the year compared to 2001,
reaching 6,060 thousand, a net addition of 956,000 new clients.
Net additions in 4Q02 reached 305,000 new clients, a 30.3%
increase compared to the previous quarter.
In line with the strategy of focusing on high-end clients, the
postpaid client base maintained its growth totaling 57,000 net
additions in 2002, including 6,000 in 4Q02.
Traffic
Postpaid Average Minutes of Use (MOU) was 223 in the last quarter
of 2002, a 16.8% increase compared to 191 in 4Q01. Blended MOU
was 110 in 4Q02.
Operating Performance
Net revenues totaled R$ 3,390.6 million (US$ 957.8 million) in
2002, a 15.1% increase compared to R$ 2,946.2 million in 2001. In
4Q02, Net Revenues were R$ 927.3 million (US$ 262.0 million), a
9.0% increase compared to the previous quarter.
Blended ARPU remained fairly stable reaching R$ 44 (US$ 12.4) in
4Q02 compared to R$ 45 recorded in the end of 2001 and R$ 44 in
3Q02.
EBITDA once again reached its best result since the creation of
Telesp Celular, totaling R$ 1,451.0 million (US$ 409.9 million),
a growth of 53.3% year over year. In the quarter, EBITDA reached
R$ 426.9 million (US$ 120.6 million), a 12.3% increase over 3Q02.
CONTACT: TELESP CELULAR S.A.
Edson Menini, Investor Relations
+55-11-3059-7531
URL: www.telespecelular.com.br
=========
C H I L E
=========
ENTEL: S&P Affirms Ratings; Upgrades Outlook to Positive
--------------------------------------------------------
Standard & Poor's Ratings Services said Tuesday that it revised
the outlook on Chilean telecom provider Empresa Nacional de
Telecomunicaciones S.A. (ENTEL) to positive from stable, based on
expectations of further improvements in financial performance in
the short-to-medium term.
Concurrently, Standard & Poor's affirmed its 'BBB' foreign and
local currency corporate credit ratings on ENTEL. As of September
2002, the company had US$787 million consolidated debt.
"The consolidation of international operations and new
businesses, the effect of efficiency programs performed in 2002,
and lower capital expenditures in the next two to three years
should allow ENTEL to continue reducing debt levels and improving
its financial profile," said Standard & Poor's credit analyst
Ivana Recalde. "Further positive rating actions would require
ENTEL to show sustained coverage ratios in excess of 8x and 40%,
measured as EBITDA to interest and funds from operations to debt,
respectively. We expect the company's ratios to drift toward this
level throughout 2003," she added.
Despite the devaluation of the Chilean peso in 2001 and 2002,
mobile and international revenue growth, headcount cuts
implemented since 2001, and interest-rate reductions in the
Chilean market helped to offset competitive pressures and lower
growth rates in the country. In line with Standard & Poor's
expectations, these factors resulted in improved cash flow
protection measures with EBITDA interest coverage and funds from
operations to debt at 6.6x and 34% of total debt, respectively,
for the 12 months ended September 2002.
Higher EBITDA margins resulting from the consolidation of the
company's newer business lines should allow the company to
continue improving financial indicators and offset a potential
reduction of mobile-to-fixed line access charges following a
regulatory tariff revision in January 2004. This revision is
expected to affect a relatively low portion of the company's
revenues and cash flow generation.
With 2.2 million mobile subscribers and a market participation of
around 38% in the long-distance segment, ENTEL is the second-
largest telecommunications provider in Chile.
ANALYSTS: Ivana Recalde, Buenos Aires (54) 114-891-2127
Marta Castelli, Buenos Aires (54) 114-891-2128
MADECO: Commences New Round of Capitalization
---------------------------------------------
Cash-strapped Chilean copper wire and cable manufacturer Madeco
is taking the first steps to comply with a conditions stipulated
in a recent debt restructuring agreement. Madeco struck a deal
with 14 creditor banks on a US$120-million restructuring of debt,
conditioned upon a minimum CLP49.40 billion capital increase,
roughly US$66 million.
In this context, the Company launched Tuesday a second attempt to
raise around US$130 million in equity and the first
"preferential" stage is due to close March 19. The shares to be
issued will be priced CLP24 each.
Late last year, an attempted capital increase failed after Madeco
was able to raise just some US$50 million, falling short of the
US$60 million amount that it needs to pay to meet short-term bank
debts.
This time around, controlling shareholder Quinenenco SA has
agreed to subscribe to the CLP49.40 billion total.
Madeco has been undergoing financial restructuring since last
year after problems in Argentina and Brazil hit company earnings,
making payment on its US$330 million in debt difficult.
In addition to cables, Madeco makes finished and semi-finished
non-ferrous products based on copper, aluminum, related alloys
and optical fiber as well as flexible packaging products for use
in the mass consumer market for food, snacks and cosmetics
products.
CONTACT: MADECO
Ureta Cox, 930
San Miguel, Santiago, Chile
Phone: 56-2 5201461
Fax: 56-2 5516413
E-mail: mfl@madeco.cl
Home Page: http://www.madeco.cl
Contacts:
Oscar Ruiz-Tagle Humeres, Chairman
Albert Cussen Mackenna, Chief Executive Officer
Investor Relations
Phone: 56-2 5201380
Fax: 56-2 5201545
E-mail: ir@madeco.cl
===================
C O S T A R I C A
===================
ICE: President Pacheco To Deliver Revised Draft To Congress
-----------------------------------------------------------
Costa Rica's President Abel Pacheco was expected to submit to the
legislative assembly by Tuesday a revised draft of a
modernization plan for the state electric power company and
telecom monopoly ICE, Business News Americas reports, citing
Costa Rican daily La Nacion.
The revised draft stipulates the following:
- ICE must limit its total debt to 60% of assets and the
government cannot oblige the Company to keep deposits in a
current account or in the form of government bonds
- 100% of ICE profits can be invested in expansion of electricity
and telecoms services;
- the comptroller has authority over ICE finances, except low-
value procurement auctions;
- ICE workers' unions will hold two places on the ICE board of
directors, four will be government representatives and one more
from the private sector; and
ICE will own the watercourse rights and spectrum licenses
required for its activities.
=============
J A M A I C A
=============
BANK OF JAMAICA: Losses Swell To $1.38B In 2002
-----------------------------------------------
Bank Of Jamaica widened its losses last year to $1.38 billion
from $1.30 billion for the 2001 calendar year, the Jamaica
Gleaner reports, citing responses by Senate majority leader,
Burchell Whiteman, to questions raised by Jamaica Labour Party
(JLP) Senator Bruce Golding.
According to Mr. Whiteman, the net value of foreign currency sold
to the market by the Central Bank in 2002 was US$187.9 million.
This was a substantial jump from the US$92.1 million sold to the
market for the previous year.
The Minister also said that the Ministry of Finance had made no
cash disbursements to assist the BoJ with losses for the last two
years.
CONTACT: Nethersole Place
PO Box 621
Kingston
Jamaica, West Indies
Tel: (876) 922-0750
Fax: (876) 922-0854
Cable: 'RESERVE' KINGSTON
Telex: 2165/2167/2173
Email: info@boj.org.jm
===========
M E X I C O
===========
GRUPO TMM: Amends Exchange Offers, Solicitation Consent
-------------------------------------------------------
Grupo TMM, S.A. (NYSE:TMM) and (BMV:TMM A) announced on Tuesday
that it has filed a registration statement that would amend its
previously announced exchange offers and consent solicitations
for all of its outstanding 9 1/2 percent Senior Notes due 2003
("2003 notes") and its 10 1/4 percent Senior Notes due 2006
("2006 notes"). The exchange offers and consent solicitations are
being amended to include warrants to purchase American Depositary
Shares of Grupo TMM as part of the consideration being offered to
holders of 2003 notes whose 2003 notes are tendered and accepted
in the exchange offer; to offer all holders of 2003 notes whose
notes are tendered and accepted the consent fee of $5.00 per
$1,000 principal amount of 2003 notes; to reduce the minimum
tender condition for the 2003 notes from 85% of the 2003 notes to
80% of the 2003 notes; and to extend the expiration date for both
exchange offers and consent solicitations. All other terms and
conditions of the exchange offers and the consent solicitations
remain the same.
The amendment to the exchange offers and consent solicitations
will be made available to holders only upon filing of a further
amendment containing complete and final terms of the warrants and
upon the declaration of the effectiveness of such further
amendment by the Securities and Exchange Commission.
The company is extending the expiration date for both exchange
offers and consent solicitations. The exchange offers will expire
at 5:00 p.m., New York City time, on Tuesday, February 25, 2003,
unless further extended by Grupo TMM with respect to one or both
series of the notes. As of 5:00 p.m., New York City time, on
February 14, 2003, approximately 30.79% of the outstanding 2003
notes, or $54,458,000 principal amount, had been tendered and not
withdrawn, and 67.21% of the outstanding 2006 notes, or
$134,425,000 principal amount, representing a majority of the
2006 notes, had been tendered and not withdrawn.
Salomon Smith Barney Inc. is acting as the dealer manager for the
exchange offers and consent solicitations.
Headquartered in Mexico City, Grupo TMM is Latin America's
largest multimodal transportation company. Through its branch
offices and network of subsidiary companies, Grupo TMM provides a
dynamic combination of ocean and land transportation services.
Grupo TMM also has a significant interest in TFM, which operates
Mexico's Northeast railway and carries over 40 percent of the
country's rail cargo. Grupo TMM's web site address is
www.grupotmm.com and TFM's web site is www.gtfm.com.mx. Grupo TMM
is listed on the New York Stock Exchange under the symbol TMM and
Mexico's Bolsa Mexicana de Valores under the symbol TMM A.
The exchange offers and consent solicitations are made solely by
the prospectus dated December 26, 2002, as amended to date, the
related letter of transmittal and consent, and any amendments or
supplements thereto. Copies of the prospectus and transmittal
materials can be obtained from Mellon Investor Services LLC, the
information agent for the exchange offers and consent
solicitations, at the following address:
Mellon Investor Services
44 Wall Street, 7th Floor
New York, NY 10005
(888) 689-1607 (toll free)
(917) 320-6286 (banks and brokers)
A registration statement relating to the warrants has been filed
with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement
becomes effective. This press release shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such State The exchange offers and consent solicitations are not
being made to, nor will tenders be accepted from, or on behalf
of, holders of existing Notes in any jurisdiction in which the
making of the exchange offers and consent solicitations or the
acceptance thereof would not be in compliance with the laws of
such jurisdiction. In any jurisdiction where securities, blue sky
laws or other laws require the exchange offers and consent
solicitations to be made by a licensed broker or dealer, the
exchange offers and consent solicitations will be deemed to be
made on behalf of Grupo TMM by the dealer manager or one or more
registered brokers or dealers licensed under the laws of such
jurisdiction.
CONTACT: GRUPO TMM COMPANY CONTACT:
Jacinto Marina, 011-525-55-629-8790
jacinto.marina@tmm.com.mx
or
Investor Relations
Brad Skinner, 011-525-55-629-8725
brad.skinner@tmm.com.mx
or
Media Relations
Luis Calvillo, 011-525-55-629-8758
luis.calvillo@tmm.com.mx
or
AT DRESNER CORPORATE SERVICES:
(general investors, analysts and media)
Kristine Walczak, 312/726-3600
kwalczak@dresnerco.com
UNEFON: Parent Announces Improved 4Q02, Full Year Results
---------------------------------------------------------
TV Azteca, S.A. de C.V. (NYSE: TZA; BMV: TVAZTCA), one of the two
largest producers of Spanish language television programming in
the world, announced Tuesday fourth quarter record net sales of
US$190 million and record EBITDA of US$116 million, a 3% and a
28% increase, respectively, over the prior year period. Fourth
quarter EBITDA margin rose twelve percentage points to 61%.
Net sales for the year rose 9% to an all-time high level of
US$644 million. Full year EBITDA increased 19% to US$308 million,
its highest level since 1997. The EBITDA margin for 2002 grew to
48%, up from 44% in 2001.
"During the year we successfully competed with innovative
programming formats, forged even closer commercial ties with
advertisers, and enhanced strength in domestic and international
markets, which translated into dynamic growth in overall net
sales," said Pedro Padilla, Chief Executive Officer of TV Azteca.
"At the same time, our cutting-edge cost control systems
preserved overall costs and expenses in sound levels, which
resulted in an annual five-year record EBITDA."
Mr. Padilla noted that TV Azteca's proven business strategy will
continue providing robust EBITDA and substantial cash flow in
2003 and beyond, and that upcoming cash generation will be
largely geared towards debt reduction and dividend distribution
on an ongoing basis.
"Our board recently approved a six-year plan for uses of cash
that reduces our leverage profile and distributes benefits of the
Company's consistent profitability to its shareholders. We found
this to be the best use for TV Azteca's cash generation,
considering that we do not foresee large investments needed to
consolidate our solid core operations in the near future," Mr.
Padilla added.
Fourth Quarter Results
Net sales grew 3% to US$190 million, up from US$185 million one
year ago. Total costs and expenses decreased 21% to US$73 million
from US$94 million for the same period of 2001. As a result, the
Company reported EBITDA of US$116 million, 28% higher than US$91
million in the fourth quarter of last year. EBITDA margin was
61%, compared with 49% for the prior year period. Net income for
the quarter was US$69 million, 6% above the US$65 million in the
fourth quarter of 2001.
Millions of pesos(1) and dollars(2) except percentages and per
share amounts.
4Q 2001 4Q 2002 Change
US $%
Net Sales
Pesos Ps. 1,922 Ps. 1,976
US$ US$ 185 US$ 190 5 +3%
EBITDA(3)
Pesos Ps. 944 Ps. 1,207
US$ US$ 91 US$ 116 25 28%
Net Income
Pesos Ps. 675 Ps. 715
US$ US$ 65 US$ 69 4 +6%
Income per ADS(4)
Pesos Ps. 3.57 Ps. 3.79
US$ US$ 0.34 US$ 0.36 .02 +6%
(1) Pesos of constant purchasing power as of December 31,
2002.
(2) Conversion based on the exchange rate of Ps.10.40 per US
dollar as of December 31, 2002.
(3) EBITDA is Profit Before Depreciation and Amortization
under Mexican GAAP.
(4) Calculated based on 188.9 million ADSs outstanding as of
December 31, 2002.
Share of Commercial Audience
TV Azteca's full day commercial audience share was 40% during the
quarter, compared with 39% for the same period of 2001, and with
37% for the prior quarter.
"During the fourth quarter, we generated comparatively large
audience levels, fitting our strategy to create the greatest
gross rating points when seasonal demand peaks," commented Mario
San Roman, Chief Operating Officer of TV Azteca. "We built a very
competitive programming grid with a full lineup of solid novelas,
newscasts, sports and entertainment shows, where La Academia, our
"musical reality" show was particularly outstanding, delivering
all-time high ratings for any internally produced entertainment
program."
Net Sales
The 3% increase in net sales reflects favorable solutions for our
clients' marketing needs, an increase of approximately 8% in
fourth quarter advertising rates in real terms, and a 4% decrease
in full day utilization rates, compared with the same quarter of
last year.
"Our sales force has been successful in designing optimal
advertising solutions to accurately suit our different clients'
marketing preferences," added Mr. San Roman. "We are confident
that our strategy of crafting exactly the right advertising
campaign for each advertiser will continue to deliver dynamic
sales going forward."
During the quarter, TV Azteca reported content and advertising
sales to Todito.com of US$6.2 million, and US$2.4 million of
advertising sales to Unefon. In the same period of 2001, sales to
Todito and Unefon were US$4.2 million and US$2.6 respectively.
Barter sales were US$4 million compared with US$2 million in the
same period of the prior year. Inflation adjustment of
advertising advances was US$6 million, compared with US$8 million
of the fourth quarter of 2001.
Costs and Expenses
The 21% decrease in fourth quarter costs and expenses resulted
from a 29% reduction in production, programming and transmission
costs to US$48 million from US$69 million in the prior year
period, as well as from a constant level of administration and
selling expense at US$25 million, compared with the same quarter
a year ago.
"During the fourth quarter, where we traditionally have
seasonally higher costs, we were particularly strict in
generating content under the most disciplined cost standards, "
said Carlos Hesles, Chief Financial Officer of TV Azteca. "We
also benefited from a superior position in the learning curve for
production of reality shows, as well as from the amortization in
the prior quarter of costs associated with the building up of the
production facilities of La Academia."
Reduction in production, programming and transmission costs
include the cancellation of US$9 million of amortization of
exhibition rights recorded during the first nine months of 2002.
After a thorough revision of its programming inventories, the
Company believes the exhibition rights previously reserved match
the interest of many of its target audiences and will continue to
bring revenue to TV Azteca in the coming quarters. Excluding the
cancellation of previously reserved exhibition rights;
production, programming and transmission costs were US$57
million, 17% below the fourth quarter of the prior year.
Administration and selling expense, constant at US$25 million,
reflects controlled personnel, services and operating expenses.
EBITDA and Net Income
Net revenue growth combined with the reduction in total costs and
expenses resulted in an all time high EBITDA of US$116 million,
up 28% compared with US$91 million a year ago. The EBITDA margin
was 61%, 12 percentage points above 49% posted in the prior year
period. Excluding the cancellation of the reserve of exhibition
rights, EBITDA was US$107 million and EBITDA margin was 56%.
Below EBITDA, results were favorably impacted by a zero balance
of depreciation and amortization in the quarter, compared with
US$14 million in the prior year period. This resulted from a
positive sum of US$8 million for total amortization, compared
with a negative US$4 million in the fourth quarter of 2001.
According to accounting bulletin C-8, adopted in 2002 by the
Company, intangible assets with indefinite life, including
television concessions, are subject to annual impairment tests to
establish their market value, which will determine their yearly
impairment. Previously, television concessions were given a
predetermined useful life and were amortized straight line. The
positive figure for amortization in the fourth quarter reflects a
market value for television concessions above book value at year-
end 2002, and thus, a reversal in accumulated amortization
recorded in the first nine months of the year, which was
determined under the prior method.
Accounting bulletin C-8 is in line with US GAAP guidelines for
amortization, and started to apply in the United States in 2002.
The Company recorded other expense of US$17 million during the
quarter, compared with a zero balance a year ago. This was
principally associated with non-recurring charges coming from
cancellation of Internet agreements, cancellation of assets
derived from the Company's operations in Costa Rica, and
adjustment in the value of property dedicated to content
production, as well as increased expenses non-deductible for tax
purposes, and larger losses of affiliates recorded through the
equity method.
Net income was also affected by a US$9 million reduction in
exchange gain compared with the prior year period. The reduction
was the result of a 2% depreciation of the peso against the
dollar during the quarter, compared with a 4% appreciation during
the same period of last year, as well as a decrease in the net
dollar liability position of the Company.
Fourth quarter net income was US$69 million, 6% above the US$65
million of the same quarter a year ago.
Advertising Advances at US$428 million
The balance of advertising advances as of December 31, 2002,
excluding presales to Unefon and Todito, was US$428 million,
compared with US$446 million in the prior year. Considering
presale contracts for 2003 that were signed during the month of
January and the first days of February of this year, the balance
of advertising advances for 2003 was 1% above the prior year's
balance.
Guidelines for Future Uses of Cash
Earlier this month, the Company announced that its board approved
a six-year course of action for uses of its free cash flow
generation, which is expected to be above US$125 million per
year.
The Company anticipates that it will use approximately US$250
million of its free cash flow within the six-year span to
gradually reduce TV Azteca's outstanding debt, following a
payment schedule fitting its maturities. The Company's major debt
obligations that expire within the next five years are US$125
million of notes due in 2004, and an additional US$300 million of
notes maturing in 2007.
The board also authorized an aggregate amount above US$500
million to make distributions to shareholders within the next six
years.
The Company expects the guidelines approved will add further
value to its stakeholders by reducing TV Azteca's overall risk
profile, and by distributing the benefits of its consistent
profitability.
Unefon
During the fourth quarter, TV Azteca made payments for US$8.5
million under credit guarantees previously granted in favor of
Unefon, the Mexican mobile telephony operator 46.5% owned by TV
Azteca. For the year ended December 31, 2002 TV Azteca paid an
aggregate amount of US$19 million to Unefon's creditors under
these guarantees.
Twelve Month Results
For all of 2002, net sales were US$644 million, a 9% increase
over last year's US$589 million. EBITDA rose to US$308 million
and EBITDA margin grew to 48%, compared with US$259 million and a
44% EBITDA margin in 2001. Net earnings were US$95 million,
compared with net earnings of US$145 million in 2001.
Millions of pesos(1) and dollars (2) except percentages and per
share amounts.
2001 2002 Change
US $%
Net Revenue
Pesos Ps. 6,124 Ps. 6,690
US$ US$ 589 US$ 644 54 +9%
EBITDA(3)
Pesos Ps. 2,696 Ps. 3,205
US$ US$ 259 US$ 308 49 +19%
Net Income
Pesos Ps. 1,506 Ps. 984
US$ US$ 145 US$ 95 (50) -35%
Income per ADS(4)
Pesos Ps. 7.97 Ps. 5.21
US$ US$ 0.77 US$ 0.50 (0.27) -35%
(1) Pesos of constant purchasing power as of December 31,
2002.
(2) Conversion based on the exchange rate of Ps.10.40 per US
dollar as of December 31, 2002.
(3) EBITDA is Profit Before Depreciation and Amortization
under Mexican GAAP.
(4) Calculated based on 188.9 million ADSs outstanding as of
December 31, 2002.
Company Profile
TV Azteca is one of the two largest producers of Spanish language
television programming in the world, operating two national
television networks in Mexico, Azteca 13 and Azteca 7, through
more than 300 owned and operated stations across the country. TV
Azteca affiliates include Azteca America Network, a new broadcast
television network focused on the rapidly growing US Hispanic
market; Unefon, a Mexican mobile telephony operator focused on
the mass market; and Todito.com, an Internet portal for North
American Spanish speakers.
To see financial statements:
http://bankrupt.com/misc/TV_Azteca.htm
CONTACT: TV Azteca
Investors, Bruno Rangel, +5255-3099-9167,
jrangelk@tvazteca.com.mx
OR
Rolando Villarreal, +5255-3099-0041,
rvillarreal@tvazteca.com.mx
Media, Tristan Canales, +5255-3099-5786,
tcanales@tvazteca.com.mx
URL: http://www.tvazteca.com.mx
=================
N I C A R A G U A
=================
ENITEL: Discloses $20M Mobile Expansion Plans for 2003
------------------------------------------------------
Nicaragua's semi-privatized incumbent telco Enitel plans to spend
up to US$20 million this year for its startup mobile operation,
Enitel Movil, Enitel CEO Carlos Ramos indicated to Business News
Americas.
The goal is to increase coverage to areas with temporary
inhabitants such as highways and resort areas, as well as
increasing capacity in the cities already covered, Ramos said.
The executive revealed that the Company already covers 65% of the
country's populated areas. Enitel aims to end 2003 with 85%
coverage of the country.
The Company is also completing expansion to Puerto Cabezas on the
Atlantic coast.
Enitel's fixed line projects for this year are led by plans to
install five secondary fiber optic rings in Managua, to
complement the existing metropolitan ring. The rings should
provide capacity for 50,000 lines and Enitel has already sold 85%
of the first ring, which was completed in January. The Company
activated some 10,000 lines in December and January, bringing the
total number of lines in service to 182,000.
For the second-half of this year, Enitel has three major fixed
line projects for which it has budgeted around US$10 million.
According to Ramos, the Company will expand coverage in some
smaller cities where demand for service is in the order of 1,000-
1,500 lines; it will boost Internet capacity, and introduce ADSL
services to the market; and finally, it will upgrade switching
centers, including some that still use analog technology.
ENITEL: Megatel's Government Stake Buyout Officially Affirmed
-------------------------------------------------------------
Enitel CEO Carlos Ramos confirmed that the Megatel consortium,
which acquired a 40% stake in the Company in 2001, would be
interested in acquiring the 49% stake still held by the state,
relates Business News Americas.
Megatel's decision, however, would depend on the bidding rules
and sale conditions.
The stake is slated for sale this year. Ramos corrected recent
press reports in which he was quoted as giving a US$50 million
estimate for the stake, saying instead that determining the price
would require a new due diligence process, whereby each bidder
would place a different value on the stake according to their
needs and means.
The Megatel consortium, made up of Sweden's Telia Swedtel and
Honduran electricity company EMCE, paid US$33 million for 40% of
Enitel and will pay US$10 million each year through April 2006 to
pay for a five-year management contract.
=============
U R U G U A Y
=============
* IMF Sees Progress in Uruguay Loan Talks
-----------------------------------------
The International Monetary Fund said that Uruguay has made
"considerable progress in many areas", bringing it closer to
obtaining an US$800 million loan. Bloomberg quoted a statement
issued by the lender saying discussions would continue in order
to "finalize the remaining key issues."
Economy Minister Alejandro Atchugarry and Central Bank president
Julio de Brun represented the country in negotiations in
Washington. The loan would help the country stabilize its
banking industry and void defaulting on its debt.
This year, the local currency declined by 4.2 percent, while
bonds fell by 10.5 percent. Bloomberg added that Uruguay's bonds
had the worst performance among those tracked by J. P. Morgan
Chase & Co.
In related news, Uruguay President Jorge Batlle said the country
is seeking to reschedule debts with the IMF, the World Bank and
the Inter-American Development Bank, said online newspaper El
Observador. The country faces about US$1.45 in debt payments due
this year.
The IMF postponed releasing a US$380 million disbursement on a
US$2.8 billion loan accord, after the country failed to resolve a
deposit freeze and liquidity problems of four suspended banks.
This aid agreement was intended to stem the decline in the
country's bonds, and currency by easing investor concerns that
Uruguay might default on its debt.
=================
V E N E Z U E L A
=================
PDVSA: Fires More Workers To Halt Strike
----------------------------------------
Another 335 employees of Venezuela's state oil company PDVSA were
dismissed this week, reports Bloomberg. In an interview with
Union Radio, strike leader Edgar Rasquin revealed that those
fired worked at the Paraguana refinery complex, the largest in
the world.
The number of dismissals has now increased to 13,163, or 40% of
PDVSA's pre-strike workforce of 33,000. At Paraguana alone, about
1,600 of the workforce of 3,500 have been fired, Rasquin said.
The firings are part of the government's bid to break a strike
that has reduced PDVSA's operations and slashed its exports.
* Venezuelan Debt Offer Fails
-----------------------------
Venezuela's efforts to sell debt maturing at more than three
months at auction were unsuccessful, reports Bloomberg. The
country sold only VEB18 billion (US$11 million) out of the VEB39-
billion of the 91-day bonds it offered along with six-, nine-,
and 12-month bonds.
Yield on the three-month notes also went down 1.8 percentage
points 37.7 percent, according to figures released by the central
bank.
The country is struggling to raise funds after a national strike
almost completely crippled the country's main source of income:
oil production. The shutdown caused investors to worry about
Venezuela's capacity to pay its debts. During the first quarter
of this year, about US$144 million, out of US$1.4 billion of
domestic debt matures.
A report from El Nacional cited unidentified government officials
saying President Hugo Chavez ordered state banks, the Deposit
Guarantee Fund and the Development Bank to back the domestic
debt.
In an effort to boost lending, the central bank also lowered the
rate at which banks sell short-term loans to commercial banks
from 42 percent to 39 percent.
***********
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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