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/raid1/www/Hosts/bankrupt/TCRLA_Public/030305.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, March 5, 2003, Vol. 4, Issue 45 Headlines A R G E N T I N A HSBC: Latin American Net Loss Narrows Despite Argentine Woes * Argentina Meets Requirement For Debt Payment Delay Agreement B E R M U D A ANNUITY & LIFE: Announces 4Q02 Earnings Release Delay GLOBAL CROSSING: Hutchison May Become Silent Partner TYCO INTERNATIONAL: Dow Corning Acquires Tyco Electronics B R A Z I L AES TRANSGAS: Misses $330M BNDES Payment BSE: America Movil May Close Purchase This Week LIGHT SERVICOS: Board Approves Sale of Stake in ALTM SUDAMERIS BRASIL: Analyst Flags As Potential Buyout Target C H I L E EMPRESAS GUACOLDA: Ratings On Review For Possible Downgrade J A M A I C A AIR JAMAICA: Chairman Pegs Current Financing Need at $35M M E X I C O AZTECA HOLDINGS: Seeks To Extend July 2003 Notes CFE: Bancomext May Finance Up to 50% of El Cajon Project GRUPO MEXICO: Inbursa Grants $310M Loan To US Subsidiary PEMEX: To Sign US$200 Million Credit Facility With EDC Soon PEMEX: Reports Improved January Production Results UNION FENOSA: Seeks Partners For Mexican Assets P A R A G U A Y COPACO: Service In Peril Due To Neglect P E R U MINERA VOLCAN: Shareholders' Called To Shore Up Capital Needs V E N E Z U E L A PDVSA: Uncovers Sabotage Attempts on Refinery PDVSA: Lower Export Levels Trigger Cut in Daily Production - - - - - - - - - - ================= A R G E N T I N A ================= HSBC: Latin American Net Loss Narrows Despite Argentine Woes ------------------------------------------------------------ UK-based financial services group HSBC, posted a loss of US$245 million in Argentina last year, although the over-all results improved. HSBC' 2002 overall net loss was down to US$34 million, from a US$1 billion net loss in 2001, reports Business News Americas. The Company attributes its Argentine losses on the funding of nonperforming assets and client lawsuits against frozen dollar deposits. About 71 percent of the Company's assets in the country are government debt, the report reveals. "The HSBC group's total assets in Argentina have shrunk to the equivalent of US$1.6bn, partly through actions taken to minimize risk exposure and also through the impact of exchange translation; this represents 0.2% of total group assets," said HSBC chairman Sir John Bond, adding, "Improvement in the situation in Argentina depends heavily on the government's ability to restore stability internally and credibility externally." However, obstacles in Argentina did not prevent the bank from launching new products, such as a joint offshore service and online auto and home insurance products. In fact, Argentina is the only Latin American country where HSBC is offering its international business Internet banking service, said the Company's CEO Sir Keith Whitson. Mr. Whitson noted that the bank increased its auto scoring portfolio by 30 percent, in spite of the economic crisis. HSBC' subsidiaries in other Latin American countries also did well last year. In Brazil, HSBC's credit cards in circulation reached the 1 million mark. In November, the bank acquired Grupo Financiero Bital for US$1.1 billion. The purchase adds about 6 million customers, 1,400 branches and a prominent position in the savings industry in Mexico, said Mr. Bond. CONTACT: HSBC Holdings PLC Head Office 10 Lower Thames Street London United Kingdom EC3R 6AE Phone: +44 (0)20 7260 0500 Fax: +44 (0)20 7260 0501 Home Page:4 http://www.hsbc.com/ Contacts: Sir John Bond, Executive Chairman Baroness Dunn, Joint Deputy Chairman K. R. Whitson, Chief Executive D. J. Flint, Executive Director Finance * Argentina Meets Requirement For Debt Payment Delay Agreement -------------------------------------------------------------- Argentina fulfilled the International Monetary Fund's requirements for delaying US$6.8 billion in debt payments, Bloomberg reports, citing a statement issued by the multilateral lender. The IMF management team will soon ask the board to acknowledge that the country has met economic targets. Last month, the government was able to collect BRL5.6 billion in taxes. According to a statement from the Economy Ministry, tax collections went up 55.1 percent to BRL4.6 billion (US$1.4 billion) from BRL3 billion last year. The ministry said that the increase was due to the inflation and increased value-added taxes triggered by the sharp devaluation of the local currency last year. The country promised to achieve a 2003 primary surplus of 2.5 percent of gross domestic product, increase government revenue, restrain inflation, and curb both federal and provincial sending in order to qualify for an aid agreement with the IMF. The country also promised to promote the independence of the central bank, limit sales of foreign exchange reserves and maintain a flexible exchange rate. ============= B E R M U D A ============= ANNUITY & LIFE: Announces 4Q02 Earnings Release Delay ----------------------------------------------------- Annuity and Life Re (Holdings), Ltd. (NYSE: ANR) announced Monday that it was delaying its fourth quarter earnings release and conference call. The delay is principally due to the Company's continuing analysis of its previously announced fourth quarter loss. The Company will issue a press release announcing its financial results and setting a conference call date as soon as practicable after the completion of its analysis of the fourth quarter loss and the completion of the audit of its financial statements for the year ended December 31, 2002. Annuity and Life Re (Holdings), Ltd. provides annuity and life reinsurance to insurers through its wholly owned subsidiaries, Annuity and Life Reassurance, Ltd. and Annuity and Life Reassurance America, Inc. CONTACT: John F. Burke ANNUITY AND LIFE RE (HOLDINGS), LTD. Cumberland House 1 Victoria Street Hamilton HM 11 P.O. Box HM 98 Hamilton HM AX Bermuda Tel: (441) 296-7667 Fax: (441) 296-7665 GLOBAL CROSSING: Hutchison May Become Silent Partner ---------------------------------------------------- The Monday edition of Reuters News reported that Asian firm, Hutchison Whampoa Ltd. 0013.HK, may have to become a silent partner in the reorganization of Bermuda-based bankrupt company, Global Crossing Ltd., allaying fears of the Hutchison's links to China. Hutchison, owned by Hong Kong billionaire, Li Ka-shing, along with Singapore Technologies Telemedia, offered to buy 65 percent of Global Crossing's assets for US$250 million. However, the two companies had to withdraw a regulatory application last week, after the Committee on Foreign Investment in the United States said that the transaction raised national security concerns. California Republican Representative Dana Rohrabacher told U.S. President George W. Bush that the Asian companies should be prevented from acquiring fiber-optic networks in the country, as Hutchison owner, Hong Kong billionaire Li Ka-shing is reputed to have ties to the Chinese government. However, sources close to the matter said that the CFIUS is only worried about Hutchison's part of the deal, and not with Singapore Technologies. The report said that it is now up to the three companies' people to work out a restructuring of the deal that earns the approval of the CFIUS. One suggestion is that Hutchison retains ownership of Global Crossing, but give up the right to have members of the board. "The CFIUS process is highly confidential and therefore we cannot comment. What we can confirm is that we continue to co-operate with the U.S. government to address any concerns," said Steve Lipin, a spokesman for Hutchison in the United States. CONTACT: GLOBAL CROSSING Press Contacts Kendra Langlie Phone: + 1 305-808-5912 E-mail: kendra.langlie@globalcrossing.com Analysts/Investors Contact Ken Simril Phone: +1 310-385-3838 E-mail: investors@globalcrossing.com TYCO INTERNATIONAL: Dow Corning Acquires Tyco Electronics --------------------------------------------------------- Dow Corning Corp. has strengthened its position in the fabricated thermal interface materials market with the completion of its acquisition of the Raychem Power Materials Business Unit of Tyco Electronics. The agreement became final on February 27, 2003. Through the acquisition, Dow Corning has obtained the Power Materials Business Unit's fabricated thermal interface materials (TIMs), electromagnetic-interference (EMI) and radio-frequency- interference (RFI) shielding products, as well as certain connector sealing products that have been sold under the trademarks GELTEK, HEATPATH and DBSEAL. Manufacturing of these products will continue at the current Menlo Park, CA facility. All employees formerly employed by the Tyco Electronics Power Materials Unit have accepted positions with Dow Corning. With the completion of this transaction, Dow Corning has significantly expanded its fabricated TIMs product line. This is consistent with the latest phase of the company's marketing strategy for thermal management materials. A leading provider of wet-dispensed TIMs, Dow Corning announced its intent to become the top supplier of fabricated TIMs in September 2002. "We are very pleased that the Tyco Electronics Power Materials Unit acquisition has been successfully concluded." said Jim Easton, director of business development, Dow Corning Electronics. "We welcome our new employees to the Dow Corning team, and look forward to working with them to provide new and existing customers with exceptional service and superior products." In addition to the three product lines, Dow Corning gains other assets and benefits from the acquisition. Most importantly, the company increases its customer base by adding the Power Materials Unit's customers. Tom Cook, executive director for the Dow Corning Electronics global business unit, said, "The fabricated thermal interface materials acquired with the Tyco Electronics Power Materials Unit give our customers more options for their heat dissipation needs. The unit's other products complement our current electronic materials families as well." About Dow Corning Electronics Dow Corning Electronics (www.dowcorning.com/electronics) - a globally integrated provider of materials, application technology and services - is focused on providing innovative technology for all segments of the electronics industry. Dow Corning Electronics has development and applications centers strategically located throughout Asia, Europe and the United States. The centers offer advanced resources for electronics materials and services, including TIMs, and are staffed with experienced professionals who can provide technical support to customers locally. About Dow Corning Dow Corning (www.dowcorning.com) provides performance-enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicon-based technology and innovation, offering more than 7,000 products and services, Dow Corning is equally owned by The Dow Chemical Company and Corning, Incorporated. More than half of Dow Corning's annual sales are outside the United States. =========== B R A Z I L =========== AES TRANSGAS: Misses $330M BNDES Payment ---------------------------------------- The AES Corporation (NYSE:AES) announced Monday that its subsidiary AES Transgas Empreendimentos Ltda. (AES Transgas) had failed to make a payment of approximately $330 million due to the Brazil National Bank for Economic and Social Development (BNDES) in respect of preferred shares of Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. (Eletropaulo), the electric distribution company serving the City of Sao Paulo, Brazil, in connection with the purchase of such preferred shares. All other former holders of preferred shares of Eletropaulo accepted an offer to defer payment until April 15, 2003, of approximately $6.5 million due by AES Transgas in connection with such purchase. The approximately $611.5 million of outstanding debt owed to BNDES and all other former holders of preferred shares of Eletropaulo under the financing arrangements for the acquisition of such preferred shares is secured by the preferred shares of Eletropaulo owned by AES Transgas. The debt owed to BNDES is also secured by additional preferred shares of Eletropaulo owned by AES. Under such financing arrangements, BNDES has the right to call due approximately $605 million of such outstanding debt as a result of the failure to pay the amount due. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This news release may contain "forward- looking statements" regarding The AES Corporation's business. These statements are not historical facts, but statements that involve risks and uncertainties. Actual results could differ materially from those projected in these forward-looking statements. For a discussion of such risks and uncertainties, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year. AES is a leading global power company comprised of contract generation, competitive supply, large utilities and growth distribution businesses. The company's generating assets include interests in 173 facilities totaling over 55 gigawatts of capacity, in 32 countries. AES's electricity distribution network sells 108,000 gigawatt hours per year to over 16 million end-use customers. For more general information visit www.aes.com or contact investor relations at investing@aes.com. CONTACT: AES CORPORATION, Arlington Kenneth R. Woodcock, 703/522-1315 BSE: America Movil May Close Purchase This Week ----------------------------------------------- The sale of Brazilian mobile operator BSE to Telecom Americas, America Movil's Brazilian unit, didn't take place last week as expected. However, according to a source familiar with the situation, the deal could be closed this week. No information was available on Monday on what price America Movil could pay for BSE. But according to an earlier report by United Press International, America Movil is buying BSE, also known as BCP Nordeste, for a price of US$190 million. "The price could be considered reasonable," Roger Oey, a telecom analyst with BBV in Sao Paulo, told United Press International. "But there's been no mention of debt. If America Movil has to take on some debt, then it would be an expensive acquisition." BSE has US$712 million in debt, or US$712 per subscriber. But, it also has a client base of 1 million and a presence in six northeastern Brazilian states, which would be savvy buy for America Movil. Buying BCP Nordeste would boost Telecom America's client base in Brazil by 20%. Currently, Telecom Americas provides service to more than 5 million clients in 14 Brazilian states, mainly in the industrialized southeast. BSE is owned by U.S. telephone company BellSouth Corp. and Brazil's influential Safra family. LIGHT SERVICOS: Board Approves Sale of Stake in ALTM ---------------------------------------------------- Brazilian distributor Light obtained approval from its board on a plan to sell its 49% stake in power equipment maintenance firm ALTM Tecnologia e Servicos de Manutencao, Business News Americas reported, citing Valor Online newspaper. The board is yet to set a price tag for the stake or indicate whether there are any potential buyers. The report also didn't indicate where the proceeds of the sale would go. Alstom owns the remaining 51% of ALTM, which was established in 1999. Light Servicos, which faces BRL1 billion (about US$288mn) worth of debt maturities in both 2003 and 2004, recently took a EUR110- million loan from its controlling shareholder, the French-based Electricite de France (EDF). 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 SUDAMERIS BRASIL: Analyst Flags As Potential Buyout Target ---------------------------------------------------------- Merrill Lynch banking analyst Paul Tucker sees the Brazilian subsidiary of Italian group IntesaBci an attractive acquisition target this year, relates Business News Americas. In his report, Tucker indicated that Banco Sudameris Brasil SA could be sold to local banking giants Unibanco or Bradesco, after failed negotiations with Unibanco in 2001 and Itau last year. "At the end of the day, it comes down to price, but we believe the higher-end retail clientele of Sudameris could prove an attractive partner for Unibanco and, possibly, Bradesco. Remember, Unibanco did offer an estimated US$300-million on top of book value for Sudameris in 2001, before being trumped by a substantially better bid from Banco Itau," the report said. Intesa, Italy's biggest bank by assets, said last year it would sell its assets in South America as part of its plans to exit the troubled market and boost profitability. CONTACT: IntesaBci SpA Piazza Paolo Ferrari 10 20121 Milano Italy Tel +39 02 88 441 Fax +39 02 8844 3638 Homepage: http://www.intesabci.it/ Contact: Corrado Passera - Chief Executive Officer Giampio Bracchi - Vice Chairman Gianfranco Gutty - Vice Chairman ========= C H I L E ========= EMPRESAS GUACOLDA: Ratings On Review For Possible Downgrade ----------------------------------------------------------- Empresa Electrica Guacolda, a Chilean thermo generator, had its Baa3 senior secured debt rating placed on review for possible downgrade by credit rating agency Moody's. The move reflects lower projected node prices in the country due to new hydro capacity, potentially weaker demand growth, the approaching expiry of several sales contracts, reduced power sales volumes under an existing contract and higher petcoke prices, Moody's said. The agency believes these factors could moderately reduce earnings and cash flow over the next several years. In addition Guacolda faces significant debt maturities in April, and its refinancing might result in higher interest expenses and lower future interest coverage ratios. Guacolda, a 304 MW coal fired generating plant in northern Chile, is 50% owned by AES Gener. Fuel distributor Copec and Inversiones Ultraterra equally own the remaining half. ============= J A M A I C A ============= AIR JAMAICA: Chairman Pegs Current Financing Need at $35M --------------------------------------------------------- Air Jamaica Chairman Gordon Stewart said that the airline will seek out US$35 million in financing, the Jamaica Gleaner reported on Saturday. The executive also said that although the airline is in "fighting shape", it is in need of a capital injection to keep afloat. Mr. Gordon also said that the lay-offs will be confined to its tour arm, Air Jamaica Vacations. Presently, some 66 workers have been laid off. The report said that another 10 employees are bound to be sent home this week. However, Mr. Stewart pointed out that every tour operator has had to lay-off staff after the September 11 attacks on the United States caused a slump in the global airline industry. Since the attacks, the airline suffered some US$70 million in losses. In the meantime, passenger loads have been quite good for the airline. The report indicated that about 72 percent of U.S. airline passengers to the Caribbean, and about 60 percent of U.K. passengers chose Air Jamaica. In fact, the airline is planning to increase its flight frequency to the U.K., hoping to make it a daily service. Mr. Stewart also said that the new visa restrictions on Jamaica have affected their services to the U.K., but things have leveled off since, and the reduction was only 10 percent. CONTACT: Air Jamaica 4 St. Lucia Avenue Kingston 5, Jamaica Phone: 876/922-3460 Fax: 929-5643 E-mail: webinfo@airjamaica.com Contact: Gordon Stewart, Chairman Allen Chastanet, Vice President for Marketing and Sales =========== M E X I C O =========== AZTECA HOLDINGS: Seeks To Extend July 2003 Notes ------------------------------------------------ Azteca Holdings, S.A. de C.V., the controlling shareholder of TV Azteca, one of the two largest producers of Spanish language television programming in the world, announced Monday its offer to exchange, subject to market and other conditions, its new 10 3/4% Senior Secured Amortizing Notes due 2008 for its outstanding 10 1/2% Senior Secured Notes due 2003. Azteca Holdings will retire one-third of the principal amount of the new notes in July 2003 and will repay the balance of the new notes in five equal annual installments. The exchange offer is anticipated to close on or about March 31, 2003. In connection with the exchange offer, Azteca Holdings is also soliciting consents from the holders of its outstanding 10 1/2% notes for amendments to the terms and conditions of the indenture governing the 10 1/2% notes. The exchange offer and consent solicitation may be terminated or amended at any time prior to the expiration date, March 31, 2003, unless extended by Azteca Holdings. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act of 1933, as amended (the "Securities Act"). The new 10 3/4% notes being offered have not been registered under the Securities Act and until the registration of the new 10 3/4% notes becomes effective, the new 10 3/4% notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the new 10 3/4% notes, nor shall there be any sale of the new 10 3/4% notes 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. Company Profile Azteca Holdings, S.A. de C.V. is a holding company whose principal asset is 55.5% percent of the capital stock of TV Azteca. 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 broadcast television network focused on the rapidly growing United States Hispanic market; Unefon, a Mexican mobile telephony operator focused on the mass market; and Todito.com, an Internet portal for North American Spanish speakers. The matters discussed in this press release are forward-looking statements and is subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Completion of any of the transactions discussed in this press release are subject to (i) the closing conditions for the exchange offer and consent solicitation and Azteca Holdings' right to terminate, modify or amend the exchange offer and consent solicitation, (ii) United States and Mexican market conditions and their impact on the exchange offer and consent solicitation, (iii) our ability and the ability of TV Azteca to service our debt and its debt, (iv) the outcome of pending disputes and legal proceedings involving TV Azteca and its affiliates, (v) competitive factors affecting TV Azteca and its subsidiaries in Mexico and the United States, (vi) cancellations of significant advertising contracts of TV Azteca, (vii) limitations on our access to sources of financing on competitive terms, (viii) significant economic or political developments in Mexico and globally which affect Mexico, (ix) changes in the Mexican regulatory environment, (x) commencement of war or armed hostilities directly or indirectly involving or affecting Mexico or the United States and (xi) terrorist attacks initiated against the United States or its allies in the United States or elsewhere. Other risks that may affect Azteca Holdings or TV Azteca are identified in Azteca Holdings' Form 20-F, TV Azteca's Form 20-F and other filings with the United States Securities and Exchange Commission. Azteca Holdings undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. CONTACT: Azteca Holdings, S.A. de C.V. Investors: Bruno Rangel, +011-5255-3099-9167 Email: jrangelk@tvazteca.com.mx Rolando Villarreal, +011-5255-3099-0041 Email: rvillarreal@tvazteca.com.mx Media: Tristan Canales, +011-5255-3099-5786 Email: tcanales@tvazteca.com.mx Web site: http://www.tvazteca.com.mx/ CFE: Bancomext May Finance Up to 50% of El Cajon Project -------------------------------------------------------- Bancomext, a Mexican state-owned bank will finance up to 50 percent of the 750MW El Cajon hydro generation project, said Alejandro Blasco, the bank's northern region director. However, local paper El Financiero reports that the bank will provide the same percentage of the financing, as to the percentage of the Mexican content of the project. Business News Americas quoted Mr. Blasco saying that the bank has held talks with the three consortia that submitted technical bids to Mexico's state-owned power utility, Federal de Electricidad (CFE). CFE is expected to announce the project winner on Friday next week. The project is estimated to cost some US$812 million, and is projected to generate an average of 1,228GWh/year. The bank supports small- and medium-sized industry and aims to reduce investment risk with the financing, said Business News Americas. 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 Home Page: 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: Inbursa Grants $310M Loan To US Subsidiary -------------------------------------------------------- Grupo Mexico SA, the world's third-largest copper miner, signed a US$310-million loan contract with Banco Inbursa for its U.S. subsidiary Americas Mining Corporation. Without disclosing the terms of the loan, Grupo Mexico said it plans to use the funds to restructure its finances. "The said credit are new funds that will be used in the financial restructuring process, which will improve the debt profile of the subsidiaries Asarco Inc and Grupo Minero Mexico," Grupo Mexico said in a one paragraph statement. Grupo Mexico, which had US$533 million in cash on hand at the end of the fourth quarter, is depending on loans to continue operating while servicing its US$2.9 billion in debt, after falling copper prices forced the Company to miss payments on more than US$1.3 billion in bank loans last year. Now the Company is in talks with a group of banks led by Bank of America Corp. and J.P. Morgan Chase & Co. to stretch out payments on the loans. To see financial statements: http://bankrupt.com/misc/Grupo_Mexico.pdf 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 PEMEX: To Sign US$200 Million Credit Facility With EDC Soon ----------------------------------------------------------- Mexican state oil company Pemex should finalize talks for a US$200-million credit facility with Canadian state credit export agency Export Development Canada (EDC) in four to six weeks, EDC's Mexico and Central America director Marvin Hough told Business News Americas. The two parties have signed an offer letter during Canadian Prime Minister Jean Chretien's visit to Mexico last week. But Mr. Hough admitted that the parties still have some work to do. Similar to a previous loan, this loan also targets specific projects, said the report but the precise details of the loan will not be released until the final loan agreement is in place. Mr. Hough said that this loan will target 23 integrated projects that form Pemex' Pidiregas-financed strategic gas program. This loan will increase two existing credit facilities Pemex has with the EDC. Pemex and the EDC signed a US$50 million general all-purpose loan agreement three years ago, followed by a US$200 million loan facility in November 2000. CONTACT: PETROLEOS MEXICANOS Marina Nacional 329, Colonia Huasteca 11311 Mexico, D.F., Mexico Phone: +52-55-5531-6061 Fax: +52-55-5531-6321 Home Page: http://www.pemex.com Contacts: Raul Munoz Leos, General Director Jose A. Ceballos Soberanis, Director Corporate Operations Jose Juan Suarez Coppel, Director Corporate Finance PEMEX: Reports Improved January Production Results -------------------------------------------------- Pemex, Mexico's state oil company, increased its January 2003 output to an average of 3.3million barrels of crude. This is 2.4 percent more than the same month last year. According to a Business News Americas report, the Company produced 2.35mb/d of Maya heavy crude, 552,000b/d of Istmo light crude, and 455,000b/d of Olmeca superlight crude. The offshore Campeche sound oilfields contributed 2.76mb/d or 82.9 percent of January's total production; the southern region 500,000b/d or 15 percent of the total; and the northern region 71,000b/d or 2.1 percent. However, the Company's natural gas production remains almost the same. Last month, natural gas production averaged 4.45 billion cubic feet a day, compared to last year's 4.46 billion cubic feet a day. The southern region, Campeche sound and northern region produced 37 percent, 34 percent and 29 percent respectively of January natural gas output, said the report. UNION FENOSA: Seeks Partners For Mexican Assets ----------------------------------------------- In a bid to reduce debt, which at the end of 2002 stood at EUR7.18 billion, Spanish Union Fenosa is looking for strategic partners to invest capital of up to US$550 million, or 50% of the value of its Mexican assets, reports Business News Americas. "We are open to different alternatives and we could partner with electric companies, or financial institutions to share our investments in Mexico which are very good investments with good cash flow," spokesperson Mauricio de la Rosa said. Union Fenosa would prefer a partner that would buy a percentage interest in all three of the Company's Mexican plants, he added. Union Fenosa will start operations at its 300MW Naco-Nogales and 500MW Tuxpan II and IV plants in April and May respectively, de la Rosa said. "These new plants will give us a positive cash flow," de la Rosa said. The spokesperson also revealed that the Spanish power company plans to consolidate its operations in Mexico in 2003 with no new investments. The electric sector reform bill, which congress is expected to approve in September, could pave the way to cogeneration projects in the future, he added. =============== P A R A G U A Y =============== COPACO: Service In Peril Due To Neglect --------------------------------------- The failure by the Paraguayan Comptroller General's office to sign necessary documentation hampered state fixed line operator Copaco's implementation of a 100-day plan Carmelo Rios, general secretary of the telecoms workers' union Sinattel, said. The plan, which the Company's directors drafted in June 2002, called for an investment of some US$20 million for network maintenance, expansion and digitalization, as well as a staff reduction program that was to axe 550 positions. "The company is in a state of total abandonment. Service could collapse at any moment because of lack of maintenance," Rios said. CONTACT: COPACO S.A. (Ex. Antelco) - Paraguay Phone: 595-21-2192175 595-21-2192010 Fax: 595-21-2192175 E-mail: teleinfo@copaco.com.py ======= P E R U ======= MINERA VOLCAN: Shareholders' Called To Shore Up Capital Needs ------------------------------------------------------------- The board of Peruvian zinc miner Volcan has called a shareholders' meeting for March 26 at 11 am, the Company said in a statement to the Lima's securities regulator Conasev. In the meeting, the Company will consider the possibility of a capital increase as one of the measures to help the Company meet its financial requirements. Cash-strapped Volcan posted a net loss of US$11.6 million in 2002 as a result of lower zinc prices and reduced production. 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. A weeklong 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. 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 ================= PDVSA: Uncovers Sabotage Attempts on Refinery --------------------------------------------- Felix Rodriguez, general manager of Petroleos de Venezuela-West (PDVSA-Occidente) said that there was a sabotage attempt on the Ule-May pipeline last Friday evening. A report by Vheadline.Com quoted Mr. Rodriguez as saying that 6 valves in four pipe-flow sub-stations were cut off and obstructed to prevent them from being opened. He added that the sabotage would have caused a serious explosion and cut off supplies to the Paraguana Refinery. The Company's air vigilance service found out that the substation gates have been opened, resulting in the discovery of the plot. Apparently, the attempt was not unique, as Mr. Rodriguez confirmed that a similar event happened at La Salina yard's 22nd tank, where valves were closed to cause a spill. One of the catalytic cracking units at the Amuay plant could not be started as a result of the acts of sabotage and difficulties in establishing a stable natural gas feed, reported Dow Jones Newswires, citing a company spokesman. However, all units are expected to produce 140,000b/d by the end of next week. PDVSA: Lower Export Levels Trigger Cut in Daily Production ---------------------------------------------------------- Venezuela's state oil company Petroleos de Venezuela (PDVSA) reduced its daily oil production average to 1.6 million barrels per day, according to a report in online newspaper VHEadline.Com. The decline in recent export levels prompted the company to decrease its daily average by 500,000 barrels per day, from about 2.1 million barrels daily. The issue is expected to be resolved this week, when oil tankers contacted by PDVSA arrive. Meanwhile, rebel PDVSA executives refuted the figures reported saying that the current production is only about 1.1 million barrels per day. Venezuela, the fifth largest oil producer in the world, is recovering from a 62-day long nationwide strike aimed at deposing President Hugo Chavez. In the course of the protest, the oil production was almost totally crippled. *********** 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 written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *