/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030327.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, March 27, 2003, Vol. 4, Issue 61 Headlines A R G E N T I N A ARGENTINE BANKS: Seeks One-Year Extension on Bank Freeze MATSUSHITA-ELECTRIC: Restructuring Closes Panasonic Argentina ROYAL AHOLD: Former LatAm Board Members Subject of Questioning B E R M U D A FOSTER WHEELER: 4Q02 Financial Results Mixed TRENWICK GROUP: Shares, LaSalle Re Series A to be Quoted on OTC TRENWICK GROUP: NYSE Grants Six Months For Listing Compliance B R A Z I L ACESITA: Posts BRL303M Net Loss Despite BRL502M Gross Profit ELETROPAULO METROPOLITANA: Registers Bigger-Than-Expected Loss LIGHT SERVICOS: Unions Call For Strike ROYAL AHOLD: May Sell Brazilian Assets To Meet Debt Payments TCP: Provides TCO Celular Update TELEMAR: Appoints Marcos Grodetzky As New CFO VARIG: RBF Votes Off Director VESPER: Launches Roaming Agreement With Brasil Telecom C H I L E AT&T LATIN AMERICA: Suspends Chilean Investments MADECO: Proposes Buy-Back of $47M Worth of Bonds C O L O M B I A AVIANCA: Issues Notice Of Appearance AVIANCA: CIT Quantifies Exposure to Avianca Airlines EMCALI: Union's Cooperation Critical To Survival E C U A D O R BANCO DEL PICHINCHA: Fitch Changes Outlook on Ratings PRODUBANCO: Fitch Changes Outlook Following Sovereign Action M E X I C O AEROMEXICO: Signs Five-Year Agreement With Pratt & Whitney T R I N I D A D & T O B A G O CARONI LTD.: Opposition Refuses To File Motion CARONI LTD.: Workers' Union Gets Support From Other Unions V E N E Z U E L A PDVSA: To Contribute $7B To State's Coffers * Venezuela Warns Cuban Debt Could Endanger Purchase Agreement - - - - - - - - ================= A R G E N T I N A ================= ARGENTINE BANKS: Seeks One-Year Extension on Bank Freeze -------------------------------------------------------- Argentine newspaper El Cronista reports that banks in the country want the government to keep restrictions on deposit withdrawals for another year. According to the newspaper, the banks fear that the financial system does not have enough cash to handle huge withdrawals that may follow the lifting of restrictions. Earlier this week, Argentine Economy Minister Roberto Lavagna said that restrictions would be lifted before President Eduardo Duhalde leaves office in May. Argentina limited cash withdrawals from banks and transfers abroad in December 2001 in a bid to avoid a run on deposits and a financial collapse, said Business News Americas on Tuesday. Previous reports said that the Argentine government is planning on compensation banks for losses incurred from the "pesofication" of all dollar deposits. However, in what form the compensation will be is yet to be settled. An earlier report from the Troubled Company Reporter - Latin America said that President Duhalde may sign a decree paving the way for the compensation this week. Talks on the banking restrictions will continue as Mr. Lavagna is set to meet the banks' representatives this week. MATSUSHITA-ELECTRIC: Restructuring Closes Panasonic Argentina ------------------------------------------------------------- Matsushita Electric Industrial Co., Ltd. (NYSE: MC) today announced plans to discontinue operations at Panasonic Argentina, S.A. (PARSA), a sales subsidiary located in Argentina, on March 31, 2003. Responsibility for sales activities in Argentina will be shifted to Matsushita's manufacturing and sales subsidiary, Panasonic do Brasil Ltda. (PANABRAS), which will establish a new Argentina sales office. This move is part of Matsushita's organizational restructuring of its South American operations in response to a sudden and severe contraction of the market in Argentina, caused by the economic turmoil in that country that began in late 2001. Matsushita Electric Industrial Co., Ltd. is one of the world's leading producers of electronic and electric products for consumer, business and industrial use, which it markets around the world under the "Panasonic," "National," "Technics" and "Quasar" brand names. Matsushita's shares are listed on the Tokyo, Osaka, Nagoya, Fukuoka, Sapporo, New York, Pacific, Euronext Amsterdam, Euronext Paris, Frankfurt and Dusseldorf stock exchanges. For more information, visit the Matsushita web site at the following URL: http://www.panasonic.co.jp/global/ To see basic info about PARSA: http://bankrupt.com/misc/PARSA.htm CONTACT: Panasonic Finance (America), Inc. Akihiro Takei, 212/698-1365 ROYAL AHOLD: Former LatAm Board Members Subject of Questioning -------------------------------------------------------------- After completing a probe into the legality of certain transactions at its Argentine store chain Disco, Ahold will once again conduct an internal inquiry into the conduct of former Latin American board members for alleged practices, Dow Jones reports, citing an article by the Financial Times. A person familiar with the situation suggested that the move is also understood to reflect concerns within the Company that U.S. authorities may widen their investigations to include Ahold's Latin American operations. Ahold is struggling to regain investor confidence following last month's disclosure of a US$500-million hole in its U.S. accounts, and issues related to Disco and the consolidation of certain joint ventures. The Securities and Exchange Commission and U.S. Justice Department are probing the income overstatement at Ahold's U.S. FoodService unit, including allegations that Ahold colluded in widespread accounting fraud with some of the world's leading food companies. Only some suppliers are implicated and it will be some time before investigators form a view about the accuracy of the allegations. The inquiry will extend into the activities of Disco not covered by the previous accounting investigation, the person said. ============= B E R M U D A ============= FOSTER WHEELER: 4Q02 Financial Results Mixed -------------------------------------------- - Cash position remains strong - International E&C and Energy performance remains solid - Special charges address legacy issues, lead to loss for the quarter Foster Wheeler Ltd. (NYSE: FWC) reported on Tuesday results for the fourth quarter 2002 and the year. Results for both periods were dominated by restructuring and special charges. Revenues for the fourth quarter 2002 totaled $995.4 million. The company reported a net loss of $112.1 million, or $2.73 per share diluted, including pre-tax special charges of $124.5 million. Approximately $90 million of the special charges were non-cash. Excluding all special charges, net income for the quarter was $5.4 million, or $0.13 per share diluted. These results compare to revenues of $1,034.9 million in the year-ago quarter, and a net loss of $343.1 million, or $8.39 per share diluted, including special pre-tax charges of $240.1 million. Excluding the charges, the net income for the fourth quarter 2001 was $10.3 million, or $0.25 per share diluted. "During 2002, we made significant progress with the restructuring of Foster Wheeler. My management team inherited judgements and estimates that were more optimistic than the ones we've chosen to use. We've established a set of accounts and adopted an approach to financial management that has resulted in a credible base from which to plan and manage performance. This process, however, led to a host of special charges that were predominantly non-cash. We believe we have dealt with the root causes of these issues by increasing the rigor of our financial and project controls, improving our contracting standards, and establishing a strong management team, both at the corporate level and in each of the company's operations. We have reduced over $40 million from our cost structure worldwide and through our focus on the generation of cash, we have delivered our strongest year-end cash position in 15 years," said Raymond J. Milchovich, chairman, president and chief executive officer. "The progress achieved operationally in 2002 has built the foundation for a solid operating plan in 2003. We expect to generate operating EBITDA in 2003 that would be approximately 30 percent higher than we have achieved over the last three years. Through the first two months, we are tracking consistent with the plan, suggesting that our initiatives are beginning to yield results. As we move forward in 2003, a key goal will be to reduce debt and improve the company's balance sheet." Cash balances worldwide at year-end were $429 million, compared to $224 million at year-end 2001. As of December 27, 2002, the company's indebtedness was $1.1 billion, compared to $1.0 billion at year-end 2001. During the third quarter of 2002, the company replaced the off-balance sheet financing related to the company's corporate headquarters building with an on-balance sheet facility. In the fourth quarter 2002, the company entered into a capital lease for an office building in Finland. These items accounted for the increase in debt. Cash flows generated from operations in 2002 were $160.4 million, compared to cash outflows of $88.7 million during 2001, an improvement of $249.1 million. In addition, the company sold substantially all of the business of Foster Wheeler Environmental Corporation in March 2003 and received cash proceeds of $80 million. During 2003, the company expects to receive an additional $57 million in capital recovery proceeds from a government project, which was not included in the sale. For the year ended December 27, 2002, revenues were $3.6 billion, a 6 percent increase over $3.4 billion in 2001. The increase is attributable primarily to increased activity in the company's European operations. Foster Wheeler's net loss for the year was $525.2 million, or $12.82 per share diluted, including pre-tax special charges of $545.9 million. In 2001, the company reported a net loss of $336.4 million, or $8.23 per share diluted, including pre-tax special charges of $254.3 million. Bookings and Segment Performance New orders booked during the fourth quarter 2002 were $567.6 million compared to $1,101.8 million in the fourth quarter of last year. The company's backlog was $5.4 billion, compared to $6.0 billion at year-end 2001. Fourth-quarter revenues for the Engineering and Construction Group (E&C) were $583.7 million, compared to $582.6 million during the year-ago quarter. New bookings for the quarter were $306.0 million, compared to $889.2 million in the fourth quarter of 2001. The Group's backlog was $4.0 billion compared to $4.5 billion at year-end 2001. Excluding the effect of special charges in both periods, earnings before interest, taxes, depreciation and amortization (EBITDA) were $24.6 million this quarter, compared to $17.0 million for the same period last year. The increase was due to improved results in the UK engineering and construction operations. For the year, E&C bookings were $1.7 billion, down from $2.6 billion in 2001. Revenues for 2002 were $2,027.5 million, up 4 percent compared to $1,944.0 million last year. Excluding the effect of special charges in both periods, EBITDA of $86.7 million for the year was essentially flat with $85.6 million last year. Energy Group revenues for the quarter were $421.7 million, up 5 percent compared to $402.6 million in the same quarter of 2001. New bookings during the fourth quarter were $264.8 million, up 30 percent, compared to $203.8 million in the year-ago quarter. The increase was mainly due to a large domestic power project order recorded in December 2002. Backlog at year-end was $1.4 billion, compared to $1.5 billion at year-end 2001. Excluding the effect of special charges in both periods, EBITDA was $33.1 million for the quarter, compared to $47.1 million last year. Improved performance in Power Systems and the company's Finnish subsidiary was offset primarily by weakness in the U.S. power operations. For the year, bookings for the Energy Group were $1,396.3 million, compared to $1,478.2 million in 2001. Revenues for the year were up 7 percent to $1,576.8 million, from $1,468.8 million for last year. Excluding the effect of special charges in both periods, EBITDA was $127.8 million for the year, compared to $123.2 million last year. The increase was primarily driven by improved performance at the company's Finnish subsidiary. Special Charges The company recorded a series of special charges for the quarter totaling $124.5 million, most of which addressed legacy issues: - $65.6 million for revisions to project claim estimates and related costs. Recoveries against these claims will be recognized as revenue when received; - $20.0 million provision for asbestos claims relating to insolvent insurers; - $16.2 million of costs in connection with the company's refinancing and restructuring efforts, performance intervention activities, employee severance, and other charges; - $13.7 million for re-evaluation of contract cost estimates and provisions for uncollectible receivables; - $5.3 million provision for impairment loss on a U.S. manufacturing facility, in accordance with the provisions of SFAS 146, "Accounting for Costs Associated with Exit or Disposal Activities;" and - $3.7 million provision for losses to be recognized in anticipation of asset sales. In addition, Foster Wheeler completed its evaluation of goodwill during the quarter in accordance with the implementation of SFAS 142, "Goodwill and Other Intangible Assets." As a result, the company recognized a non-cash $77.0 million impairment charge at a reporting unit in its Energy Group. This charge, along with $73.5 million recognized earlier in the year, has been recorded as a cumulative effect of a change in accounting principle. Annual Pension Revaluation The company completed its annual pension revaluation and recorded an after-tax charge to shareholders' equity of $226.0 million. This charge represents the cumulative minimum liability for both domestic and foreign underfunded pension plans. Declines in financial markets have unfavorably impacted pension plan asset values, resulting in underfunded pension plans. In addition, the company has changed its assumptions on the expected rate of return on plan assets, and the discount rate used to calculate the present value of its future obligations, to more closely match current market conditions. Cash payments required in 2003 remain essentially unchanged from 2002. Restatement of Prior Year Financial Statements Subsequent to the filing of the company's third quarter 2002 financial results, management determined that the assets, liabilities, and related impact on results of operations associated with one of the company's postretirement medical plans were not properly accounted for in accordance with SFAS 106, "Employers' Accounting for Post-Retirement Benefits Other Than Pensions." The company has adjusted its previously reported results for 2000, 2001 and 2002. These adjustments include an additional net liability of $20.5 million at the end of 2002, and pre-tax expenses of approximately $1.6 million for 2002. Notice from the New York Stock Exchange (NYSE) Foster Wheeler received a formal notice, dated March 18, 2003, from the NYSE indicating that it was below the continued listing criteria of a total market capitalization of not less than $50 million over a 30-day trading period and shareholders' equity of not less than $50 million. The company expects to submit a business plan that will demonstrate compliance with the continued listing standard within 18 months of notice from the NYSE. The company's business plan, if accepted, will be reviewed by the NYSE for ongoing compliance with its goals and objectives. Throughout the review process, Foster Wheeler's common stock will continue to be listed on the NYSE, subject to reassessment. To see financial statements: http://bankrupt.com/misc/Foster_Wheeler.htm TRENWICK GROUP: Shares, LaSalle Re Series A to be Quoted on OTC --------------------------------------------------------------- Trenwick Group Ltd. (NYSE:TWK) announced on Tuesday that it expects that its common shares and the Series A Perpetual Preferred Stock of LaSalle Holdings Ltd. (NYSE:LSH_pa), its Bermuda-based subsidiary, will be quoted on the Over-The-Counter (OTC) Bulletin Board beginning Tuesday, Tuesday, March 25, 2003, under the symbols "TWKGF" for Trenwick common shares and "LSRAF" for the LaSalle Series A Perpetual Preferred Stock. As previously announced, the New York Stock Exchange will suspend these securities from trading prior to the market opening Tuesday. The OTC Bulletin Board is a regulated quotation service that displays real-time quotes, last sale prices and volume information on OTC equity securities. Information regarding the OTC Bulletin Board can be found at http://www.otcbb.com. Background Information Trenwick is a Bermuda-based specialty insurance and reinsurance underwriting organization with two principal businesses operating through its subsidiaries located in the United States, the United Kingdom and Bermuda. Trenwick's reinsurance business provides treaty reinsurance to insurers of property and casualty risks from offices in the United States. Trenwick's operations at Lloyd's of London underwrite specialty insurance as well as treaty and facultative reinsurance on a worldwide basis. In 2002, Trenwick voluntarily placed into runoff its U.S. specialty program business and its specialty London market insurance company, Trenwick International Limited, and sold the in-force business of LaSalle Re Limited. TRENWICK GROUP: NYSE Grants Six Months For Listing Compliance ------------------------------------------------------------- The New York Stock Exchange (NYSE) issued a notification to Bermuda-based insurance and reinsurance underwriters Trenwick Group that its common stock could be subject to trading suspension and delisting within the next six months. The stock exchange requires that common stock must be traded at a minimum average share price above the US$1 mark over a 30-day period. However, Trenwick, for the last month, has traded its common stock at an average share price below the stock exchange's requirement. The Company now has a further six months in which to comply with those terms or face trading suspension and delisting. =========== B R A Z I L =========== ACESITA: Posts BRL303M Net Loss Despite BRL502M Gross Profit ------------------------------------------------------------ Brazilian stainless steelmaker Acesita reported a BRL303 million net loss for 2002, only slightly lower than its 2001 net loss of BRL325 million, despite making important gains this year. According to a Business News Americas report, the Company's gross profit went up 58.5 percent to BRL502 million from BRL316 million in 2001, while net revenues soared to BRL1.7 billion, with an Ebitda increase of 52.8 percent to BRL432 million. Meanwhile, total sales volume went down by 4.7 percent to 670,600 tons. The negative results, explained the Company, are mainly due to heavy financial expenses and foreign exchange volatility. In fact, about BRL336 million in losses were of an accounting nature related to how foreign debt id included in its books, said Acesita. Nevertheless, company officials said that the strong operational results reflect the conclusion of the Company's restructuring in the second half of last year, with a focus on certain steel products. As its restructuring phase is completed, the Company's capex is expected to stay at a minimum. Last year, Acesita's capex was 56.6 million. The steelmaker is forecasting investments for 2003 at about 47mn reais in accordance with its objective for the next few years of holding capex at approximately 50% of depreciation. The purpose is to limit investments to sustaining the company's operating competitiveness now that the restructuring process at its mill has been concluded; Business News Americas quoted a statement from the Company. "In the second semester, the company was able to reap the benefits of the new industrial configuration - now operating at near full capacity - and the conversion of mechanical bar capacity to the manufacturing of higher value-added products. In the second half alone we reported net revenues of 1bn reais, equivalent to annual sales of approximately 2bn reais," said Acesita CFO, Gilberto Audelino Correa. The results did not surprise sector analysts. "Much of the results were already known and the company's financial results fell within my forecasts," said Katia Brollo, a steel analyst with Unibanco bank. Brollo, who recommends investors buy up Acesita stock, said the steelmaker's new structure will result in the ending of production of lower valued-added carbon steel and a focus on higher valued-added stainless steel, while selling its stake in CST "cleaned up its finances," reports BNAmericas. This year, the Company expects a recovery in the stainless steel market after demansa slumped by 2.4 percent last year. Demand is expected to grow slightly both in the European and Asian markets. CONTACT: Acesita SA Av Joao Pinheiro, 580 Centro 30130-180 Belo Horizonte - MG Brazil Phone: +55 31 3235-4211 Fax: +55 31 3235-4300 Home Page: http://www.acesita.com.br Contacts: Valmir Marques Camilo, Chairman Bruno Le Forestier, Vice Chairman Jean-Yves A. Aime Gilet, Member ELETROPAULO METROPOLITANA: Registers Bigger-Than-Expected Loss -------------------------------------------------------------- AES Corp.'s Eletropaulo Metropolitana SA, Latin America's biggest power distributor, posted a loss bigger than what analysts had expected after a slide in Brazil's currency caused debt costs to soar. According to Bloomberg, Eletropaulo, which serves 16 million people in Brazil's largest city, Sao Paulo, lost BRL871 million (US$258mn) last year. Losses in Brazil threaten to cost U.S.-based AES control of Eletropaulo after defaulting on payments on government loans that financed the 1998 acquisition of the utility. The Brazilian government gave AES until late May to reach a plan to repay US$1.2 billion of debt or face seizure and auction of its Eletropaulo shares. "I believe they will avoid auctioning off the shares because of the losses they face," said Rafael Quintanilha, electricity analyst at BES Securities, who expected Eletropaulo to report a 680 million-real loss. "They will likely reach some kind of agreement to avoid that." Eletropaulo has a market value of US$678 million, less than half what AES owes the government's state development bank, BNDES. 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 LIGHT SERVICOS: Unions Call For Strike -------------------------------------- Electric power workers' unions in Brazil's Rio de Janeiro surprised local distributor Light with a decision to call a 24- hour strike Wednesday, reports Business News Americas. The union called the strike to protest the Company's firing of 60 employees last week, following the recent completion of a voluntary redundancy program to which 469 people signed up. According to labor union Sintergia-RJ, the voluntary redundancy program was more successful than the company itself had expected, and the unions expected this to satisfy Light's targets for cutting the workforce in 2003. However, the Company decided to lay off more employees, prompting the unions to abandon talks scheduled to restart March 20 and declare a strike. While the decision came as a surprise to Light, company spokesperson Alexandre Coimbra said it has already made preparations to ensure service is not affected once the unions go ahead with the strike. 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 ROYAL AHOLD: May Sell Brazilian Assets To Meet Debt Payments ------------------------------------------------------------ In a bid to cover liabilities totaling US$12 billion, Royal Ahold is mulling the sale of its Brazilian assets. According to an article released by NewsEdge, the Company controls three companies in the country -- supermarket chains Bom Preco and G.Barbosa and the credit card managment company Hipercard. The Company could be considering the French Carrefour as its top potential buyer since the latter has expressed willingness to acquire Ahold's assets, not only in Brazil, but across the world. TCP: Provides TCO Celular Update -------------------------------- Telesp Celular Participacoes Announces Acquisition of Control of TCO Celular Telesp Celular Participacoes S.A. -- TCP (NYSE: TCP; BOVESPA: TSPP3 (Common), TSPP4 (Preferred)) announced Tuesday the execution of the definitive share purchase and sale agreement regarding the acquisition of control of Tele Centro Oeste Participacoes S.A. ("TCO"), as contemplated in the preliminary agreement and disclosed in the Relevant Notice of January 16, 2003 (the "Acquisition"). Transference of control will be effective after consummation of certain conditions precedent, including approval by ANATEL (the Brazilian Telecommunications Agency), at which time the definitive pricing terms will be determined and disclosed. CONTACT: Telesp Celular Participacoes S.A. Investor Relations Edson Menini Phone: +55-11-3059-7531 E-mail: emenini@telespcelular.com.br Home Page: http://www.telespecelular.com.br TELEMAR: Appoints Marcos Grodetzky As New CFO --------------------------------------------- Tele Norte Leste Participa�oes S/A (NYSE: TNE), announced Monday the appointment of Marcos Grodetzky as its new Chief Financial Officer (CFO), a position he will hold concurrently with the CFO position at Telemar Norte Leste (TMAR). As an internal hire, Mr. Grodetzky combines a substantial knowledge of the Company along with significant experience and expertise in the financial sector. He has been serving as the Company's Treasurer and Investor Relations Director. Previous to joining Telemar, Mr. Grodetzky had over 20 years of experience in the financial markets, through positions in the international and investment banking areas of major institutions such as Citibank, Unibanco and Safra. Mr. Grodetzky's appointment is effective immediately. CONTACT: TNE - INVESTOR RELATIONS Roberto Terziani terziani@telemar.com.br 55 21 3131 1208 Carlos Lacerda carlosl@telemar.com.br 55 21 3131 1314 Fax: 55 21 3131 1155 GLOBAL CONSULTING GROUP Rick Huber richard.huber@tfn.com Mariana Crespo mariana.crespo@tfn.com Tel: 1 212 807 5026 Fax: 1 212 807 5025 VARIG: RBF Votes Off Director ----------------------------- Yutaka Imagawa was voted off the board of Rubem Berta Foundation, which controls Brazil's flagship airline, Viacao Aerea Rio Grandense SA. Local news wire Agencia Estado recalls that Imagawa was the one who fought the hardest to maintain the foundation's 90% stake in Varig despite heavy pressure to surrender control. Varig is about to crumble under huge amounts of debt but the RBF, a nonprofit group linked to Varig employees, has scuttled talks with creditors who have pressured the foundation to step aside. Worse still, even Brazil's government lending agency, the National Development Bank, has said it won't extend fresh financing to debt-ridden Varig until the RBF surrenders control. The foundation has been accused of everything from poor management to cooking the books: early this year, Brazil's securities regulator ordered Varig to restate financial results for the first half of 2002 and all of 2001 after finding about BRL1.3 billion reals in accounting errors. VESPER: Launches Roaming Agreement With Brasil Telecom ------------------------------------------------------ Brazilian telco Vesper signed a roaming agreement with fellow telco Brasil Telecom for its fixed wireless clients in Sao Paulo, Business News Americas reports, citing local press. Brasil Telecom VP Yon Moreira da Silva affirmed that the agreement means Brasil Telecom has chosen CDMA for its forthcoming mobile business, due to launch in 2H03. The Companuy has three Band E licenses it won in the government's November 2002 PCS auction. "One has nothing to do with the other," Business News Americas quoted Mr. Da Silva. On the other hand, Vesper launched its CDMA2000 1xEV-DO fixed wireless broadband services, in partnership with Canadian firm, Nortel Networks on Monday. Separately, Brail Telecom has three 1900MHz EV-DO base stations installed in Brasilia in preparation for trials of the service. Lucent (NYSE:LU) provides network equipment for Brasil Telecom's trial. CONTACT: Qualcomm Inc 5775 Morehouse Dr. San Diego, CA 92121-1714 Phone: 858-587-1121 Fax: 858-658-2100 Web: http://www.qualcomm.com Contact: Dr. Irwin M. Jacobs, Chairman & Chief Executive Brasil Telecom SA SIA / Sul- Asp - Lote D - Bl D - 2 Andar Sia 71215-000 Brasilia - DF Brazil Phone: +55 61 415-1901 Fax: +55 61 415-1237 Home Page: http://www.brasiltelecom.com.br Contacts: Eduardo Seabra Fagundes, Chairman Ludgero J Pattaro, Member Francisco Ribeiro de Magalhaes Filho, Member NORTEL NETWORKS CORP Suite 100 8200 Dixie Road Brampton ONTARIO, Canada L6T 5P6 Phone: +1 905 863-0000 Fax: +1 905 863-8423 Home Page: http://www.nortelnetworks.com Contacts: Frank A. Dunn, President & Chief Executive James J. Blanchard, Director Robert E. Brown, Director ========= C H I L E ========= AT&T LATIN AMERICA: Suspends Chilean Investments ------------------------------------------------ AT&T Latin America suspended plans to invest US$40 million in a regional operational platform in Chile after its parent, AT&T Corp., decided to stop injecting funds in its Latin American unit. Investments were supposed to include the development of an operating center for its customers in the region, which was aimed at generating direct savings of US$8 million per year. MADECO: Proposes Buy-Back of $47M Worth of Bonds ------------------------------------------------ Chilean copper and aluminum products manufacturer Madeco continues to restructure its finances as it attempts to recover from the economic crises in Argentina and Brazil, including hefty devaluations. Business News Americas reports that the Company launched Tuesday an offer to buy back around US$47 million worth of bonds. The offer will last until Friday (Mar. 28). Earlier this month, the Company's bonds were upgraded by Fitch credit ratings agency to BB from B after Madeco paid 30% of its rescheduled bank debts, and extended long-term deadlines granted to the balance. The payment was made possible thanks to the Company's controlling shareholders, the Luksic group's Quinenco holding company, signing up to its US$70 million portion of a roughly US$130 million equity issue. Of the amount, US$36 million was used to pay the banks. The bank debt restructuring was agreed in December last year but depended on the success of the equity issue. The other US$84 million in bank debt is now due in seven years, and subject to a three-year grace period. Madeco has total debts of some US$325 million, of which about US$100 million is in the form of long-term bonds, largely held by pension fund managers. 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 L O M B I A =============== AVIANCA: Issues Notice Of Appearance ------------------------------------ PLEASE TAKE NOTICE that Winston & Strawn, hereby appears on behalf of Debis AirFinance B.V. and Debis Finance Ireland PLC (collectively "Debis"), as a party in interest in the above- captioned cases and demands, pursuant to 11 U.S.C. 342 and 1109(b) and Rules 2002, 3017 and 9007 of the Federal Rules of Bankruptcy Procedure, that copies of all papers filed in the Debtors' case or in any related adversary proceedings be served on the individual at the addresses set forth below: Steven M. Schwartz, Esq. Edward G. H. Chin, Esq. Winston & Strawn 200 Park Avenue New York, New York 10166 Telephone No.: (212) 294-6700 Facsimile No.: (212) 294-4700 Email addresses: SSchwartz@winston.com EChin@winston.com debis AirFinance B.V. Erwin den Dikken, Esq. Evert van de Beekstraat 312 1118 CX Schiphol Airport Amsterdam The Netherlands DID 011-3120-655-9671 TEL 011-3120-655-9655 FAX 011-3120-655-9100 PLEASE TAKE FURTHER NOTICE that, pursuant to 11 U.S.C. 1109(b), the foregoing demand includes not only the notices and papers referred to or specified above but also includes, without limitation, orders and notices of any application, complaint, demand, motion, petition, plan, disclosure statement, pleading or request, whether formal or informal, whether written or oral, and whether transmitted or conveyed by mail, telephone, telegraph, telex or otherwise filed or made which affect or seek to affect in any way rights or interests of creditors, parties in interest, Debis, the Debtors or the property of the Debtors. PLEASE TAKE FURTHER NOTICE that Debis intends that neither this Notice of Appearance nor any later appearance, pleading, claim, or suit shall waive or otherwise impair or limit (a) Debis' right to have final orders in non-core matters entered only after de novo review by a District Judge, (b) Debis' right to trial by jury in any proceeding so triable in these cases or any case, controversy, or proceeding related to these cases, (c) Debis' right to have the District Court withdraw the reference in any matter subject to mandatory or discretionary withdrawal or (d) any other rights, claims, actions, defenses, setoffs, or recoupments to which Debis is or may be entitled under agreements, in law or in equity, all of which rights, claims, actions, defenses, setoffs and recoupments Debis expressly reserves. Dated: New York, New York March 24, 2003 WINSTON & STRAWN /s/ Steven M. Schwartz By: Steven M. Schwartz (SMS-4216) 200 Park Avenue New York, NY 10166 (212-294-4700) Counsel for Debis AirFinance B.V. and Debis Finance Ireland PLC NY766027.1 AFFIDAVIT OF SERVICE STATE OF NEW YORK) COUNTY OF NEW YORK) Denise A. Cunsolo, being duly sworn, deposes and says: 1. Deponent is not a party to the action, is over 18 years of age and is employed by Winston & Strawn, 200 Park Avenue, New York, New York 10166; 2. On March 25, 2003 deponent caused to be served a true and correct copy of the foregoing Notice of Appearance, Demand for Service of Papers and Reservation of Rights, by first class mail upon the persons on the attached service list. /s/ Denise A. Cunsolo Denise A. Cunsolo Sworn to before me this the 25th day of March, 2003 /s/ Notary Public Notary Public SERVICE LIST Aerovias Nacionales de Colombia S.A. Avianca 720 Fifth Avenue 5th Floor New York, New York 10019-4107 Anderson, Kill & Olick, P.C. 1251 Avenue of the Americas New York, New York 10020 Attn: Michael J. Venditto, Esq. Smith, Gambrell & Russell, LLP 1230 Peachtree Street, N.E. Suite 3100 Atlanta, GA 30309 Attn: Ronald E. Barab, Esq. Office of the United States Trustee 33 Whitehall Street 21st Floor New York, New York 10004 AVIANCA: CIT Quantifies Exposure to Avianca Airlines ---------------------------------------------------- CIT Group Inc. (NYSE: CIT) disclosed its current financing relationship to Avianca which filed voluntary petitions for re- organization under Chapter 11 of the U.S. Bankruptcy Code on Friday, March 21, 2003. Under existing agreements, CIT has operating leases with Avianca whereby it is the lessee of one MD 80 and one Boeing 757 aircraft, the latter of which is scheduled to come off lease in May. The outstanding balances under these operating leases total $41 million. EMCALI: Union's Cooperation Critical To Survival ------------------------------------------------ Colombia's workers' union Sintraemcali will play a key role in the government's attempt to prevent the liquidation of Cali-based multi-utility Emcali. According to a Business News Americas report, Colombian President Alvaro Uribe asked the union to approve cost-cutting changes to the collective labor agreement, which mandates benefits such as 19 wages a year, compared to the 13 that the majority of other workers in Colombia receive. According to estimates made by public services regulator Superservicios, which has been running Emcali for the last three years, the collective labor agreement costs the Company COL400 billion (US$135mn) a year, some 35% of revenues. "If we manage to save Emcali we are going set an example to the country to continue saving companies," Uribe told representatives of a technical committee set up to try and resolve Emcali's financial problems. Uribe also pointed out that Emcali's pension-related liabilities have risen from COL200 million in 1994 to COL930 million today. "That's why I insist that we have to review the issue of pensions' jump in the pension liability of this magnitude makes the company unsustainable." ============= E C U A D O R ============= BANCO DEL PICHINCHA: Fitch Changes Outlook on Ratings ----------------------------------------------------- Fitch Ratings has revised the Rating Outlook on the long-term foreign currency ratings of Ecuadorian Banks, currently at 'CCC+' to Positive from Stable. This action follows a similar action taken on the sovereign ratings and reflects the approval of an US$205 million Stand-by program with the IMF. Given the current low level of the sovereign ratings, the prominent position of the rated institutions within the Ecuadorian financial system, and the improving financial condition of the two banks since the crisis, a positive change in the ratings of the sovereign is likely to have a similar impact on the bank ratings. The ratings affected are as follows: Banco del Pichincha y Subsidiarias --Long-term foreign currency rating affirmed at 'CCC+', Rating Outlook revised to Positive from Stable; --Support Rating affirmed at '5T'. CONTACT: Linda Hammel 1-212-908-0303, New York Ricardo Chaves 1-212-908-0606, New York Patricio Baus +5932 222-2323, Quito Media Relations: James Jockle 1-212-908-0547, New York PRODUBANCO: Fitch Changes Outlook Following Sovereign Action ------------------------------------------------------------ Fitch Ratings has revised the Rating Outlook on the long-term foreign currency ratings of Ecuadorian Banks, currently at 'CCC+' to Positive from Stable. This action follows a similar action taken on the sovereign ratings and reflects the approval of an US$205 million Stand-by program with the IMF. Given the current low level of the sovereign ratings, the prominent position of the rated institutions within the Ecuadorian financial system, and the improving financial condition of the two banks since the crisis, a positive change in the ratings of the sovereign is likely to have a similar impact on the bank ratings. The ratings affected are as follows: Produbanco -- Long-term foreign currency rating affirmed at 'CCC+', Rating Outlook revised to Positive from Stable; -- Support Rating affirmed at '5T'. =========== M E X I C O =========== AEROMEXICO: Signs Five-Year Agreement With Pratt & Whitney ---------------------------------------------------------- Aerovias de Mexico S.A. de C.V. (Aeromexico) has signed a five- year maintenance agreement with Pratt & Whitney to provide repair services for the thrust reversers on PW2037 engines that power the airline's Boeing 757 fleet. The contract has an estimated value of $3 million U.S. dollars. Pratt & Whitney Composites Mexico S. de R.L. de C.V., a wholly- owned Mexican subsidiary of Pratt & Whitney H.A.C., will provide repair services for thrust reversers on the 18 engines that power nine aircraft. This is the first long-term maintenance agreement for the facility that opened in 2002 in Tijuana, Mexico. Pratt & Whitney Composites Mexico is the only U.S.-owned company in Mexico to have repair licenses from the U.S. Federal Aviation Administration and DGAC, the government aviation agency of Mexico. World- class capabilities include a half-million-dollar autoclave (the largest oven of its kind in Latin America), an advanced chemical etch line, and state-of- the-art clean room facilities. "We are extremely pleased to expand Pratt & Whitney's relationship with Aeromexico," said Jerry Tarnacki, director of Pratt & Whitney's global part repair and services group. "We are dedicated to providing world-class service to customers across Latin America and around the world. We are delighted with this opportunity to serve Aeromexico with the world's most advanced materials technology." Pratt & Whitney Aftermarket Services offers overhaul and repair services at nearly 30 locations around the world. In addition, it offers fleet and material management programs to both commercial and military customers. Pratt & Whitney, a United Technologies company (NYSE: UTX), is a world leader in the design, manufacture and service of aircraft engines, space propulsion systems and industrial gas turbines. ================================= T R I N I D A D & T O B A G O ================================= CARONI LTD.: Opposition Refuses To File Motion ---------------------------------------------- The United National Congress refused to file a motion to start a debate on the Caroni issue, reports the Trinidad Guardian on Tuesday. The UNC was required to submit a motion on Monday to have it debated on Private Member's Day on Friday. However, Trinidad and Tobago Agriculture Minister John Rahael was not surprised. "The UNC's refusal to file the motion is exactly what we've been saying all the time. They do not want to discuss the issue; they want to create all sorts of red herrings without assessing the issue. Their plan was to shut down Caroni," said Mr. Rahael. "I hope civil society will respond to their reaction. Friday is Private Members' Day, when the UNC can put forward its motions and we're prepared to debate it that day, " he added. Couva South MP Kelvin Ramnath said, "As Government, they have a duty to file the motion. Until they do, they and the country can expect non-co-operation, total opposition on all Bills in both Houses, public marches and demonstrations. Parliament and the legislature will be on hold." However, Mr. Ramnath made it clear that the Opposition will not file a motion. "Government is clearly stalling on the matter to reach the April deadline for the VSEP. But we're not in any hurry. We'll maintain our position, especially where non-support of Bills is concerned," he said. CONTACT: Caroni Limited Old Southern Main Road, Caroni, Trinidad & Tobago Phone: (868) 663-1781 or 662-0879 Fax: (868) 663-1404 All Trinidad Sugar and General Workers' Trade Union Rienzi Complex Exchange Village Southern Main Road, Couva. President: Mr. Boysie Moore-Jones General Secretary: Mr. Rudranath Indarsingh Tel. 868-636-2354 Fax. 868-636-3372 E-mail: atsgwtu@opus.co.tt CARONI LTD.: Workers' Union Gets Support From Other Unions ---------------------------------------------------------- The All Trinidad Sugar General Workers' Trade Union (ATSGWU) received support from various unions all over the world concerning the plight of its members who work for Trinidad and Tobago state sugar company, Caroni (1975), Ltd. Caroni offered 9,00 of its workers the Voluntary Separation of Employment Plan (VSEP) in the course of its restructuring. ATSGWU received solidarity letters from the Guyana Agricultural and General Workers' Union (GAWU) and the International Union of Food Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Association of Switzerland, reports the Trinidad Express on Tuesday. The European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT) even appealed to Prime Minister Patrick Manning to hold a "meaningful" dialogue with the union. EFFAT general secretary Harald Wieldenhofer said, "We strongly regret that the VSEP, a key element of the restructuring of Caroni Ltd, was produced without the participation of the union, especially if you take into account that 8,000 workers are affiliated to the ATSGWTU." Mr. Wieldenhofer conceded that Caroni needed to be restructured to adapt to the globalized sugar industry, and be more efficient in using natural resources. However, he added, "the future of the sugar industry in Trinidad depends on the full and democratic participation of all stakeholders in the decisions that will shape the industry itself." He recommends that Mr. Manning should discuss Caroni's restructuring with the unions. ================= V E N E Z U E L A ================= PDVSA: To Contribute $7B To State's Coffers ------------------------------------------- Venezuelan state oil company PDVSA is expected to contribute US$7 billion to the state treasury in 2003, US$2.9 billion or 29.2% less compared to 2002, according to the ministry of finance. Local paper El Nacional reports that PDVSA's forecast contribution for 2003 is 21.9% less than its average US$9bn contribution over the last five years. The government is forecasting that PDVSA will make dividend payments to the state in 2003 of US$1.4 billion, 50% less than 2002, and will pay US$146 million in corporation tax, 83% less than 2002 and down significantly from US$2.1 billion in 1999. * Venezuela Warns Cuban Debt Could Endanger Purchase Agreement -------------------------------------------------------------- Venezuela, the world's fifth-largest oil producer claims that Cuba owes it US$144 million, reports El Nacional, citing an investigation by the auditing team of Venezuela's state oil company, Petroleos de Venezuela, S.A. (PdVSA). The report adds that Cuba's debt is endangering an agreement between the two countries where Venezuela would sell crude to Cuba at preferential prices. Venezuela agreed to sell Cuba 53,000 barrels of crude a day at below market price. The PdVSA team completed the audit on August, and found that Cuba hasn't paid for oil shipped in 2000. As a consequence, the auditing team recommended the annulment of the agreement between the two countries. Opposition forces in Venezuela allege that Cuba is reselling the crude at market prices to gain foreign currency. Presently, Venezuela is trying to recover from the chaos brought by a two-month long strike that almost totally crippled its oil industry. Indignant workers were seeking the resignation of president Hugo Chavez, who retaliated by dismissing thousands of PdVSA workers. *********** 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 * * *