/raid1/www/Hosts/bankrupt/TCRLA_Public/030328.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
Friday, March 28, 2003, Vol. 4, Issue 62
Headlines
A R G E N T I N A
ACINDAR: Presents Restructuring Proposal To Ad Hoc Committee
DIRECTV LA: Files Motion Seeking Alterations To Top Exec Pacts
* Argentina May Have To Use Reserves To Pay Due Next Month
B E R M U D A
ANNUITY & LIFE: A.M. Best Drops Ratings to `Fair'
SAGE: Writes Off Bermuda Unit; Sale Talks Continue
B R A Z I L
AES CORP.: Seeks Consent to Change Default Terms
LIGHT SERVICOS: BRL1.25 Bln 2002 Losses Cast Doubt on Future
SABESP: To Seek Banks To Lead Debenture Issue
TIW: Sells Brazilian Operations
VARIG/TAM: Sign Merger Terms With CADE
C H I L E
ADEXUS: Gets Reprieve To Pay $18M In Debt
ENERSIS: Receives 5 Bids For Canutillar Hydro Plant
GUACOLDA: Shareholders Approve $60M Capital Increase
INVERLINK CAPITALES: Santiago Judge Declares Bankruptcy
INVERLINK: Sells Stake in Santiago Bourse To Bolsa Lemon
SCL TERMINAL AEREO: Moody's Downgrades Bonds to `Caa1'
C O L O M B I A
AVIANCA: Postpetition Debts Authorized; DIP Agreement Approved
AVIANCA: Obtains Interim Authority To Employ Attorneys
AVIANCA: Court OK's Outside Mechanics, Repairmen Payments
AVIANCA: Ticket Holders, Airlines, Tour Service Providers Paid
AVIANCA: Foreign Vendors, Service Providers, Governments Paid
AVIANCA: Obligations To Employees Will be Honored
M E X I C O
AHMSA: Unit Restructures $152M In Defaulted Debt
AVANTEL: Local Banamex Employees To Assume Control Soon
IUSACELL: NYSE Extends Deadline To Comply With Regulations
PEMEX: Fitch Assigns 'BBB-' Project Funding Master Trust
PEMEX: Sells $800M In Bonds On The International Market
T R I N I D A D & T O B A G O
CARONI LTD.: Ex-Parte Injunction Freezes Assets Until May 2
V E N E Z U E L A
HOVENSA: Refinery Returns to Full Operation; Liquidity OK
PDVSA: La Isla Refinery Prepares Gasoline for Export
* Venezuela Plans Bond Swap to Avert Default
- - - - - - - - - -
=================
A R G E N T I N A
=================
ACINDAR: Presents Restructuring Proposal To Ad Hoc Committee
------------------------------------------------------------
Acindar Industria Argentina de Aceros S.A. (the "Company")
announced Tuesday that it has presented a restructuring proposal
to the ad hoc committee of its creditors (the "Committee") and
that the Committee has found that it provides a foundation for a
potentially successful restructuring proposal acceptable to the
Company's creditors. The Company's creditors include
(i) holders of its 11.25% Notes due 2004 (the "Notes),
(ii) holders of U.S. dollar denominated debt under facilities
of the International Finance Corporation (the "IFC
Debt"),
(iii) holders of other bank loans that are denominated in U.S.
dollars ("Dollar Debt"),
(iv) holders of bank loans that are denominated in Argentine
pesos (including debt that was originally denominated in
U.S. dollars and converted into pesos pursuant to
Argentine law) ("Pesified Debt") and
(v) Companhia Siderurgica Belgo-Mineira ("Belgo Mineira"),
an affiliate of the Company.
Under the proposal presented by the Company to the Committee,
Acindar would effect the proposed restructuring by way of an
Acuerdo Preventivo Extrajudicial ("APE"), a type of insolvency
remedy available to debtors under the Argentine Bankruptcy Law
(the "Bankruptcy Law"). An APE consists of an out of court
agreement between a debtor and a certain percentage of its
unsecured creditors that is submitted to a court for approval
pursuant to the Bankruptcy Law. An APE enables debtors and
unsecured creditors to negotiate a restructuring without being
subject to most of the procedure and substantive encumbrances and
limitations of a concurso preventivo procedure. Once endorsed by
the court, the APE becomes binding on all unsecured creditors of
the relevant debtor affected by the restructuring proposal set
forth therein, whether or not such creditors have participated in
the negotiation or execution of the agreement. The closing for
the restructuring would occur after the court endorsement of the
APE.
Under the proposal presented by the Company to the Committee,
holders of Notes, IFC Debt and Dollar Debt would receive new
unsecured (and partially guaranteed, as explained below) senior
notes ("Senior Notes") or equivalent financial instrument, in the
same principal amount as such holders' existing debt. The Senior
Notes would bear interest on the outstanding principal amount at
a rate of (i) 4% per year from issuance through 2004, (ii) LIBOR
plus 200 basis points during 2005; (iii) LIBOR plus 250 basis
points during 2006 and (iv) LIBOR plus 300 basis points
thereafter. An additional interest payment on the Senior Notes at
a rate of 4% per year for the period from January 1, 2003 through
closing shall be made on the first principal payment date.
Principal of the Senior Notes would be payable in nine equal
installments during each of the years 2003-2011. Holders of
Pesified Debt would receive a discounted cash payment in exchange
for such debt.
Prior to the proposed restructuring, Acindar would commit up to
U.S.$20 million to make a cash tender offer for the Company's
Notes and Dollar Debt. The tender offer would be structured as a
modified dutch auction whereby holders of such debt would be
invited to tender their debt at a discount within a price range
to be specified. Certain debt that is tendered in the cash tender
offer would be subject to proration under the modified dutch
auction procedure.
Pursuant to the restructuring proposal, Belgo Mineira (or one or
more of its affiliates), in exchange for (i) certain claims
against Acindar outstanding at the time that the APE is endorsed
and (ii) an advance to Acindar of U.S.$20 million in connection
with the restructuring, would have the right to receive unsecured
convertible subordinated notes (the "Convertible Subordinated
Notes") that would bear interest at 3% per year payable in cash
and 3% per year payable in additional convertible notes. The
Convertible Subordinated Notes would mature one year after the
maturity of the Senior Notes. Acindar's shareholders would be
granted preemptive rights pursuant to Argentine law. Under the
proposal, Belgo Mineira will also agree to provide a limited
guarantee, in an amount not to exceed U.S.$48 million, of certain
of the Company's payment obligations under the Senior Notes.
Pursuant to the restructuring proposal, Acindar would agree to
pay at closing (a) overdue, accrued and unpaid interest
(excluding default interest) through November 30, 2001 at
contractual rates on any debt that remains after giving effect to
the cash tender offer and that is exchanged for Senior Notes and
(b) accrued interest on such debt for the period from December 1,
2001 through December 31, 2002 at a rate of 4% per year.
No assurance can be given that a restructuring of the Company's
financial obligations will occur or, if so, that a restructuring
will occur as described herein. In addition, all of the
transactions described or contemplated herein are subject to all
necessary approvals.
Acindar is the largest producer of non-flat steel in Argentina
with 50% of the domestic market and an annual capacity of 1.2MM
metric tons. Acindar manufactures more than 200 products
(billets, wire rods, skelps, rebars, welded meshes, cut & bend
steel, cold drawn & hot rolled bars, shapes, pipes, wires, wire
ropes, pc trands, nails) from four different locations.
CONTACTS: ACINDAR S.A.
Jos, I. Giraudo
Investor Relations Manager
(54 11) 4719 8674
Andrea Dala
Investor Relations Officer
(54 11) 4719 8672
DIRECTV LA: Files Motion Seeking Alterations To Top Exec Pacts
--------------------------------------------------------------
DirecTV Latin America filed a motion saying the "stay" bonuses to
be paid under the retention plan will be 3% of each participant's
base salary for each three-month period the person remains with
the Company, Dow Jones relates. "Post-emergence" and "success"
bonuses will be paid as a percentage of annual base salary, based
on employee tiers established in the plan, the report adds.
Court documents didn't reveal the number of employees assigned to
each tier but indicated that those in the first tier would
receive bonuses of 50% of base salary if the Company's
reorganization plan is confirmed within a year.
DirecTV Latin America said it isn't seeking to assume or reject
employment agreements at the moment, but intends to "seek relief
with respect to senior executives that are party to existing
employment agreements," through a separate motion. Court papers
didn't provide information about the type of relief the company
would seek.
DirecTV Latin America, which has 1.6 million subscribers in 28
countries, with the most subscribers in Argentina, Brazil,
Colombia, Mexico, Puerto Rico and Venezuela, filed for bankruptcy
protection from creditors on March 18 under Chapter 11 of the
U.S. Bankruptcy Code. The Company has been hammered by recessions
and strife in Argentina, Venezuela and Brazil that have resulted
in fewer subscribers.
* Argentina May Have To Use Reserves To Pay Due Next Month
----------------------------------------------------------
The government of Argentina may have to use its reserves to pay
US$820 million in World Bank debt due next month. As a
disbursement from the World Bank may not received on time, said
Bloomberg News.
An article from local paper Clarin, indicated that the country
may not receive US$500 million in payments from the World Bank in
time to pay the said debts.
Economy Minister Roberto Lavagna said the gap between the
payments and the date when the debt matures is because the
timetable is "out of synch," said the report.
However, the World Bank has pledged some US$2 billion in aid to
the country.
Argentina's economy had not been very healthy in the recent
years, but has shown some signs of improvement early this year.
In January, the country obtained approval from the International
Monetary Fund to delay payments on about US$16 million of debt.
=============
B E R M U D A
=============
ANNUITY & LIFE: A.M. Best Drops Ratings to `Fair'
-------------------------------------------------
A.M. Best Co. has downgraded the financial strength ratings to B-
(Fair) from B+ (Very Good) of Annuity and Life Re Holdings'
(NYSE: ANR) (Bermuda) life insurance subsidiaries and withdrawn
the senior debt rating on ANR's $200 million shelf registration.
Additionally, all ratings remain under review with negative
implications.
These rating actions reflect the deterioration in ANR's market
profile, lack of improvement in earnings fundamentals, continued
need to raise capital and recent assertions by the company's
auditors that ANR's capacity to continue as a going concern is in
doubt. ANR announced in February it had ceased to write new
business. It has restated its financial statements for the years
ended December 31, 2000 and 2001, successfully concluded an SEC
staff review of the company's prior public filings and withdrawn
its shelf registration. A.M. Best believes that the company's
capital remains adequate to cover its obligations to existing
policyholders. Several initiatives show potential to mitigate
these factors. Management is in varying stages of discussion with
possible investors.
Failure to secure additional capital, or further deterioration of
the company's financial position, could result in additional
downgrades of the ratings on ANR. Accordingly, A.M. Best will
continue to monitor management's efforts to restructure the
company and re-establish it as a going concern.
The financial strength ratings have been downgraded to B- (Fair)
for the following life subsidiaries of Annuity and Life Re
(Holdings), Ltd.:
-- Annuity and Life Reassurance, Ltd
-- Annuity & Life Reassurance America Inc
A.M. Best Co., established in 1899, is the world's oldest and
most authoritative insurance rating and information source. For
more information, visit A.M. Best's Web site at www.ambest.com.
SAGE: Writes Off Bermuda Unit; Sale Talks Continue
--------------------------------------------------
Sage Group Ltd. said it has written down the value of its Bermuda
unit to 1 rand (US$0.12), as discussions on the sale of the unit
are not concluded yet. The capital in Sage's U.S. business also
was cut, triggering an agreement that allows Swiss Reinsurance
Co. to take control of the unit, said the Bermuda Sun.
In a statement, the South African life insurer said that Swiss Re
hasn't taken over the business yet. The Company said that it
expects to complete the sale of its Bermuda unit by the middle of
March.
The Group's principal activities are the provision of life
assurance, investment and financial services. It's operations are
based in South Africa, the United States of America and Bermuda
and are grouped under Sage Life Ltd. Sage Life's domestic
activities embrace the full spectrum of individual life,
endowment and health insurance, retirement and employee benefit
plans.
CONTACT: Sage Group Limited
11th Floor Sage Centre
10 Fraser Street
Johannesburg
South Africa
2001
Phone: +27 011 377 5555
Fax: +27 011 834 2107
Home Page: http://www.sage.co.za
Contacts:
Louis Shill, Executive Chairman
Robin Marsden
Phone: +1-203-602-6510
E-mail: rmarsden@sageusa.com
Bernie Nackan, Executive Director
Phone: +27-11-377-5559
E-mail: bernien@sage.co.za
===========
B R A Z I L
===========
AES CORP.: Seeks Consent to Change Default Terms
------------------------------------------------
The AES Corporation (NYSE:AES) announced Wednesday the launch of
its consent solicitation seeking to amend the definition of
"Material Subsidiary" contained in certain of the events of
default contained in its outstanding 8.375% Senior Notes, Series
F, Due 2011, denominated in pounds sterling ("8.375% Senior
Notes"), 8.00% Senior Notes, Series A, Due 2008 ("8.00% Senior
Notes") and 4.50% Convertible Junior Subordinated Debentures Due
2005 ("4.50% Convertible Junior Subordinated Debentures"), in
order to generally conform such provisions to those contained in
its recently issued senior secured notes due 2005.
The terms of the consent solicitation are as follows. AES is
offering consent fees of $2.00 per GBP 1,000 principal amount of
the 8.375% Senior Notes, $1.25 per $1,000 principal amount of the
8.00% Senior Notes and $1.25 per $1,000 principal amount of the
4.50% Convertible Junior Subordinated Debentures, to holders of
record at the close of business on March 24, 2003 that validly
provide their consent to the proposed amendment by the expiration
time of 5:00 P.M., New York City time, on April 1, 2003, unless
extended. AES' obligation to accept consents and pay a consent
fee to consenting holders is subject to numerous conditions as
set forth in the consent solicitation statement. No default or
event of default currently exists under any of the 8.00% Senior
Notes, the 8.375% Senior Notes or the 4.50% Convertible Junior
Subordinated Debentures.
On March 14, 2003, AES launched a similar consent solicitation
with respect to its 8.75% Senior Notes, Series G, Due 2008, 9.50%
Senior Notes, Series B, Due 2009, 9.375% Senior Notes, Series C,
Due 2010, 8.875% Senior Notes, Series E, Due 2011, 7.375%
Remarketable or Redeemable Securities Due 2013 (puttable in
2003), 8.375% Senior Subordinated Notes Due 2007, 10.25% Senior
Subordinated Notes Due 2006, 8.50% Senior Subordinated Notes Due
2007 and 8.875% Senior Subordinated Notes Due 2027. No default or
event of default currently exists under any of these debt
securities. AES did not launch the consent solicitation for the
8.00% Senior Notes, the 8.375% Senior Notes or the 4.50%
Convertible Junior Subordinated Debentures on March 14, 2003
because of its need to comply with certain notification and
filing requirements under the Securities Exchange Act of 1934, as
amended, and the listing requirements of the New York Stock
Exchange and the Luxembourg Stock Exchange.
Holders of the 8.00% Senior Notes, the 8.375% Senior Notes or the
4.50% Convertible Junior Subordinated Debentures are urged to
read the consent solicitation statement when it becomes available
because it contains important information. Holders can obtain a
copy of the consent solicitation statement and the consent form,
free of charge, from AES. In addition, holders of 4.50%
Convertible Junior Subordinated Debentures can access the consent
solicitation statement and the consent form, which are publicly
available, free of charge, from the Securities and Exchange
Commission's website at www.sec.gov. Such consent solicitation
statement and consent form will be distributed to such holders on
or promptly after the date of this notice.
Salomon Smith Barney is acting as the sole solicitation agent for
the consent solicitations.
Questions concerning the terms of this solicitation or requests
for additional copies of the consent solicitation statement, the
consent form or other related documents should be directed to the
Liability Management Group at Salomon Smith Barney on 212/723-
6106 or 800/558-3745 (toll free). Requests for assistance in
completing the consent form may be directed to the Tabulation and
Information Agent, Mellon Investor Services LLC, at 917/320-6282
or 866/892-5621 (toll free).
Deutsche Bank Luxembourg SA will act as the Luxembourg Agent with
regards to the 8.375% Senior Notes. Copies of the consent
solicitation statement, the consent form and other related
documents will also be available in Luxembourg at the office of
Deutsche Bank Luxembourg SA at 2 Boulevard Konrad Adenauer, L-
1115 Luxembourg, phone: (+352) 421-22-639, fax: (+352) 47-31-36.
Holders of the 8.375% Senior Notes may also request information
from Deutsche Bank Luxembourg SA at this address. Questions
should be directed to Ms. Michele Penning either by email
(michele.penning@db.com) or to the phone number cited above.
The identification number for the 8.375% Senior Notes is as
follows - ISIN: XS0125168780.
The identification numbers for the 8.00% Senior Notes are as
follows - CUSIP: 00130HAP0 and ISIN: US00130HAP01.
The identification numbers for the 4.50% Convertible Junior
Subordinated Debentures are as follows - CUSIP: 00130HAN5 and
ISIN: US00130HAN5.
Under no circumstances should any holder tender or deliver any
Notes to AES, the trustee, the solicitation agent, the Tabulation
and Information Agent or the Luxembourg Agent at any time.
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 160
facilities totaling over 55 gigawatts of capacity, in 30
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 our web site at www.aes.com or
contact investor relations at investing@aes.com.
CONTACT: AES Corporation
Kenneth R. Woodcock, 703/522-1315
LIGHT SERVICOS: BRL1.25 Bln 2002 Losses Cast Doubt on Future
------------------------------------------------------------
Rio de Janeiro-based Light Servicos de Eletricidade saw its net
loss ballooned to BRL1.25 billion in 2002 against a net loss of
BRL951.4 million in the previous year. Net revenues for 2002
dropped to BRL3.65 billion from BRL3.9 billion in 2001.
Last year's operating profit stood at BRL926.1 million. No
comparable figure was disclosed.
Light is owned by Electricite de France, which injected US$1
billion in the loss-making company last year and has said it will
stand by its unit. But many doubt whether EDF will be willing to
keep pouring money into Light unless the unit puts its house in
order.
"If Light doesn't come up with decent operating results, EDF may
well give up on it," said Aline Cardoso, a Rio-based analyst with
Canada's Brascan bank.
As a sign of its poor performance, she points out that Light
loses 21% of the energy it distributes to illegal siphoning and
inefficient transmission lines, well above the sector's average
of 13%.
S&P cut Light credit rating to CCC+ earlier this year and slapped
a negative outlook on the Company, citing doubts about whether or
not Light is still a strategic investment for EDF.
Still, Telles expected EDF to support Light.
"The parent is rich," he said. "It should be able to at least
roll over Light's debt."
Light was privatized in 1996 as part of a drive that put most
Brazilian distributors in private hands, while federal and state
authorities remained in charge of power generators. Some experts
blame that complicated scheme and a lack of clear rules for much
of the sector's problems.
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
SABESP: To Seek Banks To Lead Debenture Issue
---------------------------------------------
Brazil's Companhia de Saneamento Basico do Estado de Sao Paulo
S.A. (Sabesp) will choose banks to lead a planned debenture
issuance, Dow Jones reports, citing Sabesp's Investor Relations
officer Helmut Bossert, who spoke in a conference call Wednesday.
The state-owned utility, the largest water utility in Brazil,
plans to launch US$200 million in debentures on the local market
to roll over part of a $200 million Eurobond coming due in July.
Bossert said it is unlikely that Sabesp will issue new dollar-
linked debt, but it will likely continue to make loan deals with
international development banks, which usually offer attractive
rates. The executive added that 47% of Sabesp's debt is linked to
foreign currencies, and about BRL1.3 billion ($1=BRL3.37) in debt
is coming due this year.
CONTACT: Sabesp
Helmut Bossert,(5511) 3388-8664
hbossert@sabesp.com.br
Marisa Guimaraes, (5511) 3388-9135
marisag@sabesp.com.br
Website: www.sabesp.com.br
TIW: Sells Brazilian Operations
-------------------------------
Telesystem International Wireless Inc. announces that Highlake
International Business Company Ltd., an affiliate of Opportunity
Fund, has indirectly acquired TIW's 49% interest in Telpart
Participacoes S.A (Telpart). Telpart controls Telemig Celular
Participacoes S.A. (Telemig) and Tele Norte Celular Participacoes
S.A. (Tele Norte), holding companies of two cellular operators in
Brazil. Outstanding litigation between TIW and the Opportunity
group of companies has also been settled as part of this
transaction. The total cash consideration received by TIW is US$
70 million of which US$ 5 million was paid by Telemig and Tele
Norte for release of claims for technical services. In accordance
with the terms of TIW's corporate credit facility and the
indenture governing its Senior Guaranteed Notes, TIW will apply a
portion of the net proceeds from the transaction to repay the
indebtedness outstanding under the corporate credit facility and
the remainder to redeem outstanding Senior Guaranteed Notes.
About TIW
TIW is a leading cellular operator in Central and Eastern Europe
with over 3.9 million managed subscribers. TIW is the market
leader in Romania through MobiFon S.A. and is active in the Czech
Republic through Cesky Mobil a.s. The Company's shares are listed
on the Toronto Stock Exchange ("TIW") and NASDAQ ("TIWI").
CONTACT: Telesystem International Wireless Inc.
Media:
Mark Boutet
Phone: (514) 673-8406
E-mail: mboutet@tiw.ca
Investors:
Serge Dupuis
Phone: (514) 673-8443
E-mail: sdupuis@tiw.ca
VARIG/TAM: Sign Merger Terms With CADE
--------------------------------------
Brazil's leading airlines, Varig and TAM, agreed to abide by the
ruling imposed by the anti-trust body CADE regarding pre-merger
operations. Reuters recalls that in February, the two debt-laden
firms agreed to put aside their rivalry and start merger talks.
They set a six-month timetable for the negotiations. And while
the merger process is still ongoing, CADE banned them from making
major operational changes.
In response, Varig and TAM signed an agreement Wednesday
promising the CADE agency to fully maintain separate mileage
programs and prices, and refrain from making layoffs. The
agreement, however, allows the firms to use code sharing, which
they agreed to last month, until the proposed merger is
completed.
If the two airlines fail to fulfill the terms of the agreement,
CADE will cancel the code sharing deal.
The firms are also obliged to report to CADE every month on their
merger talks until they are concluded.
CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.)
Rua 18 de Novembro No. 800, Sao Joao
90240-040 Porto Alegre,
Rio Grande do Sul, Brazil
Phone: (51) 358-7039/7040
(51) 358-7010/7042
Fax: +55-51-358-7001
Home Page: www.varig.com.br/english/
Contacts:
Dorival Ramos Schultz, EVP Finance and CFO
E-mail: dorival.schultz@varig.com.br
Investor Relations:
Av. Almirante Silvio de Noronha,
n 365-Bloco "B" - s/458 / Centro
Rio de Janeiro, Brazil
KPMG Brazil
Belo Horizonte
Rua Paraba, 1122
13th Floor
30130-918 Belo Horizonte MG
Telephone 55 (31) 3261 5444
Telefax 55 (31) 3261 5151
or
Brasilia
SBS Quadra 2 BL A N 1
Edificio Casa de Sao Paulo SL 502
70078-900 Braslia - DF
Telephone 55 (61) 223 2024
Telefax 55 (61) 224 0473
BAIN & CO
Primary Contact: Wendy Miller
Two Copley Place, Boston, MA 02116
USA
Phone: +1-617-572-2000
Fax: +1-617-572-2461
Email: miles.cook@bain.com
URL: http://www.bain.com
TAM
Daniel Mandelli Martin, President
Buenos Aires
Tel. (54) (11) 4816-0001
URL: www.tam.com.br
=========
C H I L E
=========
ADEXUS: Gets Reprieve To Pay $18M In Debt
-----------------------------------------
Chilean systems integrator and solutions distributor Adexus
effected Wednesday an agreement with creditors to restructure the
terms of US$18 million in debt repayments for another five years,
reports Business News Americas.
The agreement gives Adexus a six-month grace period on interest
payments, and a 12-month grace period on payments of principal.
Adexus' principal creditors include First International Bank,
BankBoston, Cisco Systems, Sun Microsystems and Banco de Chile.
Adexus President Carlos Busso said the measure "provides the
company with stability and the possibility to restructure and go
forward with our projects."
Busso expects the Company to close the first quarter with sales
of US$7.5 million - 8 million, down 10% on the same quarter last
year. However, the Company expects to boost its year-over-year
sales performance in the second quarter, he said.
For 2003 the company aims to generate sales of US$35mn and
consolidate its Peruvian operations, Busso said, adding that the
Ecuadorian subsidiary has been profitable since last year.
Chile-based Adexus (www.adexus.com), which also has operations in
Peru and Ecuador, focuses its business on the supply of software,
integration of corporate solutions, externalization of operations
and the creation of business units.
ENERSIS: Receives 5 Bids For Canutillar Hydro Plant
---------------------------------------------------
Chilean power sector holding Enersis received five bids for its
Canutillar hydro plant reports local paper El Mercurio, adding
that the Company will decide on the winning bidder by mi-April.
Italian company Enel is reportedly one of the bidders for the
172MW hydro plant. Enel already owns similar plants in Region X.
In related news, Enersis is expecting bids for Rio Maipo, which
along with the sale of Canutillar, Enersis hopes to raise US$800
million to help ease its US$2 billion of debt.
The divestments will be discussed at the March 31 shareholders
meeting, where the Company would also ask shareholders to approve
a US$2 billion capital increase.
In a letter to shareholders, Enersis president Pablo Yrarrazaval
explained that the capital increase "is fundamental to Enersis'
plan to strengthen its finances," and warned "if we don't achieve
[this capital increase], it could jeopardize the normal financial
operations of the company."
Most of the increase would come from parent company, Spain's
Endesa, which would result Endesa having a stake more than the 65
percent limit set by Enersis' rules.
Business News Americas said Enersis' needs the approval of 75
percent of its investors to amend the rules and proceed with the
capital increase.
CONTACT: Enersis S.A.
Avenida Kennedy Vitacura No
5454
Santiago
Chile
1557
Phone: +56 2 353 4400
Fax: +56 2 378 4768
Home Page: http://www.enersis.cl
Contacts:
Engr Alfredo Llorente Legaz, Chairman
Engr Rafael Miranda Robredo , Vice Chairman
Endesa SA
Principe de Vergara 187
28002 Madrid
Spain
Phone: +34 91 213 10 00
Fax: +34 91 563 81 81
Telex: 22917 ENE
Home Page: http://www.endesa.es
Contacts:
Rodolfo M. Villa, Chairman
Rafael Miranda Robredo, Managing Director
GUACOLDA: Shareholders Approve $60M Capital Increase
----------------------------------------------------
Shareholders of Chilean thermo generator Guacolda will decide on
a US$60-million capital increase through the issue on new shares
during its shareholders' meeting on April 7, reports Business
News Americas, citing a statement from the Company.
Robert Johnson, an analyst for Moody's Ratings said that the
Company's Baa3 senior secured debt rating could be taken off
review for possible downgrade if the capital infusion is pushed
through.
"If the owners are putting in additional money, that would
certainly change things," said Mr. Johnson.
But refinancing may be unnecessary if the capital increase is
designed to pay off the debt, "but that's just pure speculation,"
he added.
One of the reasons Moody's put Guacolda ratings on review earlier
this month was that the company has about US$100mn of debt
maturing on April 30, and its refinancing might result in higher
interest expenses and lower future interest coverage ratios, said
the report.
AES Gener owns 50 percent of Guacolda, while fuel distributor
Copec and Inversiones Ultraterra have 25 percent each.
Guacolda operates at the northern limit of the central grid with
its 304MW installed capacity.
INVERLINK CAPITALES: Santiago Judge Declares Bankruptcy
-------------------------------------------------------
A Santiago court judge declared Inverlink Capitales, the
financial headquarters of the Inverlink Holding company,
bankrupt, the Santiago Times reports. Judge Gloria Solis of the
10th Civil Court of Santiago declared Inverlink Capitales
bankrupt and named Marcos Sanchez as trustee, putting him in
charge of the Company's operations during the bankruptcy
procedures.
The declaration of the bankruptcy follows a lawsuit filed by Jose
Hinzpeter, lawyer representing five people, who invested close to
US$121,621 in the Company.
Hinzpeter said those five people gave money to Inverlink
Capitales to buy promissory notes from the Central Bank. However,
Inverlink Capitales gave false receipts - meaning the Company
never bought the promissory notes.
INVERLINK: Sells Stake in Santiago Bourse To Bolsa Lemon
--------------------------------------------------------
Bankrupt Chilean financial services group Inverlink sold its
stake in the Santiago stock exchange to local stockbroker Bolsa
Lemon Financial. Lemon Financial, according to Business News
Americas, paid CLP402 million for the stake. The share would give
its new owner the right to operate a stockbrokerage. However,
Lemon already owns a stake in the bourse and market observers
believe the stockbroker bid on behalf of a third party.
Inverlink Corredores de Bolsa will used the proceeds of the sale
to pay CLP3400 million in debt with Covarrubias Corredores and
CLP6 million it owed to the stock exchange.
The financial holding buckled under heavy investigation over a
scandal that involved its former CEO Enzo Bertinelli. The former
exec was arrested in early February for allegedly spying on the
central bank to gather classified economic data.
But there was more to it than that. Later that month a series of
irregular financial transactions between the group's insurance
and brokerage subsidiaries surfaced, followed by Inverlink
chairman Eduardo Monasterio's shocking confession in early March
that he had organized the theft of US$95 million in CDs from
industrial development agency Corfo.
SCL TERMINAL AEREO: Moody's Downgrades Bonds to `Caa1'
------------------------------------------------------
Moody's Investors Service downgraded the public underlying rating
of the outstanding US$187.86 million in long-term bonds, of
Chilean airport SCL Terminal Aereo to Caa1 with negative outlook,
from B3 showing the project's worsening financial position,
according to a press release from the ratings agency.
Misunderstanding between the concessionaire and the Ministerio de
Obras Publicas and the Direccion General de Aeronautica Civil
over a number of issues have adversely affected the airport's
finances.
Moody's said that SCL's fiscal 2002 results show a US$5.4 million
net deficit after payment of debt service and operating expenses.
Company officials have indicated that they will be using
approximately US$6.8 million of the US$15.3 million debt service
reserve fund to meet the upcoming US$15.9 million debt service
payment due July 2003.
SCL, which was created by an international consortium in 1998, is
expected to eventually default on its debt, barring any
significant positive trends in traffic and compensation measures
from the Ministry of Public Works.
In the meantime, the Ministries of Finance and Public Works are
said to be discussing the issue, although there are no guarantees
that the outcome could prevent SCL from defaulting.
===============
C O L O M B I A
===============
AVIANCA: Postpetition Debts Authorized; DIP Agreement Approved
--------------------------------------------------------------
Upon the annexed motion (the "Motion"), dated March 23, 2003, of
Aerovias Nacionales De Colombia S.A. Avianca ("Avianca S.A.") and
Avianca, Inc., as debtors and debtors in possession herein
(collectively, "Avianca" or the "Debtors"):
(1) seeking this Court's authorization to
(i) obtain post-petition financing in an amount up to
$18,500,000 pursuant to sections 105, 361, 362, 363
and 364(c)(1) of the United States Bankruptcy Code
(the "Bankruptcy Code") by entering into certain
financing agreements with Valores Bavaria S.A., a
company organized under the laws of the Republic of
Colombia ("Valores Bavaria, S.A."), Inversiones Fenicia
S.A., a company organized under the laws of the Republic
of Colombia (collectively with Valores Bavaria, S.A.,
"Valores Bavaria") and Federacion Nacional De Cafeteros
De Colombia, a private legal entity organized under the
Laws of the Republic of Colombia (the "Coffee
Federation"; Valores Bavaria and the Coffee Federation
each a "Lender" and both, collectively, the "DIP
Lenders") referred to in the postpetition loan documents
described in the Motion and on the terms and subject to
the conditions CORP/949098.2 2 set forth herein and
therein and
(ii) grant superpriority claims to the DIP Lenders (including
a priority pursuant to section 364(c)(1) of the
Bankruptcy Code, and,
(2) requesting, pursuant to Bankruptcy Rule 4001, that an interim
hearing (the "Interim Hearing") on the Motion be held for this
Court to consider entry of an interim order (the "Interim Order")
authorizing the Debtors, on an interim basis, to forthwith (a)
borrow from the DIP Lenders up to an aggregate of $18,500,000.00
(i) for the payment of such pre-petition claims as may be
permitted by the Court; and (ii) for working capital and other
general corporate purposes of the Debtors, and,
(3) requesting that (i) this Court schedule a final hearing not
later than 20 days after the entry of the Interim Order (the
"Final Order") to consider entry of a final order authorizing the
Postpetition Indebtedness (defined below) on a final basis and
(ii) establish notice procedures in respect of the final hearing;
and, pursuant to Bankruptcy Rules 4001(b) and 4001(c)(1), due and
sufficient notice under the circumstances of the Motion and the
Interim Hearing having been given by the Debtors as set forth in
the Motion and to the United States Trustee for the Southern
District of New York, the Interim Hearing having been conducted
on March 25, 2003, and upon all of the pleadings filed with this
Court, and upon the record made by the Debtors at the Interim
Hearing and after due deliberation and consideration and
sufficient cause appearing therefor:
IT IS HEREBY FOUND, AND, WHERE APPLICABLE, STIPULATED:
A. On March 21, 2003 (the "Petition Date"), the Debtors filed
with this Court their petition for relief under chapter 11 of the
Bankruptcy Code. The Debtors are now operating their business and
managing their property as debtors in possession pursuant to
sections 1107(a) and 1108 of the Bankruptcy Code. No request has
been made for the appointment of a trustee or examiner, and no
official committee has yet been appointed in this case.
B. This Court has jurisdiction over this matter pursuant to 28
U.S.C. 157 and 1334. This is a core proceeding pursuant to 28
U.S.C. 157(b)(2). The statutory predicates for the relief
sought herein are sections 105, 361, 362, 363 and 364 of the
Bankruptcy Code and Rules 4001(b) and (c) of the Federal Rules of
Bankruptcy Procedure. Venue of the Debtors' chapter 11 case and
this Motion in this district is proper pursuant to 28 U.S.C.
1408 and 1409.
C. The DIP Lenders have agreed to provide the Debtors with post-
petition financing, as allowed by sections 364(c)(1) of the
Bankruptcy Code, in an amount not to exceed $18,500,000.00 (the
"Postpetition Indebtedness"), upon the terms and conditions set
forth in the proposed Debtor in Possession Loan and Security
Agreement by and among the Debtors and the DIP Lenders (the "DIP
Loan Agreement"), a true and correct copy of which is attached
hereto as Exhibit A.
D. The Debtors represent that:
(i) an immediate and critical need exists for the Debtors to
obtain funds in order to continue the operation of their
businesses;
(ii) without such funds, the Debtors will not be able to pay
their payroll and other direct operating expenses and
obtain fuel and services needed to carry on their
businesses during this sensitive period in a manner that
will avoid irreparable harm to the Debtors' estate and
permit a successful reorganization; and (iii) at this
time, the ability of the Debtors to finance their
respective operations and the availability to it of
sufficient working capital and liquidity through the
incurrence of new indebtedness for borrowed money is
vital to restore the confidence of the Debtors' trade
vendors and suppliers of other goods and services, to
their customers and to the preservation and maintenance
of the going concern values of the Debtors' estates.
E. The Debtors are unable to obtain the adequate funds in the
form of
unsecured credit or unsecured debt allowable under section
503(b)(1) of the Bankruptcy Code as an administrative expense
pursuant to sections 364(a) or (b) of the Bankruptcy Code.
F. The DIP Lenders are willing to provide the financing
contemplated herein, all on the terms and subject to the
conditions set forth herein and in the DIP Loan Agreement and
upon a finding by the Court that such financing is essential to
the Debtors' estates and is being provided in good faith, and
that the DIP Lenders' super-priority claims and other protections
granted pursuant to this Order and the DIP Loan Documents (as
defined hereafter) will not be affected by any subsequent renewal
or modification of this Order or any other order, as provided in
Section 364(e) of the Bankruptcy Code.
G. Telephonic, hand delivery, overnight delivery or facsimile
notice of the Interim Hearing and the proposed entry of this
Interim Order has been provided to the 20 largest creditors of
each Debtor, counsel to BONY, counsel to the DIP Lenders, and the
United States Trustee for this district. Under the urgent
circumstances, requisite notice of the Motion and the relief
requested thereby has been given in accordance with Bankruptcy
Rule 4001(c), and no other notice need be given for entry of this
Interim Order.
H. The ability of the Debtors to finance their operations and the
availability to the Debtors of sufficient working capital through
the incurrence of new indebtedness for borrowed money and other
financial accommodations is in the best interests of the Debtors
and their creditors and estate. The interim financing authorized
hereunder is vital to avoid immediate and irreparable harm to the
Debtors' estates and to allow the orderly continuation of the
Debtors' businesses.
I. The DIP Lenders appear to have significant prepetition
unsecured claims. The priorities granted pursuant to this Interim
Order have no effect on the status of the DIP Lenders'
prepetition claims, and the superpriority status of the
Postpetition Indebtedness will not
extend to any prepetition claims the DIP Lenders may have against
the Debtors.
J. Based on the record before the Court, the DIP Loan Agreement
and the other DIP Loan Documents have been negotiated in good
faith and at arm's length among the Debtors and the DIP Lenders,
and credit extended and loans made to the Debtors shall be deemed
to have been extended, issued, made, or consented to, as the case
may be, in good faith
within the meaning of section 364(e) of the Bankruptcy Code.
K. The terms of the DIP Loan Documents are fair and reasonable
under the circumstances, reflect the Debtors' exercise of prudent
business judgment consistent with their fiduciary duties and are
supported by reasonably equivalent value and fair consideration.
THEREFORE, IT IS HEREBY ORDERED AND ADJUDGED THAT:
1. The Motion is granted as set forth in this Interim Order.
2. The Debtors shall be, and hereby are, authorized to execute
and deliver the Debtor in Possession Financing Agreement dated as
of March 25, 2003 (as the same may be amended from time to time
pursuant to the terms hereof and thereof, the "DIP Loan
Agreement") and any and all documents and instruments delivered
pursuant thereto or in connection therewith (collectively, the
"DIP Loan Documents"), and to perform their respective
obligations thereunder in accordance with the terms thereof.
3. The DIP Loan Agreement and the other DIP Loan Documents
constitute
valid, binding obligations of the Debtors, enforceable against
the Debtors in accordance with their terms; provided, however,
that notwithstanding any other provision hereof or of the DIP
Loan Documents, pending the entry of a final order approving the
DIP Loan Agreement (the "Final Order"), the amount of advances
made shall not exceed $10,500,000.
4. The automatic stay in effect pursuant to section 362 of the
Bankruptcy Code, be, and it hereby is, vacated and modified so as
to permit (i) all payments and applications with respect to the
Postpetition Indebtedness as provided in the DIP Loan Documents
and (ii) the DIP Lenders to exercise, upon the occurrence and
continuation of an Event of Default, and the giving of five (5)
business days' written notice to any Committee, the Office of the
United States
Trustee and Debtors' counsel, all rights and remedies DIP Lenders
have pursuant to the DIP Loan Documents.
5. The Debtors are authorized and directed to take and effect all
actions, to execute and deliver all agreements, instruments and
documents and to pay all present and future fees, costs, expenses
and taxes that may be provided for under or required or necessary
for their
performance under the DIP Loan Agreement and the other DIP Loan
Documents.
6. The "Carve-Out" shall include only
(i) (a) fees and expenses of professionals retained in these
cases by the Debtors and any committee appointed by this
Court under section 1102 of the Bankruptcy Code, (b) any
expenses of the members of such committee, in an
aggregate amount not to exceed $500,000.00 and which are
approved by the Court,
(ii) claims for the unpaid fees of the United States Trustee
or the Clerk of the Court payable pursuant to 28 U.S.C.
1930(a), and (iii) reasonable fees and expenses of a
trustee under section 726(b). The Carve-Out may not be
asserted by any party other than in the event of the
occurrence and continuation of an Event of Default as set
forth in the DIP Loan Agreement. Nothing herein shall be
construed to impair the ability of any party to object to
any of the fees, expenses, reimbursement or compensation
described in the Carve-Out.
7. The Postpetition Indebtedness shall constitute, in accordance
with section 364(c)(1) of the Bankruptcy Code, claims against the
Debtors in their chapter 11 cases which are administrative
expense claims having priority over any and all administrative
expenses of the kind specified in sections 503(b) or 507(b) of
the Bankruptcy Code, subject only to the Carve-Out. Except for
the Carve-Out, no costs or administrative expenses which have
been or may be incurred in the Debtors' chapter 11 cases, and no
priority claims, are or will be prior to or on a parity with the
claims of the DIP Lenders with respect to the Postpetition
Indebtedness. No other claim having a priority superior to or
pari passu with that granted by this Interim Order to the DIP
Lenders shall be granted while any portion of the Postpetition
Indebtedness remains outstanding.
8. The Debtors may use the proceeds of the loans and advances
made pursuant to the DIP Loan Agreement only for the purposes
specifically set forth in the DIP Loan Agreement.
9. The Postpetition Indebtedness shall become due and payable as
provided in the DIP Loan Agreement.
10. Nothing contained herein shall limit the rights of the DIP
Lenders to seek relief from the automatic stay of section 362 of
the Bankruptcy Code at any future time.
11. No failure or delay on the part of the DIP Lenders in
exercising any right, power or privilege provided for in this
Order or the DIP Loan Documents shall operate as a waiver
thereof.
12. Without limiting the rights of access and information
afforded the DIP Lenders under the DIP Loan Documents, the
Debtors shall permit representatives, agents and/or employees of
the DIP Lenders to have reasonable access to such entities'
premises and their records during normal business hours (without
unreasonable interference with the proper operation of the
Debtors' businesses) and shall cooperate, consult with, and
provide to such persons all such non-privileged information as
they may reasonably request.
13. If any or all of the provisions of this Interim Order or the
DIP Loan Agreement or any other DIP Loan Document are hereafter
modified, vacated, amended or stayed by subsequent order of this
Court or any other Court, such modification, vacatur, amendment
or stay shall not affect the validity of any obligation to the
DIP Lenders that is or was incurred prior to the effective date
of such modification, vacatur, amendment or stay, or the validity
and enforceability of any priority authorized or created by this
Order, the DIP Loan Agreement or any other DIP Loan Document and,
notwithstanding any such modification, vacatur, amendment or
stay, any obligations of the Debtors pursuant to this Interim
Order or the DIP Loan Agreement or any other DIP Loan Document
arising prior to the effective date of such modification,
vacatur, amendment or stay shall be governed in all respects by
the original provisions of this Interim Order and the DIP Loan
Agreement and the other DIP Loan Documents, and the validity of
any such credit extended pursuant to this Interim Order or the
DIP Loan Agreement or the other DIP Loan Documents is subject to
the protection accorded under section 364(e) of the Bankruptcy
Code.
14. This Order constitutes findings of fact and conclusions of
law and takes effect and becomes enforceable immediately upon
execution hereof.
15. This Order shall supersede and govern over the terms of the
DIP Loan Documents, to the extent such terms are inconsistent
with this Order.
16. This matter is set for a Final Hearing at 10:30 a.m. (Eastern
Time) on April 11, 2003, in this Court, at which time any party-
in-interest may appear and state its objections, if any, to the
borrowings by the Debtors. The following parties shall
immediately, and in no event later than March 26, 2003, be mailed
copies of this Order or such written summary of this Order as the
Court may approve: the Office of the United States Trustee; the
attorneys for the DIP Lenders, the attorneys for The Bank of New
York; the twenty largest unsecured creditors of each of the
Debtors; all creditors known to the Debtors who may have liens
against the Debtors' assets; the office of the U.S. Attorney and
the United States Internal Revenue Service. Objections to the
Motion shall be in writing and shall be filed with the Clerk of
the Bankruptcy Court, with a copy served upon Smith, Gambrell &
Russell, LLP, 1230
Peachtree Street, NE, Suite 3100, Atlanta, Georgia 30309,
Attention: Ronald E. Barab, so that such objections are received
on of before 4:00 p.m. on April 9, 2003; any objections by
creditors or other parties-in-interest to any of the provisions
of this Order shall be deemed waived unless filed and received in
accordance with the notice onor before the close of business on
such date.
SO ORDERED this 26th day of March, 2003.
/s/ Allan L. Gropper
Allan L. Gropper
UNITED STATES BANKRUPTCY JUDGE
AVIANCA: Obtains Interim Authority To Employ Attorneys
------------------------------------------------------
This cause came before the Court upon the Application (the
"Application") of Aerovias Nacionales de Colombia S.A. Avianca
and Avianca, Inc., debtors and debtors in possession in the
above-captioned cases (the "Debtors"), for an order, pursuant to
327(a) and 328(a) of title 11 of the United States Code (the
"Bankruptcy Code"), approving the retention of Smith, Gambrell &
Russell, LLP ("SGR") and Anderson, Kill & Olick, P.C. ("AKO"; SGR
and AKO, collectively, the "Firms") as bankruptcy counsel for the
Debtors under a general retainer in accordance with each Firm's
normal hourly rates and disbursement policies, as more fully set
forth in the Application; and upon the Affidavit of Ronald E.
Barab, Esq., a partner with SGR, and the Affidavit of Howard D.
Ressler, a member of AKO (collectively, the "Affidavits"), in
support of the Application and annexed thereto; and it appearing
that neither Firm represents or holds an interest adverse to the
Debtors or to their estates and each Firm is disinterested under
101(14) of the Bankruptcy Code; and the Court having
jurisdiction to consider and determine the Application as a core
proceeding in accordance with 28 U.S.C. 157 and 1334; and it
appearing that the relief requested by the Application is
necessary and in the best interests of the Debtors, their
estates, and their creditors; and sufficient notice of the
Application having been given; after due deliberation and
sufficient cause appearing therefor, it is
ORDERED, that the Application is granted and approved; and it is
further
ORDERED, that, pursuant to sections 327(a) and 328(a) of the
Bankruptcy Code, the Debtors, as debtors-in-possession, are
authorized to employ SGR and AKO as their bankruptcy counsel
under a general retainer in accordance with each Firm's normal
rates and disbursement policies as set forth in the Application,
effective as of the commencement of these cases; and it is
further
ORDERED, that the Firms shall be compensated in accordance with
the procedures set forth in sections 330 and 331 of the
Bankruptcy Code, applicable Federal Rules of Bankruptcy
Procedure, local rules and orders of the Court, guidelines
established by the Office of the United States Trustee, and such
other procedures as may be fixed by order of this Court; and it
is further
ORDERED, that this Order shall be granted on an interim basis,
and there shall be a hearing held on April 24, 2003 at 10:00 a.m.
to consider any objections to the proposed retention herein and
such objections shall be filed by no later than April 21, 2003 at
4:00 p.m. and served on the Debtors' attorneys so as to be
actually received by such filing deadline; and it is further
ORDERED, that any objections to the proposed retention shall be
filed with the Court in accordance with General Order M-182,
which order can be found at www.nysb.uscourts.gov; and it is
further
ORDERED, that service of the Application as provided therein
shall be deemed good and sufficient notice of such Application;
and it is further within one day of entry of this Order, counsel
for the Debtors shall serve this Order by mail on (i) the United
States Trustee, (ii) the twenty largest creditors and all secured
creditors, (iii) each person or entity that has filed a Notice of
Appearance in this case; and (iv) the Bank of New York; and it is
further
ORDERED, that the requirement under Rule 9013-1(b) of the Local
Bankruptcy Rules for the Southern District of New York for the
filing of a memorandum of law is waived.
IT IS SO ORDERED.
DATED: New York, New York
March 26, 2003
/s/ Allan L. Gropper
UNITED STATES BANKRUPTCY JUDGE
AVIANCA: Court OK's Outside Mechanics, Repairmen Payments
---------------------------------------------------------
This matter having come before the Court upon the Emergency
Motion For Order Authorizing Payment Or Honoring Of Certain
Prepetition Claims Of Outside Mechanics and Repairmen (the
"Motion") of Aerovias Nacionales de Colombia S.A. Avianca and
Avianca, Inc. (collectively the "Debtors" or "Avianca") and the
Court having reviewed the Motion and the Affidavit of Gerardo
Grajales filed in support thereof and the Memorandum of Points
and Authorities in Support of Emergency Motions, the record
presented by the Debtors and the statements of counsel for the
Debtors in support thereof and the emergency relief requested
therein; and the Court having entered its Order Authorizing
Payment or Honoring of Certain Prepetition Claims of Outside
Mechanics and Repairmen dated March 21, 2003, granting the
Debtors interim relief; and in light of the circumstances and the
emergency nature of the relief requested it appearing that the
Debtors have provided notice to the United States Trustee, those
parties listed as each Debtor's twenty largest unsecured
creditors, The Bank of New York, as Trustee under the Master
Airline Ticket Receivables Master Trust, the District Director of
the Internal Revenue Service, the U.S. Attorney for the Southern
District of New York, the Securities and Exchange Commission and
any person or entity who has requested notice, and the Court
finding that such notice is good and sufficient under the
circumstances; and after due deliberation and sufficient cause
appearing therefor;
IT IS HEREBY ORDERED as follows:
Avianca shall be, and hereby is, authorized in its discretion to
pay up to the amount of $4,223,000 (in addition to the $1,000,000
previously authorized by this Court's Order dated March 21, 2003)
to secure the release of 5 engines, 3 engines for MD-83 aircraft
and 2 engines for Fokker-50 aircraft and parts and any other
property currently held subject to the rights of the repairman or
vendor. Such payments will be without prejudice to Avianca to
pursue any bankruptcy or nonbankruptcy claims it may have against
the repairman or vendor regarding the refusal to deliver or
service Avianca's aircraft and parts.
ORDERED, that any further relief will be heard at a hearing to be
held before this Court on April 7, 2003 at 2:30 p.m.;
ORDERED, that within one day of the entry of this Order, counsel
for Debtors shall serve this Order by overnight courier on
(i) the United States Trustee;
(ii) the twenty largest creditors and all secured
creditors;
(iii) each person or entity that has filed a Notice of
Appearance in this chapter 11 case; and
(iv) the Bank of New York.
IT IS SO ORDERED.
Dated: New York, New York
March 26, 2003
/s/ Allan L. Gropper
United States Bankruptcy Judge
AVIANCA: Ticket Holders, Airlines, Tour Service Providers Paid
--------------------------------------------------------------
Upon the Emergency Motion for an Order Authorizing Payment to or
Honoring of Prepetition Obligations to Ticket Holders, Other
Airlines with whom the Debtors have Interline Relationships,
Travel Agents, Clearing Houses, Tour Service Providers, Barter
Arrangements, Commercial Agreements, Fuel Suppliers, In-To Plane
Service Companies, Certain Bank Charges and Other Essential
Suppliers (the "Motion") of Avianca, Inc. and Aerovias Nacionales
de Colombia S.A. Avianca (collectively the "Debtors" or
"Avianca"), and upon consideration of the Affidavit of Gerardo
Grajales in support of the Motion, the record made by the Debtors
and the Memorandum of Points and Authorities in Support of
Emergency Motions; and it appearing that the relief requested is
necessary to preserve certain of Avianca's most important ongoing
operations, and is in the best interest of Avianca's estates,
creditors, equity holders and all parties in interest; and the
Court having entered its Order Authorizing Payment or Honoring of
Prepetition Obligations to Ticketholders, Other Airlines With
Whom the Debtors Have Interline Relationships, Travel Agents,
Clearing Houses, Tour Service Providers, Barter Arrangements,
Commercial Agreements, Fuel Suppliers, In-To Plan Service
Companies, Certain Bank Charges, and Other Essential Suppliers
dated March 21, 2003 granting the Debtors interim relief; and in
light of the circumstances and the emergency nature of the relief
requested, it appearing that notice was served upon the United
States Trustee, those parties listed as each Debtor's twenty
largest unsecured creditors, The Bank of New York, as Trustee
under the Master Airline Ticket Receivables Master Trust, the
District Director of the Internal Revenue Service, the Securities
and Exchange Commission and any person or entity who has
requested notice, and the Court finding that such notice is good
and sufficient under the circumstances; and after due
deliberation and sufficient cause appearing therefor, it is
hereby ORDERED, ADJUDGED AND DECREED as follows:
That this Court has jurisdiction over these cases and the parties
and property affected thereby pursuant to 28 U.S.C. 157(b) and
1334; and
That due to the emergency nature of the Motion, this Order has
been granted upon limited notice. This Court has authority to
enter this Order without general notice to creditors pursuant to
11 U.S.C. 105(a) and 102(1). It is further
ORDERED, ADJUDGED AND DECREED, that the Motion is approved to the
following extent, and Avianca hereby is authorized to:
A. Honor tickets held by customers and vouchers or other
authorizations for free or discounted travel issued in the
prepetition period;
B. Provide air transportation to travelers who seek to redeem
miles which accrued prepetition in the Latin Pass frequent flier
bonus program and the Avianca Plus frequent flier program;
C. Comply with ticketholder requests for refunds on tickets
purchased prior to the commencement of this case, in accordance
with the terms of the tickets and Avianca's normal prepetition
refund procedures;
D. Make payments or provide other compensation to passengers and
cargo shippers in connection with claims for lost or damaged
baggage or other service deficiencies that have occurred
prepetition in accordance with Avianca's normal compensation
procedures;
E. Make payment of any Interline Claims (as defined in the
Motion) which may be due and owing IATA, ACH or other carriers
pursuant to multi-lateral or bi-lateral Interline Agreements (as
defined in the Motion) to which Avianca is a party on account of
prepetition interline obligations;
F. Pay the Travel Agents Claims (as defined in the Motion) on
prepetition sales as such payments become due, in accordance with
the terms of applicable commission agreements and Avianca's
normal prepetition procedures;
G. Pay holders or honor miscellaneous charge orders ("MCO's") or
the Tour Claims (as defined in the Motion) for charges due and
owing under prepetition MCO's or directly to those hotels where
there is a direct contractual obligation, in accordance with
Avianca's normal prepetition procedures and honor Universal Air
Travel Plan Credits in accordance with Avianca's normal
prepetition procedures;
H. Subject to a limit of $236,233 (in addition to the limit of
$150,000 imposed by this Court on March 21, 2003) in value of
tickets, continue honoring tickets issued prepetition pursuant to
barter arrangements;
I. Honor Commercial Agreements (as defined in the Motion) for the
provision of certain code sharing services and commercial
marketing services in accordance with Avianca's normal
prepetition procedures;
J. Subject to a limit of $3,000,000 (in addition to the limit of
$1,000,000 imposed by this Court in its Order dated March 21,
2003),
(a) make payments to or honor In-to Plane Service Company
Claims (as defined in the Motion), subject to the
claimant's granting to Avianca such terms on continuing
purchases of goods or services in the ordinary course of
business as Avianca may require;
(b) make payments to or allow Avianca accounts to be debited
by the banks relating to the Bank Claims (as defined in
the Motion);
(c) make payments on Other Supplier Claims (as defined in
the Motion) to other essential suppliers that Avianca may
be unable to replace on short notice, subject to the
claimant's granting to Avianca such terms on continuing
purchases of goods or services in the ordinary course of
business as Avianca may require; and (d) in its
discretion, instruct banks to honor checks drawn by
Avianca prepetition to pay claims described in the Motion
and herein which have not cleared the banking systems in
the normal course prior to the Petition Date unless
otherwise directed by Avianca, provided that sufficient
funds are in the applicable accounts to cover such checks;
and it is further
ORDERED, that the stay imposed by section 362(a) of the
Bankruptcy Code hereby is modified to the extent necessary to
permit parties to the Interline Agreements, including ARC, BSP's,
IATA and ACH, each as defined in the Motion to offset refunds due
other airlines, or travel agents and generally handle
Clearinghouse Claims (as defined in the Motion) without regard to
whether debits or credits accrued pre or post-petition and in
accordance with normal operating procedures and, further, to
permit travel agencies to deduct commissions before submitting
sales receipts in accordance with governing commission agreements
and standard prepetition procedures; and it is further
ORDERED, that any further relief will be heard at a hearing to be
held before this Court on April 7, 2003 at 2:30 p.m.; and it is
further
ORDERED, that within one day of the entry of this Order, counsel
for Debtors shall serve this Order by overnight courier on (i)
the United States Trustee; (ii) the twenty largest creditors and
all secured creditors; (iii) each person or entity that has filed
a Notice of Appearance in this chapter 11 case; and (iv) the Bank
of New York.
IT IS SO ORDERED.
Dated: New York, New York
March 26, 2003
/s/ Allan L. Gropper
United States Bankruptcy Judge
AVIANCA: Foreign Vendors, Service Providers, Governments Paid
-------------------------------------------------------------
Upon the Emergency Motion for an Order Authorizing Payment or
Honoring of Prepetition Obligations to Foreign Vendors, Service
Providers and Governments (the "Motion") of Aerovias Nacionales
de Colombia S.A. Avianca and Avianca, Inc. (the "Debtors"), and
upon the Affidavit of Gerardo Grajales in support of the Motion
(the "Affidavit"), and the record made by the Debtors in support
of the Motion requesting an order authorizing the Debtors to make
certain payments and to honor certain prepetition obligations of
the Debtors to foreign vendors, service providers and governments
in accordance with normal practice; and it appearing that the
relief requested is necessary to preserve certain of the Debtors'
most important ongoing operations, and is in the best interest of
the Debtors' estates, their creditors, equity holders and all
parties in interest; and the Court having entered its Order
Authorizing Payment or Honoring of Prepetition Obligations to
Foreign Vendors, Service Providers and Governments dated March
21, 2003, granting the Debtors interim relief; and in light of
the circumstances and the emergency nature of the relief
requested, it appearing that notice has been given under the
circumstances, including notice to the United States Trustee,
those parties listed as the Debtors' twenty largest creditors,
The Bank of New York, as Trustee under the Master Airline Ticket
Receivables Master Trust, the District Director of the Internal
Revenue Service, the U.S. Attorney for the Southern District of
New York, the Securities and Exchange Commission and any person
or entity who has requested notice; and after due deliberation
and sufficient cause appearing therefor, it is hereby
ORDERED, ADJUDGED AND DECREED as follows:
1. That this Court has jurisdiction over this case and the
parties and property affected thereby pursuant to 28 U.S.C.
157(b) and 1334; and
2. That due to the emergency nature of the Motion, this Order has
been granted upon limited notice. This Court has authority to
enter this Order without general notice to creditors pursuant to
11 U.S.C. 105(a) and 102(1). It is further
ORDERED, that the Debtors be, and they hereby are, authorized to
honor and pay any and all obligations of the Debtor to foreign
vendors, service providers or governments which arose prepetition
up to the sum of $4,250,000 (in addition to the $250,000
authorized pursuant to
this Court's Order dated March 21, 2003). For purposes of this
Order, "foreign" creditors are those entities located outside the
United States and Colombia, with the limited exception of certain
critical governmental, airport, and taxing authorities located in
Colombia. It is further
ORDERED, that all applicable banks and other financial
institutions are hereby authorized to receive, process, honor and
pay any and all checks and transfer requests evidencing amounts
paid by Debtors under this Order whether presented prior to or
after the Petition Date. Such banks and financial institutions
are authorized to be paid pursuant to this Order. It is further
ORDERED, that notwithstanding the relief granted herein and any
actions taken hereunder, nothing contained herein shall
constitute, nor is it intended to constitute, the assumption of
any contract or agreement under 11 U.S.C. 365. It is further
ORDERED, that any further relief will be heard at a hearing to be
held before this Court on April 7, 2003 at 2:30 p.m. It is
further
ORDERED, that within one day hereof, counsel for Debtors shall
serve this Order by overnight courier on (i) the United States
Trustee; (ii) the twenty largest creditors and all secured
creditors of each Debtor; (iii) each person or entity that has
filed a Notice of Appearance in this chapter 11 case; and (iv)
the Bank of New York.
IT IS SO ORDERED.
\ Dated: New York, New York
March 26, 2003
/s/ Allan L. Gropper
United States Bankruptcy Judge
AVIANCA: Obligations To Employees Will be Honored
-------------------------------------------------
This matter came on for a hearing before this Court upon the
motion (the "Motion") of the above-referenced debtors
(collectively, "Avianca" or the "Debtors") for an order
authorizing Avianca to pay wages, salaries, employee benefit
contributions and employee deductions; and the Court having
entered its Order Authorizing Debtors in Possession to Pay Wages,
Salaries, Employee Benefit Contributions and Employee Deductions
dated March 21, 2003, granting the Debtors interim relief; and it
appearing that the relief requested is necessary to preserve
Avianca's ongoing operations, and is in the best interests of the
Debtors' estates, their creditors, equity holders and all parties
in interest; and in light of the circumstances and the emergency
nature of the relief requested it appearing that sufficient
notice has been given; and after due deliberation and sufficient
cause appearing therefor, it is hereby
ORDERED, ADJUDGED AND DECREED as follows:
The Debtors are hereby authorized and empowered to pay to their
employees (the "Employees") all wages, salaries, commissions,
bonuses, sick pay, payroll taxes (including pagos parafiscoles,
the Colombian equivalent of United States payroll taxes), social
security, vacation pay (including "personal days"), and
reimbursement of business expenses incurred in the ordinary
course of Avianca's business, excluding any extraordinary bonuses
or compensation (collectively, "Prepetition Compensation"), but
including contributions or payments to or for the Employee
Benefit Contributions (as that term is defined in the Motion) in
accordance with Avianca's stated policies with regard thereto
which have been earned, incurred and/or accrued prior to the
commencement of the Debtors' bankruptcy cases by virtue of the
services rendered by the Employees of Avianca, in an aggregate
amount not to exceed $510,000 (in addition to the limit of
$375,000 authorized pursuant to this Court's Order dated March
21, 2003), provided that no individual shall be paid more than
$4,650 at this time; and it is further
ORDERED that, in addition to the above, the Debtors are hereby
authorized and empowered to pay $52,000 in Prepetition
Compensation being specifically amounts owed under Avianca S.A.'s
Cesantias obligation; and it is further ORDERED that the Debtors
are hereby authorized and empowered to apply or deliver the
Deductions (as defined in the Motion) which represent property of
the Employees, in accordance with Avianca's stated policies with
regard thereto in an aggregate amount not to exceed $90,000 (in
addition to the $28,000.00 authorized pursuant to this Court's
Order dated March 21, 2003); and it is further
ORDERED that all applicable banks and other financial
institutions are authorized to receive, process, honor and pay
any and all checks drawn on the Debtors' payroll accounts,
whether presented prior to or after the Petition Date in
accordance with Avianca's stated policies with regard thereto,
provided sufficient funds exist in the payroll accounts to cover
such payment; and it is further
ORDERED that the Debtors are hereby authorized and empowered to
pay all costs incident to Prepetition Compensation, Employee
Benefit Contributions and Deductions (such as payroll-related
taxes and processing costs) in accordance with Avianca's stated
policies with
regard thereto.
ORDERED, that any further relief will be heard at a hearing to be
held before this Court on April 7, 2003 at 2:30 p.m.;
ORDERED, that within one day of the entry of this Order, counsel
for Debtors shall serve this Order by overnight courier on (i)
the United States Trustee; (ii) the twenty larges creditors and
all secured creditors; (iii) each person or entity that has filed
a Notice of
Appearance in this chapter 11 case; and (iv) the Bank of New
York.
IT IS SO ORDERED.
Dated: New York, New York
March 26, 2003.
/s/ Allan L. Gropper
United States Bankruptcy Judge
===========
M E X I C O
===========
AHMSA: Unit Restructures $152M In Defaulted Debt
------------------------------------------------
Altos Hornos de Mexico SA (AHMSA), the steelmaker that defaulted
on US$1.8 billion of debt in 1999, said Wednesday its coal mining
unit has reached a preliminary agreement with creditors to
reschedule US$152 million in debt and resume payments. In a press
release, AHMSA said Minera Carbonifera Rio Escondido (MICARE),
its biggest subsidiary, has reached an agreement with 80% of
creditors to restructure the debt over 10 years.
After seeking approval of remaining creditors and suppliers,
AHMSA said MICARE will set a timeframe for interest payments to
resume, with principal payments to begin after a nine-month grace
period.
According to AHMSA spokesman Francisco Orduna, the agreement aims
to separate the more profitable coal unit from AHMSA's steel
operations in the debt talks.
Eduardo Osuna at Grupo Financiero BBVA-Bancomer SA, Orlando Loera
at Bank of America Corp. and Samuel Scott at Grupo Financiero
Banorte SA are leading debt negotiations with AHMSA.
AHMSA defaulted on its debt almost four years ago because of low
steel prices and shrinking demand. AHMSA's bankers stopped
negotiating with the Company last year after failing several
times to reach an agreement on new debt terms.
CONTACT: AHMSA
Prolongacion B. Juarez s/n,
Monclova , Coahuila 25770
Mexico
http://www.AHMSA.com
Phone: +52 86 33 81 72
Fax: +52 86 33 65 66
Contacts:
Alonso Ancira Elizondo, CEO, Vice Chairman, Pres/CEO
Jorge Ancira Elizondo, Chief Financial Officer
Manuel Ancira Elizondo, Chief Operating Officer
AVANTEL: Local Banamex Employees To Assume Control Soon
-------------------------------------------------------
Around 18,000 local employees of Grupo Financiero Banamex, the
Mexican unit of Citigroup Inc., are about to take control of
phone company Avantel, Dow Jones indicates. Banamex, the second-
largest financial group in the country, said in a press release
Wednesday that it will soon give 55.5% of Avantel's voting shares
to the Mexican employees, who represent 63% of its total staff.
Banamex was forced to make that decision to comply with foreign
ownership restrictions on fixed-line phone companies. Avantel
fell foul of the 49% ownership restriction for foreigners when
Citigroup bought financial group Banamex-Accival in 2001, along
with its 55% stake in the carrier. WorldCom Inc. owns the other
45%.
The 18,000 employees will soon name more than half of Avantel's
board members through holding company Promotora de Sistemas de
Teleinformatica SA.
Mexico's Economy Ministry and antitrust regulators have already
cleared the proposed ownership structure for Avantel, which has a
share of less than 30% of Mexico's long-distance market since it
launched operations in the mid-1990s.
IUSACELL: NYSE Extends Deadline To Comply With Regulations
----------------------------------------------------------
It came as a relief to Iusacell, which is working on a debt
restructuring plan, when the New York Stock Exchange decided to
give it more time to meet the bourse's demands or leave the NYSE.
Exactly for how long the bourse will extend the deadline was
unclear.
Meanwhile, Russell Olson, Iusacell's vice president for finance,
denied rumors that the Company is in negotiations to be acquired
by Telef˘nica or any other operator. He highlighted that if the
restructuring process is successful, Iusacell could make a bond
offer similar to the one made in 2001 to obtain capital. For
this, it is very important that the Company continues quoting in
the NYSE and in the Mexico City Stock Exchange (BMV), the
executive said.
Olson revealed the restructuring plan is already being designed
together with Morgan Stanley, creditors and shareholders and it
will be presented in at least 60 days.
Iusacell has a bond for US$150 million expiring on July 2004 and
other for US$350 million expiring on June 2006. If the
restructuring proves to be a futile process, the Company has
three options on which way to go to: sale to a third party, allow
shareholders to take control of the Company through a bankruptcy
process or the use of a lifeguard from creditor banks to increase
cash flow.
Grupo Iusacell, S.A. de C.V. (Iusacell, NYSE: CEL; BMV: CEL) is a
wireless cellular and PCS service provider in seven of Mexico's
nine regions, including Mexico City, Guadalajara, Monterrey,
Tijuana, Acapulco, Puebla, Leon and Merida. The Company's service
regions encompass a total of approximately 91 million POPs,
representing approximately 90% of the country's total population.
Iusacell is under the management and operating control of
subsidiaries of Verizon Communications Inc.
To see financial statements:
http://bankrupt.com/misc/Grupo_Iusacell.htm
Investor Contacts:
Russell A. Olson
Chief Financial Officer
011-5255-5109-5751
russell.olson@iusacell.com.mx
Carlos J. Moctezuma
Manager, Investor Relations
011-5255-5109-5780
carlos.moctezuma@iusacell.com.mx
PEMEX: Fitch Assigns 'BBB-' Project Funding Master Trust
--------------------------------------------------------
Fitch Ratings has assigned a foreign currency rating of 'BBB-' to
the US$500 million, 8.096% notes due Feb. 1, 2022, issued by
PEMEX Project Funding Master Trust, a Delaware trust established
by Mexico's state-owned Petroleos Mexicanos (PEMEX) to administer
the financial resources related to the Proyectos de
Infraestructura Productiva de Largo Plazo, PIDIREGAS (Long-term
Productive Infrastructure Projects). PEMEX, the trust's sole
beneficiary, and its subsidiaries irrevocably and unconditionally
guarantee all of the obligations issued by the trust. The
assigned rating is the same as PEMEX's senior unsecured foreign
currency corporate debt rating and the United Mexican States'
(UMS) foreign currency rating. The trust's Rating Outlook is
Stable.
Through PIDIREGAS, PEMEX has continued to expand its exploration
and production assets, as well as to upgrade its key refineries
to process heavy crude inputs and meet clean air mandates. These
projects, approved by the Mexican Government, are off-budget
items not subject to across-the-board budget restrictions. The
most important are focused on increasing production at Cantarell,
Mexico's largest single oil field and the primary source of Maya
crude production, the Burgos natural gas fields in Northern
Mexico and the strategic gas program (Programa Estrategico de Gas
(PEG)) involving 19 different natural gas projects.
PEMEX enjoys a solid oil and gas reserve position, which together
with a low cost structure, lends confidence that the company can
continue to generate high levels of production required to
support domestic and export growth. A portfolio of supply
contracts with U.S. petroleum refiners underpins the latter,
supporting prospects for sustained demand and cash flow. PEMEX's
cash flow volatility reflects not only crude oil price
fluctuations, but more importantly, its substantial tax burden
relative to revenues and external funding of an aggressive
capital budget. PEMEX's tax payments amount to 60.8% of its
revenues, suppressing creditor protection and siphoning off cash
flow, which could otherwise be used to support the company's
ambitious investment program. This burden is not likely to
decline over the near term, given that the company remains the
largest taxpayer in the UMS. Hence, PEMEX is forced to rely
heavily on external funding to carry forward its substantial
program to expand oil and gas production and to revamp its
refineries.
Established in 1938, PEMEX is Mexico's state oil and natural gas
company. It is the nation's largest company and ranks among the
world's largest petroleum enterprises with year-end 2001 proved
crude oil and condensates reserves of 21.9 billion barrels of oil
equivalent (BOE) and a current mean annual crude production of
3.3 million barrels per day. PEMEX's operations are integrated
through exploration and production, refining and marketing, and
petrochemical production. Under the Ley Organica de Petroleos
Mexicanos y Organismos Subsidiarios (the Organic Law for
Petroleos Mexicanos and Subsidiary Entities), PEMEX is entrusted
with the central planning and the strategic management of
Mexico's petroleum industry. PEMEX's mission is to maximize the
value of Mexico's crude oil and natural gas reserves, while
developing the infrastructure necessary to supply Mexico's
growing energy demand at the lowest cost.
PEMEX: Sells $800M In Bonds On The International Market
-------------------------------------------------------
Petroleos Mexicanos, Mexico's state-controlled oil company known
as Pemex, continues to attract international investors as higher
oil prices boosted demand for the Company's debt. According to
Bloomberg, Pemex sold EUR750 million ($800 million) of bonds, the
third international sale this year.
Luc Cardyn, a member of the credit syndicate at BNP Paribas SA,
which managed the sale together with J.P. Morgan Chase & Co.,
revealed Pemex received orders worth more than twice the amount
it sold of the 6.625% seven-year bonds.
The bonds were priced to yield 6.87 percent, or 3.05 percentage
points over German government bonds with a similar maturity and
2.90 percentage points above the mid-swap rate, a benchmark for
corporate borrowing, Cardyn said. Pemex paid a yield of 7.89
percent when it last sold seven-year euro-denominated bonds in
July 2000.
The Company has lowered its borrowing costs abroad this year
after oil prices soared to a 12-year high on concern a U.S.-led
attack on Iraq will cut off crude supplies from the Persian Gulf.
With the sale, Pemex will have sold about US$2.5 billion in
foreign bonds this year, almost double what Chief Financial
Officer Juan Jose Suarez in January said the company would sell
in 2003.
=================================
T R I N I D A D & T O B A G O
=================================
CARONI LTD.: Ex-Parte Injunction Freezes Assets Until May 2
-----------------------------------------------------------
Justice Mira Dean-Armorer of the Civil Chamber Court, Hall of
Justice ordered that an ex-parte injunction preventing Trinidad
and Tobago state sugar enterprise from disposing its assets will
continue until May 2. The Trinidad Express reports that the Judge
has also ordered the Company to file a response.
Justice David Myers granted the injunction to two Caroni
employees, Eric Roberts and Edul Mohammed on February 15. The two
employees claimed that the Company had under-funded the
employee's pension fund by some $235 million, said the report.
The news is another blow to the Company, which has received much
scorn for its offer of the Voluntary Separation of Employment
Plan (VSEP) to 9,000 of its employees.
An earlier report from the Troubled Company Reporter-Latin
America indicated that one of the unions representing Caroni
workers have taken legal action against the Company.
CONTACT: Caroni Limited
Old Southern Main Road, Caroni,
Trinidad & Tobago
Phone: (868) 663-1781 or 662-0879
Fax: (868) 663-1404
=================
V E N E Z U E L A
=================
HOVENSA: Refinery Returns to Full Operation; Liquidity OK
---------------------------------------------------------
The Hovensa LLC (BBB-/Negative/--) refinery project in St. Croix
has returned to full operation following a three-month period of
reduced production due to an interruption of heavy and medium oil
feedstocks from Venezuela and poor refining margins. The
project's main supplier, Petroleos de Venezuela S.A. (PDVSA), has
resumed its contractual supply of Merey and Mesa feedstocks since
the beginning of March. PDVSA has formally withdrawn its notice
of force majeure to Hovensa related to its feedstock delivery
obligations, which was issued on Dec. 6, 2002. The sponsors
expect to resume completion testing for the project in late
April, and until completion is achieved, the sponsors' bear the
project's debt obligations on a several but not joint basis.
The project has adequate liquidity, with a projected $225 million
in cash at the end of March, a fully funded debt service reserve
of $53 million, and an undrawn $150 million working capital
facility. The outlook remains negative pending an analysis of
Hovensa's ability to maintain an appropriate financial position
and adequately fund clean fuels capital expenditures over the
next 3 to 4 years.
ANALYSTS: Terry A Pratt, New York (1) 212-438-2080
Bruce Schwartz, CFA, New York (1) 212-438-7809
PDVSA: La Isla Refinery Prepares Gasoline for Export
----------------------------------------------------
Venezuela's state oil company Petroleos de Venezuela, S.A.
(PdVSA) plans to resume gasoline exports, according to Bloomberg.
The exports would be sourced at the Company's La Isla Refinery on
Curacao. Earlier, the said refinery was said to have had problems
with its catalytic cracker but resumed operations last week.
A Company spokesperson revealed that exports from the refinery
should be started "within days." The source added that exports
are now possible as local refineries are producing more than what
the domestic market demands.
According to the report, the Company is relying on the La Isla
Refinery to help it recover losses incurred by the national
strike, which resulted in the dismissal of at least 15,000 oil
workers.
Presently, the refinery, which has a 60,000 barrels-a-day
capacity, is processing about 190,000 barrels of oil daily,
alongside the catalytic cracker's 38,000-barrels-a-day average.
* Venezuela Plans Bond Swap to Avert Default
--------------------------------------------
The government of Venezuela plans to ask bondholders to accept
new securities in order to avoid a default in the wake of the
two-month long strike that devastated the country's oil industry.
The news came after President Hugo Chavez said on Tuesday that
the nation would be unable to pay US$5 billion of international
debt due this year. The strike was aimed at deposing Mr. Chavez,
but resulted in the dismissal of thousands of oil workers and a
sharp decline in the country's oil income.
Bloomberg News quoted a statement from the country's Finance
Ministry indicating that the bond swap may be carried out in the
second quarter of this year.
"The government rules out totally the possibility of a moratorium
or cessation of payments or a forced restructuring of foreign
debt," said the Ministry.
Venezuela has US$22.4 billion of international debt, and US$7.4
billion of domestic debt.
Venezuela's 9.25 percent bond due 2027 fell 2.65 cents on the
dollar to 60, pushing up the yield to 15.2 percent, according to
J.P. Morgan Chase & Co. prices. The bond's yield has climbed from
about 13 percent before the strike, said the report.
***********
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
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