/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030421.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 Monday, April 21, 2003, Vol. 4, Issue 77 Headlines A R G E N T I N A ACINDAR: Shareholders To Decide On Bond Issue May 16 ALIMENTOS FARGO: Argentine Fitch Rates $120M of Bonds `D(arg)' CABLEVISION: $1.5B of Bonds Rated `D(arg)' by Fitch DISTRIBUIDORA DE ELECTRICIDAD: Local S&P Rates Bonds `raD' GAS ARGENTINO: $130M of Bonds Rated `D(arg)' by Fitch METROGAS: Local Fitch Rates Bonds `D(arg)' MULTICANAL: Bonds Rated `D(arg)' by Fitch Argentina PECOM ENERGIA: Embarks On New Debt Swap Offer TGN: Argentine Fitch Rates Various Bonds `D(arg)', Stocks, `4' * Menem Vows To Repay Defaulted Debt In Full, If Re-elected B O L I V I A BANCO BISA: Moody's Downgrades Foreign Currency Ratings BANCO MERCANTIL: Moody's Cuts Ratings On Potential Deposit Run BANCO NACIONAL: Moody's Reduces Ratings On Likely Default BANCO GANADERO: LTFC Deposit Rating Lowered By Moody's BANCO UNION: Moody's Downgrades LTFC Deposit Rating FONDO FINANCIERO: Dollarized Banking System Pulls Down Ratings * Moody's Cut Ratings To Six Notches Below Investment Grade B R A Z I L AES CORP.: Lenders Approve Proposed Refinancing Transaction AES CORP.: Misses Loan Payment To BNDES NET SERVICOS: Issues Annual General Meeting Summoning Notice SUDAMERIS BRASIL: Dutch Bank Agrees To Pay $741.5M For Control TELEMAR: General Shareholders' Meeting Approves New Model VARIG: CEO Leaves Post C O L O M B I A AVIANCA: Releases Rescheduled Hearing Notice AVIANCA: Reveals Supplemental Affidavit, Proposed Attorney J A M A I C A AIR JAMAICA: Implements New Strategies To Attract Passengers M E X I C O CFE: To Sell Up To $207M Worth of Debt Certificates Next Week PEMEX: Aims For 225 Oil Wells At Campeche By 2018 SAVIA: Seminis Files Form 8-K with SEC V E N E Z U E L A PDVSA: Rating Affirmed; Outlook Revised to Stable * S&P Revises Venezuela Outlook to Stable, Affirms Ratings - - - - - - - - ================= A R G E N T I N A ================= ACINDAR: Shareholders To Decide On Bond Issue May 16 ---------------------------------------------------- Acindar's proposal to issue up to US$350 million worth of bonds will have its answer on May 16, when shareholders are due to convene, Business News Americas indicates. The Company is currently undergoing a financial restructuring and is in talks with lenders, who have a total exposure of US$277 million in the Company. About US$100 million worth is tied up in bonds. The Company declared a moratorium on principal and interest payments on these debts at the end of 2001 due to financial difficulties. Last week, Acindar announced an offer to redeem US$20 million worth of bonds. The offer, which will close May 9, is specifically offered to the World Bank's International Finance Corporations and private banks. The bonds carry an 11.25% yield and will mature next year. 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 ALIMENTOS FARGO: Argentine Fitch Rates $120M of Bonds `D(arg)' -------------------------------------------------------------- Companis de Alimentos Fargo S.A.'s corporate bonds were rated `D(arg)' by Fitch Argentina Calificadora de Riesgo S.A. on Wednesday, said the Argentine National Securities Commission. The rating, based on the Company's finances as of the end of December 2002, applies to US$120 million worth of bonds described as "obligaciones negociables simples." The bonds were classified under "simple issue" and come due on July 24, 2008. According to the rating agency, a `D(arg)' rating is issued to obligations that are currently in payment default. CABLEVISION: $1.5B of Bonds Rated `D(arg)' by Fitch --------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. rated US$1.5 billion worth of corporate bonds issued by Cablevision S.A. `D(arg)', the country's National Securities Commission revealed. The concerned bonds were classified under "Program", and described as "Obligaciones Negociables Simples." However, the posting did not indicate the bonds' CUSIP and maturity date. The rating, issued on Wednesday, is issued to securities which are presently in default, said Fitch. DISTRIBUIDORA DE ELECTRICIDAD: Local S&P Rates Bonds `raD' ---------------------------------------------------------- Standard & Poor's International Ratings, Ltd.'s Argentine branch issued a `raD' rating to US$120 million of corporate bonds issued by Empresa Distribuidora de Electricidad de Mendoza S.A., according to the National Securities Commission of Argentina. In the NSC's Web Site, the affected bonds were described as "Programa de emission de Obligaciones Negociables simples", and classified under "Program." The said bonds mature on April 13, 2005. According to S&P, an obligation is rated `raD' when it is in payment default, or the obligor has filed for bankruptcy. The `raD' rating is used when interest or principal payments are not made on the date due, even if the applicable grace period has not expired, unless the ratings agency believes that such payments will be made during such grace period. The rating was based on the Company's financial health as of the end of December 2002, said the NSC. GAS ARGENTINO: $130M of Bonds Rated `D(arg)' by Fitch ----------------------------------------------------- Fitch Argentina Calificadora de Riesgo, S.A. assigned a `D(arg)' rating to Gas Argentino's corporate bonds. According to the National Securities Commission of Argentina, the rating applies to US$130 million of "obligaciones negociables simples por US$ 130.000.000", which expired on June 7, 2000. The securities were classified under "Simple Issue." The ratings agency said that the rating is issued to financial obligations that are currently in default. The said ratings were based on the Company's finances as of the end of December last year. METROGAS: Local Fitch Rates Bonds `D(arg)' ------------------------------------------ Fitch Argentina Calificadora de Riesgo, S.A. rated corporate bonds issued by Metrogas, S.A. were rated `D(arg)' last Wednesday. At the same time, the Company's stocks, described as "Acciones Ordinarias Clase B", were also rated `3.' The `D(arg)' rating applies to US$600 million of "Obligaciones negociables simples", with undisclosed maturity date. The securities were classified under `Program', but the CUSIP was not indicated. According to Fitch, the `D(arg)' rating, is issued to financial obligations that are currently under default. Metrogas' principal activities are the production, distribution and storage of natural gas and processed natural gas for the electric power, industry and domestic sectors. Sale of natural gas accounted for 89 percent of 2001 revenues; transportation and distribution services, 9 percent and sale of processed natural gas, 2 percent. CONTACT: METROGAS, S.A. Gregorio Araoz de Lamadrid 1360 Buenos Aires Argentina CPA C 1267 Phone: +54 11 4309 1010 Fax: +54 11 4309 1025 Home Page; http://www.metrogas.com.ar Contact: William Harvey Alvarez, President MULTICANAL: Bonds Rated `D(arg)' by Fitch Argentina --------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. rated Multicanal S.A.'s corporate bonds `D(arg)', based on the Company's finances as of December 31, 2002. The rating, which is assigned to financial obligations, which are currently in default, applies to US$1.05 billion worth of securities described as "obligaciones negociables", which are classified under "program." It also affects another US$125 million worth of "obligaciones negociables", classified under "simple issue." The bonds' maturity dates were not indicated. PECOM ENERGIA: Embarks On New Debt Swap Offer --------------------------------------------- Argentine energy company Pecom Energia informed the Buenos Aires bourse that it has offered to exchange up to US$4 million in trust-preferred securities for debentures maturing April 2008. The offer, according to Business News Americas, will run until 2:00pm New York time on April 24. The new notes will replace notes issued in 1999 as the remaining part of US$101 million in trust-preferred securities held in a trust managed by UK bank HSBC, which is also acting as issuer for the new notes. The securities expired in June 2002. The offer follows an exchange offer in January, wherein Pecom Energia exchanged 96.06% of the debt securities for new notes that pay an annual interest rate of Libor plus 1% and mature in June 2011. This new debt swap offer applies to the 3.94% of old notes whose holders did not subscribe to the January offer. The exchange offer will swap each US$1 of trust notes for a US$1 bond plus US$0.098 in cash corresponding to interest on the notes. Pecom Energia will pay bondholders US$0.10 for each US$1 bond now, and pay the US$0.90 balance in April 2008. Interest will be paid at 5.625% a year, payable twice a year from October 25, 2003 until the bonds mature on April 25, 2008. CONTACT: PECOM ENERGIA S.A. DE PEREZ COMPANC S.A. Maipo 1 - Piso 22 - C1084ABA Buenos Aires, Argentina Phone: (54-11) 4344-6000 Fax: (54-11) 4344-6315 URL: http://www.pecom.com.ar/ Contacts: Jorge Gregorio C. Perez Companc, Chairman Oscar Anibal Vicente, Vice Chairman TGN: Argentine Fitch Rates Various Bonds `D(arg)', Stocks, `4' -------------------------------------------------------------- Fitch Argentina Calificadora de Riesgo, S.A. rated various corporate bonds issued by Transportadora de Gas del Norte S.A. (TGN) `D(arg)' on Wednesday, the National Securities Commission Argentina revealed. According to Fitch Research, the rating is assigned to financial commitments, which are currently in default. Based on the Company's financial status as of December 31, 2002, the rating applies to the following securities: -- US$300 million worth of "Programa de Obligaciones Negociables", classified under "Program", with undisclosed maturity date. -- US$320 million worth of bonds described as "Programa Global de Ons simples o convertibles en acciones ordinaries, autorizado por AGOyE de 21.2.96 y ampliado en USD 70 Mio por AE de; 17.5.96", which matured February 1, 2001. -- Classified under "Series and/or Class", bonds described as "Serie I emitada bajo el Progr. Global de Ons Simples por un monto de US$ 320mm", due on July 1, 2009. -- US$154.5 million worth of bonds called "Serie II emitada bajo el Prog. Global de Ons Simples por un monto de US$ 320 mm", also under "Series and/or Class." These bonds expire on August 1, 2008. -- "Serie III emitida bajo el Progr. Global de Ons Simples por un monto de US$ 320 mm" worth US$10.7 million, due on July 1, 2009. There were classified under "Series and/or Class" -- US$9.3 million of "Serie IV emitida bajo el Progr. Global de Ons Simples por un monto de US$ 320 mm", under "Series and/or Class", and matures on July 1, 2009. -- Another US$60.5 million of "Serie VI emitida bajo el Progr. Global de Ons Simples por un monto de US$ 320 mm" due on September 1, 2008. These were classified under "Series and/or Class." -- Under "Simple Issue", bonds described as "Serie III con vencimiento en octubre de 2004, emitada bajo el Programa Global de Obligaciones Negociables simples (USD 300 Mio) vencido en 0.99", which comes due on October 1, 2004. -- US$46 million of "Serie IV con vencimiento en junio de 2002, emitida bajo el Programa Global de ONs simples (USD 300 Mio) vencido en 03.99", which came due on June 3, last year. -- "Serie V, con vencimiento en junio de 2002, emitida bajo el Programa Global de ONs simples (USD 300 Mio) vencido en 03.99", worth a total of US$24 million and due on June 1, 2004. -- US$20 million of "Serie VII, con vencimiento en junio de 2002, emitida bajo el Programa Global de ONs simples (USD 300 Mio) vencido en 03.99" which came due last March 3. Meanwhile, the Company's stocks, described as "Accciones Ordinarias en Circulacion Clases A y B de 1 voto c/u, V/N $ 1" were rated `4', by the same ratings agency. * Menem Vows To Repay Defaulted Debt In Full, If Re-elected ----------------------------------------------------------- Former Argentine President Carlos Menem vowed that the country will repay bondholders of the country's defaulted debt in full, if he is voted back into the presidency this month. "We are going to honor the external debt, let there be no doubt about it," the Financial Times quoted Mr. Menem as saying. Mr. Menem is one of the top five presidential candidates who promised to repay the debt in full, if elected. Other candidates said their administration would ask for some forgiveness on the total amount. Mr. Menem also indicated that his government would attempt to ask for a reduction on the defaulted bonds' interest rates. They would also request an extension of maturities, said the former official. An economic crisis forced the country to halt payments on US$95 billion in debt at the close of 2001. The nonpayment was the biggest sovereign default in history. About US$55 billion of the debt is held by international investors, who have last month agreed to set up working groups to negotiate a settlement with the government, said the report. An earlier report from the Troubled Company Reporter - Latin America indicated that some Japanese bondholders suggested that Argentina sell off some its lands to repay the debt. ============= B O L I V I A ============= BANCO BISA: Moody's Downgrades Foreign Currency Ratings ------------------------------------------------------- Moody's Investors Service lowered Bolivian bank Banco BISA S.A.'s long-term foreign currency deposit rating to Caa1 from B2 and long-term foreign currency issuer rating to B3 from B1. The outlook is stable. The downgrade reflects Moody's view that, in a country with a highly dollarized banking system such as Bolivia, a bank deposit run appears to coincide with, precede or presage a default on foreign currency obligations. BANCO MERCANTIL: Moody's Cuts Ratings On Potential Deposit Run -------------------------------------------------------------- Moody's Investors Service downgraded the long-term foreign currency deposit rating of Banco Mercantil S.A. (Bolivia) to Caa1 from B2. The outlook is stable. The downgrade reflects Moody's view that, in a country with a highly dollarized banking system such as Bolivia, a bank deposit run appears to coincide with, precede or presage a default on foreign currency obligations. BANCO NACIONAL: Moody's Reduces Ratings On Likely Default --------------------------------------------------------- Moody's Investors Service reduced the long-term foreign currency deposit rating of Banco Nacional de Bolivia S.A. to Caa1 from B2. The outlook is stable. The downgrade reflects Moody's view that, in a country with a highly dollarized banking system such as Bolivia, a bank deposit run appears to coincide with, precede or presage a default on foreign currency obligations. BANCO GANADERO: LTFC Deposit Rating Lowered By Moody's ------------------------------------------------------ Moody's Investors Service reduced the long-term foreign currency deposit rating of Banco Ganadero S.A. (Bolivia) to Caa1 from B2. The outlook is stable. The downgrade reflects Moody's view that, in a country with a highly dollarized banking system such as Bolivia, a bank deposit run appears to coincide with, precede or presage a default on foreign currency obligations. BANCO UNION: Moody's Downgrades LTFC Deposit Rating ------------------------------------------------- Moody's Investors Service reduced the long-term foreign currency deposit rating of Banco Union S.A. (Bolivia) to Caa1 from B2. The outlook is stable. The downgrade reflects Moody's view that, in a country with a highly dollarized banking system such as Bolivia, a bank deposit run appears to coincide with, precede or presage a default on foreign currency obligations. FONDO FINANCIERO: Dollarized Banking System Pulls Down Ratings -------------------------------------------------------------- Moody's Investors Service reduced the long-term foreign currency deposit rating of Fondo Financiero Privado FIE S.A. to Caa1 from B2. The outlook is stable. The downgrade reflects Moody's view that, in a country with a highly dollarized banking system such as Bolivia, a bank deposit run appears to coincide with, precede or presage a default on foreign currency obligations. * Moody's Cut Ratings To Six Notches Below Investment Grade ----------------------------------------------------------- Moody's Investors Service cut Bolivia's long-term foreign currency rating from B1 to B3, six levels below investment grade, reports Bloomberg. The downgrade reflected Moody's concern that a run on the Bolivia's banks may lead to a default on the country's about US$6.1 billion in debt. The government has said that Bolivia is looking for US$4 billion of assistance, either through loans or debt relief, from international lenders over the next five years. =========== B R A Z I L =========== AES CORP.: Lenders Approve Proposed Refinancing Transaction ----------------------------------------------------------- The AES Corporation (NYSE:AES) announced Tuesday that its lenders have approved a proposed amendment and partial paydown in the amount of $475 million of outstanding borrowings under its senior bank facility. This amendment is part of AES's previously announced refinancing transaction that also includes an estimated $1 billion private placement of new second priority senior secured notes and a cash tender offer to acquire a portion of certain of its outstanding senior and subordinated notes. The amendment to the senior bank facilities will permit the proposed issuance of the new second priority senior secured notes and the tender offer and will lessen certain provisions in the senior bank facilities, including restrictions on the incurrence of debt by subsidiaries, investments in subsidiaries, and the early redemption or repayment of outstanding debt. The amendment is subject to consummation of the proposed private placement of second priority senior secured notes and the application of a portion of the proceeds thereof to repay $475 million of borrowings under the senior bank facilities. The second priority senior secured notes will not be registered under the Securities Act of 1933, or any state securities laws. Therefore, the second priority senior secured notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and any applicable state securities laws. This announcement is neither an offer to sell nor a solicitation of an offer to buy the second priority senior secured notes. CONTACT: The AES Corporation Kenneth R. Woodcock, 703/522-1315 AES CORP.: Misses Loan Payment To BNDES --------------------------------------- AES Corp. continues to miss payments on loans it made from Brazil's national development bank BNDES. According to Dow Jones, AES, which operates Eletropaulo Metropolitana Electricidade de Sao Paulo SA in Brazil, missed Tuesday a US$247-million loan payment owed to BNDES. AES and the national development bank have yet to renegotiate the payments. Eletropaulo has been in technical default on certain debts owed to the national development bank since January when it missed a US$85 million-payment. The unit is suffering from a hefty dollar- indexed debt load and the after effects of a power-rationing program in 2001 that has cut consumption. NET SERVICOS: Issues Annual General Meeting Summoning Notice ------------------------------------------------------------ Net Servicos de Comunicacao S.A. (the "Company") shareholders are hereby summoned to join the Annual General Meeting to be held on April 30th, 2003, at 10 am (Brazilian Time) at the Company's headquarters, located at 1356 Verbo Divino Street, 1st floor, Sao Paulo, SP to deliberate on the following AGENDA: 1. To resolve on the financial accounts provided by the Management; to examine, discuss and vote the Company's financial statements, relating to the fiscal year ended December 31, 2002; 2. To decide on the destination of the results of fiscal year ended December 31, 2002; 3. To elect the members of the Company's Board of Directors. In the terms of CVM instruction # 165/91, amended by instruction n# 282/98, the percentage for the adoption of the multiple voting process for the election of Board of Directors members is 5% of the voting capital. Shareholders of the Company who are participants of the Brazilian Stock Exchange Custody Program and intend to attend the Meeting, will be required to present a statement issued by the Custodian dated no less than 48 (Forty eight) hours prior to the Meeting, showing their holding position in the Capital Stock of the Company. Roberto Irineu Marinho - Chairman of the Board of Directors CONTACTS: Marcio Minoru Miyakava +5511 5186-2811 minoru@netservicos.com.br Lu Yuan Fang +5511 5186-2637 lfang@netservicos.com.br SUDAMERIS BRASIL: Dutch Bank Agrees To Pay $741.5M For Control -------------------------------------------------------------- Dutch banking giant ABN Amro on Wednesday agreed to buy Brazil's Banco Sudameris from Italy's Banca Intesa SpA for BRL2.29 billion (US$741.5 million) in cash and stock. Under the agreement, ABN Amro Real, the Dutch bank's Brazilian unit, will pay Intesa BRL527 million (EUR158.1 million) in cash and BRL1.77 billion (EUR529.8 million) worth of ABN Amro Real stock for 94.57% of Sudameris. ABN Amro also plans to make a public offer for the remaining shares in Sudameris that are traded on the Sao Paulo stock exchange. Banca Intesa, Italy's largest bank, has been trying to sell its Brazilian unit for more than a year. Talks with Banco Itau SA, the second-biggest domestic bank not controlled by the government, collapsed last year when the two sides couldn't agree on price. Banca Intesa plans to cut 20,000 jobs, a third of its global workforce, by the end of 2005, and is trying to sell units to reduce costs. CONTACT: IntesaBci SpA Piazza Paolo Ferrari 10 20121 Milano Italy Tel +39 02 88 441 Fax +39 02 8844 3638 Homepage: http://www.intesabci.it/ Contact: Corrado Passera - Chief Executive Officer Giampio Bracchi - Vice Chairman Gianfranco Gutty - Vice Chairman TELEMAR: General Shareholders' Meeting Approves New Model --------------------------------------------------------- Rio de Janeiro, April 16, 2003 - Tele Norte Leste Participa�oes (NYSE: TNE) announces that the General Shareholders' Meeting held on April 10, 2003, approved some changes in the Company's Bylaws designed to reconfigure the senior management structure and extinguish the CEO position, such that the responsibilities and functions which previously corresponded to the CEO, would instead be shared by the Superintendent Directors, which are currently the Chief Executive Officers of Telemar Norte Leste and Oi. 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 Investor Relations Website: www.telemar.com.br/ri VARIG: CEO Leaves Post ---------------------- Manuel Guedes left his post as Chief Executive Officer of Viacao Aerea Rio-Grandense SA (Varig), reports Bloomberg. Guedes' resignation, announced Wednesday, came while Varig suffers through its worst crisis in its 75-year history. Guedes replaced Arnim Lore in November 2002 after the latter resigned from his post amid disagreements with the Ruben Berta Foundation, which controls 87% of Varig's stock. The foundation rejected a deal reached with creditors that would have saved Varig from bankruptcy. Guedes was in charge of negotiating with creditors and trying to secure aid from the government, while at the same time overseeing talks to merge Varig with local rival TAM. Although the Company said Guedes was an interim CEO and that he would leave once the restructuring was complete, sources close to the firm said he resigned over the foundation's refusal to approve the merger with TAM. Varig, which has US$764 million in debt and negative book value of US$450 million, agreed in a letter of intent with TAM to share domestic routes and conduct a study to determine the feasibility of a merger. Alberto Fajerman, vice president in charge of strategic planning for Varig, will take over responsibility for daily activities, said Paulo Cesar Fonseca, the airline's spokesman. The airline's board will meet at a later date to decide on a replacement for Guedes. Varig has "no official position" on how Guedes' decision to leave the company may affect a proposed merger with TAM, Fonseca said. 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 TAM Daniel Mandelli Martin, President Buenos Aires Tel. (54) (11) 4816-0001 URL: www.tam.com.br =============== C O L O M B I A =============== AVIANCA: Releases Rescheduled Hearing Notice -------------------------------------------- PLEASE TAKE NOTICE that the hearing on the Motion to Compel Assumption or Rejection of Executory Co ntract or, in the Alternative, for Adequate Assurance of Future Performance filed by Michelin Aircraft Tire Corporation, originally scheduled for Tuesday, April 15, 2003, at 10:00 a.m., has been rescheduled and will now take place at 10:00 a.m., Thursday, April 24, 2003, before the Honorable Allan L. Gropper, U.S. Bankruptcy Judge, United States Bankruptcy Court for the Southern District of New York, Alexander Hamilton Custom House, Room 617, One Bowling Green, New York, New York, 10004-1408, or as soon thereafter as counsel may be heard. Dated: April 16, 2003. SMITH, GAMBRELL & RUSSELL, LLP /s/Ronald E. Barab Ronald E. Barab (RB4876) Suite 3100, Promenade II 1230 Peachtree Street, N.E. Atlanta, Georgia 30309 (404) 815-3500 Attorneys for the Debtors AVIANCA: Reveals Supplemental Affidavit, Proposed Attorney ---------------------------------------------------------- PERSONALLY APPEARED before the undersigned attesting officer duly authorized to administer oaths, RONALD E. BARAB, who, being first duly sworn, deposed and stated as follows: 1. I am a partner in the law firm of Smith, Gambrell & Russell, LLP (the "Firm"), with offices at Suite 3100, Promenade II, 1230 Peachtree Street, N.E., Atlanta, Georgia 30309-3592, and other members and associates of the Firm and I are attorneys-at- law duly admitted to practice in the State of Georgia and the United States District Court for the Northern District of Georgia, among other courts. This affidavit is submitted in further support of the Application for Authority to Employ Attorneys for Debtors-in- Possession in the above-captioned cases (the "Application"). 2. On March 21, 2003, I submitted an Affidavit (the "Affidavit") that accompanied the Application. This Supplemental Affidavit is being filed in order to update, correct and supplement the Affidavit and the Application. 3. As set forth in the Affidavit, the Firm has represented Valores Bavaria S.A., a current minority stockholder of Avianca S.A. and 50% stockholder of the majority stockholders of Avianca S.A. The Firm's representation of Valores Bavaria S.A. has not been in connection with any matter in which such company's interests are adverse to the Debtors' respective estates, and, specifically, the Firm may take a position adverse to Valores Bavaria S.A. During the period from January 1, 2001 through December 31, 2002, the aggregate fees paid by Valores Bavaria S.A. represented less than one (1%) percent of the Firm's gross revenues. The Firm's representation of Valores Bavaria S.A. was in connection with the following specific matter: The Firm reviewed Put and Guaranty Agreements in connection with a purchase money loan transaction between Valores Bavaria S.A., as borrower, and BellSouth, as lender. This matter began in July 2001 and was concluded in the third quarter of 2001. The Firm is not currently representing Valores Bavaria S.A. in connection with any pending matters. 4. As set forth in the Affidavit, the Firm has also represented Sociedad Aeronautica de Medellin Consolidada S.A. Sam S.A. ("SAM"), a wholly-owned subsidiary of Avianca S.A. The Firm's representation of SAM is not in connection with any matter in which such company's interests are adverse to the Debtors' respective estates. During the period from January 1, 2001 through December 31, 2002, the aggregate fees paid by SAM represented less than one (1%) percent of the Firm's gross revenues. 5. As set forth in the Affidavit, the Firm has also represented Aerolineas Centrales De Colombia S.A. Aces S.A. ("ACES"), an affiliate of the Debtors The Firm's representation of ACES is not in connection with any matter in which such company's interests are adverse to the Debtors' respective estates. During the period from January 1, 2001 through December 31, 2002, the aggregate fees paid by ACES represented less than one (1%) percent of the Firm's gross revenues. 6. As set forth in the Affidavit, the Firm has also represented General Electric Capital Corporation ("GECC"). The Firm's representation of GECC is not in connection with any matter in which such company's interests are adverse to the Debtors' respective estates. During the period from January 1, 2001 through December 31, 2002, the aggregate fees paid by GECC represented less than one (1%) percent of the Firm's gross revenues. 7. As set forth in the Affidavit, the Firm has also represented General Electric Capital Assurance Company ("GECAC"). The Firm's representation of GECAC is not in connection with any matter in which such company's interests are adverse to the Debtors' respective estates. During the period from January 1, 2001 through December 31, 2002, the aggregate fees paid by GECAC represented less than one (1%) percent of the Firm's gross revenues. 8. As set forth in the Affidavit, the Firm has also represented debis Financial Services, Inc. ("debis"). The Firm's representation of debis is not in connection with any matter in which such company's interests are adverse to the Debtors' respective estates. During the period from January 1, 2001 through December 31, 2002, the aggregate fees paid by debis represented less than one (1%) percent of the Firm's gross revenues. 9. In addition to the foregoing, the Firm has represented Bavaria S.A., the former majority stockholder of Valores Bavaria S.A. (identified above). Bavaria S.A. is no longer, to the best of our knowledge, the majority stockholder of Valores Bavaria S.A., but we have no knowledge of its current relationship, if any, to Valores Bavaria S.A. The Firm's representation of Bavaria S.A. has not been in connection with any matter in which such company's interests are adverse to the Debtors' respective estates, and, specifically, the Firm may take a position adverse to Bavaria S.A. During the period from January 1, 2001 through December 31, 2002, the aggregate fees paid by Bavaria S.A. represented less than one (1%) percent of the Firm's gross revenues. The Firm's representation of Bavaria S.A. was in connection with the following specific matters: a. The Firm reviewed and advised Bavaria S.A. on various engagement and confidentiality agreements with investment bankers in June and July of 2001. b. The Firm represented Bavaria S.A. in connection with a proposed acquisition by Bavaria S.A. in the third quarter of 2001 of a brewery (Compania Cervecera Nacionale, S.A. de C.V.). The representation included reviewing and commenting on a proposed Stock Exchange Agreement. This acquisition was not concluded, as a competitor acquired the target. c. The Firm represented Bavaria S.A. in the third quarter of 2001 in connection with the negotiation of a loan from Corporaci�n Andina de Fomento and certain U.S. banks and subsequent amendments thereto. d. In October 2001 the Firm represented Bavaria S.A. in connection with the possible acquisition of a brewery in El Salvador. This transaction was not concluded, as the brewery was acquired by a competitor of Bavaria. e. The Firm represented Bavaria S.A. in the fourth quarter of 2001 in connection with the acquisition of a brewery in Panama. This acquisition was successfully completed. f. The Firm represented Bavaria S.A. in connection with a variety of minor corporate matters involving labeling, confidentiality agreements, software contracts and similar matters during the first and second quarters of 2002. The Firm is not currently representing Bavaria S.A. in connection with any pending matters. 10. The Firm believes that it does not have any conflict of interest that would prevent it from taking a position adverse to the interests of any creditor in this case. 11. To the best of my knowledge, information and belief, and after due inquiry, neither I, the Firm, nor any other member or associate thereof has any legal or ethical obligation that would prevent the Firm, any other member or associate thereof, or I, from representing any of the Debtors' in the above-styled chapter 11 cases. 12. In paragraph 8 of the Affidavit, I stated that the sum of $736,020.12 received from the Debtors had been applied as follows: Invoice for 02/03 for $159,650.00 Service for 03/03 for 219,577.10 Retainer balance 356,793.12 Total $736,020.22 I have now learned that the foregoing disclosure was based upon, in the case of the first dollar amount, an estimation, and, in the case of the following dollar amount, the erroneous double counting of one of the sums added together to arrive at the dollar amount. As a consequence of the foregoing, the following dollar amount, which was determined by subtracting the sum of the first two dollar amounts from the sum of $736,020, was also in error. The actual application of the sum of $736,020.22 was as follows: Invoice for 02/03 for $159,696.20 Service for 03/03 fo r 144,165.70 Retainer balance 432,158.32 Total $736,020.22 13. In paragraph 9 of the Affidavit, I stated that the Firm received a payment from Valores Bavaria S.A. on account of Avainca S.A.'s indebtedness to the Firm for compensation for services rendered and expenses incurred on or before December 31, 2002. I have now learned that the date December 31, 2002, was in error, and that the accurate date was January 31, 2003. FURTHER AFFIANT SAYETH NOT. /s/Ronald E. Barab RONALD E. BARAB Sworn to and subscribed before me this 16th day of April, 2003. /s/Lorna J. Virts Lorna J. Virts, Notary Pub lic, Forsyth County, Georgia My Commission Expires: 5/3/2003 ============= J A M A I C A ============= AIR JAMAICA: Implements New Strategies To Attract Passengers ------------------------------------------------------------ Air Jamaica President Gordon Stewart announced the airline's new strategies to increase its passenger count, the Jamaica Gleaner reports. Among the measures to be taken are a 25 percent discount on all fares, and a 50 percent discount on all excess baggage fees. The offer is good for tickets bought between April 16 and 29, for travel up to the end of June. The report adds that the airline would also offer an extensive local menu on all flights. Mr. Stewart also mentioned that Air Jamaica will start a limited television campaign overseas. Air Jamaica has been suffering from losses since the September 11 attacks. Recently, the military conflict in the Middle East has worsened its condition. However, the airline said that it will not be taking part in the impending BWIA/LIAT merger, which is expected to be completed by June. CONTACT: Air Jamaica 4 St. Lucia Avenue Kingston 5, Jamaica Phone: 876/922-3460 Fax: 929-5643 E-mail: webinfo@airjamaica.com Contact: Gordon Stewart, Chairman Allen Chastanet, Vice President for Marketing and Sales =========== M E X I C O =========== CFE: To Sell Up To $207M Worth of Debt Certificates Next Week ------------------------------------------------------------- Mexico's state power company CFE plans to sell up to MXP2.2 billion (US$207 million) in debt certificates next week, Business News Americas reports, citing an unnamed source close to the matter. The Company chose ING as placing agent for the issue, which Standard & Poor's rate as MxA-1, while Fitch gives it a F1+. The Company will issue the debt at the country's stock exchange (BMV), and expects mutual funds to be the main buyers, said the source, adding that the amount of debt to be actually sold will depend on the price, which is yet to be set. According to the issue prospectus, the papers will be guaranteed by income from power sales to industrial clients, who pay MXP69.3 billion (US$6.51 billion) a year for their power, says Business News Americas. The report adds that payment on these clients are considered "very solid", as the Company can legally cut supplies in the event of nonpayment. The prospectus indicates that the Company generally collects 100 percent of bills with one week of expiry, although industry pays only 69 percent of its bills on time. Last year, the CFE earned MXP115 billion from power sales, 80 percent of which came from sales to final clients and 20 percent to Luz y Fuerza, the state-owned distributor serving Mexico City. In the meantime, high voltage sales account for 18.6 percent of earnings, medium voltage 36.7 percent and low voltage 44.7 percent. PEMEX: Aims For 225 Oil Wells At Campeche By 2018 ------------------------------------------------- Mexican newspaper Diario Yucatan reports that the country's state oil company Pemex aims to drill 225 oil wells in the Campeche Sound by 2018. According to the report, the Company has completed the first well, Malah 1, and will continues exploring it. The drilling of the second well will be started this year. Javier Hinojosa Puebla and Ricardo Palomo Martinez, Pemex' respective heads for the northeast and southeast offshore areas said that ten of the wells will be at the Campeche Oriente Terciario project. The Company will drill 103 wells at the Ku Maloob Zaap project, as well as building 19 oil rigs, 28 pipelines and increasing crude storage infrastructure. The other 112 wells are slated to be for Cantarell, where the company will also carry out 102 relative small-scale repairs and 284 large-scale repairs, the paper relates. SAVIA: Seminis Files Form 8-K with SEC -------------------------------------- Seminis Inc. (Nasdaq: SMNS), the world's largest developer, producer and marketer of vegetable and fruit seeds, filed April 15 Form 8-K with SEC the following information: On December 13, 2002, Savia, S.A. de C.V. ("Savia"), Seminis Inc.'s (the Company) majority stockholder, announced that it had entered into a letter of intent with Fox Paine & Company, LLC ("Fox Paine") with respect to a proposed transaction to acquire the outstanding shares of Seminis at a price of $3.40 per share. Since then, a special committee of the board of directors of the Company, consisting of all of the independent directors, has been reviewing the proposed transaction and engaged in discussions and negotiations with Savia and Fox Paine with respect to the possibility of a transaction and the terms thereof. While discussions have generally been positive, the special committee's consideration and review of the proposed transaction is ongoing. In that regard, the Company has been informed by Savia that Savia has noticed its shareholders for a meeting to be held at the end of this month to authorize the necessary actions to be taken by Savia, assuming a transaction can be agreed upon with the Company. While there can be no assurance that any transaction ultimately will be approved, negotiations are proceeding on the basis that the Company's public stockholders would receive a price in excess of $3.40 per share. The actual price to be received by the public stockholders will depend on the completion of negotiations and the approval of such transaction by the special committee and the board of directors of the Company. The Company does not expect to have any additional comments with respect to the proposed transaction unless and until a definitive agreement is executed or the proposed transaction is withdrawn. About Seminis Seminis Inc. (Nasdaq: SMNS) is the largest developer, producer and marketer of vegetable seeds in the world. The company uses seeds as the delivery vehicle for innovative agricultural technology. Its products are designed to reduce the need for agricultural chemicals, increase crop yield, reduce spoilage, offer longer shelf life, create better tasting foods and foods with better nutritional content. Seminis has established a worldwide presence and global distribution network that spans 150 countries and territories. CONTACT: Enrique Osorio Vice President, Investor Relations (805) 647-1572 enrique.osorio@seminis.com ================= V E N E Z U E L A ================= PDVSA: Rating Affirmed; Outlook Revised to Stable ------------------------------------------------- Standard & Poor's Ratings Services said Wednesday that it affirmed its 'CCC+' corporate credit rating on Venezuelan state oil company Petroleos de Venezuela S.A. (PDVSA) and revised its outlook on the company to stable from negative. "The outlook revision follows a similar change to our outlook for the ratings on the Bolivarian Republic of Venezuela, which reflects improving liquidity for the country as a result of recovering oil production against a backdrop of continuing, albeit diminished, economic pressures, and political turmoil. Future ratings changes on PDVSA will be linked to those on Venezuela," said Standard & Poor's credit analyst Bruce Schwartz. As Venezuela recovers from the political and economic strife that has affected the company during the past year, Standard & Poor's expects that the government will continue to use its authority to exploit PDVSA's financial resources to effectively consolidate the debt management of the republic with PDVSA. This interrelationship has the potential to diminish PDVSA's access to international capital markets and trade credit on favorable terms. Mechanisms to extract cash from PDVSA include royalties, taxes, dividends, use of PDVSA's cash balances to support the bolivar (the Venezuelan currency), and the slow payment on government receivables held by PDVSA. Standard & Poor's also said that although PDVSA has increased production to between 2.4 million barrels per day and 3.1 million barrels per day from less than 500,000 barrels per day at the peak of the strike, which is much more rapid than had been expected, questions remain about the long-term impact of the strike on PDVSA's production capacity. Furthermore, Standard & Poor's is concerned about the strike's impact on PDVSA's ability to finance both sustaining capital expenditures and growth initiatives. ANALYST: Bruce Schwartz, CFA, New York (1) 212-438-7809 * S&P Revises Venezuela Outlook to Stable, Affirms Ratings ---------------------------------------------------------- Standard & Poor's Ratings Services said Wednesday that it revised its outlook on its long-term rating on the Bolivarian Republic of Venezuela to stable from negative. Standard & Poor's also affirmed its 'CCC+' long-term and 'C' short-term foreign currency sovereign credit ratings on the republic. (Standard & Poor's does not rate Venezuela's bolivar-denominated debt.) "The stable outlook balances improving liquidity stemming from recovering oil production against continuing, albeit diminished, economic pressures and political turmoil," said sovereign analyst Richard Francis. "Oil-based revenue, which normally accounts for nearly 50% of total government revenue, fell by an estimated 50% in the first few months of this year during the strike, but are expected to rebound to 40% of total revenue for 2003 as a whole," he added. According to Mr. Francis, international reserves are also rising as sustained production surpasses 2.5 million barrels of oil per day. Reserves reached US$15.5 billion on April 14, 2003, up from US$14.1 billion a month earlier (and US$15.8 billion in early December 2002, before the strike began). "However, the level of international reserves could come under renewed pressure going forward, as Petroleos de Venezuela S.A. (PDVSA) uses the Macroeconomic Stabilization Fund (FIEM) to finance crucial investment, as capital controls are eased, and as debt payments ramp up, especially in June," Mr. Frances noted. "The central government's external debt service is modest in April and May, but rises to nearly 50% of average monthly current account receipts in June," he said. Standard & Poor's said that, despite the pick-up in oil production, near-term challenges include political paralysis and weakened institutions, continued contraction in the nonoil sector, rising inflation, and higher unemployment. Failure to reach a political solution to the conflict over President Hugo Chavez's tenure and social unrest continue to constrain investment and economic growth. The economy is likely to contract by nearly 15% in 2003 (because of the sharp decline in the early months), on top of the 9% contraction in 2002. "The strength of the emerging recovery, at present only in the oil sector, depends to a large extent on political factors," said Mr. Francis." A sharp fall in oil production or oil prices, heightened social unrest, or financial sector difficulties could put renewed pressures on the ratings. On the other hand, diminished political tensions, along with sustained oil output, could lead to improvements in creditworthiness," he concluded. ANALYSTS: Richard Francis, New York (1)-212-438-7348 Joydeep Mukherji, New York (1) 212-438-7351 *********** 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 * * *