/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030604.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, June 4, 2003, Vol. 4, Issue 109 Headlines A R G E N T I N A AGUAS DE BUENOS AIRES: Consortium Considers Selling Ownership COLORIN: Initiates Reorganization Proceedings INFOREXCO: Under Concurso Preventivo MASTELLONE HERMANOS: S&P Withdraws 'D' Ratings RECICLADOS ECOLOGICOS: Liquidation Proceeding to Commence ROYAL AHOLD: Reports Audited 2002 Numbers, Financing Follows SANATORIO QUINTAR: To Undergo Reorganization SHOWFOOD: Court Declares "Concurso Preventivo" SINDICATO DE TRABAJADORES: Court Declares "Concurso Preventivo" SOLDATI GROUP: Revises Debt Proposal TELEFONICA DE ARGENTINA/COINTEL: Fitch Lower Ratings to 'C' B R A Z I L AES CORP.: Brazilian Judge Orders Another Seizure on Shares KLABIN: Stock Soars on Riocell Sale Announcement TAM: Strikes Agreement With GlobalPass TAM: Posts BRL87.7M Loss in 1Q03 TELESP CELULAR: Merrill Lynch Cuts Stock To "Sell" C H I L E ENERSIS: Spanish Parent Takes Up $1.23B Worth of New Shares SANTA ISABEL: SVS Now Analyzing Results of External Audit M E X I C O AEROMEXICO: Braces For Looming Strike ALESTRA: Foreign Exchange Fluctuations Cause Bigger Losses GRUPO IUSACELL: Debt Restructuring Plan Disclosed SAVIA: Deal Finalized To Acquire Seminis P E R U ESSALUD: Financial Situation Degrading T R I N I D A D & T O B A G O BWIA: International Lease Finance Corporation Releases Aircraft BWIA: Government Demands Immediate Changes After Saving Airline BWIA: Employees Unswerved By Latest Impound Threat U R U G U A Y URAGUA: Consortium Analyzing Buyout Offers * S&P Raises Uruguay's Long-Term Foreign Currency Rating to 'B-' - - - - - - - - - - ================= A R G E N T I N A ================= AGUAS DE BUENOS AIRES: Consortium Considers Selling Ownership ------------------------------------------------------------- Spanish water consortium Aguas de Bilbao is analyzing buyout offers for its waterworks stake in Argentina, Spanish paper El Correo reports, citing utility president I¤aki Etxeberria. Aguas de Bilbao has a 20% stake in Aguas de Buenos Aires, which serves 1.7 million residents in seven areas in capital Buenos Aires' greater metropolitan area. The decision to sell the asset comes at the backdrop of the economic crisis in the area, which led 40% of its users to miss paying their bills The other stakeholders in Aguas de Buenos Aires are Impregilo (43%), Dragados (27%) and PPAP (10%). COLORIN: Initiates Reorganization Proceedings --------------------------------------------- Colorin I.M.S.S.A applied for reorganization proceedings at Court No. 26, Secretary No. 52 of Buenos Aires, reports Infobae. Through case no. 30501196424, the paint producer is seeking "concurso preventivo". The report did not indicate whether a receiver has been assigned. CONTACT: Color¡n I.M.S.S.A Juramento 5853 (1605) Munro Pcia. de Buenos Aires Rep£blica Argentina Email: catcli@colorin.com INFOREXCO: Under Concurso Preventivo ------------------------------------ The National Commercial Court of First Instance, under Dr. Raul A. Taillade, declared that "concurco preventivo" has been opened for Inforexco S.A.. Dr. Ana Amaya is the secretary for the case, relates Infobae. The deadline for verification of claims is July 14, 2003. The receiver chosen is Mr. Jacobo Alfredo Shalum of Lavalle 1672, Piso 5, Buenos Aires. An informative assembly will be held on April 16, 2004. CONTACT: INFOREXCO S.A. Hipolito Irigoyen Piso 9 Buenos Aires MASTELLONE HERMANOS: S&P Withdraws 'D' Ratings ---------------------------------------------- Standard & Poor's Ratings Services said Monday that it withdrew its 'D' corporate credit rating on Argentine fresh-milk company Mastellone Hermanos S.A., at the company's request. The 'D' ratings on the company's US$225 million 11.75% notes and US$150 million senior unsecured medium-term note program were also withdrawn. ANALYSTS: Ivana Recalde, Buenos Aires (54) 114-891-2127 Marta Castelli, Buenos Aires (54) 114-891-2128 RECICLADOS ECOLOGICOS: Liquidation Proceeding to Commence --------------------------------------------------------- Argentine paper seller Reciclados Ecologicos S.R.L. is put under "concurso mercantil liquidatorio", according to a report by Infobae. Court No. 8, Secretary No. 7 of Buenos Aires issued the ruling on the company, which has been assigned the case number 30691190354. Mr. Norberto Jose Perrone of Constitucion 2894, Buenos Aires, was assigned as receiver. The deadline for verification of claims is July 18, 2003. The informative assembly will be on October 28, 2003. CONTACT: RECICLADOS ECOLOGICOS S.R.L. Paraguay 576. Avellaneda (1780) Buenos Aires TeleFAX: 4208-9118 / 4209-0131 ROYAL AHOLD: Reports Audited 2002 Numbers, Financing Follows ------------------------------------------------------------ Ahold announced Monday that, on Friday May 30, 2003, it provided its syndicate of banks with the audited 2002 financial report for Dutch supermarket subsidiary Albert Heijn. Delivering audited 2002 financial statements for Albert Heijn no later than June 2, 2003, was one of the conditions for the availability of the USD$915 million unsecured tranche of the Euro 2.65 billion credit facility announced on March 5, 2003. These conditions include the delivery of audited 2002 financial statements for Stop & Shop no later than June 30, 2003, and of audited consolidated 2002 financial statements for Ahold no later than August 15, 2003. SANATORIO QUINTAR: To Undergo Reorganization -------------------------------------------- Court No. 4 of the Civil and Commercial Tribunal of Jujuy approved the application of Sanatorio Quintar S.R.L. to commence reorganization proceedings. The medical services company obtained "concurso preventivo" approval through case no. 30655678146, said Infobae. However, the report did not indicate whether a receiver has been appointed or not. An informative hearing will be held on December 15, 2003. CONTACT: SANATORIO QUINTAR S.R.L. Av. Hip¢lito Yrigoyen 596 S. S. de Jujuy - 4600 - Jujuy Telefax: (0388) 423-3777 Contact: Dr. Pedro Moreno Paz E-mail: sanatorio@quintar.com.ar SHOWFOOD: Court Declares "Concurso Preventivo" --------------------------------------------- The National Commercial Court of First Instance declared Argentine entertainment resort Showfood under "concurso preventivo", meaning, the Company may commence reorganization proceedings. Infobae relates that the Company is trying to recover some $3 million of debt it suffered from "Fisco." The Company is also under interference by the Direccion de Rentas, which is seeking part of the Company's income until it receives a total of $500,000 - the amount due to it. To see a list of the Company's creditors, click on the link: http://bankrupt.com/misc/SHOWFOOD.htm SINDICATO DE TRABAJADORES: Court Declares "Concurso Preventivo" --------------------------------------------------------------- S¡ndicato de Trabajadores de Obras Sanitarias (SI.TO.S.CA.) is seeking approval to commence reorganization proceedings. The Company's case, no. 30668064570, is handled by the Court of First Instance of San Fernando del Valle de Catamarca. Mr. Aldo Gabriel Saquis, who has been assigned as receiver, may be contacted at Peru 338 in Catamarca. The informational hearing is set for November 5, 2003. CONTACT: S¡ndicato de Trabajadores de Obras Sanitarias Esquiu 92 Catamarca SOLDATI GROUP: Revises Debt Proposal ------------------------------------ In an effort to retain control of the 'Casino de Tigre,' the Soldati Group submitted a new debt-restructuring proposal to its creditors, reports Clarin. The group's original proposal involved giving the shares that it has got over the 'Casino Trillenium', where Soldati has a 50% participation, and which generates more than ARS50 million per year. Under the revised proposal, the group will pay the unit's US$150 million debt in pesos for 18 years, giving as guarantee the 'Tren y Parque de la Costa' shares, without the 'Casino's Shares'. According to sources, the agreement with its creditors, the main one being the Dredsner Bank, would be already closed. The Casino Trillenium is a society between Soldati and Boldt Firm, the latter belonging to the Tavanelli family. But the major gain is for the 'Instituto Provincial de Casinos'. Trillenium only stays with the 5% from the income of the coin machines, which represents US$51.5 million per year. The move follows the restructuring of the debt of Solfina, the controller of 'Comercial del Plata.' Last week, the group refinanced the debt, slashing it down from US$50-million to just US$8 million, and which will be payable in 18 months. Soldati Group, which has been 'in Concurso' since October 2000, is the financial firm of entrepreneur Santiago Soldati. The Company holds the shares of Sociedad Comercial del Plata, Tren de la Costa, Parque de la Costa, Casino de Tigre and Compania General de Combustibles (CGC). TELEFONICA DE ARGENTINA/COINTEL: Fitch Lower Ratings to 'C' ----------------------------------------------------------- Fitch Ratings has downgraded the foreign and local currency senior unsecured ratings of Telefonica de Argentina S.A.'s (TASA) and its holding company Compania Internacional de Telecomunicaciones S.A. (Cointel) to 'C' from 'CC'. The rating action applies to approximately US$954 million in outstanding securities. The ratings remain on Rating Watch Negative. The rating action reflects the recent announcement of a debt exchange offering by TASA and Cointel. TASA is seeking to refinance US$300 million senior notes due 2004 and US$368.5 million senior notes due 2008. Under the current terms of the debt exchange offer, holders of the 2004 notes would receive 85% principal amount of newly issued notes due 2007 plus 15% cash payment while holders of the 2008 notes would receive 90% principal amount of newly issued notes due 2010 plus 10% cash payment. In each case, the newly issued notes have the same coupon as the exchanged notes. TASA is also seeking to refinance Cointel's US$225 million 8.85% series A notes due 2004 and Ps175 million 10.375% series B notes due 2004 (equivalent to approximately US$60 million). Under the current terms, Cointel bondholders would ultimately receive 85% principal amount of newly issued TASA 8.85% notes due 2011 plus 15% cash payment. Fitch views the debt exchange as distressed under the current terms of the offering; TASA and Cointel have a limited number of financing alternatives due to their weak financial position. The debt exchange offering currently requires the minimum participation of 90% of bondholders. As a distressed debt exchange, the existing notes would be considered in default under Fitch's rating methodology upon completion of the exchange, and the existing notes would be rated in the default category for 30 days. At that time, a new rating would be assigned to the newly issued notes. Successful completion of the debt exchange would be positive for TASA and Cointel as it would lengthen maturities, thus reducing short term refinancing risk. The overall debt levels of each TASA and Cointel would remain relatively stable, decreasing only slightly due to the cash payment component of the debt exchange. TASA's bond obligations would increase as Cointel noteholders participating in the exchange would receive newly issued TASA notes. TASA would then transfer the acquired Cointel notes to parent company Telefonica Internacional in exchange for a like reduction in intercompany loans owed by TASA. Cointel's bond obligations would remain largely unchanged; however, the notes would be held by parent company Telefonica Internacional instead of third party noteholders. TASA has not included its US$71 million 9.875% senior notes due 2006 in the debt exchange offering; these notes were exchanged during 2002. The rating of these notes remains at 'CC' Rating Watch Negative. Cointel's parent company Telefonica Holding de Argentina S.A. (Telefonica Holding) is not participating in the debt exchange offering as it only has an estimated US$7 million in outstanding public notes; the majority of its debt is comprised of intercompany loans. The foreign and local currency senior unsecured ratings of Telefonica Holding remain at 'CC' Rating Watch Negative. TASA's limited financial flexibility and deteriorating credit profile are a result of the economic crisis affecting Argentina. TASA's profitability has been significantly affected by the various emergency measures implemented following the sovereign's default in early 2002, including devaluation, 'pesofication' of tariffs, and prohibition of tariff adjustments. These measures have dramatically affected the financial condition of TASA due to the imbalance between the company's peso revenues and its debt, which is largely dollar denominated. TASA is an operating company that provides local-exchange, long- distance, residential Internet access and directory publishing services in Argentina. Telefonica S.A. of Spain controls either directly or indirectly 98% of TASA. Cointel is a holding company whose primary asset is a 64.8% equity stake in TASA. Telefonica Holding is a holding company whose primary asset is a 50% equity stake in Cointel. CONTACT: Guido Chamorro Chicago Phone: +1-312-368-5473 or Paola Briano Buenos Aires Phone: +011 541 14 327-2444 Media Relations: James Jockle New York Phone: +1-212-908-0547 =========== B R A Z I L =========== AES CORP.: Brazilian Judge Orders Another Seizure on Shares ----------------------------------------------------------- After issuing an order last week for the seizure of BRL550 million of shares AES Corp. holds in AES Bandeirante, as well as the seizure of the U.S. company's shares in power generator AES Tiete, Judge Ellen Garcia of the Rio de Janeiro state court issued another order to seize shares held by AES in two other local subsidiaries. Citing a court spokeswoman, Dow Jones reports that on Monday, Judge Garcia granted the seizure of shares, which AES Transgas and AES Elpa, two AES holding companies here, hold in power distributor Eletropaulo Metropolitana. The two companies hold most of the shares in Eletropaulo, which is Brazil's largest power distributor. The judge's ruling is seen delaying a share sale process of AES holdings initiated by Brazil's development bank BNDES. BNDES is in the process of selling about US$150 million in preferred, or nonvoting Eletropaulo shares which were given as guarantees for a loan the U.S. power group took out in 1998 to pay for Eletropaulo in a privatization auction. At the same time, the bank has kicked off a process to auction the controlling shares in Eletropaulo, which were also given to the bank as a loan guarantee. The total value of the loan, which was given to AES Elpa and AES Transgas, was US$1.2 billion. AES has defaulted on payments to BNDES, which triggered contractual clauses of foreclosure on AES assets here. CONTACT: ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes Gonzalves Jr., VP Finance/Investor Relations KLABIN: Stock Soars on Riocell Sale Announcement ------------------------------------------------ Shares of Klabin SA, Brazil's biggest paper maker, surged after the Company agreed to sell its Riocell unit to Rio de Janeiro- based Aracruz Celulose SA for US$610.5 million. On Friday, the Company signed a preliminary contract to sell Riocell to rival Aracruz, a long-awaited step in its bid to lower its net debt load, which ended the first quarter at BRL2.81 billion. The move caused the Company's shares to rise as much as 7% on Monday's opening bell but had tempered their gains by mid-morning to trade 2.69% stronger at BRL2.67. "There's no doubt this is one of the only ways out for Klabin to restructure its debt," said Sara Delfim, an analyst at Bear, Stearns & Co. in Sao Paulo The sale of Riocell, which has a pulp mill supplied by 40,000 hectares of eucalyptus plantations, may help Klabin recover from a cash crunch that forced it to fall behind on debt payments last year. Klabin and other Brazilian companies missed debt payments last year after banks cut credit and a one-third drop in the currency drove up interest costs. CONTACT: KLABIN Ronald Seckelmann, Diretor Financeiro e de RI Luiz Marciano Candalaft, IR Manager Tel: (11) 3225-4045 Email: marciano@klabin.com.br TAM: Strikes Agreement With GlobalPass -------------------------------------- GlobalPass, the independent web-based consumer loyalty program, has announced that effective July 1, 2003, GlobalPass and TAM Brazilian Airlines will enter into a Preferred Partner Agreement that provides GlobalPass customers the opportunity to use GlobalPass "Super Awards" for flights from the United States to destinations in South America served by TAM Brazilian Airlines. According to Guy Booth, CEO of GlobalPass, the GlobalPass "Super Awards" concept allows GlobalPass customers to purchase tickets on Preferred Partnership airlines using their GlobalPass miles as payment. Customers preferring to pay in the conventional manner may opt instead to earn Global Miles for the purchase. GlobalPass combines benefits from the airline, hospitality, charge card and merchandise service providers including participating frequent traveler programs by linking them with the "click" of a mouse. GlobalPass offers 21st century technology, putting the customer in charge of their mileage account, while allowing interaction with Service Providers, Participating Programs and GlobalPass Program Administration. GlobalPass Customers have virtually unlimited opportunities for mileage accrual and redemption on a vast array of multi-national Service Providers to choose from. TAM is Brazil's most successful commercial airline. As a result of its commitment to service and safety, its growth and reliability have only increased throughout the years and its commitment to excellence will continue to be the backbone of its corporate philosophy. Today TAM services over 50 destinations within Brazil and neighboring countries. TAM inaugurated service to Miami in 1998, soon followed by Paris and plans are underway to continue the international growth serving various European and North American destinations (http://www.tamairlines.com). CONTACT: GlobalPass, Miami John H. Jackson, 305/870-7546, Fax 305/876-9325 E-mail: jack@globalpass.com TAM: Posts BRL87.7M Loss in 1Q03 -------------------------------- TAM Linhas Aereas, Brazil's second biggest airline, said it lost BRL87.7 million during the first three months of this year. It did not provide a comparative figure, but it reported a BRL15 million profit last year at the same time. The losses, according to Dow Jones, were attributed to sharply higher dollar-linked costs coupled with sharply lower demand for flights. Costs for fuel and airline leasing alone were more than BRL200 million higher than they were in the same quarter last year, said TAM, while air traffic fell 3.2% from the year earlier period. The airline is currently negotiating a merger with Brazil's No. 1 carrier, Varig, which is also experiencing the same troubles as TAM is, in order to reduce excess flight capacity. The merger is still under study, but Varig and TAM have already launched a code-sharing program and started to trim competing flights. TAM said those efforts should start to ease losses in the second quarter, after the first code-share flights took off March 10. The Company showed had a positive book value of BRL112.7 million at the end of March and revenue of BRL820.5 million in the first quarter. CONTACT: TAM Daniel Mandelli Martin, President Buenos Aires Tel. (54) (11) 4816-0001 URL: www.tam.com.br TELESP CELULAR: Merrill Lynch Cuts Stock To "Sell" -------------------------------------------------- Merrill Lynch downgraded Brazilian mobile carrier Telesp Celular to "sell" due to its "unattractive valuation," Business News Americas reports, citing an ML analyst. "With Telesp Celular up 65% over the past three months on the back of an improved macro outlook for Brazil, we believe it is now overvalued," ML Equity Analyst Mauricio Fernandes was quoted as saying. The "fair value" for Telesp Celular would be US$3.60 per American Depositary Receipt of the company, "implying a 13% downside potential," the analyst added. ML also cited "increasing competition as not reflected in the stock price." "We believe our Ebitda margin estimates are not conservative at 41%-42%, slightly ahead of management's 40%. This represents high earnings risk," Fernandes said. According to ML: "Competition is likely to make an impact" as other competition "becomes more aggressive." Telesp Celular (NYSE: TCP) is the largest publicly traded component of Brazil's largest mobile operator Vivo, a joint venture between Telefonica Moviles of Spain and Portugal Telecom. CONTACT: Telesp Celular Participacoes S.A. Fernando Abella Garcia, Investor Relations Officer ========= C H I L E ========= ENERSIS: Spanish Parent Takes Up $1.23B Worth of New Shares ----------------------------------------------------------- In a bid to strengthen the ailing finances of its Latin American investment arm Enersis, Spanish energy group Endesa subscribed to US$1.23 billion of the Chilean subsidiary's new shares. The transaction, according to Business News Americas, was carried out through the capitalization of inter-company loans from Endesa's international investment company Elesur to Enersis. This investment cuts Enersis' debt by 14.8% or US$1.41 billion to US$8.07 billion, eliminates US$20 million of associated financial costs, reduces the debt-equity ratio by 27.3% to 1.13 from 1.56 at March 31 this year, and increases total Enersis equity by 100.9% to US$2.8 billion from US$1.39 billion at March 31, 2003. Enersis, which operates in five Latin American countries, began a financial restructuring program several months ago that involves selling assets, refinancing short-term debt and a capital increase of up to $2 billion. In the first phase of the two-stage capital increase, Endesa capitalized its total debt with Enersis as previously announced. Other shareholders are also invited to take up shares. In a second phase, between Nov. 15 and Dec. 14, minority shareholders such as pension funds and insurance companies will be invited to participate in the capital increase but Endesa will not. Afterward, Enersis will give holders of bonds issued by Enersis - including those in the U.S. market - the option of converting bonds into shares, with a ceiling of US$150 million. CONTACT: Enersis SA 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 SANTA ISABEL: SVS Now Analyzing Results of External Audit --------------------------------------------------------- The results of the external audit on the financial records of the Chilean supermarket company Santa Isabel is now in the hands of the country's securities and exchange commission (SVS). The analysis of the documents should not take more than a week, according to South American Business Information. The audit was performed by consulting firm PriceWaterhouseCoppers at the behest of Cencosud, the holding company for the retailing interests of Chilean group Paulmann. Cencosud requested the audit in order to finalize its acquisition of Santa Isabel from Dutch retail group Royal Ahold. The value of the deal was originally fixed at US$150 million. Santa Isabel has 76 outlets in Chile. =========== M E X I C O =========== AEROMEXICO: Braces For Looming Strike ------------------------------------- Flight attendants of Aeromexico are likely to lodge a strike after Mexico's largest airline admitted it doesn't have enough funds to comply with the workers' wage demands. Reuters relates that the Professional Association of Flight Attendants (ASSA) has been seeking for a 15% wage hike. But according to an Aeromexico spokesman: "The company is not in a position to offer any increase. The position until now is a zero increase and that is why the union says the airline is not making an offer." ASSA secretary general Arturo Aragon said, the Company, owned by Mexico's state-controlled Grupo Cintra, had asked its members to give up 10% of their earnings through a 5% drop in their base wage and cuts in allowances and overtime to save US$6 million. "We hope this position changes, that (Aeromexico) takes into account the deterioration there has been in our income," Aragon said. CONTACT: AEROMEXICO Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or mweitzman@aeromexico.com CINTRA Xola 535, Piso 16, Col. del Valle 03100 M,xico, D.F., Mexico Phone: +52-5-448-8050 Fax: +52-5-448-8055 Contacts: Jaime Corredor Esnaola, Chairman Juan Dez-Canedo Ruiz, CEO Rodrigo Ocejo Rojo, CFO OR C.P. Francisco Cuevas Feliu, Investor Relations Xola 535, Piso 16 Col. del Valle 03100 M,xico, D.F. Tel. (52) 5 448 80 50 Fax (52) 5 448 80 55 infocintra@cintra.com.mx ALESTRA: Foreign Exchange Fluctuations Cause Bigger Losses ---------------------------------------------------------- Mexican phone operator Alestra SA, a unit of AT&T Corp., posted a loss of MXN366.6 million in the first three months of the year, against a loss of MXN135.4 million in the same year-ago period. According to Dow Jones, the privately held company attributed widening losses to foreign exchange fluctuations. The peso's 4.4% slide against the dollar during the first quarter produced foreign exchange losses of MXN312.8 million. In the same period of 2002, Alestra had posted a foreign exchange gain of MXN75.4 million. Interest expenses also mounted during the quarter, to MXN226.1 million from MXN194.7 million for the same three months of last year. Meanwhile, the Company's total revenues rose 48.7% to MXN1.45 billion from MXN972.6 million, driven mainly by increases in international long distance call volume and data services. Alestra's other shareholders are Mexican industrial concern Alfa SA and financial group BBVA-Bancomer SA. GRUPO IUSACELL: Debt Restructuring Plan Disclosed ------------------------------------------------- Grupo Iusacell, S.A. de C.V. (BMV:CEL)(NYSE:CEL) previously publicly announced that it retained Morgan Stanley to assist it in developing a debt restructuring plan for presentation to its lenders. The Company has determined that pending agreement with its lenders on a restructuring plan; it will suspend making the US$25 million interest payment due on June 1, on its 14.25% bonds due 2006. The Company has a 30-day cure period to make the interest payment, before an event of default has occurred. If the interest payment is not made within the thirty-day period an event of default would occur under the Indenture governing the bonds, and the bondholders would have the right to accelerate the principal of the bonds or take other legal actions as they deem appropriate. The Company, while continuing with its day to day operations, will continue working with its advisors, Morgan Stanley, towards the formulation of a consensual and comprehensive restructuring plan. About Iusacell 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 92 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. (NYSE:VZ). CONTACT: Grupo Iusacell, S.A. de C.V., Mexico City Investor Contacts: Russell A. Olson Phone: 011-5255-5109-5751 Email: russell.olson@iusacell.com.mx or Carlos J. Moctezuma, Investor Relations Phone: 011-5255-5109-5780 Email: carlos.moctezuma@iusacell.com.mx SAVIA: Deal Finalized To Acquire Seminis ---------------------------------------- Seminis Inc. (Nasdaq:SMNS) announced on Monday that it has entered into a definitive merger agreement with entities related to Savia, S.A. de C.V. (BMV:SAVIA) (NYSE:VAI) pursuant to which certain Savia related parties will acquire all of the outstanding shares of Seminis, the world's largest developer, producer and marketer of fruit and vegetable seeds. Public holders of approximately 15.8 million Seminis shares will receive $3.78 per share in the merger. Immediately following the merger, certain Savia related parties will sell to certain investment funds managed by Fox Paine & Company, LLC, a San Francisco based private equity firm, a number of the Seminis shares they will then own, representing approximately 75% of the Seminis common shares, following completion of the transactions, for $3.40 per share in cash. Certain entities affiliated with Alfonso Romo Garza, Seminis' and Savia's Chairman and Chief Executive Officer, will receive co- investment rights to purchase, subject to certain conditions, up to 34% of Seminis following the merger. Stockholders of Seminis representing in excess of 85% of the currently outstanding voting power of Seminis have entered into agreements to vote in favor of the merger. Savia shareholders provided their approval at a shareholder meeting held on April 30, 2003. The overall transaction has a total enterprise value in excess of $650 million. The $3.78 per share price to Seminis' public stockholders represents a premium of 51% based on Seminis' closing price of $2.51 on December 13, 2002, the last closing price prior to the public announcement of the Savia letter of intent with Fox Paine regarding the overall transaction. The Seminis Board of Directors approved the merger agreement after receiving the unanimous recommendation of a special committee of independent directors, which was formed following the announcement of the December 13, 2002 letter of intent between Savia and Fox Paine. As part of the transaction, immediately prior to the consummation of the merger, Savia will exchange its Seminis Class C preferred shares for approximately 37.7 million shares of Seminis common stock, after which, the total number of outstanding Seminis common shares will be approximately 101.7 million. Savia expects to distribute approximately $0.53 per share to its shareholders from the proceeds of its sale of Seminis shares to Fox Paine. In addition, a portion of the proceeds will be used by Savia to settle and repay all of its currently outstanding indebtedness. Existing management will continue to run the Company, with Mr. Romo serving as Chairman and Chief Executive Officer and Dexter Paine, President of Fox Paine, serving as Vice Chairman of Seminis. Mr. Romo said, "With Fox Paine as a strategic partner, we are strengthening Seminis' position as the world's leading provider of high-quality specialty seeds in both developed and emerging markets. Fox Paine's insight and expertise in the industry is proving to be invaluable as we focus on offering total solutions to our customers and capturing value in the food chain." Mr. Paine said, "We are very excited to be making a strategic investment in Seminis and to have the opportunity to participate in its future growth. Seminis' innovative agricultural technology and its experienced and talented management team, led by Alfonso Romo Garza, together with its new capital structure, will accelerate the next stage of this dynamic company's development." The transaction is expected to be completed later this summer and is subject to customary conditions, including the approval by Seminis' stockholders, availability of financing and certain regulatory approvals. Seminis intends to file shortly with the U.S. Securities and Exchange Commission copies of the merger and other related agreements. Savia (www.savia.com.mx) participates in industries that offer high growth potential in Mexico and internationally. Among its main subsidiaries are: Seminis a global leader in the development, production and commercialization of fruit and vegetable seeds; Bionova, a grower and marketer of fresh produce; and Omega, a real estate development company. Seminis Inc. (http://www.seminis.com)is the world's largest developer, producer and marketer of vegetable seeds. 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. Fox Paine & Company, LLC manages investment funds in excess of US$1.5 billion, providing equity capital for corporate acquisitions, company expansion and growth programs and management buyouts. The Fox Paine funds are managed on behalf of over 50 leading international financial institutions, including major governmental and corporate pension systems, Fortune 100 companies, major life and property & casualty insurance and reinsurance companies, money center and super regional commercial banks, investment banking firms, and university endowments. Fox Paine was founded in 1997 by Saul A. Fox, a former general partner of Kohlberg Kravis Roberts & Co., and W. Dexter Paine, III, a former general partner of Kohlberg & Co. More information about Fox Paine can be found at www.foxpaine.com. ADDITIONAL INFORMATION Seminis will file with the SEC, and will furnish to holders of Seminis common stock, a proxy statement. HOLDERS OF SEMINIS COMMON STOCK ARE URGED TO READ THE PROXY STATEMENT TO BE PREPARED IN CONNECTION WITH THE MERGER WHEN IT BECOMES AVAILABLE, BECAUSE IT CONTAINS IMPORTANT INFORMATION. Holders of Seminis common stock may obtain a copy of the proxy statement (when it is available) and other documents containing information about Seminis, free of charge, at the SEC's web site at www.sec.gov. Copies of the proxy statement (when it is available) may also be obtained for free by directing a request to: Investor Relations, Seminis Inc., 2700 Camino del Sol, Oxnard, CA 93030-7969 USA. Seminis and certain of its directors and executive officers may, under the rules of the SEC, be deemed to be participants in the solicitation of proxies from holders of Seminis common stock in favor of the merger. Information about the directors and executive officers of Seminis and their ownership of Seminis common stock is set forth in the Annual Report on Form 10-K filed with the SEC by Seminis on January 14, 2003, as amended on January 28, 2003. Additional information regarding the interests of these participants may be obtained by reading the proxy statement regarding the proposed transaction when it becomes available. CONTACT: SAVIA Francisco Garza Phone: 52818-1735500 Email: fjgarza@savia.com.mx or SEMINIS Enrique Osorio Phone: 805/657-1542 Email: enrique.osorio@seminis.com or FOX PAINE Joele Frank, Wilkinson Brimmer Katcher, Andy Brimmer or Nina Covalesky Phone: 212/355-4449 ======= P E R U ======= ESSALUD: Financial Situation Degrading -------------------------------------- Peru's public health agency EsSalud, which is currently enmeshed in corruption allegations, saw its financial condition go from bad to worse, Business News Americas indicates. Citing executive president Jose Luis Chirinos, local daily Gestion reveals that in April, the Company posted a PEN215-million (US$61.5mn) loss, almost matching its first quarter loss of PEN256 million. The Company's union representatives have decided to lodge a strike but a declaration by the country's president, Alejandro Toledo, of a national state of emergency amid a wave of industrial action, suspend the strike for 30 days. Chirinos said 14 of the 17 union demands have already been resolved, but that the entity's dire financial situation and tight budgets mean it is simply unable to meet pay rise demands. The only wage issue that could be resolved this year is approval of holiday pay, he said. ================================= T R I N I D A D & T O B A G O ================================= BWIA: International Lease Finance Corporation Releases Aircraft --------------------------------------------------------------- International Lease Finance Corporation (ILFC), a wholly-owned subsidiary of American International Group, Inc. (NYSE: AIG), is pleased to announce that it has met successfully with the government of Trinidad and Tobago and has reached a mutually agreeable understanding concerning BWIA. On the basis of this understanding, ILFC is immediately releasing both B737-800 aircraft to BWIA for return to service. ILFC believes a positive basis has been established for BWIA's future and for ILFC's aircraft at the airline. The Company is the international market leader in the leasing and remarketing of advanced technology commercial jet aircraft to airlines around the world. ILFC owns a portfolio valued at more than $ 30 billion, consisting of more than 600 jet aircraft. AIG is the world's leading international insurance and financial services organization, with operations in approximately 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In the United States, AIG companies are the largest underwriters of commercial and industrial insurance, and AIG American General is a top-ranked life insurer. CONTACT: INTERNATIONAL LEASE FINANCE CORPORATION 1999 Avenue of the Stars 39th Floor Los Angeles, CA 90067 USA Phone: 310.788.1999 Fax: 310.788.1990 Email: ilfc@ilfc.com Home Page: http://www.ilc.com/ BRITISH WEST INDIES AIRWAYS Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, CFO (Trinidad) BWIA: Government Demands Immediate Changes After Saving Airline --------------------------------------------------------------- "As a condition for the injection of capital into the airline, the board of directors of BWIA will be asked to make immediate changes to the company's management," said Trinidad and Tobago Prime Minister Patrick Manning after the government succeeded in keeping its flag carrier British West Indies Airways (BWIA) alive. The government's demands, according to the Trinidad Guardian, are the following: First, the airline must pay off its outstanding arrears to the International Lease Finance Corporation for the months of March, April, and May. This amounts to US$5 million, equal to the letter of comfort the government issued recently. Next, the government is also asking the airline to pay the ILFC US$2.3 million monthly over the next four months to service the lease and keep it updated. Lastly, the government wants to "have a look" at the US$8 million maintenance reserve the airline owes the ILFC Mr. Manning said that the government has commissioned Zwaig consultants to conduct a due diligence report, which is expected to be complete in three weeks, to establish BWIA's financial circumstances. Changes in the airline's structure and management will then be discussed. BWIA: Employees Unswerved By Latest Impound Threat -------------------------------------------------- It was business as usual for BWIA's employees despite the threat of closure looming over the airline during the past days. "We're operating as usual, all of us-reservations specialists, pilots, supervisors, and the like. This latest go-round is unnerving, but we've been through a lot in the past few years. We're not a company of green people," said BWIA's corporate communications director Clint Williams, as quoted by the Trinidad Express. However, the impounding of two of BWIA's crafts might have affected some of its flights. Mr. Williams is advising passengers to call phone no. 669-3000 to confirm if their flights are on time. In the meantime, union's representing BWIA workers have reaffirmed their support to the airline. "A pledge was taken to support the position of the government-we have re-dedicated ourselves to the survival of BWIA," said Christopher Abraham, president of Aviation, Communications, and Allied Workers Union (ACAWU). There were some booking cancellations, but not totally unexpected, said Mr. Williams. The report cited a travel agent in Diego Martin as saying that there were two BWIA seat cancellations at their office on Wednesday last week, but those were quickly taken up by other passengers. Another travel agent in Port of Spain reportedly said that their BWIA seats are "booked solid." ============= U R U G U A Y ============= URAGUA: Consortium Analyzing Buyout Offers ------------------------------------------ Spanish water consortium Aguas de Bilbao is considering buyout offers for its waterworks stake in Uruguay, Spanish paper El Correo reports, citing utility president I¤aki Etxeberria. Aguas de Bilbao holds a 36% stake in Uragua, which serves Uruguayan city Maldonado. A drop in tourism in Maldonado led to a drop in consumption for Uragua, prompting the consortium to consider selling the asset. In addition, legal wrangling over contractual details has negatively affected public perception of the Maldonado water utility. * S&P Raises Uruguay's Long-Term Foreign Currency Rating to 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said Monday that it raised both its long-term local and foreign currency sovereign credit ratings on the Oriental Republic of Uruguay to 'B-' from 'CC' and 'SD' (selective default), respectively. Standard & Poor's also raised its short-term foreign currency sovereign credit rating on the republic to 'C' from 'SD', leaving its short-term local currency sovereign credit rating on Uruguay unchanged at 'C'. The outlook on the long-term ratings is stable. According to Managing Director Jane Eddy, the upgrades follow the completion of the distressed debt exchange that cures Uruguay's selective default and significantly reduces the sovereign's debt amortization burden (with nonofficial creditors) through 2007. "While the exchange alleviated near-term funding pressures, Uruguay's debt burden remains high-with net general government debt at a projected 90% of GDP in 2003, and interest just over 18% of general government revenue," Ms. Eddy said. "To place its financial position on a sustainable footing, the government intends to engineer a fiscal tightening that is largely premised on persistent real declines in public sector wages and in pensions," she added. Ms. Eddy explained that, while this adjustment is not without implementation risk and will be especially challenging politically in the run-up to and beyond the November 2004 presidential elections, the achievement of an improved fiscal outturn is nonetheless critical to maintaining much needed support from official creditors. "The ratings assume that the lighter amortization schedule and progress on fiscal adjustment will boost business confidence and permit a decline in real interest rates, which, in turn, would contribute to a much-needed economic recovery," noted Ms. Eddy. "While the economic rebound is not expected to be strong enough initially to preclude 2003 from being the fifth consecutive year of recession, growth in 2004-2005 is projected to surpass 3% annually. However, achieving sustainable growth beyond 2005 will depend, in part, upon Uruguay's ability to reorient the reliance of its economy beyond the Republic of Argentina and the Federative Republic of Brazil and deepen extraregional trade ties," she concluded. Standard & Poor's said that it assigned its 'B-' foreign currency rating to the more than US$3 billion of new bonds issued on May 29, 2003, as part of the exchange offer. Some holders of the defaulted bonds opted to not tender their holdings. That portion of bonds owned by these "holdouts" also is rated 'B-', up from 'D'. According to Standard & Poor's, the stable outlook balances the commitment by the government to improve upon its fiscal track record and engineer a meaningful fiscal adjustment against the economic and political challenges of doing so. In a scenario of downward pressure amid fiscal slippage, the government has indicated that those bondholders who did not tender their bonds in last month's exchange are particularly exposed to credit risk. ANALYSTS: Jane Eddy, New York (1) 212-438-7996 Marie Cavanaugh, New York (1) 212-438-7343 *********** 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 * * *