/raid1/www/Hosts/bankrupt/TCRLA_Public/030620.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, June 20, 2003, Vol. 4, Issue 121
Headlines
A R G E N T I N A
A MARINOZZI: Initiates Reorganization Proceeding
CANTERAS SAN JOSE: Under Receivership On Court Orders
DIRECTV LA: Creditor Seeks Change in Interim DIP Order
DISCO: Parent Company Offers to Buy Back All Bonds in the Market
EMILIO LOPEZ: Files To Start Reorganization
EXPRESO SINGER: Applies For 'Concurso Preventivo'
JUVENTUD UNIDA: Court Orders Receivership
MAXIMEGA: Reorganization Process Begins at Civil Court
MUSIMUNDO: Proposes To Restructure $152M in Debt
PECOM ENERGIA: Petrobras Sees Positive Results In Takeover
TELENET: Submits 'Concurso Preventivo' Motion to Court
TGS: Argentine Standard & Poor's Rates $600M of Bonds `raD'
TGS: Bonds Get Junk Ratings From Local S&P
TRAMAT: Starts Formal Reorganization Process
B E R M U D A
TYCO INTERNATIONAL: Prosecutors Seek Dismissal of Ex-CFO's Case
B R A Z I L
AES CORP.: BNDES Ditches Latest Debt Proposal
EMBRATEL: Creditors of Parent Company Won't Demand Sale
C O L O M B I A
AVIANCA: Gets Authorization To Pay Peruvian Tax Debts
AVIANCA: Debts Greater Than Revealed In Chapter 11 Filing
TELECOM: Heads for Liquidation
D O M I N I C A N R E P U B L I C
BANCO BHD: Fitch Cuts LTFC Rating To `B'
BANCO DOMINICANO DEL PROGRESO: Fitch Downgrades LTFC Rating
BANCO INTERCONTINENTAL: Fitch Reduces LTFC Ratings; Affirms STFC
BANCO MERCANTIL: LTFC Rating Reduced To `B' From `B+'
BANCO POPULAR DOMINICANO: Fitch Downgrades, Affirms Ratings
J A M A I C A
C&WJ: Blocks Gotel's Access to Network
M E X I C O
CYDSA: Restructuring Prompts June 27 Bondholder Meeting
GRUPO IUSACELL: New Owner Projects Recovery in the Near Future
ROHN INDUSTRIES: Receives Delisting Notice From Nasdaq
P A N A M A
BLADEX: Rights Offering Subscription Priced
P U E R T O R I C O
CENTENNIAL COMMUNICATIONS: Ratings Improve on Bank Facilities
V E N E Z U E L A
PDVSA: To Resume Exports of Reformulated Gasoline
PDVSA: Export Figures Up, OPEC Quota Fulfillment Doubted
- - - - - - - - - -
=================
A R G E N T I N A
=================
A MARINOZZI: Initiates Reorganization Proceeding
------------------------------------------------
Court No. 26 of Cordoba, Argentina assigned Ms. ADriana Beatriz
Cevallos as receiver for the reorganization process of A.
Marinozzi y Compania SRL. Infobae relates that the Company has
submitted its plea for 'Concurso Preventivo' to the Civil and
Commercial Tribunal of Cordoba through case number 30504683628.
A. Marinozzi makes farm-related machinery.
CONTACT: Ms. Adriana Beatriz Cevallos
27 de April 564
Provincia de Cordoba
CANTERAS SAN JOSE: Under Receivership On Court Orders
-----------------------------------------------------
The Civil and Commercial Tribunal of Marcos Juarez places sand
and pebbles extractor Canteras San Jose S.R.L. under
receivership. Local news outlet Infobae relates that Ms. Susana
Ruth Zapata was assigned receiver to the case.
The Company needs the permission of Marcos Juarez Court No. 2 to
commence reorganization proceedings.
DIRECTV LA: Creditor Seeks Change in Interim DIP Order
------------------------------------------------------
The Official Committee of Unsecured Creditors of DirecTV Latin
America, LLC, asks the Court for relief from and modification of
the release provisions contained in the Interim DIP Financing
Order.
Kathleen Marshall DePhillips, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub PC, in Wilmington, Delaware, tells Judge
Walsh that the Committee's efforts to unravel all of Hughes
Electronics Corporation's relationship with the Debtor is
ongoing. However, it is clear that:
(a) Hughes controls the Debtor as:
-- three of the four members of the Debtor's "Executive
Committee" are Hughes employees;
-- Hughes employees also hold six of the seven senior
officer positions with the Debtor and are paid by
Hughes directly;
(b) the Debtor has a $6,300,000 monthly fixed cost to two
Hughes subsidiaries -- PanAmSat and California Broadcast
Center -- which provide satellite and broadcast services
to the Debtor;
(c) Hughes has equity interests in the Hughes Local Operating
Companies. These Hughes LOCs could not function absent
the Debtor's continued operation; and
(d) Hughes has a 75% ownership stake and is the primary
creditor of Surfin. Surfin provides financing to all
LOCs in each region for the cost of integrated receiver
decoders. Repayments are made directly from the LOCs to
Surfin Obligations in an aggregate amount exceeding
$300,000,000, secured by a pledge of the Debtor's equity
in the LOC. The Debtor's continued operation is
necessary for the LOCs to honor their Surfin Obligations.
The Debtor's Interim DIP Financing Order contains these Release
Provisions:
(a) Affiliates are covered and are in some sense
beneficiaries of the Release Provisions;
(b) The Release Provisions include the defined term "Claims
and Defenses" defined as any challenge to the "amount,
validity, perfection, priority or enforceability of, or
asserting any defense, counterclaim or offset to, the
Prepetition Hughes Indebtedness; and
(c) The Committee must commence any "Claims and Defenses" on
or before the 19th day after the appointment of the
Committee or all "Claims and Defenses" will be deemed,
immediately and without further Court action to have been
"relinquished" and the Claims and Defenses as against the
Lender is forever and irrevocably relinquished and
waived.
Thus, Ms. DePhillips concludes, it appears that the Release
Provisions are intended to apply to both the Lender and its
affiliates. However, Hughes' affiliates are not identified in
any of the loan documentation. But it appears that the
Affiliates in this case consist of at least 16 LOCs, Surfin,
Hughes Holdings, PanAmSat and CBS. There may well be other
Affiliates that have a relationship to the Debtor who have yet to
be identified by the Committee. No Proof of Claim has also been
filed by the Affiliates.
Accordingly, Ms. DePhillips contends that the Release Provisions
should be modified because:
(a) depending on how broadly the Release Provisions are
interpreted, the Committee has been put to an impossible
burden, given the unique circumstances of this case:
-- the Committee's obligations could potentially go far
beyond the focused task of filing claims against
Hughes based solely on Hughes' alleged prepetition
loans to the Debtor; or
-- the Release Provision could be interpreted to require
the Committee to bring any actions it might have
against any Affiliate that might be an offset to the
prepetition Hughes indebtedness; and
(b) it is wholly inequitable in the context of this case for
the Committee to have to object to any claims before a
Proof of Claim have ever been filed, particularly to
unidentified "Affiliate" claims.
DirecTV Responds
DirecTV asks Judge Walsh to consider certain aspects in
determining whether to grant the Committee's request or not as
some of the Committee's statements are false, overstated or
completely ignore the fundamental economics of DirecTV's business
and the very reason for this bankruptcy case.
Joel A. Waite, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, notes that there are at least four notable
inaccurate or misleading statements in the Committee's Motion,
including:
A. Local Operating Companies
The Committee states that DirecTV has "economic interests
only in the LOCs concerning Argentina, Brazil and Colombia."
This implicates that Hughes, which has a controlling interest
in the other Big Six LOCs in Mexico, Puerto Rico and
Venezuela, as well as the other LOCs, has exercised its
control over DirecTV in a manner intended to benefit its
owned LOCs at DirecTV's expense. However, Mr. Waite points
out, the Committee continues to ignore the fact that DirecTV
has a significant economic interest in all of the relevant
local operating agreements and is largely relying on the
viability of the LOCs for the success of its business plan.
The LOCs' importance to DirecTV is dictated by the LOCs'
ability to attract subscribers and generate revenues that
can be used to pay royalties payable to DirecTV. DirecTV has
a substantial economic interest in each of the LOCs and the
importance of these LOCs to DirecTV is determined without
regard to their ownership.
B. Surfin Loan Guarantees
The Committee states that "although the Debtor has no
financial interest in the Hughes LOCs, Hughes also has caused
the Debtor to guarantee a portion of the Surfin Obligations
owed by the Hughes LOCs." According to Mr. Waite, this
statement entirely ignores the fundamental business reasons
why DirecTV agreed to undertake the guarantees. This
statement is, therefore, inaccurate and misleading for:
-- DirecTV has a vested economic interest in all of the LOCs,
including the Hughes LOCs, and the royalties it expects to
receive from the LOCs will be central to the success of
DirecTV's reorganization; and
-- the Loans Surfin advanced to the LOCs, which are the
subject of DirecTV's guarantee, provided substantial
benefit to DirecTV in that the loans facilitated the
financing of the integrated receiver decoders necessary
for the LOCs to provide DirecTV services to the
subscribers in each region.
The apparent conclusion the Committee drew that DirecTV does
not have a critical interest in ensuring that each of the
LOCs can provide to their subscribers the requisite equipment
to receive the service is non-sensical.
C. Satellite Contracts
In an attempt to paint DirecTV as a mere instrumentality of
Hughes, the Committee alleges that DirecTV's operating losses
stem from the "monthly costs associated with the Hughes
Satellite Contracts." Mr. Waite explains that DirecTV has
never disputed that its satellite costs represent its second
largest expense. DirecTV has also not disputed that its
satellite providers -- PanAmSat and CBS -- are Hughes
affiliates.
DirecTV's continuing receipt of satellite services is
critical to the continued operation of its satellite
television business and, therefore, the expenses incurred for
the services are an absolute necessary expense for the
estate. Moreover, these expenses are paid pursuant to
agreements that, when entered into, reflected market rates.
DirecTV is carefully reviewing these contracts and its
satellite alternatives, and will likely seek improved terms
under these agreements, as it will with all of its
programming agreements in performance of its fiduciary duty
to its estate. However, as the Committee should understand,
DirecTV is not able to alter those terms unilaterally and is
required by the Bankruptcy Code to pay for the value of the
services it receives during the case while it determines
whether to assume or reject these agreements. This fact
remains true to all of DirecTV's contracts, including
contracts with Hughes' affiliates and contracts with
unaffiliated third parties. The Committee's insinuations
that Hughes is using its satellite television contracts with
DirecTV to cause it to siphon off money from the estate for
Hughes' benefit is simply false.
Similarly, the implication that DirecTV's operating losses
are attributable to a significant degree to its payment of
excessive satellite costs is entirely inaccurate and
demonstrates the Committee's apparent lack of understanding
to the causes underlying DirecTV's financial problems. "To
argue or imply that Hughes, which has close to $3,000,000,000
invested in DirecTV and Surfin, has used its related company
satellite contracts to extract unreasonable value from
DirecTV at the expense of DirecTV's creditors is simply
absurd," Mr. Waite remarks.
D. LOC Revenue Allocation
The Committee also implies that Hughes has been able to
siphon off money to its affiliates by directing the LOCs to
"repay the current portion of the Surfin Obligations the LOCs
owed, rather than the repayment of Royalties to the Debtor."
These allegations are vastly overstated and misleading
because:
-- it ignores the underlying business justification for
having paid Surfin; and
-- the Committee fails to recognize that, even if the LOCs
had directed that portion of their cash to DirecTV as
royalty payments, as opposed to Surfin on account of the
equipment loans, DirecTV's underlying financial problems
would still exist.
Notwithstanding, Mr. Waite informs Judge Walsh that Hughes and
its affiliates are willing to address the issues concerning the
scope and timing of the releases in the Interim Order and
proposed final DIP Facility Order as they relate to Hughes in a
manner generally consistent with the Committee's request.
(DirecTV Latin America Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc.,
609/392-0900)
DISCO: Parent Company Offers to Buy Back All Bonds in the Market
----------------------------------------------------------------
Troubled Dutch retailer Ahold announced Wednesday that it will
buy back all of Argentine unit Disco SA's outstanding bonds in
the market with a face value of US$250 million. According to
Reuters, Ahold holds between 75 and 80 percent of Disco's bonds.
Once Disco's bond buyback is completed on July 22, the Company
will just have debt with banks, making the unit more saleable.
Ahold, the world's third-largest retailing and food services
group, is in the process of selling its operations in Argentina,
Brazil, Peru, Chile and Paraguay. The move is part of an effort
to focus on mature markets in Europe and the United States and
repay more than US$14 billion in debt.
According to a Disco spokesman, the sale of Disco "is in the
early stages," with advisers compiling names of interested
buyers.
CONTACT: Ahold NV, Koninklijke
3050
Albert Heijnweg1
1507 EH Zaandam
Netherlands
Phone: +31 75 6599111
Fax: +31 75 6598350
Telex: 1 9010
Home Page: http://www.ahold.com
Contact:
Norbert L.J. Berger, Secretary
EMILIO LOPEZ: Files To Start Reorganization
-------------------------------------------
Buenos Aires paint producer Emilio Lopez S.A. is seeking the
court's permission to start the reorganization of its business,
relates Infobae. The Company has filed its plea for 'consurso
preventivo' to the capital city's Court No. 17 through case No.
3050278771.
CONTACT: Emilio Lopez S.A.
Libertad 417
Buenos Aires
EXPRESO SINGER: Applies For 'Concurso Preventivo'
-------------------------------------------------
Transport company Expreso Singer S.A.T. applied for concurso
preventivo at the Civil and Commercial Tribunal of Misiones,
according to local news source Infobae. The Company presented
case number 30562924112 to Court No. 2 of Misiones. The report
did not indicate whether a receiver has been assigned to the
proceedings. However, it said that a general report will be
submitted on July 10, 2003.
JUVENTUD UNIDA: Court Orders Receivership
-----------------------------------------
The Civil and Commercial Court of Marcos Juarez in Cordoba places
social and community services firm Juventud Unida M.S. y
Deportiva under receivership following its motion for "concurso
preventivo".
According to a report from local news source Infobae, the Company
is now in the hands of Mr. Alejandro Perdo Garrida, the receiver
for the proceedings.
Creditors are advised to have their claims verified by the
receiver, as he will file the individual reports on August 5. The
general report will be submitted on September 17. They are also
invited to an informative assembly on March 19, 2004.
CONTACT: Juventud Unida M.S. y Deportiva
Alem 910, Camilo Aldao
Cordoba
Mr. Alejandro Pedro Garrida
Alem 267
Marcos Juarez
Cordoba
MAXIMEGA: Reorganization Process Begins at Civil Court
------------------------------------------------------
The Civil and Commercial Court of Bahia Golondrina of Ushuaia
received a motion seeking permission to start reorganization from
candy and biscuit maker Maximega S.A., reports Infobae. The
Company's 'concurso preventivo' plea is presented through case
no. 30675782292.
The Court assigned Mr. Luis Alberto Caballero as reciever for the
proceedings. Creditors are advised to have their claims verified,
as the receiver is scheduled to turn in the indivudual reports on
June 30. The general report is expected on August 19 this year.
CONTACT: Maximega S.A.
San Martin 131
Ushuaia, Tierra del Fuego
Mr. Luis Alberto Caballero
Lapataia 321, Ushuaia
Tierra del Fuego
MUSIMUNDO: Proposes To Restructure $152M in Debt
------------------------------------------------
Argentine major music records store Musimundo, which controls 80%
of the country's music market, with a total of 850 employers and
a web of 59 stores, has launched an effort to restructure its
US$152 million debt with creditors. The proposal seeks for a 60%
reduction of the debt, with the remaining 40% payable in 15
years.
Musimundo is currently under the administration of a pool of
banks led by Citibank, which took over the chain after its former
owner, The Exxel Group. The bank creditors earlier reached an
accord with Industria Librera Holding (Ilhsa), controller of
Musimundo's competitor Yenny-El Ateneo, to sell the chain for
some US$10 million. But the potential buyer backed out at the
last minute believing that Musimundo's disappearance from the
market is more beneficial for them than taking control of it.
PECOM ENERGIA: Petrobras Sees Positive Results In Takeover
----------------------------------------------------------
Brazil's federal energy company Petrobras takeover of Argentine
oil company Pecom Energia yielded positive results in terms of
oil production. Citing a statement from Petrobras, Business News
Americas reports that the Brazilian oil giant's production in May
has increased to 2.02 million barrels of oil a day (mboe/d) in
domestic and international operations. That is a 7% increase
compared to April.
Pecom Energia, which is now known as Petrobras Energia (Pesa)
following the acquisition, contributed 165,131boe/d to Petrobras'
244,710boe/d international output in May, which was 159,316b/d
crude and 14.5 million cubic meters a day (mcm/d) natural gas.
International production in April was 70,182boe/d.
Domestic production was 1.77mboe/d (1.54mb/d crude and 37.1mcm/d
natural gas), 2.5% down on April because of maintenance on the P-
35 platform in the Marlim field, the statement said.
TELENET: Submits 'Concurso Preventivo' Motion to Court
------------------------------------------------------
Cordoba-based telephone company Telenet S.A. is asking court
permission to reorganize itself by filing for 'concurso
preventivo' through case number 30698487541.
According to local news source Infobae, the case is under the
jurisdiction of Court No. 13 of the Civil and Commercial Tribunal
of Cordoba.
The receiver for the process is Mr. Alberto Ribotta.
CONTACT: Mr. Alberto Ribotta
Rivera Indarte 350
Provincia de Cordoba
TGS: Argentine Standard & Poor's Rates $600M of Bonds `raD'
-----------------------------------------------------------
The Argentine arm of Standard & Poor's International Ratings,
Ltd. issued a `raD' rating to corporate bonds issued by
Transportadora de Gas del Sur S.A. last Thursday.
A total of US$600 million worth of bonds were affected. According
to the National Securities Commission of Argentina, the concerned
bonds include US$100 million of "Obligaciones Negociables
emitadas bajo el Programa Global de Titulos de Corot y Mediano
Plazo por USUS$500 Mil, vencido en diciembre de 1998". These
bonds, classified under "simple issue" matured in December last
year.
The other set of bonds is described as "Programa Global de 1999"
and is classified under "program". This set is worth a total of
US$500 million.
Standard & Poor's issued the rating taking into the account the
company's financial situation as of the end of March this year.
According to S&P, the `raD' rating is assigned to financial
obligations that are in default, or if the company has filed for
bankruptcy. The rating may also be given if payment on the
financial obligation is not made on the due date, even if the
applicable grace period has not expired if S&P believes that
payment will not be made during the period.
CONTACT: Transportadora de Gas del Sur SA
5th Floor
3672 Don Bosco
Buenos Aires
Argentina
Phone: +54 11 4865 9050
Home Page: http://www.tgs.com.ar
Contacts:
Rafael Fernandez Morande, Chairman
Eduardo Ojea Quintana, Vice Chairman & General Manager
TGS: Bonds Get Junk Ratings From Local S&P
------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
assigned junk ratings to US$300 million worth of Transportadora
de Gas del Sur corporate bonds, said the country's National
Securities Commission.
Last Thursday, the Company's bonds called "programa de 2000",
with undisclosed maturity date was rated `raCC'. S&P said that
the rating signifies that the issue is highly vulnerable to
nonpayment at present.
Meanwhile, S&P also gave the Company's stocks, described as
"Acciones Ordinarias en Circulaci¢n Clase "B" de 1 voto c/u, V/N
$1" a rating of `3', signifying average liquidity.
TRAMAT: Starts Formal Reorganization Process
--------------------------------------------
Argentine transport company Tramat S.A. applied for "concurso
preventivo" at the Civil and Commercial Tribunal of Mendoza. The
Company is seeking permission to start reorganization proceedings
through case no. 30650108884.
Mendoza's court no. 2, which is in charge of the case, assigned
Mr. Gerardo Rossignoli as receiver.
Claims verifications will be held until July 7, 2003. The
receiver is expected to submit the individual reports on
September 30 this year, and the general report on February 25,
2004. Creditors are invited to an informative assembly on June
16, 2004.
CONTACT: TRAMAT SA
Gomensoro 1438
Provincia de Mendoza
Phone: 4260477
Mr. Gerardo Rossignoli
Colon 352
Provincia de Mendoza
=============
B E R M U D A
=============
TYCO INTERNATIONAL: Prosecutors Seek Dismissal of Ex-CFO's Case
---------------------------------------------------------------
Prosecutors filed a motion to dismiss tax-evasion charges filed
in New Hampshire against Tyco International Ltd.'s former Chief
Financial Officer Mark Swartz, reports Bloomberg. In the motion
filed Wednesday in federal court in Concord, prosecutors
acknowledged they may be barred from trying him in that state
since new evidence suggested that none of Swartz's alleged
criminal conduct took place in New Hampshire. A prosecution in
that state would violate rules requiring that a defendant be
tried in the same court district, or venue, where an alleged
crime was committed.
The U.S. attorney's office in Concord, New Hampshire, said it
expects another federal prosecutor to re-charge Swartz for the
same crime in some other state. The move will delay Swartz's
trial, which was scheduled to begin July 8.
"The government remains highly confident that there is sufficient
evidence to prove beyond a reasonable doubt that the defendant
willfully attempted to evade his federal income taxes for 1999,"
the U.S. attorney's office said in the court papers. "The
government therefore fully anticipates that, if this motion is
granted, the defendant will be re-indicted in another district
where venue is not a problem."
Because both the defense and prosecution agree that the New
Hampshire charges should be dismissed, it is expected that U.S.
District Judge Joseph A. DiClerico Jr., who is presiding over the
case, will agree to do so. The delay means that Swartz and his
lawyers can put off preparing to defend the federal case and
concentrate on a September trial of more serious state fraud
charges in New York.
===========
B R A Z I L
===========
AES CORP.: BNDES Ditches Latest Debt Proposal
---------------------------------------------
U.S. power utility AES Corp.'s new proposal to restructure debts
with Brazil's state-owned National Economic and Social
Development Bank BNDES went directly to the trash bin after the
latter deemed it insufficient.
Reuters relates that BNDES finance director Roberto Timotheo da
Costa said the amount of the debt AES was proposing to pay was
too small. He said vice president Joseph Brandt had been given
suggestions of how the proposal should be changed.
"It was an advance on the previous meetings," Costa said. "By the
end of Tuesday they (AES) should say whether they accept our
points."
AES has defaulted several times on payments of some US$1.2
billion it borrowed from the BNDES to fund its acquisition of
Eletropaulo Metropolitana, when it was privatized in 1998. Since
then it has been in negotiations to work out how to handle the
debt.
"AES expressed their desire not to have other partners in their
Brazilian businesses and that they want to keep the assets,"
Costa said.
EMBRATEL: Creditors of Parent Company Won't Demand Sale
-------------------------------------------------------
MCI International (ex-WorldCom) VP Dan Crawford told Brazil's
communications minister Miro Teixeira that the creditors of the
US-based telco will not include the sale of Brazilian subsidiary
Embratel in debt restructuring demands, reports the local press.
The new debt restructuring plan, which was devised by MCI and
gained approval from the US bankruptcy court of the Southern
District of New York on May 28, "does not contain any obligation
to sell Embratel," Crawford said, adding that MCI views Embratel
as a key asset.
MCI's creditors now have 45 days to analyze the details.
To see financial statements:
http://bankrupt.com/misc/Embratel_Participacoes.htm
CONTACT: Embratel Participacoes
Silvia M.R. Pereira, (55 21) 2121-9662
fax: (55 21) 2121-6388
silvia.pereira@embratel.com.br
invest@embratel.com.br
===============
C O L O M B I A
===============
AVIANCA: Gets Authorization To Pay Peruvian Tax Debts
-----------------------------------------------------
Colombian airline Avianca obtained authorization from a New York
judge to make an US$8.1 payment to Peruvian tax authority Dian.
However, the Company asked the court to not to make the
authorization mandatory to maintain flexibility, according to
South American Business Information.
The airline accumulated the debt from November 2002 to March this
year. The debt is for the "Impuesto de Valor Agregado" (IVA),
adjusted for interest, fines and inflation.
The Company will make monthly installments on the debt for three
years, said the report. However, Avianca and Dian are reported to
be at odds on the amount to be paid.
Avianca is currently undergoing Chapter 11 protection and
continues its restructuring as part of the Alianza Summa
consortium.
CONTACT: AVIANCA
P.O. Box 151310
Av. el Dorado no. 93-30
Bogota, Colombia
Phone: (1) 413 9511
(1) 295 8977
AVIANCA: Debts Greater Than Revealed In Chapter 11 Filing
---------------------------------------------------------
Troubled Colombian airline Avianca admitted that it is
renegotiating as much as US$369 million in debt, more than twice
the amount it declared in its Chapter 11 bankruptcy filing,
reports Reuters.
Alianza Summa president Juan Emilio Posada said that the airline
has total debts of about US$240 million but only US$130 million
of that would be renegotiated under Chapter 11. Avianca is part
of the Alianza Summa consortium.
The news agency says that the Company admitted that it was
negotiating a higher sum after Reuters obtained a court document
from an anonymous creditor, listing 40 major debts totaling
US$225 million. The airline's biggest creditor is an association
of Colombian pilots, to whom the airline owes US$75 million in
pension liabilities, reveals Reuters.
Most of the other creditors were foreign companies like banks and
aircraft leasing firms.
A source close to the matter told Reuters that the Company plans
to present a restructuring plan to its top seven creditors on the
first day of July.
TELECOM: Heads for Liquidation
------------------------------
Colombian Communications Minister Marta Elena de Pinto announced
that the government is going to liquidate state-owned
telecommunications company Telecom, which controls 40% of the
fixed lines in the country.
The government has hired trust fund management firm Fiduciaria La
Previsora to handle the liquidation, which is expected to last
about two years.
According to a statement from President Alvaro Uribe's office,
Telecom has been losing money since 1996. It has lost COP470
billion (US$166 million) last year, the statement added.
Along with the liquidation, Telecom's force of 10,000 workers,
including 3,000 contractors, would be halved. The refurbished
company is expected to have only 2,000 staffers and 3,000
contractors, said Telecom president Alfonso Gomez.
Gomez would remain at the helm of the Company.
===================================
D O M I N I C A N R E P U B L I C
===================================
BANCO BHD: Fitch Cuts LTFC Rating To `B'
----------------------------------------
International rating agency Fitch Ratings took various actions on
the ratings of Dominican Republic bank Banco BHD.
-- Downgraded long-term foreign currency to 'B' from 'BB-',
Rating Watch Negative;
-- Affirmed short-term foreign currency at 'B';
-- Affirmed individual at 'D' and placed on Rating Watch
Negative;
-- Affirmed support at '4T';
-- Downgraded long-term national rating to 'A(dom)' from
'A+(dom)';
-- Affirmed short-term national rating at 'F1(dom)'.
(See Fitch notes below for explanation)
BANCO DOMINICANO DEL PROGRESO: Fitch Downgrades LTFC Rating
-----------------------------------------------------------
International rating agency Fitch Ratings took various actions on
the ratings of Dominican Republic Banco Dominicano del Progreso.
-- Downgraded long-term foreign currency to 'B-' from 'B+',
Rating Watch Negative;
-- Affirmed short-term foreign currency at 'B';
-- Affirmed individual at 'D' and placed on Rating Watch
Negative;
-- Affirmed support at '5T';
-- Downgraded long-term national rating to 'A-'(dom)' from
'A(dom)';
-- Downgraded short-term national rating to 'F2(dom)' from
'F1(dom)'.
(See Fitch notes below for explanation)
BANCO INTERCONTINENTAL: Fitch Reduces LTFC Ratings; Affirms STFC
----------------------------------------------------------------
International rating agency Fitch Ratings took various actions on
the ratings of Dominican Republic Banco Intercontinental
(BanInter).
-- Downgraded long-term foreign currency to 'B' from 'BB-',
Rating Watch Negative;
-- Affirmed short-term foreign currency at 'B';
-- Affirmed individual at 'E';
-- Affirmed support at '4T'.
(See Fitch notes below for explanation)
BANCO MERCANTIL: LTFC Rating Reduced To `B' From `B+'
-----------------------------------------------------
International rating agency Fitch Ratings took various actions on
the ratings of Dominican Republic Banco Mercantil.
-- Downgraded long-term foreign currency to 'B-' from 'B+',
Rating Watch Negative;
-- Affirmed short-term foreign currency at 'B';
-- Affirmed individual at 'D' and placed on Rating Watch
Negative;
-- Affirmed support at '5T'.
(See Fitch notes below for explanation)
BANCO POPULAR DOMINICANO: Fitch Downgrades, Affirms Ratings
-----------------------------------------------------------
International rating agency Fitch Ratings took various actions on
the ratings of Dominican Republic bank Banco Popular Dominicano.
-- Downgraded long-term foreign currency to 'B' from 'BB-' and
placed it on Rating Watch Negative;
-- Affirmed short-term foreign currency at 'B';
-- Affirmed individual at 'C/D' and placed on Rating Watch
Negative;
-- Affirmed support at '4T';
(See Fitch notes below for explanation)
FITCH NOTES: The actions reflect the rapid deterioration of the
operating environment, already under pressure from a slowing
economy but further exacerbated by the intervention of Banco
Intercontinental (BanInter, then the country's third largest
bank) in April 2003, which highlights some shortcomings in bank
oversight.
Further manifestation of the deterioration of the operating
environment was evident in deposit outflows from Bancredito
(fourth largest bank), which, per recent statements made by the
Central Bank, received material liquidity assistance to meet
these outflows.
While Fitch believes that these outflows do not reflect the
banking system's underlying fundamentals, it is clear that the
situation remains fragile, with slower economic growth, currency
depreciation and volatility and inflationary pressures as a
result of the Central Bank's liquidity injections into BanInter
and Bancredito.
Fitch's rating actions reflect concerns that the local market has
reached a point of nervousness where there is the possibility
that issues regarding particular banks could quickly escalate to
a loss of confidence in the banking system and in the
authorities' capacity to provide generalized support, should it
become necessary. The Rating Watch Negative on the banks'
individual ratings reflects our concern that any of the banks may
prove vulnerable to quick shifts in market confidence. The lower
long-term ratings reflect concerns regarding the pressures placed
on sovereign creditworthiness by the BanInter episode, and the
potential that the banking system may require further support,
which could add significantly to these pressures and leads Fitch
to place the long-term ratings on Rating Watch Negative. The
national ratings assigned by Fitch to a number of banks in the
country have also been downgraded due to the deterioration of the
banking system's credit quality relative to other sectors in the
Dominican Republic. Should the operating environment show signs
of sustained stability and the government succeeded in obtaining
support from the international financial community, the Rating
Watch Negative could be removed from the Individual and Long-Term
ratings, as appropriate. On the other hand, should pressure on
individual banks escalate to systemic deposit outflows, further
downgrades could take place.
CONTACT: Franklin Santarelli
Phone: +58 212 286 3356
Carlos Fiorillo
Caracas
Phone: +58 212 286 3232
Gustavo Lopez
Phone: +1-212-908-0853
Peter Shaw
New York
Phone: +1-212-908-0553
Media Relations:
Matt Burkhard
New York
Phone: +1-212-908-0540
=============
J A M A I C A
=============
C&WJ: Blocks Gotel's Access to Network
-------------------------------------
Jamaican incumbent fixed line operator Cable & Wireless (C&WJ)
decided to restrict competitive local exchange carrier Gotel
Communications from using its network to terminate incoming
international calls.
In a release, C&WJ claimed that the practice was illegal and has
resulted in a loss in revenue of more than US$800,000 (about J$47
million) since January.
C&WJ said it has an interconnection agreement with Gotel but that
did not allow the relatively new telecommunications provider to
terminate incoming international calls on its network, or transit
to other third party interconnected networks.
"We have tried to be as conciliatory and amicable as one can be
in a conflict situation, but Gotel has chosen not to respond as
we think they ought to in the given situation," a C&WJ source
told Business News Americas, to explain why the Company has not
taken direct action until now.
C&WJ told Gotel parent company Index Communications Network
Limited late April it would be within its rights to terminate the
interconnection agreement, but added that it is willing to extend
the agreement to facilitate international traffic once the
existing breach is rectified and compensation is assured.
C&WJ is the flagship operation of Cable and Wireless West Indies
and is the market where competition is growing fastest.
===========
M E X I C O
===========
CYDSA: Restructuring Prompts June 27 Bondholder Meeting
-------------------------------------------------------
Monterrey-based industrial group Cydsa will hold an extraordinary
meeting with bondholders on June 27 at the behest of one key
bondholder, English investment fund Fintec Advisory, relates
Business News Americas. Cydsa, which produces textiles,
industrial packages, chemicals, petrochemicals and plastics, and
offers wastewater and environmental management and services, is
negotiating the rescheduling of a US$403 million debt-bond
payment, which was due December 2002, according to El Financiero.
The Company's board members will continue dialogue with
bondholders during the June 27 meeting and hopes to "come out
with a solution that is favorable to all involved."
Other bondholders include banks Citibank-Banamex, BBVA Bancomer,
and Comerica. A previous extraordinary meeting held in May failed
to yield concrete results, says the report.
An unnamed company official revealed that Cydsa has been affected
by poor performances from some of its subsidiaries, which have
struggled in the present economic climate.
In 2000, the Company's debts amounted to US$600 million. However,
Cydsa managed to slash it down to its current level of US$200
million, thanks to cost-cutting efforts, which included the
reduction of its workforce to 6,700 from 10,500 employees and
sell off of some assets.
CONTACT: CYDSA, S.A. DE C.V., IN MEXICO
Jesus Montemayor, Treasury Director
+011-528-18-152-4585
E-mail: jmontemayor@cydsa.com
GRUPO IUSACELL: New Owner Projects Recovery in the Near Future
--------------------------------------------------------------
Mexican magnate Ricardo Salinas Pliego sees a promising outlook
for Grupo Iusacell SA despite having little cash in hand to
expand in a saturated industry dominated by Mexican wireless
giant America Movil SA and Spanish heavyweight Telefonica Moviles
SA, reports Dow Jones.
But before that, Salinas Pliego, who is expected to complete the
US$10 million purchase of Iusacell in the next month or two from
Verizon Communications Inc. and Vodafone Group Plc, will have to
sit down with Iusacell's creditors to work out a debt plan.
It will take another 30 to 60 days to submit a viable
restructuring plan to holders of Iusacell's US$815 million debt.
"Things have changed for bondholders," Salinas Pliego said in an
interview Tuesday. "If Iusacell shuts down, I would say that they
won't be able to recover anything," he said. "The only hope they
have of getting their money back is to have a healthy company
operating, and that is what we want to propose. We'll stage a
turnaround and to do that we need time."
Salinas Pliego said it's too early to give any details about the
proposed debt restructuring, since he still has to complete the
purchase and have a closer look at the books of the wireless
carrier.
ROHN INDUSTRIES: Receives Delisting Notice From Nasdaq
------------------------------------------------------
ROHN Industries, Inc., (Nasdaq: ROHNE), (the "Company") a
provider of infrastructure equipment to the telecommunications
industry, announced Wednesday that it received a Nasdaq Staff
notice letter, dated June 12, 2003, advising the Company that the
Company is not in compliance with the minimum bid price
requirement as set forth in Marketplace Rule 4310c(4), and its
securities are, therefore, subject to delisting from The Nasdaq
SmallCap Market. Nasdaq notified the Company that this issue,
together with the issue concerning the Company's failure to
timely file its Form 10-Q for the period ended March 31, 2003,
will be considered at the Company's scheduled written hearing on
Thursday, June 26, 2003.
The Company is a manufacturer and installer of telecommunications
infrastructure equipment for the wireless industry. Its products
are used in cellular, PCS, radio and television broadcast
markets. The Company's products include towers, poles, related
accessories and antennae mounts. The Company also provides design
and construction services. The Company has a manufacturing
location in Frankfort, IN along with offices in Peoria, IL and
Mexico City, Mexico.
===========
P A N A M A
===========
BLADEX: Rights Offering Subscription Priced
-------------------------------------------
Banco Latinoamericano de Exportaciones, S.A. (NYSE: BLX)
("BLADEX" or the "Bank"), a specialized multinational bank
established to finance trade in the Latin American and Caribbean
region, announced Wednesday that the subscription price for
shares of the Bank's Class A, Class B and Class E common stock
purchased pursuant to its rights offering will be $6.68 per
share. The expiration date of the rights offering is June 20,
2003.
The subscription price of $6.68 is the lowest of the three
averages of the last reported sales price of a Class E share on
the New York Stock Exchange for three periods consisting of 90,
30 and 10 trading days, respectively, each ending on June 18,
2003.
On June 18, 2003, the last reported sale price of a Class E share
of the Bank on the New York Stock Exchange was $7.52 per share.
For further information regarding the Bank and its rights
offering, please contact the Information Agent for this offering,
MacKenzie Partners, Inc., at (800) 322-2885 or call collect at
(212) 929-5500.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these shares in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
To obtain a written prospectus meeting the requirements of
Section 10 of the United States Securities Act of 1933, as
amended, please contact the Information Agent or:
Carlos Yap S.
Senior Vice President, Finance
BANCO LATINOAMERICANO DE EXPORTACIONES, S.A.
Head Office
Calle 50 y Aquilino de la Guardia
Apartado 6-1497 El Dorado
Panama City, Republic of Panama
Tel No. (507) 210-8581
Fax No. (507) 269 6333
E-mail Internet address: cyap@blx.com
- or -
William W. Galvin
The Galvin Partnership
76 Valley Road
Cos Cob, CT 06807
U.S.A.
Tel No. (203) 618-9800
Fax No. (203) 618-1010
E-mail Internet address: wwg@galvinpartners.com
=====================
P U E R T O R I C O
=====================
CENTENNIAL COMMUNICATIONS: Ratings Improve on Bank Facilities
-------------------------------------------------------------
Standard & Poor's Ratings Services said Wednesday that it raised
to 'B' from 'B-' the rating on the $735 million jointly available
secured bank facilities of Centennial Cellular Operating Co. LLC
and wireless provider Centennial Puerto Rico Operations Corp. The
loan has an upstream guarantee from the U.S. wireless and Puerto
Rico wireless operating subsidiaries, and their assets are
pledged to the banks as collateral under the security agreement.
At the same time, Standard & Poor's affirmed the 'B-' corporate
credit rating on Wall, N.J.-based parent company Centennial
Communications Corp. (Centennial). Standard & Poor's also
affirmed the 'CCC' rating on the recently priced $500 million
senior unsecured notes due 2013 co-issued by Centennial and
Centennial Cellular Operating Co. under Rule 144A with
registration rights. This issue has been increased from $300
million. Net proceeds of the issue will be used to permanently
pay down $300 million of the bank facility term loan and $170
million of the outstanding revolving credit. As a result of this
transaction, the company will have cash and availability under
the revolving credit of about $275 million. All other ratings are
also affirmed. The outlook is stable.
"The upgrade reflects the fact that the bank facility has been
permanently reduced to $735 million with the proceeds of the new
unsecured note issue," said Standard & Poor's credit analyst
Catherine Cosentino.
"As a result, the bank loan rating is now one notch above the
corporate credit rating to reflect the strong likelihood of full
recovery of principal." A value of approximately $800 million has
been ascribed to Centennial's assets securing the bank loan. This
represents a very conservative cash flow multiple of nearly 3x
consolidated cash flows.
The assets in the security pool include the stock of the
subsidiaries holding the FCC wireless licenses, as well as the
company's wireless properties in the United States, Puerto Rico,
and the U.S. Virgin Islands. The combination of these assets
provides just over 1x coverage of the fully drawn bank facility.
The rating on the $500 million senior unsecured notes continues
to be two notches below the corporate credit rating because of
the significant concentration of priority obligations relative to
the consolidated assets of the company. Most of the priority
obligations are borrowings under the company's $735 million of
secured bank facilities. Even with the bank paydown from the new
note issue, total secured debt will represent a sizeable
obligation, at about $721 million.
The rating reflects the high business risk of regional wireless
carriers. The regional wireless carriers have faced increased
competition from the larger, national players such as Verizon
Wireless and AT&T Wireless. The company's financial risk remains
fairly high, given its credit metrics, which include a debt to
annualized EBITDA of about 6.4x for the third quarter of the
fiscal year ended May 31, 2003.
ANALYST: Catherine Cosentino, New York (1) 212-438-7828
=================
V E N E Z U E L A
=================
PDVSA: To Resume Exports of Reformulated Gasoline
-------------------------------------------------
Venezuelan state oil company Petroleos de Venezuela SA (PDVSA)
will ship 300,000 barrels to the U.S. east coast Sunday as it
resumes exports of reformulated gasoline from its Paraguana
refinery, the world's largest refinery complex. Citing a PDVSA
spokesman, Bloomberg reports that resumption of reformulated
gasoline exports comes almost seven months after they were halted
because of a nationwide work stoppage.
The shipment was supposed to go out a month ago but was
repeatedly delayed because of planned maintenance at the Puerto
La Cruz refinery, said the spokesman. The shutdown of the Puerto
La Cruz refinery meant that the gasoline that had been slated to
be shipped was kept back for domestic use, the spokesman said.
The Puerto La Cruz refinery resumed production last week.
PDVSA: Export Figures Up, OPEC Quota Fulfillment Doubted
--------------------------------------------------------
Petroleos de Venezuela S.A. was exporting an average of 919,000
barrels of oil from the San Jose terminal per day, reports local
news agency Venpres, citing port manager Jose Luis Lozada.
Venezuela's state oil company previously exports an average of
800,000 barrels a day from the said port. However, the report did
not mention the reasons for the sudden increase.
Mr. Lozada said that most exports went to the United States. The
Netherlands. China, India and Canada also imported oil from
PdVSA, he added.
However, reports Dow Jones, analysts doubt that the company has
the capacity to increase its daily output to meet the output
quota for Venezuela. Members of the Organization of Petroleum
Producing Countries (OPEC) agreed that the country's output quota
would 2.923 million barrels per day.
At present, the company is back to producing about 2.8 million
barrels daily after a two-month long national strike slashed it
down by as much as 90 percent. However, it has lost about 18,000
employees who were dismissed for their participation in the
strike.
***********
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
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or balance thereof are $25 each. For subscription information,
contact Christopher Beard at 240/629-3300.
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