/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030626.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, June 26, 2003, Vol. 4, Issue 125 Headlines A R G E N T I N A ALFA MANDATARIA: Creditors Summoned To Formal Meeting DEPLI: Seeks Court's Permission to Reorganize DIRECTV: Has Until August 15 to Make Lease-Related Decisions DISCO: Local Standard & Poor's Assigns Bonds 'raB' LOMA NEGRA: Bonds Get Default Ratings From Moody's M B DESIGN: Court Calls Creditors To Formal Meeting MIDAN: Files For "Concurso Preventivo" at Buenos Aires Court REALTY I: LA Moody's Notes Risk, Rates Securities 'C' REALTY I: Participation Certificates Rated `Default' REPSOL YPF: Crude Rebound Helps Firm Top 2002 Export List B E R M U D A GLOBAL CROSSING: Seeks SAP Settlement Agreement Approval B R A Z I L COPEL: Ups Rates By 25.27% With New Regulatory Approval EMBRATEL: Ends Conflict With Intelig Following Court Order EMBRATEL: Chilean Unit Wins Long-distance License GERDAU: Fitch Assigns 'BBB-' Local Currency Rating GERDAU: N. American Subsidiary Prices Private Note Offering USIMINAS: Cosipa to Place Two New Debt Issues in the 2H03 C H I L E COEUR D'ALENE: Names New Vice President of Technical Services ENAMI: Year-End 2002 Figures Show Bank Debt Swelling J A M A I C A C&WJ: Ups Call Rate to Cuba M E X I C O CFE: Sets Another Deadline for Tuxpan V bidding CFE: Emission Problems Prompt Profepa Shutdown Order PEMEX: PAN Deputy Favors Floating Debt on Stock Exchange V E N E Z U E L A CANTV: Shareholders Seek Dollar Payments from ADRs CERRO NEGRO: Status Improves, Fitch Revises Rating Watch HAMACA: Rating Watch Status Changed To Positive From Negative MSLP/SWEENY FUNDING: Fitch Removes Rating Watch Negative PDVSA: Fitch Upgrades Ratings as Currency Improves PDVSA FINANCE: Production Prompts Watch Negative Removal PETROZUATA: Fitch Revises Rating Watch Status on Debt Ratings SIDOR: Usiminas Participates in Huge Debt Restructuring SINCOR: Fitch Changes Rating Watch Status To Positive - - - - - - - - - - ================= A R G E N T I N A ================= ALFA MANDATARIA: Creditors Summoned To Formal Meeting ----------------------------------------------------- Alfa Mandataria S.R.L., which recently filed for "concurso preventivo", is officially notifying its creditors of a formal informational meeting. The move is part of the Company's reorganizational plan. Presently, Court No. 13 of Buenos Aires handles the Company's case with assistance from a representative from Secretary No. 25. CONTACT>: Alfa Mandataria S.R.L. Eduardo Acevedo Street No. 338 Buenos Aires DEPLI: Seeks Court's Permission to Reorganize --------------------------------------------- Electric goods maker Depli S.R.L. filed for "Concurso Preventivo" at Court No. 24 of Buenos Aires, relates local news source Infobae. If approved, the Company may then continue with its reorganization process. The receiver for the proceedings is Mr. Roque Albertp Pepe. Claims will be verified until August 22, 2003. Mr. Pepe will file the individual report on September 26 and the general report on October 31. Creditors are invited to an informative assembly on March 31 next year. CONTACT: Mr. Roque Alberto Pepe Argentina 5785 Buenos Aires DIRECTV: Has Until August 15 to Make Lease-Related Decisions ------------------------------------------------------------ DirecTV Latin America, LLC obtained an extension of the deadline by which it is required by Section 365(d)(4) to assume or reject its Unexpired Leases up to and including August 15, 2003. DirecTV Latin America, LLC is a party to two unexpired non- residential real property leases in Fort Lauderdale, Florida: Lessor Location Use ------ -------- --- CB Richard Ellis 2400 East Commercial Blvd. Corp. office Iron Mountain New Town Commercial Center warehouse (DirecTV Latin America Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900) DISCO: Local Standard & Poor's Assigns Bonds 'raB' ------------------------------------------------- Standard & Poor's International Ratings Ltd. Sucursal Argentina rates US$250 million of bonds issued by retail chain Disco S.A. 'raB', said the National Securities Commission of Argentina. The rating denotes weak protection parameters, and was based on the Company's finaces as of the end of September last year. The bonds, which the NSC described as "Obligaciones Negociables de Mediano Plazo" matures on May 15, 2008. LOMA NEGRA: Bonds Get Default Ratings From Moody's -------------------------------------------------- Corporate bonds issued by Loma Negra Cia. Industrial Argentina were rated 'D' by Moody's Latin America Calificadora de Riesgo S.A. said the National Securities Commission of Argentina. The rating, based on the Company's financial position as of February 28, 2003, is issued to bonds that are in payment default. Without revealing the maturity date, the NSC described the bonds as "programa de Eurobonos a mediano plazo." M B DESIGN: Court Calls Creditors To Formal Meeting --------------------------------------------------- The Court of First Instance of Buenos Aires calls creditors of M.B. Design Argentina S.A. to a meeting relates Infobae. The Company is under receivership and the court has assigned Mr. Jorge Edmundo Sahade as receiver for the proceedings. Claims will be verified until November 28. Mr. Sahade will file the individual report on February 4 and the general report on March 22 next year. The informative assembly will be on October 13, 2004. CONTACT: M.B. Design Argentina S.A. 3rd Floor Marcelo T. Alvear 1840 Buenos Aires Mr. Jorge Edmundo Sahade 1st Floor '34' Ave. de Mayo 1324 Buenos Aires MIDAN: Files For "Concurso Preventivo" at Buenos Aires Court ------------------------------------------------------------ Argentine tour company Midan S.A. has presented its petition for "concurso preventivo" to Court No. 14 of Buenos Aires. A report by local news source Infobae reveals that Ms. Maria Cristina Agrela was designated as receiver for the process. The receiver will verify claims until August 22. The individual report will ne submitted on October 3 while the general report will be on Novemvber 14 this year. The informational assembly will be on May 14 next year. CONTACT: Ms. Maria Cristina Agrel Viamonte 1365 Buenos Aires REALTY I: LA Moody's Notes Risk, Rates Securities 'C' ----------------------------------------------------- A total of US$12.8 million of debt securities from financial trust Realty I were rated 'C' by Moody's Latin America Calificadora de Riesgo S.A., relates the National Securities Commission of Argentina. The rating, which denotes that the securities present a high credit risk, applies to $11.2 million of "Titulos de Deuda Fiduciaria Clase B" and US$1.6 million of "Titulos de Deuda Fiduciaria Clase B". The maturity dates of both securities were not indicated. REALTY I: Participation Certificates Rated `Default' ------------------------------------------------------ Moody's Latin America Calificadora de Riesgo S.A. rated participation certificates of financial trust Realty I S.A. 'D' earlier this month. The ratings agency said the rating indicates the obligor's incapacity to meet the obligation. The National Securities Commission of Argentina relates that the certificates were worth US$3.2 million, but the maturity date was not indicated. REPSOL YPF: Crude Rebound Helps Firm Top 2002 Export List --------------------------------------------------------- Spanish-Argentine oil giant Repsol YPF topped the list of Argentine exporters last year, according to a new report prepared by the financial magazine Prensa Economica and carried by the Clarin newspaper. The report, which focuses on Argentina's top 1,000 exporting companies, which account for 95% of total exports, showed that Repsol registered sales of US$2.09 billion. For the second year in a row, Repsol YPF posted export totals above the US$2 billion mark, as a result of higher crude prices that generated an 18 percent increase in sales. ============= B E R M U D A ============= GLOBAL CROSSING: Seeks SAP Settlement Agreement Approval -------------------------------------------------------- Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, in New York, recounts that on October 8, 1998, the GX Debtors entered into a Software End-User License Agreement with SAP America, Inc., an enterprise software provider that maintains and licenses certain proprietary software. Pursuant to the Agreement, SAP licensed to the GX Debtors and certain of its affiliates the right to use certain SAP software. The GX Debtors use the Software to, among other things, track the location of funds in their cash management system, categorize data regarding investments, organize information relating to sales and distribution of the Debtors' products and services, produce financial statements, monitor purchasing of products and services, conduct billing transactions, and pay employees. All of the GX Debtors' critical records are maintained and accessed through the Software. Essentially, the Software is the basis for the GX Debtors' information reserve. As a result, continued access to the Software is integral to the GX Debtors' efficient operations on a going forward basis. Pursuant to the Agreement, SAP also provides maintenance services in connection with the Software and the Licenses costing $1,500,000 per year. As of December 31, 2002, the GX Debtors owe SAP under the Agreement $2,466,663.01, including $1,057,314.13 in prepetition and $1,409,348.88 in postpetition arrearages. Mr. Walsh relates that the downturn in the telecommunications sector, the Debtors' restructuring, and the resultant decrease in their workforce, have reduced the number of Licenses required by the Debtors. In late 2002, the Debtors and SAP started discussions to restructure the Agreement to reflect the current and anticipated future requirements. Following extensive arms'- length negotiations, the Parties executed a settlement agreement. Pursuant to the Settlement Agreement, the Debtors will: (i) assume the Agreement pursuant to Section 365 of the Bankruptcy Code; (ii) reduce the cure amount otherwise due under the Agreement by $1,500,000; (iii) eliminate certain of the Debtors' outstanding obligations to SAP; and (iv) negotiate in good faith with SAP to reduce maintenance costs associated with the Licenses for the year 2003. The salient terms of the Settlement Agreement are: A. Parties: GX and all of its subsidiaries and affiliates, excluding Asia Global Crossing Ltd. and its direct and indirect subsidiaries and SAP and all of its direct and indirect subsidiaries and other affiliates. B. Payment to SAP: Within 10 business days of the entry of the final order approving the Settlement Agreement, the Debtors will pay to SAP $950,000, which will be inclusive of and in full and final settlement of all amounts due and owing as of December 31, 2002, except for any claims resulting from any breach by the GX Entities involving the unauthorized use or disclosure of Proprietary Information. To the extent the Total Cash Consideration is not paid when the amount is due, SAP will have an allowed administrative expense claim against the Debtors for the deficiency. C. Maintenance Fees: Promptly after the execution of the Settlement Agreement, the parties agree to negotiate in good faith to reduce the maintenance fees paid by the GX Entities under the Agreement. D. Warranty of Work, Services or Material Provided by SAP: SAP covenants that any work, services or material will be promptly and adequately provided in accordance with the terms of the Agreement or, in the absence of these terms, customary industry practices. E. Assumption of the Agreement: The Debtors will assume the Agreement, as amended by the Settlement Agreement, effective after the occurrence of the effective date of a plan of reorganization for substantially all of the Debtors that preserves or transfers substantially all of the core network on a going concern basis. F. Assignment of the Agreement: The GX Entities will be permitted to assign the Agreement, subject to the terms and conditions of the Agreement, pursuant to a confirmed Plan or other order of the Court, to the Investor or any entity created in connection with the transactions contemplated by the Purchase Agreement, provided that the assignment is solely for the purpose of providing continued use of the Software to operate the business of the GX Entities. G. Releases: Both parties agree to mutual releases providing that the parties and their officers, employees, shareholders, agents, representatives, attorneys, successors and assigns are discharged and released from any and all claims, demands, obligations, causes of action, rights or damages, through and including December 31, 2002, other than claims arising under the warranties contained in the Agreement, claims for unauthorized use or disclosure of Proprietary Information, and claims relating to obligations expressly preserved in the Settlement Agreement. By this Motion, the Debtors seek approval of the Settlement Agreement, including the assumption of the Agreement. Mr. Walsh insists that the Settlement Agreement is fair and equitable and in the best interests of the Debtors' estates because under the Settlement Agreement, the Debtors, among other things: (i) maintain the right to continued use of the Software; (ii) obtain a substantial reduction in cure costs compared to the amounts actually due to SAP under the original Agreement; (iii) obtain a release from any and all claims by SAP against the Debtors in connection with the Agreement which SAP may now have or have ever had through and including December 31, 2002; (iv) will participate in good faith negotiations to reduce the maintenance fees paid by the Debtors for certain Licenses under the Agreement so as to more accurately reflect the Debtors' current business needs; and (v) receive the benefits of a cooperative relationship with SAP on a going forward basis. Mr. Walsh explains that the Settlement Agreement is in the best interest of the Debtors' estates, their creditors, and all parties-in-interest since it provides the Debtors with a substantial reduction in cure costs. The Software and Licenses are critical to the Debtors' operations. Absent the Settlement Agreement, the Debtors will have no alternative but to assume the Agreement pursuant to Section 365 of the Bankruptcy Code and to pay almost $2,500,000 in cure costs. Pursuant to the Settlement Agreement, the Debtors are only obligated to pay to SAP $950,000 in full satisfaction of the $2,466,663.01 due and owing as of December 31, 2002 under the Agreement. As the Software and Licenses are essential to the Debtors, the Settlement Agreement provides the Debtors with fair and reasonable relief in the nature of cost savings. In assuming the Agreement by way of the Settlement Agreement, the Debtors, with the payment of negotiated cure costs: (i) obtain the benefit of additional future services at a cost commensurate with services required; and (ii) maintain a stabilized and beneficial relationship with SAP on a going forward basis in the event additional Licenses will be needed in the future. Given the extensive nature of the Parties' business relationships and the complexity of their contractual transactions, any litigation arising from the outstanding payments due and owing under the Agreement would likely be time consuming and costly. In addition, extensive litigation would divert the attention of the Debtors' management and personnel from their efforts to implement the Plan and focus on Global Crossing's future. Mr. Walsh notes that one element of the Settlement Agreement is the Debtors' continued payment of maintenance fees, which are calculated based on the number of Licenses maintained by the Debtors. Due to the significant downsizing of the Debtors' workforce and the resulting decrease in the number of Licenses required to operate their business, assumption of the Agreement will result in ongoing obligations to pay maintenance fees for more Licenses than the Debtors currently require. Pursuant to the Settlement Agreement, the Debtors will have the opportunity to work with SAP to negotiate in good faith for reduced maintenance fees to more accurately reflect the current needs of their employees. Considering the benefit to the estates accruing from the assumption and the reduction in cost to the Debtors through the negotiated cure amounts, as well as the potential to reduce maintenance obligations on a going forward basis, the Debtors have determined, in their business judgment, to assume the Agreement. Mr. Walsh asserts that the Licenses are vital components of the Debtors' business and they must assume the Agreement in connection with their restructuring. Moreover, if the Debtors do not assume the contract, they may be obligated to pay administrative expenses totaling $1,409,348.88 for postpetition products and services, which in itself far exceeds the agreed $950,000 cure amount. Failure to assume the contract would force the Debtors to terminate the SAP system and to look elsewhere for the provision of similar products and services, a conversion that would be at best difficult, uncertain, and extremely costly. (Global Crossing Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 609/392-0900) =========== B R A Z I L =========== COPEL: Ups Rates By 25.27% With New Regulatory Approval ------------------------------------------------------- Cia. Paranaense de Energia (Copel), Brazil's second-largest combined power generator and distributor, increased electricity rates by 25.27% Tuesday after obtaining authorization from Brazil's power regulator, reports Bloomberg. The rate increase was less than the 28.43% increase Copel requested, the agency said. Nevertheless, it will help the Company recoup losses from last year's currency decline that drove up utilities' debt- servicing costs and power crisis in 2001 that cut consumption. Last year, Curitiba, Brazil-based Copel, which serves about 10 million customers in Parana, lost US$113 million, prompting it to scale back power purchases from other utilities. CONTACT: Cia Paranaense de Energia COPEL Rua Colonel Dulcidio, 800 Batel 80420-170 Curitibia - PR Brazil Phone: +55 41 322-3535 Fax +55 41 224-4312 Home Page: http://www.copel.com Contacts: Ary Queiroz, Chairman EMBRATEL: Ends Conflict With Intelig Following Court Order ---------------------------------------------------------- Brazil's telecoms regulator Anatel revealed that Embratel, Brazil's largest long distance carrier, was ordered to interconnect its network with rival Intelig so that the latter can offer Internet services, relates Business News Americas. The order, which was issued by the Brazilian federal court on June 16, puts an end to the litigation mounted by Intelig in March last year, says the report. 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 EMBRATEL: Chilean Unit Wins Long-distance License ------------------------------------------------- Embratel learned that its subsidiary in Chile won a concession to provide long-distance telephone services in the country, reports Business News Americas. Chilean authorities have notified the Company's Chilean unit that it would grant it an operating license within a few days, according to Embratel in a note to Chile's market regulator. Embratel is a unit of scandal-ridden WorldCom Inc., which filed for bankruptcy amid a US$11 billion accounting scandal. The parent's financial troubles have sparked interest among companies interested in acquiring Embratel. However, Brazilian laws prohibit telephone companies from being sold until at least five years after the privatization of the telecommunications sector, making Embratel untouchable until August 2003. GERDAU: Fitch Assigns 'BBB-' Local Currency Rating -------------------------------------------------- Fitch Ratings has issued a 'BBB-' local currency rating and a 'B' foreign currency rating to Gerdau S.A. (Gerdau). The Rating Outlook for the local currency rating is Stable and the Rating Outlook for the foreign currency rating is Positive. The investment grade local currency rating of Gerdau is supported by the company's dominant market position in Brazil, its ability to generate strong cash flow throughout the price cycle for steel and its solid financial profile. The foreign currency rating of Gerdau is constrained by Fitch's 'B' rating of Brazil, which also has a Rating Outlook of Positive. Gerdau operates 24 steel mills throughout Brazil, the United States, Canada, Chile, Uruguay, and Argentina. In Brazil, Gerdau is the leading producer of long steel products, with an estimated market share of approximately 48%. Brazil is the company's most important market, accounting for 57% of consolidated revenues and 79% of cash operating profits (EBITDA). The company's North American operations are less profitable, accounting for 38% of revenues and 16% of EBITDA. Gerdau generated consolidated sales of BRL9.2 billion (US$2.6 billion) and EBITDA of BRL2.1 billion (US$740 million) during 2002. With total consolidated debt of BRL7.4 billion (US$2.1 billion) and cash of BRL1.4 billion (US$400 million) at the end of 2002, Gerdau's leverage, as measured by net debt-to-EBITDA, was 2.8 times (x). During 2003, Fitch expects the company to generate about US$825 million of EBITDA on a consolidated basis. The increase vis-a-vis 2002 is expected to come from increased exports and higher average prices for exports. With interest expense estimated to be about US$120 million, capital expenditures projected to be about US$230 million and working capital increases anticipated to be US$75 million, Gerdau should generate about US$400 million of free cash flow. Gerdau will likely maintain a cash balance of about US$300 million-US$400 million and given the low likelihood that the company will make a major acquisition during 2003, the company's net debt should remain stable or decrease modestly at most to US$1.5 billion from US$1.7 billion at year-end 2002. Consequently, Fitch projects the company's net debt/EBITDA ratio to be 1.8x, its total debt-to-EBITDA ratio to be 2.4x and its interest coverage to be about 6.8x. CONTACT: Anita Saha, CFA +1-312-368-3179, Chicago Joseph Bormann, CFA +1-312-368-3349, Chicago Jayme Bartling, +55 11 287-3177, Sao Paolo MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York GERDAU: N. American Subsidiary Prices Private Note Offering ----------------------------------------------------------- Gerdau Ameristeel Corporation (TSX:GNA.TO) announced Monday that it has priced a private offering of $405 million of 10.375% Senior Unsecured Notes due 2011. The Company has also entered into a senior secured credit facility providing commitments of $350 million. The closing of the offering and the initial draw- down under the senior secured credit facility are expected to take place on June 27, 2003. Gerdau Ameristeel will use the proceeds of the offering of Senior Notes and the initial draw- down under the senior secured credit facility to repay debt under its existing credit facilities. The refinancing will significantly extend the Company's debt maturities and provide a more permanent capital base. In addition, the refinancing will benefit the Company's liquidity and operating flexibility, and allow the full and seamless integration of the companies that were merged on October 25, 2002 to form Gerdau Ameristeel. The Senior Notes have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent such registration or an applicable exemption from registration requirements. The issuance will be offered to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States in compliance with Regulation `S' under the Securities Act." CONTACT: Osvaldo Burgos Schirmer Executive Vice President Investor Relations Director Press Office +55(51) 3323-2170 imprensa@gerdau.com.br www.gerdau.com.br USIMINAS: Cosipa to Place Two New Debt Issues in the 2H03 --------------------------------------------------------- Sao Paulo-based flat steelmaker Cosipa will float two new debt issues amounting to US$250 million in the second half of this year, Business News Americas reports, citing Rinaldo Soares, president at Brazilian flat steelmaker Usiminas. Cosipa is a subsidiary of Belo Horizonte-based Usiminas. The new debt issues are designed to roll over the unit's existing debt, Soares said Tuesday. One debt issue will amount to US$100 million in debentures and be led by Banco do Brasil, maturing in up to three years. The other is being negotiated with the Japan Bank of International Cooperation (JBIC) and should total US$150 million. Mr. Soares indicated the maturity on this issue would be five years. Usiminas plans to concentrate on reducing its debt and capture synergies with Cosipa, he said. The group's net debt is expected to fall US$150 million in the first half and by a total of US$300 million for the year, said the company's president. Depending on the exchange rate, group net debt hovers around US$2.5 billion, of which 50% is hedged, according to Mr. Soares. CONTACT: Usinas Siderurgicas de Minas Gerais Usiminas PN A Rua Prof. Jose Vieira de Mendonca, 3011 Engenheiro Nogueira 31310-260 Belo Horizonte - MG Brazil Tel +55 31 3499-8000 Fax +55 31 3499-8475 Web http://www.usiminas.com.br Contact: Jose Augusto Muller de Oliveira Gomes, Chairman ========= C H I L E ========= COEUR D'ALENE: Names New Vice President of Technical Services ------------------------------------------------------------- Coeur d'Alene Mines Corporation (NYSE: CDE), the world's largest primary silver producer, announced Tuesday the appointment of James R. Arnold as Vice President Technical Services and Projects to direct engineering, metallurgy, planning and project work for the Company, including its developmental silver and gold projects in Bolivia and Alaska. With over 29 years experience in the mining industry, Mr. Arnold was most recently Chief Operating Officer for Earthworks, an environmental management company owned by Coeur, where he was instrumental in project evaluations. In his new position, Mr. Arnold will oversee Coeur's major developmental projects, such as San Bartolome in Bolivia and Kensington in Alaska, from a feasibility and construction perspective. San Bartolome is Coeur's major silver development project with approximately 126 million ounces of silver resources. A potential construction decision is expected at San Bartolome as soon as next year. Kensington, near Juneau, contains 1.8 million ounces of proven and probable gold reserves, and 1.4 million ounces of resources. Coeur anticipates receiving all necessary permits for Kensington by the end of January 2004. A member of the Society of Mining Engineers for 20 years, Mr. Arnold has served on a number of SME committees, including the Board of Directors and Executive Committee. He helped develop the environmental rules adopted by the Nevada Mining Association, which have been in use for 15 years, and was elected chairman of the Association in 1996. His degrees include a BS in Metallurgical Engineering from the University of Idaho and an MS in Engineering Management from the University of Missouri-Rolla. Coeur d'Alene Mines Corporation is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile and Bolivia. CONTACT: Tony Ebersole, Investor Relations Phone: +1-208-665-0335. ENAMI: Year-End 2002 Figures Show Bank Debt Swelling ---------------------------------------------------- Chile's state minerals company Enami continues to be a thorn in the government's side. According to a report released by Business News Americas, the Company increased bank debts at the end of last year to US$398 million, compared to US$383 million at end- December 2001. Of the December 31, 2002 total, US$156 million was short term and the rest long term. Principal creditors were Dresdner Bank and Deutsche Bank. As part of an effort to resolve Enami's debt problem, the government will send a bill to congress soon to transfer Enami's Ventanas copper smelter-refinery, its principal asset, to state copper corporation Codelco. Enami registered a US$21.6-million loss last year, compared with a US$28.7 million loss in 2001. CONTACT: ENAMI (Empresa Nacional de Mineria) MacIver 459, Santiago, Chile Phone: 637 52 78 637 50 00 Fax: 637 54 52 Email: webmaster@enami.cl Home Page: www.enami.cl/ Contact: Jorge Rodriguez Grossi, President ============= J A M A I C A ============= C&WJ: Ups Call Rate to Cuba --------------------------- CABLE & Wireless Jamaica revealed Monday that it will increase the cost of calls to Cuba, relates The Jamaica Observer. The move aims to rationalize an anomaly in the tariffs on the service, said C&WJ. According to the telecommunications giant, it currently charges $18 per minute to Cuba, but has to pay approximately $50 per minute for terminating calls to that Caribbean country. "The per minute rate for these calls is to be increased to J$66.00, effective July 21," C&WJ said in a statement. "The new rate will apply to calls made from fixed lines, mobile phones and using World-Talk calling cards." The Company claimed that this subsidy was being abused by other telecom providers, both local and overseas, who have been deliberately routing their calls to Cuba through Cable & Wireless Jamaica to reduce the cost to themselves. =========== M E X I C O =========== CFE: Sets Another Deadline for Tuxpan V bidding ----------------------------------------------- Mexico's state power company CFE announced it has extended to August 29 the deadline for the bidding of the 431-527MW Tuxpan V combined cycle thermoelectric project in Veracruz state, says Business News Americas. Previously, the CFE had extended the deadline to July 1 because some interested companies requested more time. Bidding rules are now available through August 23, and the CFE will open economic bids October 13. Commercial operations are set to begin in December 2003. CFE: Emission Problems Prompt Profepa Shutdown Order ---------------------------------------------------- Francisco P,rez R�os thermoelectric plant at Tula in Hidalgo, Mexico has been ordered to temporarily shutdown one of its steam units due to inadequate emissions control, reports Business News Americas. The Francisco P,rez R�os thermoelectric plant is owned by state owned company CFE. The country's environmental agency Profepa, which ordered the shutdown, said in a statement that the situation is serious, and depending on what measures the CFE takes to reduce pollution levels, it could order the total closure of Francisco P,rez R�os. PEMEX: PAN Deputy Favors Floating Debt on Stock Exchange -------------------------------------------------------- National Action Party (PAN) deputy Mauricio Candiani Galaz suggested that the eventual debt issue by Petr�leos Mexicanos (Pemex) on the Mexico City Stock Exchange (BMV) would be a positive action, according to a report released by Internet Securities. According to Candiani Galaz, the process, which is still under consideration, is not an initial step in the eventual privatization of the oil company. It makes the state-owned company more transparent. He said Pemex would issue "only debt and no stocks" -- meaning, holders will not have any type of corporate control over the firm. The issue would help the Company to capitalize and judge its capacity of both payment and debt, he added. He further noted that this type of issue was a success for the Federal Electricity Commission (CFE) and would likely have the same results for Pemex. Mr. Galaz acknowledged that there are still some details of the operation that must be worked out, such as how they could be used to pay taxes or for investment in oil infrastructure. ================= V E N E Z U E L A ================= CANTV: Shareholders Seek Dollar Payments from ADRs -------------------------------------------------- Stockholders of Cantv, Venezuela's largest telco, have turned to Cantv ADRs to get dollars after the government imposed currency controls. Business News Americas recalls that Venezuelans were barred from trading bolivares directly for dollars due to the currency control. However, Venezuelans discovered a convenient loophole that opened on May 19, allowing Cantv stockholders to convert their holdings from local paper to ADRs on the New York stock exchange. The NYSE shares are out of the jurisdiction of the government's currency controls so people have turned to Cantv ADRs to get dollars. For the one month, between May 19-June 19, trade volume equalled US$12 million. During the four months of currency controls prior to the opening of the loophole, only 961,000 Cantv shares were bought. Each ADR equals seven local shares, which carry a price of VEB4,800 (US$3) each. CERRO NEGRO: Status Improves, Fitch Revises Rating Watch -------------------------------------------------------- Following Fitch Ratings' recent rating actions that upgraded the Bolivarian Republic of Venezuela's foreign currency rating and the senior unsecured debt rating of Petroleos de Venezuela S.A. (PDVSA) to 'B-' from 'CCC+', Fitch Ratings revised the Rating Watch to Positive from Negative the `B' senior secured debt rating of Cerro Negro Finance, Ltd. (Cerro Negro) The following securities are affected: --US$200 million bonds due 2009; --US$350 million bonds due 2020; --US$50 million bonds due 2028. Fitch is currently reviewing the project, and shall follow up with corresponding rating actions if necessary in the coming weeks. Cerro Negro is owned 41.67% by an ExxonMobil subsidiary, 41.67% by a PDVSA subsidiary and 16.67% by a Veba Oel subsidiary. The project is involved in the development of Venezuela's extra heavy crude oil reserves. CONTACTS: Caren Y. Chang +1-312-368-3151, Chicago Alejandro Bertuol +1-212-908-0393, New York Carlos Fiorillo +58-212-286-3356, Caracas MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York HAMACA: Rating Watch Status Changed To Positive From Negative ------------------------------------------------------------- Following Fitch Ratings' recent rating actions that upgraded the Bolivarian Republic of Venezuela's foreign currency rating and the senior unsecured debt rating of Petroleos de Venezuela S.A. (PDVSA) to 'B-' from 'CCC+', Fitch Ratings revised the Rating Watch to Positive from Negative the `B' senior secured debt rating of Petrolera Hamaca, S.A. (Hamaca) The move affects total senior project loans of US$1.1 billion, consisting of: --US$627.8 million senior agency loan due 2018; --US$470 million senior bank loan due 2015, borrowed on a several (not joint) basis 30% by Corpoguanipa, S.A., a subsidiary of PDVSA, and 70% by Hamaca Holdings L.L.C. Fitch is currently reviewing the project, and shall follow up with corresponding rating actions if necessary in the coming weeks. Hamaca is owned 40% by ConocoPhillips subsidiary, 30% by ChevronTexaco subsidiary, and 30% PDVSA subsidiary. The project is involved in the development of Venezuela's extra heavy crude oil reserves. CONTACTS: Caren Y. Chang +1-312-368-3151, Chicago Alejandro Bertuol +1-212-908-0393, New York Carlos Fiorillo +58-212-286-3356, Caracas MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York MSLP/SWEENY FUNDING: Fitch Removes Rating Watch Negative -------------------------------------------------------- Fitch Ratings removed the Rating Watch Negative on the `BBB' senior debt rating of Merey Sweeny, L.P. (MSLP) and Sweeny Funding Corp. The move affects US$350 million of senior bonds due 2019. The change in the watch status follows Fitch's recent rating actions that upgraded the Bolivarian Republic of Venezuela's foreign currency rating and the senior unsecured debt rating of Petroleos de Venezuela S.A. (PDVSA) to 'B-' from 'CCC+'. The MSLP is a 50-50 joint venture indirectly owned by ConocoPhillips and Petroleos de Venezuela, S.A. (PDVSA). The JV has the sole responsibility for financing the construction of a delayed coker, vacuum tower and related processing facilities at ConocoPhillips Sweeny petrochemical complex in Sweeny, Texas. CONTACTS: Alejandro Bertuol +1-212-908-0393, New York Jennifer F. Conner +1-312-368-2080, Chicago Caren Y. Chang +1-312-368-3151, Chicago MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York PDVSA: Fitch Upgrades Ratings as Currency Improves -------------------------------------------------- Fitch Ratings, the international rating agency, has upgraded the senior unsecured foreign currency rating of Petroleos de Venezuela S.A. (PDVSA) to 'B-' from 'CCC+'. Fitch removed PDVSA from Rating Watch Negative and assigned the company a Rating Outlook Stable. The rating action follows Fitch's upgrade of the Bolivarian Republic of Venezuela's long-term foreign currency rating to 'B-' from 'CCC+' and its long-term local currency (Venezuelan bolivar) rating to 'B-' from 'CCC+'. The sovereign actions reflect the government's success in getting oil production back up to levels achieved prior to the national strike earlier this year, thereby relieving public financing pressures. In addition, voluntary domestic debt swaps and recent external bond payments have mitigated concerns about the sovereign's near-term debt service willingness. PDVSA's assigned rating is constrained by Fitch's long-term foreign currency rating of Venezuela. The strong link with the sovereign's credit profile is based on the company's nature as a state-owned entity and the shareholder's ultimate ability to restrict PDVSA's financial flexibility, including the possible widening of the purpose of its borrowing to quasi-sovereign and fiscal, rather than commercial, uses. PDVSA's credit outlook is influenced by three fundamental factors: political interference risk, vulnerability to cash flow redirection to the sovereign and the company's ability to attract private investment. PDVSA, Venezuela's national oil company, is engaged in the exploration and production of crude oil and natural gas, the refining, marketing and transportation of crude and refined products, and the production of petrochemicals, as well as various other hydrocarbon-related activities. The Bolivarian Republic of Venezuela is the company's sole shareholder. CONTACT: Alejandro Bertuol +1-212-908-0393, New York Caren Chang +1-312-368-3151, Chicago Franklin Santarelli +58212-286-3356, Caracas MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York PDVSA FINANCE: Production Prompts Watch Negative Removal -------------------------------------------------------- Fitch Ratings removed the Rating Watch Negative on the `BB-' rating of PDVSA Finance. The move follows Fitch's recent rating actions that upgraded the Bolivarian Republic of Venezuela's foreign currency rating and the senior unsecured debt rating of Petroleos de Venezuela S.A. (PDVSA) to 'B-' from 'CCC+'. The recent performance of the structured transaction has improved significantly since the beginning of the year, with current oil production levels at PDVSA almost back to pre-strike levels at around 2.8 million barrels per day. Quarterly debt service payments have been made in February and May 2003; the latter providing coverage levels in excess of 10 times. CONTACTS: Alejandro Bertuol +1-212-908-0393, New York Jennifer F. Conner +1-312-368-2080, Chicago Caren Y. Chang +1-312-368-3151, Chicago MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York PETROZUATA: Fitch Revises Rating Watch Status on Debt Ratings ------------------------------------------------------------- Following Fitch Ratings' recent rating actions that upgraded the Bolivarian Republic of Venezuela's foreign currency rating and the senior unsecured debt rating of Petroleos de Venezuela S.A. (PDVSA) to 'B-' from 'CCC+', Fitch Ratings revised the Rating Watch to Positive from Negative the `B' senior secured debt rating of Petrozuata Finance Inc. (Petrozuata). The following securities are affected: --US$300 million series A bonds due 2009; --US$625 million series B bonds due 2017; --US$75 million series C bonds due 2022. Fitch is currently reviewing the project, and shall follow up with corresponding rating actions if necessary in the coming weeks. Petrozuata is owned 50.1% by a ConocoPhillips subsidiary and 49.9% by a PDVSA subsidiary. The project is involved in the development of Venezuela's extra heavy crude oil reserves. CONTACTS: Caren Y. Chang +1-312-368-3151, Chicago Alejandro Bertuol +1-212-908-0393, New York Carlos Fiorillo +58-212-286-3356, Caracas MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York SIDOR: Usiminas Participates in Huge Debt Restructuring ------------------------------------------------------- Usinas Sider�rgicas de Minas Gerais S/A - USIMINAS (BOVESPA: USIM3, USIM5, USIM6; OTC: USNZY) announced Monday that its associated companies, Cons�rcio Siderurgia Amaz"nia Ltda (Amaz"nia) and Sider�rgica Del Orinoco C.A. (Sidor), celebrated an agreement with their creditors and the Venezuelan government in relation to the restructuring of its debts. In accordance with the clauses of the agreement: 1. consolidated Sidor and Amaz"nia debt was reduced from US$ 1.883 million to US$ 791 million; 2. Cons�rcio Siderurgia Amaz"nia Ltda (Amaz"nia) shareholders increased participation by means of a US$ 133.5 million cash contribution in a new company whose purpose is the acquisition and capitalization of Sidor and Amaz"nia debt; 3. the Venezuelan government increased its participation in Sidor from 30% to 40.3%; 4. all guarantees offered by the shareholders in Amaz"nia relative to the loans made to Sidor have been released and substituted with a security of the fixed assets of Sidor which, together with shares from Amaz"nia given in guarantee and those detained by Amaz"nia in Sidor, were placed in trust for the benefit of Sidor's creditors and the Venezuelan government; 5. additionally, the portion of Sidor's excess cash (determined in accordance with an agreed-upon formula) will be applied to repay Sidor's debt, and the remainder will be distributed to the Venezuelan government and to the above-mentioned company created. USIMINAS took part in the restructuring through a cash contribution of approximately US$ 25.8 million in the form of subordinated convertible debt. After conclusion of this first phase, total shareholdings of USIMINAS will come to 11.35% of total Amaz"nia capital stock. At the end of the entire process of restructuring, total shareholdings of USIMINAS in the capital stock of Amaz"nia may, if debt conversion options are exercised, reach up to 16.60%. Remaining Sidor debt is composed of three parts: one of US$ 350.5 million to be amortized in up to 8 years with one year of grace; one of US$ 26.3 million to be amortized in up to 12 years with one year of grace, and the remaining parcel of US$ 368.6 million, to be paid in up to 15 years with one year of grace. Additionally, Venezuelan government suppliers' debt was fixed at US$ 45.4 million to be paid off in up to 5 years. With this restructuring, USIMINAS maintains its share in a business with competitive costs and a more solid financial structure. Sidor is the main producer of steel in Venezuela, with an installed capacity of 3.6 million tons annually and is the second largest exporter in the country. CONTACTS: Breno J�lio de Melo Milton bmilton@usiminas.com.br Phone: (5531) 3499-8710 Paulo Esteves paulo.esteves@thomsonir.com.br Phone: (5511) 3897-6466 SINCOR: Fitch Changes Rating Watch Status To Positive ----------------------------------------------------- Following Fitch Ratings' recent rating actions that upgraded the Bolivarian Republic of Venezuela's foreign currency rating and the senior unsecured debt rating of Petroleos de Venezuela S.A. (PDVSA) to 'B-' from 'CCC+', Fitch Ratings revised the Rating Watch to Positive from Negative the `B' senior secured debt rating of Sincrudos de Oriente Sincor, C.A. (Sincor project) Securities affected: --US$1.2 billion senior bank loans borrowed by the sponsors of Sincor Finance Inc. Fitch is currently reviewing the project, and shall follow up with corresponding rating actions if necessary in the coming weeks. Sincor is owned 47% by a TOTALFinaElf subsidiary, 38% by a PDVSA subsidiary and 15% by a Statoil subsidiary. The project is involved in the development of Venezuela's extra heavy crude oil reserves. CONTACTS: Caren Y. Chang +1-312-368-3151, Chicago Alejandro Bertuol +1-212-908-0393, New York Carlos Fiorillo +58-212-286-3356, Caracas MEDIA RELATIONS: Matt Burkhard +1-212-908-0540, New York *********** 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 * * *