/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030627.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 =20 Friday, June 27, 2003, Vol. 4, Issue 126 Headlines A R G E N T I N A ALPARGATAS: Local Fitch Rates Numerous Debt Issues In Default=20 BANCO BISEL: Moody's Latin America Rates Bonds `D' BANCO DE GALICIA: Argentine Fitch Rates Various Bonds `D(arg)' BANCO DE GALICIA: Fitch Lowers Corporate Bonds To Junk Status BANCO HIPOTECARIO: S&P Assigns `raD' to US$2.75 Billion of Bonds BANCO RIO: S&P Argentina Issues Default Ratings To Bonds BANCO RIO: US$2.5 Billion of Bonds Get Junk Ratings From S&P COMPANIA DE RADIOCOMUNICACIONES: Local Moody's Rates Bonds `D' DROGERIA MAGNA: Bonds Get 'C' Rating from Moody's Latin America EIBA: Fitch Argentina Issues Default Ratings To Bonds FARGO: Fitch Argentina Rates Bonds `D(arg)' FARGO: Ratings Withdrawn at the Company's Request=20 INTERNATIONAL DE TELECOMUNICACIONES: Fitch Rates Bonds `C(arg)' LM COMUNICACIONES: Files for "Concurso Preventivo" MOSCHIONI HERMANOS: Petitions Court For Reorganization Approval SA IMPORTADORA: Junk Rating Issued on US$100 Million of Bonds=20 TELEFONICA DE ARGENTINA: Fitch Moves Bonds To Junk Territory TUTINO Y COMPANIA: Initiates First Reorganization Step B E R M U D A CRM: Ratings Withdrawn at the Company's Request=20 GLOBAL CROSSING: Seeks Court OK To Employ FTI As Consultant=20 SEA CONTAINERS: Extends Exchange Offer for Senior Notes Due 2003 B R A Z I L EMBRATEL: Shares Soar on Potential Buyout=20 EMBRATEL: Seeks Anatel Intervention in Brasil Telecom EMBRATEL: Chilean Unit Gets License To Start LD Operations GERDAU: Domestic Sales Down in 1Q03 C H I L E ENERSIS: Updates Status on $2B Capital Increase E C U A D O R PACIFICTEL: Conatel Postpones Decision on Intervention J A M A I C A C&WJ: OUR Rules Cuban Call Price Hike Falls Within Price Cap M E X I C O GRUPO IUSACELL: Lands Cellular Contract for Interior Ministry PVI: Court Approves Sale Procedures, Chapter 11 Financing=20 T R I N I D A D & T O B A G O BWIA: Caribbean Governments Step Up Airline Salvage Efforts V E N E Z U E L A CITGO: Production Rebounds, Venezuela Rules Out Sale Potential PDVSA: Analysts Expect Rigid Government Control SIDOR: Siderar Increases Stake Through Debt Restructuring - - - - - - - - - - =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D A R G E N T I N A =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D ALPARGATAS: Local Fitch Rates Numerous Debt Issues In Default=20 ------------------------------------------------------------- Fitch Argentina Calificadora de Riesgo assigned default ratings=20 to various corporate bonds issued by Alpargatas S.A. I. y C.,=20 based on the Company's financial status as of the end of March=20 this year. Among the affected bonds are US$81.1 million worth of=20 "Obligaciones Negociables Serie A por US$1.1 millones y Serie B=20 por US$80 millones", as described by the National Securities=20 Commission of Argentina. This debt was classified as "Simple=20 Issue." Some US$40 million of bonds, classified under "Series and/or=20 Class" which the NSC described as "Eurobonos a Mediano Plazo -=20 Serie X" also received the 'D(arg)' ratings. Bonds called "Obligaciones Negociables Subordinadas=20 Obligactoriamente Convertibles en Acciones Ordinarias" received=20 the same ratings. This set, which is under "Program", is worth a=20 total of ARS80 million due on July 30 this year. The ratings also apply to two sets of bonds both described as=20 "Obligaciones Negociables Convertibles", worth US$5.1 million and=20 ARS70 million respectively. Both sets are classified under=20 "Simple Issue", and their maturity dates were not indicated. BANCO BISEL: Moody's Latin America Rates Bonds `D' -------------------------------------------------- The National Securities Commission of Argentina relates that the=20 local branch of Moody's Ratings Agency assigned default ratings=20 to various bonds issued by local bank, Banco Bisel S.A. last=20 week. The 'D' rating, which denotes payment default, was based on=20 the Company's financial status as of the end of March this year. Some US$54 million worth of the banks's bonds called=20 "Obligaciones Negociables Subordinadas" the rating. These bonds=20 were under "series and/or class" and matured in July 2000.=20 Another series of bonds described as "Programa Global de Emisi=A2n=20 de Obligaciones Negociables Subordinadas", worth US$200 million,=20 received identical ratings. These were classified as "program",=20 but the maturity date was not indicated. The rating also applies to US$100 million worth of bonds called=20 "Programa Global de Obligaciones Negociables", and to US$300=20 million of "Programa de Emisi=A2n de T=A1tulos de Deuda a Mediano=20 Plazo", which matured in July 2000. CONTACT: Banco Bisel S.A. Mitre 602 Rosario 2000 Santa Fe Argentina Phone: 0341-4200300 Home Page: http://www.bancobisel.com.ar/ Contact: Guillermo Harteneck, President Jean Luc Perron, Vice President Bernard Brousse, Vice President BANCO DE GALICIA: Argentine Fitch Rates Various Bonds `D(arg)' -------------------------------------------------------------- Corporate bonds issued by Banco de Galicia y Buenos Aires=20 received default ratings from local ratings agency Fitch=20 Argentina Calificadora de Riesgo S.A., relates the National=20 Securities Commission of Argentina. The affected bonds include US$200 million of bonds, which the NSC=20 described as "Obligaciones Negociables a Largo Plazo". Some=20 US$150 million worth of "Obligaciones Negociables", as well as=20 US$62 million of "Obligaciones Negociables (con garantia MIGA)"=20 also received the 'D(arg)' rating.=20 The bonds were all classified under "Simple Issue", and their=20 maturity dates were not indicated in the NSC announcement. The=20 rating issued was based on the Company's financial situation as=20 of December 31, 2002. CONTACT: Banco de Galicia y Buenos Aires Tte. Gral Juan D. Peron 407 1038 Buenos Aires, Argentina =20 Phone: +54-11-6329-0000 Fax: +54-11-6329-6100 Home Page: http://www.bancogalicia.com.ar =20 BANCO DE GALICIA: Fitch Lowers Corporate Bonds To Junk Status ------------------------------------------------------------- Banco de Galicia y Buenos Aires' corporate bonds were rated=20 'BB(arg)' by Fitch Argentina Calificadora de Riesgo last week.=20 The rating, which denotes a fairly weak credit risk relative to=20 other issues in the Argentina, was given based on the Company's=20 finances as of the end of December last year. The rating applies to bonds, which the National Securities=20 Commission of Argentina describes as "Programa Global Clase 6",=20 worth a total of US$73 million. The maturity date was not=20 indicated. At the same time, the rating also applies to US$43 million worth=20 of bonds called "Programa Global Clase 7", which matured last=20 Wednesday. The affected bonds were all classified under=20 "Program." BANCO HIPOTECARIO: S&P Assigns `raD' to US$2.75 Billion of Bonds ---------------------------------------------------------------- Standard & Poor's International Ratings, Ltd. Sucursal Argentina=20 assigned 'raD' ratings to a total of US$2.7 billion worth of=20 various bonds issued by Argentine bank Banco Hipotecario S.A. on=20 Monday. The rating, which is assigned to financial obligations=20 that are in payment default or if the company has filed for=20 bankruptcy protection, was based on the Company's financial=20 results as of March 31, 2003. According to the National Securities Commission of Argentina, the=20 rating applies to the following bonds: -- US$2 billion worth of bonds called "Programa Global de ONs=20 autorizado por AGE de fecha 24.10.97 y ampliaci=A2n autorizada por=20 AGE de fecha 14.12.98", under "Program" -- US$500 million of bonds called "Programa Global de emisi=A2n de=20 C,dulas Hipotecarias Argentinas, autorizado por Decretos PEN N=A7=20 577/94, 139/96 y Resoluci=A2n del Directorio N=A7190/96.", under=20 "Program" The bonds' maturity dates and CUSIP were not indicated in the=20 announcement. CONTACT: Banco Hipotecario SA 151 Reconquista Buenos Aires Argentina Phone: +54 011 4347 5546 Home Page: http://www.hipotecario.com.ar Contact: Miguel K. Kiguel, Chairman BANCO RIO: S&P Argentina Issues Default Ratings To Bonds -------------------------------------------------------- Standard & Poor's International Ratings, Ltd. Sucursal Argentina=20 assigned default ratings to US$250 million of "obligaciones=20 negociables", which are classified as "simple issue."=20 The said rating is assigned to financial obligations that are in=20 payment default or if the obligor has filed for bankruptcy, and=20 was based on the Company's financial situation as of the end of=20 March 31, 2003. CONTACT: Banco Rio de la Plata SA Bartolome Mitre 480 1036 Buenos Aires Argentina Phone: +54 11 4341 1000 Home Page: http://www.bancorio.com.ar Contacts: Jose Luis Enrique Cristofani, Chairman Claudio Alberto Cesario, Vice Chairman BANCO RIO: US$2.5 Billion of Bonds Get Junk Ratings From S&P ------------------------------------------------------------ Corporate bonds issued by Banco Rio de la Plata S.A. received=20 junk ratings from the Argentine branch of Standard & Poor's=20 International Ratings, Ltd. on Monday. The ratings were given=20 according to the bank's financial situation as of the end of=20 March this year. The rating agency issued a 'raC' rating to bonds called "programa=20 global de obligaciones negociables de Corto Plazo". This set of=20 bonds is worth US$500 million, classified under 'Program.' The=20 rating is issued to bonds on which the obligor has filed for=20 bankruptcy or any similar situation, but has remained current=20 with payments on the bonds. Meanwhile, bonds called "Programa de Obligaciones Negociables=20 tramo subordinado por U$S 1000.000.000" worth US$1 billion was=20 given a 'raCC' rating, which denotes that the bonds are highly=20 vulnerable to non-payment. These bonds were classified under=20 "program." Another US$1 billion worth of bonds called "Programa de=20 Obligaciones Negociables tramo no subordinado", also under=20 "Program", was rated 'raCCC', which means that the bonds are=20 currently vulnerable to nonpayment. COMPANIA DE RADIOCOMUNICACIONES: Local Moody's Rates Bonds `D' -------------------------------------------------------------- Bonds issued by Companis de Radiocomunicaciones Moviles S.A.,=20 which the National Securities Commission described as "Programa=20 Global de ONs simpleas, autorizado por AGE de fecha 26.6.97 y=20 23.9.97" were rated 'D' by Moody's Latin America Calificadora de=20 Riesgo S.A. recently. The bonds, worth a total of US$350 million,=20 matured on March 3 this year. The ratings agency, which used the Company's financial results as=20 of the end of March 31, 2003 in deciding on the rating, said the=20 'D' rating denotes that the company has not fulfilled its=20 financial obligations on the above bonds. DROGERIA MAGNA: Bonds Get 'C' Rating from Moody's Latin America --------------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. assigned a 'C'=20 rating to corporate bonds issued by Drogeria Magna S.A.,=20 according to the National Securities Commission of Argentina. The=20 rating means that there is a high possibility of a default or a=20 delay on the payments on the bonds. The NSC described the bonds as "Obligaciones negociables=20 simples", which are classified as "simple issue". The bonds,=20 which matured in April this year, are worth a total of US$5=20 million. EIBA: Fitch Argentina Issues Default Ratings To Bonds ----------------------------------------------------- Inversora Electrica de Buenos Aires S.A.'s bonds received=20 'D(arg)' ratings from Fitch Argentina Calificadora de Riesgo S.A.=20 last week. The rating, which is given to issues that are in=20 payment default, or if the company has filed for bankruptcy, was=20 given based on the company's finances as of March 31, 2003. The rating applies to US$100 million worth of bonds called=20 "Obligaciones negociables Clase A", and US$140 million worth of=20 "Obligaciones negociables Clase B" which are classified under=20 "Series and/ or Class". The rating also applies to US$130 millin=20 worth of bonds called "Obligaciones Negociables Simples no=20 convertibles en acciones", under "simple issue" and matures on=20 September 16 next year. FARGO: Fitch Argentina Rates Bonds `D(arg)' ------------------------------------------- Bonds issued by Compania de Alimentos Fargo S.A. received default=20 ratings from Fitch Argentina Calificadora de Riesgo S.A. last=20 week. The `D(arg)' rating, which is given to bonds that are in=20 payment default or if the company has filed for bankruptcy, was=20 given based on the Company's finances as of the end of March this=20 year. The rating applies to bonds called "Obligaciones negociables=20 simples" worth a total of US$120 million. These were classified=20 under "simple issue" and mature on July 24, 2008. FARGO: Ratings Withdrawn at the Company's Request=20 ------------------------------------------------- Standard & Poor's Ratings Services said Wednesday that it=20 withdrew its 'D' corporate credit rating on Argentine packaged=20 bread producer Compania de Alimentos Fargo S.A. (Fargo), at the=20 company's request. The 'D' rating on the company's US$120 million=20 13.25% medium-term notes due Aug. 1, 2008, is also withdrawn. ANALYSTS: Mariano Ingaramo, Buenos Aires (54) 114-891-2124 Marta Castelli, Buenos Aires (54) 114-891-2128 INTERNATIONAL DE TELECOMUNICACIONES: Fitch Rates Bonds `C(arg)' --------------------------------------------------------------- Some US$225 million of bonds called "Clase A bajo el Programa de=20 U$S 800 millones" issued by Compania International de=20 Telecomunicaciones received junk ratings from Fitch Argentina=20 Calificadora de Riesgo, according to the National Securities=20 Commission of Argentina. Bonds called "Clase B bajo el Programa de U$S 800 millones",=20 worth US$175 million, also under "series and/or class" received=20 the same ratings. The ratings agency assigned 'C(arg)' to the bonds on Monday,=20 based on the Company's finances as of the end of March this year.=20 The rating means that the bonds have extremely weak credit risk=20 relative to other issues in the country. Capacity for meeting=20 financial commitments is solely reliant on sustained, favorable=20 business or economic developments, said the ratings agency. LM COMUNICACIONES: Files for "Concurso Preventivo" -------------------------------------------------- Argentine TV and radio distributor L.M. Comunicaciones S.A. has=20 filed for "Concurso Preventivo" at the Civil and Commercial=20 Tribunal of Rosario, relates local news portal Infobae. Rosario's Court No. 7, assigned Mr. Roberto Munoz as receiver for=20 the reorganization process, which includes an informative=20 assembly on November 11, 2003. The receiver is instructed to=20 verify claims until August 19 this year in order to prepare the=20 necessary reports.=20 CONTACT: Mr. Roberto Munoz Rioja 4735, Rosario Provincia de Santa Fe MOSCHIONI HERMANOS: Petitions Court For Reorganization Approval --------------------------------------------------------------- The Civil and Commercial Tribunal of San Luis has received a=20 motion for "Concurso Preventivo" from local engine producer=20 Moschioni Hermanos S.R.L. recently. The Company is seeking=20 permission from the Court to start its reorganization procedure. San Luis Court No. 2, which handles the case, designated Mr.=20 Humberto Zibarelli as receiver. Creditors are advised to have=20 their claims verified before July 11 this year. The informative=20 assembly will be on August 5 this year, said Infobae. CONTACT: Mr. Humberto Zibarelli 25 de Mayo 749 Provincia de San Luis SA IMPORTADORA: Junk Rating Issued on US$100 Million of Bonds=20 ------------------------------------------------------------- Some US$100 million worth of bons issued by S.A. Importadora y=20 Exp. de la Patagonia were rated 'D(arg)' by the Argentine branch=20 of Fitch Ratings Agency. The National Securities Commission of=20 Argentina described the bonds as "Obligaciones negociables", and=20 classified them as "Program.", however, it did not indicate the=20 bonds' maturity date. Fitch said that the rating, based on the Company's financial=20 situation as of the end of March this year, is assigned to=20 financial commitments which are currently in default. TELEFONICA DE ARGENTINA: Fitch Moves Bonds To Junk Territory ------------------------------------------------------------ Fitch Argentina Calificadora de Riesgo S.A. moved various=20 corporate bonds issued by Telefonica de Argentina S.A. to junk=20 territory on Wednesday, said the National Securities Commission=20 of Argentina. The ratings agency assigned a 'C(arg)' rating to some US$368.5=20 million of bonds called "Serie por US$368.5 millones bajo el=20 Programa de Ons por U$S1.500 millones", classified under "series=20 and/or class" which come due on May 07, 2008. The same rating=20 applies to bonds, which are under "simple issue", called=20 "obligaciones negociables" worth US$300 million, but with=20 indisclosed maturity date. Concurrently, Fitch assigned a 'raCCC' to about US$71.38 million=20 of bonds called " Serie por U$S 71.375.350 bajo el Prog. de Ons.=20 por U$S1.500". These were classified as "series and/or class" and=20 mature on July 1, 2006. According to the ratings agency, the rating denotes that bonds=20 pose an extremely weak credit risk relative to other issues in=20 Argentina. The Company;'s capacity to pay its obligacions on=20 these debts is mainly reliant on sustained, favorable business or=20 economic developments. CONTACT: TELEFONICA DE ARGENTINA Tucuman 1, 18th Floor, 1049 Buenos Aires, Argentina Phone: (212) 688-6840 Home Page: http://www.telefonica.com.ar Contacts: Carlos Fernandez-Prida Mendez Nunez, Chairman Paul Burton Savoldelli, Vice Chairman Fernando Raul Borio, Secretary TUTINO Y COMPANIA: Initiates First Reorganization Step ------------------------------------------------------ Argentine company Tutino y Compania S.A.I.C. y M is seeking=20 permission from the Court to start its reorganization process.=20 The Company has submitted its motion for "Concurso Preventivo" at=20 the Civil and Commercial Tribunal of La Rioja, through Court No.=20 1. Mr. Mario Contreras was assigned receiver for the process. CONTACT: Mr. Mario Contreras Belgrano 389 La Rioja =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D B E R M U D A =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D CRM: Ratings Withdrawn at the Company's Request=20 ----------------------------------------------- Standard & Poor's Ratings Services said Wednesday that it=20 withdrew its 'D' corporate credit rating on Argentine mobile=20 provider Compania de Radiocomunicaciones Moviles S.A. (CRM), at=20 the company's request. The 'D' ratings on the company's US$150=20 million 9.25% medium-term notes due May 8, 2008, and $350 million=20 senior unsecured medium-term note program due Sept. 17, 1997,=20 were also withdrawn. ANALYSTS: Mariano Ingaramo, Buenos Aires (54) 114-891-2124 Marta Castelli, Buenos Aires (54) 114-891-2128=20 GLOBAL CROSSING: Seeks Court OK To Employ FTI As Consultant=20 ----------------------------------------------------------- Global Crossing Vice President Mitchell Sussis recounts that on=20 August 6, 2001, Roy Olofson, a former officer of one of the GX=20 Debtors, sent a letter to the Debtors raising questions about=20 certain alleged accounting improprieties. Mr. Olofson=20 subsequently sent draft complaints to the GX Debtors and=20 threatened to file suit based on the alleged accounting=20 improprieties. On February 11, 2002, the GX Debtors' board of directors passed a=20 resolution creating a Special Committee on Accounting Matters of=20 the Board of Directors of Global Crossing Ltd. to undertake a=20 comprehensive investigation of the Olofson Allegations and other=20 accounting matters and to recommend to the Board of Directors an=20 appropriate response to the Olofson Allegations. At its'=20 inception, the Special Committee consisted of Mark Attanasio,=20 Geoffrey Kent, and William Cohen, who were charged with=20 conducting the Investigation. Mr. Attanasio informed Samuel Winer of Foley & Lardner that he=20 wished to retain Foley & Lardner on behalf of the incipient=20 Special Committee. Foley & Lardner immediately began working=20 with the Debtors and its other professionals to conduct the=20 Investigation. FTI was retained by Foley & Lardner to act as the=20 Special Committee's financial advisors and to assist Foley &=20 Lardner in the Investigation. FTI immediately began working with=20 the Debtors and their other professionals to commence the=20 Investigation. Due to the extreme notoriety of the Olofson Allegations and the=20 adverse impact on the Debtors' business caused by the daily media=20 coverage, Mr. Sussis states that FTI began providing services=20 prior to being retained by the Debtors. The Debtors and Foley &=20 Lardner needed FTI immediately to assist the Special Committee=20 to, among other things: (i) preserve evidence at facilities in New Jersey, New York,=20 California and Ireland;=20 (ii) resolve accounting issues to facilitate the=20 reorganization or sale of the Debtors' assets in the=20 best interests of creditors;=20 (iii) allow completion of the Debtors' year 2001 audit;=20 (iv) demonstrate to the United States Securities and Exchange=20 Commission that the Debtors were taking the appropriate=20 steps to independently investigate the Olofson=20 Allegations and would take the appropriate corrective=20 measures;=20 (v) respond to the requests and inquiries of multiple=20 interested parties and their counsel; and=20 (vi) begin an immediate and comprehensive investigation of=20 the Debtors' accounting matters.=20 The Debtors believed that the work of the Special Committee was=20 crucial to the Debtors' estates. FTI's services included,=20 without limitation: -- assisting Foley & Lardner and the Debtors with collecting,=20 preserving, and reviewing voluminous documents and other=20 evidence relevant to the Investigation; -- interviewing current and former employees, officers, and=20 directors of the Debtors; -- interviewing other witnesses; and=20 -- communicating with the SEC and other governmental=20 authorities. On February 26, 2002, February 27, 2002, and March 18, 2002,=20 Messrs. Attanasio, Kent and Cohen resigned from the Special=20 Committee. Despite these resignations, Mr. Sussis relates that=20 FTI continued to assist Foley & Lardner in continuing its work=20 to, among other things, avoid the material, adverse negative=20 consequences to the Debtors' estates and their creditors that=20 would have resulted from the postponement of the ongoing=20 Investigation. Given the national media attention directed at=20 the Debtors during the first few weeks of these Chapter 11 cases,=20 it was of the utmost importance for the Debtors to resolve any=20 allegations of accounting improprieties as quickly and=20 efficiently as possible, so as not to interfere with the Debtors'=20 efforts to reorganize. Following the resignation of the three original members of the=20 Special Committee, GX's Board of Directors appointed Alice Kane,=20 Jeremiah Lambert, and Myron Ullman, III as the new independent=20 members to the Special Committee. For a variety of reasons, the=20 new members to the Special Committee decided to retain Coudert=20 Brothers as its primary counsel. At this critical juncture, FTI=20 was in the process of completing an interim report for the=20 benefit of the Special Committee. While FTI ceased its work as=20 of March 25, 2002, Foley & Lardner continued to provide some=20 additional services. These services included providing the=20 Debtors with memoranda and summaries which embodied the work=20 product of both Foley & Lardner and FTI for delivery to the=20 Special Committee and its counsel, Coudert Brothers. At the request of the Debtors, Mr. Sussis reports that FTI met=20 with Coudert Brothers to share the information which both Foley &=20 Lardner and FTI had obtained during the course of their services. =20 In addition, FTI met with Jeremiah Lambert and Coudert Brothers=20 to answer any questions they had concerning the work performed by=20 FTI. Foley & Lardner fully shared the results of its work and the work=20 of FTI with the Special Committee and with Coudert Brothers. =20 Foley & Lardner delivered an enormous amount of data to the=20 Special Committee and Coudert Brothers, which data had been=20 developed by both FTI and Foley & Lardner, including: a) all memoranda memorializing all of the interviews; b) summaries of the capacity purchases and sales that are the=20 subject of the questions about the Debtors' historical=20 accounting; c) suggested additional areas and topics for investigation and interviews; d) a 61-page presentation which FTI prepared and which=20 reflected the work of Foley & Lardner and FTI on behalf of=20 the Special Committee; e) a compilation of key internal documents and other materials=20 to assist the Special Committee and Coudert Brothers with=20 the Investigation; f) a chart of key personnel involved in each of the=20 transactions; g) over 700 boxes of documents that Foley & Lardner and FTI=20 received and reviewed as part of the evidence gathering=20 process, together with CD-ROMs and other electronic data; h) legal source material which had been gathered by Foley &=20 Lardner and FTI; and i) other information delivered to Coudert Brothers in a=20 meeting on May 7, 2002 and in subsequent discussions. FTI's work in assisting Foley & Lardner contributed significant=20 value to the Debtors and the Special Committee in connection with=20 the Investigation, including, without limitation: a) preserving evidence and enabling the Special Committee to validate independently the thoroughness of the evidence=20 gathering process; b) commencing the Investigation before important witnesses=20 left their employment with the Debtors and creating a=20 written record of the interviews of those employees; c) addressing the pressing nature of the Investigation during=20 a time when multiple constituencies were in agreement with=20 the Debtors' management, Board of Directors, and counsel=20 that it was necessary to proceed with the Investigation as=20 quickly as possible; and d) demonstrating that the Debtors were responding to the=20 Olofson Allegations. On February 28, 2003, Mr. Sussis reminds the Court that FTI filed=20 its motion for allowance and payment of an administrative expense=20 claim seeking $182,994.41 in fees and disbursements. In=20 response, the Debtors and FTI engaged in negotiations to resolve=20 the FTI Motion and reached an agreement, pursuant to which the=20 Debtors now seek to retain FTI for the sole purpose of allowing=20 it to be paid and reimbursed as a professional, albeit at=20 compromised amounts. The Debtors seek to retain FTI pursuant to=20 the Agreement in an effort to reduce the overall costs of the=20 Investigation in light of the fact that the Special Committee=20 ultimately chose different counsel and consultants and that the=20 selection necessarily implied a certain amount of duplication of=20 services. Pursuant to the Agreement, Mr. Sussis informs the Court that FTI=20 will reduce its Fee request to $60,000, which represents nearly a=20 66% reduction in its total outstanding fees. FTI's Disbursements=20 of $8,051.76, however, will be reimbursed in full. The Debtors=20 believe that this "compromise" is fair and reasonable and have=20 been further advised that this reduction is acceptable to the=20 Creditors' Committee and the U.S. Trustee. The Fees represent hourly rates charged by FTI, which currently=20 range from:=20 Managing Directors $450 - 550=20 Directors $350 - 425=20 Managers $300 - 325 Senior Consultants $250 - 275 Consultants $150 - 225=20 Paraprofessionals $80 - 125=20 These rates are consistent with the rates charged by FTI in=20 matters of this type and are subject to periodic adjustment to=20 reflect economic and other conditions. FTI's hourly rates are=20 set at a level designed to fairly compensate the company for the=20 work of its staff and to cover fixed and routine variable=20 overhead expenses. Hourly rates vary with the experience and=20 seniority of the individuals assigned to the matter and may be=20 adjusted by FTI from time to time. Mr. Sussis alleges that the Disbursements represent actual,=20 necessary expenses and other charges incurred by FTI. It is=20 FTI's policy to charge its clients for all expenses incurred in=20 connection with a client's case. The Disbursements include,=20 among other things, telephone and telecopier charges,=20 transportation and travel expenses, shipping or hand delivery=20 charges, and expenses for "working meals." FTI believes that it=20 is appropriate to charge these expenses to the client incurring=20 them rather than to increase its hourly rates and thereby spread=20 the expenses among all clients. FTI has charged the Debtors for=20 the Disbursements in a manner and at rates consistent with=20 charges made generally to its other clients. Pursuant to the Agreement, FTI waives and forever releases any=20 and all claims against the Debtors, their officers, directors,=20 employees, shareholders, successors and assigns for any payment=20 not included in the Fees and Disbursements, including any=20 administrative expense claims under Section 503 of the Bankruptcy=20 Code. FTI Managing Director Peter Salomon assures the Court that at the=20 time the Firm performed services to the Debtors and Foley &=20 Lardner, FTI did not hold any interest adverse to the Debtors or=20 their estates in the matters regarding which the Firm was=20 engaged. However, he admits that FTI currently provides or in=20 the past has provided services in unrelated matters to these=20 parties: A. Professionals: Simpson Thacher & Bartlett, Arthur Andersen,=20 and Swidler Berlin Shereff Friedman LLP; B. Strategic Partners: CISCO Systems Inc., EMC Corporation,=20 Nortel Networks, Lucent Technologies, and PRC; C. Litigation Claimants: TyCom US Inc., Qwest Communications=20 Corp., BellSouth Telecommunications Inc., CompUSA Inc.,=20 John Armstrong, MCI WorldCom Network Services Inc.,=20 Southwestern Bell Telephone Co., Travelers Casualty &=20 Surety Company of America; D. Secured Creditors: ABN Amro Bank N.V., Aegon USA Inc.,=20 Alliance Capital Management, Allstate Insurance, American=20 Express Asset Management, Apollo Advisors, Bain Capital,=20 Bank Leumi, Bank of America, Bank of China, Bank of Hawaii,=20 Bank of Montreal, Bank of New York, Bank of Nova Scotia,=20 Bank of Scotland, Bank of Tokyo Mitsubishi, Pacific=20 Investment Management Co., PPM American Inc., Rabobank=20 Nederland, Royal Bank of Canada, Scotia Capital,Scudder=20 Investments, Stanfield Capital Partners, Stein Roe Farnham=20 Inc., Sumitomo Trust & Banking Co., Taipei Bank, TCW,=20 Textron Financial Corp., Toronto Dominion Bank, Travelers=20 Companies, UBS Warburg, Van Kampen, and West LB; E. Other Creditors: Bank One, Chase Manhattan Bank, Credit=20 Suisse First Boston, PB Capital Corp., Wachovia Bank,=20 Washington Mutual, and Zurich Scudder Investments; F. Vendors: Alcatel, American Exress, Cisco, Comsat, Corning=20 Inc., Lucent Technologies, Nortel Networks, Palmer, Shain,=20 Siemens, Tekelec, Tesco; G. Indenture Trustees: Manufacturers Hanover Trust Company and=20 Chase Manhattan Bank; and H. Significant Stockholders: Pacific Capital Group Inc.=20 Microsoft Corp.. (Global Crossing Bankruptcy News, Issue=20 No. 42; Bankruptcy Creditors' Service, Inc., 609/392-0900) SEA CONTAINERS: Extends Exchange Offer for Senior Notes Due 2003 ---------------------------------------------------------------- Sea Containers Ltd. (NYSE: SCRA, SCRB; www.seacontainers.com),=20 marine container lessor, passenger and freight transport=20 operator, and leisure industry investor, announced Wednesday that=20 it has extended the exchange offer for its outstanding 9-1/2%=20 Senior Notes due 2003 and 10-1/2% Senior Notes due 2003, which=20 commenced on May 28, 2003, until 5:00 p.m., New York City time,=20 on Friday, June 27, 2003. The date by which Notes may be tendered through the guaranteed=20 delivery procedure described in the exchange offer materials will=20 not be extended. Accordingly, certificates representing any Notes=20 tendered pursuant to the guaranteed delivery procedure must be=20 received by The Bank of New York, the exchange agent for the=20 exchange offer, not later than 5:00 p.m., New York City time, on=20 Monday, June 30, 2003. As of 10:00 a.m. Wednesday, based on the information received=20 from the exchange agent for the exchange offer, approximately $22=20 million aggregate principal amount of the Notes has been tendered=20 for exchange. Under the rules of the U.S. Securities and Exchange Commission,=20 Sea Containers has filed exchange offer materials with the=20 Commission and disseminated them to the holders of the Notes.=20 These materials may be obtained by contacting Georgeson=20 Shareholder Communications Inc., the information agent for the=20 exchange offer, 17 State Street, New York, New York 10004. Banks=20 and brokers call 1-212-440-9800; U.S. noteholders call toll free=20 1-866-324-5897; and foreign noteholders call collect +44-207-335- 8700. The exchange offer materials and other documents filed by Sea=20 Containers with the U.S. Securities and Exchange Commission also=20 are available at its public reference room at 450 Fifth Street,=20 N.W., Washington, D.C. 20549, or at the Commission's website=20 www.sec.gov. Investors are urged to read these materials and=20 documents carefully. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D B R A Z I L =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D EMBRATEL: Shares Soar on Potential Buyout=20 ----------------------------------------- A report suggesting that No. 1 Mexican phone company Telefonos de=20 Mexico SA (Telmex) might be out to buy Embratel Participacoes SA,=20 Brazil's largest long-distance carrier, pushed the latter's=20 shares Wednesday to their biggest gain in six months. Embratel's=20 shares jumped 38 centavos (13 U.S. cents), or 6.8%, to BRL6 in=20 Sao Paulo. Earlier in the day, the stock jumped to as high as=20 BRL6.27, having the biggest gain since a 16% climb Jan. 2.=20 There's "speculation in the market that Telmex could be=20 interested in buying Embratel," said Lucio Graccho, who helps=20 manage the equivalent of about US$350 million in stocks for HSBC=20 Asset Management in Sao Paulo.=20 Telmex is seeking to purchase assets in Latin America, Mexico's=20 El Economista newspaper reported Wednesday, citing an interview=20 with Chief Executive Jaime Chico Pardo.=20 Meanwhile, a spokeswoman for Telmex's America Movil unit said she=20 did not know of any plans to purchase Embratel but did not rule=20 out any further acquisitions in the region, reports Reuters. "Our core business in Brazil is in the wireless sector and we=20 intend to consolidate those operations. Embratel is long=20 distance," said America Movil spokeswoman Patricia Ramirez.=20 "We're open to new opportunities, but for now I don't have any=20 information (about a possible takeover of Embratel)," she added.=20 Telmex, which is controlled by billionaire Carlos Slim, already=20 owns about US$1.7 billion in bonds from WorldCom, Embratel's=20 parent company.=20 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: Seeks Anatel Intervention in Brasil Telecom ----------------------------------------------------- For more than 60 days Embratel has negotiated to lease local=20 lines from south and central Brazil's incumbent local telephony=20 provider Brasil Telecom. However, Brasil Telecom still refuses to=20 interconnect. As a result, Embratel is asking telecoms regulator Anatel to step=20 in, alleging Brasil Telecom of engaging in anticompetitive=20 practices, reports Business News Americas. Embratel said that the=20 operator's delaying tactics are holding back its local telephony=20 projects. Anatel has previously ordered Brasil Telecom to offer competitors=20 the best rates it offers its own corporate clients and Embratel=20 knows exactly how low the incumbent's prices can be because both=20 operators vied for a contract to supply lines to a company called=20 Dataprev in 2000. Brasil Telecom's winning bid was much lower=20 than that offered by Embratel.=20 But Brasil Telecom has ignored Anatel's ruling. And in doing so,=20 Embratel claimed that Brasil Telecom is engaging in=20 anticompetitive practices, which is sufficient grounds for=20 intervention Refusal to interconnect is the only other situation in which an=20 operator is liable to be intervened, Embratel added. EMBRATEL: Chilean Unit Gets License To Start LD Operations ---------------------------------------------------------- Embratel's subsidiary in Chile told stock market regulator SVS=20 that it already has the necessary authorization to start domestic=20 and international long distance operations in the country,=20 reports Business News Americas. Embratel Chile already has a=20 concession to provide data transmission services, the report=20 reveals. GERDAU: Domestic Sales Down in 1Q03 ----------------------------------- Brazilian long steel group Gerdau has relied on exports and=20 operations in North America to make up for the downturn in=20 domestic sales in the first quarter, Business News Americas=20 indicates, citing Gerdau investor relations chief, Osvaldo=20 Schirmer. "We don't foresee any price adjustments, and if there are any,=20 they would be in line with inflation," the official said, adding=20 that demand from the civil contraction sector has dropped the=20 most while that from industry and agriculture remains steady.=20 Due to uncertainties surrounding domestic economic growth, Gerdau=20 has not yet decided whether to build a new 1Mt/y mill in Sao=20 Paulo state.=20 "We have decided to slow down the project. We need to have more=20 security as to how domestic demand will be in 2-3 years time when=20 the investment is completed," Mr. Schirmer said.=20 The project would involve two units of 500,000t each and was=20 estimated to need US$400 million when it was first announced two=20 years ago. Mr. Schirmer said no new capex estimate has been=20 issued but the figure has probably changed.=20 =3D=3D=3D=3D=3D=3D=3D=3D=3D C H I L E =3D=3D=3D=3D=3D=3D=3D=3D=3D ENERSIS: Updates Status on $2B Capital Increase ----------------------------------------------- Chilean power sector holding company Enersis revealed that as of=20 June 24, it has sold US$1.37 billion of new stock in its US$2- billion capital increase. The amount, according to Business News=20 Americas, represents 66.3% of the total increase.=20 In a statement, the Company said that international investment=20 company Elesur, through which Endesa Spain owns Enersis, bought=20 US$1.22 billion and minority shareholders bought US$150 million=20 of the new stock. Endesa subscribed to the increase through the=20 capitalization of inter-company loans from Elesur to Enersis.=20 Minority shareholders have subscribed at a daily rate of US$10=20 million-plus over the last two weeks and subscription reached a=20 peak of US$28.7 million on June 24. The previous high was US$18.3=20 million on June 17.=20 The period for shareholders to subscribe to the capital increase=20 ends June 30.=20 The period for shareholders to subscribe to the capital increase=20 ends June 30, and the preferential period for shareholders=20 outside the Endesa group for the remaining shares will begin in=20 November. The capital increase also includes a buyback of bonds issued on=20 the Chilean market. From November 1-15 holders will be able to=20 exchange their bonds for Enersis stock at CLP60.4202 a share, the=20 same price as the new stock issued in the increase. Business News Americas recalls that Endesa has previously said it=20 will buy any shares that are not subscribed by shareholders or=20 bondholders. CONTACT: Enersis SA Avenida Kennedy Vitacura No 5454 Santiago Chile 1557 Phone: +56 2 353 4400 Fax: +56 2 378 4768 Home Page: http://www.enersis.cl Contacts: Engr Alfredo Llorente Legaz, Chairman Engr Rafael Miranda Robredo, Vice Chairman Endesa SA Principe de Vergara 187 28002 Madrid Spain Phone: +34 91 213 10 00 Fax: +34 91 563 81 81 Telex: 22917 ENE Home Page: http://www.endesa.es Contacts: Rodolfo M. Villa, Chairman Rafael Miranda Robredo, Managing Director =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D E C U A D O R =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D PACIFICTEL: Conatel Postpones Decision on Intervention ------------------------------------------------------ Ecuador's telecoms regulator Conatel delayed for one week a=20 decision whether to grant a recommendation to intervene in state- run fixed line operator Pacifictel. Business News Americas=20 recalls that telecoms regulatory enforcement agency Suptel=20 recommended the intervention because of Pacifictel's supposed=20 failure to meet buildout goals agreed in a 2001 concession=20 modification.=20 Conatel was scheduled to deliver a decision this week but decided=20 to give Pacifictel a week to submit evidence that will counter=20 Suptel's allegations. However, a Conatel source told local daily El Universo initial=20 justifications expressed by the Company would not be sufficient=20 to avoid intervention. Nevertheless, Pacifictel's concession=20 contract is the only legal document that spells out the=20 conditions for intervention, the source said, implying that in=20 the event of an appeal the Company may find ample arguments in=20 its favor in constitutional law or other administrative=20 regulations.=20 =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D J A M A I C A =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D C&WJ: OUR Rules Cuban Call Price Hike Falls Within Price Cap ------------------------------------------------------------ The Office of Utilities Regulation (OUR) of Jamaica ruled that=20 rates increase imposed by Cable & Wireless Jamaica (C&WJ) on=20 calls to Cuba was within the rules. The increase will take effect=20 starting July 21. A report from the Jamaica Observer cited the OUR as saying C&WJ's=20 increase from $18 to $66 per minute did not exceed the price cap=20 set, based on the Company's weighted average increase on its=20 services. This formula allows the Company rates hike of more than=20 10% on its international and domestic services. David Geddes, public relations officer at the OUR was quoted by=20 the report as saying, "When we (OUR) calculated it (the increase)=20 they would still be in the regime. Increasing the calling price=20 to one country (Cuba) while decreasing the price of 100 other=20 countries obviously would not increase the basket of services=20 (over 10 per cent) so that will not disrupt the basket." The OUR explained that when the 266% Cuban increase was factored=20 in with other services, the aggregate increase did not exceed=20 10%, said the report. Earlier this year, C&W cut international call rates by an average=20 of 25% through a flat rate of $18 per minute. Domestic calls were=20 increased by 65% at the same time, but the OUR said that the=20 rebalancing keeps the changes within the price cap. Recently, C&WJ explained that it had to impose the price hike as=20 it needs to pay about $50 per minute in terminating calls to=20 Cuba. The Company added that the situation worsened when other=20 companies dumped their Cuba traffic to C&WJ to avoid the $50=20 termination fee. The new rate will apply to calls made from fixed lines, mobile=20 phones and using World-Talk calling cards. Operator-assisted=20 calls (person-to-person and station-to-station) will be charged=20 at $198 for the first three minutes, and $66 for each additional=20 minute, said the report. CONTACT: Cable & Wireless PLC 124 Theobalds Road London England WC1X 8RX Phone: +44 (0)20 7315 4000 Fax: +44 (0)20 7315 5000 Home Page: http://www.cw.com Contacts: Sir Ralph Robins, Non Executive Chairman Sir Winfried W. Bischoff, Non Executive Deputy Chairman Graham M. Wallace, Chief Executive Robert E. Lerwill, Executive Director Finance =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D M E X I C O =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D GRUPO IUSACELL: Lands Cellular Contract for Interior Ministry ------------------------------------------------------------- Grupo Iusacell, S.A. de C.V. (Iusacell), Mexico's third largest=20 mobile operator, was awarded a contract to provide employees of=20 the country's interior ministry with tri-band and 3G mobile=20 phones, Business News Americas reports, citing a company=20 statement. According to the report, the terms of the contract=20 were not disclosed. =20 Grupo Iusacell is a wireless cellular and PCS service provider in=20 seven of Mexico's nine regions, including Mexico City,=20 Guadalajara, Monterrey, Tijuana, Acapulco, Puebla, Leon and=20 Merida. The Company's service regions encompass a total of=20 approximately 92 million POPs, representing approximately 90% of=20 the country's total population. CONTACT: Grupo Iusacell S.A. De C.V. Av Prolongacion Paseo dela Reforma 1236 Col Santa Fe Delegacion Cuajimalpa Mexico DF Mexico 05348 Phone: +52 5 109 4400=20 Home Page: http://www.iusacell.com.mx PVI: Court Approves Sale Procedures, Chapter 11 Financing=20 --------------------------------------------------------- Princeton Video Image, Inc. (OTCBB: PVII) announced Wednesday=20 that it has received bankruptcy court approval for Chapter 11=20 debtor-in-possession financing and sale procedures for the sale=20 of its assets pursuant to Section 363 of the U.S. Bankruptcy=20 Code.=20 The financing agreement approved by the bankruptcy court is with=20 PVI Virtual Media Services, LLC, a newly formed entity owned by=20 PVI's two secured creditors and largest stockholders, that will=20 provide PVI with interim financing to fund its post-petition=20 operating expenses. PVI expects this debtor-in-possession=20 financing to allow the delivery of services to PVI's customers=20 and clients to continue without interruption during the=20 bankruptcy process.=20 The bankruptcy court has also approved a competitive bidding and=20 sale process for the sale of PVI's assets pursuant to Section 363=20 of the Bankruptcy Code. PVI has entered into an agreement with=20 PVI Virtual Media Services, LLC to sell substantially all of its=20 assets to PVI Virtual Media Services, LLC pursuant to Section 363=20 of the Bankruptcy Code. PVI expects that, upon consummation of=20 the asset sale, PVI will be liquidated pursuant to a plan of=20 liquidation which would be subject to the approval of the=20 bankruptcy court. In the event of a liquidation, any recovery for=20 shareholders of PVI would be highly unlikely and would depend on=20 the outcome of the competitive bidding procedure.=20 About Princeton Video Image, Inc:=20 Princeton Video Image, Inc. (PVI) provides real-time virtual=20 advertising, programming enhancements, virtual product=20 integration and targeted interactive services for televised=20 sports and entertainment events. PVI services the advertising=20 industry with its proprietary, Emmy award-winning technology.=20 Headquartered in New York City and Lawrenceville, New Jersey, PVI=20 has offices in Los Angeles, Toronto, Tel Aviv and Mexico City.=20 =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D T R I N I D A D & T O B A G O =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D BWIA: Caribbean Governments Step Up Airline Salvage Efforts ----------------------------------------------------------- A number of Caribbean governments agreed to form a holding=20 company to act as a framework for troubled regional airlines,=20 BWIA and LIAT, reports RadioJamaica.Com, citing St. Vincent and=20 the Grenadines Prime Minister Dr. Ralph Gonsalvez. The Caribbean Airlines (Holding) Limited, will be incorporated in=20 Trinidad and Tobago to hold shares of the two airlines. It will=20 be remain subject for approval from the Registrar of Companies. The move is seen as part of the governments' move to reorganize=20 the troubled companies. This could result in the merger of the=20 two airlines, suggested Mr. Gonsalvez. CONTACT: British West Indies Airways Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D V E N E Z U E L A =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D CITGO: Production Rebounds, Venezuela Rules Out Sale Potential -------------------------------------------------------------- Venezuela Energy and Mines Minister Rafael Ramirez said that the=20 Citgo Petroleum Corp., the country's U.S. oil unit will not be=20 sold, reports Bloomberg News. Presently, output at the country's=20 state oil company, Petroleos de Venezuela S.A. (PdVSA) has risen,=20 reducing the need for fresh capital from asset sales. Mr. Ramirez said that the decision was reached after a study=20 indicated that the Company's assets are worth keeping. Citgo has=20 several refineries, pipelines and a chain of 13,800 gasoline=20 stations in the U.S., said Bloomberg. Late last year, PdVSA said that it is reviewing all assets for=20 possible sale, to brace for possible losses from a nationwide=20 strike that broke out early in December.=20 PDVSA: Analysts Expect Rigid Government Control ----------------------------------------------- Market analysts and former managers of the Venezuelan state oil=20 enterprise, Petroleos de Venezuela, S.A. (PdVSA) said that the=20 Company is likely to be put under strict government control,=20 according to South American Business Information. PdVSA's=20 situation will likely be put under the same controls its Mexican=20 and Colombian counterparts are under. Mexico's state oil company=20 is Pemex, while Colombia's is Ecopetrol. The analysts added that PdVSA is likely to adjust to trends in=20 the petroleum market after having delays in its restructuring.=20 PdVSA is trying to regain normal operations after a national=20 strike slashed off as much as 90% of its average output, and=20 resulted in the dismissal of about 18,000 workers. SIDOR: Siderar Increases Stake Through Debt Restructuring --------------------------------------------------------- Siderar S.A.I.C. announced Monday that its associated companies,=20 Consorcio Siderurgia Amazonia Ltd. (Amazonia) and Sider=A3rgica del=20 Orinoco C.A. (Sidor), have reached an agreement with their=20 financial creditors and the Venezuelan government relating to the=20 restructuring of Sidor's and Amazonia's financial debt. Under the=20 terms of the agreements, Sidor's and Amazonia's aggregate=20 financial debt has been reduced from US$1,883 million to US$791=20 million, certain shareholders of Amazonia have contributed=20 US$133.5 million in cash to a newly created company for the=20 acquisition and capitalization of Sidor's and Amazonia's=20 financial debt, the government of Venezuela has increased its=20 participation in Sidor from 30% to 40.3% and all the guarantees=20 provided by the shareholders of Amazonia with respect to loans=20 made to Sidor have been released and replaced with a security on=20 the fixed assets of Sidor which, together with the pledges on the=20 shares of Amazonia and the shares that Amazonia holds in Sidor,=20 have been placed in trust for the benefit of Sidor's financial=20 creditors and the Venezuelan government. In addition, a portion=20 of Sidor's excess cash (determined in accordance with an agreed- upon formula) will be applied to repay Sidor's financial debt and=20 the remainder will be distributed to the Venezuelan government=20 and the newly created company referred to above. Siderar's subsidiary, Prosid Investments S.C.A. (Prosid), a=20 shareholder of Amazonia, has participated in this restructuring=20 agreement by making an aggregate cash contribution, mainly in the=20 form of new subordinated convertible debt, of US$15.0 million=20 (the maximum amount allowed under Siderar's debt restructuring=20 agreements) to the newly created company and by capitalizing in=20 Amazonia convertible debt previously held by Prosid in the amount=20 of US$30.8 million plus accrued interest.=20 Siderar's indirect participation in Amazonia has increased from 19.76% to 21.14% and may decrease to 14.4% if and when all of its=20 new subordinated convertible debt is converted into equity. Sidor's remaining financial debt is now made up of three=20 tranches, one of US$350.5 million to be repaid over 8 years with=20 one year of grace, one of US$26.3 million to be repaid over 12=20 years with one year of grace and the remaining tranche of=20 US$368.6 million, to be repaid over 15 years with one year of=20 grace. In addition, Sidor's commercial debt with certain=20 Venezuelan government-owned suppliers has been fixed in the=20 amount of US$45.4 million, to be repaid over the next five years. As a result of this restructuring, Siderar, through its=20 subsidiary, Prosid, has retained a participation in a business=20 with competitive costs and an improved financial structure. *********** 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=20 co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ,=20 and Beard Group, Inc., Washington, DC. John D. Resnick, Edem=20 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=20 publication in any form (including e-mail forwarding, electronic=20 re-mailing and photocopying) is strictly prohibited without prior=20 written permission of the publishers. Information contained herein is obtained from sources believed to=20 be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year,=20 delivered via e-mail. Additional e-mail subscriptions for=20 members of the same firm for the term of the initial subscription=20 or balance thereof are $25 each. For subscription information,=20 contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *