/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030707.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, July 7, 2003, Vol. 4, Issue 132 Headlines A R G E N T I N A AGRO COMERCIAL: Submits "Concurso Preventivo" Filing To Court ARGENTINE UTILITIES: Congress To Investigate Phone Rates Hike ARTES GRAFICAS: Court Calls Creditors To Formal Meeting CLASS SRL: Court Declares Bankruptcy DISCO: Seeks More Info Regarding Results of Accounting Review GF GALICIA: Shares Fall To 4-Week Low GUIARGEN SA: Creditor's Bankruptcy Request Granted OLMOS FRAGRANCE: Seeks Court Authorization to Reorganize REPSOL YPF: Announces Dividend Payment of ArP2.6 Per Share SECURITY CONSULTANTS: Calls Creditors To Formal Meeting SIDERAR: Fitch Upgrades Local Currency Rating To A(arg) SIFALPA SRL: Bankruptcy Process Begins SWEET VICTORIAN: Takes First Step Toward Reorganization TECSOL SA: Court Declares Bankruptcy THERAPIA NORTE: Seeks Court's Permission For Reorganization TYPEN SAICF: Creditors Formal Meeting Announced ULTIMATE SYSTEM: Files For "Concurso Preventivo" WALL T WALL SA: Creditor's Request Promps Bankruptcy Ruling B O L I V I A BOLIVIAN BANKS: Poor Economy Hampers Solution To Bad Loans B R A Z I L ELETROPAULO METROPOLITANA: Regulator Authorizes 10.95% Rate Hike LIGHT SERVICOS: EdF Hires Goldman Sachs To Restructure Debts VARIG-TAM: Merger Means Losses For Varig Creditors C O L O M B I A EMCALI: Accord With Union May Lead To Agreement With Creditors E L S A L V A D O R BANCO AGRICOLA: Fitch Cuts Long-Term Foreign Currency Rating BANCO CUSCATLAN: Fitch Reduces, Affirms Ratings BANCO SALVADORENO: Fitch Slashes Rating on Slumping Economy BANCO DE COMERCIO: Fitch Moves To Reduce Ratings M E X I C O AEROMEXICO: Alfonso Pasquel B rcenas Resigns as Chairman, CEO AUSOL: Extends APE Solicitation, Cash Tender Offer N I C A R A G U A ENITEL: Nicaragua Awards Sale Contract To France's BNP Paribas V E N E Z U E L A CANTV: Stock Climbs on Government Currency Controls PDVSA: Energy and Mines Ministry Reshapes Board of Gas Unit - - - - - - - - - - ================= A R G E N T I N A ================= AGRO COMERCIAL: Submits "Concurso Preventivo" Filing To Court ------------------------------------------------------------- The Civil and Commercial Tribunal of Rafaela has received a motion seeking permission to commence reorganization proceedings from local company Agro Comercial S.A.C.I.F.A., relates local news source, Infobae. The machinery and parts manufacturing company is in the hands of Court No. 2 of Rafaela. The report, however, did not indicate whether a receiver has been assigned to the case. CONTACT: Agro Comercial S.A.C.I.F.A. Avenida A. de la Casa 393 Rafaela, Santa Fe ARGENTINE UTILITIES: Congress To Investigate Phone Rates Hike ------------------------------------------------------------- Brazil's lower house's consumer protection committee will set up an inquiry commission as part a plan to investigate telecommunications regulator Anatel's decision to authorize phone rate increases of as much 41.75%. According to a Bloomberg report, the protection committee already has enough congressional signatures to ask for the set-up of the inquiry commission. Chico Alencar, a deputy of Lula's Workers' Party, said he expects the commission to begin its investigation in August. The move by Congress follows court rulings last week in states such as Rio de Janeiro, Santa Catarina and Parana that suspended the increases. President Luiz Inacio Lula da Silva had tried to block the increases last week, concerned they may fuel faster inflation and weaken the country's economic recovery. "Anatel is being too generous with operators and too careless with consumers," Alencar said. The phone companies have said they need the rate increases, which are stipulated in their concessions, to keep up with an annual inflation rate that surged to a seven-year high of 17.2 in May. The average increase authorized by Anatel was 28.75%. ARTES GRAFICAS: Court Calls Creditors To Formal Meeting ------------------------------------------------------- Buenos Aires Court No. 24, which is under Dr. Ballerini, is advising creditors of Artes Graficas Pitzel SRL to a formal organizational meeting. The graphic arts company recently filed its motion for "Concurso Preventivo". In its filing, the Company declared assets of ARS510,745 and liabilities of ARS267,991. The Court assigned Mr. Omar Villalba as receiver, to whom creditors must have their claims verified before September 22, 2003. The informative meeting will be on April 20 next year. CONTACT: Mr. Omar Villalba 10th Floor C Tucuman Street No. 1484 Buenos Aires CLASS SRL: Court Declares Bankruptcy ------------------------------------ A request from Obra social Directivos y Empresarios Peque¤os y Medianos resulted in the bankruptcy of Class S.R.L., relates a local source. Court No. 5, under Dr. Vassallo, which handles the case, assigned Ms. Monica Beatriz Costa as receiver. The deadline for claims verification is September 1, this year, CONTACT: Class S.R.L. Ground Floor Moreno Street No. 455 Buenos Aires Ms. Monica Beatriz Costa 4th Floor E Reconquista Street No. 715 Buenos Aires DISCO: Seeks More Info Regarding Results of Accounting Review ------------------------------------------------------------- Argentine supermarket chain Disco S.A. informed the Argentine stock exchange that it has requested more information from its troubled parent, Dutch retail giant Royal Ahold NV, regarding the results of its accounting review, says Dow Jones. The parent, which completed Tuesday a company-wide internal probe into accounting regularities, announced it had uncovered a total of around EUR970 million in wrong accounting. This included some EUR8 million related to problematic accounting at Disco. Disco's acting Vice President Jesus Fernandez de Gabriel said in a filing to the bourse that the Company has asked Ahold for some "reports related to that announcement, with the aim of knowing the adjustments and modifications that it should carry out" to its accounts. He also asked for "suggestions...to identify the new controls and procedures that should be applied" to prevent a repetition of errors. Local press reports also added that, besides the inflation of earnings, Ahold also found imprecise documentation and a lack of internal controls at the Argentine unit. Disco reported losses of ARS1.76 billion ($1=ARS2.795) in the first nine months of 2002, amid a 10.9% contraction in Argentina's economy. GF GALICIA: Shares Fall To 4-Week Low ------------------------------------- Shares of Grupo Financiero Galicia, Argentina's second- largest bank, fell 5 centavos, or 4.1%, to ARS1.16, its lowest price in four weeks, on investors' concern that banks will face difficulties recovering from the country's economic crisis. According to Bloomberg, Grupo Galicia holds the largest percentage of Argentine bonds, causing investors to rethink buying its shares. Potential investors are curious to know how the government will compensate banks for some US$11 billion in losses caused by last year's currency devaluation and the forced conversion of dollar-denominated loans and deposits into pesos. Those steps were taken after Argentina defaulted on US$95 billion of debt, helping to cause the economy to shrink 10.9% last year. "We need to know how solvent banks will be," said Marcelo Nicoletti, chief economist for ABN Amro Asset Management in Buenos Aires and manager of the Rembrandt Argentina Fund, which oversees about US$270 million in Argentine equities. Nicoletti said his bank lowered its recommendation on Argentine bank stocks from ``overweight'' to ``neutral'' a month ago because of a lack of clarity on government plans to compensate banks for their losses. CONTACT: GRUPO FINANCIERO GALICIA Teniente General Juan D. Peron 456, Piso 3 1038 Buenos Aires, Argentina Phone: (54 11) 4343 7528 / 9475 Web site: http://www.gfgsa.com Contacts: Eduardo J. Escasany, Chairman and CEO Sergio Grinenco, CFO, Banco de Galicia y Buenos Aires GUIARGEN SA: Creditor's Bankruptcy Request Granted -------------------------------------------------- Editorial publishing house Guiargen S.A. goes bankrupt for a debt of $46,095 to Editorial Antartica S.A., after the creditor filed a request at Court No. 8 of Buenos Aires, which is under Dr. Gonzalez. Mr. Hector Ricardo Martinez is assigned receiver for the process. Creditors are advised to have their claims verified before September 19 this year. CONTACT: Guiargen S.A. 12th Floor, Office No. 1027 Florida Street No. 165 Buenos Aires Mr. Hector Ricardo Martinez 5th Floor 40 Independencia Ave. No. 2251 Buenos Aires OLMOS FRAGRANCE: Seeks Court Authorization to Reorganize -------------------------------------------------------- Cosmetics distributor Olmos Fragrance submitted a motion for "Concurso Preventivo" to Court No. 20 of Buenos Aires. The Company is asking permission to start its reorganization process. The Court assigned Ms. Susana G. Roiter as receiver for the process. Creditors must have their claims verified before August 7, as the receiver will submit the individual reports on September 18, followed by the general report on October 30. The informative assembly will be on April 8 next year. CONTACT: Ms. Susana G. Roiter Marcelo T. de Alvear 1430 Buenos Aires REPSOL YPF: Announces Dividend Payment of ArP2.6 Per Share ---------------------------------------------------------- Standard & Poor's Ratings Services said Thursday that YPF S.A.'s (YPF, local currency: BB+/Positive/--; foreign currency: BB/Stable/--) dividend announcement will not affect the credit quality of the company given its sound financial profile and a strong cash flow generation since the second quarter of 2002 due to unusually high crude oil prices. YPF announced dividends of Argentine peso (ArP) 2.6 per share that would total approximately ArP1 billion (about $360 million). This payment follows a first payment of $682 million in April 2003. Although YPF's payout ratio has increased to more than 90%, it is still commensurate with the company's cash generating ability. Standard & Poor's expects YPF's dividend policy to reflect the Repsol group's cash management policy, but not to increase the company's cash needs or jeopardize the capital expenditure requirements of YPF. ANALYSTS: Pablo Lutereau, Buenos Aires (54) 114-891-2125 Emmanuel Dubois-Pelerin, Paris (33) 1-4420-6673 SECURITY CONSULTANTS: Calls Creditors To Formal Meeting ------------------------------------------------------- Security Consultants Office S.R.L. is calling its creditors to a formal meeting, relates a local source. The Company stopped making debt payments since April 15 this year. Court No. 10 of Buenos Aires, which is under Dr. Chomer, handles the case. CONTACT: Security Consultants Office S.R.L. Parroissien Street No. 4428 Buenos Aires SIDERAR: Fitch Upgrades Local Currency Rating To A(arg) ------------------------------------------------------- Fitch Ratings announced it was upgrading the local currency rating of Argentine steelmaker Siderar, part of the Argentine- Italian Techint group, to A(arg) from BBB(arg), reports Business News Americas. The move comes after the Argentine economy managed to grow in the first half of this year, as its current account expanded, the peso currency strengthened and inflation fell. In May, Fitch Ratings removed Siderar's foreign currency rating of 'C' from Rating Watch Negative and simultaneously withdrew the foreign currency rating of Siderar S.A. following the successful completion of a refinancing agreement with all its creditors to extend its debt maturities. The refinancing provided all creditors with a partial pay down of 17.94% of outstanding debt, additional security and substantially higher interest rates, which in Fitch's view provide incremental compensation for extending the maturity of the notes sufficient to prevent a loss of present value to the original noteholders. Siderar, Argentina's largest integrated steelmaker with installed capacity of 2.2Mt/y, reported net income of ARS26.6 million (currently US$9.5mn) for the first three months of this year, compared with a loss of ARS74.9 million in the same period of 2002. CONTACT: Leonardo Stazi Siderar S.A.I.C. Phone: 54 (11) 4018-2308/2249 Home Page: www.siderar.com SIFALPA SRL: Bankruptcy Process Begins -------------------------------------- Sifalpa S.R.L. is placed under official bankruptcy status after its creditor, Power Tools S.A. filed a request at Court No. 8 of Buenos Aires. The Company reportedly owes Power Tools some US$16,914. The Court designated Mr. Norberto Jose Perrone as receiver. Claims will be verified until September 29 this year. CONTACT: Sifalpa S.R.L. Boyaca Street No. 1958 Buenos Aires Mr. Norberto Jose Perrone Constitucion Street No. 2894 Buenos Aires SWEET VICTORIAN: Takes First Step Toward Reorganization -------------------------------------------------------- Buenos Aires-based textile products producer Sweet Victorian S.A. has applied for "Concurso Preventivo", relates local news source Infobae. Buenos Aires Court No. 46 handles the case, but the report did not indicate whether a receiver has been assigned to the case or not. CONTACT: Sweet Victorian S.A. Tucuman 540 Buenos Aires TECSOL SA: Court Declares Bankruptcy ------------------------------------ Court No. 13 of Buenos Aires declared Tecsol S.A. under bankruptcy, granting a request from Lloyd's TSB Bank PLC. The Company reportedly owes the bank some $24,828. The source added that Secretary No. 25, under Dr. Guerri, aids the Court on the matter. Mr. Claudio Barberia is assigned receiver for the process. Claims will be verified until September 4 this year. CONTACT: Tecsol S.A. Ground Floor dA Estados Unidos Street No. 337 Buenos Aires Mr. Claudio Barberia 7th Floor G Viamonte Street No. 749 Buenos Aires THERAPIA NORTE: Seeks Court's Permission For Reorganization ----------------------------------------------------------- Argentine mental health services company Therapia Norte S.A. is seeking court permission to start its reorganization process, local newspaper El Cronista Comercial reports. The Company reportedly stopped making debt payments since March this year. The motion for "Concurso Preventivo" was submitted to Court No. 6 of Buenos Aires, which is under Dr. Carlos Ferrario. Dr. Jorge Sicoli from Secretary No. 11 assists the Court on the matter. According to the report, Mr. Miguel Angel Visco is assigned receiver for the process. Creditors are advised to have their claims verified before September 29 this year. CONTACT: Therapia Norte S.A. Rodriguez Pena 2 D Buenos Aires Mr. Miguel Angel Visco 3 de Febrero 4683 3 P Buenos Aires Phone: (005411) 4701 9539 TYPEN SAICF: Creditors Formal Meeting Announced ----------------------------------------------- Creditors of Typen S.A.I.C.F. are called to a formal meeting, reveals a local source. The Company stopped paying its debts in March 28 of this year. The Company declared assets of ARS242,876 and liabilities of ARS195.282. The case is now in Court No. 25 of Buenos Aires. Secretary No. 50 of Buenos Aires assists the Court on the matter. CONTACT: Typen S.A.I.C.F. Colombres Street No. 257 Buenos Aires ULTIMATE SYSTEM: Files For "Concurso Preventivo" ------------------------------------------------ Ultimate System S.A., which provides teaching services, submitted a motion for "Concurso Preventivo" to Court No. 2 of Buenos Aires, reports local news source Infobae. The Court assigned Mr. Jorge A. Gomez as receiver for the case. Credit claims will be verified until October 13 this year. The receiver will then file the individual reports on November 24, followed by the general report on February 4 next year. The informative assembly will be on July 14 next year. CONTACT: Ultimate System S.A Suipacha 68 Buenos Aires Mr. Jorge Gomez Presidente Peron 1558 Buenos Aires WALL T WALL SA: Creditor's Request Promps Bankruptcy Ruling ----------------------------------------------------------- Court No. 20 of Buenos Aires, which is under Dr. Taillade, declared Wall T Wall S.A. officially bankrupt, after a request from Mr. Juan Montenegro, to whom the Company owes some $7051. The Court assigned Mr. Oscar Chapiro as receiver, to whom creditors must have their claims verified before October 2 2003. CONTACT: Wall T Wall S.A. Parera Street No. 185 Buenos Aires Oscar Chapiro 5th Floor 514 Lavalle Street No 1290 Buenos Aires ============= B O L I V I A ============= BOLIVIAN BANKS: Poor Economy Hampers Solution To Bad Loans ---------------------------------------------------------- International and local analysts believe that Bolivian banks may not see a solution to their enormous amounts of bad loans just yet due to the country's dismal macro economic situation, reports Business News Americas. According to the latest report from Bolivia's banking regulator, past-due and nonperforming loans reached 20.9% of total loans in June, which analysts suggest is a very high ratio of bad loans. Total loans in the banking sector were US$2.6 billion in June 15. Bolivia is still suffering from an economic crisis that has dragged on for four years and has seen the banks' asset quality deteriorate in a sustained way, general manager Sebastian Landiva at local rating agency PCR Bolivia said. "The banks' bad loan problem is due to a generalized trend of economic problems both for corporate clients and individual customers," said Ricardo Chaves, Latin American banking director at Fitch Ratings in New York. Landiva said some banks have sought to reduce the percentage of bad loans by granting new loans but those efforts have failed due to a widespread lack of good loan subjects in Bolivia. "The macro economic situation in Bolivia does not permit any quick solution to the banks' high levels of bad loans," Chaves noted. =========== B R A Z I L =========== ELETROPAULO METROPOLITANA: Regulator Authorizes 10.95% Rate Hike ---------------------------------------------------------------- Embattled Brazilian power utility Eletropaulo Metropolitana announced that it has obtained approval from the country's electricity market regulator to increase prices by 10.95%, says Reuters. The rate escalation, approved Thursday to be implemented Friday, is less than the 28.22% rise in the IGP-M price index for the 12 months through June and is also less than the 34.46% increase Eletropaulo requested. The increase will help the Sao Paulo-based utility, which serves about five million customers, recoup losses from last year's currency decline that drove up utilities' debt-servicing costs and a power crisis in 2001 that cut consumption. Eletropaulo stock, which had been falling about 3% before the announcement, erased losses and closed 0.4% higher at BRL25.9. Eletropaulo, Latin America's largest power distributor in revenue terms, is owned by debt-ridden U.S. power firm AES Corp. CONTACT: ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes Gonzalves Jr., VP Finance/Investor Relations LIGHT SERVICOS: EdF Hires Goldman Sachs To Restructure Debts ------------------------------------------------------------ Electricite de France, Europe's biggest power producer, hired Goldman Sachs Group, Inc. to help restructure the US$1.7 billion debt of its ailing Brazilian unit Light Servicos de Eletricidade SA, says Valor Economico. Valor adds that the bank would study the French company's prospects in Brazil and the possibility of selling Light. EdF's investment in Light has totaled US$2.7 billion since AES Corp. left the joint venture. Light is the biggest energy distributor in Brazil's Rio de Janeiro state. On Tuesday, the unit missed payment on part of its debt and said it is still seeking to negotiate with creditors to extend the maturity of its obligations. According to industry observers, if Light can arrange a restructuring agreement with its creditors in the coming months, it would likely survive its current crisis, as electricity consumption is expected to increase steadily over the next few years. CONTACT: LIGHT SERVICOS DE ELETRICIDADE S.A. Avenida Marechal Floriano, 168 20080-002 Rio de Janeiro, Brazil Phone: +55-21-2211-2794 Fax: +55-21-2211-2993 Home Page: http://www.lightrio.com.br Contact: Bo Gosta Kallstrand, Chairman Michel Gaillard, President and CEO Joel Nicolas, Executive Director, Operation Paulo Roberto Ribeiro Pinto, Executive Director, Investor Relations and CFO VARIG-TAM: Merger Means Losses For Varig Creditors -------------------------------------------------- The eventual merger of Brazilian airlines Viacao Aerea Rio- Grandense SA (Varig) and TAM Linhas Aereas SA will mean losses for the creditors of Varig, says Valor Economico newspaper. The paper relates that Carlos Lessa, president of Brazil's state- controlled development bank BNDES, Varig's foreign and national creditors will lose part of the US$1.2 billion they lent the airline because Varig won't use the financial aid it gets from BNDES to pay those debts. The new airline will start debt-free, says the newspaper. Varig's largest creditors include three state-controlled companies: fuel distributor BR Distribuidora, Banco do Brasil and airports administrator Infraero, with a combined BRL650 million (US$229 million) in loans. Varig also owes BRL450 million to General Electric and US$448 million to Boeing Co. Meanwhile, the newspaper reveals that Gilberto Carlos Rigoni is returning to the presidency of the Board of the Fundacao Ruben Berta, Varig's controlling shareholder, following a preliminary court decision. As a result, the closing of the merger may be delayed until next week as Rigoni opposes the merger terms. CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.) Rua 18 de Novembro No. 800, Sao Joao 90240-040 Porto Alegre, Rio Grande do Sul, Brazil Phone: (51) 358-7039/7040 (51) 358-7010/7042 Fax: +55-51-358-7001 Home Page: www.varig.com.br/english/ Contacts: Dorival Ramos Schultz, EVP Finance and CFO E-mail: dorival.schultz@varig.com.br Investor Relations: Av. Almirante Silvio de Noronha, n 365-Bloco "B" - s/458 / Centro Rio de Janeiro, Brazil TAM Daniel Mandelli Martin, President Buenos Aires Tel. (54) (11) 4816-0001 URL: www.tam.com.br =============== C O L O M B I A =============== EMCALI: Accord With Union May Lead To Agreement With Creditors -------------------------------------------------------------- Empresas Municipales de Cali (Emcali), Colombia's second largest diversified city-owned utility, moved a step nearer to an agreement with creditors after reaching an accord with its union to salvage the ailing utility, Business News Americas reports, citing local daily La Republica. According to Cali Mayor Jhon Maro Rodriguez, the Company's workers have agreed to give up some pension benefits and to allow their collective contract to expire in 2008, in accordance with demands made by the central government. This would make it easier for the Company's creditors to reach an accord with Emcali, Rodriguez said. In January, President Alvaro Uribe announced that the government was willing to assume part of Emcali's COL1.5 trillion in debts provided the Company lowered its labor costs and allowed customers to assume stakes in the business. ===================== E L S A L V A D O R ===================== BANCO AGRICOLA: Fitch Cuts Long-Term Foreign Currency Rating ------------------------------------------------------------ International rating agency Fitch Ratings downgraded the long- term foreign currency rating of Banco Agricola to `BB' from `BB+' and maintained a negative outlook on the rating. The ratings agency also affirmed the El Salvadorian bank's short-term foreign currency at `B', individual rating at `D' and support rating at `5T' (See Fitch's Notes below for explanation.) BANCO CUSCATLAN: Fitch Reduces, Affirms Ratings ----------------------------------------------- International rating agency Fitch Ratings downgraded the long- term foreign currency rating of Banco Cuscatlan de El Salvador to `BB' from `BB+' and maintained a negative outlook on the rating. The ratings agency also affirmed the bank's short-term foreign currency at `B', individual rating at `D' and support rating at `5T' (See Fitch's Notes below for explanation.) BANCO SALVADORENO: Fitch Slashes Rating on Slumping Economy ----------------------------------------------------------- International rating agency Fitch Ratings downgraded the long- term foreign currency rating of Banco Salvadoreno to `BB' from `BB+' and maintained a negative outlook on the rating. The ratings agency also affirmed the El Salvadorian bank's short-term foreign currency at `B', individual rating at `D' and support rating at `5T' (See Fitch's Notes below for explanation.) BANCO DE COMERCIO: Fitch Moves To Reduce Ratings ------------------------------------------------ International rating agency Fitch Ratings downgraded the long- term foreign currency rating of Banco de Comercio de El Salvador to `BB' from `BB+' and maintained a negative outlook on the rating. The ratings agency also affirmed the bank's short-term foreign currency at `B', individual rating at `D' and support rating at `5T' (See Fitch's Notes below for explanation.) FITCH NOTES: Fitch Ratings downgraded the ratings of the above- mentioned banks citing the gradual deterioration of the operating environment for banks over the past few years, which has resulted in relatively low profitability, asset quality concerns given the industry's high levels of non-performing, restructured and foreclosed assets, as well as tight capital bases, given the high levels of non-earning assets tied up in equity. The ailing state of the coffee sector in El Salvador, to which many banks had significant exposure, resulted in the State initiative of establishing a special support program (Ficafe), to pool weak bank loans from the sector and exchange them for Ficafe bonds, which provides significant medium term relief for banks but portrays the underlying asset quality of the system. Additionally, the relatively slow economic growth of the past few years in El Salvador, coupled with low interest rates, has resulted in a number of banks increasing foreign exposure to companies operating in other countries in the region. While in Fitch's view this increases loan portfolio diversification, it also brings about higher transfer and credit risk, as most other countries in the region have lower ratings than El Salvador. While in 2001 and 2002 GDP growth was slow (1.8% and 2.3%, respectively), the economic outlook for 2003 is blurred by the slow U.S. economy, which is the main recipient of El Salvador's exports, as well as the main provider of remittance flows from Salvadorian nationals working in that country. Fitch's forecast is that at 2-2.5% for 2003, El Salvador's economic growth will continue to be relatively subdued, although the uncertainty of the upcoming presidential elections in March 2004 could potentially hinder further growth. In the meantime, banks will have to continue contending with a low interest rate environment, which has resulted in significantly narrower net interest margins. The changing environment has forced banks to tighten cost control and to begin charging fees for services rendered, although there is still more to be done in this regard. Other important trends are the shift in loans outside El Salvador, as low interest rates give local banks a competitive advantage versus other banks in the region, which operate in more fragmented and inefficient banking systems. This, coupled with low credit demand locally given the slow economy, has pushed banks to lend to companies operating in countries like Honduras, Guatemala, Nicaragua and Costa Rica. On the other hand, profitability has weakened in the past two years as a result of the slow economy and the decline in coffee prices, one of El Salvador's main exports. This has had a negative impact on non- performing assets, which have been on the rise and also prompted the authorities to establish a support program for some banks called Ficafe. As to capital adequacy, in general ratios have improved, aided by tighter regulations, which will take the minimum credit risk- weighted capital ratios to 12% by 2005, although in our view, the underlying capital strength of the equity bases of banks is hampered by the high proportion of non-earning assets on their balance sheets. Full reports on each of the banks in the following list, which deal with the particulars of each institution, will be published in due course. CONTACT: Akiko Kudo +1-212-908-0819, New York Gustavo Lopez +1-212-908-0853, New York Erick Campos +503 263 1300, San Salvador MEDIA RELATIONS: James Jockle +1-212-908-0547, New York =========== M E X I C O =========== AEROMEXICO: Alfonso Pasquel B rcenas Resigns as Chairman, CEO ------------------------------------------------------------- The Board of Directors of Cintra, S.A. de C.V., Holding Company of Aerov¡as de M‚xico, S.A. de C.V., Compania Mexicana de Aviacion, S.A. de C.V. and subsidiaries, in their meeting from Wednesday accepted the irrevocable resignation of Alfonso Pasquel B rcenas as Chairman of the Board and Chief Executive Officer of Aerov¡as de M‚xico, S.A. de C.V. Likewise, The Board of Directors of Cintra, S.A. de C.V. agreed in appointing Arturo Barahona Oyervides -who was the Deputy Chief Executive Officer of Aerov¡as de M‚xico, S.A. de C.V., as Chief Executive Officer of the Company since Thursday. The Deputy CEO position will be eliminated from the organization and budget, due to its functions will be integrated to the Company's Head Office. Luis Gutierrez Ruvalcaba, Chairman of the Board of Cintra, S.A. de C.V., will also be Chairman of the Board of Aerov¡as de Mexico, S.A. de C.V., starting on August 1st. AUSOL: Extends APE Solicitation, Cash Tender Offer -------------------------------------------------- Autopistas del Sol S.A. (the "Company") announced Thursday that it is extending its solicitation (the "APE Solicitation") from holders of its 9.35% Series A Senior Notes due 2004 and Series B Senior Notes due 2009 (together, the "Existing Notes") and other unsecured financial indebtedness (the "Bank Debt" and, together with the Existing Notes, the "Existing Debt"), subject to certain eligibility requirements, of powers of attorney in favor of an attorney-in-fact to execute a consent to an acuerdo preventivo extrajudicial (the "APE") until 5:00 p.m., New York City time, on July 8, 2003, unless further extended by the Company. The Company also announced Thursday that it is extending until 5:00 p.m., New York City time, on July 8, 2003, unless further extended by the Company, its offer to apply up to U.S.$18 million to purchase for cash (the "Cash Tender Offer") a portion of its Existing Debt at a price to be determined through a modified Dutch auction. APE Solicitation As of 5:00 p.m., New York City time, on July 3, 2003, approximately U.S.$264 million principal amount of Existing Debt had been tendered in the APE Solicitation. The APE Solicitation will remain in all respects subject to all terms and conditions described in the Solicitation Statement dated May 15, 2003. The Cash Tender Offer As of 5:00 p.m., New York City time, on July 3, 2003, approximately U.S.$5 million principal amount of Existing Debt had been tendered in the Cash Tender Offer. The Cash Tender Offer will remain subject to all terms and conditions described in the Offer to Purchase dated May 15, 2003. The Information Agent for both the APE Solicitation and the Cash Tender Offer is D.F. King & Co., Inc. and its telephone number is (212) 493-6920. For further information, contact Autopistas del Sol S.A. at (54 11) 5789-8700. This extension notice is dated as of July 3, 2003. ================= N I C A R A G U A ================= ENITEL: Nicaragua Awards Sale Contract To France's BNP Paribas -------------------------------------------------------------- French bank BNP Paribas emerged as the winner for the contract to complete the privatization of Nicaragua's fixed line operator Enitel, Business News Americas reports, citing Carlos Fernandez, the head of Enitel shareholding unit Uretel. Mr. Fernandez also revealed that the World Bank has confirmed approval of the decision to award the contract to a bank of global standing. According to him, BNP and Uretel will now negotiate the finer details of the contract. The Nicaraguan government is expected to sell its 49% stake in Enitel in early November. Enitel was partially privatized in 2001 when the government sold its 40% stake in Enitel to the Megatel consortium, comprised of Sweden's Telia Swedtel and Honduran electricity company EMCE. Megatel paid US$33 million for the stake and is presently paying the government US$10 million a year, as part of a five-year management contract that will expire in April 2006. Enitel employees hold the remaining 11% of the Company. ================= V E N E Z U E L A ================= CANTV: Stock Climbs on Government Currency Controls --------------------------------------------------- Shares of Venezuela's biggest phone company CA Nacional Telefonos de Venezuela (CANTV) climbed VEB75, or 1.6%, to VEB4705, reports Bloomberg. Government restrictions on foreign exchange trading since January have spawned an unofficial market where the bolivar trades as much as 38% weaker than the fixed official rate of 1,598 per dollar. "Whenever you have a devaluation, the bolivar price of stocks with a lot of assets always goes up," said Robert Bottome, an analyst with research company Veneconomy in Caracas. PDVSA: Energy and Mines Ministry Reshapes Board of Gas Unit ----------------------------------------------------------- Venezuela's energy and mines ministry were scheduled to meet with the board members of PDVSA Gas, the state oil Company's PDVSA's gas unit, on July 3-5 to decide a new "strategic business orientation," Business News Americas reports, citing PDVSA Gas spokesperson Jose Angel Calatayud. Calatayud revealed that the ministry is planning to replace some of the board of PDVSA Gas with its own officials in order to have more influence on the Company's operations. PDVSA Gas board members previously reported to PDVSA, but will now answer to the ministry, he explained, adding that the moves are part of the ministry's overall reshaping of PDVSA management. "I can't say until what point this will influence the management of the projects that are in process," Calatayud added. *********** 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 * * *