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/raid1/www/Hosts/bankrupt/TCRLA_Public/030715.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 Tuesday, July 15, 2003, Vol. 4, Issue 138 Headlines A R G E N T I N A CARRIZO: Initiates Court-Administered Reorganization DISCO: IFC Mulls Acquisition Funding Scenarios EDEMSA: Local S&P Assigns Default Rating To $150M of Bonds INTERCLINICAS: Seeks Court-Authorized Reorganization PAN AMERICAN: S&P Ups Ratings to 'B', Outlook Improves PECOM ENERGIA: S&P Upgrades Ratings; Outlook Stable PETROBRAS ENERGIA: Informs Bourse of Bond Buy Back Plans REPSOL YPF: Restructures Top Echelons S.A.O.C.A.: Files Motion For "Concurso Preventivo" TELEFONICA DE ARGENTINA: CNV Approves New Notes Offering B A R B A D O S C&W: Technical Loophole in Barbados' Network Leads To Losses B E R M U D A GLOBAL CROSSING: Committee Reaffirms ST Purchase Deal Support TYCO INTERNATIONAL: Adopts New Policies On Compensation B O L I V I A PRIVATIZED COMPANIES: Adviser Claims Near Bankruptcy B R A Z I L ENRON: Files Official Reorganization Plan With Bankruptcy Court SABESP: Announces $6.2M Investment Plan For Guaruja USIMINAS: Announces Equity Dividend Payment USIMINAS: Steadfast in Argentina, Venezuela Investments C H I L E ENDESA CHILE: Fitch Rates Proposed $200M Bond Issue 'BBB-' E C U A D O R PETROECUADOR: Signs Supply Deal With Petroleos de Venezuela H O N D U R A S BANCO SOGERIN: Sale To Banco del Pais Complete M E X I C O GRUPO TMM: Amplifies Recent Judgment On TFM Vat Claim MIDITEL: Telmex Halts Service On Failure To Meet Obligations MIDITEL: Moves a Step Nearer to Bankruptcy T R I N I D A D & T O B A G O CARONI: Reaches Tentative Labor Agreement With Union U R U G U A Y ANCAP: Uruguay To Hold Referendum on New JV Law ANCAP: AGCEI Accuses Government of Defending Monopoly * Uruguay: IMF Approves Request For Waivers Of Applicability - - - - - - - - - - - ================= A R G E N T I N A ================= CARRIZO: Initiates Court-Administered Reorganization ---------------------------------------------------- The Civil and Commercial Tribunal of Jujuy announced that the informative assembly for the reorganization process of local company, Carrizo Construcciones S.R.L., will be next Monday, July 21, relates Infobae. The Company, which is involved in construction and building repair, has submitted its motion for "Concurso Preventivo" at Court No. 1 of Jujuy, Argentina. The report did not indicate whether a receiver has been assigned to the case yet. DISCO: IFC Mulls Acquisition Funding Scenarios ---------------------------------------------- The International Finance Corporation, the private-sector investment arm of the World Bank, plans to put up money to buy Disco SA, the Argentine unit of troubled Dutch supermarket chain Royal Ahold NV, says Dow Jones. The IFC revealed in a statement posted on its Web site that it "has been approached by potential bidders for Disco and is considering providing a portion of the required financing once the winning bid is determined." A spokesperson from the organization suggested that IFC is considering putting up as much as 25% of the cash needed to buy the chain, which, according to Argentine press reports, is worth between US$300-400 million. The contribution could be an equity investment or a loan to the winning bidder, the spokesperson said. The proposal was presented on July 7 and could be approved at a board meeting as early as July 29. CONTACT: DISCO S.A. Larrea 847, Piso 1 1117 Buenos Aires, Argentina Phone: +54-11-4964-8000 Fax: +54-11-4964-8076 Home Page: http://www.disco.com.ar AHOLD NV, KONINKLIJKE 3050 Albert Heijnweg1 1507 EH Zaandam Netherlands Phone: +31 75 6599111 Fax: +31 75 6598350 Telex: 1 9010 Home Page: http://www.ahold.com Contact: Norbert L.J. Berger, Secretary EDEMSA: Local S&P Assigns Default Rating To $150M of Bonds ---------------------------------------------------------- Standard & Poor's International Ratings, Ltd. Sucursal Argentina rated US$150 million worth of corporate bonds issued by local company Empresa Distribuidora de Electricidad de Mendoza S.A. 'raD' recently. The rating, which is assigned to issues that are currently in payment default, applies to bonds that the National Securities Commission of Argentina describes as "Programa de Emision de Obligaciones Negociables simples". The bonds mature on April 13, 2005. Basing the ratings on the company's financial situation as of the end of March 2003, S&P said the default status may also be assigned if the obligor has filed for bankruptcy, or if interest or principal payments are not made on the due date, even if the applicable grace period has not expired, unless the ratings agency has reason to believe that payment will be made during such grace period. FERROVEND: Reorganization Plans Submitted For Court Review ---------------------------------------------------------- Ferrovend S.A. has filed a motion seeking "Concurso Preventivo" to Court No. 1 of Buenos Aires, which is under Dr. Julian Dieuzeide. The Company, which stopped making debt payments earlier this month, is seeking Court permission to start its reorganization process. The Court assigned Ms. Noemi Vivares as receiver to whom creditors must submit their claims for verification before September 22, 2003. CONTACT: Ferrovend S.A. 4th Floor B Santiago del Estero 1434 Buenos Aires Ms. Noemi Vivares 2nd Floor D Cordoba 2626 Buenos Aires Phone: (005411)4963 3289 INTERCLINICAS: Seeks Court-Authorized Reorganization ---------------------------------------------------- Interclinicas S.A., a medical services company in Argentina, petitioned the Court for permission to start a formal reorganization process. The Company submitted a motion for "Concurso Preventivo" at Court No. 9 of Buenos Aires, which is under Dr. Eduardo Favier Dubois. El Cronista Comercial reports that the Company ceased making debt payments on May 23 this year. CONTACT: Interclinicas S.A. 5th Floor B Ave. Cordoba 456 Buenos Aires PAN AMERICAN: S&P Ups Ratings to 'B', Outlook Improves ------------------------------------------------------ Standard & Poor's Ratings Services said Friday that it raised its long-term foreign and local currency corporate credit ratings on oil and gas producer Pan American Energy LLC (PAE) to 'B' from 'CCC+'. The outlook on both ratings is stable. As of March 2003, PAE's total debt amounted to $701.4 million. "The upgrade is based on Standard & Poor's expectation that the company will continue to show sound financial and operating performance despite the challenging conditions in Argentina," said credit analyst Pablo Lutereau. The stable outlook reflects Standard & Poor's expectations that despite some institutional challenges for the companies operating in the Argentine economy, the regulations for the sector are not expected to suffer changes affecting the current environment. Strong financial performance helped by unusually high crude oil prices and increased production allowed EBITDA interest coverage to reach a strong 10.9x in 2002 (15.6x in the first quarter of 2003) from approximately 2.4x in fiscal 1998. Standard & Poor's expects PAE's coverage ratios to remain strong with FFO to total debt above 20% and EBITDA interest coverage of 4x throughout a normal price cycle. Debt to capitalization, of 18.1% as of March 2003, is expected to remain at moderate levels in the range of 20%-30%. Although PAE's financial flexibility is reduced by current market conditions, a strong cash flow generation ability (with funds from operations at 57.9% of the total debt in 2002 and 18.7% for the first quarter of 2003) boosted by the unusually high crude oil price during the 12 months ended March 2003, should help maintain liquidity strong in the short to medium term. However, Standard & Poor's expects PAE to maintain an adequate level of liquidity in a scenario of lower crude oil prices. Because the company can pace the development of its reserves, Standard & Poor's does not expect PAE's liquidity position to be significantly affected by the large capital expenditures requirements associated to that end. Accordingly, in a lower crude oil price scenario and without an improvement in natural gas realization prices, Standard & Poor's expects PAE to reduce its investments, resulting in lower growth rates. Nevertheless, at 2002 production levels and considering its performance through the cycle, Pan American should be able to meet its financial obligations. In the less-likely scenario that the company decides to continue heavily investing despite lower prices, its conservative financial profile provides some room to finance increasing indebtedness and still maintain an adequate financial profile. Analyst: Pablo Lutereau Buenos Aires Phone: (54) 114-891-2125 Marta Castelli Buenos Aires Phone: (54) 114-891-2128 PECOM ENERGIA: S&P Upgrades Ratings; Outlook Stable --------------------------------------------------- Standard & Poor's Ratings Services said Friday that it raised its foreign currency corporate credit rating on Argentine-based integrated energy company Pecom Energia S.A. (Pecom) to 'B-' from 'CCC'. The outlook is stable. "The upgrade is based on Standard & Poor's expectation that because of the economic incentives as well as the existence of cross-default clauses between Pecom and Petroleos Brasileiros (Petrobras), Pecom's financial flexibility will improve after the change in its controlling shareholder," said credit analyst Pablo Lutereau. With sales of more than US$1.4 billion in 2002 and consolidated assets of approximately US$4 billion, Pecom is one of the most important power companies in Argentina and the Southern Cone. The financial flexibility of Pecom is limited by current market conditions and the company's financial profile. Although no capital infusions or financial aid by the shareholder is expected in the near term, the existence of cross-default clauses between Petrobras' indebtedness and Pecom's debt results in an incentive for the former to support its subsidiary. According to Standard & Poor's criteria, the mere existence of such clauses does not merit equalization of the ratings. However, in the current case, Standard & Poor's factors in the ratings some potential support to Pecom from its parent, Petrobras. Pecom's liquidity is somewhat adequate. As of March 2003, Pecom's total debt amounted to US$2.19 billion. Although the company's funding ability is reduced by current market conditions, the restructuring of all its obligations significantly reduces Pecom's refinancing risk. The company also has approximately US$224 million in cash and short-term investments. As is the common practice in most Latin American countries, the company does not have committed credit lines. Pecom needs to make significant capital expenditures in order to develop its reserve, therefore affecting its liquidity position. Therefore, in a lower crude oil price scenario and without an improvement in natural gas realization prices, Standard & Poor's does not expect Pecom to significantly reduce its investments without jeopardizing its future production level and its repayment ability. Both the rating and outlook assume no significant changes in the regulation affecting the sector. Should any such change take place, ratings will be adjusted in order to reflect either the improvement or deterioration in Pecom's repayment ability. Analyst: Pablo Lutereau Buenos Aires Phone: (54) 114-891-2125 Reginaldo Takara Sao Paulo Phone: (55) 11-5501-8932 PETROBRAS ENERGIA: Informs Bourse of Bond Buy Back Plans -------------------------------------------------------- Argentine energy company Petrobras Energia (formerly Pecom Energia) told the Buenos Aires stock market that it is planning to buy back another US$6.2 million of O series debentures issued in March. In June, Petrobras Energia bought back US$7.8 million of the dollar-denominated series O debentures, Business News Americas recalls. Petrobras Energia placed US$33 million in one-year debentures to pay part of a US$35-million bond payment due on March 21. The O series was for US$29.2 million and pays 7.5% annual interest, while the US$3.6 million P series pays 8.5% annual interest. REPSOL YPF: Restructures Top Echelons ------------------------------------- The Board of Directors of Repsol YPF unanimously approved the new organizational structure proposed by Alfonso Cortina, the Company's CEO, thereby completing the process begun last September 2002 with the approval of new Corporate Governance criteria and the appointment of Ram�n Blanco as Chief Operating Officer. Alfonso Cortina expressed to the Board of Directors that "This new structure is in keeping with the recent measures adopted by our Board aimed at transparency and professionalization, it strengthens management bringing it closer to our activities in order to promote growth." He also mentioned that it was the Company's objective to provide Repsol YPF with a "Strong, professional, highly qualified and well coordinated management team that would be up to the task of meeting the new challenges facing the Company." The new Repsol YPF organizational chart reflects significant changes in the makeup and functions of the Executive Committee and the Management Committee, the Company's top management and executive control bodies. New 2003 Organization In the new Repsol YPF organizational structure, the Chief Operating Officer, the Corporate Directors and the Country Manager for Argentina will report to the CEO, Alfonso Cortina. Furthermore, and in accordance with the Corporate Governance criteria adopted by the Company, Corporate Audit Management, which is under the Board of Directors' Audit and Control Committee, will also report to Alfonso Cortina. The Corporate Directors areas, responsible for defining the lines of action internally, as well as externally at the global level, are: Institutional Affairs and the Assistant to the Chairman, the Chief Financial Officer (CFO), Human Resources, External Relations, Legal Affairs, Planning and Control, and Real Estate Activities The business lines will report directly to Ram�n Blanco, the Chief Operating Officer. The Executive Vice-Presidency for Exploration and Production will be maintained. The competencies of the Vice-Presidency for Refining and Marketing are divided into five General Management areas: Refining and Marketing in Europe, Refining and Marketing in Latin America, Chemicals, LPG, and Trading-Transport (RYTTSA). A new Liquid Natural Gas Management area has been created. The Country Managers for other countries will report to the Chief Operating Officer, and because of the similarities with the business lines, the Corporate Management for Shared Services, which includes the Systems, Procurement and Contracting, Engineering, Technology, the Environment, Safety and Quality, and e-Business areas, will also report to the COO. Ram�n Blanco will also be responsible for coordination activities with Gas Natural SDG. New Executive and Management Committees The objective of the Executive Committee is to provide support to the CEO and the Chief Operating Officer in defining the most relevant strategies and decisions. In addition to Group control, their function will be to propose to the Board of Directors, the Objectives, the Strategic Plan, the Annual Budget, the Human Resources Policy, and the appointment of Directors; to prioritize and approve expenditure and expense proposals; the strategic control of results and of the Group's basic parameters and Strategic Business areas, as well as oversee the Company's business performance and financial status. The makeup of the Executive Committee aims to find a balance between corporate functions such as financial control, as represented by the CFO, and the exploration and production, trading-transport, and refining and marketing business areas. The Management Committee, formerly the Core Corporate Management Governance Committee, and as delegated by the Executive Committee, will carry out the follow up and coordination of the business areas and the corporate functions. Furthermore, their functions, among others will be to analyze and propose objectives, the strategic plan and carry out the follow up and coordination of the business areas and the corporate functions. Furthermore, their functions, among others, will be to analyze and propose objectives, the strategic plan, and the annual budget, and approve the Corporate Directors' policies and initiatives. The top- ranking managers in the business lines and corporate directions will be represented in this committee. Members of the Repsol YPF Executive Committee - Chairman: Alfonso Cortina (Chief Executive Officer CEO) - Ram�n Blanco (Chief Operating Officer (COO) - Miguel Angel Rem�n (Executive Vice-President, Exploration and Production) - Alfonso Ballestero (Managing Director RYTTSA) - Luis Ma�as (Chief Financial Officer, CFO) - Jorge Segrelles (Managing Director, Refining and Marketing in Europe) - Secretary: Jos, Manuel Revuelta (Corporate Director for Institutional Affairs and Assistant to the Chairman) Three new members have joined this Committee: Alfonso Ballestero, Luis Ma�as and Jorge Segrelles. Members of the Repsol YPF Management Committee - Chairman: Alfonso Cortina (Chief Executive Officer, CEO) - Ram�n Blanco (Chief Operating Office COO) - Miguel Angel Rem�n (Executive Vice-President, Exploration and Production) - Alfonso Ballestero (Managing Director RYTTSA) - Fernando Cid (Corporate Director for Real Estate Activities) - Nemesio Fern ndez-Cuesta (Corporate Director, Shared Services) - Jes�s Fern ndez de la Vega (Corporate Director, Human Resources) - Pedro Fern ndez Frial (Corporate Director, Planning and Control) - Antonio Gomis S ez (Corporate Director, External Relations) - Manuel Guerrero (Corporate Director, LPG) - Luis Ma�as (Chief Financial Officer, CFO) - Juan Pedro Maza (Managing Director, Chemicals) - Pascual Olmos ( Managing Director, Refining and Marketing in Latin America) - Rafael Piqueras (Corporate Director, Legal Affairs) - Jorge Segrelles (Managing Director, Refining and Marketing in Europe) - Secretary: Jos, Manuel Revuelta Lapique (Corporate Director for Institutional Affairs and Assistant to the Chairman) Seven new members have joined the Management Committee: Alfonso Ballestero, Nemesio Fern ndez-Cuesta, Pedro Fern ndez Frial, Manuel Guerrero, Juan Pedro Maza, Pascual Olmos and Jorge Segrelles Appointments and brief biographical notes -CFO: Luis Ma�as -Corporate Director for Planning and Control: Pedro Fern ndez Frial -Corporate Director for Shared Services: Nemesio Fern ndez-Cuesta -Managing Director, Refining and Marketing in Europe: Jorge Segrelles -Managing Director, Chemicals: Juan Pedro Maza -Managing Director LPG: Manuel Guerrero -Director, LNG: Carlos Quintana Luis Ma�as Ant�n (Chief Financial Officer). PHD in Economics. He began his career in Repsol YPF in 1987 as the Head of the Financial Markets Department. He has been the Director of the Chairman's Office, Director of the Financial Area, and Deputy Chief Financial Officer of the Company. He is currently the Corporate Director for Planning and Control. Pedro Fern ndez Frial (Corporate Director, Planning and Control). An Industrial Engineer, his long career in Repsol YPF began in 1980 as Resources Conversion Engineer. Among other posts, he has been the Director of Control and Planning, and Director of Control and Development at Repsol Chemicals. Until his new appointment, he has been the Director General for the Chemicals area. Nemesio Fern ndez Cuesta (Corporate Director for Shared Services). An Economics and Business graduate, and Spanish Civil Service: Economista del Estado (Senior Economist), he joined INH in 1987 and held several top responsibility posts at Repsol YPF. As the Executive Vice-President of Repsol Commercial, he took leave in 1996 when he was appointed Secretary of State for Energy and Mineral Resources. Before rejoining Repsol YPF, he occupied the Presidency of Prensa Espa�ola and Diario ABC. Jorge Segrelles (Managing Director, Refining and Marketing in Europe). A Law Graduate and State Financial and Tax Inspector, with a Master Degree in Law from Harvard University, before joining the oil sector he held several posts, including Financial Manager at the OECD, and as Vice-Secretary General of Tabacalera, S.A. He joined INH in 1985 and since then, has held several top posts, and is currently the Assistant Vice-President of the Group's Downstream activities. Juan Pedro Maza (Managing Director, Chemicals). An Industrial Engineer, he has developed most of his professional career in the Refining Area in Spain and Latin America. First in Spain, where he held management jobs in four of the five Spanish refineries and, subsequently, as the Director General of Refining and Marketing in Latin America. He is currently the Managing Director of Refining and Marketing in Europe. Manuel Guerrero (Managing Director, LPG). A Law Graduate, he already had experience in the international hydrocarbon sector when he was appointed President of Repsol Distribution in 1987. He has been the Executive President of Repsol Portugal and Managing Director of Repsol Gas. He started his career in 1998 as an expert in LPG. Until his new appointment as Managing Director of LPG, at the worldwide level, he had held the post of Managing Director of LPG Europe. Carlos Quintana (Director LNG). A Law Graduate, he began his professional career in the oil sector in 1974 as a lawyer and has broad experience in the Legal Affairs area. He joined Repsol YPF in 1997 as the Director of the International Legal Area and has held several other top posts in this area until he was appointed Managing Director of Gastream in 2002. Juan Sancho y Carmelo de las Morenas. Alfonso Cortina, Repsol YPF's CEO, in the Board of Directors' Meeting, stressed the excellent professional qualification of the new management team and expressed his appreciation for the services rendered by Juan Sancho and Carmelo de las Morenas, who will be leaving their posts because of their retirement. "I wish to express my appreciation for the efforts and the work they have carried out over all these years, and their fundamental contribution to the Group's development". S.A.O.C.A.: Files Motion For "Concurso Preventivo" -------------------------------------------------- The Civil and Commercial Tribunal of Lomas de Zamora announces that claims verification for the reorganization of freight transport company S.A. Organizacion Coordinadora Argentina will end this Friday, July 18. The Company's case is heard at Court No. 10 in Lomas de Zamora. TELEFONICA DE ARGENTINA: CNV Approves New Notes Offering -------------------------------------------------------- Telef�nica de Argentina S.A. ("TASA") announced Friday that it has received the relevant approvals from the Comisi�n Nacional de Valores ("CNV") for the public offering of new notes to be issued in connection with its offers to exchange two series of existing TASA notes (the 11.875% TASA Notes due 2004 (the "TASA 2004 Notes") and the 9.125% TASA Notes due 2008 (the "TASA 2008 Notes")) for two new series of TASA notes plus a cash payment (the "TASA Exchange Offers"), and its offers to exchange two series of existing notes issued by TASA's holding company, Compa��a Internacional de Telecomunicaciones S.A. ("Cointel"), (the 8.85% Cointel Series A Notes due 2004 (the "Cointel Series A Notes") and the 10.375% Cointel Series B Notes due 2004 (the "Cointel Series B Notes")) for two new series of TASA notes plus a cash payment (the "Cointel Exchange Offers" and together with the TASA Exchange Offers, the "Exchange Offers"). In accordance with the terms of each of the Exchange Offers, tenders of existing notes may not be withdrawn after 11:59 p.m., New York City time, on July 14, 2003, except under the limited circumstances described in the relevant prospectus and proxy solicitation, each dated June 17, 2003. Copies of the relevant prospectus and proxy solicitation may be obtained by calling D.F. King & Co., Inc., at +1-800-549-6697 or +1-212-269-5550, or by mail at 48 Wall Street, 22nd Floor, New York, NY 10005, Attention: Thomas A. Long. You may read a copy of our registration statement and any other document we file at the SEC's public reference room at 450 Fifth Street, N.W. Washington, D.C. 20549. These documents are also available at the public reference rooms at the SEC's regional office in New York City. Please call the SEC at +1-800-SEC-0330 for further information on the public reference rooms. Our filings are also available to the public over the Internet at the SEC's website at http://www.sec.gov. Morgan Stanley & Co., Incorporated (including its affiliates) is acting as dealer manager for the exchange offers. BBVA Banco Franc,s S.A. (Reconquista 199, (C1003ABE) Buenos Aires, Argentina; Attention: Santiago Barros Moss, Tel. 5411 4346-4311) is acting as solicitation agent in Argentina. Any questions regarding the exchange offer may be addressed to Morgan Stanley as dealer manager for this transaction at the following numbers: CONTACT: Morgan Stanley Simon Morgan Phone: +1-212-761-2219 Heather Hammond Phone: +1-212-761-1893 =============== B A R B A D O S =============== C&W: Technical Loophole in Barbados' Network Leads To Losses ------------------------------------------------------------ British telecom Cable & Wireless announced that it lost nearly BBD$1 (US$500,000) in Barbados due to a loophole in the cellular telephone network there that allowed clients to make free overseas calls. According to AP, Cable & Wireless alleges that for months now, cell phone users in Barbados punched in *89 after dialing overseas telephone numbers, and then talked for hours without getting an invoice. Dialing *89 accesses voice mail on the island and does not attract charges for airtime. The problem however has been corrected, said company officials. Cable & Wireless has sent invoices with the charges to clients who took advantage of the loophole, the Company said, but declined comment on whether they would seek to file criminal charges. ============= B E R M U D A ============= GLOBAL CROSSING: Committee Reaffirms ST Purchase Deal Support ------------------------------------------------------------- The Official Committee of Unsecured Creditors (the "Creditors' Committee") in the Global Crossing Chapter 11 proceedings reaffirmed its support for the company's reorganization plan under which Singapore Technologies Telemedia will acquire a majority stake in the reorganized telecom firm. The ST Telemedia transaction was the culmination of an extensive auction process, complex negotiations among Global Crossing, its creditor groups, ST Telemedia and other parties, and lengthy proceedings to confirm the Chapter 11 Plan in both the U.S. and Bermuda courts. The Creditors' Committee believes that this transaction provides the Global Crossing unsecured creditors -- who have suffered severe losses -- with the best means to recoup some of their losses. Under the ST Telemedia transaction, unsecured creditors collectively will be receiving a substantial equity interest in a reorganized Global Crossing. The Creditors' Committee remains optimistic that the transaction will be approved on a timely basis by the Committee on Foreign Investment in the United States and other federal regulatory authorities. Recently, other parties such as XO Communications and IDT Corporation have publicly announced their interest in acquiring Global Crossing. The Creditors' Committee has carefully reviewed these expressions of interest, but does not believe any of them provides a greater value for creditors or is a viable alternative to the ST Telemedia transaction. Pursuing any of these alternatives would carry multiple execution and timing risks that would inject substantial delay into Global Crossing's efforts to emerge from bankruptcy. Global Crossing would be required to undertake a new auction process, due diligence and negotiations with prospective investors, renegotiation of a new Chapter 11 Plan among the various creditor groups, additional confirmation proceedings in the U.S. and Bermuda courts, and new regulatory approval processes. These steps could require several months for completion, and carry the risk that Global Crossing could not timely reorganize. The benefits of the ST Telemedia transaction under the confirmed Chapter 11 Plan far outweigh these risks. The Creditors' Committee continues to believe that the ST Telemedia transaction provides the greatest likelihood of achieving the maximum value for the unsecured creditors of Global Crossing and will be timely approved by the federal regulatory authorities. TYCO INTERNATIONAL: Adopts New Policies On Compensation ------------------------------------------------------- Board Limits Executive Severance, Sets Requirements for Stock Ownership and Revises Compensation Structure for Directors Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI) announced Friday that its Board of Directors has adopted limits on severance and change-in-control agreements for senior executives. The Board has also adopted guidelines that require senior executives (e.g., "Section 16B officers" as defined by the Securities and Exchange Commission) to retain a minimum percentage of shares acquired through equity awards and, over time, to hold certain amounts of Tyco common stock. In addition, the Board has revised the compensation structure for directors. Prior to Friday's action, the Company had no official corporate policy on severance and no requirement for stock ownership by its senior management or Board. The severance and change-in-control policies will be applied to future severance agreements. The major provisions of these policies include: Senior Executives will be limited to cash severance of two times base salary and bonus at the time of termination and payments of 2.99 times base salary and bonus in a change-of-control situation. Post-employment benefits will be limited to outplacement services and transitional health benefits, with no provisions for consulting contracts, airplane usage, offices or other perquisites. The new minimum ownership guidelines range from two times base pay for Senior Vice Presidents to ten times base pay for the Chief Executive Officer. These officers will be required to retain at least 75% of vested stock and shares acquired on option exercises (net of taxes) until certain minimum guidelines are met and to retain at least 25% thereafter. Executives may reach this target over a multi-year period. The principal changes in directors' compensation are to move the equity part of their compensation from stock options to stock units that vest at their retirement from the Board and to recognize the added responsibilities of certain Board roles. Total compensation for non-chair directors will not change. The major provisions of their compensation structure include: The cash compensation for individual members will remain at $80,000 per year. Directors will also receive $120,000 per year in deferred stock units ("DSU's") that will be paid out in shares only at the time of a director's retirement from the Board. Directors were previously paid a comparable value in the form of stock options. Additional retainers will be granted for committee chairs, including $20,000 for Audit Committee Chair, $15,000 for the Compensation or Governance Committee Chair and $20,000 for the Lead Director. Chairman and CEO Ed Breen said: "At the time of our Annual Meeting, we told our shareholders that our new Board would develop a severance policy as part of its review of the Company's governance program. We have now fulfilled that commitment. In addition, the Board has adopted guidelines that require Tyco's senior executives and directors to maintain certain levels of Company stock, thereby ensuring that the interests of Tyco's leadership and shareholders are completely aligned. We believe these policies further our goal of establishing clear and transparent standards for all aspects of Tyco's management so that our investors know that we are acting on their behalf." ABOUT TYCO INTERNATIONAL LTD. Tyco International Ltd. is a diversified manufacturing and service company. Tyco is the world's largest manufacturer and servicer of electrical and electronic components; the world's largest designer, manufacturer, installer and servicer of undersea telecommunications systems; the world's largest manufacturer, installer and provider of fire protection systems and electronic security services and the world's largest manufacturer of specialty valves. Tyco also holds strong leadership positions in medical device products, and plastics and adhesives. Tyco operates in more than 100 countries and had fiscal 2002 revenues from continuing operations of approximately $36 billion. Contact: Gary Holmes (Media) Phone: 212-424-1314 Ed Arditte (Investors) Phone: 212-424-1390 ============= B O L I V I A ============= PRIVATIZED COMPANIES: Adviser Claims Near Bankruptcy ---------------------------------------------------- A number of privatized companies in Bolivia are nearing bankruptcy, according to a report by the country's special presidential advisor Juan Carlos Virreira. The only exceptions are oil companies Andina and Chaco. Railroads Andina and oriental, electric power companies Valle Hermoso, Guaracachi, and Corani, telco Entel, and airline Lloyd Aero Boliviano are in very bad shape, reports local news agency Jahtha citing the adviser's statements. Business News Americas relates that Mr. Virreira is linked to the Revolutionary Left Movement (MIR) party, which is pushing for a total overhaul of the entire privatization or capitalization program in the country. The Nationalist Revolutionary Movement (MNR) and President Gonzalo Sanchez de Lozada were the main proponents of the privatization program during their last term in office in the mid-90s. The MNR reportedly argued that Mr. Virreira's report exaggerated the severity of the companies' situations. =========== B R A Z I L =========== ENRON: Files Official Reorganization Plan With Bankruptcy Court --------------------------------------------------------------- Enron Corp. filed its proposed Joint Chapter 11 Plan of Reorganization and related disclosure statement with the U.S. Bankruptcy Court Friday, with the support of Enron's Official Unsecured Creditors' Committee. "This is a good day in what has been a very complicated process," said Stephen F. Cooper, Enron's acting CEO and chief restructuring officer. "We have, with the support of our Creditors' Committee and the Enron North America Examiner, filed a plan that maximizes recovery for our stakeholders, creates platforms to distribute value, and preserves jobs through the creation of our new business entities. Having reached agreement with a broad base of our economic stakeholders, we can expedite this process and hopefully avoid lengthy bankruptcy maneuvering and the associated legal expenses." The disclosure statement details the estimated recovery percentages for more than 350 classes of creditors. The recovery percentage estimates range from 100 percent for certain claims, such as priority claims, to zero cents on the dollar for holders of common stock. The Plan does preserve the rights of Enron shareholders to a contingent recovery in the extremely unlikely event that Enron's total assets exceed total allowed claims. Based upon preliminary estimates, Enron's unsecured creditors will receive between 5 percent and 75 percent of their claim, depending on which particular debtor the claim is against. Three debtors represent more than three-fourths of Enron's unsecured claims: Enron Corp., Enron North America, and Enron Power Marketing, Inc. The estimated recoveries for unsecured claims against those debtors are: Enron Corp., 14.4 percent; Enron North America, 18.3 percent; and Enron Power Marketing, Inc., 21.3 percent. The Plan, which covers Enron's 174 debtor entities, must be approved by 50 percent of the creditors and two-thirds of the dollar amount of claims for each creditor class in all debtor entities. The Bankruptcy Court is expected to hold a hearing on the disclosure statement in the fall. If the Plan is confirmed by the end of the year, partial distributions could begin on a periodic basis as soon as is practical pursuant to the Plan. Last month, Enron announced the creation of CrossCountry Energy Corp., a holding company for Enron's interests in Transwestern Pipeline Company, Citrus Corp., and Northern Plains Natural Gas Company. Enron also announced plans in May to create a new international energy company, which will be called Prisma Energy International Inc. and will be comprised of the majority of Enron's international energy infrastructure businesses. Both companies will be independent businesses with independent boards of directors. Enron is still in the process of determining whether to sell Portland General Electric or distribute stock of PGE to Enron's creditors. As detailed in the filings made Friday, in addition to cash and interests in potential litigation claims, creditors would receive equity interests in the newly created entities. The Plan, the Disclosure Statement and this press release, including the exhibits attached hereto, may contain statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that any such forward- looking statements are based on management's current expectation and, as such, are not guarantees of future performance. Accordingly, actual results could differ materially as a result of known and unknown risks and uncertainties, including, but not limited to: various regulatory issues; the outcome of the Company's Chapter 11 process; risks inherent in the Company's Chapter 11 process, such as the non-confirmation of the Plan, non-occurrence or delayed occurrence of the Plan's effective date or delayed distribution or non-distribution of securities or other assets under the Plan; the uncertain outcomes of ongoing litigation and governmental investigations involving the Company's operating subsidiaries and the Debtors, including those involving foreign regulators and the U.S. Congress, the Department of Justice, the Securities and Exchange Commission ("SEC"), the Department of Labor, the Internal Revenue Service, the Pension Benefit Guaranty Corporation, the National Association of Securities Dealers, Inc., the Federal Energy Regulatory Commission, the Commodity Futures Trading Commission, the Federal Trade Commission, the California and Connecticut Attorneys General and numerous Congressional committees and state agencies; the uncertain outcomes of numerous lawsuits and claims; the effects of negative publicity on the Company's operating subsidiaries' business opportunities; the effects of the departure of past and present employees of the Debtors; uncertain resolution of special purpose entity issues; the preliminary and uncertain nature of valuations and estimates contained in the Plan; financial and operating restrictions that may be imposed on an operating subsidiary of the Company if the Company is required to register under the Public Utility Holding Company Act; potential environmental liabilities; increasing competition and operational hazards faced by the Debtors and operating subsidiaries of the Company; the potential lack of a trading market for the securities distributed to creditors; uncertainties created by the lack of reported information for securities distributed to creditors and the lack of independent operating history of the Company's operating subsidiaries; economic, political, regulatory and legal risks affecting the finances and operations of the Debtors and the Company's operating subsidiaries; and the uncertain timing, costs and recovery values involved in the Debtors' efforts to recover accounts receivable and to liquidate the remaining assets. The United States Bankruptcy Code (the "Code") does not permit solicitation of acceptances or rejections of the Plan until the Bankruptcy Court approves the Disclosure Statement relating to the Plan as providing adequate information of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the debtors and the condition of the debtors' books and records, that would enable a hypothetical reasonable investor typical of the holder of claims or interests of the relevant class to make an informed judgment about the Plan. Neither the Plan nor the Disclosure Statement has been approved by the Bankruptcy Court as containing adequate information under the Code for use in solicitation of acceptances or rejections of the Plan. Accordingly, none of the Plan, the Disclosure Statement or this press release, is intended to be, nor should they in any way be construed as, a solicitation of votes on the Plan. The information contained in the Disclosure Statement should not be relied on for any purpose before a determination by the Bankruptcy Court that the Disclosure Statement contains adequate information. The information contained in the Plan and the Disclosure Statement is not to be used for investment purposes. The Debtors reserve the right to amend or supplement the Plan and the Disclosure Statement at a future date. As explained in a November 8, 2001 Form 8-K filed by the Company with the SEC, the previously issued financial statements of the Company for the fiscal years ended December 31, 1997 through 2000 and for the first and second quarters of 2001 and the audit reports covering the year-end financial statements for 1997 through 2000 should not be relied upon. In addition, as explained in an April 22, 2002 Form 8-K filed by the Company, the financial statements of the Company for the third quarter of 2001 should not be relied upon. The Company continues to believe that the existing common and preferred stock of the Company have no value. However, the Plan provides the Company's stockholders with a contingent right to receive recovery in the very unlikely event that the aggregate value of the Company's assets exceeds the total amount of allowed claims. CONTACT: Mark Palmer (713) 853-4738 SABESP: Announces $6.2M Investment Plan For Guaruja --------------------------------------------------- The Sao Paulo government revealed that state water utility Sabesp will invest more than BRL18 million (US$6.2 million) for a water distribution system in the city of Guaruja next year, says Business News Americas. Works will include construction of two new reservoirs and a pipeline system. As a result, the city, which already has six existing reservoirs, will increase storage capacity to 30M/l up from 21.5M/l. Sabesp is Brazil's largest water utility in terms of users, providing water to 25 million residents and sewerage services to 16.8 million residents. CONTACT: Sabesp Helmut Bossert,(5511) 3388-8664 hbossert@sabesp.com.br Marisa Guimaraes, (5511) 3388-9135 marisag@sabesp.com.br Website: www.sabesp.com.br USIMINAS: Announces Equity Dividend Payment ------------------------------------------- The Board of Directors of USINAS SIDERURGICAS DE MINAS GERAIS S.A. - USIMINAS, in a meeting held on July 10, 2003, decided to pay its shareholders of record as of July 11, 2003, according to its By-laws and prevailing law, Interest on Equity relative to the first semester of 2003, in the amount of R$ 0.3730 per ordinary share and R$ 0.4103 per preferential share. Income tax of 15% (fifteen percent) will be deducted, respecting the legal exemptions. From July 14, 2003, the shares will be negotiated "Ex-interest on Equity". The amounts to be paid will be computed in the calculation of obligatory minimum dividend payment in the 2003 fiscal year. Payment will be made as of August 01, 2003. Paulo Penido Pinto Marques Director of Finance and Investor Relations Usinas Sider�rgicas de Minas Gerais S/A - USIMINAS USIMINAS: Steadfast in Argentina, Venezuela Investments ------------------------------------------------------- Paulo Penido, head of finance and investor relations at Usiminas, told analysts that the Brazilian flat steelmaker is maintaining its investments in steel companies in Argentina and Venezuela to gain strategic and market information from mills. Usiminas holds a 5.32% stake in Argentine steelmaker Siderar and has invested a total of US$17 million in the unit, says Business News Americas. Penido said Siderar has provided a return of US$15 million through dividends and technical assistance contracts. The investment has practically been amortized, Penido added. With regards to its investment in Venezuela's largest steelmaker Sidor, Usiminas pumped US$99 million into the mill but has had to write off 100% of the investment. Moreover, it had to inject another US$25.8 million not only to improve the unit's finances but also to release the Brazilian company from a loan guarantee worth US$70 million, Penido revealed. Sidor is currently restructuring its debts. As part of the process, Usiminas will up its participation in Amazonia to 16.6% from 13.5%. But Amazonia will see its stake in Sidor cut from 70% to 59.7%, with Venezuela's state-owned CVG holding the balance. As a result, Usiminas' share in Sidor rises to 9.9% from about 9.5%. The restructuring will see Amazonia injecting a total of US$133.5 million into Sidor. 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 ========= ENDESA CHILE: Fitch Rates Proposed $200M Bond Issue 'BBB-' ---------------------------------------------------------- Fitch Ratings has assigned a foreign currency rating of 'BBB-' to the proposed issuance by Empresa Nacional de Electricidad S.A. (Endesa-Chile) of US$200 million senior unsecured notes. The 10- year notes will carry a fixed interest rate with semiannual payments. The proceeds will be used to pay at maturity on July 24, 2003 approximately US$381 million of Euro medium-term notes that were issued in 2000 by Endesa-Chile International. The Rating Outlook is Stable. The assigned ratings and stable outlook reflects the substantial completion of the financial and economic strengthening plan by both Endesa-Chile, and its parent, Enersis S.A. Both companies have made important strides that should allow them to stabilize their financial positions and refocus on core business activities that should yield long term growth opportunities. The most recent step in Enersis' and Endesa-Chile's stabilization process has been the successful capital increase at Enersis, including the conversion of US$1.4 billion of subordinated debt with Endesa- Spain to equity and subscription of an additional US$663 million by minority shareholders of Enersis. This follows the May 2003 completion of the combined US$2.3 billion bank refinancing (US$743 million at Endesa-Chile) as expected, which refinances all international bank obligations due during 2003 and 2004. The bank debt is also rated 'BBB-'. The new bank facility provides a 30-month grace period, places limits on additional indebtedness and includes excess cash flow recapture provisions, which should further result in debt reductions. The bank facility also requires any new money financing be used to prepay the bank debt with limited carve outs, including the payment of the Euro medium term notes. As stated previously, the Euro medium term notes are expected to be paid with proceeds from the new bond issuance. Endesa-Chile, however, maintains other sources of near term liquidity including potential bridge facilities, cash on hand, operating cash flow, and financial support from Enersis, if necessary. Endesa-Chile will use cash on hand to repay the balance of the maturity not covered by the bond issuance. While easing near-term liquidity pressures, the covenants of syndicated bank facility limit financial flexibility and should result in Endesa-Chile refinancing this debt prior to its scheduled maturity through local or international capital market transactions. The proposed international bond issuance is the first of such transactions. In addition to the refinancing, Endesa-Chile's balance sheet has benefited from application of asset sales proceeds, which have already been received, plus the deconsolidation of US$390 million of total debt held at the divested assets. The debt repayment of US$551 million, including US$381 million of Euro medium-term notes to be paid in July, and the deconsolidation of related company debt should reduce Endesa-Chile's total consolidated debt by US$500 million during 2003. EBITDA-to-interest ratios at Endesa-Chile should remain relatively stable versus 2002 at 2.6 times (x), but start to show notable improvement in 2004 due to the lower debt and as investments in the region begin to recover under reasonable economic and regulatory assumptions. The steps taken by Endesa-Chile provide it with breathing room to refocus on its core businesses, improve operating cash flow and create a capital structure that better matches asset lives and prospective cash flows, which will all be necessary to maintain the stable outlook. The bond offering is a positive step in this regard, and should set the stage for further debt issuances in the local and international bond markets and international bank market to refinance the syndicated bank loan. The underlying credit quality of Endesa-Chile is supported by its efficient, low-cost hydroelectric generation operations, leading market positions and sound business strategy. Endesa-Chile further benefits from constructive regulatory environments in Chile, Peru and Colombia, diverse and growing service territories, and improving operating characteristics. Additionally, the five countries in which the group operates provide Endesa-Chile with an important level of geographic diversification. This diversification has helped limit Endesa- Chile's exposure to any one particular economy or regulatory regime. Nevertheless, the credit quality of neighboring countries has been pressured over the past few years, increasing the risk associated with cash flows received from its electricity generation investments in these countries, which is reflected in the consolidated credit rating of Endesa-Chile. Endesa-Chile is the largest electricity generation company in Chile and owns and operates approximately 39% of the country's total generating capacity. Endesa-Chile also has ownership interests in electric generation in Argentina, Colombia, Peru and Brazil. The company is 60%-owned by Enersis. Enersis is, in turn, 65.1%-owned by Endesa-Spain, Spain's largest electric utility, which holds existing energy investments in South America. CONTACT: Jason T. Todd Chicago Phone: +1-312-368-3217 or Daniel R. Kastholm, CFA Chicago Phone: +1-312-368-2070, or Carlos Diez Santiago Phone: +562-206-7171 Media Relations: Matt Burkhard New York Phone: +1-212-908-0540 ============= E C U A D O R ============= PETROECUADOR: Signs Supply Deal With Petroleos de Venezuela ----------------------------------------------------------- Ecuador state oil enterprise Petroecuador signed an agreement with its Venezuelan counterpart, Petroleos de Venezuela S.A. (PdVSA), to import liquefied petroleum gas (LPG) next year, said Ecuador energy minister Carlos Arboleda. The contract stipulates that PdVSA will supply Petroecuador some 500,000 tones of LPG annually, and provides some US$50 million in annual savings for Petroecuador, reports Dow Jones. PdVSA will replace Pteroecuador's current supplier, Dutch shipping company Trafigura Beheer BV, whose contract expires in December this year. A report by Business News Americas relates that the contract could be extended to other products such as naphtha, diesel, asphalt and lubricants. PdVSA may also provide legal and technical advice to help modernize Petroecuador and modify the hydrocarbons law. Venezuela's energy minister Rafael Ramirez said that his country is willing to help other state-owned companies to unify marketing and distribution processes in the region. The two companies are reportedly studying possibilities of constructing a natural gas pipeline and the creation of a singles regional oil company to be called PetroAmerica, out of the regions energy companies. =============== H O N D U R A S =============== BANCO SOGERIN: Sale To Banco del Pais Complete ---------------------------------------------- Intervened Honduran bank Sogerin was bought by local bank Banco del Pais, reports La Tribuna, citing the country's deposit insurance agency Fosede. The sale met much criticism from banking and securities regulator CNBS for failing to provide adequate disclosure of the Sogerin sale. The sale of another intervened bank, Capital, was also criticized. The two banks were intervened in May last year due to financial instability. The bidding for Sogerin began in May this year, with at least eight financial institutions reportedly expressing interest. CNBS said that the auction for Sogerin's entire shareholding will be held soon. =========== M E X I C O =========== GRUPO TMM: Amplifies Recent Judgment On TFM Vat Claim ----------------------------------------------------- Grupo TMM, S.A. (NYSE: TMM and BMV: TMM A; "TMM") and Kansas City Southern (NYSE: KSU; "KCS"), owners of the controlling interest in TFM, S.A. de C.V. ("TFM"), announced Friday that on July 9, 2003, TFM was formally notified by a three-judge panel of the Court of the First Circuit ("Circuit Court") of its June 11, 2003, judgment, which granted TFM constitutional protection ("Amparo") against the ruling of the Federal Tribunal of Fiscal and Administrative Justice ("Fiscal Court") issued on December 6, 2002, which had denied TFM the right to receive the Value Added Tax (VAT) refund. TFM initiated its claim for the VAT refund in 1997. The Circuit Court's judgment ordered the Fiscal Court to vacate its December 6, 2002, resolution, and to issue a new resolution following the guidelines of the Circuit Court's judgment. The Circuit Court found that the VAT refund certificate had not been delivered to TFM, and confirmed the Fiscal Court's determination that TFM has the right to receive the VAT refund certificate. The Circuit Court's ruling states that the Treasury's decision denying delivery of the VAT refund certificate to TFM violated the law, and it instructs that the VAT reimbursement certificate be issued to TFM on the terms established by Article 22 of the Federal Fiscal Code in effect at that time. As a result of this ruling, the case has been remanded to the Fiscal Court, and TFM believes that the guidelines contained in the Circuit Court's decision are clear. However, TFM cannot be certain of the final terms of the new resolution to be issued by the Fiscal Court. In addition, a third party claim or legal action could be brought against TFM as a consequence of the new ruling to be issued by the Fiscal Court in compliance with the judgment of the Circuit Court. Should such an action or claim be brought against TFM, TFM believes it would have sufficient legal defenses. As of Friday, it is not possible to determine when the Fiscal Court will issue its new ruling, nor when TFM is likely to receive the VAT refund. Headquartered in Mexico City, Grupo TMM is Latin America's largest multimodal transportation company. Through its branch offices and network of subsidiary companies, Grupo TMM provides a dynamic combination of ocean and land transportation services. Grupo TMM also has a significant interest in TFM, which operates Mexico's Northeast railway and carries over 40 percent of the country's rail cargo. Grupo TMM's web site address is www.grupotmm.com and TFM's web site is www.tfm.com.mx. KCS is a transportation holding company that has railroad investments in the United States, Mexico, and Panama. Its primary holding is KCSR. KCS's rail holdings and investments are primary components of a NAFTA Railway system that links the commercial and industrial centers of the United States, Canada and Mexico. KCS is headquartered in Kansas City, Missouri. CONTACT: Grupo TMM Jacinto Marina Phone: 011-525-55-629-8790 Email: jacinto.marina@tmm.com.mx Brad Skinner (Investor Relations) Phone: 011-525-55-629-8725 Email: brad.skinner@tmm.com.mx or Dresner Corporate Services Kristine Walczak (general investors, analysts and media) Phone: 312/726-3600 Email: kwalczak@dresnerco.com or Proa Structura Marco Provencio Phone: 011-525-55-629-8758 Email: mp@proa.structura.com.mx Home Page: www.grupotmm.com GRUPO TFM Home Page: www.tfm.com.mx MIDITEL: Telmex Halts Service On Failure To Meet Obligations ------------------------------------------------------------ Mexico's regulator Cofetel confirmed that Telmex, the country's largest phone company, cut off service to long distance and Internet access provider Miditel, relates Business News Americas. Telmex, after obtaining approval from the communications ministry, cut off the service to Miditel due to unpaid bills. According to a source close to the matter, Telmex is providing temporary service to Miditel's 1,900 clients until they can be farmed out to different carriers. Local daily Diario de Yucatan recalls that Telmex started legal action against Miditel in 2000 to recover years' worth of unpaid interconnection fees. Telmex also took legal steps last week to seek payment in the form of Miditel assets, which include radio spectrum for the provision of rural and local telephony services. In 1999, Cofetel revoked Miditel's mobile telephony licenses the Company won in 1998 on failure to pay interest charges of US$21.72 million on the unpaid portion of the US$120-million license fee. Subsequently, Miditel's US-based partner Macow pulled out of the Company, taking with it US$21.5 million financing that it had pledged to the venture. MIDITEL: Moves a Step Nearer to Bankruptcy ------------------------------------------ Miditel, whose debt to 17 creditors totals MXN2.02 billion, is slipping ever closer to bankruptcy. According to a report by Business News Americas, a federal judge in Mexico gave the Company only a year to work out a debt agreement with creditors. If the Company fails to strike an accord by then, it'll be declared bankrupt. Miditel's creditors include French bank Societe Generale (MXN909 million), Telmex (MXN485 million) and equipment vendor Ericsson (MXN151 million). ================================= T R I N I D A D & T O B A G O ================================= CARONI: Reaches Tentative Labor Agreement With Union ---------------------------------------------------- Trinidad and Tobago state sugar company Caroni (1975) Ltd reached an agreement with the All Trinidad Sugar and General Workers Trade Union (ATSGWU) "in principle", The Trinidad Express reports, citing union attorney Douglas Mendes. However, the two parties haven't had the chance to put the agreement into writing, says the report. Mr. Mendes asked for two weeks in order to finalize everything. Sub-committees are set to meet on July 14 and 15. Until the matter is finalized, Industrial Court president Gladys Gafoor said that the injunction barring the government from promoting the Voluntary Separation of Employment Plan (VSEP) stays in place. The two parties were ordered by the Industrial Court to negotiate the VSEP issue. CONTACT: Caroni Limited Old Southern Main Road, Caroni, Trinidad & Tobago Phone: (868) 663-1781 or 662-0879 Fax: (868) 663-1404 All Trinidad Sugar and General Workers' Trade Union Rienzi Complex Exchange Village Southern Main Road, Couva. President: Mr. Boysie Moore-Jones General Secretary: Mr. Rudranath Indarsingh Tel. 868-636-2354 Fax. 868-636-3372 E-mail: atsgwtu@opus.co.tt ============= U R U G U A Y ============= ANCAP: Uruguay To Hold Referendum on New JV Law ----------------------------------------------- The government of Uruguay is expected to hold a referendum in the last week of November or early December this year on a law to allow state oil company Ancap to establish a joint venture partnership with a foreign oil company, reports Business News Americas. This, after opponents of the law acquired the signatures of at least 607,000 voters, equivalent to 25% of the electorate, to force the referendum. The signatures were presented in January 2003. The Electoral Court will confirm in August that the target was met. The two main partners in the governing coalition, the Colorados and the Nationals, will support the government's plans, as will the Independent Party and some elements of the leftist Broad Front. Opposing the partnership will be most of the leftist Broad Front coalition and its new partner, Nuevo Espacio, as well as the main labor federation, Pit-Cnt, and the Ancap workers' union, Fancap. Ancap started with a number of international oil companies -- Brazil's federal energy company Petrobras, Venezuela's state oil company PDVSA, Anglo-Dutch conglomerate Shell, the US' ChevronTexaco, and Spain's Repsol-YPF and Cepsa -- during 2002, but the process has been put on hold until the question of the referendum is resolved. CONTACT: Administracion Nacional de Combustibles, Alcohol y Portland (ANCAP) Central Administration Paysando s/n esq. Avenida del Libertador Montevideo, 11100 Uruguay P.O. Box 1090 Phones: +598(2) 902 0608 902 3892 902 4192 Fax +598(2) 902 1136 902 1642 Telex ANCAP UY 23168 E-mail: info@ancap.com.uy Home Page: www.ancap.com.uy Contact: Benito E. Pi eiro, Chief Executive Officer Phone +598(2) 900 2945 +598(2) 902 0608 Ext. 2253 Fax +598(2) 908 9188 ANCAP: AGCEI Accuses Government of Defending Monopoly ----------------------------------------------------- The head of Uruguay's large industrial energy consumers' association, AGCEI, claimed that the government is keeping fuel prices low and taxing natural gas sales in order to defend the monopoly of state-owned oil company Ancap, reports Business News Americas. "The government has put taxes [on natural gas] so people keep using fuel oil. They want to defend [Ancap's] monopoly," Washington Corallo, AGCEI President, told Business News Americas. Even Ancap president Jorge Sanguinetti has stated in recent days that taxes will be used to keep Ancap in business, he said. Sanguinetti announced Thursday that Ancap was due to hike fuel oil prices by 29% Friday, bringing the price into line with international oil prices. The price of other fuels, such as gasoline and liquid petroleum gas, were frozen. This move does bring fuel oil prices more or less into line with natural gas, but this still means that energy costs are more than double the price in Argentina and significantly more expensive than in Brazil, Corallo said. * Uruguay: IMF Approves Request For Waivers Of Applicability ------------------------------------------------------------ International Monetary Fund 700 19th Street, NW Washington, D.C. 20431 USA July 11, 2003 The Executive Board of the International Monetary Fund (IMF) completed today the third review under the Stand-By Arrangement for Uruguay, and approved the request for waivers of applicability, until July 22, 2003, of performance criteria for end-June. Upon completion of the review, a disbursement of SDR 145.7 million (about US$204 million) became immediately available. The current Stand-By Arrangement was initially approved on March 25, 2002 in an amount of SDR 594.1 million (about US$823 million) for a 24-month period (see Press Release No. 02/14). The arrangement was augmented by SDR 1.16 billion (about US$1.6 billion) on June 25, 2002 (see News Brief No. 02 /54), and by SDR 376 million (about US$521 million) on August 8, 2002 (see News Brief. No. 02/87). In commenting on the Executive Board decision, Anne Krueger, First Deputy Managing Director and Acting Chair, said: "Uruguay's performance under the Stand-By Arrangement has been favorable, and commendable progress has been achieved in containing the crisis and stabilizing the economy. The authorities' firm implementation of sound macroeconomic policies and the successful recent debt exchange have contributed to a notable improvement in economic and financial indicators. There are encouraging signs that the economy has bottomed out, bank deposits have continued to increase in recent months, and risk spreads have declined markedly. "While the debt exchange has addressed the near-term financing needs and improved the medium-term debt profile, important tasks nevertheless still lie ahead. The authorities remain firmly committed to make further strong progress on the implementation of policies in the fiscal, banking, and structural areas, that will be critical to ensuring a return to growth and sustainable debt dynamics. "For 2003, the authorities are committed to attaining a primary surplus of 3 percent of GDP. To this end, they are exercising continued expenditure restraint, while taking steps to improve the social safety net and to strengthen tax collections. The continued commitment to a floating exchange rate regime is welcome, and base money will remain the intermediate target of monetary policy until technical and institutional conditions for implementing an inflation-targeting regime are met. "Fully restoring stability and confidence in the banking system is a key element of the program. Important steps have already been taken and, in the coming months, the authorities will advance the restructuring of the two public banks (BROU and the mortgage bank BHU) and finalize the resolution of the four liquidated banks. "A return to sustained economic growth will depend on continued prudent macroeconomic policies and further structural reforms. To achieve a permanent improvement of the primary balance, the authorities will further strengthen the revenue effort while reducing rigidities and raising efficiency in spending programs. Structural reforms will focus on strengthening competition, expanding the room for private sector activity, and further diversifying trade. Uruguay's political and legal institutions have proved effective in dealing with the financial crisis, and it is now essential to further build on the consensus already achieved on prudent macroeconomic policies to move forward with an ambitious structural reform agenda that will ensure a durable recovery of Uruguay's living standards," Ms. Krueger stated. CONTACT: Imf External Relations Department Public Affairs: Phone: 202-623-7300 Fax: 202-623-6278 Media Relations: Phone: 202-623-7100 Fax: 202-623-6772 *********** 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 * * *