/raid1/www/Hosts/bankrupt/TCRLA_Public/030728.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 28, 2003, Vol. 4, Issue 147
Headlines
A R G E N T I N A
AOL LATIN AMERICA: Compliance Restored, NASDAQ OK's Re-Listing
AUTOPISTAS DEL SOL: Results of APE Solicitation, Tender Offer
CONSTRUCCIONES DEL PLATA: Bankruptcy Proceedings Started
CONSTRUCCION Y DISENO: Initiates Reorganization
CRESA: Court Set Claims Verifications Deadline
CTI: America Movil Acquires Controlling Interest
DISCO: French Firm Partners With 2 Other Firms To Make Bid
EKOSONIDO: Court Announces Bankruptcy
HAVANNA: Numerous Investors Indicate Interest
INSUMET: Goes Into Bankruptcy Proceeding
JV MADERAS: Court Declares Company Bankrupt
LUMPARIS: Court Authorizes Bankruptcy
MARJUS: Creditors Advised To Have Claims Verified by Receiver
OCA: Two Investors Express Acquisition Interest
LAPA: LAF Management Preparing Alternative Plan
MINSUR: Court Sets Creditors Claims Verification Deadline
NAPAR: Court Sets Credit Authentication Deadline
NEW NOW: Initiates Bankruptcy On Court Ruling
ROVARELLA HERMANOS: Court Assigns Receiver For Restructuring
SABELLI: Receiver Takes Charge of Bankruptcy Process
THE CAR SHOP: Court Designates Receiver For Bankruptcy
TRANSPORTE AUTOMOTOR 7: Starts Reorganization Process
TRASO: Begins Reorganization Process Following Court Approval
B E R M U D A
SEA CONTAINERS: Resumes Quarterly Common Share Cash Dividend
SEA CONTAINERS: Announces Expiration Of Exchange Offer
B R A Z I L
AES CORP: Rumors Suggest Agreement With BNDES Over Debts
BCI: Announces Second Quarter Results
CEMAR: GP Seeks To Partner With Eletrobras Over Purchase
COPEL: Requiao Opposes Plan To Include Firm In Generators' Pool
CSN: Moody's Confirms Ratings, Changes Outlook To Stable
EMBRATEL: Wins Anatel Bid
GERDAU: Yet To Confirm Info On Plans To Build Plant
TELEMAR: Announces New Rates Following Increase
TELEMAR: Inks Deals To Gain Foothold in the International Market
C H I L E
COEUR D' ALENE: Reports Improved Financial Results In 2Q03
ENDESA CHILE: Responds To Declarations Of UN Spokesman
M E X I C O
CINTRA: 2Q03 Results Show Lower Revenues, Increased Expenses
DESC: 2Q03 Results Show Substantial Improvement
GRUPO IUSACELL: Share Price Tumbles On Analysts' Debt Concerns
GRUPO TMM: Provides Update On Mexican Regulatory Approvals
SANLUIS CORPORACION: Reports Mildly Improved 2Q03 Results
P A R A G U A Y
MULTIBANCO: CFO Resigns Amid Investigation
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A R G E N T I N A
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AOL LATIN AMERICA: Compliance Restored, NASDAQ OK's Re-Listing
--------------------------------------------------------------
America Online Latin America, Inc. (Nasdaq:AOLA), one of the
leading interactive services providers in Latin America,
announced on Thursday that it has received notice from the NASDAQ
Stock Market that it has regained compliance with the continued
listing requirements of the NASDAQ SmallCap Market.
NASDAQ stated that as of the close of trading on Monday, July 21,
2003, AOL Latin America demonstrated compliance with the $1.00
minimum bid price requirement for its class A common stock, set
forth under Marketplace Rule 4310(c)(4), and all other
requirements necessary for continued listing on the SmallCap
Market.
"We are pleased to have regained compliance with NASDAQ's
continued listing requirements," said Charles Herington,
President and CEO of AOL Latin America, "This is an important
development for our investors, as we continue to participate
together in the progress of the online medium in Latin America."
About AOL Latin America
America Online Latin America, Inc. (Nasdaq:AOLA) is the exclusive
provider of AOL-branded services in Latin America and has become
one of the leading Internet and interactive services providers in
the region. AOL Latin America launched its first service, America
Online Brazil, in November 1999, and began as a joint venture of
America Online, Inc., a wholly owned subsidiary of AOL Time
Warner Inc. (NYSE:AOL), and the Cisneros Group of Companies.
Banco Itau, a leading Brazilian bank, is also a minority
stockholder of AOL Latin America. The Company combines the
technology, brand name, infrastructure and relationships of
America Online, the world's leader in branded interactive
services, with the relationships, regional experience and
extensive media assets of the Cisneros Group of Companies, one of
the leading media groups in the Americas. The Company currently
operates services in Brazil, Mexico and Argentina and serves
members of the AOL-branded service in Puerto Rico. It also
operates a regional portal accessible at http://www.aola.com.
America Online's 34.4 million members worldwide can access
content and offerings from AOL Latin America through the
International Channels on their local AOL services.
CONTACT: America Online Latin America, Inc.,
Fort Lauderdale
Financial Community and News Media:
Monique Skruzny
Phone: 954/689-3142
Email: aolairr@aol.com
AUTOPISTAS DEL SOL: Results of APE Solicitation, Tender Offer
-------------------------------------------------------------
Autopistas del Sol S.A. (the "Company") announced Thursday the
expiration of its solicitation (the "APE Solicitation") from
holders of its 9.35% Series A Senior Notes due 2004 and 10.25%
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"). The APE Solicitation was
commenced on May 15, 2003 and expired, after four extensions, at
5:00 p.m., New York City time, on July 24, 2003.
The Company also announced Wednesday the expiration of its offer
to apply up to U.S. $18 million to repurchase its Existing Debt
for cash (the "Cash Tender Offer") at a purchase price determined
through a modified dutch auction. The Cash Tender Offer was
commenced on May 15, 2003 and expired, after four extensions, at
5:00 p.m., New York City time, on July 24, 2003.
APE Solicitation
As of 5:00 p.m., New York City time, on July 24, 2003,
approximately U.S. $451 million principal amount, or
approximately 95%, of Existing Debt had been tendered in the APE
Solicitation or agreed, subject to certain conditions, to
participate in the APE by entering into support agreements.
The Company intends to file the APE with a commercial court in
the City of Buenos Aires for court approval as promptly as
practicable.
The Cash Tender Offer
As of 5:00 p.m., New York City time, on July 24, 2003,
approximately U.S. $8 million principal amount of Existing Debt
had been tendered in the Cash Tender Offer.
The Company expects to accept for purchase all of the Existing
Debt tendered in the Cash Tender Offer at a purchase price of
U.S. $380 per U.S. $1,000 principal amount of Existing Debt.
Payment of the purchase price in the Cash Tender Offer is
expected to be made by the depositary on July 29, 2003, or
promptly thereafter.
All figures in this announcement are approximate and subject to
adjustment as tenders in both the APE Solicitation and the Cash
Tender Offer are reconciled with the letters of transmittal
submitted by holders of Existing Debt.
The Information Agent for both the APE Solicitation and the Cash
Tender Offer was D.F. King & Co., Inc. and its telephone number
is (1 212) 493-6920. For further information, contact Autopistas
del Sol S.A. at (54 11) 5789-8700.
CONSTRUCCIONES DEL PLATA: Bankruptcy Proceedings Started
--------------------------------------------------------
Construcciones del Plata S.R.L., which is declared bankrupt by
Court No. 26 of Buenos Aires, kicked off its bankruptcy process
with the verification of creditors' claims. Infobae reports that
the receiver, Mr. Ricardo Luis Bonifatti, will authenticate
claims until September 29 this year.
Following the conclusion of the verification process, the
receiver will then prepare the individual reports, which are to
be submitted on November 11. The general report will follow on
February 2 next year.
CONTACT: Ricardo Luis Bonifatti
Avenida Corrientes 119
Buenos Aires
CONSTRUCCION Y DISENO: Initiates Reorganization
-----------------------------------------------
Argentine company Construccion y Diseno S.R.L. began its
reorganization process following the approval of its motion for
"Concurso Preventivo", relates Infobae. The reorganization kicks
off with the credit authentication process.
Creditors must submit their claims for verification before
September 29 this year. The deadline for the individual reports
is October 13 while the general report is due on November 24. The
Court set the informative audience meeting for March 17 next
year.
The Civil and Commercial Tribunal of San Miguel de Tucuman
handles the company's case. However, the report did not mention
whether a receiver has been assigned to the case.
CONTACT: Construccion y Diseno S.R.L.
San Lorenzo 357
San Miguel de Tucuman
Tucuman
CRESA: Court Set Claims Verifications Deadline
----------------------------------------------
Creditors of Argentine company C.R.E.S.A. S.A. have until
September 19 to have their claims verified by the receiver, Ms.
Beatriz Laura Colucci. Infobae relates that Court No. 2 of Buenos
has declared the Company's bankruptcy.
The receiver is required to prepare the individual reports on
November 3 this year, followed by the general report on December
17.
CONTACT: Beatriz Laura Colucci
Eduardo Acevedo 217
Buenos Aires
CTI: America Movil Acquires Controlling Interest
------------------------------------------------
America Movil, S.A. de C.V. (America Movil) [BMV: AMX] [NYSE:
AMX] [NASDAQ: AMOV] [LATIBEX: XAMXL] announced Thursday that it
has acquired an option to purchase a controlling interest in
argentine wireless company CTI. This transaction takes place in
the context of a restructuring of CTI's debt that would result in
a write off of over 75% of its US$1.1-billion debt.
CTI has 1.2 million subscribers and licenses that allow it to
provide nationwide wireless service in Argentina, a country with
a population of approximately 37 million people. Coinmov entered
into an agreement with Verizon and other CTI shareholders under
which, subject to certain conditions including regulatory
approvals, will acquire a 100% ownership interest in CTI
Holdings. Coinmov has provided America Movil with the option
mentioned before which, if exercised, would leave America Movil
with a 60% voting interest and 49% economic interest in Coinmov
and, eventually, CTI. Exercise by America Movil of its option
would depend, among other things, on obtaining regulatory
approvals.
Upon completion of the debt restructuring CTI's enterprise value
will amount to just under 200 million dollars, once payments made
to the equity holders and the cash position of the company are
taken into account. In the case of the secured debt, nearly 74%
of the total debt, lenders have accepted the restructuring plan
and in the case of the unsecured obligations, substantially all
of them bonds issued by CTI Holdings, commitments have been
obtained from bondholders that represent approximately 90% of the
outstanding CTI bonds to support and vote in favor of a
restructuring plan of such debt.
Through its subsidiary Techtel, America Movil has agreed to
manage and operate CTI once the closing of the Coinmov purchase
agreement takes place.
About America Movil
America Movil is the leading provider of wireless services in
Latin America. It has more than 36 million wireless subscribers
across the continent.
About Techint
Argentina's main consortium, Techint (America Movil's partner in
Techtel) generated revenues of 7.8 billion dollars in 2002 and
has over 42 thousand employees. It has participated in the
telecommunications industry since 1990.
About Techtel
Techtel, a subsidiary of America Movil and Techint, is a
communications company that provides data, video, voice and long
distance phone services to the home and corporate markets in
Argentina and Uruguay. Its fiber-optic backbone extends over four
thousand kilometers.
DISCO: French Firm Partners With 2 Other Firms To Make Bid
----------------------------------------------------------
French retail holding Casino has partnered with US private equity
Oak Tree and local fund Coinvest in order to make a joint
takeover bid for Royal Ahold's supermarket chain Disco in
Argentina. The short-list of candidates also includes local
businessman Francisco de Narvaez, Cencosud and Wal-Mart.
Disco's sale is still going through its initial stage and ABM-
AMRO is gathering preliminary interest declarations. Whoever
takes over Disco will have to assume a big debt with several
local and foreign banks. Nevertheless, Ahold wants to prevent the
price, -some US$300 million, from going down and, for this
reason, last month it announced the repurchase of all the notes
of Disco floating on the market for a total US$250 million
nominal value.
EKOSONIDO: Court Announces Bankruptcy
-------------------------------------
Court No. 26 of Buenos Aires announced the bankruptcy of
Ekosonido S.R.L. reports local news portal Infobae. The
bankruptcy process proceeds with the appointment of Ms. Analia
Ostojich as receiver. The deadline for authentication of claims
is September 17 this year. The receiver will then prepare the
individual reports, which are due on October 29 this year. The
general report must be submitted on December 11, 2003.
CONTACT: Ekosonido S.R.L.
Ave. Corrientes 1438
Buenos Aires
Analia Ostojich
Quirno 926
Buenos Aires
HAVANNA: Numerous Investors Indicate Interest
---------------------------------------------
Argentine traditional confectionery firm Havanna is drawing the
attention of several investors. The Company, controlled by The
Exxel Group, is carrying out a formal restructuring proceeding
and its debt amounts to US$34 million. Market sources pointed out
the trust funds Pegasus, Coinvest and Dolphin are negotiating
with Deutsche Bank, Banco Rio, Citibank, Sudameris and
Creditanstalt, creditors of Havanna, to possibly take charge of
the debt in exchange of a stake in the company.
Exxel owns 70% of Havanna and the other 30% belongs to the
Deutsche Bank. Havanna registers turnover of ARS35 million a year
and, despite its financial difficulties, it has carried on with
its expansion plan.
We are planning to open some 26 new franchised outlets this year,
a spokesperson from the firm said.
Havanna has 110 outlets and exports alfajores (an Argentine
sweet) for over US$4 million annually.
Juan Navarro, head of The Exxel Group, would be determined to
keep control of the Company, either through the management or
through an important share portion.
INSUMET: Goes Into Bankruptcy Proceeding
----------------------------------------
Insumet S.R.L. enters the bankruptcy process upon the order of
Court No. 14 of Buenos Aires, according to a report by local news
source Infobae. Creditors have until October 9 this year to have
their claims verified.
The designated receiver is Ma. Maria Cristina Agrelo. She is
instructed to prepare the individual reports for submission on
November 20. The general report is due on February 6 next year.
CONTACT: Maria Cristina Agrelo
Viamonte 1365
Buenos Aires
JV MADERAS: Court Declares Company Bankrupt
-------------------------------------------
Argentine company JV Maderas S.R.L. was placed under bankruptcy
by an order from Court No. 26 of Buenos Aires. A report from
local news portal Infobae relates that the Court appointed Mr.
Ernesto Garcia as receiver for the process.
Creditors are informed that the deadline for verification of
credit claims is September 29 this year. The receiver will then
hand in the individual reports on November 11, 2003 followed by
the general report on February 2 next year.
CONTACT: JV Maderas S.R.L.
Pasaje S. Spiritu 3960
Buenos Aires
Ernesto Garcia
Montevideo 536
Buenos Aires
LUMPARIS: Court Authorizes Bankruptcy
-------------------------------------
Court No. 3 of Buenos Aires declares local company Lumparis S.A.
bankrupt, according to a report from Infobae. The report adds
that the court is aided by Secretary No. 6.
The bankruptcy proceedings continue with the receiver, Mr. Javier
Hernan Gandara authenticating creditors' claims. The deadline for
the verification is September 23 this year. The receiver is
expected to file the individual reports on November 4, followed
by the general report on December 17.
CONTACT: Javier Hernan Gandara
Riobamba 719
Buenos Aires
MARJUS: Creditors Advised To Have Claims Verified by Receiver
-------------------------------------------------------------
Creditors of Argentine company Marjus S.R.L. were advised to have
their claims verified by the receiver, Ms. Eva Rodriguez. A
report by local news source Infobae relates that the Company was
recently declared bankrupt by Court No. 14 of Buenos Aires.
The receiver is instructed to verify creditors' claims until
October 13 this year, then proceed to the preparation of the
individual reports, which are due for submission to the court on
November 24. The general report would then be submitted on
February 2 next year.
CONTACT: Eva Rodriguez
Presidente Peron 1509
Buenos Aires
OCA: Two Investors Express Acquisition Interest
-----------------------------------------------
Two investors are interested in acquiring Argentine private
postal operator OCA, which is currently managed by a pool of
banks that took over the firm in exchange for a debt that its
previous owner, The Exxel Group, had with them. It is said that
the banks, led by Deutsche Bank, would want between US$20 and
US$30 million for OCA.
The Company, founded by Alfredo Yabran, started a formal
restructuring proceeding on December 9, 2002 and the term for the
verification of credits expired last Friday. OCA owes the banks
some US$220 million.
The firm registered turnover of some ARS19 million a month, which
represents 20% of the total postal market.
LAPA: LAF Management Preparing Alternative Plan
-----------------------------------------------
Although the decree that ruled the creation of the state-owned
airline Lineas Aereas Federales (LAF) -the successor of LAPA-
states the Company should be privatized 180 days after its start-
up. Meanwhile, the management of the Company is already working
on an alternative plan.
Alberto Bidart, appointed president of LAF; Jorge Baravalle,
vice-president and current director of Intercargo; and Nicolas
Scioli, responsible for the administration of the airline, have
already started to look for investors that help accelerate the
start-up of the Company.
The State aims to find a capitalist partner that contributes part
of the ARS18 million required to set up LAF. In exchange, they
would give the private investor a certain percentage of the
shares, with a preferential option for the rest.
A source close to the process said negotiations with potential
partners from bordering countries had been held. Mexicana de
Aviacion and a European aircraft leasor would be the most
important candidates. These virtual investors would have proposed
to acquire the Company before it starts operations, so as to
outline the characteristics of the firm themselves.
Official sources said in case there is more than one bid, the
government would launch a public tender.
MINSUR: Court Sets Creditors Claims Verification Deadline
---------------------------------------------------------
The credit claims authentication process for the bankruptcy of
Argentine company Minsur S.A. ends on September 22 this year. A
report by local news source Infobae says that Court No. 20 of
Buenos Aires recently declared the Company bankrupt.
The designated receiver is Ms. Nora Cristina Roger, said the
report adding that the individual reports will be submitted on
November 11 this year. The general report is due for filing on
December 15.
CONTACT: Nora Cristina Roger
Hipolito Yrigoyen 1349
Buenos Aires
NAPAR: Court Sets Credit Authentication Deadline
------------------------------------------------
The Court No. 20 of Buenos Aires decided that the credit claims
verification process for the bankruptcy of local company Napar
S.A.I.C. end September 1 this year. The Company, which the court
has declared bankrupt, is now in the hands of its receiver, Ms.
Nora Cristina Roger.
The receiver will file the individual reports on October 13 this
year followed by the General report on November 24, relates local
news portal Infobae. However, the report did not mention whether
the date for the informative assembly has been set.
CONTACT: Nora Cristina Roger
Hipolito Yrigoyen 1349
Buenos Aires
NEW NOW: Initiates Bankruptcy On Court Ruling
---------------------------------------------
Court No. 17 of Buenos Aires ruled that local company New Now
S.R.L. be put under bankruptcy, reports local news source
Infobae, without indicating the reasons behind the ruling.
Secretary No. 34 assists the Court on the case.
Creditors must have their claims authenticated by the receiver,
Mr. Juan Rogue Treppo before the September 22 deadline. The
individual reports are due on November 3, while the deadline for
the general report is December 6 this year.
CONTACT: Juan Roque Treppo
Sarmiento 1183
Buenos Aires
ROVARELLA HERMANOS: Court Assigns Receiver For Restructuring
------------------------------------------------------------
Court No. 24 of Buenos Aires appointed Mr. Isaac Jospe as
receiver for the reorganization process of Rovarella Hermanos
S.A., relates local news portal Infobae. The Company's
application for "Concurso Preventivo" was recently approved by
the Court.
The reorganization process continues with credit claims
verification, which will end on November 22 this year. The
receiver will then prepare the individual reports to be submitted
on October 22. He will then turn in the general report on
November 24. The informative assembly will take place on May 26
next year.
CONTACT: Isaac Jospe
Uriburu 1054
Buenos Aires
SABELLI: Receiver Takes Charge of Bankruptcy Process
----------------------------------------------------
Sabelli y Compania S.R.L., which was recently declared bankrupt
by Court No. 26 of Buenos Aires, is placed under the care of the
receiver, Ms. Diana Ines Panitch. Local news source Infobae
relates that the Company's creditors have until October 30 to
have their claims verified.
The Court ordered that the individual reports be filed on October
30 and the general report on December 12. However, it did not
mention whether the court has set a date for an informational
assembly.
CONTACT: Sabelli y Compa¤Ħa S.R.L.
Velez Sarsfield 53
Buenos Aires
Diana Ines Panitch
Avenida Corrientes 1250
Buenos Aires
THE CAR SHOP: Court Designates Receiver For Bankruptcy
------------------------------------------------------
Court No. 26 of Buenos Aires assigned Mr. Ricardo Luis Bonifatti
as receiver for the bankruptcy proceedings of local company, The
Car Shop Corporation S.A., relates local news portal Infobae
recently.
According to the report, the creditors have until September 29 to
have their claims authenticated by the receiver. The deadline for
the individual reports is November 11, while the general report
must be filed by December 26.
CONTACT: The Car s Shop Corporation S.A.
Niceto Vega 5510
Buenos Aires
Ricardo Luis Bonifatti
Avenida Corrientes 123
Buenos Aires
TRANSPORTE AUTOMOTOR 7: Starts Reorganization Process
-----------------------------------------------------
Transporte Automotor 7 de Julio S.A. commenced its reorganization
process following the approval from the Civil and Commercial
Tribunal of San Miguel de Tucuman of the Company's motion for
"Concurso Preventivo".
Infobae relates that the individual reports will be submitted on
September 23,2003 followed by the general report on November 5.
However, the report did not indicate whether a receiver has been
assigned to the case, or if the deadline for credit claims
verification has expired. Creditors are invited to attend an
information assembly on November 3 this year.
TRASO: Begins Reorganization Process Following Court Approval
-------------------------------------------------------------
The Civil and Commercial Tribunal of San Miguel de Tucuman
approves the motion for "Concurso Preventivo" filed by Traso
S.R.L., according to Infobae. The Company is now starting its
reorganization process.
Creditors are required to have their claims authenticated by
August 8. However, the report did not indicate whether the court
has assigned a receiver to the case. The individual reports are
due for submission on October 28, while the general report is due
on October 13.
CONTACT: Traso S.R.L.
Maipu 471
San Miguel de Tucuman
Tucuman
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B E R M U D A
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SEA CONTAINERS: Resumes Quarterly Common Share Cash Dividend
------------------------------------------------------------
Sea Containers Ltd. (NYSE: SCRA and SCRB, www.seacontainers.com)
marine container lessor, passenger and freight transport operator
and leisure industry investor, announced Thursday its board had
decided to resume quarterly dividend payments on the company's
Class A and B common shares. The quarterly dividend has been set
at 2.5 cents per Class A share and 2.25 cents per Class B share
with the next payment to be made on August 21, 2003 to
shareholders of record August 7, 2003.
Mr. James B. Sherwood, President, said that in the board's view
the new 15% tax rate in the U.S. made it a priority for the
company to resume dividend payments for a portion of its profits.
He said that the company had recently repaid about $238 million
of expensive securitized and bond debt from the proceeds of an
asset sale which would reduce annual interest costs by $21.7
million. $22.5 million of senior notes were exchanged for new
such debt at an increased interest cost of $0.7 million p.a. but
the net savings in annual interest is still significant totalling
$21 million.
He indicated that the company has closed on July 23, 2003 its
exchange offer for its December 1, 2004 maturing senior
subordinated debenture debt of $99 million and had received
acceptances for $19.1 million of new senior notes due 2009 at the
same annual interest rate of 12.5%. The company intends to redeem
the balance of this debt either from net proceeds of asset sales,
lower cost bank debt, sale of new debentures or equity or a
combination of the four to achieve the lowest overall cost. The
company owns 14.4 million common shares in Orient-Express Hotels
which are currently trading at approx. $15 per share. No further
action with respect to 2004 debenture redemption is expected this
year.
The company will announce its second quarter results on August
14, 2003 and a conference call will follow the press release at
10 a.m. New York City time that day. The number to dial is 212
346 6430.
SEA CONTAINERS: Announces Expiration Of Exchange Offer
------------------------------------------------------
Sea Containers Ltd. (NYSE: SCRA and SCRB, www.seacontainers.com),
marine container lessor, passenger and freight transport
operator, and leisure industry investor, announced Thursday the
expiration of the exchange offer for its outstanding 12-1/2%
Senior Subordinated Debentures due 2004. The exchange offer
expired Wednesday, July 23, 2003 at 5:00 p.m., New York City
time.
Based on the information provided by the exchange agent for the
exchange offer, approximately $19.1 million aggregate principal
amount of the Debentures has been tendered for exchange.
Sea Containers has waived the condition requiring not less than
50% of the Debentures to be tendered, and it is expected that the
exchange offer will close on Tuesday, July 29, 2003. Upon the
closing, Sea Containers will cancel the Debentures accepted for
exchange and will issue an equal aggregate principal amount of
12-1/2% Senior Notes due 2009. The 12-1/2% Senior Notes will be
listed on the New York Stock Exchange (CUSIP No. 811371 AM 5).
CONTACT: Sea Containers Services Ltd,
Sea Containers House
20 Upper Ground, London SE1 9PF
Contact:
Steve Lawrence, Public Relations and Communications
Phone: +44 20 7805 5830
Email: steve.lawrence@seacontainers.com
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B R A Z I L
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AES CORP: Rumors Suggest Agreement With BNDES Over Debts
--------------------------------------------------------
Speculation is rife in the Sao Paulo's Bovespa stock market that
national development bank BNDES has reached an agreement with US
power company AES to settle US$1.2 billion of debts, Business
News Americas reports, citing newspaper Valor Economico.
Under the pending agreement, AES would centralize all its debts
into one single company while BNDES would terminate its plans to
sell the shares bought by AES in Sao Paulo distributor
Eletropaulo.
The report expects a statement regarding the matter will be
published this week.
BCI: Announces Second Quarter Results
-------------------------------------
-- Axtel transaction completed
-- 95% of BCI's assets now comprised of cash and short term
investments
-- Canbras successfully completes refinancing of US$ 18.5 million
of bank debt
As a result of the adoption on July 17, 2002 of the Plan of
Arrangement BCI's consolidated financial statements for the
second quarter of 2003 reflect only the activities of BCI as a
holding company. BCI's 75.6% interest in Canbras Communications
Corp. ("Canbras") is recorded under Investments on the balance
sheet at its estimated net realizable value of $15 million and
Canbras' operating results are not reflected on BCI's
consolidated statements of earnings.
Second Quarter Results
As at June 30, 2003, BCI's shareholders' equity was $213.1
million, down by $35.4 million from the first quarter of 2003.
This decrease was as a result of a $27.3 million provision for
the Vesper loan guarantees, interest expense of $4.6 million on
the BCI's 11% senior unsecured notes, administrative expenses of
$3.2 million, foreign exchange losses of $1.9 million on cash and
temporary investments held in US dollars due to a decline in the
US dollar exchange rate since the first quarter of 2003 and a
$1.4 million loss on Axtel S.A de C.V. ("Axtel"), partially
offset by interest income of $3.1 million.
The provision for the Vesper loan guarantees was as a result of
recent developments at the Vespers, a portion of whose bank
indebtedness is guaranteed by BCI. In particular, interest due in
May 2003 of approximately 22.4 million Brazilian reais has not
been paid by the Vespers, thereby allowing its banks to initiate
a process that could ultimately result in a call on BCI's
guarantees. Based on this information, BCI has prudently
established a provision in the second quarter of 2003 of $27.3
million (US$20.2 million), being the Corporation's best estimated
of its maximum exposure.
During the quarter, pursuant to the Axtel transaction announced
on March 27, 2003, BCI received cash payments of US$ 4 million,
which included US$ 1.2 million as the first instalment on the
Axtel short term note. As a result, BCI's cash and temporary
investments reached $402 million at the end of the second quarter
of 2003. The remaining balance of the Axtel short term note of
$3.2 million, being the equivalent of US$2.3 million, is recorded
as notes receivable on BCI's balance sheet.
Total liabilities include BCI's 11% senior unsecured notes due
September 2004 in the amount of $160 million. Accrued liabilities
were $22.3 million at the end of the second quarter of 2003, up
$4.7 million from the first quarter of 2003 mainly as a result of
the accrued interest on the BCI's 11% senior unsecured notes and
other administrative expenses.
Net costs from July 1, 2003 to December 31, 2004 are estimated at
approximately $19.1 million, including interest expenses on the
11% senior unsecured notes of approximately $23.0 million,
interest income of approximately $14.6 million and operating
costs of approximately $10.7 million. These future net costs
exclude any amounts that may be required to settle contingent
liabilities such as law suits and the Comcel voice over IP claim.
These estimates for future net costs are consistent with the
estimates provided at the end of the first quarter of 2003.
The net loss for the second quarter was $35.4 million, or $0.89
per share.
Update on Remaining Asset Held for Disposition
-- BCI is still actively seeking to dispose of its interest in
Canbras.
The following is a summary of the second quarter financial and
operational results of Canbras, as well as an update on the
company's liquidity situation:
Revenues were $15.5 million in the quarter, down $1.0 million or
6.3% compared to the second quarter of 2002. This decrease is
mainly as result of a 33% devaluation of the average translation
rate of the Brazilian real compared to the Canadian dollar
relative to the second quarter of 2002, partially offset by price
increases and cable and internet access subscriber growth. EBITDA
reached $5.0 million in the second quarter of 2003, up from $2.6
million a year ago. The increase was mainly due to lower cost of
service and operating expenses both resulting principally from
the devaluation of the average translation rate of the Brazilian
real, partially offset by lower revenues. For the first six
months of 2003, revenues were $29.0 million, a decrease of $4.7
million, or 14%, relative to the same period a year ago. This
decrease is mainly as result of a 43% devaluation of the average
translation rate of the Brazilian real compared to the Canadian
dollar relative to the first half of 2002, partially offset by
price increases and cable and internet access subscriber growth.
EBITDA for the first half of 2003 reached $8.0 million up from
$5.5 a year ago. Debt at the second quarter of 2003 was $22.4
million.
During the second quarter of 2003, one of Canbras' subsidiaries,
Canbras TVA, was successful in refinancing its US$ 18.5 million
of bank debt. The US$ 9.25 million principal repayment due on May
14, 2003 was repaid with the proceeds of a new reais-denominated
loan facility (together with R$ 4.0 million of cash on hand), and
the final principal repayment due in May 2004 is expected to be
repaid at that time by a further draw-down under the reais-
denominated loan. Borrowings under the new loan facility are
being repaid in monthly installments with the final maturity in
February 2007. The new reais-denominated loan was also based on
an agreement with Canbras' partner in Canbras TVA, which should,
if business plans are achieved, provide the Canbras Group with
access to enough liquidity for it to be able to continue in
operation in 2003 and beyond.
Plan of Arrangement Update
On December 2, 2002, the Ontario Superior Court of Justice (the
"Court") approved a Claims Identification Process for BCI. The
Claims Identification Process established a procedure by which
all claims against BCI will be identified within a specified
period. This period began on May 31, 2003 following the Court's
decision, on May 9, 2003, to dismiss the motion for certification
as a class action of the $1 billion lawsuit filed by a common
shareholder of BCI ("the Shareholder Action"). The claim
identification period will continue until August 31, 2003
(September 30 for taxation authorities), during which time any
persons believing that they have a claim against BCI as at May
31, 2003 must submit the appropriate forms or be forever barred
from making such claims in the future against BCI. Following the
period for the identification of claims, it is expected that the
Court, upon the advice of Ernst & Young Inc., the Monitor under
BCI's Plan of Arrangement, will make further orders with respect
to the timing, determination and resolution of the identified
claims. For a more detailed description on the Claim
Identification Process, please refer to note 1 of the attached
financial statements.
-- On June 30, 2003, BCI announced that the plaintiff in the
Shareholder Action, whose motion for certification was dismissed
on May 9, 2003, had filed an amended statement of claim, again
seeking to proceed by way of class action against BCE Inc. and
BCI in connection with the $1 billion lawsuit originally filed on
September 27, 2002. The plaintiff continues to seek $1 billion in
damages on behalf of the same class of shareholders. BCI remains
of the view that the allegations contained in the lawsuit are
without merit and intends to take all appropriate actions to
vigorously defend its position.
BCI is operating under a court supervised Plan of Arrangement,
pursuant to which BCI intends to monetize its assets in an
orderly fashion and resolve outstanding claims against it in an
expeditious manner with the ultimate objective of distributing
the net proceeds to its shareholders and dissolving the company.
BCI is listed on the Toronto Stock Exchange under the symbol BI
and on the NASDAQ National Market under the symbol BCICF. Visit
our Web site at www.bci.ca.
CEMAR: GP Seeks To Partner With Eletrobras Over Purchase
--------------------------------------------------------
Brazilian investment group GP Investimentos, which was due to
present its bid for Cemar on Friday, is seeking to partner with
federal power company Eletrobras to make a joint bid for the
Maranhao state power distributor, says Business News Americas.
GP, through SVM Participacoes, will present an offer that would
primarily consist of an agreement with Cemar's creditors to
resolve around BRL806 million (US$279mn) of debts.
Just over BRL350 million is owed to Eletrobras and Eletronorte,
and GP is reported to have suggested that the government's
companies convert part of the debts into Cemar shares. GP was
trying to get a 60% discount on the debt.
CONTACT: COMPANHIA ENERGETICA DO MARANHAO
Av. Colares Moreira, 477
65075-441 - Sao Luiz- MA
PHONE: (98) 217-2119
FAX: (98) 235-3024
WEBSITE: http://www.cemar.com.br/
CREDITORS: CENTRAIS ELETRICAS BRASILEIRAS S.A. - ELETROBRAS
Avenida Presidente Vargas 409, 13 Andar
20071-003 Rio de Janeiro Brazil
Phone: (21) 2514-5151
Fax: +55-21-2242-2697
Home Page: http://www.eletrobras.gov.br
Contacts:
Cladio da Silva avila, President
Jose Alexandre Nogueira de Resende, Director of
Financial and Market Relations
Investor Relations Division
Phone: (0XX21) 2514-6207 / 2514-6333
Av. Presidente Vargas, 409 - 9 andar
20071-003 - Rio de Janeiro - RJ
Email: arlindo@eletrobras.gov.br
CENTRAIS ELETRICAS DO NORTH DO BRAZIL - ELETRONORTE
Av. Presidente Vargas, 489 -13 andar.
20071-003- Rio do Janeiro RJ
Phone: + (55+61) 429 5139
Fax: +(55+61) 328 1373
E-mail: elnweb@eln.gov.br
Home Page: http://www.eln.gov.br/
Contact:
Mr. Arlindo Soares Castanheira, Investor Relations
Phone: 55 21 2514.6331
55 21 2514.6333
Fax: 55 21 2242.2694
E-mail: arlindo@eletrobras.gov.br
FLEETBOSTON FINANCIAL CORP.
100 Federal Street
Boston, MA 02110
Phone: (617) 434-2200
Fax: (617) 434-6943
URL: http://www.fleet.com/home.asp
COPEL: Requiao Opposes Plan To Include Firm In Generators' Pool
---------------------------------------------------------------
Brazil's Parana state governor Roberto Requiao rejected a
proposal by the mines and energy ministry to allow state power
company Copel participate in the generators' pool, relates
Business News Americas.
"They want the power produced by the Copel generators to be
prorated in favor of everybody so that Copel in return would pay
more for the energy to be delivered to people in Parana, because
the price of purchase would be an average incorporating the
higher costs of other plants," Requiao said.
Copel would be obliged to sell its own power to the pool, to be
managed by a new body known as ACEE, and buy back at a higher
price, the official added.
On July 10, Requiao and Copel president Paulo Pimentel met with
mines and energy minister Dilma Rousseff to present plans, which
would allow Copel to maintain its self-dealing position, as well
as the integration of all business units, Copel CFO Ronald
Ravedutti revealed.
The new model obliges companies to separate distribution and
generation activities; the Parana state government is in the
process of reintegrating these two businesses after they were
obliged to separate under the previous system, according to
Business News Americas.
CONTACT: Cia Paranaense de Energia COPEL
Rua Colonel Dulcidio, 800
Batel
80420-170 Curitibia - PR
Brazil
Phone: +55 41 322-3535
Fax +55 41 224-4312
Home Page: http://www.copel.com
Contacts:
Ary Queiroz, Chairman
CSN: Moody's Confirms Ratings, Changes Outlook To Stable
--------------------------------------------------------
Moody's Investors Service confirmed the B1 Global Local Currency
rating for Companhia Siderurgica Nacional (CSN) and the B2
foreign currency senior unsecured rating for CSN Iron, S.A.,
guaranteed by CSN. The rating outlook was changed to stable from
negative.
Simultaneously, Moody's assigned a B2 foreign currency rating to
CSN's new senior unsecured note issue of up to US$300 million due
2008. Net proceeds from this issue will be used for general
corporate purposes.
According to Moody's, the confirmation reflects CSN's position as
the leading integrated steel producer in Brazil, its relatively
low cost production profile given the Company's ownership of
certain key raw materials such as iron ore and limestone, and its
strong position in value-added products such as galvanized steel
and tin plate.
However, the rating also considers CSN's continued high, although
improving, leverage position; modest debt protection measures
following significant debt financed capital expansion programs in
recent years; refinancing risk, given the level of short term
debt in the capital structure; and the cyclical commodity
pressures inherent in the steel industry, says Moody's.
Rio de Janeiro-based CSN had consolidated net revenues of BRL5.2
billion in 2002, the ratings agency reveals in its report.
EMBRATEL: Wins Anatel Bid
-------------------------
The final result of the bid launched by Agencia Nacional de
Telecomunicacoes (Anatel) has just been ratified: Embratel's
offer was chosen last month. The object of such bid is the
provision, installation, configuration and maintenance of links
for data, voice and image traffic, interconnecting the Agency's
main office in BrasĦlia to its regional branches and operational
units spanning over the country. The 12-year contract will bring
over R$ 5,6 million to Embratel.
"In fact, we will proceed with a service that we have already
been providing to Anatel, which has been expanded to over fifty
additional points", explains Maria Teresa Lima, Embratel's
director of Corporate Sales- Government.
In the first semester of this year, Embratel won 53 bids launched
by the Government. "The bidding process is extremely important to
the country, because it makes it possible to cut as much as 50%
of Government expenses with certain telecommunications services,
like local telephone service", adds Maria Teresa Lima.
One of the main bids won by Embratel was launched by Procuradoria
Geral da Republica -PGR (Attorney General) aiming at expanding
their data, voice and image capacity. Their structure, which
became operational this month, can support a monthly traffic of
one million e-mails. The sixty-month contract is worth R$ 41,4
million.
Another major achievement of Embratel was the bid launched in May
by Caixa Economica Federal to offer Electronic Data Interchange
(EDI) service interconnecting 14 thousand attendance points
(including branches, banking correspondents, lottery shops and
electronic points) installed by Caixa all over the country. The
24-month contract will bring around R$ 16 million to Embratel.
Embratel is the premium telecommunications provider in Brazil,
offering a wide range of telecommunication services, such as
advanced voice, high-speed data transmission, internet, data
communication by satellite and corporate networks. The company is
national leader in data and internet services, in a privileged
position to become the Latin American carrier with an all-
distance network. Embratel network has national coverage with
almost 17,500 miles of optic cables, representing around one
million miles of fiber optics.
CONTACT: Flavio Resende
EMBRATEL
Advertising, Press and Public Relations Department
Tel: (02121) 2121 7837 / 2121 6291
Fax: (02121) 2121 7791
Mid-West- Phone: (02161) 242-9058 / 2845 / 916-9188
E-mail: cmsocial@embratel.net.br
URL: www.embratel.com.br
GERDAU: Yet To Confirm Info On Plans To Build Plant
---------------------------------------------------
Brazilian long steelmaking group Gerdau is yet to confirm
information revealed by the participants at the ABM metals
conference in Rio de Janeiro that the Company will go ahead with
plans to build a 1Mt/y mill in Sao Paulo but only in 2005.
"The decision on the construction of the Sao Paulo mill will be
announced this year. We do not have any new information. Neither
do we confirm the date of 2005," said a Gerdau official.
Business News Americas recalls that in the past, Gerdau
executives claimed that uncertainties surrounding domestic
economic growth have delayed the Company's decision on the mill.
The project, which was estimated to require US$400 million when
it was first announced two years ago, would involve two units of
500,000t each. Schirmer said no new capex estimate has been made
but the figure has probably changed.
TELEMAR: Announces New Rates Following Increase
-----------------------------------------------
According to an interim decision from the Supreme Court of
Justice, Telemar Norte Leste (TMAR) increased its Local and Long
Distance service rates, effective on June 29, 2003, as follows,
including taxes.
(These increases can still be changed by the Supreme Court of
Justice.)
Local Service Previous Rate New Rate Increase
Installation Fee 45.21 56.04 23.95%
Residential
Subscription 28.59 32.69 14.34%
Non Residential
Subscription 44.89 55.65 23.95%
Trunk
Subscription 44.89 55.65 23.95%
Local Pulse 0.109 0.125 14.34%
Pre-paid Card
(Public Telephone) 0.081 0.093 14.34%
Long Distance (*)
Distance (Km) Previous Rate New Rate Increase
0 - 50 0.2897 0.3310 14.28%
51 - 100 0.4130 0.4719 14.28%
101 - 300 0.4327 0.4945 14.28%
+ 300 0.4663 0.5329 14.28%
(*) DLD per minute rates for calls between 9-12h and 14-18h on
weekdays, excluding holidays.
TELEMAR: Inks Deals To Gain Foothold in the International Market
----------------------------------------------------------------
As part of an effort to get a 20% share of the international data
market in three years' time, Rio de Janeiro-based fixed line
operator Telemar signed contracts with US telco Sprint, US IP
network operator iPass and British Telecom, reveals Telemar
corporate services manager Denize Meza. According to Business
News Americas, the Company will be able to offer services such as
company intranet access from a remote location in another
country. The operator's data network now stretches across 150
countries.
=========
C H I L E
=========
COEUR D' ALENE: Reports Improved Financial Results In 2Q03
----------------------------------------------------------
- Strong silver and gold production expected in 2003-
- Company-wide silver reserves increase 164 percent-
Highlights
-- Second quarter silver production of 3.8 million ounces, up 15
percent from a year ago.
-- Six months silver production of 7.4 million ounces, up 19
percent over the last year's period.
-- Second quarter gold production of 29,682 ounces, up 29 percent
over
last year's period.
-- Six months gold production of 62,845 ounces, up 59 percent
over
previous year.
-- Cerro Bayo/Martha mines produced 1.3 million silver ounces
during the second quarter, more than five times last year's
second quarter, at
cash costs of $1.33 per ounce.
-- Six month operating cash flow (before working capital changes)
of
$6.5 million compared to $(8.1) million in 2002's comparable
period.
-- New mineralized zone discovered at Cerro Bayo containing 27 ft
of
0.77 ounces per ton gold equivalent in initial drill hole.
-- Debt reduced 66 percent from end of first quarter. From 1998
to July, 21, 2003 debt level has declined from $288.6 million to
the
current $28.9 million.
-- Company-wide silver reserves increased 164 percent with 126
million
ounces of new silver reserves at San Bartolome in Bolivia.
-- A total of 14.6 million ounces of silver production expected
in 2003, with estimated full-year gold production of 112,000
ounces. 2003 cash costs estimated at $3.43 per ounce of silver.
"Since the end of the first quarter, Coeur has continued its
silver and gold production growth, significantly improved its
financial strength, and substantially grown the total reserve
base. We remain on track for a year of strong silver and gold
production and much stronger financial results," said Dennis E.
Wheeler, Chairman and Chief Executive Officer. "Our South
American mines -- the Cerro Bayo and Martha -- continue to drive
our improved production and cash flow compared to a year ago,
adding four times the silver equivalent production compared to
last year's second quarter, and at extremely low production
costs. Exploration results in South America are outstanding, and
we anticipate additional high-grade reserve increases this year.
"Meanwhile, our debt restructuring efforts continued, with an
additional 66 percent reduction in convertible indebtedness since
the end of the first quarter. As of July 21, 2003 our total debt
had been reduced to just $28.9 million. With our strong cash
position, we are able to maintain our growth. Finally, the
conversion of San Bartolome's resources to proven and probable
reserves increases our silver reserve base by 164 percent, and
further advances this major silver project."
Financial Summary
Coeur d' Alene Mines Corporation (NYSE: CDE), the world's largest
primary silver producer, reported Thursday second quarter 2003
revenue of $26.2 million, an 18 percent increase over revenue of
$22.1 million in the second quarter of 2002. The increase was due
primarily to the higher silver and gold production from the
Company's Cerro Bayo and Martha mines in South America, which
began production in the second quarter of 2002. Company-wide
production in the second quarter was 3,761,787 ounces of silver
and 29,682 ounces of gold, up 15 percent and 29 percent,
respectively, from the previous year's second quarter.
For the first six months of 2003, Company revenue was $55.5
million, an increase of 42 percent from the same period a year
ago. Production totaled 7,364,715 ounces of silver and 62,845
ounces of gold. This represented a 19 percent increase in silver
production over last year's six months period, and a 59 percent
increase in gold production.
During the second quarter 2003 the Company reported a net loss of
$4.4 million, or $0.03 per share, compared to a net loss of $10.9
million, or $0.16 per share a year ago. For the first six months
of 2003, the Company reported a net loss of $35.6 million, or
$0.26 per share, which included a $28.2 million charge for the
early retirement of debt, based on the issuance of common shares
in excess of the original conversion ratio and a charge of $2.3
million related to a change in accounting principle associated
with reclamation reserves. For the first six months of 2002 the
Company reported a loss of $22.8 million, or $0.38 per share.
The Company's balance sheet continues to strengthen. Since the
end of the first quarter, convertible indebtedness has been
reduced by $56.4 million, representing a 66 percent reduction in
the Company's convertible debt. Taking into consideration these
debt reductions, the Company's convertible indebtedness due in
December 2003 and January 2004 totaled $14.7 million at July 21,
2003. Since the beginning of 1998, Coeur's total debenture
indebtedness has been reduced from $288.6 million to the current
$28.9 million at July 21, 2003.
Cash and cash equivalents as of June 30, 2003 was $19.5 million.
Year to date operating cash flow before working capital changes
improved to $6.4 million compared to cash used in operations of
$8.1 million in 2002.
For the second quarter, Coeur realized an average silver price of
$4.53 per ounce compared to an average realized price during last
year's second quarter of $4.77 per ounce. For its gold sales,
Coeur realized an average price of $330 per ounce during the
second quarter compared to an average gold price of $304 per
ounce during the same period last year.
2003 Estimated Production, Cash Costs and Capital Expenditures
For the full year 2003, Coeur anticipates consolidated silver
production of 14.6 million ounces. Company-wide gold production
is expected to be 112,000 ounces. Coeur anticipates full year
cash operating costs of $3.43 per ounce/silver, and capital
expenditures are expected to total $19.4 million, mostly due to
the relocation of the crushing facility at Rochester, which will
be completed this year.
Overview of Operations
South America
Cerro Bayo (Chile)/Martha (Argentina)
-- 1,347,745 million ounces of silver and 14,538 ounces of gold
produced
during the second quarter, up 417 percent and 146 percent,
respectively, over last year's period
-- Low cash costs of $1.33 per ounce of silver during second
quarter
-- First six months production of 2,625,202 silver ounces and
36,954
gold ounces
-- Average discovery costs currently less than $0.10 per ounce of
silver
equivalent
During the second quarter, Cerro Bayo increased silver production
more than five times the amount produced the same period a year
ago, to a total of 1.3 million ounces. Gold production increased
nearly two and a half times to 14,538 ounces. This was due
largely to the fact that the mine initiated production in the
second quarter last year. Cash costs during the second quarter
2003 were $1.33 per ounce of silver.
North America
Rochester Mine (Nevada)
-- 1,353,346 million ounces of silver and 15,144 ounces of gold
produced
during the second quarter
-- 2,443,046 million ounces of silver and 25,891 ounces of gold
produced
in first six months period
-- Cash costs of $4.33 per ounce of silver during the second
quarter, a
decrease of 30 percent from the first quarter
-- Cost expected to return to $4 level in second half of 2003
Rochester produced 1.4 million ounces of silver and 15,100 ounces
of gold during the second quarter compared to 1.6 million ounces
of silver and 17,100 ounces of gold in the second quarter of last
year. The lower production was due primarily to factors related
to the crusher relocation project
However, cash costs at Rochester declined 30 percent from the
first quarter, to $4.33 per ounce of silver, as the measures
taken to offset the crusher relocation began to take effect. The
Company anticipates cash costs to drop below $4.00 per ounce in
the second half of the year, with the completion of installation
of the new crusher, and as high-grade ore under the old crusher
is accessed.
Coeur Silver Valley - Galena Mine (Idaho)
-- Second quarter silver production of 1,060,696 million ounces
-- Cash operating costs of $4.73 in quarter
-- New optimization plan for developing new veins, infrastructure
-- Future production growth, lower cash costs are projected
At Coeur Silver Valley, silver production was 1.1 million ounces
in the second quarter, down slightly from the 1.4 million ounces
produced in the same period last year. Cash operating costs
increased to $4.73 per ounce during the recent second quarter,
compared to $4.14 per ounce in last year's period. The increase
was largely due to short-term grade issues.
In July, the Company announced the temporary suspension of silver
production at Silver Valley in order to complete major scheduled
repairs on the mine's hoisting equipment. During the maintenance
period, Coeur began a program designed to increase production and
lower costs through 2011.
Mine personnel are currently completing Coeur's ongoing review of
this expansion plan that is designed to materially reduce Silver
Valley's cash costs by 2006 and significantly increase silver
production by 2008.
Strong Exploration Results (South America)
Cerro Bayo
A significant high-grade discovery was made at the end of second
quarter on a wide mineralized zone located between the Javiera
and Wendy veins in the central Cerro Bayo area. The initial
discovery hole contains 27 feet of 0.77 opt gold equivalent and
is located 200 meters west of existing underground infrastructure
of the Cerro Bayo mine. The mineralized zone is composed of two
high grade veins containing 5.7 feet of 0.97 opt Au Eq and 7.7
feet of 1.33 opt Au Eq. Initial interpretations are that this
zone was penetrated close to its intersection with the Javiera
vein and remains open primarily to the south and at depth. This
mineralized zone does not outcrop and substantiates the
exploration potential immediately west of the Lucero vein.
Other veins discovered in the first six months of 2003 include
the Daniella vein, with an initial drill hole locating a seven-
foot wide vein assaying 1.08 gold equivalent ounces per ton.
Also, the Guanaco 2 Sur vein was discovered with an initial drill
hole containing eight feet of 0.34 gold equivalent ounces per
ton. Coeur continues to have good exploration results in the
Guanaco 2 Sur vein that is known to extend over a 3000 feet of
strike length.
The successful results of the Company's exploration efforts and
the presence of numerous untested targets on our large land
package continues to support our belief that the Cerro Bayo
property has the potential to contain reserves in excess of one
million gold equivalent ounces.
Martha Mine and Santa Cruz Province
In the Santa Cruz Province of Argentina, initial reconnaissance
over our 465 square mile land package continues to discover
numerous low sulfide, epithermal veins. These veins are being
geologically mapped and sampled prior to drilling, which is
planned during the second half of this year.
Exploration efforts continued during the second quarter at the
Martha Mine to discover very high grade ore shoots such as the R4
Zone along the eastern extension of the Martha vein. The high
grade R4 Zone is located less than 600 feet east of the Martha
mine, with average grades in excess of 100 silver equivalent
ounces per ton. One drill intercept in the R4 Zone contained 44
feet of .42 ounces of gold per ton, and 666 ounces of silver per
ton. An IP/ resistivity geophysical survey was conducted over the
R4 Zone and the eastern extension of the Martha vein. The R4 Zone
demonstrated a strong IP/ resistivity response that was similar
to other untested anomalies on the Martha and other veins on the
property. These geophysical anomalies will be drill tested during
the third quarter.
At the Tesoro prospect on the Malbec property, located six miles
north of the Martha mine, core drilling under a massive sulfide
outcrop encountered 37 feet of polymetallic mineralization
containing .04 ounce per ton gold, 14.2 ounces per ton silver,
2.8 percent copper, 9.2 percent lead and 19 percent zinc
beginning at 25 feet below the surface. This massive sulfide zone
has now been traced down to 130 feet below the surface.
Due to very limited exposures surrounding the massive sulfide
outcrop, the Company conducted an IP/resistivity geophysical
survey over a 1300 ft by 1300 ft area to find extensions of the
mineralization.
Geophysics detected a very large chargeability anomaly at a depth
of approximately 200 feet below the surface. The anomaly is
somewhat flat lying underneath the entire surveyed area and
approximately 30 to 60 ft thick. The flat lying layer may
represent an altered unit with disseminations of massive sulfides
similar to those intersected in the recent drilling. A drilling
program is planned during the third quarter to test the
geophysical anomalies.
126 Million Ounces of New Proven and Probable Silver Reserves at
San Bartolome
At the Company's major San Bartolome silver project in Bolivia,
resources at the property were converted to proven and probable
reserves totaling 126 million silver ounces, which effectively
increased Coeur's company-wide silver reserves by 164 percent.
The new reserves measure 35.3 million tons at 3.58 ounces of
silver per ton.
An updated feasibility study is underway to establish a final
mine plan and refining construction cost estimates. Assuming a
construction decision by early 2004, the project could be in
production in 2005 after an 18-month construction period. The ore
is accessible in above ground gravel deposits in a region with
historical silver production of over two billion ounces.
Once in production, San Bartolome is expected to contribute an
average six million ounces of silver a year for at least ten
years. The Company has also established that tin can be
commercially recovered on two of the three major deposits, adding
to project economics.
Hedging
Coeur does not currently have any of its silver production
hedged. The Company currently has 40,000 ounces of gold sold
forward over the next 15 months at an average price of $339 per
ounce.
Coeur d'Alene Mines Corporation is the country's largest silver
producer, as well as a significant, low-cost producer of gold.
The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile and Bolivia.
CONTACT: COEUR D'ALENE MINES CORPORATION
Tony Ebersole, Investor Relations
+1-208-665-0335
ENDESA CHILE: Responds To Declarations Of UN Spokesman
------------------------------------------------------
Endesa Chile announced the following with respect to declarations
concerning the Ralco Project that have appeared in the press
today emanating from Mr Rodolfo Stavenhagen, special spokesman
for the United Nations on the rights of indigenous peoples:
1. We believe the declarations of Mr Stavenhagen concerning the
Ralco project to be serious, inappropriate and unwise as they
were made during a visit to find out the true posiition of the
indigenous communities and prior to having all the necessary
information for carrying out the whole of his task.
2. The United Nations spokesman has given his opinion without
having listened to the other parties involved, including Endesa
Chile, and without having all the information necessary for
making an impartial judgment as would be expected from a person
in his senior position. Endesa Chile deeply regrets that Mr
Stavenhagen has overstepped the mark in what is the essence of
the work for which he is responsible by issuing a weakly-based
and incomplete opinion.
3. We expect Mr Stavenhagen to clarify his statements and to act
with the responsibility that his position warrants in order that
his visit and work are carried out seriously and scrupulously.
4. Endesa Chile reaffirms its constant commitment to openly
provide him with the necessary information he requires and to
collaborate in an informed dialogue.
===========
M E X I C O
===========
CINTRA: 2Q03 Results Show Lower Revenues, Increased Expenses
------------------------------------------------------------
(All figures are expressed in pesos of equivalent purchasing
power as of June 30th, 2003, unless specified otherwise.
Financial Statements meet Mexican GAAP, and are not audited.)
CINTRA, S.A. DE C.V., (BMV:CINTRA) Mexico's leading air
transportation system reported its non audited results for the
second quarter 2003.
Highlights
As a consequence of the continued domestic and international
market contraction, total revenue showed a decrease with respect
to those for the same period 2002 regarding with the yield
reduction in 7.6% compared to 2Q 2002. The reduction in EBITDAR
was due to the increase in Operation expenses, particularly jet
fuel and promotion and sales, that increased 15.4% and 15.9%
respectively, for the same period 2002.
In addition to the above mentioned issues, the 4.8% increase in
rents was due to the fleet renewal, grounding equipment and
incorporating leased aircraft (2 Airbus A-320 and 2 MD87),
contributed to increase the Operation loss in a 95.8%, compared
to the same quarter 2002.
The ASK's during 2Q 2003 reported 9,887 million, 1.6% higher than
the same period 2002, this capacity growth is due to the increase
in routes, as well as the flight equipment replacement which
offer higher operation availability than the previous one.
The demand expressed in RPK's for the April - June period was
6,041 million, 4.4% higher than the same period 2002, since the
yield reached 0.967 pesos, 7.6% lower than the second quarter
2002, as a consequence of the unfair competition in the domestic
and international markets; the ASK/Cost increased 3.2% for the
same period in 2002, as a result of the exchange between the
Mexican peso and the U.S. dollar.
Revenues
Total revenues were 6,917 million pesos, that represents a 0.5%
decrease in real terms, compared with the period April - June
2002, such increase was generated by the contraction in the
domestic market and cargo, reaching 6.1% and 5.3% respectively;
however, international market and other were increased in 33.2%
and 0.5% respectively, compared to the second quarter 2002.
It is important to mention that, as the same than the first
quarter, domestic revenues were affected by the unfair
competition from domestic airlines that do not belong to CINTRA.
In U.S. dollars terms, total revenues were 660 million for the
second quarter 2003, that shows a 6.0% decrease with respect to
the same period 2002, due to the reduction in revenue,
particularly domestic market in 11.3%, compensated with other
that increased 28.6%.
Operation expenses
Operation expenses for the period April - June 2003 were 6,520
million pesos, higher in 3.7% than the 2Q 2002. Personnel cost
was 2,406 million pesos, higher 1.9% than the same period 2002,
this as a result of the salary increases in 2002 compensated with
the personnel reduction in Cintra's companies, as well as a
salaries reduction in Mexicana de Aviaci˘n.
Jet fuel expenditure was 1,015 million pesos, superior in 15.4%
than the same period last year, this rise was due to the
significant increase in the jet fuel price and the devaluation of
the Mexican peso, which average exchange rate during the quarter
was $10.46 Mexican pesos per U.S. dollar than $9.47 Mexican pesos
per U.S. dollar during the same period last year, compensated
with the jet fuel coverage program that protects the 38% of our
2003 consumptions.
Aircraft and traffic servicing were 828 million pesos during the
period, 4.4% higher than those in 2Q 2002 as a consequence of the
devaluation of the Mexican peso. Maintenance was 698 million
pesos during the quarter, similar than the same quarter 2002 as a
result of our optimization efforts in this matter.
Passenger service was 222 million pesos during the second quarter
2003, 4% higher than the same period 2002 mainly due to the
devaluation of the Mexican peso. Commissions were 500 million
pesos which reflects a 3.8% decrease as a result of the new
incentives program started during the first quarter 2003.
Promotion and sales increased 15.9% compared to the period April
- June 2002, reaching 430 million pesos, due to the
intensification of promotions to increase the loading levels in
domestic and international routes, as well as the devaluation of
the Mexican peso.
Insurance figures reached 149 million pesos during the second
quarter 2003, lower in 8.2% than the same period 2002, as a
result of the reduction in premiums, compensated with the
devaluation of the Mexican peso, since the premiums should be
paid in U.S. dollars. Administrative and IT expenses were 272
million pesos, lower in 5.7% than the same period 2002 which
reflects the implemented discipline and austerity measures.
Operation expenses during the period 622 million dollars, lower
in 2.1% than the same quarter 2002; this tendency is reflected in
most of the Operation Expenses figures.
Capital expenses
Capital expenses were 991 million pesos during 2Q 2003, 2.5%
higher than the same period 2002 due to: The aircraft rents
equivalent to 746 million pesos, 4.8% higher than the same
quarter last year originated by the fleet renewal and the
devaluation of the Mexican peso.
Regarding depreciation, it reached 246 million pesos, 3.8% lower
than the same period 2002 due to the depreciation in almost 100%
of the Mexicana's Boeing B-727 aircraft.
Operation loss
During the second quarter 2003 the operation loss was 594 million
pesos, compared to 303 million pesos in the same period 2002.
As we mentioned previously, the domestic and international
markets contraction influenced the results, as well as the
devaluation of the Mexican peso.
Integral Financing Income
Integral Financing Income during the period April - June 2003 was
7 million pesos, lower in 98.4% than the 2Q 2002, integrated as
follows: financial expenses were 86 million pesos, increasing in
7.2% than the same period 2002 due to the devaluation of the
Mexican peso. Foreign exchange gain was 80 million pesos,
compared to 415 million pesos loss during the same quarter 2002,
also as a result of the Mexican peso parity.
Loss of monetary position was 1.4 million pesos during the second
quarter 2003 compared to the gain of 65 million pesos during the
same period 2002, due to the deflation in the National Consumer
Price Index (NCPI) for the second quarter 2003.
Net loss
During the second quarter 2003 Cintra shows a 699 million pesos
net loss, lower in 5.6% than the same period 2002.
It is important to mention that the exchange rate has distorted
the Financial Statements, since the results in Mexican pesos do
not allow to compare them realistically against previous periods.
Relevant events
These are the most relevant events during the second quarter
2003:
Insurance Premiums renewal
The insurance program was renewed for the period May
2003 - June 2004, reaching a 42% reduction, compared to the
insurance expenses during 2003.
The Boeing B-727 Aircraft grounding
On May 30th was operated the last official itinerary
flight in the Boeing B-727/200 aircraft in Mexicana de Aviacion.
Increase in the jet fuel price
One of the most important events that affected the
results of Cintra, was compensated with the jet fuel coverage
program that protects the 38% of our 2003 consumptions.
Foreign exchange
As we mentioned previously, the average foreign exchange during
the quarter was key in the results obtained during the 2Q,
reaching $10.46 Mexican pesos per U.S. dollar against $9.47
Mexican pesos per U.S. dollar during the same quarter 2002.
Cash flow increase
In spite of the decrease in revenue, Cintra's cash flow increased
in approximately 26 million dollars during the second quarter
2003.
Aircraft renewal
During the second quarter 2003 Mexicana leased two Airbus A-320
and Aeromexico incorporated two MD-87.
Resignation of the CEO of Aeromexico
On July the 2nd, 2003, Alfonso Pasquel Barcenas presented his
irrevocable resignation as CEO in Aeromexico which was accepted
by the Board of Directors, appointing Arturo Barahona Oyervides
to substitute him.
Agreements with Labor Unions
Another important event during the second quarter was the
agreement with Mexicana's labor unions to reduce their members
salaries; a similar agreement was celebrated with the rest of the
personnel, which all together represents a 10% annual reduction
in Operation expenses.
Regarding Aeromexico, the agreement with the Flight Attendants
labor union in the last annual salary revision negotiations was
not to increase the salaries, due to the market conditions.
Main Accumulated Results January - June 2003
Revenues
Total revenues during the first semester 2003 were 13,709 million
pesos, a 0.6% increase than the same period 2002 mainly as a
result of a 3.7% increase in the international market and the
exchange between the Mexican peso and the U.S. dollar during the
last six months period; also influenced the 20% increase in Other
Income.
In US dollars terms, total revenues during the first semester
2003 were 1,285 million dollars, 7.8% lower than those for the
same period 2002, as a result of the 12.5% decrease in domestic
revenues, affected by the unfair competition from domestic
airlines.
Operation Expenses
During the first semester 2003 Operation expenses were 13,236
million pesos, a 6.7% increase than the same period 2002, as a
result of the 32.9% increase in jet fuel expenditure, 6.7%
increase in aircraft and traffic servicing and 11.0% increase in
promotion and sales, all of them compared to the same period
2002; the above mentioned increases are consequence of the
exchange between the Mexican peso and the US dollar ant the
intensification of promotions and sales campaigns, respectively.
In US dollars terms, Operation expenses were 1,241 million
dollars during the period January - June 2003, 2.2% lower than
the same period 2002, tendency reflected in most of the issues.
Capital expenses
Capital expenses during the first semester 2003 were 2,041
million pesos, 4.9% higher than the same semester 2002, as a
result of 9.5% increase in rents and 7.3% decrease in
depreciations; also influenced by the exchange between the
Mexican peso and the U.S. dollar.
Operation loss
As a result of the above mentioned matters, during the first
semester 2003 Operation loss was 1,568 million pesos, compared to
720 million pesos during the same period 2002.
Integral Financial Income
Integral Financial Income was 114 million pesos during the first
semester 2003, 70.7% lower than the same period last year, as a
result of the 96.2% decrease in exchange and the 46.4% loss of
monetary position.
Net loss
During the period January - June 2003 the net loss was 1,758
million pesos, 50.1% higher than the same period 2002.
It is important to mention that the exchange rate has distorted
the Financial Statements, since the results in Mexican pesos do
not allow to compare them realistically against previous periods.
To see financial statements: http://bankrupt.com/misc/CINTRA.htm
DESC: 2Q03 Results Show Substantial Improvement
-----------------------------------------------
Desc, S.A. de C.V. (NYSE: DES; BMV: DESC) announced Thursday its
results for the second quarter ended June 30, 2003 (2Q03). All
figures were prepared according to generally accepted accounting
principles in Mexico.
HIGHLIGHTS
2Q03 results, compared to the previous quarter (1Q03), reflect an
important recovery, posting a 45.4% EBITDA increase due to:
- The sale of land properties in the Real Estate Sector for over
US $100 million, which offset the decline in the Automotive
Sector caused by the low demand from industries in the U.S. and
Mexico, as well as the seasonal effect of Easter Week during
April 2003,
- The increase in capacity utilization, which reached almost 100%
in certain Chemical Sector businesses (solution rubber, emulsion
rubber and carbon black), despite the closing of tire plants in
Mexico during 2002, and
- More favorable results from the Food Sector as a result of
improved sales volumes in the branded products business through
Corfuerte in Mexico.
For the second quarter of 2003, Desc's operating results declined
compared to 2Q02, operating income decreased 11.6% and EBITDA
declined 6.4% mainly due to the following factors:
- The elimination of sales to DaimlerChrysler during this
quarter, from the stamping, axle and propeller shaft businesses,
as a result of Mexico City plant closing, the delay in the
initiation of operations of the Tractor Project, which affected
the production of power train components and temporary shutdowns
in some OEMs assembly plants,
- Raw material costs increases in the Chemical Sector, and
- Outstanding results from the Real Estate Sector, as a result of
the sale of a land property in the State of Mexico and a lot in
the Arcos Bosques project.
SALES
Compared to 1Q03, sales increased 16.6%, to US $550 million,
compared to US $471 million for the previous quarter. This
increase was mainly due to the over 400% revenue increase from
the Real Estate Sector as a result of the sale of two important
land properties located in the State of Mexico and in Mexico
City. Both sales represented approximately US $ 100 million.
During the second quarter 2003, dollar sales remained flat
compared to 2Q02 reaching US $550 million, mainly due to the
higher sales in the Real Estate Sector, previously described.
Year-over-year sales from the Automotive Sector declined 27.5%
due to the decline in vehicle demand from Mexico and the U.S. In
the Chemical Sector, dollar sales dropped 3.8% as a result of
price wars in most of the businesses, despite the fact that
capacity is running at a 90%-100% in most of these.
In the Food Sector, the 8.9% decline in revenues was due to the
divestiture of the pork operations in the Bajio region, which
took place during the second half of 2002. Excluding these
operations, sales from this Sector decreased 4.4%.
EXPORTS
Quarter-over-quarter, exports remained at similar levels due to
the mixed results; a 3.0% rise in the Automotive Sector, a 9.9%
decline in the Chemical Sector and a 0.9% increase in the Food
Sector.
Total exports during 2Q03 reached US $212 million, a 19.8%
decline compared to the figure reported during 2Q02. This
decrease was due to the economic slowdown in the U.S. causing a
negative effect in the Automotive, Food and Chemical Sectors,
which declined by 28.4%, 5.0% and 4.9%, respectively. During the
quarter, exports represented 38.6% of total sales.
OPERATING INCOME AND OPERATING MARGIN
Quarter-over-quarter consolidated operating income increased over
110% from US $20 million to US $42 million, mainly due to the
excellent performance of the Real Estate Sector (+519.3%). This
increase offset the 62.2% decline in the operating income from
the Automotive Sector due to the seasonality effect of Easter
Week and the drop in volumes in the automotive industry in Mexico
and the U.S.
Operating income declined 11.6% to US $42 million in 2Q03 from US
$48 million in 2Q02. This decrease was mainly due to the 87.2%
decline in the Automotive Sector due to the seasonality effect of
the quarter, a lower demand from the U.S. market and the closing
and the DaimlerChrysler operations during 2002, which impacted
the stamping, axle and propeller shaft businesses.
In the Chemical Sector, operating income declined 60.4% due to
the increases in raw materials prices during April and May as
well as the price wars in the Polymers and Ecosystems business
divisions.
TAXES
During the quarter, tax provisions reached US $10 million, which
included Income and Asset Taxes and Employee Profit Sharing, a
56.6% decline compared to 2Q02, reflecting a lower operating
result. Deferred taxes had a net effect in the amount of US $11
million.
NET MAJORITY INCOME (LOSS)
Net majority income for the second quarter of 2003 was US $12
million, reflecting the US $16 million exchange rate gain.
DEBT STRUCTURE
Year-over-year, Desc posted a US $58 million net debt increase,
mainly due to the lower operating results from the Automotive and
Chemical Sectors and higher working capital requirements in these
sectors.
Quarter-over-quarter, the Company's net debt remained stable at
US $987 million.
At the end of the second quarter of 2003, the debt composition
was 68% dollar-denominated and 32% pesodenominated. Debt profile
at the end of the 2Q03 is 73% in long-term debt and 27% in short-
term debt. The average cost of debt was 4.5% for dollar-
denominated and 7.05% for peso-denominated, compared to 4.8% and
9.1%, respectively in 2Q02.
DEBT REFINANCING
As of the close of the first quarter and second quarter of 2003,
Desc was not in compliance with the Leverage EBITDA covenant
under its Ps. 1.3 billion credit agreement and its US $275
million credit agreement (collectively, the "Credit Agreements").
Desc is otherwise in compliance with the Credit Agreements,
including making timely payments of principal and interest.
To date, lenders under the Credit Agreements and other credit
facilities which have cross-default provisions have not exercised
any remedies.
Desc is pursuing a waiver of these defaults and the refinancing
of the Credit Agreements and certain of its other credit
facilities. While Desc can make no assurances, Desc presently
believes that it will be successful in reaching an agreement with
its lenders regarding the refinancing of a significant portion of
its credit facilities (including the Credit Agreements) and in
obtaining such a waiver. However, Desc may incur additional costs
in the form of fees, interest expense or additional restrictions
in connection with any such waiver, refinancing and / or
amendment of its credit facilities.
If Desc is unable to obtain a waiver with respect to these
defaults, the lenders under the Credit Agreements could declare
the outstanding borrowings thereunder immediately due and
payable, which would trigger crossacceleration provisions in
Desc's other credit facilities.
Any such acceleration or the exercise of other rights and
remedies by the lenders under these credit agreements would
likely have a material adverse effect on Desc.
RESULTS BY SECTOR
Automotive Sector
Quarter-over-quarter, dollar sales declined 1.5% due to lower
demand from the OEMs. Operating income declined 62.2% reflecting
a decline in revenues and the higher costs of raw materials.
Sales and operating income declined 27.5% and 87.2%,
respectively, compared to the same quarter of 2002. This result
was mainly due to:
a) The sales decline in the axle, stamping and propeller shaft
businesses as a result of the closing of the DaimlerChrysler
plant in Mexico City,
b) The holiday period during Easter Week in April 2003,
c) Temporary shutdowns in some assembly plants such as GM, Ford,
Nissan, Volkswagen and DaimlerChrysler, in order to reduce
inventories, and
d) The closing of the spark plug and electric component
businesses during 2Q02.
Mexico's total vehicle production, for the six-month period ended
June 30, 2003, was 829,802 units, which represents a 13.0%
decline when compared to the same period of 2002.
The sales decline caused operating income to reach US $4.0
million, reaching an operating margin of 2.3% and EBITDA of US
$21.5 million. Quarter-over-quarter, operating income and EBITDA
declined 62.2% and 22.0%, respectively, due to the previously-
mentioned factors and the decline in vehicle demand in Mexico and
the U.S. During the second quarter the implementation of the
Tractor Project continued. This project which consists in the
manufacturing of components for axles, half-axles and output-
shafts contributed with sales of US $ 14.4 million during 2Q03.
The increases in unit sales volumes are listed below:
- propeller shafts 17.9%,
- pins 30.7%,
- constant velocity joints 16.6%, and
- tappets 39.1%.
Year-over-year, the most significant reductions were in the
following businesses:
- pick-up boxes 92.6%,
- pistons 35.9%,
- light transmissions 36.7%,
- heavy-duty transmissions 21.7%,
- aluminum wheels 31.2%, and
- steel wheels 30.9%.
Export sales reached US $119.9 million, a 28.4% decline compared
to the same quarter of 2002.
The average capacity utilization in transmissions, stampings,
axles and cv joints businesses reached approximately 52%.
Sales per employee increased to US $103.3 thousand, compared to
US $113.5 thousand in the same period of the previous year. This
decline reflects the sales decline reported during the quarter.
During the quarter investments were made in the following
projects:
1. Tractor Project - US $4.8 million to complete the installation
and validation of the machinery, which was moved from the United
States to Quertaro and the State of Mexico,
2. CV joints plant - US $1.5 million invested in the expansion of
capacity, and
3. Maintenance - US $1.4 million for maintenance of the remaining
operations.
Chemical Sector
Compared to 1Q03, sales declined 4.1% in 2Q03 due to a lower
demand in the phosphates and laminates businesses. Operating
income increased 39.1% due to the lower costs of raw materials
towards the end of May and during June 2003.
During the quarter, sales slightly declined 3.8% compared to
2Q02, as a result of the decrease in sales such as polystyrene,
phosphates and laminates, due to price wars, lower requirements
of detergent production and the contraction of the furniture
industry.
Exports for the quarter declined 4.9%, from US $69 million in
2Q02, to US $66 million in 2Q03.
Raw material prices such as butadiene monomer (BM) and styrene
monomer (SM) as well as natural gas remained stable after
reaching, in certain cases, high historic levels. Year-over-year,
styrene monomer and styrene monomer increased 88% and 24% while
natural gas increased an average 64%.
These raw material price increases were not entirely passed onto
final prices due to the current market conditions. Therefore,
operating margin declined from 7.0% in 2Q02 to 2.9% in 2Q03 and
EBITDA dropped 36.8% during the same period.
Despite the current condition and notwithstanding the low demand
in some of the businesses, the subsidiaries dedicated to the
production of carbon black, solution rubber, emulsion rubber and
acrylic laminate increased their average capacity utilization to
100%.
The strict controls in operating expenses have helped to
partially offset cost increases.
FOOD SECTOR
Branded Products
Quarter-over-quarter net sales remained flat due to the solid
performance of the "Del Fuerte" tomato puree, "Embasa" ketchup
and the increase in coffee exports to the U.S.
Other contributed factors were the new line of "Del Fuerte"
chiles and salsas launched during the fourth quarter of 2002, the
distribution of "Ybarra" canned tuna and the increased sales in
the "Zuko" powdered beverage concentrate. These factors have
helped compensate for the drop in economic consumption in Mexico
and the U.S.
During this quarter, ASF (Authentic Specialty Foods), the branded
products business in the U.S., reported an expense due to the
severance payments, which negatively impacted its operating
income. Year-over-year, another relevant event was the increase
in costs main raw materials offset by the improved performance of
the plants operation and strict expense controls.
As a result, the operating margin of the branded products
division declined from 6.3% in 2Q02 to 2.8% in 2Q03.
Pork Business
During the quarter, sales in the Pork Business declined 20.5% due
to the closing of the Bajio region operations in 3Q02. Excluding
the Bajio operations, sales declined 10.2%.
The operating margin was 2.7%, which was above the -10.1%
reported in 2Q02, as a result of the 14.3% increase in prices
from Ps. 14.08 per kg. in 2Q02 to Ps. 16.10 per kg. in 2Q03,
despite the increase in the cost of raw materials, and the
closing of the Bajio operation, which had high negative margins.
Capacity utilization remained at 100% in the Southeast region
despite the 2.2% decline in sales volumes year-over- year.
Real Estate Sector
Sales in 2Q03 reached US $107.1 million, an increase of 307.1%
compared to 2Q02 and of 402.3% compared to 1Q03, reflecting the
sale of two important properties. The first, a US $76 million
land property located in the State of Mexico (with permits and
the basic infrastructure for its development) and the second a US
$ 20 million, 187 thousand sq.ft. commercial lot located in the
Arcos Bosques project. The results for the quarter reflect these
two transactions. Sales for the quarter were as follows:
- residential land reserves 70.5%,
- commercial lots 23.5 %, and
- Punta Mita and Arcos Bosques, the remaining 6%.
Operating margin for the quarter was 30.5%, compared to the 21.7%
achieved in 2Q02 and the 24.7% achieved in 1Q03, as a result of
the sales previously described.
During this quarter, the Real Estate Sector achieved an important
portion of its strategic goals, which included the sale of large
properties purchased a long time ago and is the reason why it
reported a much stronger profit compared to previous quarters.
In Punta Mita, we concluded the marketing and sales of the lots
denominated Ranchos and continued to sell and develop the
residential lots with ocean and golf course views. Investments
into this project during the quarter were US $1.1 million.
In Bosques de Santa Fe, we have concluded the construction and
sold 82% of the single-family and 42% of the multi-family lots.
The construction of the clubhouse in this property is on schedule
and it is expected to be completed by the first half of 2004.
Investments made into this project during 2Q03 were US $5.8
million.
In Arcos Bosques, the construction of North Building "C"
continued this quarter. This project is expected to be concluded
towards the end of 2003. During the quarter, a 20 thousand sq.ft.
office space was sold and US $2.9 million were invested in the
building.
CONTACT: Marisol V zquez-Mellado
Alejandro de la Barreda / Carolina Rend˘n
Tel.: (5255) 5261 8037
alejandro.delabarreda@mail.desc.com.mx
GRUPO IUSACELL: Share Price Tumbles On Analysts' Debt Concerns
--------------------------------------------------------------
Shares of Grupo Iusacell SA, Mexico's third-largest cellular
telephone service provider, fell 4 centavos, or 6.7%, to 49
centavos (4 U.S. cents). Bloomberg attributed the drop in the
stock to analysts' concern that bondholders may gain control of
the Company to recover more defaulted debt, thereby reducing
equity value.
Verizon Communications Inc. and Vodafone Group Plc, which own
73.9% of Iusacell, reiterated plans to sell their shares to
Movil@ccess SA, a Mexican pager company controlled by Ricardo
Salinas Pliego.
Fintech Advisory Inc., a New York bond fund, lodged its own bid,
doubling the price for the shares to a total offer of US$20
million. If Verizon and Vodafone don't accept its bid, Fintech
threatened it will organize bondholders to request early payment
of US$350 million of bonds.
"Investors think Ricardo Salinas will get a sweet deal from the
debt holders," said Rizwan Ali, an analyst with Bear Stearns &
Co. in New York. "If he's not able to get a sweet deal from the
debt holders, then the equity doesn't have much value."
GRUPO TMM: Provides Update On Mexican Regulatory Approvals
----------------------------------------------------------
Grupo TMM, S.A. (NYSE: TMM and BMV: TMM A; "TMM") a Latin
American multi-modal transportation and logistics company and
owner of the controlling interest in Mexico's busiest railway,
TFM, provided an update on the status of certain regulatory
proceedings in Mexico relating to the proposed acquisition of its
interest in Grupo Transportacion Ferroviaria Mexicana, S.A. de
C.V. ("Grupo TFM") by Kansas City Southern ("KCS") as provided
for in the Acquisition Agreement between TMM and KCS. As
previously reported, the Mexican Competition Commission has
provided formal written notice of its approval of the
transactions under the Acquisition Agreement. This approval will
remain valid until September 20, 2003. If the transaction is not
completed by this date, a request for extension would have to be
submitted. There can be no assurance that the Competition
Commission approval would be extended.
This transaction also requires, among other things, governmental
approval of the Mexican Foreign Investment Commission. The
Foreign Investment Commission informally requested additional
information from the parties in connection with its consideration
of the transaction and requested an extension of the time to
provide its determination with respect to the transaction. In
response to such request, the parties extended the time to make
such determination until July 29, 2003. On July 21, 2003, KCS
filed a response to certain items set forth in the Foreign
Investment Commission's request. All of the matters described in
the filing are subject to KCS receiving an unconditional approval
from the Foreign Investment Commission. The Foreign Investment
Commission has requested, and KCS and Grupo TFM-TMM have agreed
to, an additional extension of the time period until August 12,
2003. There is no assurance that the approval of the Mexican
Foreign Investment Commission will be obtained or that the
approval, if obtained, will not contain conditions that are
unacceptable to either TMM or KCS. Under the Acquisition
Agreement, it is a condition to both TMM's and KCS's obligations
to complete the transaction that the approvals by regulatory
agencies whose approval is required, including the Foreign
Investment Commission, do not impose conditions that, in the
aggregate, are reasonably likely to result in a material adverse
effect on KCS, Grupo TFM or TMM.
Headquartered in Mexico City, Grupo TMM is a Latin America's
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 (IR)
Phone: 011-525-55-629-8725
Email: brad.skinner@tmm.com.mx
Dresner Corporate Services
Kristine Walczak (IR, analysts and media)
Phone: 312-726-3600
Email: kwalczak@dresnerco.com
PROA STRUCTURA
Marco Provencio
Phone: 011-525-55-629-8758
Email: mp@proa.structura.com.mx
SANLUIS CORPORACION: Reports Mildly Improved 2Q03 Results
---------------------------------------------------------
(Millions of US dollars )
SANLUIS Corporacion, S.A. de C.V. (BMV: SANLUIS), a Mexican
industrial group that manufactures auto parts, reported Thursday
results for the three months ended June 30, 2003.
* Compared with the same period last year, sales increased 3%.
* On an accumulated basis, during the year's first half, sales
increased by 8% while EBITDA improved 4%.
* In the second quarter sales were U$ 121.2 million.
* EBITDA in the last three months was U$ 16.9 million.
* Rassini Chassis Systems, which will manufacture coil springs
for
automotive suspensions, was inaugurated in Ohio, USA.
Operational Results
Sales and EBITDA (earnings before interest, depreciation,
amortization and income taxes) of SANLUIS in the first six months
of 2003 totaled U$ 236.4 million and U$ 35.2 million,
respectively.
Higher sales levels combined with increased plant efficiency,
higher productivity, lower average steel price, reduced fixed
costs at plants as well as lower sales and administrative
expenses have brought as a result satisfactory EBITDA levels.
These improvements partially compensated negative influences like
gas, power and scrap price increases. The company absorbed
product price reductions as a consequence of discounts in mature
platforms as well as extraordinary discounts requested by
Daimler-Chrysler. During the quarter, a shift in the brake
product mix was experienced as lower priced products increased
their share since higher priced products reduced their volumes.
Although foreign exchange losses incurred were lower than last
year, and EBITDA improved and financial expenses were on a
reduced level, all of these elements did not translate into
higher net income. This occurred since on a pro-forma basis the
results of the financial restructuring, in anticipation of its
closing, were already reflected one year ago as an agreement in
principle was reached at that point in time with a lenders
representative committee. The following table shows this point.
(Amounts in U$ Million) January-June
2002 2003
-EBITDA $ 33.7 $ 35.2
-Depreciation (15.3) (14.9)
-Net Financial expen se (24.9) (14.8)
-(Loss) Foreign
exchange gain (37.4) (5.5)
-Monetary Position (Loss)
Gain 13.9 4.4
-Other (Expenses) Gains 1.8 (4.2)
-Taxes+Profit sharing 11.7 (5.3)
-(Loss) Gain before minorities
and debt restructure
effects $ (16.5) $ (5.1)
-Restructure effects
and mining sale 53.3 --
-Minority Participation
(Gain) Loss (0.6) 1.0
-Net Income (Loss) $37.4 $ (6.1)
The effects derived from the financial restructure and sale of
the Mining Division were already incorporated in second quarter
2002 numbers. It generated an extraordinarily favorable effect of
U$ 53.5 million consisting of:
U$ Million
Debt restructuring effects
- Debt discount $83.9
- Cancelled interests due in 2001 and 2002, net of deferred taxes
17.4
- Foreign exchange effects 1.7
- Debt restructuring $103.0
- Loss Mining Division sale $(49.7)
- Total extraordinary restructure & mining sale effect $53.3
Assuming that the above-mentioned special effect was eliminated,
the half year results would be a U$ 5.1 million loss which
compares with last year's reported net loss of U$ 16.5 million.
The positive operational results are not completely reflected in
a higher cash position because in the Suspension business we
incorporated a new supplier. While our most important special
steel supplier normalized its operations, after a prolonged
strike, we purchased raw material from an alternative source at
lower prices but less credit tenor.
The suspension business, including Brazil, recorded sales during
the first six months of U$169.5 million, which places it at the
same level achieved in the same period during 2002.
The Brake business during the last quarter reached sales of U$
34.4 million, a 22.0% increase over the same period in 2002.
In the first half of the year Brakes' sales were 30.2% more than
in the same period 2002.
Rassini Chassis Systems
Rassini Chassis Systems' plant was inaugurated in Montpelier,
Ohio. The new business unit will produce coil spring suspensions.
It will have four production lines capable of producing 10
million springs annually for the OEM car and pick-up market. The
plant enjoys a close proximity to its suppliers and customers,
facilitating the reception of raw material and finished product
delivery elements that will unquestionably become competitive
advantages in the value creation chain. The plant will employ 80
people.
The incursion into the United States is to consolidate SANLUIS
Rassini's leadership as a designer and producer of high-tech
suspension system components throughout the American continent.
SANLUIS
SANLUIS produces suspensions and brake components for the global
automotive industry, with a principal focus on original equipment
manufacturers (OEMs).
Suspension products include leaf springs (parabolic and multi-
leaf), coil springs, torsion bars, bushings, and stabilizer bars.
The Brake Division produces drums and discs.
SANLUIS Rassini has a 90% share of the Mexican market for light
truck suspensions and a 62% share of the U.S. and Canadian
market. Its solid and diversified client base includes General
Motors, Ford, DaimlerChrysler, Nissan, Volkswagen, and Toyota.
In the Brake business, SANLUIS Rassini has an 12% market share in
the U.S. and Canada in the disc and drum segment of the light
vehicle market.
CONTACT: SANLUIS Corporacion, S.A. de C.V.
Hector Amador
Tel : (525) 5 229-58-38
Fax: (525) 5 202-66-04
http://www.sanluiscorp.com
E-mail: hamador@sanluiscorp.com.mx
===============
P A R A G U A Y
===============
MULTIBANCO: CFO Resigns Amid Investigation
------------------------------------------
Carlos Marcos resigned from his post as CFO of Multibanco, the
intervened Paraguayan bank, which is currently at the center of
an investigation conducted by the central bank and banking
regulator.
Business News Americas suggests that Marcos' resignation was
prompted by the ongoing investigation into Multibanco's irregular
dealings, which were discovered after the bank was intervened
last month due to financial woes.
Marcos has been charged with the crime of withholding crucial
financial information.
Local authorities intervened in the business of Multibanco last
month after they uncovered a US$10 million bank deficit. The
deficit has since widened to US$21 million after a closer look
into Multibanco's dealings showed it had transferred large
amounts of deposits to an offshore bank with 50 related
fictitious companies. The deficit figure is likely to continue to
rise as the authorities dig deeper into Multibanco's offshore
transactions.
Last week, a central bank official told Business News Americas
that the bank was heading for judicial liquidation within 30
days.
Owners of the bank are in jail pending court proceedings.
***********
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.
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