/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030804.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, August 4, 2003, Vol. 4, Issue 152 Headlines A R G E N T I N A BERKELIA: Court Moves Informational Meeting Date CABLEVISION: Denies Reports of Pending Bankruptcy Filing CONINGAS: Enters Bankruptcy Process on Court Decision DISCO: IFC To Lend Cash Required For Purchase FARMACIA NUEVA: Informationgal Meeting Rescheduled KEHOE: Court Assigns Receiver for Bankruptcy PETROBRAS ENERGIA: Ups Capital Contingency Plan By 42.5% PETROBRAS ENERGIA: Parent Reveals Slumping Sales Volumes, Prices QUICKFOOD: Reaches Debt Agreement With Creditor Banks SAN ROQUE: Court Sets Deadline For Claims Verification SANARFARM: New Date Set for Organizational Meeting SIRK PFEIFFER: Bankruptcy Proceeds With Claims Verification * Argentina Wants IMF Agreement Before Outlining Debt Plans B E R M U D A GLOBAL CROSSING: Court Clears Stipulation with AGX Ch. 7 Trustee B R A Z I L ARACRUZ: Closes $400M Receivables Securitization Financing CEMIG: Profits Return After 3 Consecutive Quarterly Losses EMBRATEL: Could Go Under the Hammer, Reports Say TAM: BRL100M Profit in 1H03 Boosted By 1Q03 Results TELEMAR: Net Losses Balloon in the 2Q03 VARIG: Ends 2002 With A Loss of $942M C H I L E SANTA ISABEL: Ahold Completes Sale To Cencosud D O M I N I C A N R E P U B L I C UNION FENOSA: Economic, Regulatory Conditions Hamper Profits M E X I C O ASARCO: Responsible for Lead, Arsenic Contamination, Says EPA GRUPO IUSACELL: Salinas To Unveil Debt Restructuring Plan Soon N I C A R A G U A ENITEL: Signs Backhaul Agreement With New World Network T R I N I D A D & T O B A G O CARONI: Winds Up Operations CARONI: CEO Assures VSEP Payment Will Be Made on Time V E N E Z U E L A CANTV: S&P Upgrades Debt Rating On Sovereign Rating Action PDVSA: S&P Raises Ratings; Outlook Stable - - - - - - - - - - ================= A R G E N T I N A ================= BERKELIA: Court Moves Informational Meeting Date ------------------------------------------------ Court No. 9 of Buenos Aire moved the date of the informative assembly for the reorganization of Berkelia S.A., relates local news source Infobae. The new date for the meeting is August 19 this year. Berkelia is undergoing reorganization after its motion for "Concurso Preventivo" was approved by the court. The report, however, did not reveal who was the designated receiver for the case. CABLEVISION: Denies Reports of Pending Bankruptcy Filing -------------------------------------------------------- Argentine cable TV operator CableVision, a unit of Hicks, Muse, Tate & Furst and Liberty Media, denied reports it may file for protection under the bankruptcy law. The Company slammed the reports, saying it is inaccurate and calculating. Market sources have intimated that CableVision might file for protection under the local bankruptcy law in an attempt to solve the difficult financial and legal situation of the firm. The company has US$900 million in liabilities. Moreover, some holders of CableVision's debt, such as US private equity W. Huff, fear that the Company may be sold to an investment holding similar to Hicks for a ridiculous price. The operation would be financed by CableVision's owners in a move to free its directors from lawsuits filed against them. CONINGAS: Enters Bankruptcy Process on Court Decision ----------------------------------------------------- The Civil and Commercial Tribunal of La Matanza ruled that local company Coningas S.A. is officially entering bankruptcy. Infobae relates that Court No. 4, which handles the Company's case, has assigned a receiver for the process. The designated receiver, Mr.Arnolfo Grinblat, was instructed by the court to authenticate creditors' claims until October 2 this year. He is expected to hand over to the court the individual reports on November 13, followed by the general report on December 30. Infobae did not mention whether the cour has chosen a fate for the informative assembly. CONTACT: Coningas S.A. Evita 373 Madero Arnoldo Grinblat Perdo B Palacios 1380 Ramos Meija DISCO: IFC To Lend Cash Required For Purchase --------------------------------------------- The International Finance Corporation (IFC) -the private-sector investment arm of the World Bank- has decided to lend some of the cash needed to buy Argentine supermarket chain Disco, a unit of Dutch Royal Ahold, to the candidate that wins the competition for the chain. On July 7, potential bidders for Disco asked IFC to finance the operation and its board of directors approved the proposal last week. The IFC is considering spending from US$25 - US$50 million. In each case, we expect to spend less than 25% of the final price, an IFC spokesperson explained. Retail giant Ahold announced it was selling the Argentine unit - and the rest of its South American assets- in April, a few weeks after the Dutch firm admitted it had overstated earnings at its U.S. Food Service unit. At the time, there were reports of errant accounting at Disco. Disco is Argentina s second-largest supermarket chain and is 100% owned by Ahold. FARMACIA NUEVA: Informationgal Meeting Rescheduled -------------------------------------------------- The informative audience for the reorganization of Farmacia Nueva Vernet S.A. was moved to August 19 this year, according to a report by local news source Infobae. Court No. 9 of Buenos Aires changed the date, the report adds, without revealing the court's reasons. Farmacia Nueva is currently undergoing restructuring following the court's approval of its motion for "Concurso Preventivo". The report did not reveal the name of the receiver designated for the process. KEHOE: Court Assigns Receiver for Bankruptcy -------------------------------------------- The Civil and Commercial Tribunal of Pergamino assigned Mr. Daniel Oscar Volta as receiver in the bankruptcy proceedings of Kehoe S.A.. Creditors must submit their claims to Mr. Volta for authentication before August 5 this year. According to a report by local news source Infobae, the receiver is due to file the individual reports at Court No. 3 of Pergamino, which handles the Company's case, before September 17 this year. The general report is due for submission on October 29. CONTACT: Kehoe S.A. Avenida Hipolito Yrigoyen Pergamino Daniel OScar Volta Avenida Julio Roca 814 Pergamino PETROBRAS ENERGIA: Ups Capital Contingency Plan By 42.5% -------------------------------------------------------- Argentine energy company Petrobras Energia increased its capital contingency plan for future losses associated with the start up of the OCP pipeline in Ecuador by 42.5% to 124 million pesos (US$41.9mn), reports Business News Americas. The reasons for the increased cost, according to the Company's parent, Petrobras Energia Participaciones, in a statement, are delays in developing Ecuador's block 31 and higher than expected transport costs on the OCP. The report reveals that the Company cut its international investment plan in 2000 and consequently will not be able to produce enough oil on block 31 to meet its reserve capacity commitment of 80,000b/d on the OCP when it starts up in August. In addition, one of the partners on the OCP has pulled out of its ship-or-pay commitment, meaning that transport prices for the other partners will increase. Higher than expected investment in the construction of the OCP is also a factor in the increased costs. PETROBRAS ENERGIA: Parent Reveals Slumping Sales Volumes, Prices ---------------------------------------------------------------- Petrobras Energia Participaciones announced that sales volumes and prices for most of the main products of its subsidiary, Petrobras Energia, fell in the second quarter of 2003, compared to the same period in 2002, relates Business News Americas. Oil sales at the subsidiary fell to 113,000 barrels a day (b/d), from 122,000b/d in 2Q02. Oil sales averaged ARS54.7 a barrel compared to ARS60.3/b in the second quarter of 2002. Gas sales fell to 287 million cubic feet a day (mcf/d), from 365mcf/d a year ago, while average prices dropped to ARS2.15 a cubic foot from ARS2.87 a year ago. Petrochemicals manufactured in Brazil fell to 34,000 tonnes, from 49,000t a year ago, while the price fell to ARS2,708/tonne, from ARS3,065/t a year ago. However, petrochemical sales in Argentina rose to 150,000t, from 121,000t a year ago. The price dropped to ARS1,125/t, from ARS1,456/t in the year earlier period. Output of refined products increased 27.7% from 2Q02 to 484t, and electric power sales fell 17.6% to 1,284GWh. Petrobras Energia Participaciones is a subsidiary of Brazil's federal energy company Petrobras. QUICKFOOD: Reaches Debt Agreement With Creditor Banks ----------------------------------------------------- The Argentine unit of Quickfood has reached an agreement with a group of banks in order to refinance a ARS30-million (US$10.17 million) debt. The debt will be cancelled in 11 semiannual payments and an annual interest rate of 6% plus the CER adjustment coefficient. Rabobank, which was part of the group of creditor banks, decided to separate from the rest and will refinance US$6 million in debt in eight semiannual payments and an annual 5% interest rate. SAN ROQUE: Court Sets Deadline For Claims Verification ------------------------------------------------------ Court No. 2 of Bahia Blanca decided that the credit claims authentication process for the bankruptcy of San Roque S.R.L. will end on November 14 this year. Infobae reports that the Civil and Commercial Tribunal of Bahia Blanca recently declared the Company bankrupt. CONTACT: San Roque S.R.L. Estomba 2135 Bahia Blanca SANARFARM: New Date Set for Organizational Meeting -------------------------------------------------- The date for the informative assembly related to the reorganization of Buenos Aires-based Sanarfarm S.A. was changed, relates Infobae. The city's court no. 9 decided that the meeting should be held on August 19, 2003. The court has approved the Company's motion for "Concurso Preventivo" and the reorganization process will now proceed with the informative assembly after the completion of the authentication of claims and the presentation of the individual and general reports. SIRK PFEIFFER: Bankruptcy Proceeds With Claims Verification ----------------------------------------------------------- Creditors of Argentine company Sirk Pfeiffer y Perez S.R.L. must submit their credit claims to for authentication before September 12 this year. The Civil and Commercial Tribunal of La Plata assigned Mr. Gabriel Gustavo Iglesias as receiver to verify the claims. The court also instructed the receiver to prepare the individual reports to be submitted by October 20 this year. Local news source Infobae reports that the general report is due for submission on February 16, 2004. CONTACT: Sirk Pfeiffer y Perez S.R.L. Calle 508 Esquina Gonnet La Plata Gabriel Gustavo Iglesias Calle 12 Numero 836 La Plata * Argentina Wants IMF Agreement Before Outlining Debt Plans ----------------------------------------------------------- Argentina is seeking an aid agreement with the International Monetary Fund before outlining plans to reschedule US$95 billion in defaulted bonds, reports Bloomberg. According to Economy Minister Roberto Lavagna, an IMF agreement is "indispensable" if the country is to be able to make an offer to bondholders. "We are basically seeking to defer payments over the next three years," Lavagna said, adding, "We aren't asking for fresh funds because Argentina is over -- indebted, we don't have the capacity for further indebtedness." Argentina plans to present "the main guidelines" for the debt plan during the IMF meeting in Dubai to be held Sept. 23. Meanwhile, analysts, such as Christian Stracke, of New York-based CreditSights Inc., said the announcement would do little to reassure investors because it points only to guidelines, rather than a new arrangement. Argentina needs to reach an agreement with the fund and international bondholders to regain access to credit markets and boost confidence in the economy, the analyst said. "This is a little bit of a setback because some were expecting something a bit more meaningful," Stracke said. "It's pretty clear there is no firm proposal coming from Argentina in September." ============= B E R M U D A ============= GLOBAL CROSSING: Court Clears Stipulation with AGX Ch. 7 Trustee ---------------------------------------------------------------- On March 31, 2003, the Court approved a settlement between Global Crossing and Asia Global Crossing, which provides for the transition of AGX's billing and accounting functions to AGX's network. In addition, AGX agreed to provide GX access to any files, records and similar financial data, in AGX's custody, necessary for GX to complete its financial audit in accordance with applicable rules and regulations. GX has not yet completed its financial audit. Thus, GX requires access to AGX's financial records, files and databases located at AGX's office at 11150 Santa Monica Blvd., Suite 400 in Los Angeles, California. In a Court-approved Stipulation, AGX's Chapter 7 Trustee, Robert L. Geltzer, and the GX Debtors agree that: A. The Trustee will provide GX and its auditors, Grant Thornton LLP with unlimited access to the Premises, except as provided in this Stipulation. At all relevant times, GX's and Grant's access will be supervised by security officers or other personnel selected, designated or approved by the Trustee. In addition, AGX, upon security access to the shared network directory currently controlled by Asia Netcom Corporation Limited, will provide access to the shared network directory to GX and Grant; B. GX and Grant each agree that it will not remove or, in any way, damage or destroy, any documents, records, files or databases, however denominated, from the Premises; provided that, GX and Grant will be permitted to copy, at GX's expense, any of the documents, which they require, in their sole discretion, and remove the copies from the Premises, which copies are subject to inspection by the security officers or other personnel selected, designated or approved by the Trustee; C. GX will reimburse AGX for any and all reasonable expenses incurred in providing accessibility to the Premises, including, but not limited to: (1) pro-rated rent from June 19, 2003 until GX informs the Trustee, in writing, that it no longer requires access to the Premises -- the Access Period; (2) security for the Premises during the Access Period, including security officers, replacement locks for the doors to the Premises, and video camera; (3) travel, accommodations and related expenses to send two people to California to inspect the Premises and make arrangements for access thereto; and (4) any other miscellaneous expenses incurred in connection with providing access to GX and Grant; provided, that, the Trustee provides customary documentation to support the charges prior to the incurrence thereof. Unless otherwise agreed by the parties, the Access Period will terminate no later than August 8, 2003; D. Upon completion of its audit, subject to the execution by the Trustee and his accountant of a confidential agreement agreeable to Grant and containing the information described in this Stipulation, Grant will allow the Trustee and the accountant to the Trustee to review, on a confidential basis, the work papers Grant prepared, which related to AGX. The Trustee agrees to execute a confidential agreement agreeable to Grant with respect to the work papers which will provide, among other things, that: (1) only the Trustee and his accountant will have access to the work papers; (2) no copies of the work papers will be made; and (3) the Trustee and his accountant will maintain the confidentiality of the information contained in the work papers. Notwithstanding, neither GX nor Grant makes any representation or warranties to the Trustee about the work papers and provision of the work papers does not constitute, imply or evidence the truth of anything contained therein. Therefore, the work papers and their contents will not constitute a basis for any claim or liability by the Trustee against Global Crossing or Grant in connection with the preparation, accuracy, and completeness of the work papers. The Trustee will not rely on any information provided by or contained in the work papers prepared by Grant. The work papers will remain Grant's sole and exclusive property; E. This Stipulation and Agreement is not intended and will not be deemed to create or imply that Grant has any fiduciary or other duties, of any kind, to the Trustee, or to the estate or creditors of AGX. The Trustee understands that Grant is not performing any services or audit for AGX, its estate or the Trustee and has no duties to them in that connection except as specifically stated in this Stipulation; and F. The Trustee agrees that he will not remove or destroy any documents, files or databases located in the Premises during the Access Period, without the prior written consent of GX. Notwithstanding, the Trustee will be permitted to remove any and all documentation necessary for the Trustee to carry-out his duties and administer AGX's Chapter 7 cases in accordance with the Bankruptcy Code. To the extent that the Trustee removes any documentation, files or databases from the Premises, the Trustee will provide GX with reasonable prior written notice thereof and create, as his own cost, a copy of the documentation, which will be left in the same location as the original. (Global Crossing Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service, Inc., 609/392-0900) =========== B R A Z I L =========== ARACRUZ: Closes $400M Receivables Securitization Financing ---------------------------------------------------------- Aracruz Celulose S.A. (NYSE: ARA) announced Wednesday the pricing of a US$400 million export receivables securitization financing. The transaction had a final maturity of 8 years and an average life of 5 years. The coupon was 7.048% p.a. The transaction was the largest in company's history. The deal improves considerably the company's debt profile, since the new funds will replace short-term financing borrowed for the acquisition of Riocell, early this month. According to Isac Zagury, chief financial officer, "the deal was extremely satisfactory, not only for its low cost but also in terms of volume, which exceeded our early expectations. Besides, large institutional investors, who only consider investment grade papers, as it was the case, provided the funds. Aracruz was already well known by equity investors since it was the first Brazilian company to list an ADR level 3 at the NYSE, eleven years ago. Now, with this transaction, the company enhances its relationship with debt investors." The deal was priced off of the 5-year US Treasury, which had a yield of 3.152% p.a. at the time of pricing. The final book had approximately 30 institutional investors. "Using the future export receivables structure generated savings of approximately 4% p.a. compared with an offering of Aracruz senior unsecured debt," added the CFO. CONTACT: Aracruz Celulose S.A. Investor Relations Department: Phone: (55-21) 3820 8131 Fax: (55-21) 2541 0795 E-mail: invest@aracruz.com.br CEMIG: Profits Return After 3 Consecutive Quarterly Losses ---------------------------------------------------------- Companhia Energetica de Minas Gerais registered a BRL383.8- million ($129 million) net profit in the second quarter of the year, reversing a BRL45.5-million loss in the comparable period last year. It's the second quarterly profit after three consecutive quarterly losses for Brazil's largest combined power generator and distributor, according to Valor Online. The Company, which is 51%-owned by the Minas Gerais state government, saw a 40% rise in revenue to BRL1.46 billion in the second quarter of 2003, from BRL1.04 billion in the same quarter a year earlier, says the report. On June 30, Cemig's net equity stood at BRL6.21 billion. CONTACT: CEMIG Luiz Fernando Rolla, Investor Relations Phone: +55-31-3299-3930 Fax: +55-31-3299-3933 Email: lrolla@cemig.com.br or Eliza Gibbons The Anne McBride Company Phone: +1-303-477-1350 Fax: +1-212-983-1736 Email: eliza@annemcbride.com EMBRATEL: Could Go Under the Hammer, Reports Say ------------------------------------------------ Brazilian long-distance phone carrier Embratel, a unit of MCI (former WorldCom), will be sold, and Mexican Telmex would be interested in acquiring the firm, according to recent reports. WorldCom is carrying out a bankruptcy proceeding in the US, a fact that has affected its Brazilian subsidiary. TAM: BRL100M Profit in 1H03 Boosted By 1Q03 Results --------------------------------------------------- Brazilian airline TAM Linhas Aereas moves into the black with a BRL188-million (US$63 million) net profit for this year's second quarter. The Company cited cost cutting measures, cheaper oil prices, and the appreciation of the local currency as factors that helped its figures. Although the Company suffered an BRL88-million loss during 1Q03, its 2Q03 results propped up its final tally for the year's first half. TAM reports a BRL100-million profit for 1H03, a sharp contrast to its BRL223-million loss in 1H02. "It was a surprise. Given the situation of the sector in general, I wasn't expecting it," comments Unibanco aviation industry analyst Carlos Albano. TAM is currently in merger negotiations with rival Varig. Analysts say that a merger is only way to keep both ailing companies on air. TELEMAR: Net Losses Balloon in the 2Q03 --------------------------------------- Tele Norte Leste Participacoes SA (Telemar), Brazil's No. 1 telephone company, saw its net losses more than double in the second quarter, reaching BRL165.6 million (US$55.8mn), up 118% from the BRL76.3 million the group lost in the same period of 2002. The Company continues to report losses as costs grew to expand wireless services. According to Bloomberg, Telemar's BRL4-billion investment to expand its wireless unit since 2001 has more than doubled the Company's total debt to BRL11.4 billion. Chief Financial Officer Marcos Grodetzky pledged to cut debt by BRL1 billion ($338 million) by yearend using cash generated from rising sales. Second-quarter sales rose 20% to BRL3.34 billion from BRL2.79 billion in the same period last year. The plan "is extremely positive," said Leonardo Rufino, who helps manage US$610 million in equities, including Telemar shares, at Opportunity Asset Management Ltda. in Rio de Janeiro. "If a company such as Telemar is able to generate cash and use it to reduce debt, this is a very good sign." Besides plan to reduce its net debt, Grodetzky also revealed that the Company may cut investment for expansion by BRL100 million, bringing overall spending in 2003 to BRL1.7 billion. VARIG: Ends 2002 With A Loss of $942M ------------------------------------- Viacao Aerea Riograndense SA (Varig), Brazil's embattled flagship airline, reported a loss of BRL2.8 billion ($942 million) for 2002, bigger than the BRL1.61 billion posted in the previous year. The airline, which is in the process of merging with TAM, said the biggest part of the loss was due to a 35% slump in the local currency last year, which hiked its debt and operating costs, such as leasing and fuel. The Company, however, managed to post an operating profit of BRL42.6 million, an indication that the situation can be reversed. Varig, which is facing the deepest crisis in its 75-year history, closed the year with negative net worth of BRL4.5 billion, which means that if it were to sell all of its assets it would still owe that amount, says Reuters. Varig, based in Porto Alegre, in southern Brazil, is Latin America's largest airline. CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.) Rua 18 de Novembro No. 800, Sao Joao 90240-040 Porto Alegre, Rio Grande do Sul, Brazil Phone: (51) 358-7039/7040 (51) 358-7010/7042 Fax: +55-51-358-7001 Home Page: www.varig.com.br/english/ Contacts: Dorival Ramos Schultz, EVP Finance and CFO E-mail: dorival.schultz@varig.com.br Investor Relations: Av. Almirante Silvio de Noronha, n 365-Bloco "B" - s/458 / Centro Rio de Janeiro, Brazil ========= C H I L E ========= SANTA ISABEL: Ahold Completes Sale To Cencosud ---------------------------------------------- Ahold announced Friday that it has successfully closed the sale of its 99.6% interest in Santa Isabel S.A. to Chilean retailer Cencosud S.A. Ahold and Cencosud completed the transaction based on a total value, excluding any liabilities, of approximately USD 150 million for Ahold's operations in Chile, which is equal to the amount announced at the time of the initial discussions with Cencosud. After adjustment of the value for net working capital and external interest-bearing debt, the net proceeds of the transaction for Ahold amount to approximately USD 77 million. Cencosud will assume the external interest-bearing debt of USD 17.5 million. The transaction is limited to Ahold's supermarket activities in Chile. Its activities in Peru and Paraguay, previously subsidiaries of Santa Isabel, remain with Ahold and will also be divested, as was announced on April 3, 2003. Cencosud has interests in real estate, do-it-yourself (DIY) stores and hypermarkets in Chile and Argentina. Its wholly-owned subsidiary, Hipermercados Jumbo S.A., is the third-largest food retailer in Chile with 7 hypermarkets, 16 DIY stores and 3 shopping centers. The company also operates 11 hypermarkets, 23 DIY stores and 11 shopping centers in Argentina. Santa Isabel has been part of Ahold's store portfolio since 1998. At year-end 2002, Santa Isabel operated 77 stores in Chile. Santa Isabel employs approximately 7,000 people in Chile. The divestment of Santa Isabel in Chile, the intention of which was announced on February 5, 2003, is part of Ahold's strategic plan to restructure its portfolio to focus on high-performing businesses and to concentrate on its mature and most stable markets. CONTACT: Royal Ahold N.V. P.O. Box 3050 1500 HB Zaandam Netherlands Phone: +31 (0)75 659 57 20 Fax: +31 (0)75 659 83 02 Home Page: http://www.ahold.com =================================== D O M I N I C A N R E P U B L I C =================================== UNION FENOSA: Economic, Regulatory Conditions Hamper Profits ------------------------------------------------------------ Spanish energy company Union Fenosa will reach profitability levels in its two distribution subsidiaries in the Dominican Republic one or two years later than expected, Business News Americas reports, citing a Fenosa executive. Fenosa strategy director Jose Manuel Arrojo attributed the delay to the regulatory and economic conditions in the Dominican Republic. Fenosa bought 50% of distributors EDE Sur and EDE Norte in a 1999 privatization that did not establish a clear regulatory situation. This year high fuel prices for power generation and sharp devaluation of the Dominican peso have created problems at the distributors, Arrojo said. Most of the problems are at EDE Norte, with EDE Sur working relatively well, Arrojo said, without explaining the differences. Fenosa has exposure on its EBITDA of only 1% from Dominican Republic operations, he added. =========== M E X I C O =========== ASARCO: Responsible for Lead, Arsenic Contamination, Says EPA ------------------------------------------------------------- The US Environmental Protection Agency released a report last week blaming copper miner Asarco, a subsidiary of Grupo Mexico, for lead and arsenic contamination affecting residential areas in El Paso, Texas, and the Mexican town of Ciudad Juarez. Now state Sen. Eliot Shapleigh is calling for the smelting company to pay more for the cleanup. "Now that the EPA has ruled that Asarco is responsible for the lead and arsenic contamination in three Central El Paso neighborhoods, the company should step in and clean up the homes," Shapleigh said. "One million dollars (from Asarco's trust fund) will not pay for $80 million worth of cleanup. Asarco needs to pay more." Asarco agreed in January to set up a US$100-million clean-up fund to pay for remediation work at several US sites contaminated by the Company over its 104-year history. The Texas contamination is in addition to those sites, according to the report. Grupo Mexico, burdened by the financing of its 1999 purchase of Asarco Inc., defaulted on more than US$1.3 billion of debt in the past two years after copper prices fell to record lows. It has since persuaded dozens of banks, hundreds of bondholders and the U.S. State Department to stretch out payments as it struggles to return to profit. CONTACT: GRUPO MEXICO S.A. DE C.V. Avenida Baja California 200, Colonia Roma Sur 06760 Mexico, D.F., Mexico Phone: +52-55-5264-7775 Fax: +52-55-5264-7769 Home Page: http://www.gmexico.com Contacts: Germ n Larrea Mota-Velasco, Chairman and CEO Xavier Garca de Quevedo Topete, President and COO Alfredo Casar Perez, COO, Ferrocarril Mexicano Daniel Ch vez Carre>n, COO, Industrial Minera M,xico Daniel Tellechea Salido, VP and Administration and Finance President ASARCO 2575 E. Camelback Rd., Ste. 500 Phoenix, AZ 85016 Phoenix City Phone: 602-977-6500 Fax: 602-977-6701 Home Page: http://www.asarco.com Contacts: Germ n Larea Mota-Velasco, Chairman and CEO Genaro Larrea Mota-Velasco, President Daniel Tellechea Salido, VP and CFO GRUPO IUSACELL: Salinas To Unveil Debt Restructuring Plan Soon -------------------------------------------------------------- Mexico's Grupo Salinas will soon unveil its debt restructuring plan for recently acquired mobile operator Iusacell, local daily El Economista indicated, citing Salinas spokesperson Hector Romero. "Talks [with creditors] have to start in the next few days," Romero said. "We intend to present a business plan to creditors with strategies for moving the company forward." Among the options being considered is the creation of synergies with its existing subsidiaries, Romero revealed. The group includes broadcaster TV Azteca, retail group Elektra, mobile operator Unefon, trunking operator Biper, portal Todito, Telecosmos and Movil Access. Other options that could be discussed, Romero said, include Iusacell using Movil Access' call center and joint supply purchases for Iusacell and Unefon. "There are several synergies that can be exploited to increase revenues, reduce costs and boost margins," he said. Iusacell is certainly in need of synergies. ================= N I C A R A G U A ================= ENITEL: Signs Backhaul Agreement With New World Network ------------------------------------------------------- Nicaraguan fixed line operator Enitel signed a backhaul agreement with New World Network, reports Business News Americas, citing a statement from the Caribbean region network operator. Under the agreement, Enitel will provide backhaul facilities and services connecting the ARCOS-1 landing station at Bluefields with Managua and other cities in its network, says the report. Last month, the government finalized preparations to complete the company's privatization. An earlier report from BNAmericas revealed that French bank BNP Paribas won the contract to complete the privatization process. Enitel was partially privatized in 2001 when the government sold its 40% stake in Enitel to the Megatel consortium, comprised of Sweden's Telia Swedtel and Honduran electricity company EMCE. Megatel paid US$33 million for the stake and is presently paying the government US$10 million a year, as part of a five-year management contract that will expire in April 2006. Enitel employees hold the remaining 11% of the Company. ================================= T R I N I D A D & T O B A G O ================================= CARONI: Winds Up Operations --------------------------- Trinidad and Tobago state sugar enterprise Caroni (1975) Ltd. wound up operations Thursday. The Company closed after 28 years of operations and losing billions of dollars. "Caroni 1975 Limited will cease to be a trading company as we know it and a small team of people will be working on certain aspects of the industry," local news source the Trinidad Guardian quoted Caroni CEO Chandra Bobart as saying. Unions representing Caroni workers fought hard to prevent the government's divestment plan and tried to stop the government from promoting the Voluntary Separation of Employment Plan (VSEP) to the workers. However, their efforts were in vain. "I have done my duty. I can live with a very clear conscience," said Rudy Indarsingh, president of the All Sugar and General Workers Trade Union. He added that all he could do now is ensure the packages the workers will receive will be to their benefit. The Sugar Manufacturing Company (SMC) will replace Caroni, said the report. The new company's refining operations will be limited to Usine St Madeleine and the Estate Development and Management company. The latter is expected to attract and manage industrial activity for SMC. CARONI: CEO Assures VSEP Payment Will Be Made on Time ----------------------------------------------------- Chandra Bobart, chief executive officer of Trinidad and Tobago state oil company Caroni (1975) Ltd. said measures will be taken to ensure that VSEP payments are made on time, reports the Trinidad Guardian. Mr. Bobart added that the date and venue for the VSEP payments to workers who accepted the offer will be kept secret to ensure the workers' safety. "One has to be careful that one does not openly publicise that VSEP cheques amounting to $790 million would be issued to 9000 sugar workers and it would be unfair to make our workers and their families potential targets for kidnappers," said the officer. Caroni is set to cease operations soon, the report added. Mr. Bobart will be part of a transition team to gear up the Company's replacement. ================= V E N E Z U E L A ================= CANTV: S&P Upgrades Debt Rating On Sovereign Rating Action ---------------------------------------------------------- Standard & Poor's Ratings Services said Thursday that it raised its foreign currency corporate credit rating and senior unsecured debt rating on Venezuelan full service telecommunications company, Compa -a An>nima Nacional Tel,fonos de Venezuela (CANTV) to 'B-' from 'CCC+', following a similar action taken on the ratings of the Bolivarian Republic of Venezuela. The outlook on CANTV is stable. The company had US$246 million in debt outstanding at March 31, 2003. The sovereign upgrade reflects improved external liquidity indicators as a result of the return to normal oil production levels following the devastating strike of December 2002/January 2003. International reserves increased to nearly US$19 billion as of July 29, 2003, from a low of US$13.6 billion in February 2003, the result of renewed foreign exchange earnings from oil exports and capital controls put in place in early 2003. The recently completed voluntary external debt exchange will further improve the government's capacity to service its debt by lowering external debt amortization over the next four years. CANTV has been able to increase sales in the last quarter, partially because of non-residential and residential-fixed-to- mobile rate increases by a weighted average of 15.5%. "Although the company's margins have been affected by increases in general costs, interconnection fees, and the devaluation of the Bolivar, CANTV has been able to generate positive free cash flow as a result of lower capital expenditures," said credit analyst Patricia Calvo. The 'B-' rating is also based on the effect that sovereign implications might have on CANTV's credit profile. CANTV is partially owned by Verizon Communications Inc. (A+/Stable/--) and Telef>nica S.A. (A/Stable/A-1). ANALYSTS: Patricia Calvo, Mexico City (52) 55-5279-2073 Manuel Guerena, Mexico City (52) 55-5279-2011 PDVSA: S&P Raises Ratings; Outlook Stable ----------------------------------------- Standard & Poor's Ratings Services said Thursday that it raised its corporate credit rating on Venezuelan state oil company Petroleos de Venezuela S.A. (PDVSA) to 'B-' from 'CCC+'. At the same time, Standard & Poor's raised its corporate credit rating on PDVSA's wholly owned affiliate PDV America Inc. to 'BB' from 'BB-'. The outlook is stable. "The rating upgrades reflect the upgrade of the foreign currency rating on the Bolivarian Republic of Venezuela to 'B-' from 'CCC+'. Future ratings changes on PDVSA and its affiliates will be linked to rating changes on Venezuela, in addition to changes in either entity's financial or operational profile," said Standard & Poor's credit analyst Bruce Schwartz. As Venezuela recovers from the political and economic strife that has affected the company during the past year, Standard & Poor's expects that the government will continue to use its authority to exploit PDVSA's financial resources to effectively consolidate the debt management of the country with PDVSA. If production volumes can be sustained and higher-than-average oil prices persist, Standard & Poor's believes that PDVSA's credit metrics (such as funds from operations to total debt) for 2003 should be consistent with those of strong investment-grade companies; however, PDVSA's credit metrics exclude the potential fiscal burden that PDVSA may need to shoulder via dividends and other contributions to the Republic of Venezuela. PDVSA's liquidity for the very near term appears adequate as a result of cash balances, cash trapped in the PDVSA finance structure, and potential access to the Macroeconomic Stabilization Fund (FIEM), but a repetition of operational disruptions or plunging oil prices could quickly reduce PDVSA's liquidity and financial flexibility. ANALYST: Bruce Schwartz, CFA, New York (1) 212-438-7809 *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Oona G. Oyangoren, Editors. Copyright 2003. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *