/raid1/www/Hosts/bankrupt/TCRLA_Public/030813.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
Wednesday, August 13, 2003, Vol. 4, Issue 159
Headlines
A R G E N T I N A
ACINDAR: Announces First Quarter Results
AA2000: Posts Higher Losses For 1H03
BANCO HIPOTECARIO: Argentine S&P Rates US$1.7 B of Bonds 'raD'
BANCO SUQUIA: To Have New Owner By Friday
BUILD FLOOR: To Be Liquidated After Bankruptcy Announcement
CENTRAL PUERTO: Reports 1H03 Results
CENTRO TECNICO: Credit Authentication Ends Today
CRM: Bonds Get Default Rating From Argentine Standard & Poor's
CTECSAC: Enters Liquidation Process
DISTRIBUIDORA LOS ANDES: Court Orders Bankruptcy
GF GALICIA: Reports Results for the 2Q03
GRINFA: Court Orders Liquidation
LIBERIUS: Court Approves Motion for "Concurso Preventivo"
MICROBIZ: Credit Verification Period Ends Today
N Y H: Deadline For Credit Verification Expires Today
PETROBRAS ENERGIA: Reports Results For 2Q, Ended June 30, 2003
POO: Seeks More Time To Present Debt Restructuring Proposal
SANCOR: S&P Assigns 'raD' to Various Bonds
TURBINE POWER: Fitch Argentina Rates Bonds 'D(arg)'
B E R M U D A
TRENWICK GROUP: Fitch Withdraws Ratings
B R A Z I L
ACESITA: Outlook Depends on Nickel Prices, says Analyst
KLABIN: In Talks With Unnamed Group Over Sale of Bacell
VESPER: Embratel Executes Letter Of Intent
D O M I N I C A N R E P U B L I C
* Dominican Republic: Fitch Assigns 'B+' Rating
E C U A D O R
PETROECUADOR: Bidding Schedule To Be Announced Wednesday
M E X I C O
CFE: Reports 1H03 Results
SATMEX: Exec Downplays Effects Of Missed Interest Payment
SATMEX: Losses Increase in the 2Q03
SAVIA: Seminis Reports Third Quarter and Nine-Month Results
VITRO: Strengthens Its Top Financial Management
V E N E Z U E L A
PDVSA: Dismissed Workers To Get Severance Payments
PDVSA: Rodriguez To Keep Post
- - - - - - - -
=================
A R G E N T I N A
=================
ACINDAR: Announces First Quarter Results
----------------------------------------
Acindar S.A. (the "Company") announced Monday a net income for the period
ended June 30, 2003 of ARS353.5 million. Results were positively affected by
the revaluation of the Peso, which determined a foreign exchange gain of
ARS151.6 million.
On April 8, 2003 the Comision Nacional de valores issued Resolution 441/03,
which suspended the application of inflation adjustments of Financial
Statements since March 1, 2003. Whereas results for the Period January 1 to
February 28, 2003 were adjusted by applying the variation in the Argentine
wholesale price index (WPI) from the time of the applicable operation until
February 28, 2003, results for March 1 to June 30, 2003 are expresses in
nominal Argentine pesos.
Furthermore, the comparison between the first quarter of year 2003 and the
same period of 2002 is affected by the extremely adverse conditions
prevailing in Argentine during the first quarter of 2002. Therefore, the
comparison between both periods should be done carefully and taking into
consideration that the basis of it, corresponds to the most recessive and
volatile period of the recent Argentine history.
Revenues for the period ended June 30, 2003 significantly increased when
compared to revenues for the same period in 2002. While domestic revenue
increased as a consequence of larger volumes and domestic prices, which
reflected almost entirelt the increase in the Company's production costs,
export sales decreased as a consequence of lower volume and prices. Export
prices were influenced by a lower exchange rate and mix of sales.
While electricity and natural gas prices have not risen significantly, the
Company cannot exclude that in the coming months, local costs increases
(including electricity and gas prices) may exceed significantly its ability
to pass them into process. Additionally, the Company believes that an
increase in the rate of inflation and a slowdown in the pace of devaluation
or a revaluation of the peso may cause its margins to decrease to tend to
its average historical levels.
Operating Result
Net sales as of March 2003 increased 23.8%, to ARS625.7 million for the
period ended June 30, 2003 as compared with ARS471.1 million for the same
period of 2002.
Domestic net sales increased from ARS271.6 million for the period ended June
30, 2002 to ARS487.2 million for the present period. Higher domestic sales
were consequence of an increase in shipments and domestic prices as well.
Export sales decreased from ARS205.6 million for the period ended June 30,
2002 to ARS151.9 million for the present period,
The Company average price for the first quarter of 2003 was 7,3% higher than
for the same period of year 2002.
The average cost per ton of the Company decreased 2.7% compared to the same
period of the previous year,
Gross profits for first quarter of year 2003 rose to ARS270.9 million
compared to ARS178.7 million for the same period of year 2002.
Administration and selling expenses for the quarter ended June 30, 2002
included a non-recurrent charge related to the provision for debt
restructuring fees. Consequently administrative and selling expenses for the
first quarter of year 2003 showed a decrease of 34.0% when compared with the
same period of year 2002.
As a consequence of this performance, EBITDA for the quarter ended June 2003
was ARS249.4 million (39.8% of net asles), in comparison with ARS113.9
million (24.2% of net sales) for the same period of the previous year,
Financial income (expenses) and holding gains (losses), as a consequence of
debt restructuring and revaluation of the peso, represented a net gain of
ARS129.1 million, compared to a net loss of ARS695.5 million in the same
period of year 2002. As a consequence of the revaluation of the Peso during
the period foreign exchange gains amounted to ARS151.6 million.
Income tax for the period was a gain of ARS12.1 million due to the effect of
deferred income tax applied since January 1, 2003 in accordance with new
accounting rules.
Net Income for the quarter ended June 30, 2003 amounted to ARS353.3 million.
No extraordinary results were recorded.
Debt Restructuring
On March 25, 2003 the Company announced the outlines of the proposal
presented to the committee of its creditors, considering that such proposal
provided a foundation for a potentially successful restructuring agreement
acceptable to the Company's creditors.
The first stage of the mentioned restructuring process was the Cash Tender
Offer, which finished on May 29, 2003. As it was announced, US$40,041,663 in
aggregate principal amount of Notes and Dollar Debt had been validly
tendered pursuant to the Cash Tender Offer, Acindar has accepted for
purchase, at a Purchase Price of US$650 per US$1,000 Tender Offer. The cash
payment required to complete the Cash Tender Offer was US$26,027,080.
Acindar also paid an aggregate of US$2,002,083 as an Early Tender Payment in
connection with the Cash Tender Offer.
Acindar has also received from the creditors committee, notifications of
their satisfaction with respect to the progress of the negotiations to date.
In addition, the banks have expressed that the proposal for the company's
restructuring is in the position to be brought to their respective credit
committees for approval, which, if such approval is obtained, would allow
the preparation, negotiation and execution of the definitive documentation
to proceed.
It was in this favorable context of the agreement that on June 9, 2003,
Acindar announced the start of the process of canceling certain payments to
the company's creditors in pesos and dollars as previously described in our
March 25 communication. Such payments allowed the company to reduce a
significant portion of its debt in pesos and advance some of its payments in
dollars on account of a final restructuring plan.
The payments were as follows:
(i) the amount of US$58,807,561 applies to the cancellation of certain
credits in pesos that have a total nominal value of US$86,997,107.
(ii) the amount of US$17,919,977 applied to the partial cancellation of
certain credits in dollars that corresponds to the capital debt overdue on
November 30, 2001, plus the accrued and applicable interests of such debt
and of the remainder of the debt in dollars (excluding negotiable
Obligations due 2004) calculated at its original rate until November 30,
2001, and from December 1, 2001 until June 4, 2003, at a rate of $4% per
annum, and
(iii) the amount of US$6,795,261 applied to the cancellation of accrued
interests on the Negotiable Obligations due 2004 (remaining after the offer
to repurchase which was completed on May 29) calculated at its original rate
until November 30, 2001, and since December 1, 2001 until June 4, 2003, at a
rate of 4% per annum.
CONTACT: ACINDAR S.A.
Jose I. Giraudo, Investor Relations Manager
Phone: (5411) 4719 8674
Andrea Dala, Investor Relations Officer
Phone: (5411) 4719 8672
AA2000: Posts Higher Losses For 1H03
------------------------------------
Aeropuertos Argentina 2000 (AA2000), the troubled airport concessionaire,
sinks deeper into the red with a 1H03 net loss of ARS2.14 million compared
to its ARS56.6 million net loss for the first half of 2002.
Citing a report filed by the Company with the Comision Nacional de Valores,
Business News Americas reports that although the Argentine peso is getting
stronger, a decline in sales kept the company in a losing position. Sales
declined 23.1$ to ARS150 million for the first six months of this year.
The Company expects a further decline in cargo traffic as costs increase and
imports decline. However, AA2000 projects that passenger traffic will start
to grow with the economy showing signs of recovery. The airline has reduced
its fleet and the frequency of flights.
AA2000is a multinational consortium formed by Corporacion America
Sudamericana (35%), Societa Per Azioni Esercizi Aeroportuali (28%), Simest
Spa (8%), Ogden Corporation (28%) and RIVA (1%).
Operating 32 airports in the country, the Company has a 30-year concession
that started in 1998.
BANCO HIPOTECARIO: Argentine S&P Rates US$1.7 B of Bonds 'raD'
--------------------------------------------------------------
The Argentine arm of Standard & Poor's International Ratings, Ltd. assigned
default ratings to corporate bonds issued by Banco Hipotecario S.A. on
Friday. The rating, which was based on the Company's finances as of March
31, 2003, applies to a total of US$1.7 billion of bonds.
Some US$500 million of bonds called "Programa Global de emisi¢n de Cdulas
Hipotecarias Argentinas, autorizado por Decretos PEN N§ 577/94, 139/96 y
Resoluci¢n del Directorio N§190/96" received the rating. These were
classified under "Program", and its maturity date was not indicated.
Bonds called "Programa de Obligaciones Negociable (antes era por U$S 2.000
millones", worth a total of US$1.2 billion also received the rating.
S&P said that an obligation is rated 'raD' when it is in payment default or
it its obligor has field for bankruptcy. The 'raD' rating is used when
principal or interest payments are not made on the date due, even if the
applicable grace period has not expired, unless the ratings agency believes
that payment will be made during such grace period.
BANCO SUQUIA: To Have New Owner By Friday
-----------------------------------------
Argentine bank Banco Suquia, which formerly belonged to French bank Credit
Agricole, is likely to see its new owner on Friday, when federal bank Banco
Nacion announces the name of the winning bidder.
According to Business News Americas, three Argentine groups have submitted
technical and financial bids for Banco Suquia, which is administered by
Banco Nacion. The groups are Roggio, Banex and Dinosaurio.
Meanwhile, the respective sales of Banco Bisel and Bersa, which also
belonged to Credit Agricole, will begin on August 26.
Banco Nacion took over Suquia, Bisel and Bersa after their French parent
exited Argentina last year due to the country's financial and economic crise
s.
CONTACT: BANCO SUQUIA S.A
25 de Mayo 160 Cordoba
5000 Cordoba
Argentina
Phone: 0351-422-2048
Fax: 0351-420-0279
E-mail: relacioninversores@bancosuquia.com.ar
Home Page: http://www.bancosuquia.com.ar/
Contact:
Bernard Pierre Jean Brousse, Vice-President
Nestor Jose Belgrano, Director
BANCO DE ENTRE RIOS S.A. (BERSA)
Monte Caseros 128
Parana
3100 Entre Rios
Argentina
Phone: 0343-4201200
Fax: 0343-4213869
Contact: Alberto Roque Ferrero, Vice-President
BANCO BISEL S.A.
Mitre 602 Rosario
2000 Santa Fe
Argentina
Phone: 0341-4200300
Home Page: http://www.bancobisel.com.ar/
Contact:
Guillermo Harteneck, President
Jean Luc Perron, Vice President
Bernard Brousse, Vice President
BUILD FLOOR: To Be Liquidated After Bankruptcy Announcement
-----------------------------------------------------------
Buenos Aires-based company Build Floor S.A. will be liquidated following a
ruling from the city's Court No. 11, which declared the company bankrupt.
The Court, assisted by Clerk No. 21, assigned Mr. Hugo Adriano Zaragoza as
receiver for the process.
Following the closure of the credit verification period on September 26 this
year, the receiver will prepare the individual reports, which must be filed
at the Court by November 7. The general report comes due on December 21.
CONTACT: Hugo Adriano Zaragoza
Avenida Cordoba 1318
Buenos Aires
CENTRAL PUERTO: Reports 1H03 Results
------------------------------------
Argentine thermo generator Central Puerto registered a net profit of ARS72
million (US$24.5mn) for the first half of the year, reversing a loss of
ARS316 million for the same period last year, Business News Americas
relates, citing a company statement to the Buenos Aires bourse.
For the second quarter of the year, the Company reported net profits of
ARS29.9 million, down 52.9% from ARS63 million for the same year-ago period
due to new accounting regulations that came into effect on January 1 this
year, said company spokesperson Mariana Helguera.
Deferred tax benefits accounted for a ARS57-million gain in the first half
of the year, while exchange rate differences accounted for a ARS35.6-million
gain in the period.
Net revenues fell 9.7% to ARS120 million due to lower contract and spot
market sales, which was partly compensated by higher spot market prices.
Operating income for the first half of 2003 was ARS22.1 million compared to
a loss of ARS13.6 million in the same period last year mainly due to the
higher spot market prices, Helguera said.
Operating costs fell 34.5% to ARS97.7 million over the period due to lower
fuel costs per GWh generated, which fell to ARS16.6/MWh generated, from
ARS30.8 in the first half of last year.
According to Helguera, Central Puerto has been in default on its US$302
million debt since February last year, and now owes about US$350 million
including accumulated interest. It has hired US investment bank Merrill
Lynch to help restructure its debt.
"We expect to complete the restructuring by the end of this year," she said.
At the end of the first half of 2003, Central Puerto's equity stood at
ARS554 million.
The Company is 63.9% controlled by the French Total.
CONTACTS: CENTRAL PUERTO
Jacques Chambert Loir, CEO
2701 Avenida Tomas A Edison
Buenos Aires, Argentina
Phone +54 1 317 5074
Home Page http://www.centralpuerto.com
CENTRO TECNICO: Credit Authentication Ends Today
------------------------------------------------
Today, August 13, is the last day for the credit verification process for
the bankruptcy of Argentine air conditioner seller Centro Tecnico Buen Aire
SA. Proofs of claims must be submitted to the receiver, Mr. Tito Gargalione.
An earlier report from the Troubled Company Reporter - Latin America
indicates that the bankruptcy was triggered by a request from Acordar
Cooperativa se Credito y Consumo Ltda., which was granted by the city's
Court No. 1. The Company owes some ARS17,130 to the Acordar.
CONTACT: Centro Tecnico Buen Aire S.A.
Rincon Street No. 85
Buenos Aires
Mr. Tito Gargaglione
1st Floor C
Medrano Avenue No. 833
Buenos Aires
CRM: Bonds Get Default Rating From Argentine Standard & Poor's
--------------------------------------------------------------
A total of US$350 million of corporate bonds issued by Compania de
Radiocomunicaciones Moviles S.A. received default ratings from Standard &
Poor's International Ratings, Ltd. Sucursal Argentina. The country's
Securities Commission described the affected bonds as "Programa Global de
ONs simpleas, autorizado por AGE de fecha 26.6.97 y 23.9.97".
S&P said that the rating is given when an obligation is in payment default,
or if the obligor has filed for bankruptcy. The 'raD' rating, which is
issued on Thursday, was based on the Company's finances as of the end of
March this year.
The affected bonds matured on March 3 this year. These were classified under
"Program".
CTECSAC: Enters Liquidation Process
-----------------------------------
Buenos Aires-based Compania de Transporte El Colorado S.A.C. was declared
bankrupt by the city's Court No. 2, reports local news source Infobae. The
receiver, Ms. Mirta Addario, will oversee the liquidation of the company's
assets.
The credit verification process will end on September 22 this year.
Creditors must present their proofs of claim to the receiver before that
date. The receiver will prepare the individual reports, which are to be
submitted by November 6 this year. The general report must be submitted by
December 23.
CONTACT: Mirta Addario
Moreno 442
Buenos Aires
DISTRIBUIDORA LOS ANDES: Court Orders Bankruptcy
------------------------------------------------
The Civil and Commercial Tribunal of Salta orders the bankruptcy of local
company Distribuidora Los Andes S.H., reports Infobae. The bankruptcy will
proceed with the credit verification process, which ends on September 17
this year.
Creditors must submit their proof of claims to the receiver, Mr. Carlos
Dante Lema before the said date. The report did not mention the deadlines
for the individual and general reports.
CONTACT: Distribuidora Los Andes S.H.
Pueyrredon 596
Salta
Carlos Dante Lema
Martin Cornejo 267
Salta
GF GALICIA: Reports Results for the 2Q03
----------------------------------------
Financial services holding company Grupo Financiero Galicia SA reported a
net loss of ARS68.5 million ($1=ARS2.915) for the second quarter ended June
30 of the current year, compared with net income of ARS1.26 billion a year
earlier.
The results, according to Dow Jones Business News, are driven by the group's
banking unit Banco de Galicia y Buenos Aires.
The bank, one of Argentina's largest private-sector banks, makes up most of
the group's assets. It was among the financial institutions hardest hit by
last year's financial and economic crisis.
The group also reported a net financial loss of ARS35.3 million, compared
with ARS1.79 billion a year earlier. Financial income was ARS299.4 million
against financial expenses of ARS334.7 million, according to figures
presented by Dow Jones.
That loss came on the back of a decline in inflation-indexed assets, as
Argentina experienced a second quarter of deflation.
The loss is also explained by the lack of credit activity since Argentina's
banking crisis of last year. Without income from making loans, banks have
come to rely on central bank notes as a major source of income. However, the
yields on these notes are far lower than the interest-rates the banks are
paying out on time deposits, leaving many banks with a net financial loss.
Still, despite the phasing out of an 18-month-old banking freeze during the
second quarter, interest-rates fell during the second quarter - a positive
sign that the financial system is gradually getting back on its feet.
As of June 30, Galicia's total assets stood at ARS21.6 billion, against
ARS27.7 billion a year earlier.
CONTACT: GRUPO FINANCIERO GALICIA
Teniente General Juan D. Peron 456, Piso 3
1038 Buenos Aires, Argentina
Phone: (54 11) 4343 7528 / 9475
Web site: http://www.gfgsa.com
Contacts:
Eduardo J. Escasany, Chairman and CEO
Sergio Grinenco, CFO, Banco de Galicia y Buenos Aires
GRINFA: Court Orders Liquidation
--------------------------------
Court No. 8 of Buenos Aires ruled that Grinfa S.A. should undergo "Concurso
Mercantil Liquidatorio", reports Argentine news source Infobae. The
Company's assets will be liquidated.
The court assigned Mr. Alberto Francisco Romeo as receiver for the
liquidation. Creditors must submit their claims for verification before
September 19 this year.
The individual reports are due for submission on October 31, 2003, while the
general report must be submitted by November 14. However, Infobae did not
indicate whether the court has set the date for an informative assembly.
CONTACT: Alberto Francisco Romeo
Parana 275
Buenos Aires
LIBERIUS: Court Approves Motion for "Concurso Preventivo"
---------------------------------------------------------
Dr. Maria Uzal, insolvency judge of court no. 26 of Buenos Aires, approved a
petition for "Concurso Preventivo" filed by local company Liberius S.A.,
relates Infobae. The city's Clerk No. 52, Dr. Gonzalo Gros assists the court
on the case.
The reorganization proceeds with the credit verification process, which ends
on October 3 this year. Creditors are advised to submit their proofs of
claim to the receiver, Mr. Carlos Rapetti before the said deadline.
CONTACT: Liberius S.A.
16th Floor 'D'
Uruguay 615
Carlos Rapetti
7th Floor 'B'
Echeverria 2670
Buenos Aires
Phone: (005411) 4783 5459
MICROBIZ: Credit Verification Period Ends Today
-----------------------------------------------
Ms. Norma Gomez Salgado, receiver for the bankruptcy of Buenos Aires-based
Microbiz SRL, will end the credit verification process today, August 13. The
end of the verification period means that the receiver will then start
preparations for the individual reports.
Court No. 17 of Buenos Aires, which is under Dr. Trebino Figueroa, declared
the company bankrupt upon a request from Luis Polnoroff. The Company
reportedly failed to make payments on its debt of US$148 and ARS6000 to Mr.
Polnoroff.
CONTACT: Microbiz SRL
9th Floor
Cerrito Street No. 1574
Buenos Aires
Ms. Norma Gomez Salgado
5th Floor
Viamonte Street No. 1546
Buenos Aires
N Y H: Deadline For Credit Verification Expires Today
-----------------------------------------------------
The credit verification process for the reorganization of Argentine
restaurant services company N. y H. Bruno S.R.L. ends today, August 13. The
receiver, Mr. Sergio Daniel Argoitia, will proceed with the preparations for
the individual reports.
The Civil and Commercial Tribunal of Concordia, which approved the company's
motion for "concurso preventivo" requires the receiver to file the
individual reports by October 2 this year. The general report must be
submitted be November 14. The informative assembly will be on March 1, 2004.
CONTACT: N. y H. Bruno S.R.L.
1 de Mayo 59,
Concordia, Entre Rios
Mr. Sergio Daniel Argoitia
Andrade 124
Concordia
PETROBRAS ENERGIA: Reports Results For 2Q, Ended June 30, 2003
--------------------------------------------------------------
Petrobras Energ”a Participaciones S.A. (Buenos Aires: PC NYSE: PZE announces
the results for the second quarter ended June 30, 2003.
Net income for 2003 second quarter was P$255 million (P$0.12 per share and
P$1.20 per ADR). Net income was 60.4% higher than income for 2002 second
quarter. This significant rise in the quarter results is mainly attributable
to a 29% average decline in the US dollar price which had an impact on the
Company's financial results, given the net borrowing monetary position
mainly denominated in dollars. However, since a significant portion of sales
are dollar denominated, the peso appreciation mentioned above adversely
affected 2003 second quarter operating income.
- Gross profit for 2003 quarter was P$426 million, accounting
for a 37.4% margin. Gross profit totaled P$550 million in 2002
quarter. The drop in gross profit was mainly attributable to
the following:
- A decline in oil and gas sales volumes, reflecting reduced
investments in 2002 and, to a lesser extent, the effects of
the National Oil Strike in Venezuela.
- Lower margins of petrochemicals due to a drop in
international prices.
- Lower styrenic volumes given the shrinkage in the Brazilian
market.
The drop in gross profit for the E&P and Petrochemicals
businesses was partially offset by an increase in gross profit
for the Refining segment as a result of a 24% rise in sales
volumes and higher margins derived from a recovery in prices.
- Operating income for 2003 quarter totaled P$299 million,
accounting for a P$83 million drop compared to 2002 quarter.
This 21.7% decline was attributable to a P$124 drop in gross
profit, offset by a P$25 million decline in administrative and
selling expenses and a P$16 million rise in other income, net.
- Net debt excluding debt attributable to affiliates under joint
control as of June 30, 2003 was US$1,891 million, accounting
for a 10.1% drop compared to the US$2,103 million net debt as
of June 30, 2002.
Net Sales
In 2003 quarter, net sales dropped to P$1,140 million or 16.5%. 2002 quarter
included P$54 million attributable to sales from the farming and forestry
activities and P$12 million in the
Electricity business attributable to Conuar sales, which assets were
divested during 2002 fiscal year. Excluding these effects, sales declined
12.3%.
During 2003 quarter sales for the E&P business dropped 19.2% mainly due to a
12.2% decline in oil and gas sales volumes and a 9.5% fall in sales prices.
As regards the Petrochemicals business, during 2003 quarter sales declined
19.6% due to a 26.4% drop in average prices and lower styrenics sales
volumes. Sales for the Refining business increased P$55 million and sales
for the Hydrocarbon Marketing and Transportation segment roseP$12 million.
Conversely, and since the amount of P$12 million is included in 2002 quarter
attributable to Conuar sales, sales for the Electricity business declined
P$8 million. The generation business recorded a P$5 million increase in
sales.
Considering intercompany eliminations in 2003 quarter, 93% is attributable
to oil sales to the Refining business and 6% to sales from the Refining to
the Petrochemicals business.
Gross Profit
Gross profit for 2003 quarter declined to P$426 million or 22.5%. The amount
of P$36 million is included in 2002 quarter attributable to farming and
forestry activities, which were divested in 2002 fiscal year. Excluding this
effect, gross profit dropped P$88 million due to the combined effect of
lower prices, margins and volumes. These effects as a whole resulted in a
drop in gross profit for the Oil and Gas Exploration and Production and
Petrochemicals segments in the amount of P$88 million and P$54 million,
respectively. In contrast, increased volumes and margins for the Refining
segment resulted in a P$47 million gross profit increase.
Administrative and Selling Expenses
During 2003 quarter administrative and selling expenses dropped to P$123
million or
16.9%, mainly due to the effect of reduced expenses incurred abroad in terms
of dollars and reduced expenses in Argentina in terms of pesos.
Administrative and selling expenses include charges for Affiliates under
Joint Control in the amount of P$15 million and P$19 million for 2003 and
2002 quarters, respectively.
Excluding such charges, the ratio of administrative and selling expenses to
sales was 10.4% in 2002 quarter and 10.5% in 2003 quarter.
Other Operating Expenses
In 2003 quarter Other Operating Expenses include a provision for the tax on
banking transactions (P$12 million), provision for environmental remediation
(P$8 million), offset by the favorable resolution of commercial claims in
Venezuela and advisory services provided to other companies.
The 2002 quarter loss was mainly attributable to the adverse resolution of
commercial disputes and penalties paid to contractors for contract
termination, as a result of investment cuts (P$9 million) and the tax on
banking transactions (P$13 million) partially offset by income from advisory
services to other companies.
Operating Income
The Corporate Expense & Eliminations line for 2002 quarter includes a P$26
million gain attributable to operating income from the farming and forestry
activities, and P$3 million attributable to Conuar, which assets were
divested in 2002 fiscal year.
Equity in Earnings of Affiliates
Equity in earnings of affiliates increased P$26 million to P$137 million.
Equity in earnings of utilities totaled P$123 million in 2003 quarter and
P$81 million in 2002 quarter. Considering the uncertainty that characterizes
such companies' businesses, such investments were valued up to their
recoverable value. Such increase is attributable to the significant recovery
in the stock market price of such companies' shares in the second quarter of
2003. The Company's management believes that in the current scenario the
stock market price of shares is the most objective indicator to determine
the respective recoverable values.
Financial income (expense) and holding gains (losses)
Excluding financial income (expense) of affiliates under joint control,
financial income (expense) of Petrobras Energ”a Participaciones and its
subsidiaries accounted for P$93 million and P$315 million losses in 2003 and
2002 quarters, respectively. These lower results are attributable to the
peso appreciation and a 5.8% drop average indebtedness stated in dollars.
Consequently, interest expense dropped to P$119 million in 2003 quarter from
P$260 million in 2002 quarter. Income from measurement of derivative
instruments accounted as non-hegde declined to P$40 million from P$110
million mainly due to the impact of the dollar depreciation in 2002 quarter.
Other Expenses, net
In 2003 quarter, the P$59 million loss is mainly attributable to the
following:
- P$39 million for estimated contingencies related to compliance with the
crude oil transportation contract subscribed with OCP.
- P$11 million impairment charge to write off book value of interest in Faro
V”rgenes area for valuation at net realizable value.
- P$8 million reserve on the book value of loans granted to hydrocarbon
production joint ventures in Venezuela given the Venezuelan crisis context.
- The P$34 million loss in 2002 quarter is mainly attributable to
contingencies related to the "Ship or Pay" contract with OCP in the amount
of P$33 million.
OPERATING INCOME BY BUSINESS SEGMENT
Oil and Gas Exploration and Production
Net sales for 2003 quarter decreased to P$622 or 19.2% mainly due to the
combined effect of a drop in prices and sales volumes.
During 2003 second quarter, including the effects of hedging transactions
and tax on exports, the average crude price decreased to P$54.7 per barrel
or 9.3% from P$60.3 per barrel in 2002 quarter.
The drop in sales prices derived from the impact of a 29% reduction in the
dollar price in real terms, which adversely affected the dollar-denominated
flow from foreign operations and, to a lesser extent, the flow from the
country's operations, in addition to existing limitations to increase gas
sales prices. Such effects were partially offset by a 10.3% increase in
international crude oil prices in addition to a 49% increase in the
production exposed to the WTI, on account of a reduction in hedged volumes
and this allowed to capitalize on the quarter's high prices.
The reduction in volumes is in line with the restrictive investment policy
implemented during 2002. Though such policy proved to be adequate to protect
operating cash flow in the 2002 economic context, it resulted in delays in
the development of hydrocarbon reserves to cover the fields natural decline.
Oil and gas sales volumes decreased to 160.9 thousand boe/d or 12.2% in 2003
quarter. Oil sales volumes dropped to 113.1 thousand bbl/d or 7.5% in 2003
quarter. Gas sales volumes fell to 286.5 million cubic feet per day or 21.6%
in 2003 quarter.
In Argentina, sales decreased to P$351 million or 19.7% due to the combined
effect of a 5.5% decline in sales prices and a 15.6% drop in sales volumes.
Oil price fell to P$62.0 per barrel or 6.8%. Sales volumes decreased to 56.5
thousand bbl/d or 7.8% mainly as a consequence of the mature fields decline
as a result of investments cuts.
Tax on exports accounted for a P$14 million lower revenue in 2003 quarter.
Natural gas sales revenues declined to P$30 million or 54.5%. Daily gas
sales volumes dropped to 220.3 million cubic feet or 25.2% due to the
restrictive investment policy in 2002 and a lower demand early in the
quarter. Sales prices fell to P$1.50 per thousand cubic feet or 39.3%
pursuant to the Public Emergency Law provisions which limit the possibility
of increasing the sales price of the gas sold in the domestic market, mainly
in connection with sales agreements entered into with utility companies.
Combined sales of oil and gas outside of Argentina decreased to P$271
million or 18.6%. Oil and gas sales volumes dropped to 67.7 thousand boe/d
or 7%. The average sales price per barrel of oil fell to P$47.4 or 12.3% in
2003 quarter.
Oil and gas sales in Venezuela dropped to P$145 million or 31.3% in 2003
quarter. The average price of oil per barrel dropped to P$38.2 or 17.8%.
Daily sales volumes of oil equivalent dropped to 43.9 thousand bbl/d or 17.8
% mainly due to the natural fields decline as a result of lower investments
and for the purposes of PDVSA strike that resulted in delayed compliance
with the plans.
Oil sales in Ecuador totaled P$16 million in 2003 quarter after the approval
of the Development Plan for Block 18 in 2002 fourth quarter. Daily oil sales
volumes in 2003 quarter, net of the Government's interest, totaled 2.8
thousand bbl/d.
Gross profit in 2003 quarter dropped to P$280 million or 23.9% mainly as a
consequence of the peso appreciation and reduced sales volumes. Gross margin
was 45% in 2003 quarter and
47.8% in 2002 quarter.
The ratio of administrative and selling expenses to sales was 6.9% for 2003
quarter and 8.2% for 2002 quarter.
Other operating income for 2003 quarter mainly results from the favorable
resolution of commercial disputes in Venezuela. The 2002 quarter includes
P$9 million as a result of the resolution of commercial disputes and
penalties paid to contractors for contract termination as a consequence of
the investment plan reduction.
Hedge of Produced Crude Oil Price
The Company, as a crude oil producer, is exposed to the related
price-fluctuation risk. In such conditions, the Company uses various
derivative instruments to mitigate such risk. These instruments use West
Texas Intermediate (WTI) as reference price, which is used mainly to
determine the sale price in the market.
Refining
Operating income for the Refining business segment totaled P$35 million in
2003 quarter compared to a P$11 million loss in 2002 quarter, boosted by a
general recovery in contribution margins and increased sales volumes.
Gross profit increased P$47 million to P$52 million in 2003 quarter. Gross
margin on sales was 16% in 2003 quarter and 1.9% in 2002 quarter. Gross
margin improvement mainly derived from improved operations in the domestic
market as a consequence of the combined effect of increased volumes and
improved operations competitiveness resulting from higher sales prices and
reduced dollar-denominated supply costs.
In the period under review, domestic market sales prices increased 10%, 30%,
26% and 12 % for diesel oil, gasoline, by-products of the reformer process
and heavy products, respectively.
Such increases reflect the gradual recovery in prices during the 2002 second
quarter. Conversely, and mainly as a consequence of the dollar price
reduction effect, heavy products, paraffins and diesel-oil export prices
decreased 24%, 27% and 13%, respectively.
As regards costs, in 2003 quarter the average crude oil price decreased to
P$73.4 per barrel or 14.9% compared to P$86.2 per barrel in 2002 quarter due
to the dollar price reduction incidence. The average cost of operations in
2003 quarter reflects the application of Resolution 85/03. Such Resolution
ratified the agreement signed between Producers and Refineries (effective
through July 2003) whereby refineries committed themselves to reflect a
reference crude oil price of US$28.5 per barrel in the prices offered by
them to the domestic market. Within this relative price context and in line
with the strategy designed to maximize product contribution margins implying
the optimization of crude oil processed, crude oil volumes processed
increased to 36,732 bbl/d or 27.5% in 2003 quarter.
Net sales of refinery products increased to P$324 million or 20% in 2003
quarter, mainly boosted by increased sales volumes in addition to higher
local sales prices for gasoline and diesel oil.
Total sales volumes in 2003 quarter increased 24%. The new price scenario in
the domestic market boosted a sustained growth of sales volumes.
Accordingly, sales volumes in Argentina increased an average of 53% with
increases of 103%, 168%, 63% and 8% for diesel oil, asphalts, heavy products
and gasolines, respectively. Such volumes allowed for a market share growth
to 4.4% in 2003 quarter from 3.8% in 2002 quarter for diesel oil and to 3% i
n 2003 quarter from 2.3% in 2002 quarter for gasolines. This is particularly
significant within a context of a 0.8% and 13.6% demand shrinkage,
respectively.
Export volumes decreased 13%, mainly diesel-oil (36%) and paraffins (29%),
reflecting the effects of a trade policy that prioritized the development of
the highest contribution market, in this case the domestic market.
The ratio of administrative and selling expenses to sales was 4.3% for 2003
quarter and 4.5% for 2002 quarter.
Operating income for the Petrochemical business segment decreased to P$33
million or 63% mainly due to a drop in styrenics business margins and a
significant shrinkage in sales volumes, mainly in Brazil.
Gross profit dropped to P$60 million or 47.4% due to reduced sales volumes
and sales margins.
Gross margin on sales decreased to 22.2% in 2003 quarter from 33.9% in 2002
quarter. As regards styrenics, sales volumes dropped and sales margins
declined as a consequence of lower international prices and higher costs due
to the WTI impact. As regards sales volumes, the Brazilian market shrinkage
was a determining factor. In 2003 quarter, the Brazilian industry has faced
its worst crisis after the second quarter of 1999 when the real devaluation
took place. Regarding fertilizers, in spite of the significant recovery in
sales volumes, the margin was lower compared to 2002 quarter due to an
increased participation of resale products in the final mix.
In Argentina, styrenics sales decreased to P$109 million or 16.2% mainly due
to a 12% drop in sales volumes (22% in exports and 2% in local sales), and
reduced prices (15% and 3% for styrene and polystyrene, respectively), as a
consequence of the dollar price reduction and in line with a 5% and 2% drop,
respectively, in their international reference prices.
Styrene sales volumes dropped 34% due to a 60% decrease in exports in line
with the Brazilian market shrinkage. Domestic market sales rose 16% as a
consequence of the market recovery.
Polystyrene sales volumes dropped an average of 16% compared to 2002
quarter. Crystal and high impact polystyrene volumes decreased 31% in the
domestic market due to reduced stocks in transformer industries in the light
of price drop prospects as a consequence of the war in Iraq, and a 25%
reduction in the export market on account of increased high-impact
polystyrene deliveries to Brazil in 2002 quarter. Bi-oriented polystyrene
sales volumes increased 88% as a consequence of increased exports to the
European market.
Synthetic rubber total sales volumes rose 11% due to a 37% increase in
domestic market sales.
The average price dropped 3%. Fertilizers sales in 2003 quarter increased to
P$65 million or 27.5% mainly due to increased sales volumes, partially
offset by a 18% price drop. It is worth mentioning that 2002 quarter was
characterized by reduced operations on account of the prevailing uncertain
market scenario.
Innova sales in Brazil for 2003 quarter decreased to P$97 million or 39.4%
as a consequence of a strong shrinkage in volumes and, to a lesser extent, a
reduction in sales prices. As a consequence of the low demand in Brazil,
significant 18% and 44% drops were recorded in styrene and polystyrene sales
volumes, respectively (37% in the domestic market and 72% in exports).
Styrene and polystyrene average sales prices dropped 17% and 34%,
respectively. Given the strong shrinkage in demand in Brazil and the high
level of polystyrene stocks, the Company brought forward the crystal
polystyrene plant shutdown scheduled for September 2003. Such shutdown
lasted 48 days.
The ratio of administrative and selling expenses on sales was 9.3% for 2003
quarter and 8.9% for 2002 quarter.
Hydrocarbon Marketing and Transportation
Sales include oil, gas and LPG brokerage services. Sales revenues
significantly increased in 2003 quarter, but due to the business specific
features, characterized by low contribution margins, gross profit did not
record a similar increase.
Electricity
Net sales of electricity generation increased to P$55 million or 10% as a
consequence of increased electricity sales prices partially offset by
reduced sales volumes.
The increase in energy sales prices was mainly attributable to the
following: (a) energy deliveries by less efficient machines at higher market
prices as a result of reduced gas supply availability during the first half
of June 2003 as a consequence of lower temperatures and increased gas
consumption by industries. The latter circumstance did not affect Genelba
Power Plant operations given the firm gas supply contracts entered into; (b)
the effect of the following regulatory changes: (i) during the 2003 April /
October period, collection of additional energy income for guaranteed supply
to the electricity market, recording higher sales (P$4 million); (ii)
increased equipment maintenance costs derived from devaluation and (iii)
increased power price.
Net sales attributable to Genelba Power Plant in 2003 quarter increased to
P$46 million or 9.5%. The average price of energy and power delivered
increased to P$42.8 per MWh or 34.6% in 2003 quarter from P$31.8 per MWh in
2002 quarter. In 2003 quarter energy delivered dropped to 1,067 GWh or
19.8%. In spite of this decline, the Power Plant operated at full capacity
during higher prices periods.
Net sales attributable to Pichi Pic£n Leuf£ Hydroelectric Complex increased
to P$9 million or 12.5% in 2003 quarter. The average price of energy and
power delivered increased to P$37.6 per MWh or 24.1%. In 2003 quarter,
energy delivered dropped to 217 GWh or 4.8%. In accordance with the Energy
Support Price Method mechanisms and as a result of the prices recorded in
both fiscal years and future estimates, the Company recorded a P$1 million
gain in both fiscal years.
Gross margin for the generation business increased to 40% in 2003 quarter
from 14% in 2002 quarter, mainly boosted by increased generation prices.
The ratio of administrative and selling expenses on sales for the generation
business was 3.6 % for 2003 quarter and 4.0% for 2002 quarter.
Petrobras Energ”a Participaciones S.A. is a leading company in an important
sector of the Argentine and Latin American industry, including oil and gas
production and transportation, refining and petrochemicals, electricity
generation, transmission and distribution.
CONTACT: Daniel E. Rennis, Investor Relations
Email: drennis@petrobrasenergia.com
Alberto Jankowski
Email: ajankows@petrobrasenergia.com
Tel: (5411) 4344-6655
POO: Seeks More Time To Present Debt Restructuring Proposal
-----------------------------------------------------------
Argentine spices maker Poo has asked its creditors, to which it owes some
ARS15 million (US$ 5.15 million), for sixty days to present a debt
restructuring proposal. It is said that Poo would request a 30% write-off.
The firm controlled by Sabores Argentinos (66%) is carrying out a formal
restructuring proceeding. Seventy percent of its liabilities belong to banks
and the other thirty percent is debt with suppliers.
Thirty-three percent of the Company is owned by Guillermo and Reynaldo
Gonzalez Poo, members of the founding family, who are confronted with its
controllers.
Poo is one of the leaders in the Buenos Airesspices market. It shares the
top position with Layco (another brand of the firm) and is followed by
Alicante. In the provinces, the situation is the opposite: Alicante leads
the market with a 60% share and Poo follows with 30%.
SANCOR: S&P Assigns 'raD' to Various Bonds
------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina rates
corporate bonds issued by Sancor Coop. Unidas Ltda. 'raD', according to the
National Securities Commission.
The default ratings applies to the following bonds:
-- US$300 million of "Programa de Obligaciones Negociables", under program.
Maturity date is April 23, 2006.
-- US$19 million of "Serie 2, bajo el Programa de Ons. por U$S 300
millones", under "Series and/or class". These bonds mature on January 27,
2004.
-- US$75.8 million of "Serie 3, bajo el Programa de Ons. por U$S 300
millones", also under "series and/or class". Bonds mature on January 27,
2004.
The ratings agency said that an obligation is rated 'raD' when it is in
payment default of the obligor has filed for bankruptcy.
TURBINE POWER: Fitch Argentina Rates Bonds 'D(arg)'
---------------------------------------------------
A total of US$20 million of bonds issued by Turbine Power Co. S.A. received
default ratings from Fitch Argentina Calificadora de Riesgo S.A. on Friday.
The 'D(arg)' rating, which is assigned to financial commitments that are
currently in default, was based on the Company's finances as of March 31,
2003.
The National Securities Commission of Argentina described the affected bonds
as "obligaciones negociables garantizadas", which came due in November last
year. The bonds were classified under "simple issue".
=============
B E R M U D A
=============
TRENWICK GROUP: Fitch Withdraws Ratings
---------------------------------------
Fitch Ratings has affirmed and withdrawn its long-term and senior debt
rating on Trenwick America Corp. (TAC) and its long-term ratings on Trenwick
Group, Ltd. (Trenwick). Fitch has also affirmed and withdrawn its long-term
and preferred stock rating on Trenwick's LaSalle Re Holdings, Ltd.'s
(LaSalle Re) subsidiary and its rating on Trenwick Capital Trust I's (TCT)
capital securities.
Fitch's rating action follows Trenwick's August 7, 2003 announcement that it
had signed a letter of intent to restructure its debt obligations. The
restructuring will include a Chapter 11 bankruptcy filing in the U.S. and
similar proceedings in Bermuda, Barbados, or the U.K.
Note: These ratings were initiated by Fitch as a service to users of Fitch
ratings. The ratings are based primarily on publicly available information.
Entity/Type/Issue Action Rating
Trenwick Group, Ltd. --Long-term Affirm/ 'D'. Withdraw Trenwick America
Corp. --Long-term Affirm/ 'D'; --Senior debt Withdraw 'D'.
LaSalle Re Holdings, Ltd. --Long-term Affirm/ 'D'; --Preferred stock
Withdraw 'C'.
Trenwick Capital Trust I --Preferred capital sec Affirm/ Withdraw 'C'.
CONTACT: Mark E. Rouck CPA, CFA, +1-312-368-2085, Chicago
Michael J. Barry, +1-212-908-0621, New York
MEDIA RELATIONS: James Jockle +1-212-908-0547, New York
===========
B R A Z I L
===========
ACESITA: Outlook Depends on Nickel Prices, says Analyst
-------------------------------------------------------
Katia Brollo, a Unibanco analyst, suggested that the future results of
Brazilian stainless steelmaker Acesita will hinge on the behavior of nickel
markets, relates Business News Americas.
Nickel is a major factor in the cost of producing stainless steel.
"Nickel prices have been very unstable, and there is doubt if the company
can pass on price increases to some clients," Brollo said.
Acesita includes clauses in some nickel contracts that put the burden of
higher nickel prices on the buyer. But the Company's Asian clients do not
accept being charged for the price increase, forcing the steelmaker to
swallow the cost, the analyst said.
Acesita recently reported a net profit of BRL46.4 million (currently
US$15.5mn) for the second quarter, compared to losses of BRL194 million in
the comparable period of last year, Business News Americas recalls.
However, Ebitda margins fell below 20% from the previous three quarters,
when margins were over or just below 30%, due to higher nickel prices and
operational problems, the report adds.
Belo Horizonte-based Acesita, controlled by European steel group Arcelor,
has installed capacity of 850,000t/y of crude steel and is Latin America's
sole integrated stainless steelmaker.
CONTACTS: ACESITA
Fabio Abreu Schettino
Financial Operations and Investor Relations Manager
Tel: (55 31) 3235-4241
Adriana Lcia Fernandes
Investor Relations Coordinator
Tel: (55 31) 3235-4270
Flavia Bozzolla Vieira
Analyst
Tel: (55 31) 3235-4235
www.acesita.com.br ri@acesita.com.br
KLABIN: In Talks With Unnamed Group Over Sale of Bacell
-------------------------------------------------------
Brazilian paper maker Klabin SA continues to sell off assets to concentrate
on making paper for packaging, Bloomberg reports.
Currently, the Company is in negotiations with a group for the sale of its
Klabin Celulose Bacell, Miguel Sampol, Klabin's chief executive, said
without revealing the name of the group. Klabin expects to complete the
transaction by the end of September.
South American Business Information reported earlier that Klabin is going to
sell off Bacell for an estimated US$150 million and named US International
Paper as the most likely buyer.
Klabin is seeking to offload Bacell in order to reduce its debts. In 2002,
the Company's debt amounted to BRL2.8 billion against a cash of
BRL979 million. The Company expects to reduce its total debt burden by BRL1
billion until the end of the year.
VESPER: Embratel Executes Letter Of Intent
------------------------------------------
Embratel announced Monday that it has executed a letter of intent to acquire
Vesper Sao Paulo S.A. and Vesper S.A., the competitive local service
providers in the Sao Paulo (Region III) and North & East (Region I) regions
of Brazil. The operations of Vesper encompass local services in 17 states,
addressing 76 percent of the population. This acquisition will enable
Embratel to widen the scope of its local voice service business, including
the offering of competitive broadband access via EV-DO technology to small
company, SOHO and residential clients. Vesper's 2002 revenues were R$388
million.
This business combination between Embratel and two local mirrors is a way to
preserve the competitive model in Brazil. The acquisition of Vesper by
Embratel evidences the company's commitment to be the leader in the
Brazilian telecommunications market with a full array of services.
Residential clients, business customers and broadband Internet users will
have a strong alternative to monopoly local service providers.
The completion of the transaction is subject to definitive agreements,
certain precedent conditions and appropriate governmental approvals.
Details of the transaction
The letter of intent covers Embratel's acquisition of 100 percent of both
Vesper's shares. The acquisition of Vesper will be free of bank debt and
will not require cash from Embratel. Qualcomm and Vesper will enter into a
tower sale/leaseback arrangement to raise funds for the company. The
proceeds of this tower sale will be used to retire all the outstanding bank
debt and fund any short-term needs. Additional funding requirements for
Vesper for 2003 will be covered through the synergies derived from a
combined Embratel and Vesper operations and cash on hand.
Enhances Embratel's Competitive Position
The acquisition of Vesper will enable Embratel to accelerate its local
business plan and deploy broadband internet access in competition with ADSL.
Embratel will be able to economically widen the scope of its local voice
service business by providing individual lines to small businesses and
residential clients in addition to the current business of addressing large
corporates with multiple lines. Vesper has approximately 500,000 residential
clients and small businesses, many of which are under pre-paid service
plans. The company had revenues of R$388 million in 2002, of which 34
percent is derived from local telephony services, utilizing fiber optic
technology, to 2,800 business customers.
In addition, Vesper has deployed EV-DO technology in Sao Paulo, offering
high speed broadband Internet access. This type of access can be offered in
conjunction with the telephone line or independently and is competitive with
existing ADSL technologies with the advantage of wireless solutions.
Embratel will have a technological solution that will enable it to serve the
residential market and offer broadband access to the Internet.
Vesper's existing switching and network infrastructure has sufficient
capacity to more than double the clients without additional investment. The
evolution of Vesper's network will utilize CDMA technology.
Synergies with Embratel
Embratel's scope and size will provide the necessary scale - savings on
overhead, call center, network and interconnection on long distance calls
for Vesper. In addition, Embratel will leverage its brand name and marketing
power to enhance sales of the services currently provided by Vesper. The
majority of Embratel's 20 million customers will have a choice for local
telephony services.
Embratel believes that the synergies obtained by the two combined operations
will enable Vesper to become EBITDA positive in 2004.
UBS Warburg is acting as financial advisor to Embratel in this transaction.
About Vesper:
Vesper was founded in early 1999, obtaining, in a public auction, an
authorization to operate local telephony services in Regions I and III
covering 76 percent of Brazil's population. Its authorizations also provided
wireless frequencies in the 1.9Ghz valid up to 2019 and renewable for 20
more years. Vesper deployed CDMA wireless technology in 87 cities, by which
the majority of its residential and small business customers are served. In
addition to its residential and small business offers, Vesper provides
services to corporations who are served by fiber-optics.
About Embratel:
Embratel is the premier communications provider in Brazil offering a wide
array of advanced communications services over its own state-of-the-art
network. It is the leading provider of data and Internet services in the
country and is uniquely positioned to be the country's only true national
local service provider for corporates. Service offerings: include telephony,
advanced voice, high-speed data communication services, Internet, satellite
data communications, corporate networks and local voice services for
corporate clients. Embratel is uniquely positioned to be the all-distance
telecommunications network of South America. The Company's network is has
countrywide coverage with 28,868 km of fiber cables comprising 1,068,657 km
of optic fibers.
CONTACT: Embratel Participacoes S.A.
Investor Relations:
Silvia M.R. Pereira
Phone: (55 21) 2121-9662
Fax: (55 21) 2121-6388
Email: silvia.pereira@embratel.com.br
invest@embratel.com.br
===================================
D O M I N I C A N R E P U B L I C
===================================
* Dominican Republic: Fitch Assigns 'B+' Rating
-----------------------------------------------
Fitch Ratings, the international rating agency, assigned Monday a 'B+'
rating to foreign and local currency obligations of the Dominican Republic.
The Rating Outlook is Stable.
In spite of a long period of strong economic growth, which has resulted in
comparatively strong external and public sector debt indicators, the rating
reflects Fitch's concerns about a deterioration of the financial system's
operating environment, evidenced by the collapse of the second largest
private commercial bank, Banco Intercontinental (BanInter) as a result of
fraudulent transactions. The situation remains fragile, as two other
commercial banks have required liquidity assistance. Although other banks in
the system have benefited from a flight to quality up until now, Fitch is
concerned that in the event of the discovery of additional problems, the
potential for a further loss of confidence in the banking system remains,
requiring additional government support. Thus far, the BanInter failure has
had serious ramifications to the economy, contributing to currency weakness,
higher inflation and a recession.
The government estimates that the central bank has provided assistance to
BanInter equivalent to 13.5% of GDP. The authorities have since dissolved
BanInter and are in the process of recovering some of its cost. They have
successfully sold a portion of BanInter's assets to an international bank.
Of the other two banks that have experienced problems, one has been sold and
the other bank is being restructured and recapitalized.
While the magnitude of this shock will affect the economy for some time,
Fitch views positively the recent announcement by the IMF that it will
consider the approval of the Dominican Republic's request for support of its
economic and financial program through a 24-month, Stand-By Arrangement
amounting to SDR 437.8 million (US$618 million) at the end of August. The
letter of intent submitted to the IMF includes a reinforced strategy for
dealing with the banking crisis and measures to offset some of the costs.
The program also includes measures to improve public finances and ensure
debt sustainability, as well as establish the framework to support a
flexible exchange rate regime. After the agreement is approved with the IMF,
the World Bank and the Inter-American Development Bank are expected to
provide an additional US$600 million in assistance combined.
Although public sector and external debt (including private sector) are
expected to increase to 47% of GDP and 40% of GDP, respectively, by the end
of 2003, this is still low relative to other sovereigns in the 'B' rating
category. In addition, debt service is low relative to peers as more than
70% of the debt is due to multilateral and bilateral creditors and benefits
from concessional terms. Fitch estimates that the public sector's financing
requirement will reach 7.5% of GDP in 2003.
Nevertheless, the recent problems with BanInter underscore the importance of
pressing ahead with a comprehensive reform agenda, including enhancing
economic policy transparency and improving governance. The proposed IMF
agreement addresses these issues, among others, and it appears reasonable
that the government should be able to successfully implement its program as
it has a majority in Congress. However, this could change following the May
2003 presidential elections as the opposition has a significant lead in the
polls.
Fitch will closely monitor developments in the financial system and the
possible impact on the sovereign's creditworthiness in the months ahead.
Approval and successful implementation of an IMF program would be positive
for the sovereign's creditworthiness. Conversely, continued financial system
weakness, combined with a lack of progress on the reform front and pressure
on the Dominican Republic's modest foreign exchange reserves, could have a
negative impact on the country's sovereign ratings going forward.
CONTACT: Fitch Ratings, New York
Theresa Paiz Fredel
Phone: 212-908-0534
Shelly Shetty
Phone: 212-908-0324
Matt Burkhard (Media Relations)
Phone: 212-908-0540
=============
E C U A D O R
=============
PETROECUADOR: Bidding Schedule To Be Announced Wednesday
--------------------------------------------------------
The schedule for the bidding on contracts for Ecuadorian state oil company
Petroecuador's five main oil fields will be known Wednesday, Business News
Americas indicates.
The fields in question - Auca, Shushufindi, Lago Agrio, Libertador and
Sacha - are currently producing about 210,000 barrels a day (b/d). Energy
and mines minister Carlos Arboleda wants to increase that amount by about
50,000b/d.
Last week, the minister announced plans to award association contracts
instead of service contracts on the fields.
Previously, he said he would abandon plans to award association contracts
following a 10-day strike in June against government moves to privatize the
country's oil industry.
However, he now says "that type of contract is for small jobs and here we
want [contracts] that will allow the optimization of the fields and make
them productive for the next 20 years," newspaper La Hora reported.
"These are alternatives that are in the law," an energy ministry source told
Business News Americas, attributing minister Arboleda's apparent
contradictions to press misrepresentation. Which alternative to take
"depends on what's most convenient for the state and the interested
companies," the source added.
===========
M E X I C O
===========
CFE: Reports 1H03 Results
-------------------------
Mexico's state power company CFE reported net losses of MXN1.3 billion for
the first half of the year, that's 75.7% lower than the registered net loss
in the comparable period of last year, Business News Americas reports,
citing a company information.
An increase in tariff from February of last year led to a 29.9% increase in
revenue from power sales to MXN65.9 billion over the period. Costs and
expenses, which the CFE lists as operating costs, depreciation,
administrative costs and labor expenses, increased 45.2% from the first of
last year to MXN70 billion, meaning that operating losses were MXN4.9
billion in the first half of 2003, compared to MXN1.95 billion profits in
the first half of last year.
Financing costs in the first half of 2003 were down by 64% to MXN2.46
billion.
SATMEX: Exec Downplays Effects Of Missed Interest Payment
---------------------------------------------------------
Mexican satellite operator Satmex's decision not to pay a US$16.2 million
interest payment due August 1 shall not affect its US$230 million in loan
guarantees from the US Ex-Im Bank and French export financer Cofase,
according to Satmex operations VP Arturo Gonzalez.
"Ex-Im Bank and Cofase were already informed that we were not going to make
the payment and their credit guarantee remains in place," Business News
Americas quoted Gonzalez as saying.
Satmex, whose debt totaled US$524 million as of June 30, missed the interest
payment on its US$320 million senior notes due November 1, 2004. Reports
have it that the Company is negotiating with bondholders to extend the terms
of the senior notes, which is a condition for accessing the loan guarantee.
The Company doesn't rely entirely on the guarantees for the launching of its
Satmex 6 satellite, which is expected to take place in November or December
this year. However, failure to obtain those funds could present some
problems, Gonzalez said.
Satmex is also seeking an extra US$70 million to cover ground equipment,
software, simulators and an insurance policy for Satmex 6.
The Mexican consortium of Principia and Loral controls 75% of Satmex, while
the government has the other 25%.
SATMEX: Losses Increase in the 2Q03
-----------------------------------
Satmex saw its losses widen in the second quarter of the year to US$7.2
million, from a loss of US$87,000 in the same period last year, Business
News Americas reports, citing the local press. The Company's net loss
through the end of the first half was US$13.9 million. Sales for the quarter
were down slightly at US$19.3 million, compared to US$20.4 million in the
same quarter a year ago. Satmex said it would try and take advantage in the
boom in Spanish language broadcasting in the US, as well as pay TV services.
SAVIA: Seminis Reports Third Quarter and Nine-Month Results
-----------------------------------------------------------
Seminis, Inc. (Nasdaq: SMNS - News), the world's largest developer, producer
and marketer of vegetable and fruit seeds, reported Monday final results for
the three-month and nine-month periods ended June 27, 2003. The company
released preliminary third quarter results late last month due to filing
requirements of its majority shareholder, Savia S.A. de C.V.
RESULTS FOR THE THREE-MONTH PERIOD ENDED JUNE 27, 2003
Net sales for the three months ended June 27, 2003 were $113.1 million
compared to $106.6 million for the same period last year. This represents an
increase of 6.1% from the same period last year. The increase was primarily
due to increased sales in the Asia sales region as well as in the Europe,
Middle East and Africa sales region. The increase in the EMEA region was
mainly attributable to favorable exchange rate fluctuations in that region.
Gross profit increased to $71.0 million or 62.8% of sales compared to $65.0
million or 61.0% for the same period last year. This increase was primarily
due to the continued optimization of our internal processes.
Operating expenses in the reported period increased by $4.1 million to $63.3
million, compared to $59.2 million for the same period last year, an
increase of 6.9%. This increase was primarily due to exchange rate
fluctuations as well as increases in legal and administrative fees related
to the transaction proposed by Savia S.A. de C.V. and Fox Paine & Company,
LLC in December 2002.
Operating income for the period was $8.1 million compared to $6.3 million
for the same period last year, an increase of $1.8 million or 29.2%.
Net loss for the period was $3.3 million compared to net income of $4.3
million during the same quarter last year. Net loss available to common
shareholders was $8.0 million or $0.12 per share compared to a net loss
available to common shareholders of $0.4 million or $0.01 per share during
the same period last year.
The total outstanding syndicated bank debt as of June 27, 2003 was $216.6
million compared to $238.7 million as of June 28, 2002, a reduction of $22.1
million or 9.3%.
Seminis Chairman and Chief Executive Officer, Mr. Alfonso Romo, commented:
"The successful implementation of our value-added pricing strategy has shown
that the market recognizes the benefits that our products offer growers,
retailers and consumers. Together with a streamlined organization, we have
the financial strength and flexibility to move aggressively into new markets
in Asia and South America, while continuing to fully fund our R&D engine,
the largest in the vegetable seed industry."
RESULTS FOR THE NINE-MONTH PERIOD ENDED JUNE 27, 2003
Total sales for the nine months ended June 27, 2003 increased 4.1% to $352.7
million from $339.0 million during the same period last year. Net seed sales
reached $340.6 million during the nine-month period, an increase of 5.1%
compared to $324.1 million for the same period of last year. The increase
was primarily due to favorable currency fluctuations.
Gross profit for the period increased to 63.0%, from 62.1% for the same
period last year, partly due to the previously stated optimization
strategies.
Total operating expenses for the period increased by 4.1% to $184.9 million,
from $177.5 million for the same period last year. The increase was
primarily due to the previously mentioned increase in operating expenses
during the three-month period ended June 27,2003 as well as severance
expenses incurred mainly during the second quarter of the fiscal year.
Operating income for the period was $38.9 million, inline with the $38.8
million reported for the same period last year.
Net loss available to common shareholders for the period was $4.9 million or
$0.08 per share compared with a net loss available to common shareholders of
$3.3 million, or $0.05 per share for the same period last year.
Total outstanding syndicated bank debt was reduced by $13.1 million during
the nine months ended June 28, 2003.
FOX PAINE TRANSACTION
Seminis also announced that proxy statements have been mailed to all
shareholders of record regarding the proposed transaction with Fox Paine,
and that a shareholders' meeting will be held in early September to complete
the voting process. With shareholders' approval, the company expects to
complete the transaction by the end of September, the close of its fiscal
year.
"This is an historic crossroad for Seminis. Having acquired the world's
leading vegetable seed brands and fully integrating them into a single
Seminis organization, we are ready to take on new partners that will allow
us to continue growing and expanding the reach and capabilities of the
company," said Mr. Romo.
ABOUT SEMINIS
Seminis, Inc. is the largest developer, producer and marketer of vegetable
and fruit seeds in the world. The company uses seeds as the delivery vehicle
for innovative agricultural technology. Its products are designed to reduce
the need for agricultural chemicals, increase crop yield, reduce spoilage,
offer longer shelf life, create better tasting foods and foods with better
nutritional content. Seminis has established a worldwide presence and global
distribution network that spans 150 countries and territories.
To see financial statements: http://bankrupt.com/misc/SEMINIS.htm
VITRO: Strengthens Its Top Financial Management
-----------------------------------------------
Vitro, S.A. de C.V. (NYSE: VTO; BMV: Vitro A) announced Monday that in order
to continue strengthening its financial position, reinforce its commitment
to establish efficient processes and reduce costs and expenses, Chief
Executive Officer, Federico Sada, informed that starting on August 18, the
current responsibilities of the Chief
Financial Officer will be split and undertaken by the Executive Vice
President of Administration and the Chief Financial Officer.
Claudio Del Valle, will be the new Executive Vice President of
Administration.
The offices of the Comptroller and Tax, e-business and MIS, Procurement, and
the Administration and Finance Departments of the various business units,
will continue reporting to him.
Alvaro Rodr”guez has been designated as Chief Financial Officer, and the
Corporate Financing and Treasury area will report to him.
Alvaro Rodr”guez joins Vitro after a successful financial career in leading
Mexican companies. He has been CEO of Farmacias Benavides and Vice President
of Finance and Administration (CFO) of Grupo Elektra S.A. de C.V. He holds a
B.A. in Economics from the Instituto Tecnologico Autonomo de Mexico (ITAM)
and an MBA from Harvard Business School. By strengthening its financial
team, Vitro will be able to continue developing a specialized and thorough
work in its financial operations, maintaining a healthy financial structure
to increase its businesses profitability, and reinforcing a firm expenses
and investment discipline. In addition, this structure will allow the
company to keep on complying with the accounting guidelines and rules
established by the Securities authorities and to implement policies in order
to achieve the companies business strategies aimed to meet the investors
expectations. Federico Sada reiterated the commitment shared by everyone in
Vitro to maintain the company's leadership based on its values, such as
customer's orientation, quality, creativity and innovation, team work, and
integrity. Sada pointed out that, despite the adverse economic environment
faced in the last months, it is necessary to undertake additional efforts
for Vitro to increase its profitability and productivity ratios for the
second half of year 2003.
Vitro, S.A. de C.V. (NYSE: VTO; BMV: VITROA), through its subsidiary
companies, is one of the world's leading glass producers. Vitro is a major
participant in three principal businesses: flat glass, glass containers and
glassware. Its subsidiaries serve multiple product markets, including
construction and automotive glass; fiberglass; food and beverage, wine,
liquor, cosmetics and pharmaceutical glass containers; glassware for
commercial, industrial and retail uses; plastic and aluminum containers.
Vitro also produces raw materials and equipment and capital goods for
industrial use.
Founded in 1909 in Monterrey, Mexico-based Vitro has joint ventures with
major world-class partners and industry leaders that provide its
subsidiaries with access to international markets, distribution channels and
state-of-the-art technology. Vitro's subsidiaries have facilities and
distribution centers in eight countries, located in North, Central and South
America, and Europe, and export to more than 70 countries worldwide. For
further information, please visit our website at: http://www.vitro.com
CONTACT: VITRO, S. A. DE C.V.
(Media Monterrey):
Albert Chico Smith
Tel: +52 (81) 8863-1335
Email: achico@vitro.com
(Media Mexico D.F.):
Eduardo Cruz
Tel: +52 (55) 5089-6904
Email: ecruz@vitro.com
(Financial Community):
Beatriz Martinez/Jorge Torres
Tel: +52 (81) 8863-1258/1240
Email: bemartinez@vitro.com
jtorres@vitro.com
BREAKSTONE & RUTH INT.
(U.S. Contacts):
Alex Fudikis/Susan Borinelli
(646) 536-7012 / 7018
Email: Alex fudikis@breakstoneruth.com
sborinelli@breakstoneruth.com
=================
V E N E Z U E L A
=================
PDVSA: Dismissed Workers To Get Severance Payments
--------------------------------------------------
More than 18,000 workers of Venezuela's state oil company, who were fired
after having participated in a labor stoppage last December-January, are to
receive severance benefits from the Company, reports Bloomberg.
Petroleos de Venezuela SA President Ali Rodriguez said that the Company
would fulfill all legal obligations to the workers, even though some had
committed acts of sabotage during the work stoppage that ended Feb. 1.
"The company will fulfill whatever legal obligation it has to fulfill,"
Rodriguez said.
Earlier, Venezuelan President Hugo Chavez stated that fired PDVSA employees
would not be paid because they were "criminals who all but shut oil
production" which contributes about half of Venezuela's income.
However, under very strict Venezuelan labor laws, severe punishments are
established for employers who illegally deprive workers of their jobs.
PDVSA: Rodriguez To Keep Post
-----------------------------
Contrary to earlier reports, Ali Rodriguez will remain at his post as PDVSA
president. According to him, Venezuelan President Hugo Chavez is not
planning to replace him with infrastructure minister Diosdado Cabello, as
what national newspapers have been reporting for the past month.
***********
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 America 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 * * *