/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/030902.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, September 2, 2003, Vol. 4, Issue 173 Headlines A R G E N T I N A AUTOPISTA LOS LIBERTADORES: Hits Rough Spot AZERTIA TECNOLOGIAS: Unit Gets Shot in the Arm From Parent CEMEFIR: Claims Verification Process Ends Today EUROMAYOR: Fitch Assigns Default Rating To Bonds EUROMAYOR: Fitch Moves Bonds To Junk Territories GAS ARGENTINO: Fitch Assigns Default Ratings To Bonds GRINFA: Credit Check Ends Today LOST: Receiver Ends Verification Process METROGAS: $600M of Bonds Rated 'D(arg)' by Fitch TRAINING CENTER: Receiver Prepares Individual Reports B A R B A D O S C&W: Proposed Rate Hike Meets Objection B R A Z I L EMBRATEL: Signs Partnership Deal With Costa do Sauipe KLABIN: Aims To Top Woodpulp Market in LatAm With Two Units SABESP: Announces Tariff Adjustment C H I L E BANCO SUDAMERIS: Intesa To Get Rid of Last Chilean Assets ENDESA CHILE: IAF Supports Work Fundaci▋ Pehuen In Alto Bio Bio METRO: Reports Reduced Net Loss For 1H03 D O M I N I C A N R E P U B L I C ELECTRICARIBE/ELETROCOSTA: Government Approves US$60M Bailout TRICOM: S&P Downgrades Ratings to 'CC' From 'CCC+' E C U A D O R PACIFICTEL: FS Board To Approve Bidding Rules J A M A I C A C&WJ: Supreme Court Rules Favorably in Oceanic Case M E X I C O GRUPO TMM: Announces Repurchase By TFM Of Stake In Mexrail P A N A M A CSS: Pres. Moscoso Pushes For Prompt Action To Escape Bankruptcy T R I N I D A D & T O B A G O CARONI: US Investors Want To Buy Caroni, says Union Head U R U G U A Y GALICIA URUGUAY: Accepts Clients' Deposit-Return Survey Offer V E N E Z U E L A BANCO DE VENEZUELA: Fitch Raises Ratings BANCO DEL CARIBE: Fitch Ups Ratings BANCO EXTERIOR: Fitch Ups Ratings Following Upgrade on Venezuela BANCO MERCANTIL: Sovereign Upgrade Prompts Upgrade on Ratings BANCO OCCIDENTAL: LTFC Rating Raised To `CCC-` BANCO PROVINCIAL: Fitch Raises Ratings BANCO VENEZOLANO: Fitch Upgrades Ratings BANESCO BANCO: Fitch Takes Action on Various Ratings - - - - - - - - ================= A R G E N T I N A ================= AUTOPISTA LOS LIBERTADORES: Hits Rough Spot ------------------------------------------- Chilean highway concessionaire Autopista los Libertadores posted a 1H03 net loss of CLP595 million, reports Business News Americas, citing a Company statement to the country's securities regulator, the SVS. The result highly contrasts with its 1H02 net profit of CLP583 million. Los Libertadores, which runs the route from Santiago to Los Andes, attributed the negative results to an increase in financial and operating costs. Infraestructura 2000, a consortium led by Spanish construction group OHL, controls Los Libertadores. The concessionaire has a 28-year concession awarded in 1996, worth US$122 million. AZERTIA TECNOLOGIAS: Unit Gets Shot in the Arm From Parent ---------------------------------------------------------- The Argentine division of Azertia Tecnologias received a capital injection from Azertia parent, Spanish technology conglomerate Corporacion IBV, to the tune of EUR1.1 million (US$1.2 million). Citing Azertia Argentina CFO Gonzalo Vazquez, Business News Americas reports that a larger chunk of the capital, EUR824,000, went to the restructuring of financial and operational debt. He also revealed that EUR196,000 was used to help ease Azertia's debts to sister companies, while EUR90,000 was used to pay off external debt. The Argentine division, which was launched in 1998, now has 140 employees. CEMEFIR: Claims Verification Process Ends Today ----------------------------------------------- The credit verification process for the bankruptcy of Buenos Aires-based Cemefir S.A. ends today, September 2. As instructed by the court, the receiver will now start preparations for the individual reports. The city's Court No. 4 holds jurisdiction over the Company's case. Under the Argentine bankruptcy law, the receiver is also required to prepare a general report on the process. CONTACT: Mario Kahan Lavalle 2306 Buenos Aires EUROMAYOR: Fitch Assigns Default Rating To Bonds ------------------------------------------------ Fitch Argentina Calificadora de Riesgo S.A. assigned a 'D(arg)' rating to some US$10 million of corporate bonds issued by Euromayor S.A. de Inversiones. The National Securities Commission of Argentina described the bonds as "Primera Serie por 10 millones de U$S dentro de un Programa Global". The rating, issued last Tuesday, denotes that the bonds are currently in default. The Company's finances as of the end of April this year determined the given rating. The bonds matured in April this year, and were classified under "series and/or class". However, its CUSIP was not revealed. EUROMAYOR: Fitch Moves Bonds To Junk Territories ------------------------------------------------ A number of corporate bonds issued by Euromayor S.A. de Inversiones were moved to junk territory with `CCC(arg)' ratings from Fitch Argentina Calificadora de Riesgo S.A., according to the country's National Securities Commission. The affected bonds are: -- US$3.07 million of "Serie I Clase dolares" -- US$3.07 million of "Serie II Clase dolares", which matured in June this year. -- US$6.80 million of "Serie I Clase pesos" -- US$4.42 million of "Serie II Clase pesos", which matured in June this year. The ratings, which were issued on Tuesday, were based on the Company's finances as of April 30, 2003. Fitch said that the rating denotes an extremely weak credit risk relative to other issues in the same country. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. GAS ARGENTINO: Fitch Assigns Default Ratings To Bonds ----------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. assigned default ratings to US$130 million of corporate bonds issued by local company Gas Argentino S.A. last week. The ratings agency said the 'D(arg)' rating is assigned to financial commitments which are currently in default. The National Securities Commission of Argentina described the affected bond as "Obligaciones negociables simples por U$S 130.000.000", which matured in June 2000. These bonds were classified under "simple issue". GRINFA: Credit Check Ends Today ------------------------------- The credit verification process for the bankruptcy of Argentine company Grinfa S.A. ends today, September 2, 2003. The receiver, Mr. Alberto Francisco Romeo, will start preparing the individual reports. The Troubled Company Reporter - Latin America earlier reported that Buenos Aires' Court No. 8, which is under Dr. Garibotto, declared the company bankrupt upon the request of Bulonera Norte S.A.. However, local sources did not indicate whether the court has set the deadline for the individual and general reports. CONTACT: Alberto Francisco Romeo 5th Floor Parana 275 Buenos Aires LOST: Receiver Ends Verification Process ---------------------------------------- The receiver for Buenos Aires-based Lost S.R.L. will end today the credit verification process for the Company's bankruptcy proceedings. This means the receiver will start preparations for the individual reports, which must be presented to the court on November 7. An earlier report by the Troubled Company Reporter - Latin America indicated that the city's Court No. 19 declared the Company bankrupt, and assigned Ms. Raquel Steinhaus as receiver. The court also requires the receiver to submit the general report on December 22. The general report is prepared after the individual reports have been processed by the court. CONTACT: Lost S.R.L. Ladines 3047 Buenos Aires Raquel Steinhaus Paraguay 577 Buenos Aires METROGAS: $600M of Bonds Rated 'D(arg)' by Fitch ------------------------------------------------ A total of $600 million of Metrogas S.A.'s corporate bonds were rated 'D(arg)' by the Fitch Argentina Calificadora de Riesgo S.A. last week. The National Securities Commission of Argentina described the affected bonds as "Obligaciones Negociables Simples". The rating issued was based on the Company's finances as of the end of June this year. Fitch said that the 'D(arg)' rating is assigned to financial obligations that are in default. It applies to bonds that were classified under "Program." TRAINING CENTER: Receiver Prepares Individual Reports ----------------------------------------------------- Court No. 17 of Buenos Aires ordered Training Center S.A.'s receiver to prepare the individual reports as the deadline for the verification of credit claims expires. These reports must be submitted to the court before October 14 this year. The court also ordered the receiver to prepare a general report on the bankruptcy process. An earlier report from the Troubled Company Reporter - Latin America indicated that the deadline for the general report is November 25. Creditors are invited to attend an informative assembly on June 3 next year. CONTACT: Jose M. Nullo Suipacha 612 Buenos Aires =============== B A R B A D O S =============== C&W: Proposed Rate Hike Meets Objection --------------------------------------- The Barbados Consumer Research Organisation (BCRO) filed an objection to the country's public services regulator FTC against Cable & Wireless proposed rate hike. C&W has proposed three flat rate plans, for business and residential users: 2,000 minutes included with the $28 Barbados dollar line rental fee; an additional 2,000 minutes for $10; or unlimited usage for an additional $20. C&W also requested that the line rental fee increase to $32 after six months, reports Business News Americas. According to the BCRO, the hike will have an adverse social impact. C&W Barbados CEO Donald Austin clarified that the obligatory metered charging it requested would only apply to excess minutes. Local newspaper the Barbados Nation reports that the matter will be discussed in a public hearing if the objection filed meets the FTC requirements. =========== B R A Z I L =========== EMBRATEL: Signs Partnership Deal With Costa do Sauipe ----------------------------------------------------- Embratel and Bahia's tourist destination Costa do Sau︾e have entered into partnership for the supply of an integrated telecommunications service solution to the condominium, and celebrated a corporate association to explore a common interest media. The infrastructure provided by Embratel will outfit the condominium with the carrier's entire portfolio of services comprising over eighty cutting-edge technology services. In the initial phase, the solution will involve long distance domestic and international telephone services covering the entire complex. In every hotel, inn or shop installed therein Embratel will provide local numbers for inbound and outbound calls made through its telephone exchanges. The solution contemplates the provision of data communication service to Costa do Sau︾e as well. Through Business Link Direct and FastNe services Embratel will be providing access to the internet and the interconnection among the several sites managed by the condominium, including Vila Nova da Praia, a leisure center reproducing all the details of a Brazilian small town like bars, restaurants and inns. Thanks to this corporate association, the partnership will be widely announced over the media installed in the internal areas of the condominium. Costa do Sau︾e has six theme inns (Gabriela, Pelourinho, Aldeia, Carnaval, Agreste and Torre) and five hotels under the international management of Marriott (Renaissance Costa do Sau︾e Resort and Costa do Sau︾e Marriott Resort & SPA), Accor (Sofitel Costa do Sau︾e and Sofitel Su﹀es Costa do Sau︾e) and Superclubs (SuperClubs Breezes), and turned out to be one of Brazil's favorite tourist destinations. The hotels are lessees of the condominium, which manages all the public areas, including the golf course and Vila Nova da Praia, and the telecommunications infrastructure services as well. Embratel is the premium telecommunications provider in Brazil, offering a wide range of telecommunication services, such as advanced voice, high-speed data transmission, internet, data communication by satellite and corporate networks. The company is national leader in data and internet services, in a privileged position to become the Latin American carrier with an all- distance network. Embratel network has national coverage with almost 17,500 miles of optic cables, representing around one million miles of fiber optics CONTACT: EMBRATEL Advertising, Press and Public Relations Department Further information: (02121) 2121 7837 / 2121 6291 Fax: (02121) 2121 7791 Mid-West- Phone: (02161) 242-9058 / 2845 / 916-9188 Attention: Flavio Resende E-mail: cmsocial@embratel.net.br Embratel on the internet: www.embratel.com.br KLABIN: Aims To Top Woodpulp Market in LatAm With Two Units ----------------------------------------------------------- Klabin announced it intends to keep its two remaining units in Brazil, particularly in the Bahia state: Camacari-based woodpulp, and Feira de Santana-based packaging unit. The announcement follows the sale of a 50% stake in the partnerships Klabin Kimberly, in Brazil, and KCK Tissue, in Argentina, totaling BRL408 million. The Company, the largest producer and exporter of packaging paper (mainly kraftliner) in Brazil, hinges on the two Bahia-based units to become a leader in the integrated production of woodpulp, paper and packaging in Latin America. Klabin increased net income by 47% in the first half of 2003, to BRL1.68 billion, while net profit was at BRL1 billion. CONTACT: KLABIN Ronald Seckelmann, Diretor Financeiro e de RI Luiz Marciano Candalaft, Gerente de RI Tel: (11) 3225-4045 Email: marciano@klabin.com.br SABESP: Announces Tariff Adjustment ----------------------------------- Cia. de Saneamento Basico do Estado de Sao Paulo, (BOVESPA:SBSP3) (NYSE:SBS), the largest water and sewage utility company in the Americas and the third largest in the world (in terms of number of customers), as required by Instruction CVM No. 358, dated Jan. 3, 2002, hereby announces that, in accordance with Article 28 of the Tariff System Regulation approved by State Decree No. 1,446, dated Dec. 16, 1996, tariffs and other conditions governing water supply and sewage collection services will be adjusted by 18.95%, except social and slum tariffs that will be adjusted by 9.0%, effective as from Aug. 29, 2003. SABESP's tariff adjustments will be calculated using the formula below: (VPA x IrA) + (VPB x IrB) IRT = ----------------------------- R Where: IRT = Tariff Adjustment Index VPA = Amount A, which corresponds to the values recorded between July of the previous year and June of the current year, related to costs and expenses with: electric power; treatment supplies; federal taxes -- including CPMF -- Contribuicao Provisoria sobre Movimentacao Financeira (Temporary Contribution on Financial Transactions) and the Cofins/Pasep taxes on revenues; State and Municipal taxes, and charges for the exploitation of water resources for the purpose of public supply; IrA = Adjustment Index for Amount A: the annual variation of the following ratio: Amount A values, accumulated between July of the previous year and June of the current year, divided by the accumulated billed volume in the same period, in relation to the same calculated ratio between the Amount A values, accumulated between July of two previous years and June of the previous year, divided by the accumulated billed volume in the same period; VPB = Amount B, which is calculated as the difference between the accumulated Gross Operating Revenues, in the period from July of the previous year to June of the current year, and the Amount A for the same period; IrB = Adjustment Index for Amount B = equals to the IPCA Index (Brazilian Wide-Ranging Consumer Price Index) published by IBGE - - Instituto Brasileiro de Geografia e Estatistica (Brazilian Institute of Geography and Statistics), accumulated in the period; R = Gross Operating Revenues, which corresponds to the values recorded between July of the previous year to June of the current year, originated from direct and indirect operating revenues related to water supply and sewage collection services; One should consider SABESP's official information as data source for the tariff adjustment calculation, in particular the Financial Statements periodically issued (i.e. DFP -- Demonstracoes Financeiras Padronizadas ("Standard Financial Statements according to the Brazilian Corporate Law") and ITR -- Informacoes Trimestrais ("Quarterly Financial Statements according to the Brazilian Corporate Law")). Further details on the adjustment application will be made available on Sabesp's Web site www.sabesp.com.br and will also be published at the Sao Paulo State Official Gazette. CONTACT: Helmut Bossert Tel.: 5511-3388-8664 E-mail: hbossert@sabesp.com.br Marisa Guimaraes Tel.: 5511-3388-9135 E-mail: marisag@sabesp.com.br URL: www.sabesp.com.br ========= C H I L E ========= BANCO SUDAMERIS: Intesa To Get Rid of Last Chilean Assets --------------------------------------------------------- Italian bank Intesa is yet to complete its exit from the Chilean market, Business News Americas indicates. In May, Intesa sold its Chilean subsidiary Banco Sudameris to local bank Banco del Desarrollo. However, it still has a number of active derivates contracts on the Chilean market. Now, Intesa is putting these contracts up for sale to complete its Chilean exit, according to market sources. Intesa has offered the derivates contracts to several different banks, which are evaluating the offer, the sources added. ENDESA CHILE: IAF Supports Work Fundaci▋ Pehuen In Alto Bio Bio ---------------------------------------------------------------- The Agreement on Cooperation signed Thursday consists of sharing the financing of the initiatives put forward by the Fundaci▋ Pehu�n with the Pehuenche communities of Alto B︽ B︽. The agreement is an important recognition by the Inter-American Foundation (IAF), an independent institution financed by the Government of the United States, of the work carried out by the Fundaci▋ Pehu�n and Endesa Chile with the Pehuenche communities. The Inter-American Foundation (IAF), an independent institution financed by the Government of the United States, which promotes the development of communities in Latin America and the Caribbean, signed an Agreement on Cooperation with the Fundaci▋ Pehu�n to finance projects for the development of the Pehuenche communities of Alto B︽ B︽. The agreement was signed Thursday during a ceremony that took place in Alto B︽ B︽, attended by the Governor of the Province of B︽ B︽, Esteban Krause, the President of the IAF, David Valenzuela and the President of the Fundaci▋ Pehu�n, Wilfredo Jara. Also in attendance were the regional authorities and representatives from the Pehuenche communities that will benefit from the agreement. The Inter-American Foundation will provide a significant financial contribution that amounts to US$ 76,000 per annum that will extend for a period of three years. This support reflects an important recognition of the work undertaken by the Fundaci▋ Pehu�n that has spent over a decade contributing towards the development of the Pehuenche communities of Alto B︽ B︽. Furthermore, it demonstrates that the Fundaci▋ Pehu�n and Endesa Chile, as the sponsor company, have satisfied the real needs of the communities and that all the initiatives have been carried out in a participative and constructive atmosphere with mutual respect. The IAF is an independent overseas aid entity of the Government of the United States, managed by a council of directors appointed by the President of that country and ratified by the Senate. In order to comply with its tasks, which consist of granting donations and providing support for basic and local development in Latin America and the Caribbean, the United States Congress assigns it funds each year to which are added funds donated by the Fiduciary Fund for Social Progress managed by the Inter- American Development Bank. The Fundaci▋ Pehu�n is a non-profit making organization founded by Pangue, a subsidiary of Endesa Chile, with the object of promoting programs to improve the financial situation of the Pehuenche Communities of Alto B︽ B︽. It works with the communities in the areas of education, health, housing and financial income, as well as in the promotion of aspects related to the Pehuenche culture. Agreement on Cooperation The Agreement on Cooperation consists of sharing the financing of initiatives put forward by the Fundaci▋ Pehu�n for the Pehuenche communities of Alto B︽ B︽, within the framework of promoting basic development. For a period of three years various initiatives will be undertaken, grouped into the project named "Means of support on the basis of cultural heritage, the territory and the organizational base". These initiatives point towards an improvement in the quality of education, the training of youth, the strengthening of the social organization, the participation of women, the reinforcement of the culture itself, the protection of natural resources and the development of tourism in the area. The agreement involves an amount of US$ 146,000 per annum, i.e. US$ 438,000 over the period of three years, which the IAF and Fundaci▋ Pehu�n will finance in equal parts. In addition to the donation mentioned, the IAF has committed its support of the projects to be carried out by Fundaci▋ Pehu�n within the scope of the agreement. In turn, the latter must execute the projects and participate in a broad initiative of common learning within the Network of Business Foundations of America (Redeam�rica) that comprises a total of 35 entities. By means of this agreement, Fundaci▋ Pehu�n will benefit greatly as it will be able to link up to an international learning network that will give it greater efficiency in its performance, both in its management and in its projects, in addition to enabling it to obtain support in the form of financial resources. The Fundaci▋, in its eagerness to contribute towards the self- supporting development of the Pehuenche communities of Alto B︽ B︽ close to the Pangue and Ralco hydroelectricity projects, has created various projects and activities to improve the quality of their lives, the strengthening of their cultural identity and the integral growth of the people and their organizations. In this respect, the agreement is open to the participation of other institutions and entities interested in the project, complementing it with other initiatives with a similar purpose with respect to the basic development and increase in financial resources in order to achieve the welfare of the Pehuenche families. METRO: Reports Reduced Net Loss For 1H03 ---------------------------------------- Chilean company Metro S.A. reports a CLP1.18 billion net loss for this year's first semester. A report by Business News Americas said that this is an improvement from its CLP8.1 billion net loss during the same period last year. A 6.94% increase in revenue boosted the Company's results. However, increased operating, administration and sales costs reduced its operating profit by 61.6%, the report added. The Company, which is owned by the country's capital, Santiago, has three existing lines, moving about 200 million passengers through its network annually. A fourth line is currently constructed to add to the Company's 40.2km network. =================================== D O M I N I C A N R E P U B L I C =================================== ELECTRICARIBE/ELETROCOSTA: Government Approves US$60M Bailout ------------------------------------------------------------- Union Fenosa's units in Colombia Electricaribe and Electrocosta will get a total of US$6 million in bailout funds from the country, reports local newspaper El Tiempo. Colombian head of state Alvaro Uribe reportedly authorized the bailout fund. The money would be used to settle the distributors' US$6 million financial obligation for power purchased in July. The two companies will issue new shares to pay for its September power purchases from Barranquilla-based state generator Corelca. The shares would then be transferred to the state's oil company Ecopetrol, which will use them to pay its debts to the government. Spain's Union Fenosa controls 70% of both companies. However, said Business News Americas, it is not clear whether it would inject more capital to maintain its controlling stake. TRICOM: S&P Downgrades Ratings to 'CC' From 'CCC+' -------------------------------------------------- Standard & Poor's Ratings Services said Thursday that it lowered its local and foreign currency corporate credit and its senior unsecured debt ratings on full-service telecommunications provider Tricom S.A. to 'CC' from 'CCC+'. The outlook is negative. The downgrade reflects continued concerns regarding the company's ability or willingness to meet its coupon due Sept. 1, 2003. As of March 31, 2003, the Dominican Republic-based company had total debt outstanding of $473 million. Tricom has been affected by a number of factors: the acquisition and consolidation of the pay-TV operation (formalized in October 2001); costs associated with the new, advanced digital trunking services (iDEN) operation in Panama; and, more recently, as of March 31, 2003, the 36.4% year-over-year devaluation of the Dominican peso. For fiscal 2002, Tricom's EBITDA decreased by about 4.5%, causing EBITDA to cover gross interest expenses 1.2x compared with 2x for the corresponding period in fiscal 2001. As of first-quarter 2003, this trend persisted, with EBITDA decreasing by 20.4%, interest expense coverage decreasing to 1.1x from 1.5x the prior year, and its $473 million debt in relation to its last-12-month EBITDA deteriorating to 6.4x. Tricom has filed with the SEC a registration statement with the terms of an exchange offer and consent solicitation for its $200 million, 11.375% senior notes due September 2004. "Standard & Poor's considers that the devaluation of the Dominican peso and its effect on the company's financial performance decreases the bondholders' anticipated discretion to accept the offer under the stated terms or to reject it and give the company time for an alternative refinancing plan," said credit analyst Patricia Calvo. Upon failure to meet the September coupon payment, the ratings would be lowered to 'D'. ANALYST: Patricia Calvo, Mexico City (52) 55-5279-2073 ============= E C U A D O R ============= PACIFICTEL: FS Board To Approve Bidding Rules --------------------------------------------- The board of Ecuador's state assets holding company Fondo de Solidaridad (FS) was expected to give definitive approval last Friday for the bidding rules for the tender of contracts to administrate fixed line telcos Andinatel and Pacifictel. According to Ecuadorian daily El Comercio, FS is looking to launch the sale of the contracts in the first week of September. The sale of administration contracts was one of the conditions for a loan package from the International Monetary Fund (IMF), which has given the FS an extended deadline of September 17 to begin the auctions. An IMF technical team is scheduled to visit Ecuador next week. ============= J A M A I C A ============= C&WJ: Supreme Court Rules Favorably in Oceanic Case --------------------------------------------------- Cable & Wireless Jamaica emerged victorious in a legal battle against mobile phone provider Oceanic Digital Jamaica Limited, reports local news source Radio Jamaica, citing a ruling from the Supreme Court. Oceanic said it will appeal the ruling. Oceanic filed the case last month, claiming C&WJ breached an agreement by terminating Oceanic's international calls through its network. Oceanic also claims it had lost a "substantial" amount of revenue because of this. In the meantime, C&WJ President Gary Barrow said the Company is still willing to work with Oceanic Digital despite the ruling. CONTACT: Cable & Wireless PLC 124 Theobalds Road London England WC1X 8RX Phone: +44 (0)20 7315 4000 Fax: +44 (0)20 7315 5000 Home Page: http://www.cw.com =========== M E X I C O =========== GRUPO TMM: Announces Repurchase By TFM Of Stake In Mexrail ---------------------------------------------------------- Grupo TMM, S.A. (NYSE: TMM and BMV: TMM A; "TMM"); announced Thursday that on August 27, 2003, its subsidiary, TFM, S.A. de C.V. (TFM), has given notice to Kansas City Southern (KCS) of exercise of its right to repurchase shares representing an aggregate 51 percent interest in Mexrail, Inc. ("Mexrail") that were sold to KCS in May 2003. The shares are currently held in a voting trust pending the receipt of approval of the United States Surface Transportation Board of KCS's application to assume control of Mexrail. Under the terms of the Stock Purchase Agreement entered into on April 15 2003, TFM, acting through its Chairman, has the unilateral right to repurchase the shares of Mexrail. The purchase price for the shares is $32,680,000 which is the same amount received by TFM in May 2003 upon closing of the sale of the shares to KCS, and will be funded out of TFM's existing cash balances. Upon completion of the repurchase, which the agreement provides is to occur on September 4, 2003, the fifth business day after exercise of the repurchase right, TFM will again own 100 percent of Mexrail. Headquartered in Mexico City, Grupo TMM is Latin America's largest multimodal transportation company. Through its branch offices and network of subsidiary companies, Grupo TMM provides a dynamic combination of ocean and land transportation services. Grupo TMM also has a significant interest in TFM, which operates Mexico's Northeast railway and carries over 40 percent of the country's rail cargo. Grupo TMM's web site address is www.grupotmm.com and TFM's web site is www.tfm.com.mx. CONTACT: Grupo TMM Jacinto Marina, Chief Financial Officer 011-525-55-629-8790 (jacinto.marina@tmm.com.mx) or Brad Skinner, Senior Vice President Investor Relations 011-525-55-629-8725 or 203-247-2420 (brad.skinner@tmm.com.mx) or Marco Provencio Media Relations, Proa/StructurA 011-525-55-629-8708 and 011-525-55-442- 4948 (mp@proa.structura.com.mx) or Dresner Corporate Services (general investors, analysts and media) Kristine Walczak, 312-726-3600 (kwalczak@dresnerco.com) =========== P A N A M A =========== CSS: Pres. Moscoso Pushes For Prompt Action To Escape Bankruptcy ---------------------------------------------------------------- Panama's President Mireya Moscoso is urging immediate action to save the ailing state-run social security agency CSS, reports Business News Americas. Bankruptcy looms for CSS, which saw its pension deficit increase by US$354 million in the year to June. As of June this year, the agency's financial reserves stood at US$1.72 billion while its pension obligations totaled US$4.37 billion, with the shortfall set to grow given increased pension payment arrears due to higher unemployment, according to local daily La Prensa. The Panamanian government has yet to present new proposals to confront the agency's financial woes pending the results of a technical analysis. ================================= T R I N I D A D & T O B A G O ================================= CARONI: US Investors Want To Buy Caroni, says Union Head -------------------------------------------------------- A group of US investors are interested in acquiring Caroni (1975) Ltd., reports the Trinidad Guardian, citing National Team Unity leader Ramesh Lawrence Maharaj. According to Mr. Maharaj, the investors have already approached the government on the matter. He said in a solidarity rally in Chacaguanas that these investors are even interested in re-hiring the Company's retrenched workers. However, he refused to comment further after his speech in the rally. After retrenching a huge chunk of its workforce, the government has formally closed the Company amid squabbles over its Voluntary Separation of Employment Plan. Local reports indicate that some of the retrenched workers have received their VSEP benefits. The Sugar Manufacturing Company (SMC) replaces Caroni, with operations limited to Usine St Madeleine and the Estate Development and Management company. The latter is expected to attract and manage industrial activity for SMC. ============= U R U G U A Y ============= GALICIA URUGUAY: Accepts Clients' Deposit-Return Survey Offer ------------------------------------------------------------- Argentine bank Banco de Galicia y Buenos Aires S.A. announced Friday that its Uruguayan sister, suspended Banco Galicia Uruguay, will accept all the offers clients made during a recent deposit-return survey, relates Dow Jones. The survey was launched June 17 to gauge clients' interest in several new options for getting back deposits that have been trapped in bank vaults since early 2002. Clients were given the chance to exchange their deposits for government-backed bonds, convertible bonds issued by the bank, fixed dollar payments, or a mixture of all three. Banco Galicia Uruguay said that clients owning US$182.9 million of the trapped deposits had "expressed interest" in the proposal, which came on top of an offer made last December promising to return over nine years the money that has been trapped in the bank since last February. There's an estimated US$1.2 billion of trapped deposits in bank vaults. Meanwhile in its filing to the stock exchange on Friday, the Argentine bank said its sister unit would make the second payment to clients under the deposit-return plan on Sept. 1 drawn up last December. The bank said it would repay 15% of clients' deposits this year. Galicia Uruguay was suspended in February 2002 amid a financial crisis that swept into Uruguay from neighboring Argentina. CONTACT: BANCO GALICIA URUGUAY S.A. World Trade Center Luis A. Herrera 1248 Piso 22 Montevideo Uruguay Tel.:(+598-2) 628-1230 www.bancogalicia.com.uy ================= V E N E Z U E L A ================= BANCO DE VENEZUELA: Fitch Raises Ratings ---------------------------------------- International rating agency Fitch Ratings upgraded the ratings of Venezuelan bank Banco de Venezuela. The ratings affected are: (to/from) -Long-term foreign currency 'B-' 'CCC-' (Outlook Stable) -Short-term foreign currency 'B' 'C' -Long-term local currency 'B-' 'CCC-' -Short-term local currency 'B' 'C' -Individual 'D' 'D/E' Support affirmed at '5'. The outlook on the ratings has been changed to stable from negative. The Rating Watch Negative on the individual rating was also lifted. (See FITCH NOTES below for explanation) BANCO DEL CARIBE: Fitch Ups Ratings ----------------------------------- International rating agency Fitch Ratings upgraded the ratings of Venezuelan bank Banco del Caribe. The ratings affected are: (to/from) -Long-term foreign currency 'B-' 'CCC-' (Outlook Stable) -Short-term foreign currency 'B' 'C' -Long-term local currency 'B-' 'CCC-' -Short-term local currency 'B' 'C' -Individual 'D' 'D/E' - Support affirmed at '5'. The outlook on the ratings has been changed to stable from negative. The Rating Watch Negative on the individual rating was also lifted. (See FITCH NOTES below for explanation) BANCO EXTERIOR: Fitch Ups Ratings Following Upgrade on Venezuela ---------------------------------------------------------------- International rating agency Fitch Ratings upgraded the ratings of Venezuelan bank Banco Exterior. The ratings affected are: (to/from) -Long-term foreign currency 'B-' 'CCC-' (Outlook Stable) -Short-term foreign currency 'B' 'C' -Long-term local currency 'B-' 'CCC-' -Short-term local currency 'B' 'C' -Individual 'D' 'D/E' -Support affirmed at '5'. The outlook on the ratings has been changed to stable from negative. The Rating Watch Negative on the individual rating was also lifted. (See FITCH NOTES below for explanation) BANCO MERCANTIL: Sovereign Upgrade Prompts Upgrade on Ratings ------------------------------------------------------------- International rating agency Fitch Ratings upgraded the ratings of Venezuelan bank Banco Mercantil. The ratings affected are: (to/from) -Long-term foreign currency 'B-' 'CCC-' (Outlook Stable) -Short-term foreign currency 'B' 'C' -Long-term local currency 'B-' 'CCC-' -Short-term local currency 'B' 'C' -Individual 'D' 'D/E' -Support affirmed at '5'. The outlook on the ratings has been changed to stable from negative. The Rating Watch Negative on the individual rating was also lifted. (See FITCH NOTES below for explanation) BANCO OCCIDENTAL: LTFC Rating Raised To `CCC-` ---------------------------------------------- International rating agency Fitch Ratings upgraded the ratings of Venezuelan bank Banco Occidental de Descuento. The ratings affected are: (to/from) -Long-term foreign currency 'CCC+' 'CCC-' (Outlook Stable) -Long-term local currency 'CCC+' 'CCC-' -Short-term foreign currency affirmed at 'C' -Short-term local affirmed 'C' -Individual affirmed at 'D/E' - Support affirmed at '5'. The outlook on the ratings has been changed to stable from negative. The Rating Watch Negative on the individual rating was also lifted. (See FITCH NOTES below for explanation) BANCO PROVINCIAL: Fitch Raises Ratings -------------------------------------- International rating agency Fitch Ratings upgraded the ratings of Venezuelan bank Banco Provincial. The ratings affected are: (to/from) -Long-term foreign currency 'B-' 'CCC-' (Outlook Stable) -Short-term foreign currency 'B' 'C' -Long-term local currency 'B-' 'CCC-' -Short-term local currency 'B' 'C' -Individual 'D' 'D/E' Support affirmed at '5'. The outlook on the ratings has been changed to stable from negative. The Rating Watch Negative on the individual rating was also lifted. (See FITCH NOTES below for explanation) BANCO VENEZOLANO: Fitch Upgrades Ratings ---------------------------------------- International rating agency Fitch Ratings upgraded the ratings of Venezuelan bank Banco Venezolano de Credito. The ratings affected are: (to/from) -Long-term foreign currency 'B-' 'CCC-' (Outlook Stable) -Short-term foreign currency 'B' 'C' -Long-term local currency 'B-' 'CCC-' -Short-term local currency 'B' 'C' -Individual 'D' 'D/E' - Support affirmed at '5'. The outlook on the ratings has been changed to stable from negative. The Rating Watch Negative on the individual rating was also lifted. (See FITCH NOTES below for explanation) BANESCO BANCO: Fitch Takes Action on Various Ratings ---------------------------------------------------- International rating agency Fitch Ratings upgraded the long-term foreign currency rating of Venezuelan bank Banesco Banco Universal to 'CCC+' from 'CCC-'. The outlook on the rating is stable. At the same time, Fitch affirmed the bank's short-term foreign currency rating at 'C,' individual at 'D/E' and support at '5'. The outlook on the ratings has been changed to stable from negative. The Rating Watch Negative on the individual rating was also lifted. (See FITCH NOTES below for explanation) FITCH NOTES: The upgrade on the above-mentioned Venezuelan banks' ratings indicates a relative improvement in the operating environment for banks, as reflected in the June 23, 2003 upgrade of the Bolivarian Republic of Venezuela's long-term foreign currency rating to 'B-' (Outlook Stable) from 'CCC+' and its long-term local currency (Venezuelan Bolivar - VEB) rating to 'B- ' from 'CCC'. In addition, some other concerns relating to possible politically motivated interference of the banking system, including but not limited to a distressed debt exchange by the government, retaliatory measures against institutions that supported the strike of early 2003, as well as directed lending and interest rate ceilings, have diminished as these actions have not materialized. While voluntary domestic debt swaps and recent external bond repurchases have mitigated concerns about Venezuela's debt service willingness over the near term, the government's success in getting oil production back up to levels close to the ones achieved prior to the national strike earlier this year somewhat relieved public financing pressures. On the other hand, the foreign exchange controls so far appear to have had a limited impact on banks as these have continued to honour foreign exchange liabilities, which are mostly limited to letters of credit and correspondent banks, using pre-existing foreign currency assets. In this regard, it must be noted that banks have limited foreign currency exposures locally, as these are generally booked in branches and off-shore banks based in other countries (and therefore so far not subject to the controls). Bank depositors who wish to withdraw foreign currency deposits may freely do so although these have to be exchanged into VEB at the official exchange rate. Measures relating to minimum lending requirements to sectors such as micro-loans and agriculture have been in place for some time now although have thus far not had a sizeable negative impact on the system's asset quality. Measures relating to interest rate controls have not been implemented. In general, although the system's asset quality has witnessed some deterioration, this has been limited and most banks have ample loan loss reserve coverage, even when including restructured loans. On the other hand, despite the lack of foreign exchange gains, the high interest rate environment has resulted in large net interest revenue for most institutions, underpinning their overall profitability. Equity to assets and risk-weighted capital ratios at most banks continue to be ample, although this is justified given the volatile environment. Liquidity has been enhanced by the foreign exchange controls, as deposits have not been able to exit the country and banks have been unable to on-lend these deposits due to the economic contraction. A large proportion of excess liquidity has thus been placed in short-term CDs issued by the Central Bank. While Fitch acknowledges the improvement in the operating environment for financial institutions, there are still many potential threats that could undermine the health of the financial system. The detailed credit analysis of each of the institutions in the following list will be published in due course. CONTACT: Franklin Santarelli Carlos Fiorillo Tel: +58 212 286 3356, Caracas Gustavo Lopez Tel: 1-212-908-0853, New York London Ratings Desk: +44 (0) 20 7417 6300 Media Relations: James Jockle +1-212-908-0547, New York *********** 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 * * *