/raid1/www/Hosts/bankrupt/TCRLA_Public/030908.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, September 8, 2003, Vol. 4, Issue 177
Headlines
A R G E N T I N A
ACINDAR: Belgo Likely To Boost Current Ownership
AGUAS ARGENTINAS: Cuts Off Services To Buenos Aires
ATEBA: Credit Check For Reorganization Ends
CABLEVISION: S&P To Reassess Rating Upon Conclusion of APE
CTI MOVIL: America Movil To Award Nokia $54M GSM Contract
DISCO: Troubles May Drive Away Potential Investors
IMPORCAB: Last Day For Credit Authentication Today
LAER: Resumes Flights, Rebuilds Relationship With Staff
LAS MARIANAS: Receiver Closes Verification Process
LEDESMA PINTURAS: Credit Authentication Period Ends
MMP INTERNACIONAL: Receiver Closes Verification Process
SAMIR: Last Day For Credit Check Today
SCP: Bondholders Oppose Sale of Stake to CGC
SOLAVI: Individual Reports Due For Filing Today
SOUTHERN WINDS/LAFSA: Signs Six-month Accord With Authorities
TELECOM ARGENTINA: Struggles To Outline Definite Debt Proposal
* Issues Holders Notice of Argentine Floating Rate Bonds Due 2023
B R A Z I L
BCP: America Movil's Acquisition Neutral to Credit Quality
EMBRATEL: Market Participants Worried About Plan To Purchase ATTL
SABESP: Announces Negotiations With San Bernardo de Campo
TELEMAR: Anatel Orders Increased Intelig Interconnection
C H I L E
COEUR D'ALENE: Announces Public Offering
TELEFONICA CTC: Sells Health Unit, Reports Higher Market Share
J A M A I C A
C&WJ: Oceanic Refuses To Accept Defeat
C&WJ: Raises Rates of Domestic Telephone Calls By 30%
M E X I C O
ALESTRA: Follows Telmex Lead, Won't Hike Rates
ALESTRA: Largest Creditors Support Latest Restructuring Plans
CFE: More Power Outages Possible
GRUPO TMM: Responds to KCS Lawsuit
INNOVA: $200 Million Senior Unsecured Notes Rated 'B+' by S&P
INNOVA: Moody's Assigns B2 Rating To Proposed Debt Offering
PEMEX REFINACION: To Use Energy Solutions' Real-Time Model
T R I N I D A D & T O B A G O
BWIA: Steps Up Efforts To Oust Rival
TRINMAR: Workers Continue With Protest Action, Make More Demands
V E N E Z U E L A
PDVSA: Venezuela Goes Forward With Offshore Development Plans
PDVSA: Army General Suggests State Council Creation For Security
- - - - - - - -
=================
A R G E N T I N A
=================
ACINDAR: Belgo Likely To Boost Current Ownership
------------------------------------------------
Brazil's iron and steel firm Belgo Mineira may soon raise its
current 20.5% stake in its Argentine fellow company Acindar to a
controlling interest.
On August 29, Acindar announced its shareholders had approved an
issuance of US$80 million in bonds convertible into stocks, as
part of the restructuring of its financial debt of US$340
million.
Acindar began to default in the payments of its debt in November
2001, when the contraction of the Argentine economy made the
demand for its steel products shrink.
Gustavo Pittaluga, Acindar spokesman, said that Belgo Mineira -a
unit of the European holding Arbed- would capitalize the loans
granted to Acindar through the subscription of these notes.
The Company has to send the plan to the local Securities Exchange
Commission, CNV; for its approval, and then shareholders will
decide whether to subscribe. This could happen before the end of
September, Pittaluga explained.
When the bonds become due, Belgo Mineira will be able to exchange
them for shares and consequently increase its stake in Acindar.
AGUAS ARGENTINAS: Cuts Off Services To Buenos Aires
---------------------------------------------------
Aguas Argentinas SA shutdown its water supply to the city of
Buenos Aires Wednesday night, leaving most of its consumers
without water for 8 hours beginning 9:00 p.m., reports Dow Jones
Business News.
The utility explained it had no option but to shut down its
purification plant in the Buenos Aires suburb of Palermo when it
discovered certain unknown organic materials in the water, which
draws from Buenos Aires' expansive waterway, the River Plate.
A spokesman for the Company described the occurrence as a
"natural event" over which it had no control.
Yet Aguas Argentinas, one the largest private water concessions
in the world, already faces criticism for its actions. The
national water regulator, ETOSS, said Thursday that it has
launched an investigation into the Company's handling of the
situation and its decision to cut off the city's water supply
without consulting the regulator.
"What we lament is that the company had not opportunely
communicated the situation during the day yesterday [Wednesday]
to the regulatory body," said Carlos Vilas, a director of ENTOSS,
in a radio interview. "It has the obligation to do that and it
did not do it."
A spokesman for ENTOSS said Vilas' comments didn't necessarily
represent the position of the regulator but that many of the
concerns he expressed in the interview were shared by ENTOSS. The
regulator has the authority to impose fines on water
concessionaires for various breaches of regulations.
An Aguas Argentinas spokesman argued that the Company acted in
"the best possible way, given the circumstances," and the risks
they posed to people's health. He said the company had to shut
down the purification plant to ensure that it hadn't been
contaminated.
ATEBA: Credit Check For Reorganization Ends
-------------------------------------------
The credit verification process for the reorganization of Ateba y
Compania S.A. ends today, September 8. The Company's receiver,
Mr. Eduardo Osvaldo Casares, is instructed by the court to
prepare the individual reports and have them filed by October 20.
The Company's reorganization was started shortly after the Civil
and Commercial Tribunal of Mendoza approved the Company's motion
for "Concurso Preventivo".
The receiver is also required to prepare a general report on the
reorganization process. The court expects this report to be ready
by December 1 this year, according to local news source Infobae,
without mentioning whether the court has set a date for an
informative assembly.
CONTACT: Ateba y Compania S.A.
Coni 1742 Godoy Cruz
Mendoza
Eduardo Osvaldo Casares
Colon 412
Mendoza
CABLEVISION: S&P To Reassess Rating Upon Conclusion of APE
----------------------------------------------------------
CableVision S.A (CableVision, D/--/--), the largest Argentine-
based cable-TV provider, launched Wednesday its proposal for an
Out-of-Court Agreement (Acuerdo Preventivo Extrajudicial-APE)-on
US$797 million debt, including all rated bonds.
The proposal gives creditors three options to restructure their
current holdings: new debt (a mix of notes with step-up interest
rates and convertible notes); a combination of debt and equity;
and/or a partial cash tender for up to US$99.9 million. The cash
tender will be partly funded by a US$45 million capital infusion
from Hicks, Muse, Tate & Furst Inc. and Liberty Media
International Inc., owners of 50% of the equity of CableVision
and 78.2% of the economic rights for VLG Argentina (which has the
other 50% of the equity), respectively. The offer does not
contemplate payments on accrued interest and arrears. Creditors
have until Oct. 10, 2003 to accept the proposal, which requires a
67% adhesion.
If the offer is successful, CableVision will reduce debt,
increase capitalization, and extend the maturity schedule.
Therefore, Standard & Poor's will reassess the rating once the
APE is concluded.
ANALYSTS: Ivana Recalde, Buenos Aires (54) 114-891-2127
Marta Castelli, Buenos Aires (54) 114-891-2128
CTI MOVIL: America Movil To Award Nokia $54M GSM Contract
---------------------------------------------------------
Mexican mobile holding company America Movil plans to upgrade its
Argentine mobile operator CTI, in line with the recent upgrades
with its other units in Mexico, Ecuador, Colombia and Brazil.
Citing an America Movil spokesperson, Business News Americas
reports that the plan involves awarding Sweden's Nokia a US$54-
million contract to build a GSM overlay for CTI, which has about
1.2 million subscribers or some 17% of the Argentine mobile
market.
Argentine daily La Nacion quoted CTI sources as saying that the
overlay would be no more expensive than digitalization of CTI's
analogue coverage in provincial areas.
This year's full investment for CTI should be US$100 million when
handset purchases are factored in.
Meanwhile, the report reveals that America Movil has the option
to buy 60% of the voting rights and 49% of the equity in holding
company Coinmov, which is in the process of acquiring 100% of CTI
from US telco Verizon.
DISCO: Troubles May Drive Away Potential Investors
--------------------------------------------------
Royal Ahold's supermarket chain in Argentina, Disco, is facing
some troubles that are pushing interested investors away.
Firstly, the local tax bureau, AFIP, claims it has some EUR45
million (US$49.2 million) in taxes related to the issuance of
bonds between 1998 and 2002. These securities were applied tax
rebates in case they were offered publicly but the AFIP says they
were not offered to investors. The firm denied irregularities in
a release issued last Monday.
Secondly, Ahold has not been able to resolve the embargo on
Disco's shares in Uruguay. Ahold has been banned from selling its
shares in Disco since June 5, as a result of a civil action
brought by a group of depositors at Banco Montevideo of Uruguay.
The bank is owned by the Velox Group, Aholds former partner in
Disco, and went bankrupt last year after Velox defaulted on
loans.
These issues have raised concerns among investors interested in
acquiring Disco - Frances Casino, USWal-Mart, Chilean Cencosud,
local businessman Franciso De Narvaez and a private equity fund -
and some of them would have withdrawn.
De Narvaez would not be able to gather enough money for the
operation.
Meanwhile, Cencosud is not fully convinced of purchasing the
chain, taking into account that the acquisition of Santa Isabel -
from Ahold - in Chile turned out to be much more difficult than
expected. Apparently Ahold did not comply with all the conditions
of the deal.
Casino and Wal-Mart are also worried about the situation in
Disco, although both of them are still interested. In case it
wins the contest, Casino said it would partner with an Argentine-
American private equity fund. The latter would put the necessary
funds while Casino would contribute with its experience in the
retail market. Wal-Mart, on the contrary, would use its own
resources.
The understanding of Disco's accountancy issues demands an army
of highly-qualified accountants, the kind that only a
multinational company can hire. These kind of resources are
difficult to obtain for a local company, said an expert in the
supermarket business.
Ahold is yet to release Disco's 2002 financial statements.
IMPORCAB: Last Day For Credit Authentication Today
--------------------------------------------------
Creditors of Imporcab S.A. must present their claims for
verification to the Company's receiver as the credit
authentication period expires today, September 8, 2003. The
receiver, Mr. Juan Jose Colace, who was appointed by the court,
will now prepare the individual reports.
Buenos Aires' Court No. 12 declared the Company bankrupt earlier.
Working with Clerk No. 23, the court ordered the receiver to have
the individual reports filed by October 20. The general report,
on the other hand, must be submitted on November 1.
CONTACT: Juan Jose Colace
Presidente Peron 1509
Buenos Aires
LAER: Resumes Flights, Rebuilds Relationship With Staff
-------------------------------------------------------
After a year without activity, Argentine state-owned airline
Lineas Aereas Entre Rios Sociedad del Estado (LAER) has resumed
flights between Buenos Aires and Parana. It has also managed to
rebuild the relationship with its staff, which used to be full of
conflicts derived from the loss of jobs. LAER had suspended
operations on April 19, 2002.
LAER subscribed an accord with American Falcon, which in exchange
for a US$25,000 fee operates LAER's Fokker F-28. The provincial
government of Entre Rios is responsible for and supports the
risks of the route Parana-Buenos Aires and the commercial aspects
of the operation are being handled by LAER's staff. After the
morning flight, the plane flies for American Falcon.
Nevertheless, the situation of the Company is still serious: its
ARS25-million debt is too high in relation to its income, which
is causing some troubles to the airline. The government of Entre
Rios wants to reach an accord with its creditors as soon as
possible.
Additionally, occupation levels are not ideal, but the firm
believes it will manage to reverse this trend. They are even
thinking of adding a new flight to Concordia.
LAS MARIANAS: Receiver Closes Verification Process
--------------------------------------------------
Ms. Glora Della Sala, the receiver for bankrupt Argentine company
Las Marianas S.R.L., closes the credit verification process
today. Buenos' Aires' Court No. 23, which is under Dr. Villanueva
ordered the receiver to prepare the individual reports.
An earlier report by the Troubled Company Reporter - Latin
America indicated that the Company entered bankruptcy after the
court granted a request filed by its creditor, Carlos Nunez, for
its failure to pay $32,174 of debt.
Local sources, however, did not indicate whether the court has
set the deadlines for the filing of the individual and general
reports.
CONTACT: Las Marianas S.R.L.
Habana 4374
Buenos Aires
Ms. Gloria Della Sala
5th Floor 'A'
Uruguay Street No. 662
Buenos Aires
LEDESMA PINTURAS: Credit Authentication Period Ends
---------------------------------------------------
The credit verification period for the bankruptcy of Ledesma
Pinturas S.A. expires today, September 8, as ordered by Buenos
Aires' Court No. 24. The Company's receiver, Ms. Alicia Zurron,
will now start preparations on the individual reports, which must
be presented to the court on October 20.
The receiver is also required to file general report on December
1. She may voice out her opinions on the reasons behind the
Company's financial woes in this report.
An earlier edition of the Troubled Company Reporter - Latin
America indicated that the Company was declared bankrupt by force
of a petition filed by Ana Ortigoza, which was approved by the
court. The Company reportedly owes the complainant some $26,270.
CONTACT: Ledesma Pinturas S.A.
6th Floor 53
Esmeralda St. No. 1075
Buenos Aires
Alicia Zurron
Corrientes Ave. 2963
Buenos Aires
MMP INTERNACIONAL: Receiver Closes Verification Process
-------------------------------------------------------
Ms. Maria del Carmen Amandule, receiver for Buenos Aires-based
company M.M.P. Internacional S.A., closes the credit verification
process regarding the Company's bankruptcy today. As ordered by
the city's Court No. 5, the receiver will now prepare the
individual reports.
The receiver is also required to prepare a general report on the
bankruptcy process. Local news portal Infobae earlier reported
that the deadlines for the individual and general reports are
October 20, and December 1, respectively.
CONTACT: Maria del Carmen Amandule
24 de Noviembre 1226
Buenos Aires
SAMIR: Last Day For Credit Check Today
--------------------------------------
Today, September 8, 2003, is the last day for credit
verifications for the bankruptcy of Samir S.A., according to an
earlier report by the Troubled Company Reporter - Latin America.
The receiver, Angel Pozzi, will prepare the individual reports
upon completion of the verification process. These reports must
be submitted to the court on October 20 this year.
Buenos Aires' Court No. 4, which handles the Company's case,
ordered the receiver to prepare a general report on the matter
and have it filed on December 1.
The Company was declared bankrupt after the court approved a
petition filed by its creditor, Graciela Gramajo, to whom the
Company owes some $67,824.
CONTACT: Samir S.A.
2nd Floor
Moreno St. No. 1389
Buenos Aires
Angel Pozzi
1st Floor C
Combate de loz Pozos St. No. 129
Buenos Aires
SCP: Bondholders Oppose Sale of Stake to CGC
--------------------------------------------
A group of Sociedad Comercial del Platas bondholders are opposing
the sale of an 81% stake in its unit Compania General de
Combustibles (CGC) to the private equity fund Southern Cross.
These creditors have warned that the operation involves an amount
that represents less than 10% of the oil holdings book value.
Southern Cross bid amounts to ARS70 million (US$23.73 million).
The deal is still waiting from approval by the court in charge of
Sociedad Comercial del Plata's formal restructuring proceeding.
The holding accrues a debt of ARS1.241 billion (US$420.68
million) and its net assets amount to minus ARS419 million
(US$142.03 million).
Bondholders also said that SCP might go bankrupt if its board of
directors does not solve the financial issues derived from the
debt restructuring proceeding soon.
SOLAVI: Individual Reports Due For Filing Today
-----------------------------------------------
The individual reports regarding the reorganization of Argentine
transport company Solavi S.A. is due for submission today, as
ordered by Buenos Aires' Court No. 10. Working with Clerk No. 40,
the court also requires the receiver to prepare a general report
on the reorganization.
An earlier report by the Troubled Company Reporter - Latin
America said that the Company started reorganization shortly
after the court approved its motion for "Concurso Preventivo". A
local accountant, Mr. Alberto Abraham Forman, was assigned as the
Company's receiver.
The general report must be presented to the court on October 20.
Local news portal Infobae reported that an informative assembly
will be held on March 22 next year.
CONTACT: SOLAVI S.A.
570 Presidente Roque Saenz Pena
Buenos Aires
Argentina
Mr. Alberto Abraham Forman
64 Carabobo
Buenos Aires
Argentina
SOUTHERN WINDS/LAFSA: Signs Six-month Accord With Authorities
-------------------------------------------------------------
Argentine government authorities, including president Nestor
Kirchner, last week signed a six-month accord between local
airline Southern Winds (SW) and start-up state-owned carrier
Lineas Aereas Federales, or LAFSA. The accord establishes that
the government will pay up to ARS3.2 million (US$1.08 million) a
month for fuel and will also be responsible for the salaries.
Some 850 former LAPA and Dinar employees will be hired gradually,
while the operation expands with new aircraft.
The recently signed accord only covers the general aspects of the
deal and leaves the practical matters - business plan, aircraft,
etc - to three annexes. Official sources pointed out that
although important parts of these annexes are ready, others are
still to be defined.
Julio De Vido, Minister of Federal Planning, announced that LAFSA
and SW would fly together to Tucuman, Salta, Rio Gallegos,
Ushuaia, Calafate, Trelew, Comodoro Rivadavia, Rio Grande, Bahia
Blanca, Resistencia and Corrientes (all cities in Argentina). The
alliance would gradually acquire 10 planes.
One issue that needs to be worked on is the fleet, since the term
of the agreement - 180 days - seems too short for SW to commit to
incorporate 10 planes, taking into account LAFSA may be
privatized and become an independent company in a few months
term.
TELECOM ARGENTINA: Struggles To Outline Definite Debt Proposal
--------------------------------------------------------------
Telecom Argentina is having some troubles in outlining a definite
proposal for its creditors and finding a solution for its US$3.2
billion debt.
Even though the Company had not announced an official schedule,
it was expected to present a debt-restructuring offer in
September. But the complexity of its talks with creditors will
delay the restructuring at least until the end of November.
Several issues contributed to this delay. During the first stage
of the restructuring, a cash tender offer, Telecom only managed
to repurchase 9% of its debt, while it aimed at a 25%. As a
result, it has to refinance a sum that is much higher than
expected, which is making the deal harder. The appreciation of
the Euro against the US dollar also made matters worse for
Telecom, since the company has a big part of its debt denominated
in Euros. These issues and the result of the talks with the most
important creditors will influence the Company's proposal.
Although Telecom hasn't released details of the negotiation, it
is said it will try to agree with major creditors first and tie
its offer to an out-of-court agreement (APE) so that the agreed
conditions become due to all the creditors.
CONTACT: TELECOM ARGENTINA STET - FRANCE TELECOM SA(TELECOM)
Alicia Moreau de Justo 50, 10th Floor
Capital Federal (1107) Repoblica Argentina
Phone: +54 11 4968 4000
Home Page: http://www.telecom.com.ar
Contacts:
Alberto J. Ricciardi, Chief Financial Officer
Elvira Lazzati, Finance Director
Pedro Insussarry, Investor Relations Manager
Phone: (5411) 4968-3626/3627
Fax: (5411) 4313-5842/3109
Email: inversores@intersrv.telecom.com.ar
* Issues Holders Notice of Argentine Floating Rate Bonds Due 2023
-------------------------------------------------------------
Pursuant to Condition 6(b) of the Terms and Conditions of the
Bonds (the "Terms and Conditions"), Citibank N.A., as Fiscal
agent (the "Fiscal Agent") has, at the request of the holders of
at least 25% of the principal amount outstanding of the Bonds,
instructed the federal Reserve Bank of New York, as Collateral
Agent, to liquidate the necessary amount of collateral to allow
the Fiscal Agent to pay the interest payment that was due on the
Bonds on May 31, 2003.
Pursuant to Condition 2(c) of the Bonds, the Fiscal Agent has set
September 18, 2003 as the new record date (the "New Record Date")
for the payment of the above interest.
Payment will be made to the persons in whose name the Bonds are
registered at the close of business in New York City as of the
New Record Date. Pursuant to Condition 2c, payment will be made
on September 25, 2003, five Business Days (as defined in the
Terms and Conditions) after the New Record Date.
===========
B R A Z I L
===========
BCP: America Movil's Acquisition Neutral to Credit Quality
----------------------------------------------------------
Fitch Ratings views America Movil, S.A. de C.V.'s (America Movil)
offer to acquire BCP, S.A. (BCP) as neutral to its credit
quality. Fitch maintains a 'BBB' foreign currency rating and a
'BBB+' local currency rating to the senior unsecured debt of
America Movil. The Rating Outlook for these ratings is Stable.
Fitch views the proposed acquisition as strategically positive.
The acquisition will further expand America Movil's presence in
Brazil and enhance its position as one of the largest wireless
operator in the country. The acquisition will add 1.7 million
subscribers to the company's existing 6.7 million subscriber base
in Brazil, strengthening the company's position as the second
largest wireless provider. Operating synergies are also available
by combining operations from various contiguous service
territories in and around the State of Sao Paulo and the Sao
Paulo Metropolitan area. The acquisition will increase America
Movil's geographical coverage in Brazil and will bring it closer
to building a nationwide network.
Fitch expects the transaction to be financed with America Movil's
sizeable cash balances of US$1.2 billion at June 30, 2003, which
would increase net debt by US$625 million. Pro forma leverage
measured by net debt-to-EBITDA should increase to 1.3 times (x)
from 1.1x. Interest coverage should remain stable or slightly
improve with the additional EBITDA generation from BCP. The
company may add some to gross debt to replenish cash balances in
the near term. Interest coverage should remain consistent with
the rating category; EBITDA-to-gross interest was a strong 8.6x
for the full year ending 2002 and 7.8x for the 6 months ending
June 30, 2003. BCP currently generates approximately US$400
million in annual revenues and US$150 million in EBITDA. BCP is
expected to be free cash flow positive and self funding with
capex expected to be less than US$75 million annually.
The acquisition will further diversify America Movil's revenue
and cash flow stream beyond Telcel, its core Mexican wireless
operations. The addition of BCP increases the America Movil's
exposure to higher risk, lower rated countries that are
incorporated into our local currency rating of 'BBB+'.
Nevertheless, the company's international diversification
provides it with important cash flow and currency
diversification. The combination of international diversification
and high offshore cash balances, generally more that $200
million, lowers foreign transfer and convertibility risks
consistent with Fitch's foreign currency rating of 'BBB'.
On August 29, 2003, America Movil announced that it will acquire
Brazilian wireless provider BCP for a price of US$625 million.
The acquisition represents an acquisition value of approximately
US$368 per subscriber and 4.2x EBITDA. As part of the
transaction, America Movil has given Brazilian telecommunications
provider Telemar Norte Leste S.A. an option to acquire an
unspecified stake in BCP; providing the opportunity for
additional sector consolidation and synergies. The acquisition of
BCP is the latest in a string of acquisitions that America Movil
has completed throughout the Latin American region as part of its
growth strategy over the past two years, including most recently
BSE, a former affiliated company of BCP.
America Movil's acquisition strategy thus far has been balanced
and has not resulted in a deterioration of credit protection
measures. Strong cash flow generation has allowed America Movil
to complete several acquisitions predominately with internal cash
flow, thus avoiding increasing debt leverage levels. Over the
past two years, Debt/EBITDA has remained below 2x while
EBITDA/Interest has ranged between 7-9x. Our ratings incorporate
the expectation of possible additional modest international
acquisitions.
America Movil is the largest provider of wireless services in
Mexico. Through its Telcel unit, the company has 21 million
subscribers and an estimated 77% market share. Telcel generates
approximately two thirds of America Movil's consolidated cash
flow. In total, America Movil is composed of subsidiaries in more
than seven countries in Latin America with more than 36 million
subscribers. The company's major investments outside Mexico are
located in Brazil, Colombia, Ecuador and Guatemala. These
business units are EBITDA positive and largely self-funding.
During the first six months of 2003, operations outside Mexico
accounted for 36% of America Movil's revenues and 29% of EBITDA.
CONTACT: Guido Chamorro
Chicago
Phone: +1-312-368-5473
Sergio Rodriguez, CFA
Monterrey
Phone: +011 528 18 335-7179
Media Relations:
James Jockle
New York
Phone: +1-212-908-0547
EMBRATEL: Market Participants Worried About Plan To Purchase ATTL
-----------------------------------------------------------------
Embratel Participacoes SA's aggressive plan to buy bankrupt AT&T
Latin America Corp. (ATTL) for an undisclosed sum indicates a
sharp turnaround in the Company's fortune over the past year, Dow
Jones suggests, citing market participants.
Nevertheless, the market participants remain worried about a
company that's saddled with BRL3.4 billion in debt and doesn't
have the firepower to put together a coherent strategy in a
region where competition is fierce.
"I have my doubts about this deal as I am not sure this is the
right strategy for Embratel," said Alexandre Constantini of Bear
Stearns in Brazil. "I can't deny that Argentina and Chile aren't
interesting markets but there's much competition. I would prefer
it if Embratel focused on Brazil," he added.
Embratel says the purchase could take a couple of months to close
and is subject to factors including U.S. Bankruptcy Court
Approval. But there are doubts about how Embratel hopes to build
a regional presence with ATTL. There's also much concern about
the impact of the purchase on Embratel's debt profile.
For now, financial data on ATTL is sketchy, says Dow Jones.
According to the last fully disclosed earnings release, ATTL's
debt totaled US$849.1 million as of Sept. 30, 2002. If it's
anywhere near that size today, or larger, it could nearly double
Embratel's existing debt.
SABESP: Announces Negotiations With San Bernardo de Campo
---------------------------------------------------------
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), hereby announces the following
relevant notice:
As required by CVM Instruction No. 358, dated Jan. 3, 2002,
COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO -- SABESP
hereby announces that it is in negotiations with the Municipality
of Sao Bernardo do Campo as regards the transfer of water and
sewage services and the balance of the Municipality's debt with
SABESP.
Further details will be defined at an Extraordinary Shareholders
Meeting to be convened at a future date to approve the above-
mentioned negotiation in accordance with applicable law.
CONTACT: Sabesp
Investor Relations:
Helmut Bossert
Phone: 011-5511-3388-8664
Email: hbossert@sabesp.com.br
Marisa Guimaraes
Phone: 011-5511-3388-9135
Email: marisag@sabesp.com.br
Email: www.sabesp.com.br
TELEMAR: Anatel Orders Increased Intelig Interconnection
--------------------------------------------------------
Brazil's telecom regulator Anatel ordered fixed line operator
Telemar to increase its interconnection capacity with rival
Intelig in Rio de Janeiro, Belo Horizonte, Salvador, Recife and
Fortaleza, reports Business News Americas, citing a statement
from Intelig.
The two companies have been in talks over the interconnection
since June, but hasn't reached an agreement yet. Anatel said that
the delay could harm customers' interests and the competitiveness
in the sector.
Intelig has already signed agreements with Brasil Telecom and
Telesp Celular. The Yankee Group analyst Fabio Zaffalon said that
the Intelig's plan to launch local telephony next month is likely
to be difficult for the Company as it will be the third or fourth
player to enter the regions. Intelig said it needs extra
interconnection to start offering the said services.
Recently, Anatel ruled in favor of Embratel in squabbles over
Telemar's allegedly giving illegal discounts to the latter's data
subsidiary for the lease of its last-mile network. The regulator
warned that Telemar could face a BRL106,000 fine daily if it
continues with the illegal activity.
CONTACT: Telemar Norte Leste SA
Rua Humberto de Campos, 425-8
andar
Leblon
22430-190 Rio de Janeiro - RJ
Brazil
Phone: +55 21 3131-1205
Fax: +55 21 3131-1144
Home Page: http://www.telemar.com.br
Contacts:
Ronaldo I. dos Santos Pereira, Chairman
Marcos Grodetzky, Finance Director
=========
C H I L E
=========
COEUR D'ALENE: Announces Public Offering
----------------------------------------
Coeur d'Alene Mines Corporation (NYSE: CDE) announced Thursday
that it will be filing a preliminary prospectus supplement with
the Securities and Exchange Commission relating to a proposed
public offering of 20,635,000 shares of its common stock. Coeur
has also granted the underwriters a 30-day option to purchase up
to an additional 3,095,250 shares of common stock at the public
offering price to cover over allotments, if any.
The offering is being managed by CIBC World Markets. A copy of
the prospectus related to the offering can be obtained, when
available, from CIBC World Markets by e-mail:
useprospectus@us.cibc.com or fax: 212-667-6136.
The net proceeds will be used for exploration and development
activities, debt reduction, acquisitions, and general corporate
purposes.
Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile and Bolivia.
CONTACT: Tony Ebersole, Director of Investor Relations
Phone: 208-665-0335
TELEFONICA CTC: Sells Health Unit, Reports Higher Market Share
--------------------------------------------------------------
Telefonica CTC Chile's health Services subsidiary, Istel
(isapre), was sold to Consalud (isapre), reports South American
Business Information. The sale was sealed for the price of CLP167
million.
The health services sector's regulatory agency said that every
measure was taken to avoid causing losses to customers.
In the meantime, CTC said that it reached the 100,000 mark in the
number of ADSL broadband connections. Another report from the
same source cited a Company statement saying CTC has increased
its share in the domestic broadband market to 36%.
=============
J A M A I C A
=============
C&WJ: Oceanic Refuses To Accept Defeat
--------------------------------------
Oceanic Digital is not giving up easily on its legal battle
against Cable & Wireless Jamaica (C&WJ), the Jamaica Gleaner
indicates.
Oceanic had sued C&WJ after the latter took steps to prevent
Oceanic from terminating incoming overseas traffic on its
network, but to Oceanic's disappointment, the Supreme Court ruled
in favor of C&WJ last Thursday.
In an effort to bar C&WJ from cutting inter-connection with
Oceanic's circuits, Oceanic filed an appeal with the Supreme
Court.
In a press release Tuesday, Oceanic said its right to bring
international telephone calls into Jamaica and to have those
calls terminated on Cable & Wireless telephone systems, will soon
be dealt with at a trial where all the facts can be presented and
heard in open court.
A Cable & Wireless victory will result in Oceanic paying
additional amounts to C&WJ for all telephone calls, both local
and international, that originate or terminate on C&WJ's network.
C&WJ: Raises Rates of Domestic Telephone Calls By 30%
-----------------------------------------------------
CABLE & Wireless Jamaica (C&WJ) implemented Monday a 30% increase
in the prices of domestic telephone calls as part of a measure to
re-balance revenues.
According to the Jamaica Gleaner, the revised rates will see
callers using the international direct dialling service paying a
reduced flat fee of $16.50 per minute for all zones except Cuba.
At the same time, companies using domestic toll free lines will
now be required to pay increases ranging from a low of 100% to a
high of 575% for the service.
David Geddes, communications manager at the Office of Utilities
Regulation (OUR), said the revised rates are based on aggregate
price movements approved by the regulatory body under the price
cap regime for C&WJ over a four-year period.
While overseas calls have been reduced to $16.50 per minute and
will be billed per second, C&WJ announced that operator assisted
calls to the overseas countries will now be billed at $49.50 for
the first three minutes or part thereof and $16.50 per minute for
each additional minute or part thereof.
Charges for calls to the United States, Canada and the United
Kingdom made using the Company's premium WorldTalk calling cards
have also been reduced by 22% from $23 per minute to $18 per
minute. However, domestic calls made using the WorldTalk calling
cards have been increased by between 33 - 50%.
Calls to Caribbean countries, exept Cuba, have also been reduced
to $18 per minute. Direct dialled calls to Cuba are to be billed
at $66 per minute, while operator assisted calls will attract a
charge of $198 for the first three minutes or part thereof and
$66.50 per minute for each additional minute or part thereof, the
Company said.
The rates on select speeds of international leased circuits over
the Maya 1 system are to be reduced by 20%, C&WJ said.
===========
M E X I C O
===========
ALESTRA: Follows Telmex Lead, Won't Hike Rates
----------------------------------------------
Mexican long distance operator Alestra S. de R.L. de C.V. said it
will not increase its rates following a recent announcement made
by Tel,fonos de Mexico (Telmex) to leave its rates for local and
long-distance calls unchanged.
South American Business Information relates that the Company's
competitor, Axtel has also decided to stay in line with Telmex.
Telemex offers calls at 1.40 pesos (US$0.12) after the 100 free
calls, while the basic monthly fee remains at 156.55 pesos
(US$14.43), says the report.
Axtel Communications Director Jose Manuel Basave said, ""We have
some differences from Telmex and other tariffs that are the same
because they are regulated by the Federal Telecommunication
Commission (Cofetel). We have 100 free calls, but also have a
service of 500 pesos (US$46.11) for unlimited local calls."
"If you do something different you are out of the market, we must
maintain our prices," the report quoted sources at Alestra as
saying.
Alestra is currently undergoing restructuring and has recently
scheduled a noteholders' meeting for a cash tender offer.
AT&T has a 49% stake in Alestra. An earlier report from the
troubled Company Reporter - Latin America indicates that the
Company has reached an agreement with Mexico's WalMart chain to
distribute AT&T cards at their stores.
Onexa - a 50:50 joint venture between local bank BBVA Bancomer
and Mexican industrial group Alfa - holds the other 51% in
Alestra.
CONTACT: Alestra, S. de R.L. de C.V.
Sergio Bravo
Phone: 011 528 18 625 2269
Email: sbravo@alestra.com.mx
ALESTRA: Largest Creditors Support Latest Restructuring Plans
-------------------------------------------------------------
"Many of our most important bond holders, including UBS, Fintech,
and Banco Inbursa have told us of their desire to participate in
the present offer," Business News Americas quoted Alestra CFO
Patricio de la Garza as saying at a bondholders meeting. The
bankrupt long distance operator has recently presented its plans
to restructure US$570 million of debt.
"We hope to reach a participation of 90% [of Alestra debts], but
if we don't reach that our alternative option is a prepackaged
bankruptcy plan," the official added. UBS, Fintech, and Banco
Inbursa are among the Company's largest creditors.
The offer, which expires on October 2, asks creditors to exchange
US$1,000 of existing 12 1/8% notes due 2006 and 12 5/8% notes due
2009 for either US$1,060 of new senior notes due 2010 or a cash
payment of US$550, or a combination of the two, said the report.
CFE: More Power Outages Possible
--------------------------------
A spokesperson for Mexico's state power company, CFE warned that
the power outage that hit the country on Tuesday could happen
again. Business News Americas reports that damage in CFE's Ticul
I substation caused the four-hour power failure.
The source said that two "strong discharges" hit the substation
in Yucatan, which affected the Company's power plants in
Campeche, Tabasco and Chiapas. Over two million users throughout
Mexico were affected by the blackout.
The spokesperson pointed out that the large-scale outages that
recently struck Canada, the United States and the United Kingdom
shows that no part of the world is immune to such problems.
Local newspaper La Reforma said that the economic impact of
Tuesday's outage has not been quantified yet.
CONTACT: COMISION FEDERAL DE ELECTRICIDAD
Rio Rodano 14, Col. Cuauhtemoc
06598 Mexico, D.F., Mexico
Phone: +52-55-5229-4400
Fax: +52-55-5310-4614
Home Page: http://www.cfe.gob.mx
Contacts:
Alfredo Elias Ayub, General Director
Arturo Hernandez Alvarez, Director of Operations
Francisco J. Santoyo Vargas, Director of Finance
GRUPO TMM: Responds to KCS Lawsuit
----------------------------------
Grupo TMM, S.A. (NYSE:TMM) (BMV:TMM A; "TMM" or "the company");
announced Thursday that Kansas City Southern ("KCS") has
initiated a lawsuit in Delaware state court seeking a preliminary
injunction against the company. The suit seeks to impose
restrictions on Grupo TMM pending the outcome of the arbitration
or other dispute resolution process under the Acquisition
Agreement, which the company terminated following the vote of its
stockholders against approval of the agreement. Grupo TMM
believes that KCS's lawsuit is without merit and will vigorously
defend the action through all available legal means.
Grupo TMM looks forward to presenting its case to the court in
Delaware. The company believes KCS is seeking to create
uncertainty for Grupo TMM and impede its continued efforts to
restructure its outstanding indebtedness. Grupo TMM's
stockholders exercised their legal rights to vote against the
approval of the Acquisition Agreement, and that is not a fact
that KCS can change through this litigation. The company TMM
remains confident that once all of the facts have been presented,
Grupo TMM will prevail both in defeating KCS's motion for an
injunction and in any arbitration of this dispute.
Headquartered in Mexico City, Grupo TMM is a Latin American
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
Brad Skinner, Senior Vice President
Investor Relations
Phone: 011-525-55-629-8725 or 203-247-2420
Email: brad.skinner@tmm.com.mx
Marco Provencio
Media Relations, Proa/StructurA
Phone: 011-525-55-629-8708 and 011-525-55-442- 4948
Email: mp@proa.structura.com.mx
Dresner Corporate Services
(general investors, analysts and media)
Kristine Walczak
Phone: 312-726-3600
Email: kwalczak@dresnerco.com
INNOVA: $200 Million Senior Unsecured Notes Rated 'B+' by S&P
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned Thursday its 'B+'
rating to the proposed $200 million senior unsecured notes due
2010/2013 to be issued by Innova S. de R.L. de C.V. (Innova)
under Rule 144A/Reg S with Registration Rights. The proceeds will
be used to partially refinance the company's US$375 million
senior notes due in 2007.
The company's local and foreign currency corporate credit ratings
are affirmed. The outlook is positive.
At June 30, 2003, Innova's total debt (including shareholder
loans and satellite lease payments) was US$910 million.
The ratings on Innova reflect strong competition from cable
operators, some of which are undertaking digital upgrades;
financial risk from the company's heavy subscriber acquisition
spending; the absence of positive free or discretionary cash
flow; negative equity; high leverage in the medium term; and a
significant currency mismatch as all of its debt and a
significant amount of its programming and overall costs are
dollar denominated, while 100% of its revenues are peso based.
These factors are partially mitigated by the company's position
as the largest provider of pay-TV services in Mexico, consistent
subscriber growth, positive developments on the DTH competitive
front, improving cash flow and credit measures, and business and
financial support from its key shareholders, 60% owner Grupo
Televisa S.A. (BBB-/Stable/--) and 30% owner News Corp. Ltd.
(BBB-/Stable/--), which consider Innova an important investment.
"Innova's operating momentum should support free cash flow
increases and credit measure improvement," said credit analyst
Patricia Calvo. "An upgrade would be contingent on sustained
healthy profitability and cash flow, the magnitude of which
should become clearer over the next 12-18 months."
ANALYST: Patricia Calvo
Mexico City
Phone: (52) 55-5279-2073
INNOVA: Moody's Assigns B2 Rating To Proposed Debt Offering
-----------------------------------------------------------
Ratings agency Moody's Investors Service said it assigned a B2
Rating to the proposed new offering of senior unsecured debt by
Innova S. de R. L., and indicated (*) that existing ratings would
be upgraded once the proposed offering will be successfully
completed.
According to the agency, the rating outlook is stable proforma
for the proposed transactions (currently positive at B3 rating
levels).
- Senior Implied Rating -- B3 (* to be raised to B2)
- Senior Unsecured Issuer Rating -- B3 (* to be raised to B2)
- US$375 million of 12-7/8% Senior Unsecured Notes due 2007 -- B3
(* to be raised to B2)
- Rating Outlook -- Positive (* to be changed to Stable)
- Approximately US$200 million of new Senior Unsecured Notes due
2010 or 2013 -- B2 (assigned prospectively)
Innova plans to issue an estimated US$200 million of new Senior
Unsecured Notes which will be used to replace part of its
existing US$375 million of 12-7/8% Senior Unsecured Notes due
2007.
The new notes are expected to rank pari-passu with the existing
notes in all respects, and have substantially similar terms and
conditions associated with the same.
This refinancing will be followed by a formal capitalization of
shareholder loans and interest payments amounting to around
US$380 million.
Notably, an event of default will occur under the indenture of
the proposed new notes if this capitalization does not take place
after 120 days of issuance.
PEMEX REFINACION: To Use Energy Solutions' Real-Time Model
----------------------------------------------------------
Pemex Refinacion, the refining and refined products branch of the
national oil company of Mexico, will use Energy Solutions' world-
class pipeline management software on its Salamanca- Guadalajara
pipeline.
Constructor Aleman e Hijos (CAH), selected by PEMEX REFINACION as
the principal contractor, has partnered with Foxboro's SCADA
system and Energy Solutions' ESIPAS real-time modeling software
for this crucial project.
Energy Solutions will supply its best-in-class real-time modeling
system with applications for leak detection and location, line
pack management, batch tracking and scraper tracking to PEMEX
REFINACION.
Mr. Javier Ortiz, Chief of SCADA Projects, said, "PEMEX
REFINACION has committed itself to preventing environmental
damage and product loss in its pipeline network. That is why it
is so important to have a very robust and reliable technology,
such as the one provided by Energy Solutions." The Salamanca
project is the first of a series of upgrades that will implement
the necessary improvements to prevent leaks and other product
losses.
The pipeline runs more than 340 km between Salamanca and
Guadalajara, with a 44 km branch running from Degollado to
Zamora. It supplies refined products to storage and distribution
terminals at Zamora, El Castillo, and Zapopan.
Rene Varon, Vice President of Sales-Americas of Energy Solutions,
said, "Energy Solutions is proud to be a part of PEMEX's plans to
improve its safety and security. Our top-of-the-line leak
detection and location systems will help PEMEX ensure that
product losses damage neither the environment nor PEMEX's bottom
line. We expect our relationship with PEMEX to be long and
fruitful."
About PEMEX REFINACION
PEMEX REFINACION is a branch of Petroleos Mexicanos, the national
oil company of Mexico. Its businesses include petroleum refining
and the distribution, storage, and direct sales of refined
products. The company also administers franchise operations for
Pemex-branded service stations.
For more information about PEMEX REFINACION, please visit PEMEX's
website at http://www.pemex.com.
About Invensys Foxboro
Invensys Foxboro is part of the Invensys Production Management
Division and provides world-class Foxboro information technology,
automation, and process solutions to a wide range of
manufacturing applications for the cement, chemical, metals &
mining, oil & gas, pulp & paper, power, pharmaceutical and
specialty chemicals.
For more information about Invensys Foxboro, please visit their
website at http://www.foxboro.com/.
About Energy Solutions
Energy Solutions is the leading global supplier of pipeline
management software to the oil and gas industry. Energy Solutions
provides total solutions, from front-end design to pipeline
optimization, leak detection, advanced scheduling and contract
management, to more than 500 clients in over 70 countries.
For more information about Energy Solutions, please visit our
website at http://www.energy-solutions.com.
=================================
T R I N I D A D & T O B A G O
=================================
BWIA: Steps Up Efforts To Oust Rival
------------------------------------
BWIA has called for an unprecedented public hearing in its
pursuit to oust Caribbean Star, a relatively new airline, which
began flying regional routes in October 2000, off Tobago air
bridge.
Citing Ram Bissessar, chairman of the Air Transport Licensing
Authority (ATLA), the Antigua Sun reports that the call for a
public hearing was made at a recent meeting of the Authority.
Tobago Express and a Tobago hotelier, Allan Clovis, have joined
BWIA in its call, the report adds.
No date has been fixed for the hearing yet but according to
Bissessar, it will be held by the middle of this month.
This is the first time in the aviation history of the country
that a public hearing will be called to resolve a licensing
issue.
Antigua-based Caribbean Star was granted a provisional license by
ATLA to operate some four and a half flights a day on the air
bridge earlier this year.
At that time, there were howls of protests from both BWIA and
Tobago Express in which it was claimed that there was enough
capacity on the route and there was no need for an additional
carrier being given rights to operate, especially since that
carrier was foreign owned.
However, officials at the Tobago House of Assembly and passengers
who use the air bridge regularly have been full of praise for the
service now being offered by Caribbean Star, more so when it came
to holiday weekends and there was absolute need for increased
capacity on the route.
During the recent Independence weekend, Caribbean Star mounted
extra sections to handle the number of requests they had received
for seats on the air bridge. A similar situation existed over the
Emancipation weekend.
A spokesman for Caribbean Star said that his airline was able to
provide enhancements, which Tobago Express was not able to. He
explained that Caribbean Star's flights are available to travel
agents locally as well as worldwide and this assists Tobago in
selling its tourism product anywhere in the world.
If the result of the public hearing demands that the provisional
license granted Caribbean Star were revoked, it would mean
decreased capacity on the air bridge, which would become evident
during the busier travel seasons and holiday weekends.
CONTACT: British West Indies Airways
Phone: + 868 627 2942
E-mail: mailto:mail@bwee.com
Home Page: http://www.bwee.com/
TRINMAR: Workers Continue With Protest Action, Make More Demands
----------------------------------------------------------------
Operations at Trinmar remained at a standstill Wednesday as
workers continued to stay off the job to press their demands on
several issues. And the conflict is getting worse, The Trinidad
Express indicates, as the administrative staff at the Company's
head office at Point Fortin threw in their support with the
production and other workers.
Trinmar workers shut down operations at the plant Tuesday morning
to protest a stalemate in negotiations for a new collective
agreement. Operations were brought to a complete halt after
workers learned that parent company, Petrotrin, had decided to
dispense with an agreed governance model for Trinmar and fully
subsume its operations.
Ancil Roget, branch president of the Oilfield Workers Trade
Union, who led the protest, said they now understand that Trinmar
is to be operated as a department of Petrotrin.
State-owned oil company Petrotrin is the parent company of
Trinmar.
Roget said the union has been involved in negotiations with the
Company since November 2002, for a new collective agreement for
the period May 2002 -2005. After 32 meetings, the Company has put
on the table a wage increase of 5%. The union has asked for a 22%
increase.
Roget said Trinmar's offer "is provocative. The company does not
mean well and has little intention to settle negotiations."
Meanwhile, the workers are now also demanding the removal of
Malcolm Jones, executive chairman of Petrotrin.
In an interview with the Express, Roget said: "The workers are
calling for the removal of Mr, Jones because his action is
against the interest of workers."
Roget said Jones made structural changes to Trinmar that would
make the company a department of Petrotrin. He said the change
was made without any consultation with workers.
=================
V E N E Z U E L A
=================
PDVSA: Venezuela Goes Forward With Offshore Development Plans
-------------------------------------------------------------
"Venezuela has an ample business portfolio to cover offshore oil
and gas exploration and production in its Atlantic and Caribbean
continental shelves, where discovery possibilities total some 100
trillion cubic feet of gas and 18 billion barrels of crude oil",
according to Aires Barreto, vice-president of Petrleos de
Venezuela, S.A. (PDVSA) in his presentation "PDVSA: a competitive
and sustainable corporation in the international energy
business", at a Master Class organized by the Aberdeen City
Council.
The Venezuelan delegation to Europe's most important conference
and exhibition on offshore operations, Offshore Europe
(www.offshore-europe.co.uk), was headed by Luis Vierma, Deputy
Minister of Hydrocarbons and PDVSA director, with Aires Barreto,
vice-president of PDVSA; Carlos Barbieri, general manager of the
Plataforma Deltana project; Juan Baiocco and Alberto Soto,
executives of the PDVSA Domestic Capital Formation management
unit; C,sar Hern ndez, PDV (UK) corporate manager; and Antonio
Vincentelli, vice-president of the Venezuelan Petroleum Chamber.
The PDVSA agenda for Offshore Europe 2003 includes a number of
presentations in the Master Class, sponsored by the Aberdeen City
Council; the forum "Venezuela: Offshore Development", organized
by PDVSA, with the participation of its Shell and Statoil
partners and Venezuelan industry; a technical seminar on LNG for
medium and small enterprises at the Eurocenter Al-Invest Business
Meetings; and a press conference, together with meetings of
Venezuelan businessmen with international companies that have
investments in the country or are considering entering into them.
This year's Offshore Europe brings together more than 1,600
companies and 25,000 attendants from 72 countries. Barreto
confirmed that the Venezuelan energy corporation is promoting
offshore business cases, with emphasis on the creation of
association mechanisms which would bring together medium-sized
and small European companies with Venezuelan entrepreneurs,
thereby supporting PDVSA's domestic capital formation efforts.
This initiative seeks to strengthen the competitiveness of the
Venezuelan private goods and services sector related to the oil,
gas and petrochemical industries.
"Our presence at this event responds to our special interest in
channeling the interest of medium-sized and small foreign
companies so that they, jointly with Venezuelan entrepreneurs,
can establish and consolidate a supplies chain aimed at meeting
the needs of natural gas developments in Venezuela's continental
shelf, particularly those already going forward also in the east
of the country, such as the Plataforma Deltana and Mariscal Sucre
(LNG), with the idea of replicating the successful North Sea
experience of Aberdeen's Offshore Supply Office", Aires Barreto
said.
Plataforma Deltana and Mariscal Sucre
Over the past three years PDVSA has been working on the
Plataforma Deltana project, conceived for the exploration and
development of one of Venezuela's most promising offshore gas
basins, covering a total area of 48,000 square kilometers east of
the Orinoco river basin, in the Atlantic ocean. Of this area,
some 25,000 square kilometers are in depths greater than 1,000
meters.
Speaking of the Plataforma Deltana project, Carlos Barbieri, its
general manager said: "we currently have an area of 23,000 square
kilometers under study. This is close to the Venezuela and
Trinidad-Tobago border, where we estimate some 38 trillion cubic
feet of natural gas and 3.2 billion barrels of crude are to be
found in place. We have so far invested $180 million to generate
7.6 trillion cubic feet of proven, probable andpossible natural
gas reserves".
The selection of international partners for Areas 2 and 4 was
completed at the end of 2002, and the respective exploration
licenses were awarded to ChevronTexaco and Statoil in February
2003. On 29 August last, 14 companies were present to receive the
framework contract covering the licenses for Areas 3 and 5, which
will be awarded before the end of the year. Worthy of note is the
participation of a consortium of Venezuelan companies as a
potential minority partner.
With regard to the Mariscal Sucre project (LNG), its partners are
PDVSA Gas (60%), Shell (30%), Mitsubishi (8%), with the remaining
2% being reserved for the future inclusion of Venezuelan
concerns. On this point, Barbieri stated that: "the exploration
information available on the fields of this project, found
offshore to the north of the Paria Peninsula, indicate non-
associated gas reserves of between 12 and 14 trillion cubic feet.
Following the results of a technical study, which should be
completed by the end of 2003, a Joint Development Agreement will
be signed by the partners. The agreement considers a plan that
includes the production of one billion cubic feet per day of gas
to liquefy 4.7 million tonnes per annum of LNG for export and,
should it prove necessary, transfer 300 million cubic feet per
annum of natural gas to the Venezuelan domestic market".
The Plataforma Deltana and Mariscal Sucre developments, among
other oil and petrochemical projects, are part of a plan to build
a major industrial complex called CIGMA (Gran Mariscal de
Ayacucho Industrial Complex) in the Paria Peninsula, which will
enable PDVSA to hold a strategic position in the Atlantic basin's
LNG market. The Complex will enjoy the advantages of its
location, close to Giria, the only area in Venezuela's eastern
coastal region, which can provide flat land to build the planned
installations, together with water deep enough for large tanker
navigation.
A clear and coherent legal framework
Deputy Minister of Hydrocarbons and PDVSA Director, Luis Vierma,
highlighted the fact that: "the interest shown by the national
and international private sector in the Petrleos de Venezuela
business portfolio holds firm. At the close of the first half of
2003, over 500 leaders of the business, financial, government and
academic sectors had endorsed the various presentations made by
us in Caracas, Houston, London, Madrid and Washington, among
other cities. Moreover, 55 companies from 19 countries are taking
part in the Venezuelan petroleum industry as major players".
Vierma explained that this trust is based, among other aspects,
on a clear and coherent legal framework which includes modern
legal instruments, such as the Hydrocarbons Law, the Law of
Gaseous Hydrocarbons, bilateral agreements which do away with
double taxation, and the Investment Protection and Promotion Law.
"For the first time in the modern Venezuelan petroleum industry's
history, the opportunity to engage in the upstream hydrocarbons
business is open to the private national and international liquid
hydrocarbons business sectors, with a share that can reach up to
49%. Similarly, private participation can reach up to 100% in the
gas business as well as downstream activities, coal and
petrochemicals.
Vierma, who is also president of the Corporacin Venezolana del
Petrleo (CVP), reiterated that this PDVSA subsidiary had
recently undertaken the strategic and technical administration of
the exploration and production business ventures with third
parties, which involve 33 Operating Agreements, four Strategic
Associations in the Orinoco Belt, as well as three Exploration
and Production Risk Contracts with Shared Profits. He added that
"PDVSA will continue marketing the volumes produced and receiving
the corresponding dividends, because CVP is a subsidiary which
acts as an administration and control entity for the preservation
of PDVSA's solid financial position in the international
markets".
Maximizing the value of a natural resource Referring to Petrleos
de Venezuela's operational and financial position, Aires Barreto
emphasized that "we have returned to normal operations and are
making efforts to consolidate this stability after the
contingency faced during December 2002 and January 2003". In this
sense, he stated that at present Venezuela produced a total of
3.3 million barrels per day of crude, refined 1.1 million barrels
in its domestic system and exported 2.4 million barrels per day.
At the August closing, PDVSA sales revenues reached $11.9
billion, of which 88% had been invoiced, or $10.4 million. Of
this invoiced amount, 96% had been collected, or $10 billion.
Barreto added that the 2004-2009 Business Plan focused on
maximizing the value of the natural resource through four main
activities: exploration in the search for light and medium-
density crudes in traditional areas, as well as the development
of new areas on land and offshore with private capital
participation; monetization of heavy crudes; and an intensive
development of the gas business and downstream activities. "In
this way -Barreto said- we seek to strengthen the Corporation's
position as a secure supplier that is competitive, reliable and
sustainable".
Venezuela's crude reserves stand at 313 billion barrels (78
billion barrels of conventional crude reserves and 235 billion
barrels of extra-heavy Orinoco Belt crudes) and natural gas
reserves in the order of 148 trillion cubic feet. It can also
count on a total refining capacity of 3.28 million barrels per
day in 24 refineries (six in Venezuela, one in the Caribbean,
eight in the United States and nine in Europe)
PDVSA: Army General Suggests State Council Creation For Security
----------------------------------------------------------------
Venezuela's Army General Raul Baduel proposed the formation of a
state council to oversee the security of the country's state oil
company, Petroleos de Venezuela S.A.(PdVSA), government news
agency Venpres reports.
Recent reports indicate that the Company was victimized by
several incidents, which were pointed out as "sabotage" attempts.
The Company's El Palito refinery and the Chuao building were
damaged from blasts.
"The state is committed to establishing a security policy through
a program of activities designed to neutralize the forces that
are trying to weaken or destroy the nation," Business News
Americas cited Mr. Baduel as saying.
However, the officer did not give further details on the proposed
council. Business News Americas said that Mr. Baduel is
instrumental in restoring President Hugo Chavez to power after an
attempted coup that fizzled out earlier this year.
Venezuela was hit by a national strike that unsuccessfully sought
to oust Mr. Chavez. In the end, at least 18,000 PdVSA workers
were terminated and production was heavily affected. At one
point, the Company was down to only 10% of its capacity.
The Company is currently undergoing restructuring after it was
West and East divisions. A recent report from the Troubled
Company Reporter - Latin America quoted PdVSA president Ali
Rodriguez as saying the Company is expecting to sell some US$18
billion worth of crude this year, which signifies "total
recovery" from the damage wrought by the strike.
CONTACT: Petroleos de Venezuela S.A.
Apdo 169
Avenida Libertador La
Campina
Caracas
Venezuela 1010-A
Phone: +58 212 708 4111
Fax: +58 212 708 4661
Home Page: http://www.pdvsa.com
Contacts:
Ali Rodriguez Araque, Chairman
Jorge Kamkoff, Vice Chairman
Jose Rafael Paz, Vice Chairman
***********
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 * * *