/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/031028.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, October 28, 2003, Vol. 4, Issue 213 Headlines A R G E N T I N A AT&T LATIN AMERICA: Selects Telmex as Highest Bidder BALANCEADOS AYACUCHO: Receiver Closes Credit Check for Bankruptcy BALUMBA: Sells Conrad to PPE BECARPLAST: Court Assigns Receiver for Bankruptcy Proceedings BRILLOS: Credit Verifications in Bankruptcy Process Start CACONFI: Court Approves Creditor's Petition For Bankruptcy CP DEL PLATA: Individual Reports Due Today FRIGOSOL: Credit Authentication in Bankruptcy Process Closes GRANDELAR: Credit Check in Bankruptcy Ends December 19 HANKE CULCUY: To Undergo A Reorganization Process INSTITUTO CAIP: Seeks Reorganization LA EUSKARA: Individual Reports Due Today MADERA POSADAS: Files "Concurso Preventivo" Motion PETROBRAS ENERGIA: Places $100M of Notes on Local, Int'l Markets PRANA: Enters Bankruptcy on Court Orders PUBLICOLOR DIGITAL: Court Orders Bankruptcy REFRIGERACION TECNOLOGICA: Credit Verification Deadline Expires RVS: Accountant Serra Takes Over As Receiver TRANSUB: Enters Bankruptcy on Court Orders * Report on Argentine Electricity Sector -- S&P B E R M U D A LORAL SPACE: Bankruptcy Court Approves Sale To Intelsat B R A Z I L ELETROPAULO METROPOLITANA: Temporary Energy Sales Improve EMBRATEL: No Longer Expects to Acquire AT&T Latin America TELEMAR: Summary Of Notice To Shareholders C H I L E ENDESA CHILE: Ralco Plant Exceeds 90% of Work Project INVERLINK: Pizarro Seeks To Acquire Magister TELEFONICA CTC: Registers a Profit in the 3Q03 D O M I N I C A N R E P U B L I C * Fitch Downgrades the Dominican Republic's FC & LC Rtgs to 'B' M E X I C O DESC: Releases Results for the 3Q Ended Sep. 30, 2003 EMPRESAS ICA: Provides Update On Restructuring Plan EMPRESAS ICA: Announcement Doesn't Impact Ratings, Says S&P GRUPO IMSA: Announces Third Quarter 2003 Results GRUPO IUSACELL: Announces Results for the Third Quarter 2003 HYLSAMEX: Alfa Considers Options Regarding Ownership SANLUIS CORPORACION: Announceas 3Q 2003 Results P E R U PAN AMERICAN: Purchases Huaron Royalty T R I N I D A D & T O B A G O BWIA: Govt. to Introduce Drastic Actions To Address Woes - - - - - - - - ================= A R G E N T I N A ================= AT&T LATIN AMERICA: Selects Telmex as Highest Bidder ---------------------------------------------------- AT&T Latin America Corp. is pleased to announce that it has selected Telefonos de Mexico, S.A. de C.V. ("Telmex") as the highest bidder in an auction for substantially all of its assets. ATTL has entered into an agreement with Telmex to purchase such assets. The transaction is subject to the approval of the United States Bankruptcy Court for the Southern District of Florida, and the satisfaction of various customary closing conditions. A hearing to approve the agreement is scheduled to take place on November 3, 2003 in Miami, Florida. Throughout the sale process, ATTL will remain focused on meeting customer commitments, and ensuring the operational and financial objectives are met. About AT&T Latin America AT&T Latin America Corp., headquartered in Washington, D.C., is a facilities-based provider of integrated business communications services in five countries: Argentina, Brazil, Chile, Colombia and Peru. The Company offers data, Internet, voice, video- conferencing and e-business services. CONTACT: AT&T Latin America Corp. Cesar Amaro Phone: +1-011-562-241-4818 Email: cesar.amaro@attla.com Catherine Castro Phone: +1-202-689-6336 Email: catherine.castro@attla.com Home Page: http://www.attla.com BALANCEADOS AYACUCHO: Receiver Closes Credit Check for Bankruptcy ----------------------------------------------------------------- Ms. Angela Elma Miletti, receiver for Dolores-based company Balanceados Ayacucho S.R.L., closes the credit verification process for the Company's bankruptcy today. As ordered by the province's Court No. 2, which handles the Company's case, the receiver will prepare the individual reports. The court requires the receiver to file these reports on December 12 this year. After these are processed, the receiver will prepare the general report, which is to be submitted on February 27 next year. The Troubled Company Reporter - Latin America earlier reported that the informative assembly will be held on June 29 next year. Local news sources, however, did not reveal the meeting's venue. CONTACT: Balanceados Ayacucho S.R.L. Alem 941 Ayacucho, Dolores Angela Elma Miletti Mendoza 143 Dolores BALUMBA: Sells Conrad to PPE ---------------------------- American-based Park Place Entertainment (PPE) became the new owner of 80% of the famous hotel, Conrad, after it agreed to pay former owner Balumba a total of US$105 million for the debts. Baluma has got US$50 million worth of 'Obligaciones Negcociables (ON). Majority of these are in the hands of fund administrators and banks. PPE's proposal includes an extension in the payment of the debt from 2004 to 2010 with an interest rate of the 4.5 % plus Libor. The hotel, located in Punta del Este, Uruguay, is one of the most posh and high society summer resorts of the Argentineans. BECARPLAST: Court Assigns Receiver for Bankruptcy Proceedings ------------------------------------------------------------- Buenos Aires Court No. 4 assigned Mr. Pablo Ernesto Aguilar as receiver for the bankruptcy of local company Becarplast S.A., according to a report by local news source Infobae. Clerk No. 7 assists the court on this particular place, the report adds. The credit verification period will end on November 6 this year. Creditors must have their claims authenticated by the receiver before the said date. The purpose of this process is to ascertain the amount and nature of the Company's debts. The receiver will prepare the individual reports on the results of the verifications. After the reports are processed at court, the receiver will prepare the general report. The deadlines of the submission of these reports, however were not revealed by the report. CONTACT: Pablo Ernesto Aguilar Hipolito Yrigoyen 1516 Buenos Aires BRILLOS: Credit Verifications in Bankruptcy Process Start --------------------------------------------------------- The credit verification process for the bankruptcy of Buenos Aires company Brillos S.A. has begun. Local news source Infobae indicates that the receiver, Mr. Jorge Serrano, will close the process on December 23 this year. The Company enters bankruptcy on orders from the city's Court No. 6, which declared it "Quiebra". Clerk No. 12 assists the court on the case. The receiver is also required to prepare the individual and general reports for the process, but the report did not reveal the deadlines for filing of these reports. CONTACT: Brillos S.A. Parana 123 Buenos Aires Jorge Serrano Uruguay 662 Buenos Aires CACONFI: Court Approves Creditor's Petition For Bankruptcy ---------------------------------------------------------- A creditor's petition for the bankruptcy of Buenos Aires company Caconfi S.A. was approved by the court, relates Argentine newspaper La Nacion. The Company's failure to make debt payments prompted the creditor to file the petition. Insolvency Judge Paez Castaneda of the city's Court No. 21 assigned Mr. Juan Belli, a local accountant, as the Company's receiver. He will be verifying creditors' claims until March 15 next year. The receiver is also required to prepare the individual and general reports on the process, but the report did not mention whether the court has set the deadlines for the submission of these reports. CONTACT: Caconfi S.A. Ave Roque Saenz Pena 705 Buenos Aires Juan Belli 7th Floor Ave Santa Fe 960 Buenos Aires CP DEL PLATA: Individual Reports Due Today ------------------------------------------ The individual reports for the bankruptcy of Buenos Aires-based Clinica Privada del Plata S.A. are due for submission at the city's Court No. 3 today. The Company's receiver, Ms. Ana Maria Valera, prepared the reports after the credit verification process was completed earlier this year. The receiver will prepare a general report after the individual reports are processed by court. This report must be presented to the court on December 9 this year, the Troubled Company Reporter - Latin America earlier said. CONTACT: Ana Maria Varela Talcahuano 768 Buenos Aires FRIGOSOL: Credit Authentication in Bankruptcy Process Closes ------------------------------------------------------------ The deadline for the authentication of creditors claims for the bankruptcy of Frigosol S.R.L. expires today. An earlier report by the Troubled Company Reporter - Latin America indicated that creditors must present their proofs of claims to the Company's receiver, Ms. Silvia Guidice. Court No. 4 of the Civil and Commercial Tribunal of Catamarca issued the bankruptcy order, the report said. However, local sources did not mention whether the court has set the deadlines for the filing of the receiver's reports. CONTACT: Frigosol S.R.L. Catamarca 1398 Lanus Oeste Lomas de Zamora Silvia Giudice Belgrano 269 Lomas de Zamora GRANDELAR: Credit Check in Bankruptcy Ends December 19 ------------------------------------------------------ The credit verification process for the bankruptcy of Grandelar S.A. expires on December 19 this year. Creditors must present their claims to the Company's receiver, Ms. Sandra Dallo, for authenticated before the said date. Argentine newspaper La Nacion relates that Dr. Ferrario of the city's Court No. 6 approved a petition for bankruptcy filed by the Company's creditor, Cooperativa de Credito, Vivienda y Consumo Confiar Ltda. recently. Clerk No. 12, Dr. Mendez Sarmiento, assists the court on the case. CONTACT: Grandelar S.A. Diego de Rojas 2336 Buenos Aires Sandra Dallo 8th floor, Room C Tucuman 1711 Buenos Aires HANKE CULCUY: To Undergo A Reorganization Process ------------------------------------------------- Hanke Culcuy y Compania S.A., which is domiciled in the Argentine province of Santa Fe will undergo a reorganization process. Local news portal Infobae relates that Court No. 3 of the province's Civil and Commercial Tribunal approved the Company's motion for "Concurso Preventivo", paving the way for the reorganization. Mr. Daniel Francisco Piumetti, a local accountant was appointed as receiver for the process. Creditors have until November 3 this year to have their claims authenticated by the receiver. Failure to do so disqualifies them from payments the Company will make at the end of the process. Upon completion of the credit verifications, the receiver will prepare the individual reports, which are to be submitted to the court on December 16 this year. The general report is supposed to follow on February 27, 2004. The court has also called for an informational assembly to be held on August 13 next year. CONTACT: Hanke Culcuy y Compania S.A. Km 14 Ruta Nacional 19 San Agustin, Santa Fe Daniel Francisco Piumetti San Martin 2347 Buenos Aires INSTITUTO CAIP: Seeks Reorganization ------------------------------------ Buenos Aires mental institution Instituto Caip S.R.L. filed a motion for "Concurso Preventivo", relates local news source La Nacion. The Company, which specializes in child and adolescent mental care, stopped making debt payments last month. Insolvency Judge Taillade of the city's Court No. 20 handles the Company's case with assistance from Clerk No. 40, Dr. Perillo. The report, however, did not indicate whether the petition is likely to be approved or not. CONTACT: Instituto Caip S.R.L. Gurruchaga 742 Buenos Aires LA EUSKARA: Individual Reports Due Today ---------------------------------------- Court No. 2 of the Civil and Commercial Tribunal of Dolores in Argentina required the receiver of local company La Euskara S.A. to submit the individual reports today. Mr. Miguel Telese, the receiver, prepared the reports after completing the credit verification process 42 days ago. The Troubled Company Reporter - Latin America earlier revealed that the general report, which is to be submitted to the court on December 11, will be prepared after the individual reports are processed at court. CONTACT: La Euskaria S.A. Muniz 539 Dolores Miguel Telese Buenos Aires 595 Dolores MADERA POSADAS: Files "Concurso Preventivo" Motion -------------------------------------------------- Madera Posadas S.A., which is domiciled in Buenos Aires, is seeking court permission to reorganize. A report by local newspaper La Nacion indicates that the Company has submitted its motion for "Concurso Preventivo" at the city's Court No. 12, which is under Insolvency Judge Ojea Quintana. The Company, which sells and manufactures ceilings, iron straps, moldings and socles, stopped making debt payments on May 14 this year, the report adds without indicating whether the motion is likely to be approved or not. CONTACT: Madera Posadas S.A. Florida 336 Buenos Aires PETROBRAS ENERGIA: Places $100M of Notes on Local, Int'l Markets ---------------------------------------------------------------- Argentine energy company Petrobras Energia began to sell Friday some US$100 million in notes on local and international capital markets. According to Business News Americas, the Series R notes have a 9.375% annual coupon payable semiannually, and a 9.50% annual yield to maturity in 2013. Petrobras Energia will use the proceeds to cancel existing liabilities. The transaction, Petrobras Energia's first on international capital markets since Argentina's financial crash in 2002, comes amid a surge in demand for emerging market bonds. Low yields on debt in the U.S., Europe and Japan boosted emerging market corporate bond sales in the third quarter to US$7.7 billion from US$462 million in the year-earlier period. PRANA: Enters Bankruptcy on Court Orders ---------------------------------------- Dr. Paez Castaneda, insolvency judge for Buenos Aires' Court No. 21, orders the bankruptcy of local automotor dealer Prana S.A., reports Argentine newspaper La Nacion. The ruling came after the Company's receiver filed a motion for bankruptcy for nonpayment of debt. Working with Clerk No. 41, Dr. Melnitzky, the court gave creditors until March 16 next year to have their claims verified by the receiver, Mr. Juan Facoltini. The receiver's duties include the preparation of the individual and general reports, whose deadlines were not revealed. CONTACT: Prana S.A. Ave de los Constituyentes 4895 Buenos Aires Juan Facoltini 2nd Floor, Room 36 Bernardo de Yrigoyen 330 Buenos Aires PUBLICOLOR DIGITAL: Court Orders Bankruptcy ------------------------------------------- Buenos Aires Court No. 3 ruled that local company Publicolor Digital S.A. is "Quiebra", meaning, the Company is bankrupt. Working with Clerk No. 6, the court assigned Ms. Maria Centiempo as receiver for the process. To determine the nature and amount of the Company's debts, the receiver will validate creditors' proof of claims until December 23 this year. He will then prepare the individual reports on the results of the verification process and submit them to the court on March 10 next year. The general report is due for submission on April 28. This is prepared after the individual reports are processed at court. The Company's assets may then be liquidated to reimburse its creditors. CONTACT: Maria Cenatiempo Ave de Mayo 1365 Buenos Aires REFRIGERACION TECNOLOGICA: Credit Verification Deadline Expires --------------------------------------------------------------- Creditors of Buenos Aires' Refrigeracion Tecnologica S.A. must have their claims authenticated by the receiver, Mr. Natalio Kinsbruner, as the deadline expires today. Subsequently, the receiver will start preparing the individual reports, as ordered by the city's Court No. 26. After the reports are processed at the court, the receiver will prepare the general report. However, the deadlines for the submission of these reports were not revealed. The Troubled Company Reporter - Latin America earlier indicated that the Company started reorganization following approval of its motion for "Concurso Preventivo". CONTACT: Refrigeracion Tecnologica S.A. Ave. Gaona 1295 Buenos Aires Natalio Kinsbruner Marcelo T. de Alvear 1671 Buenos Aires RVS: Accountant Serra Takes Over As Receiver -------------------------------------------- Ms. Marta Susana Serra, an accountant from Buenos Aires, takes over as receiver for local company RVS S.A., which is currently undergoing the bankruptcy process. A report by Argentine newspaper La Nacion indicates that the credit verification period will end on February 5 next year. The city's Court No. 15 issued the bankruptcy order and assigned the receiver, the report adds. Clerk No. 29 works with the court on the case. In the meantime, the report did not indicate whether the court has set the deadlines for the filing of the receiver's reports. CONTACT: Marta Susana Serra Donato Alvarez 862 Buenos Aires TRANSUB: Enters Bankruptcy on Court Orders ------------------------------------------ Court No. 24 of Buenos Aires ordered the bankruptcy of local company Transub S.R.L. Argentine news source Infobae relates that the court, which works with Clerk No. 48 on the case, declared the Company "Quiebra". Mr. Hugo Edgardo Borgett, the Company's receiver, will verify creditors' claims until December 10 this year. This part of the bankruptcy process determines the nature and amount of the Company's debts. The individual reports must be presented to the court on February 23 next year followed by the general report on April 7. CONTACT: Hugo Edgardo Borgett Presidente Peron 863 Buenos Aires * Report on Argentine Electricity Sector -- S&P ----------------------------------------------- After a decade of a successful transformation, the Argentine electric industry is facing very high uncertainty that could affect electricity delivery to end-users in some regions of the country in 2004 and 2005. Interruption would be due mainly to transmission constraints, according to a report published Friday by Standard & Poor's Ratings Services. The electric sector was affected by the stressed Argentine economy even before 2002 due to the crisis of the sovereign, evidenced by very adverse conditions in the financial markets. "In addition, since 2002, the sector has faced a tremendous financial imbalance because of pesification and tariff freezes for distribution and transmission companies and indirect pesification of electricity prices combined with devaluation and inflation," said Standard & Poor's credit analyst Sergio Fuentes. Importantly, the power generators' and transmission and distribution companies' relatively good credit strength during the 1990s allowed them to finance part of their long-term investments with U.S. dollar-denominated debt at favorable interest rates in the international markets. Thus, most of the companies in the sector now have peso flows to service dollar- denominated debt obligations and have therefore defaulted on them. The report, titled "Dire Straits for the Argentine Electric Industry," is available on RatingsDirect, Standard & Poor's Web- based credit research and analysis system. Members of the media may obtain copies of the full report by contacting Gregg Stein at (1) 212-438-1730 or by E-mail at gregg_stein@standardandpoors.com. ANALYSTS: Sergio Fuentes, Buenos Aires (54) 114-891-2131 Marta Castelli, Buenos Aires (54) 114-891-2128 ============= B E R M U D A ============= LORAL SPACE: Bankruptcy Court Approves Sale To Intelsat ------------------------------------------------------- Loral will continue to operate its international FSS fleet and manufacturing business Loral Space & Communications announced Friday that the U.S. Bankruptcy Court for the Southern District of New York has approved the sale of Loral's North American satellites for up to $1.1 billion to Intelsat, Ltd. As previously reported, Intelsat was the high bidder in an auction held October 20, 2003. "Today's [Friday's] decision by the bankruptcy court is a tremendous step forward in our strategy to emerge from bankruptcy as a viable and profitable player in the satellite industry," said Bernard L. Schwartz, chairman and CEO of Loral. "The sale to Intelsat allows Loral to eliminate its nearly $1 billion in secured debt and provides the framework for a plan of reorganization that recognizes the growth potential of the remaining FSS and manufacturing businesses." Announced in July, the agreement with Intelsat provides for the sale of the in-orbit Telstars 5, 6, 7 and 13, as well as Telstar 8, which is scheduled for launch in mid 2004. The agreement also includes rights to the 77 degrees West longitude orbital slot, formerly occupied by Telstar 4. The sale to Intelsat remains subject to FCC approval and is expected to close in early 2004. Loral intends to reorganize around its remaining satellite services business, comprised of a fleet of five international satellites, and Space Systems/Loral (SS/L), its satellite manufacturing business. SS/L recently received orders for the construction of four new satellites - one each for Intelsat and PanAmSat Corporation and two for DIRECTV, Inc. Loral Space & Communications is a satellite communications company. It owns and operates a global fleet of telecommunications satellites used by television and cable networks to broadcast video entertainment programming, and by communication service providers, resellers, corporate and government customers for broadband data transmission, Internet services and other value-added communications services. Loral also is a world-class leader in the design and manufacture of satellites and satellite systems for commercial and government applications including direct-to-home television, broadband communications, wireless telephony, weather monitoring and air traffic management. For more information, visit Loral's web site at www.loral.com. CONTACT: Jeanette Clonan John McCarthy (212) 697-1105 =========== B R A Z I L =========== ELETROPAULO METROPOLITANA: Temporary Energy Sales Improve --------------------------------------------------------- Eletropaulo, Brazil's largest electricity distributor, reported an increase in sales of temporary energy to industrial and commercial clients, reports Business News Americas. In September, the Company registered monthly sales of 7,000MWh, that's 60% better than the 4,400MWh registered at the start of the year. The Company, which is owned by the US energy company AES, said that temporary energy contracts, which complement firm energy contracts, allow clients to obtain discounts of up to 50% depending on hour and load. CONTACT: ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes Gonzalves Jr., VP Finance/Investor Relations EMBRATEL: No Longer Expects to Acquire AT&T Latin America --------------------------------------------------------- Embratel announced Friday it no longer expects to acquire AT&T Latin America's subsidiaries in five South American countries. The company actively participated in this Chapter 11, 363 sale process, up to the point where it thought the acquisition price was consistent and accretive to its business. Embratel's final bid will continue to be valid until a final outcome of the process is determined by the U.S. Bankruptcy court in Miami, Florida. Embratel will continue to evaluate organic and M&A opportunities to enhance its value. Embratel is the premier communications provider in Brazil offering a wide array of advanced communications services over its own state-of-the-art network. It is the leading provider of data and Internet services in the country. Service offerings: include telephony, advanced voice, high-speed data communication services, Internet, satellite data communications, corporate networks and local voice services for corporate clients. Embratel is uniquely positioned to be the all-distance telecommunications network of South America. The Company's network is has countrywide coverage with 28,868 km of fiber cables comprising 1,068,657 km of optic fibers. http:/www.embratel.com.br CONTACT: Silvia M.R. Pereira, Investor Relations Phone: (55 21) 2121-9662 Fax: (55 21) 2121-6388 Email: silvia.pereira@embratel.com.br invest@embratel.com.br TELEMAR: Summary Of Notice To Shareholders ------------------------------------------ Telemar Norte Leste S/A announced that the Company's Executive Board authorized JCPs in the amount of R$ 300,887,179.00 be credited to the Company's shareholders based upon their holdings as of October 28, 2003. The Company's relevant bodies will review the following payment details for ratification by April 30, 2004: 1. Amounts to be credited: Holders on October 28, 2003 of Ordinary Shares (TMAR3) and Class "B" Preference Shares (TMAR6) will be allocated JCPs in the gross amount, per thousand shares, of R$ 1.18, which net of withholding income tax amounts to R$ 1.00 (both per thousand shares). Shareholders of Class "A" Preference Shares (TMAR5) will be allocated JCPs in the gross amount per thousand shares of R$ 1.30, which net of withholding income tax amounts to R$ 1.10 (both per thousand shares); 2. Remuneration of allocated JCPs: The amounts above will bear interest from the allocation date through to the end of the current fiscal year at the CDI rate for that period and from January 1, 2004 through to the date of payment at the TR rate; 3. Payment: Payment dates will be those established by the Company's relevant bodies, as review for approval by April 30, 2004; 4. Taxation: The amounts are subject to the IRRF (withholding income tax). To prevent withholding, exempt shareholders must file documentation at the Banco do Brasil branch where they bank or another bank by October 31, 2003; 5. Trading Date "ex-JCPs": Shares will be traded "ex-Interest on Capital" as of October 29, 2003, based on their equity position as of October 28, 2003. ========= C H I L E ========= ENDESA CHILE: Ralco Plant Exceeds 90% of Work Project ----------------------------------------------------- On Wednesday [Oct. 22] morning, the Board of Endesa Chile, presided over by Luis Rivera, and the Company's executive team, headed by Hector Lopez, and numerous local authorities celebrated the near-conclusion of the dam project at the Ralco Plant located in Alto B�o B�o, 120 kilometers from the city of Los Angeles. On finalizing this stage of the works, the dam is 155 meters high and 350 meters wide at its highest point. According to the General Manager of the Company, Hector Lopez, "the celebration of having finished the highest point is the most important milestone of this project. It constitutes a material expression and a symbol that all the difficulties that we have had to face - human, social, political, legal, from nature -, have been overcome". He added that "despite the difficulties, this project has survived because at each stage of a process that was well thought out and managed, the objectives proposed were complied with". With respect to the end of the conflict with the Pehuenche families that had not yet accepted the exchange of their land, the General Manager of Endesa Chile stated that "in recent weeks, and with the cooperation of many, we have happily managed to resolve our problems with the families that had the exchange pending. The solution agreed has demonstrated our permanent desire to resolve this conflict by way of a friendly negotiation". Following this most significant milestone, the current stage of progress of the works has surpassed 90%. Operations are expected to start up during the second half of next year. The dam that was recently concluded will lead to the formation of a reservoir with a total volume of 1,222 million cubic meters and a maximum surface area of 3,467 hectares. The water to be utilized in the plant will be taken from the reservoir and channeled through a seven-kilometer long tunnel to the machinery cavern where the generators are located. The power generated will be conducted via a transmission line to the Central Interconnected System (CIS). The installed power will be 570 MW and it will produce an annual average of 3,380 GWh. INVERLINK: Pizarro Seeks To Acquire Magister -------------------------------------------- Inversiones Pizarro, the Chilean investment company, offered to pay CLP50 million for a 64% stake in Magister, the pension fund of Inverlink Capitales, the bankrupt Chilean financial holding company. On top of that, Pizarro, which already owns a 21% stake in Magister, also offered to pay off the latter's debt totaling CLP2,165 million. Pizarro made the offer in partnership with Sociedad Educando Limitada; Sociedad Inmobiliaria e Inversiones Comerciales C. and C. Montefraile Limitada; Sociedad de Inversiones PIU Limitada and Sociedad de Inversiones Soria. TELEFONICA CTC: Registers a Profit in the 3Q03 ---------------------------------------------- Telefonica CTC Chile, Chile's largest telco, continues to see an improvement in its financial situation after the Company reduced debt to cut interest payments, fired workers and shed businesses not tied to telephone services For the third consecutive quarter, Telefonica CTC, the Santiago- based unit of Spain's Telefonica, registered a profit. Citing a statement from the Company, Bloomberg reports that Telefonica CTC had net income of CLP1.29 billion (US$2mn) in the third quarter of the year, compared with a loss of CLP17.3 billion a year earlier. "The company is in a better position than it was two or three years ago," said Cristian Ureta, who helps manage US$200 million in fixed-income securities at Banco Security in Santiago, including some of Telefonica's bonds. CONTACT: TELEFONICA CTC CHILE Gisela Esobar, gescoba@ctc.cl Veronica Gaete, vgaete@ctc.cl M.Jos, Rodriguez, mjrodri@ctc.cl Florencia Acosta, macosta@ctc.cl Tel: 562-691-3867 Fax: 562-6912392 =================================== D O M I N I C A N R E P U B L I C =================================== * Fitch Downgrades the Dominican Republic's FC & LC Rtgs to 'B' --------------------------------------------------------------- International ratings agency Fitch Ratings downgraded Friday the ratings on the Dominican Republic's foreign and local currency obligations to 'B' from 'B+'. The rating remains on Rating Watch Negative. The action reflects liquidity concerns due to continued pressures on the sovereign's slim foreign exchange reserve position. In addition, Fitch remains concerned about the availability of multilateral funding over the coming year due to unresolved issues in the electricity sector. Foreign exchange reserves have fallen to US$520.8 million as of the end of September 2003 from US$583.1 million as of end July, in spite of an infusion of US$123.5 million from the IMF in early September as part of its US$618 million two-year Stand-By Arrangement approved on Aug. 29. The Dominican authorities have reportedly agreed to an initial US$15 million payment (in addition to future payments) to Spanish electricity company Union Fenosa to repurchase electricity distribution companies Edesur and Edenorte, a transaction which would further pressure external liquidity and public finances, and perhaps put at risk future IMF and related multilateral disbursements that are dependent upon IMF support. Already, it appears that this transaction has resulted in a delay in the Stand-by review and a disbursement of US$61.7 million which was supposed to have occurred on Oct. 15. With US$504.3 million in public sector medium and long-term debt amortizations due next year, the Dominican Republic can ill afford to lose multilateral financing. Disputes involving government entities in the power sector could potentially result in other contingent liabilities to the sovereign. The Compania de Electricidad de San Pedro de Macoris project involves a political risk guarantee (PRG) from the Inter- American Development Bank, which if activated because of a failure of the government to meet its guarantee of the power purchase agreement, would compromise sovereign creditworthiness. In the event the PRG is activated, US$70 million would become immediately payable to the IDB. If the IDB does not convert this amount into a loan, the Dominican government would have 30 days to make the payment to the IDB. In the event the government fails to make payment, it would be in non-accrual status with the IDB and all new financing as well as amounts pending disbursement under the existing portfolio would cease. When the sovereign's ratings were initially assigned, Fitch warned that continued financial system weakness, combined with a lack of progress on the reform front and further pressure on the Dominican Republic's modest foreign exchange reserves, could have a negative impact on the country's sovereign ratings. In spite of a long period of strong economic growth, which resulted in comparatively strong external and public sector debt indicators, the Dominican Republic's ratings reflected Fitch's concerns about the deterioration of the financial system's operating environment due to the collapse of Banco Intercontinental. While it appears that the government has made some progress in addressing financial system weaknesses, new concerns have arisen due to electricity sector issues. Fitch is concerned that these problems have the potential to disrupt the availability of multilateral financing as well as create other contingent liabilities to the sovereign. Although public sector and external debt (including private sector) are expected to increase to 50% of GDP and 41% of GDP, respectively, by the end of 2003, this is still low relative to other sovereigns in the 'B' rating category. In addition, debt service is low relative to peers as more than 70% of the debt is due to multilateral and bilateral creditors and benefits from concessional terms, which leaves Fitch to believe that meeting the sovereign's financial requirements is manageable as long as multilateral support continues. In the coming days and weeks, Fitch will continue to monitor the Dominican Republic's discussions with the IMF, including additional delays in future disbursements, as well as developments in the electricity sector that could result in additional public finance pressures. The loss of multilateral support would be an immediate cause for a downgrade. CONTACT: Theresa Paiz Fredel Phone: +1-212-908-0534 Roger M. Scher Phone: +1-212-908-0240 Media Relations: Matt Burkhard Phone: +1-212-908-0540 =========== M E X I C O =========== DESC: Releases Results for the 3Q Ended Sep. 30, 2003 ----------------------------------------------------- Desc S.A. de C.V. (NYSE: DES; BMV: DESC) announced today its results for the third quarter ended September 30, 2003 (3Q03). (All figures were prepared according to generally accepted accounting principles in Mexico.) HIGHLIGHTS Desc's operating results for 3Q03 declined when compared to 3Q02; operating income dropped by 63.0% and EBITDA declined by 32.1% mainly due to these factors: - Lower demand from OEMs due to temporary shutdowns and the elimination of sales to DaimlerChrysler due to the closing of its plant in Mexico City, which affected the pick-up boxes and stamping, axles and propeller shafts businesses. - Higher raw material costs in the Chemical Sector, which affected the polymers and specialities products divisions. - Strong results in the Real Estate Sector due to sales in the Bosques de Santa Fe and Punta Mita projects. Desc sold its adhesives and waterproofing businesses in September of 2003, the proceeds of which will be used to strengthen its financial structure. SALES Sales in dollars for 3Q03 declined 0.4% to US $488 million when compared to US $490 million reported in 2Q03, due to lower sales in the Automotive Sector. Year-over-year, sales from the Automotive Sector decreased by 12.9% due to the decline in vehicle demand from Mexico and the U.S. In the Chemical Sector, sales dropped 1.1% as a result of pressures from increased competition, as well as a decrease of construction, particularly for public works. In the Food Sector, the 16.6% increase in revenues was mainly due to improved results in the branded products division and the closing of the pork business in the Bajio operations during the 3Q02. In the Real Estate Sector, sales increased 49.4% YoY due to higher revenues in the Bosques de Santa Fe and Punta Mita Projects. EXPORTS Total exports during 3Q03 reached US $217 million, a 2.2% decline compared to the figure reported during 3Q02. This decrease was a result of a negative effect to the Automotive Sector, which declined by 6.1%, due to the Mexican exportation platforms. During the third quarter of 2003, exports represented 44.5% of total sales. OPERATING INCOME AND OPERATING MARGIN Year-over-Year, consolidated operating income in dollars dropped 63.0% from US $36 million to US $13 million, due to lower results in the Automotive, Chemical and Food Sectors, which posted declines of 99.2%, 57.2% and 61.9%, respectively. These were mainly due to lower demand from the U.S. market, the closing of the DaimlerChrysler operations in 2002, and the increase in raw material prices experienced during the quarter in the Chemical Sector. On the other hand, the Real Estate Sector registered an increase in its operating income in dollars of 251.6% to US $9.0 million in 3Q03 from US $3.0 million in 3Q02. TAXES During the quarter, tax provisions reached US $5 million, which included Income and Asset Taxes and Employee Profit Sharing, a 67.0% decline compared to 3Q02, reflecting a lower operating result. The net amount of deferred taxes was US $(3.5) million. NET MAJORITY INCOME (LOSS) Net majority loss for 3Q03 was US $36 million mainly due to a higher exchange rate loss caused by a near 9.0% depreciation of the peso versus the dollar during the quarter compared with the 3Q02, as well as a lower operating result. DEBT STRUCTURE Quarter-over-quarter, Desc posted a US $20 million net debt decrease, mainly due to the divestiture of the adhesives and waterproofing material businesses in the Chemical Sector. This was partially offset by debt derived from working capital requirements in the Autoparts and Chemical Sectors. Year-over-year, the Company's net debt increased by 5.1% to US $967 million. At the end of the third quarter of 2003, Desc's debt composition was 70% dollar-denominated and 30% peso-denominated. Desc's debt profile at the end of the 3Q03 is 71% in long-term debt and 29% in short-term debt. The average cost of debt was 5.0% for the dollar-denominated, and 7.4% for the peso-denominated one, compared to 4.8% and 8.5%, respectively in 3Q02. DEBT REFINANCING Desc is in the process of renegotiating approximately 70% of its total consolidated debt, the equivalent of approximately US $700 million, with its main creditors. This amount includes approximately US $410 million in syndicated loans and short-term credit lines, mainly for working capital needs. Given that during the first three quarters of 2003, Desc failed to meet the leverage ratio covenant in its two syndicated credit agreements, it initiated discussions with the applicable financial institutions beginning last quarter in order to resolve the default. To date, Desc has complied and met with all other credit obligations and principal and interest payments under its credit agreements. Once this process is completed, the restructuring will give Desc greater financial flexibility and enable it to comply with the conditions stipulated in its credit agreements. This refinancing is led by Citigroup, BBVA Bancomer and Inbursa Grupo Financiero. To date, Desc has met with these banks and all of its creditors in New York and in Mexico City. Desc expects to conclude these negotiations in the next few months. As part of this renegotiation, the Board of Directors approved the granting of certain guarantees, the commitment of satisfying new financial ratios and the allocation of part of the proceeds from the sale of assets to prepay the bank debt once the restructuring process is concluded, and as result cash levels will experience a significant decline. DIVESTITURES In the third quarter of 2003, Desc sold the assets of its adhesives and waterproofing businesses in the Branded Products Division to the Henkel Group. The amount of the transaction will not de disclosed. The proceeds of this transaction will be used to strengthen the Company's financial structure. ADOPTION OF BULLETIN C-15 "VALUATION AND TREATMENT OF LONG-TERM ASSET DETERIORATION" The objective of this Bulletin is to identify the possible deterioration of tangible and intangible fixed assets and goodwill amortization. It establishes the criteria for recognizing losses in these items, and the manner in which to present them in the financial statements, including discontinued operations. Long term assets are those assets needed for operating the business, including those expecting to provide future benefits (cash flow), be it operational or corporate. Due to the fact that it will be mandatory to apply Bulletin C-15 starting in 2004, the Company has initiated the process of valuing its different assets and expects there to be a relevant charge in the Income Statement once this valuation is completed. RESULTS BY SECTOR AUTOMOTIVE SECTOR During 3Q03, sales and operating income in dollars declined by 12.9% and 99.2%, respectively, compared to 3Q02 as a result of: a) Lower sales in the axle, propeller shaft and pick-up box businesses due to the closing of the DaimlerChrysler plant in Mexico City. In the aluminum and steel wheel, cv joint and light and heavy duty transmission businesses, the declines were due to lower orders from OEMs in the United States and Mexico. b) OEMs such as GM, Ford, RenaultNissan and VW continued having technical shutdowns during the quarter due to high inventory levels. c) The domestic aftermarket division posted lower sales in the piston business due to the reuse of these components. d) Mexico's total vehicle production as of September 30, 2003 was 1,214,564 units, which represents a 15.0% decline compared to the same period of 2002. e) Total vehicle production in the United States, from January through September 2003, was 9,056,709 units, which represents a 3.0% decline versus the same period of 2002. These factors caused operating income to reach US $0.1 million, with an operating margin of 0.1% and EBITDA of US $17 million. During the third quarter the implementation of the Tractor Project continued. This project which consists of manufacturing components for axles, half-axles and output shafts contributed sales of US $42.7 million during 2003 and US$ 17.4 million during 3Q03. The increases in volumes year-over-year are listed below: - pins 42.6% and, - propeller shafts 27.3%. Year-over-year, the most significant volume reductions were in the following businesses: - pick-up boxes 100.0%, - aluminum wheels 33.7%, - steel wheels 29.5%, - heavy-duty transmissions 27.1%, - light transmissions 20.5% and, - pistons 16.0%. Export sales reached US $121 million, a 6.1% decline compared to the same quarter in 2002. The average capacity utilization in the transmission, stamping, axle and propeller shaft businesses reached approximately 54%. During 3Q03, investments were made in the following projects: 1. Tractor Project - US $4.2 million to complete the installation and validation of the machinery which was moved from the United States to Queretaro and the State of Mexico, 2. CV joint plant - US $1.6 million invested in expansion and maintenance of production lines, and, 3. Maintenance - US $3.0 million for maintenance of the remaining operations. OTHER EVENTS Starting in the third quarter of 2003, due to its high manufacturing quality, the gear business began supplying components for the front axle to BMW North America for its X5 platform as well as components for the front axle to Nissan for its ZW platform. CHEMICAL SECTOR During 3Q03, dollar sales declined slightly, 1.1% compared to 3Q02, from US $185 million to US $183 million. Operating income and EBITDA in dollars declined 57.2% and 35.3%, respectively, compared to 3Q02 due to the increases in raw material prices affecting mainly the polymers and specialized products businesses. It is worth noting that during the third quarter of 2003, the ecosystems division which consists of the phosphate and laminates businesses improved its operating income and EBITDA in dollars by 11.3% and 1.2%, respectively, when compared to 3Q02 due to improvements in the phosphates business, resulting from improvements in the operation and in raw material prices. Exports for the quarter increased 2.3%, from US $68 million in 3Q02, to US $69 million in 3Q03, demonstrating the market diversification effort done by our divisions. During 3Q03 Desc continued to experience pressure from our clients to maintain prices of our finished products. Compared to 3Q02, Desc's main raw materials such as butadiene monomer, natural gas, acetocyanohidrine and high sulfate full oil (HSFO) registered price increases of 36.8%, 61.6%, 20.5% and 20.6%, respectively. These raw material price increases have not been entirely passed on to final prices due to the current market conditions. Capex reached US $2.8 million, allocated to meet future demand in the rubber business for polymers and specialties products. FOOD SECTOR Branded Products During 3Q03, net sales increased 11.0% when compared to 3Q02, due to the strong performance of "Del Fuerte" brand tomato puree, "Embasa" brand ketchup and higher exports to the U.S. in the coffee business, as well as the price increases in the majority of categories in the domestic market. In ASF (Authentic Specialty Foods), the branded products business in the U.S., the new products launched under the "La Victoria" and "Embasa" brands have been well accepted. In Mexico, the chiles and salsas "Del Fuerte" continue increasing its sales, as well as higher sales of "Zuko" brand powdered beverage mix, have offset the drop in demand stemming from lower economic activity in the U.S. and Mexico. The numbers reported for 3Q02 were not representative and demonstrated an extraordinary behavior due to an adjustment of inventories. As a result of this, the operating margin in the branded products division declined from 7.9% in 3Q02 to 4.7% in 3Q03. Pork Business During the quarter, sales in the Pork Business increased 27.8% when compared to 3Q02. The operating margin in the 3Q03 was 3.1% compared to 22.2% reported in 3Q02 due to the closing of the Bajio operation in 2002. For this reason sales figures and operating margin are not comparable. Considering pork operations in the Bajio during the 3Q02, operating margin improved from -10.4% to 3.1% in the 3Q03, based on Pork price increases, from $10.90 per kg in 3Q02 to $13.10 per kg in 3Q03. Capacity utilization remained at 100% in the Southeast region, due to a high demand. Investments in fixed assets reached US $0.22 million, which was allocated to equipment to maintain and modify the infrastructure of farms. REAL ESTATE SECTOR Sales in 3Q03 reached US $36 million, an increase of 49.4% when compared to 3Q02, driven mainly by the residential project Bosques de Santa Fe. Operating margin for 3Q03 was 24.9%, compared to 10.6% during 3Q02 due to greater sales and lower operating expenses during the quarter. Sales for the 3Q03 were as follows: - Bosques de Santa Fe 63.7%, - Punta Mita 14.3%, - Completed inventory (Bosques de las Lomas) 12.5% and, - Commercial lots 9.5%. During this quarter, the Real Estate Sector sold 11 residential lots and one lot for the development of apartments in the Bosques de Santa Fe project. With these sales, 86% of the single-family and 57% of the multi-family residential lots have been sold. In Punta Mita, Desc we completed the sale of 2 beachfront lots and one lot for the expansion of the Four Seasons Hotel. Investments in this project during the quarter were US $0.5 million. In Arcos Bosques, the construction of North Building "C" continued on schedule and within budget and is set for completion before year-end. During the quarter, US $2.1 million were invested in the project. CONTACT: Marisol V zquez-Mellado Alejandro de la Barreda / Carolina Rend�n Tel.: (5255) 5261 8037 alejandro.delabarreda@mail.desc.com.mx EMPRESAS ICA: Provides Update On Restructuring Plan --------------------------------------------------- Empresas ICA Sociedad Controladora, S.A. de C.V., the largest engineering, construction, and procurement company in Mexico, announced Friday that, as part of its restructuring efforts and refinancing strategy, it is analyzing different financial restructuring options, including a capital increase. This analysis has recently involved preliminary discussions with certain shareholders, including parties related to Grupo Financiero Inbursa, S.A. de C.V. ("Inbursa"), regarding various alternatives, including the possibility of subscribing for a significant number of newly issued shares at a per share subscription price not greater than the recent market price of ICA's shares. To date, no agreements, contracts, arrangements or understandings have been reached with any party regarding a capital increase or any other possible transaction. There can be no assurance that any capital increase, or any other transaction between ICA and any other party, will be agreed to or consummated or as to the terms and conditions or timing of any such transaction. Founded in 1947, ICA has completed construction and engineering projects in 21 countries. ICA's principal business units include Civil Construction and Industrial Construction. Through its subsidiaries, ICA also develops housing, manages airports and operates tunnels, highways, and municipal services under government concession contracts and/or partial sale of long-term contract rights. CONTACT: Dr. Jos� Luis Guerrero (5255) 5272-9991 x2060 jose.guerrero@ica.com.mx Lic. Paloma Grediaga (5255) 5272-9991 x3470 paloma.grediaga@ica.com.mx URL: www.ica.com.mx In the United States: Zemi Communications Daniel Wilson (212) 689-9560 d.b.m.wilson@zemi.com EMPRESAS ICA: Announcement Doesn't Impact Ratings, Says S&P ----------------------------------------------------------- Standard & Poor's Ratings Services said Friday that Empresas ICA Sociedad Controladora S.A. de C.V.'s (ICA, CCC/Negative/--) announcement that a capital increase is among the financial restructuring options being considered as part of its restructuring efforts and refinancing strategy has no impact on the company's rating or outlook. Nevertheless, the announcement has shed light on the alternatives that the company is exploring as part of its refinancing strategy. In a filing with the SEC, parties related to the Slim family disclosed that they have recently had preliminary discussions with them regarding the financial condition of the issuer and the possibility of acquiring additional shares of the company by means of subscribing for a potential capital increase. The filing states that the discussions have contemplated the possibility that one or more of the parties involved could acquire a significant number of additional shares that could result in the Slim family holding, in the aggregate, a majority of ICA's outstanding shares. GRUPO IMSA: Announces Third Quarter 2003 Results ------------------------------------------------ Grupo Imsa, S.A. de C.V. announced Friday results for the third quarter of 2003. Unless otherwise stated, all figures are presented in millions of September 30, 2003 pesos (Ps), or in millions of nominal U.S. dollars(a) (US$). Third Quarter 2003 Highlights -- Third quarter revenues in peso terms rose year-over-year by 1.1% and quarter-over-quarter by 5.9% to Ps 8,002. Year-to-date revenues increased 5.7% compared to the previous year. -- IMSA ACERO's third-quarter sales volume grew 4.8% year-over- year and 10.1% quarter-over-quarter. -- In the third quarter ENERMEX's sales volume declined 9.8% compared to the third quarter of 2002 and by 9.1% vs. second quarter 2003. -- Operating expenses as a percent of sales were 10.4% in third quarter 2003, compared to 10.7% the previous year and 11.0% the previous quarter. -- Third quarter EBITDA totaled Ps 1,004, 24.3% below that of the same period of 2002 but 2.3% above second quarter 2003. Year- to-date EBITDA decreased 9.5% compared to 2002. -- Grupo Imsa's total debt was reduced by US$37 during the third quarter of 2003. -- Net interest coverage -- defined as EBITDA divided by net interest expense -- was 11.2 times for the twelve months ended September 2003. -- In the month of August, APM, an IMSA ACERO company that produces non-coated flat steel, concluded the expansion of its hot-rolled steel capacity from 1.5 million tons to 2.2 million tons per year. -- In October, IMSA Signode inaugurated a new, state-of-the-art plant to produce steel and plastic strapping. With this new plant, the company will be in a position to offer domestic and foreign customers better service. (a) Nominal dollars result from the translation of nominal pesos using the average exchange rate of each month. CONTACT: Grupo Imsa, Monterrey Marcelo Canales Phone: (52-81) 8153-8349 Adrian Fernandez Phone: (52-81) 8153-8433 Investor Relations: Jose Luis Fornelli Phone: (52-81) 8153-8416 Email: jfornell@grupoimsa.com GRUPO IUSACELL: Announces Results for the Third Quarter 2003 ------------------------------------------------------------ Grupo Iusacell, S.A. de C.V. ("Iusacell" or "the Company") announced Friday results for the third quarter ended September 30, 2003. Financial Results Changes in accounting policies: In the third quarter of 2003 Iusacell conducted a series of changes in its accounting policies. The changes are in accordance with Mexican GAAP and in agreement with its independent auditors. Iusacell decided to write off some intangible assets in accordance with recently released accounting pronouncements by the Mexican Accounting Institute, which requires, among other things, intangible assets to produce measurable cash flows. Consequently, the Company decided to amortize approximately $762 million of other assets derived from preoperative and installation expenses related mainly to PCS operations, and other differed charges. The Company also decided to follow a more prudent approach in relation to deferred income taxes. Since Iusacell cannot assure the recovery of some of its tax loss carry forwards, $192 million of deferred income tax was cancelled, and the effect is presented as an extraordinary item. Additionally, $164 million of deferred expenses related to the original issuance of debt were also cancelled as an extraordinary item in the quarter. Iusacell is now expensing the postpaid handsets-related costs rather than amortizing it within the average life of the postpaid contracts. Consequently, $157 million representing the balance of the 2003 amortization cost was expensed in the quarter. Additionally, the charges applied retroactively to January 1, 2003, were reclassified from amortization to cost. This reclassification impacted EBITDA for the quarter with an additional $223 million. Resulting from the more conservative criteria regarding revenue recognition from prepaid cards, the account of deferred liabilities (sale of services not yet consumed) was updated by $80 million of deferred liabilities rather than revenues. After conducting a comprehensive review of the Company's assets during this quarter, Iusacell decided to adjust the inventory of spare parts and some network components, resulting in a $60 million increase in the provision for obsolete equipment. Operational change: As part of the operational streamlining and in order to better focus on active customers, Iusacell reduced the period in which a prepaid customer can receive incoming calls but cannot make outgoing calls from 305 and 275 days (depending on the amount of airtime previously charged) to 90 days. This policy change identified approximately 437,000 existing prepaid customers who have not utilized Iusacell's network services in an extended period of time. These inactive accounts were turned over in an extraordinary subscribers write-off. As of September 30, 2003 subscribers totaled 1.5 million. Revenue in the quarter decreased 8% from the previous quarter and 21% from the year ago period to $1,066 million, as a result of the update of deferred liabilities, lower subscriber base and lower ARPUs. Cost of sales in the third quarter of 2003 increased 99% from the year ago period driven mainly by changes in accounting policies, from $457 million to $912 million. Operating expenses: sales and advertising expenses in the quarter declined slightly year over year due primarily to fewer gross subscriber additions. As a percentage of revenues, sales and advertising expenses increased from 24% to 31% in the third quarter of 2003, resulting from lower revenues in the period. EBITDA was mainly affected by lower revenues as well as changes in accounting policies during the quarter, ending with a negative $395 million for the period. Depreciation and amortization expenses of $285 million in the third quarter of 2003 also were affected by the accounting adjustments particularly derived from the reclassification of handset amortization as part of the cost. Operating loss in the quarter increased from the $98 million recorded last year to $680 million in the current quarter driven by the changes in accounting policies and lower revenues. Integral financing cost in the quarter ended with $658 million, compared to $440 million in the same quarter of last year. The result was mainly driven by a $500 million foreign exchange loss resulting from the 5% depreciation of the peso against the U.S. dollar in the quarter. Interest expense increased $15 million in the third quarter of 2003, compared to the same period of 2002 as a result of the 11% peso depreciation in the twelve-month period ended September 30, 2003. Net loss in the quarter of $2,510 million was the result of changes in accounting policies and higher integral financing costs. This compares to a net loss of $517 million in the year ago period. Capital expenditures: Iusacell invested approximately US$6.5 million in its regions during the third quarter of 2003 to expand coverage. Debt: As of September 30, 2003, including trade notes payable and notes payable to related parties, debt totaled US$811 million. All of the Company's debt is U.S. dollar-denominated. As previously communicated, most of the Company's financial debt is classified as current in the Balance Sheet presented herein, in accordance with Mexican GAAP. To see financial statements: http://bankrupt.com/misc/GRUPO_IUSACELL.htm CONTACT: Grupo Iusacell Carlos Moctezuma +011-5255-5109-5759 Web site: http://www.iusacell.com HYLSAMEX: Alfa Considers Options Regarding Ownership ---------------------------------------------------- Mexican conglomerate Alfa is mulling its options on how to keep its ownership of Hylsamex in accordance with Mexican securities regulations, reports Business News Americas. According to Juan Carlos Maussan, a Merrill Lynch analyst, Alfa owns 92% of Hylsamex, a violation of stock exchange rules that stipulate a 12% minimum free-float requirement. Already, the Mexican equivalent to the SEC has established a special commission to analyze the issue. However, it has been lenient with enforcing the rule, the analyst said. Alfa's options include selling, delisting or spinning off steel subsidiary Hylsamex. But according to Maussan, Hylsamex's independent listing on the stock exchange gives analysts and investors a clearer understanding of Alfa's total value, making the option to delist the steel company "unattractive." A spin-off would likely involve paying a special dividend to existing shareholders, meaning such a move would not provide Alfa with resources. Lastly, selling Hylsamex would provide Alfa with "fresh resources" and has no direct disadvantage, Maussan said. The analyst expects Alfa to decide on the matter in the first half of next year. CONTACT: Hylsamex S.A. de C.V. 101 Ave Munich Cuauhtemoc 66452 San Nicolas de los Garza Nuevo Leon Mexico Phone: +52 81 8865 2828 Fax: +52 81 8865 1210 Home Page: http://www.hylsamex.com.mx Contact: Engr. Dionisio Garza Medina, Chairman Alejandro Elizondo Barragan, Chief Executive Engr SANLUIS CORPORACION: Announceas 3Q 2003 Results ----------------------------------------------- SANLUIS Corporacion, S.A. de C.V., a Mexican industrial group that manufactures auto parts, reported Friday results for the three months ended September 30, 2003. (Figures in U.S. dollars unless indicated otherwise.) - Compared with the same quarter last year, sales increased 8.5%, reaching a total of U$ 114.7 million. - Year-to-date sales up to September 2003 show an 8.1% improvement over the same period last year. - In the first nine months sales were U$ 351 million. - EBITDA year to date was U$ 49.4 million. Operational Results Sales and EBITDA (earnings before interest, depreciation, amortization and income taxes) of SANLUIS in the third quarter were U$ 114.7 million and U$ 14.1 million, respectively. The suspension business recorded sales during the third quarter of US $84.1 million, which places it 10.2% above the sales level in the same quarter last year. The Brake business during the last quarter reached sales of US $30.6 million, a 4.4% increase over the same period in 2002. Consolidated Results for the Third Quarter 2003 (US $ Millions) 2002 2003 Q3 Q4 Q1 Q2 Q3 Last 12 Months Sales : Suspensions 76.4 80.9 82.8 86.8 84.1 334.6 Brakes 29.3 35.0 32.4 34.4 30.6 132.4 Consolidated 105.7 115.9 115.2 121.2 114.7 467.0 EBITDA: 16.4 18.9 18.3 16.9 14.2 68.3 % EBITDA Margin 15.5 16.3 15.9 13.9 12.4 14.6 The main factors driving the improvement in results in the third quarter 2003 were: - Strong production levels by our main customers as a consequence of high demand for light trucks in the U.S. market. - New contracts in the Brake Division that increased their volumes rapidly. - Reduced fixed costs thanks to strict cost controls. Administrative and sales expenses were reduced from 8.5% relative to sales in 2002 to 7.6% in the first nine months of 2003. - Favorable exchange rate trends. Amongst the negative aspects during the quarter were: - High energy (gas, electricity) costs as well as increased prices of scrap for the foundry. - Lower prices due to discounts granted in mature products of our Suspension Division. - Greater share of lower priced products in our sales composition in the Brake Division. - Third quarter cyclical activity reduction in the automotive industry since production volumes diminish as part of the preparation for the launching of the new model year. SANLUIS SANLUIS produces suspensions and brake components for the global automotive industry, with a principal focus on original equipment manufacturers (OEMs). Suspension products include leaf springs (parabolic and multi- leaf), coil springs, torsion bars, bushings and stabilizer bars. The Brake Division produces drums and discs. SANLUIS Rassini has a 90% share of the Mexican market for light truck suspensions and a 62% share of the U.S. and Canadian markets. Its solid and diversified client base includes General Motors, Ford, DaimlerChrysler, Nissan, Volkswagen, and Toyota. In the Brake business, SANLUIS Rassini has an 12% market share in the U.S. and Canada in the disc and drum segment of light vehicles. To see financial statements: http://bankrupt.com/misc/SANLUIS_Corporacion.htm ======= P E R U ======= PAN AMERICAN: Purchases Huaron Royalty -------------------------------------- Pan American Silver Corp. is pleased to announce it has bought back the existing 3% Net Smelter Royalty on its Huaron silver mine in Peru from a group of Peruvian companies for US$2.5 million. The Huaron mine produces approximately 4.6 million ounces of silver annually at an average cash cost of US$3.65/oz and has a projected mine life of more than 10 years. At current production levels and a silver price of US$5/oz, the buyout of the royalty will reduce Huaron's cash costs by US$850,000 per year, starting in 2006. As part of a feasibility study launched in September to examine a mine expansion, a US$1 million drill program has been initiated to upgrade the mine's resources and to increase the proven and probable reserve base. Should an expansion to an annual production rate of 6 million ounces prove viable, the purchase of the royalty will save more than US$1 million per year in operating costs for the life of the mine. According to Pan American's Chairman and CEO, Ross Beaty: "The buy-back of the Huaron royalty is timely and sensible. It will increase Huaron's already robust cash flow, decrease the mine's total cash costs and have a positive impact on our earnings over the mine's operating life. This result will be enhanced if we expand the mine next year, as I fully expect we will. Huaron is an excellent asset and its future growth is now unencumbered." CONTACT: Brenda Radies, VP Corporate Relations (604) 684-1175 www.panamericansilver.com ================================= T R I N I D A D & T O B A G O ================================= BWIA: Govt. to Introduce Drastic Actions To Address Woes -------------------------------------------------------- Trinidad's Prime Minister Patrick Manning indicated that the government may have to resort to drastic measures to solve BWIA's financial situation, which according to him, remains unacceptable, relates RadioJamaica. When asked by reporters if the decisions would lead to a halt in state financial assistance to the ailing BWIA, Mr. Manning said that was a possibility. While expressing disappointment over BWIA's inability to meet any of its performance expectations, Mr. Manning said his government was not willing to pump any additional resources into the airline. The PM's comments came despite reports by BWIA that it had a relatively good summer season and did not require any additional state assistance for September. *********** 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., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. 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. 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