/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/031030.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 Thursday, October 30, 2003, Vol. 4, Issue 215 Headlines A R G E N T I N A BANCO RIO: IFC $70M Trade Finance Facility to Provide Liquidity CASA BORGES: Receiver Prepares Individual Reports For Bankruptcy CONFORT ESTILO: Receiver Completes Credit Verifications CRAR: Court Orders Bankruptcy DAGER: Court Approves Bankruptcy Petition DIRECTV LA: Moves Again To Extend Exclusive Filing Periods ESTABLICIMIENTO METALURGICO: Court Orders Bankruptcy GOTICA Y COMPANIA: Reorganization Disolves to Bankruptcy GS VIAL: Claims Verification Wraps Up Today LAMINADOS LAMDECO: Receiver Verifies Claims in Bankruptcy LOCKBIT: Court Sets Schedule for Bankruptcy Process MULTICANAL: Extends APE Solicitation, Cash Option Solicitation NEO COMUNICACIONES: Court Orders Bankruptcy OPEN SPORTS BUSINESS: Court Orders Bankruptcy PINTURERIA PROFESIONAL: Official Reorganization Starts PROYECTOS E INSTALACIONES: Proofs of Claims Ends Today PRO SUN: Court Orders Bankruptcy PUBLICIDAD DINAMICA: Court Designates Receiver for Bankruptcy ROYAL AHOLD: 3Q03 Sales Up Slightly; Near Term Convoluted B E R M U D A LORAL SPACE: Intelsat to Issue Notes To Finance Asset Purchase B R A Z I L EMBRATEL: Evaluating Acquisition Targets SABESP: Local Currency Rating Outlook Improves to Stable TCP: Analysts Project Narrower 3Q03 Net Loss C H I L E COEUR D' ALENE: Announces Final Redemption of 6 3/8% Debentures COEUR D'ALENE: Cash Resources Sufficient to Meet Current Needs J A M A I C A JPSCO: Senator Seeks Generating Capacity Details M E X I C O GRUPO SIMEC: First Three Quarters 2003 Show Improved Results GRUPO TMM: Reports Improvement in 3Q03, 9-Months 2003 TFM: Reports Consolidated 3Q03, YTD Results Through September P A N A M A CSS: Reports $25M Loss for 1H03 V E N E Z U E L A PDVSA: CITGO Clarifies Recent Income Statements Reports - - - - - - - - - - ================= A R G E N T I N A ================= BANCO RIO: IFC $70M Trade Finance Facility to Provide Liquidity --------------------------------------------------------------- The International Finance Corporation (IFC), the private sector development arm of the World Bank Group, has approved an investment of up to $70 million in a structured trade finance facility arranged by Banco Rio de la Plata S.A. The transaction will make pre-shipment export financing available to Argentine exporters. The IFC facility will consist of an A Loan of up to $20 million with a tenor of up to 2 years, as well as a syndicated 1-year credit of up to $50 million from international commercial lenders. The maturities of the facility's A and B Loans represent a significant extension of funding tenors, in comparison with those currently available to the majority of Argentine exporters from other trade finance sources. The project demonstrates that successful financial restructuring by an Argentine corporate entity can result in renewed access by that borrower to international funding, and re-introduction of its name in the global financial markets. Declan Duff, IFC's Director of Global Financial Markets noted: "The project represents the first international syndication undertaken by an Argentine bank, which has successfully restructured its foreign debt obligations since the onset of the Argentine crisis. And Banco Rio has done so with the financial backing of its parent, Grupo Santander." Banco Rio was also chosen for the effort because the bank has traditionally had a well-developed business franchise among smaller corporates. This continues to be the case today, making it more likely that trade finance resources provided by the project will be made available to second-tier exporters. Banco Rio is the second largest private bank in Argentina, and a subsidiary of Grupo Santander. It provides a wide range of commercial banking, investment, and financial services to over 1,000,000 clients, including large, medium and small companies, as well as individuals. The bank has a network of approximately 205 branches as well as 129 points of sale, and employs 3,500 personnel. IFC has provided support to Argentina since the onset of its crisis in late 2001 by - amongst other things - arranging funding for exporters. The Corporation's focus on the export sector - both directly, by lending to companies, and now indirectly, by arranging funding for financial intermediaries - is a response to cutbacks in conventional trade finance for Argentine corporates. As a result of these cutbacks, aside from 10-15 top-tier exporters who now have reasonable access to trade finance, most Argentine companies face difficulties in obtaining export credits of any sort, and especially pre-shipment export funding. Bernard Pasquier, IFC's Director for Latin America and the Caribbean, noted: "This transaction comes at a crucial time to support one of the main drivers of the Argentine economic recovery, the export sector. It underscores IFC's long-term commitment to assist the Argentine corporate and financial sectors at a time when foreign credits are very scarce, and the domestic banking system has not yet recovered from the crisis in late 2001." In fiscal year 2003, IFC committed $1.8 billion to 54 projects in 16 countries of the Latin America and Caribbean Region. This was an increase of $706 million from investment commitments made to the Region during fiscal year 2002, and the largest amount committed by IFC to Latin America and the Caribbean in recent years. The total IFC financing amount also included $918 million mobilized from banks participating in IFC syndicated loans. IFC's financing to the region accounted for almost half of IFC's global funding to clients in fiscal year 2003, the latter of which totaled $5.0 billion. IFC's mission (www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $37 billion of its own funds and has arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's committed portfolio at the end of FY03 was $16.7 billion with an additional $6.6 billion held for participants in loan syndications. CONTACT: Adriana Gomez Phone: (202) 458-5204 Fax: (202) 974-4384 E-mail: agomez@ifc.org IFC Global Financial Markets Xavier Jordan / Matias Eliaschev Phone: (202) 458-9640 / (202) 473-1418 Fax: (202) 974-4801 / (202) 974-4384 E-mail: xjordan@ifc.org meliaschev@ifc.org CASA BORGES: Receiver Prepares Individual Reports For Bankruptcy ---------------------------------------------------------------- The bankruptcy Casa Borges S.A. proceeds with the end of the credit verification process today. The receiver, Mr. Juan Carlos Guaita, who validated the claims, will prepare the individual reports, which must be submitted to the court on December 12. The receiver will prepare the general report after the individual reports are processed at court. This report must be submitted on February 13 next year. The Troubled Company Reporter - Latin America earlier indicated that Buenos Aires' Court No. 26 issued the bankruptcy order. Clerk No. 51 works with the court on the case. CONTACT: Casa Borges S.R.L. Presidente Peron 1492 Buenos Aires Juan Carlos Guaita Ave de Mayo 749 Buenos Aires CONFORT ESTILO: Receiver Completes Credit Verifications ------------------------------------------------------- Mr. Luis Guevara, receiver for Confort Estilo S.R.L. closes the verification process for the Company's reorganization process today. He will now prepare the individual reports on the results of the verifications. Buenos Aires Court No. 1, which handles the Company's case requires these reports to be filed on December 12. The receiver will also prepare a general report, which is due on February 25, 2004, after the individual reports are processed at court. The informative assembly will be held on August 12 next year. CONTACT: Luis Guevara Ayacucho 242 Buenos Aires CRAR: Court Orders Bankruptcy ----------------------------- Buenos Aires court No. 1 rules that local company Crar S.R.L. is "Queibra Decretada", reports Argentine news portal Infobae. Clerk No. 1 aids the court on the case. Mr. Daniel Macri, a local accountant, was assigned as the Company's receiver. He will authenticate creditors' claims until December 15 this year. He is also required to prepare the individual and general reports, whose deadlines were not revealed by the report. CONTACT: Daniel Macri Simbron 5742 Buenos Aires DAGER: Court Approves Bankruptcy Petition ----------------------------------------- Insolvency judge Ferrario of Buenos Aires' Court No. 6 approves the petition for the bankruptcy of Dager S.R.L., reports Argentine newspaper La Nacion. The Company's creditor filed the bankruptcy petition for nonpayment of debt. With assistance from Clerk No. 11, Dr. Piatti, the court assigned Mr. Roberto Boffa as the Company's receiver. Credit verifications run until February 5 next year. The receiver is required to prepare the individual and general reports on the process. La Nacion, however, did not mention whether the court has set the deadlines for these reports. CONTACT: Dager S.R.L. Moron 3065 Buenos Aires DIRECTV LA: Moves Again To Extend Exclusive Filing Periods ---------------------------------------------------------- Joel A. Waite, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that the Debtor, the Creditors' Committee and Hughes Electronics Corporation continue to engage in negotiations with respect to the terms of a consensual plan of reorganization. The parties agree that it would be productive to the plan formulation process and the Chapter 11 Case generally to further extend the Exclusive Periods. Thus, DirecTV, Committee and Hughes ask the Court to extend the Exclusive Proposal Period to November 12, 2003 and the Exclusive Solicitation Period to January 12, 2004. The Court will convene a hearing on November 12, 2003 to consider the Debtor's request. By application of Del.Bankr.LR 9006-2, the Debtor's exclusive filing period is automatically extended through the conclusion of that hearing. (DirecTV Latin America Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) ESTABLICIMIENTO METALURGICO: Court Orders Bankruptcy ---------------------------------------------------- Establecimiento Metalurgico Weber S.R.L., which is domiciled in Buenos Aires, enters bankruptcy on orders from the city's Court No. 10. Without revealing the reasons behind the ruling, Infobae reports that the court declared the Company "Quiebra". The receiver, Mr. Eduardo Hector Vasini, will prepare the individual reports after the credit verification process is completed on November 28 this year. These reports are to be submitted to the court on February 16 next year. The receiver will also prepare a general report, which is to be filed at the court on March 29, 2004. The Company's assets will then be liquidated to reimburse its creditors. CONTACT: Eduardo Hector Vasini Rivadavia 4783 Buenos Aires GOTICA Y COMPANIA: Reorganization Disolves to Bankruptcy -------------------------------------------------------- Gotica y Compania S.R.L., which was undergoing reorganization, enters bankruptcy, relates Argentine news source Infobae. The Company is currently handled by its receiver, Ms. Mabel Vargas de Gallardo, an accountant from Salta, where the Company is based. Court No. 1 of the province's Civil and Commercial Tribunal issued the bankruptcy order. The court instructed the receiver that claims verifications will be done "por via incidental". The receiver's duties include the preparation of the individual and general reports. However, the source did not mention the deadlines for these reports. CONTACT: Gotica Compania S.R.L. Pueyrredon 1072 Salta Mabel Vargas de Gallardo Diego Barcelo 44 Ciudad del Milagro, Salta GS VIAL: Claims Verification Wraps Up Today ------------------------------------------- Buenos Aires accountant Ms. Ines Etelvina Clos ends the verification process for the bankruptcy of local company GS Vial S.A. today. The Troubled Company Reporter - Latin America earlier revealed that the city's Court No. 43 ruled that the Company is "Quiebra Decretada". The receiver will prepare the individual reports on the results of the verification process. She is also required to prepare the general report. Local sources, however, did not reveal the deadlines for the submission of these reports. It is expected that the Company's assets will be liquidated at the end of the process. Proceeds will be used to pay its creditors, who have valid claims. CONTACT: Ines Etelvina Clos Lavalle 715 Buenos Aires LAMINADOS LAMDECO: Receiver Verifies Claims in Bankruptcy --------------------------------------------------------- Creditors for Buenos Aires company Laminados Lamdeco S.A. must have their claims authenticated by the receiver by December 29 this year. Infobae relates that Mr. Jose Maria Nullo acts as the Company's receiver for the bankruptcy proceedings. The verifications are done to determine the nature and amount of the Company's debts. The receiver will prepare the individual reports, which must be submitted to the court on February 27 next year, after the verifications are closed. The city's Court No. 17, which handles the Company's case, requires the receiver to file the general report on March 26, 2003. Clerk No. 33 works with the court on the case. CONTACT: Laminados Lamdeco S.A. Moldes 2181 Buenos Aires Jose Maria Nullo Avenida Callao 420 Buenos Aires LOCKBIT: Court Sets Schedule for Bankruptcy Process --------------------------------------------------- Buenos Aires' Court No. 6, which handles the bankruptcy of local company Lockbit S.A., has set the schedule for the Company's bankruptcy process. Argentine news portal Infobae reports that the individual reports are due for submission on February 26 next year. The Company's receiver, Mr. Juan Carlos Vilalonga, will prepare the individual reports after the credit verifications will be closed on December 12 this year. He will also prepare the general report, which must be filed on April 13 next year, after the individual reports are processed at the court. An earlier report by the Troubled Company Reporter - Latin America revealed that the Argentine beverage company was declared bankrupt by Judge del Ferrario, who handles the Company's case with assistance from Clerk No. 12, Dr. Mendez Sarmiento. The bankruptcy order came after the Company's creditor, Vinares S.A. sough for its bankruptcy for non-payment of debt. CONTACT: Lockbit S.A. 10th Floor, Room B Adolfo Asinas 1433 Buenos Aires Juan Vilanova 6th floor, Room B Hipolito Yrigoyen 1249 Buenos Aires MULTICANAL: Extends APE Solicitation, Cash Option Solicitation -------------------------------------------------------------- Multicanal S.A. (the "Company") announced that it is extending until 5:00 p.m., New York City time, on December 12, 2003, unless further extended by the Company in its sole discretion, its solicitation (the "APE Solicitation") from holders of its 9 1/4% Notes due 2002, 10 1/2% Notes due 2007, 13.125% Series E Notes due 2009, Series C 10 1/2% Notes due 2018 and Series J Floating Rate Notes due 2003 (together, the "Existing Notes"), and other financial indebtedness (the "Bank Debt" and together with the Existing Notes, the "Existing Debt") of powers of attorney in favor of an attorney- in- fact, to execute an acuerdo preventivo extrajudicial (the "APE"). The Company also announced that it is extending until 5:00 p.m., New York City time, on December 12, 2003, unless further extended by the Company in its sole discretion, its offer to purchase for cash (the "Cash Option Solicitation") not more than U.S.$131 million of its Existing Debt at a price of U.S.$300 per U.S.$1,000 aggregate principal amount of Existing Debt tendered for purchase. As of 5:00 p.m., New York City time, on October 1, 2003, holders (including certain holders who may not have submitted complete documentation) of approximately U.S.$279.2 million or approximately 53% principal amount of Existing Debt in the aggregate have either tendered in the Cash Option Solicitation or agreed to participate in the APE Solicitation. A holder of Existing Debt that has tendered in either the Cash Option Solicitation or the APE Solicitation prior to the date hereof or that elects to participate in the APE Solicitation or the Cash Option Solicitation after the date hereof will not be entitled to withdraw its power of attorney and tenders. The Information Agent for both the Cash Option Solicitation and the APE Solicitation is D.F. King & Co., Inc. and its telephone number is (212) 493-6920. The Depositary for the Cash Option Solicitation and the Exchange Agent for the APE Solicitation is JPMorgan Chase Bank and its telephone number is (212) 623-5162. This extension notice is dated as of October 2, 2003. NEO COMUNICACIONES: Court Orders Bankruptcy ------------------------------------------- Neo Comunicaciones Publicitarias S.R.L. enters bankruptcy on orders from Buenos Aires Court No. 8. The city's Clerk No. 16 assists the court on the case. A local accountant, Mr. Felipe Florio, was assigned as the Company's receiver. Argentine news source Infobae indicates that the receiver will validate creditors' claims until December 29 this year. The receiver will prepare the individual reports on completion of the verification process. These reports are to be submitted to the court on March 11 next year, followed by the general report on April 27. At the end of the bankruptcy process, the Company's assets will be liquidated to reimburse its creditors. Payments will be based on the results of the credit verification process, where the amount and nature of the Company's debts are determined. CONTACT: Neo Comucaciones Publicitarias S.R.L. Ave Rivadavia 1157 Buenos Aires OPEN SPORTS BUSINESS: Court Orders Bankruptcy --------------------------------------------- Argentine news portal Infobae reports that Buenos Aires' Court No. 13 declares local company Open Sports Business S.A. "Quiebra". Working with Clerk No. 25, the court assigned Mr. Date Giampaolo as the Company's receiver. Creditors must have their claims verified by the receiver on December 9 this year, after which the receiver will prepare the individual reports. The receiver will also prepare a general report after the individual reports are processed at court. The source, however, did not reveal whether the deadlines for the submission of these reports have been set. CONTACT: Dante Giampaolo Anchorena 672 Buenos Aires PINTURERIA PROFESIONAL: Official Reorganization Starts ------------------------------------------------------ Pintureria Profesional Marcos S.R.L., which was undergoing the bankruptcy process, will reorganize. A report by Argentine news source Infobae indicates that the Company's receiver, Mr. Raul Brener, will verify creditors' claims until December 18 this year. The individual reports on the results of the verifications must be submitted to the court on February 25 next year. After these are processed at court, the receiver will summarize the results in a general report, which must be submitted to the court on April 23 next year. Court No. 25, which handles the Company's case ordered the informative assembly to be held on October 6 next year. Clerk No. 49 aids the court on the case. CONTACT: Raul Brener Lambare 1140 Buenos Aires PROYECTOS E INSTALACIONES: Proofs of Claims Ends Today ------------------------------------------------------ The credit verification period for the reorganization of Proyectos e Instalaciones Andisa S.A., ends today, October 30. The Company's receiver will prepare the individual reports. An earlier report by the Troubled Company Reporter - Latin America revealed that Judge Villanueva of Buenos Aires Court No. 23 approved the Company's motion for "Concurso Preventivo". Clerk No. 46, Dr. Timpanelli works with the court on the case. Documents submitted to the court revealed that, the Company, which is involved in the construction of electrical systems, stopped making debt payments on October 30, 2001. CONTACT: Proyectos e Instalaciones Andisa S.A. 8th Floor, Room B Alsina 1433 Buenos Aires PRO SUN: Court Orders Bankruptcy -------------------------------- Pro Sun S.A., which is domiciled in Buenos Aires, enters bankruptcy on orders from the city's Court No. 4, relates Argentine news portal Infobae. Clerk No. 8 aids the court on the case. The court assigned Mr. Gonzalo Daniel Cueva, a local accountant, as the Company's receiver. He will verify creditors' claims until December 5 this year. The receiver is also required to prepare the individual and general reports. Infobae, however, did not reveal whether the court has set the deadlines for the filing of these reports. CONTACT: Gonzalo Daniel Cueva Terrero 1752 Buenos Aires PUBLICIDAD DINAMICA: Court Designates Receiver for Bankruptcy ------------------------------------------------------------- Court No. 9 of Buenos Aires assigns Mr. Silvio Gustavo Gobracz as receiver for local company Publicidad Dinamica S.A., which is undergoing the bankruptcy process. A report by Infobae indicates that Clerk No. 17 aids the court on the case. The credit verification period ends on December 22 this year. This part of the bankruptcy process determines the amount and nature of the Company's debts. The results of this process will also be used as basis for payments at the end of the process, when the Company's assets are liquidated. The receiver will prepare the individual reports after the said date and submit these to the court on March 12 next year. The general report, which is a summary of the individual reports after processing at court, should follow on May 5, 2004. CONTACT: Silvio Gustavo Gobracz Tucuman 1484 Buenos Aires ROYAL AHOLD: 3Q03 Sales Up Slightly; Near Term Convoluted --------------------------------------------------------- - Consolidated 3Q 2003 sales amounted to Euro 13.0 billion, a decline of 7.1% compared to the same period last year - Sales are significantly impacted by the lower currency exchange rates of in particular the US Dollar; sales excluding currency impact increased by 2.7% - Persistent weak global economy and fierce competition impact sales - Operating income 2003 expected to be impacted by margin squeeze, particularly at U.S. Foodservice - Professional fees of advisors in 2003 in excess of Euro 100 million Ahold announced Tuesday consolidated net sales for the third quarter of the year (12 weeks through October 5, 2003) of Euro 13.0 billion, a decline of 7.1% compared to Euro 14.0 billion generated in the 2002 third quarter. Sales are significantly impacted by the lower currency exchange rates of in particular the U.S. Dollar; sales excluding currency impact increased by 2.7%. The overall impact of acquisitions and divestments on net sales growth in the third quarter was not material. The sales numbers presented in this press release are preliminary and unaudited. USA - RETAIL In the United States, net sales of USA retail in USD increased by 3.3% to USD 6.2 billion (2002: USD 6.0 billion). Comparable sales increased by 1.1% and identical sales increased by 0.3%. EUROPE - RETAIL In Europe sales rose 0.3% to Euro 3.0 billion (2002: Euro 3.0 billion). Lower sales at Albert Heijn were offset by sales growth at Schuitema, Central Europe and Spain. FOODSERVICE Net sales at U.S. Foodservice increased by 5.9% to USD 4.3 billion (2002: USD 4.0 billion), partially achieved by low margin business. The acquisition of Allen Foods and Lady Baltimore in December and September of 2002, respectively, contributed approximately 2% to the sales growth. SOUTH AMERICA In South America sales amounted to Euro 511 million (2002: Euro 586 million), down 12.8% compared to last year caused by the disposal of Santa Isabel Chile in July of 2003. ASIA In Asia sales declined 28% to Euro 78 million (2002: Euro 109 million) due to the sale of most of the assets of Ahold Malaysia and Ahold Indonesia in the course of the third quarter of 2003. OUTLOOK 2003 Ahold expects operating income for full-year 2003 to be impacted by continued pressure on margins, primarily at U.S. Foodservice. Ahold also expects professional fees of lawyers, accountants and other advisors to be in excess of Euro 100 million in 2003. DEFINITIONS - Identical sales compare sales from exactly the? same stores. - Comparable sales are identical sales plus sales from? replacement stores. - Currency impact: the impact of using different? exchange rates to translate the financial figures of our subsidiaries to Euros. The financial figures of the previous year are restated using the actual exchange rates in order to eliminate this currency impact. ============= B E R M U D A ============= LORAL SPACE: Intelsat to Issue Notes To Finance Asset Purchase -------------------------------------------------------------- Intelsat, Ltd. announced Tuesday its intent to issue and sell $900 million aggregate principal amount of its Senior Notes in a private placement under Rule 144A and Regulation D in the United States and in accordance with Regulation S outside of the United States. The Senior Notes will be senior unsecured obligations of Intelsat, Ltd. and will rank equally with its other senior unsecured indebtedness. It is intended that the net proceeds from the issuance and sale will be used to finance the proposed purchase of the North American satellite assets of Loral Space & Communications Corporation and certain of its affiliates and for general corporate purposes. The notes will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States unless they are registered or unless such sale is exempt from the registration requirements of the Securities Act. =========== B R A Z I L =========== EMBRATEL: Evaluating Acquisition Targets ---------------------------------------- Embratel Participacoes SA, Brazil's biggest long-distance telephone company, is still interested in making acquisitions despite losing out in the bidding for bankrupt operator AT&T Latin America (ATTL). Embratel, controlled by WorldCom Inc., is evaluating opportunities in Argentina, Chile and Colombia, Chief Executive Jorge Rodriguez said, without revealing the names of the companies Embratel may be interested in. Speaking at the Futurecom conference in Florianopolis, Rodriguez highlighted those three countries as the main focus for the Company's international expansion. Meanwhile, Embratel chairman Dan Crawford announced that Embratel has submitted documents on the purchase of Brazilian start-up local loop operator Vesper to the government authorities, and the Company aims to wrap up the deal once those approvals come through. To see latest financial statements: http://bankrupt.com/misc/EMBRATEL.htm 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 SABESP: Local Currency Rating Outlook Improves to Stable -------------------------------------------------------- Standard & Poor's Ratings Services revised Tuesday its outlook on its 'BB-' local currency rating on Companhia de Saneamento Basico do Estado de Sao Paulo - Sabesp to stable from negative. At the same time, Standard & Poor's affirmed its 'B+' foreign currency and 'BB-' local currency corporate credit ratings on Sabesp. The outlook on the company's foreign currency rating is still stable. The outlook assigned to Sabesp in the Brazil national scale was also revised to stable from negative and its 'brA' was affirmed. "This action reflects the successful renegotiation of Sabesp's large debt maturities during 2003 when Brazilian corporates were still in an unfavorable credit environment," said Standard & Poor's credit analyst Juliana Gallo. The company refinanced R$367 million and R$400 million debentures put options in March and October, respectively, and issued US$225 million senior unsecured notes to deal with a US$200 million Eurobond, which matured in July. The ratings on Sabesp incorporate the following risks: risks of operating in the volatile economic environment; lack of defined regulatory framework for the water utility sector, reducing predictability; high amount of debt and significant refinancing needs for the next years; and challenge to reduce overdue customer receivables. These risks are partially offset by the company's strategic importance as a regional provider of water and wastewater service in the state of Sao Paulo; virtual monopoly for service, covering a large territory; capacity to progress in the capital program that expanded wastewater collection and treatment capability throughout the system; and strong cash generation. The stable outlook reflects the company's capacity to refinance its significant maturities in a negative credit environment for Brazilian companies, as well as Standard & Poor's expectation that Sabesp will maintain a moderate financial policy and that it will have the ability to fund much of its capital program internally. ANALYSTS: Juliana Gallo, Sao Paulo (55) 11-5501-8948 Milena Zaniboni, Sao Paulo (55) 11-5501-8945 Juliana Gallo, Sao Paulo (55) 11-5501-8948 Milena Zaniboni, Sao Paulo (55) 11-5501-8945 TCP: Analysts Project Narrower 3Q03 Net Loss -------------------------------------------- Analysts expect Telesp Celular Participacoes SA (TCP), the biggest unit of Vivo, Brazil's largest mobile-phone company, to report a much lesser net loss in the third quarter compared to the BRL92.1-million net loss in the same quarter last year. According to the median of estimate of nine analysts surveyed by Bloomberg, the Company, which is controlled by Portugal Telecom SGPS SA and Telefonica Moviles SA of Spain's Vivo venture, will report a net loss of BRL7 million ($2.44 million) for the third quarter this year. A lower net loss is expected to come as the Company signed up new customers and cut the cost of making payments on debt. The Sao Paulo-based company has hedging contracts covering all its debt, which is two-thirds denominated in foreign currencies and reached BRL5.47 billion at the end of June. A 6 percentage- point reduction in Brazil's benchmark interest rate in the third quarter coupled with a 29 percent strengthening of the real against the dollar since the end of the third quarter a year ago helped reduce financing costs, analysts such as Roberta Kosaka of Banco Brascan said. "Interest rates have come down considerably the past months, which will reduce the financing expenses for Telesp Celular's debt," said Kosaka, a telecommunications analyst in Sao Paulo. "Naturally, the results are expected to come better." ========= C H I L E ========= COEUR D' ALENE: Announces Final Redemption of 6 3/8% Debentures --------------------------------------------------------------- Coeur d'Alene Mines Corporation, the world's largest primary silver producer, announced Tuesday the redemption of the remaining outstanding $4.9 million principal amount of the Company's 6 3/8% Convertible Subordinated Debentures due January 31, 2004. The final redemption date is set for November 28, 2003. Under terms of the indenture, the debentures are redeemable at the option of the Company in whole or part at 100% of the principal amount for cash, plus accrued interest to the redemption date. Notice of redemption will be mailed at least 30 days, but not more than 60 days, before the redemption date to each holder of debentures. From and after the redemption date, interest will cease to accrue on the debentures. The debentures may be converted into shares of the Company's common stock at any time before the close of business on November 26, 2003 in accordance with the terms and conditions of the indenture governing the debentures. Coeur d'Alene Mines Corporation is the world's largest primary silver producer, as well as a significant, low-cost producer of gold, with anticipated 2003 production of 14.6 million ounces of silver and 112,000 ounces of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile and Bolivia. COEUR D'ALENE: Cash Resources Sufficient to Meet Current Needs -------------------------------------------------------------- Coeur d'Alene Mines' Cerro Bayo property, located in Southern Chile, produced 1.2 million ounces of silver and 15,200 ounces of gold during the third quarter of 2003. Total cash costs for the latest three-month period was $1.18 per ounce compared to $0.91 in the third quarter of 2003, according to a report in Frederick, Maryland's SunStream News. Exploration at Cerro Bayo during the third quarter focused on reserve/resource delineation drilling of the Javiera, Wendy, Tranque Norte and Veronica veins. General reconnaissance exploration was also carried out on Coeur's properties in the Santa Cruz Province of Argentina. Results obtained from drilling adjacent to the R-4 Zone on the Martha mine property and on the Malbec property located 10 miles north of the Martha mine have indicated the presence of mineralized zones. Production at Mina Martha progressed as planned. During the quarter, ore was mined from the open pit and underground workings. Open pit mining was completed during the third quarter of 2003. Current exploration is delineating both shallow, open pit reserves and a southeast extension of the R-4 Zone. A new geological model is being prepared for R-4 with this new information. Coeur's Rochester mine, located in Nevada, produced 1.7 million ounces of silver and 15,300 ounces of gold, during the third quarter of 2003 compared to 1.7 million ounces of silver and 18,900 ounces of gold in the third quarter of the prior year. Cash costs for the latest three-month period increased to $3.66 per ounce as compared to $2.83 in the third quarter of 2002. The lower gold production and increased per ounce cash cost of production in the third quarter of 2003 as compared to the third quarter of 2002 were the result of the placement of lower grade ore on the leach pad, construction activities associated with the crusher relocation project, construction of a new off-pad haul road and ongoing reclamation activities. As a result, pit ore to the crusher was replaced with low-grade ore, which ultimately reduced ounce production. With all non-production related activities complete, pit production will resume as planned and ounce production is expected to increase and per ounce operating costs are expected to decrease over the next several quarters. In the third quarter of 2003, silver production from Coeur Silver Valley in Idaho, was 0.4 million ounces, down 0.8 million ounces from the 1.2 million ounces produced in the third quarter of 2002. Total cash costs for the current quarter increased to $5.46 per ounce compared to $4.54 per ounce in the third quarter of the prior year. The decrease in production and the increase in per ounce cash costs is the result of the temporary suspension of operations during the third quarter as maintenance work on the mine's hoist was completed to prepare the mine for future operations pursuant to a long-term development plan. Measures have been taken to address these short-term issues and to develop an operational base for future productivity improvements. Exploration drilling of targets from the 5200 level are planned during the remainder of 2003. The final feasibility study at the San Bartolome silver project near Potosi, Bolivia is scheduled for completion near the end of the first quarter of 2004. The Company recently completed an independent ore reserves report for the San Bartolome project. As a result, the previously reported mineralized material containing 40.3 million tons of ore with an average grade of 3.14 per ton has been reclassified to proven and probable ore reserves of 35.3 million tons with an average grade of 3.48 ounces of silver per ton resulting in 123 million ounces of contained silver. Sales of metal in the nine months ended September 30, 2003 were $78.1 million, an increase of $17.7 million, or 29%, from the same period of 2002 of $60.5 million. The increase in product sales of metal is attributable to increased production of silver and gold which accounted for $13.8 million, or 78%, of the increase, and higher realized gold prices which accounted for $3.8 million, or 22%, of the increase. In the nine months ended September 30, 2003, the Company produced a total of 10.7 million ounces of silver and 93,400 ounces of gold, compared to 10.0 million ounces of silver and 73,400 ounces of gold in the nine months ended September 30, 2002. In the nine months ended September 30, 2003, the Company sold 10.9 million ounces of silver and 97,300 ounces of gold compared to 9.6 million ounces of silver and 66,000 ounces of gold for the same period in 2002. The increase in silver and gold production is the result of the start-up of operations at the Cerro Bayo and Martha mines in the second quarter of 2002, which accounted for 3.8 million ounces of silver production and 52,200 ounces of gold production during the first nine months of 2003. Realized silver and gold prices were $4.71 and $341 per ounce, respectively, in the nine months ended September 30, 2003 compared to $4.67 and $306 in the comparable period of 2002. Interest and other income in the nine months ended September 30, 2003 decreased by $4.1 million compared with the same period of 2002. The decrease was primarily due to a gain on the sale of the Petorca mine of $1.3 million, $1.5 million from a business interruption claim at the Galena mine, $1.0 million from sales of investments and $0.7 million of timber sales at the Galena mine, partially offset by $0.6 million in foreign exchange variations in the second quarter of 2002. Production costs in the nine months ended September 30, 2003 decreased by $3.2 million, or 5%, from the nine months ended September 30, 2002 to $55.7 million. The decrease is the result of reduced production costs at the Rochester and Silver Valley mines of $12.1 million and $3.4 million, respectively, offset in part by increased production costs at the Cerro Bayo mine of $12.3 million. Depreciation and amortization increased in the nine months ended September 30, 2003 by $4.8 million, from the prior year's comparable period, primarily due to increased depletion recorded at the Cerro Bayo mine in conjunction with commencement of commercial production at the mine. Administrative and general expenses increased in the nine months ended September 30, 2003 compared to the same period in 2002 by $2.5 million due to increased financing activities associated with the Company's ongoing financial restructuring, which was completed in the third quarter of 2003. Exploration expenses increased by $1.0 million in the nine months ended September 30, 2003 compared to the same period in 2002 as a result of the Company's expanded exploration activities in the Cerro Bayo/Martha mine property areas. Pre-feasibility expenses decreased by $1.1 million due to lower pre-feasibility expenses on the San Bartolome project in the nine months ended September 30, 2003 as compared to the same period of 2002. Interest expense decreased in the nine months ended September 30, 2003 compared with the nine months ended September 30, 2002 to $10.7 million from $17.4 million as a result of a decrease in the Company's overall debt level. During the nine months ended September 30, 2003, the Company recorded a loss on the early retirement of debt of $34.0 million compared to $2.9 million recorded in the same period of 2002. The Company's net loss amounted to $53.5 million, or $0.35 per share, for the nine months ended September 30, 2003 compared to a net loss of $35.1 million, or $0.51 per share, for the same period in 2002. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital at September 30, 2003, increased by $99.7 million to approximately $106.3 million compared to $6.6 million at December 31, 2002. The increase was primarily attributed to $99.4 million of cash provided by financing activities. The ratio of current assets to current liabilities was 4.7 to 1.0 at September 30, 2003 compared to 1.2 to 1.0 at December 31, 2002. Net cash used in operating activities in the three months ended September 30, 2003 was $0.2 million compared to net cash used in operating activities of $2.3 million in the three months ended September 30, 2002. The decrease in operating cash outflow of $2.1 million is primarily the result of increased production levels and lower production costs at the Cerro Bayo/Martha Mines. Net cash used in investing activities in the third quarter of 2003 was $7.8 million compared to net cash used in investing activities of $3.2 million in the prior year's comparable period. The increase in cash used in investing activities primarily resulted from an increase in expenditures on mining assets associated with the crusher relocation project at the Rochester mine. Net cash provided by financing activities was $75.4 million in the thirdquarter of 2003, compared to cash provided of $0.7 million in the third quarter of 2002. The increase was primarily a result of proceeds on issuance of common stock of $76.0 million, offset in part by bank borrowing repayments of $0.5 million and retirement of debt of $0.1 million. As a result of the above, cash and cash equivalents increased by $67.4 million in the third quarter of 2003 compared to a decrease of $4.7 million for the comparable period in 2002. Net cash used in operating activities in the nine months ended September 30, 2003 was $4.5 million compared to net cash used in operating activities of $7.7 million in the nine months ended September 30, 2002. The decrease in operating cash outflow of $3.2 million is primarily the result of increased inventory levels associated with increased production levels at the Cerro Bayo/Martha Mines. Net cash used in investing activities in the nine months ended September 30, 2003 was $17.0 million compared to net cash used in investing activities of $5.0 million in the prior year's comparable period. The increase in cash used in investing activities primarily resulted from an increase in capital expenditures at the Cerro Bayo and Rochester mines for increased development work and crusher relocation project. Net cash provided by financing activities was $99.4 million in the nine months ended September 30, 2003, compared to cash provided of $5.2 million in the same period of the prior year. The increase was primarily a result of proceeds on issuance of common stock of $87.5 million and proceeds on the issuance of long-term debt of $33.3 million offset in part by retirement of debt of $22.4 million. As a result of the above, cash and cash equivalents increased by $77.8 million in the first nine months of 2003 compared to a decrease of $7.5 million for the comparable period in 2002. The Company has improved its working capital position since December 31, 2002 by completing a series of transactions designed to improve its capital structure. These transactions include: During the third quarter of 2003, the Company completed a public offering of 23,730,250 shares of common stock at a public offering price of $3.40 per share, which included 3,095,250 shares purchased by the underwriters at the offering price to cover over allotments. The Company realized total net proceeds from the offering, after payment of the underwriters' discount, of approximately $76.0 million. On July 7, 2003, the Company sold 0.2 million shares of common stock to an institutional investor for an aggregate of $0.3 million, or $1.40 per share. The net proceeds from the sale of shares were used to pay amounts owed by the Company's subsidiary, Empresa Minera Manquiri S.A., a Bolivian corporation, under contracts pursuant to which it obtained certain mineral rights in Bolivia and for general corporate purposes. The sale of share was effected pursuant to the Company's shelf registration statement. On May 23, 2003, the Company sold 8.1 million shares of common stock to an institutional investor for an aggregate of $10 million, or $1.23 per share. The Company also granted the investor an option, exercisable within 30 days, to purchase an additional 1.2 million shares of common stock at a price of $1.23 per share. The proceeds of the sale were used for general corporate purposes and working capital needs, including the repayment of 13-3/8% Notes and 6-3/8% Debentures. On June 20, 2003, the Company sold 1.2 million shares of common stock to the institutional investor for an aggregate of $1.5 million, or $1.23 per share, in connection with the above-referenced option. The sales of shares were effected under the Company's shelf registration statement. On February 26, 2003, the Company completed a private placement of $37.2 million principal amount of 9% Notes. The net proceeds were approximately $33.3 million. The 9% Notes are senior in right of payment to the 6-3/8% and 7-1/4% Debentures. The 9% Notes are convertible into Coeur common stock, at any time prior to maturity at a conversion price of $1.60 per share, subject to adjustment. Interest is payable semi-annually on February 15 and August 15 of each year. The Company is entitled to elect to pay interest in cash or stock, in its sole discretion. The 9% Notes are redeemable at the option of the Company six months after issuance, subject to certain conditions, and at the option of the holders in the event of a change in control. Of the financial advisory fees paid by the Company in connection with the issuance of the 9% Notes, the Company elected to issue 0.6 million unregistered shares of common stock valued at $1.54 per share in lieu of cash. On March 7, 2003, the Company called for the redemption of approximately $22.4 million principal amount of the outstanding 6-3/8% Debentures, which was funded by a portion of the proceeds received from the sale of the 9% Notes. The debt was retired on April 7, 2003. Effective as of July 10, 2003, Coeur d'Alene Mines Corporation entered into a series of agreements under which indebtedness of the Company will be exchanged for or converted into shares of the Company's common stock. The Company and each of the holders of the Company's 9% Notes entered into an Early Conversion Agreement. The amount of principal converted under the Early Conversion Agreements was $32.6 million, and the common shares issued, including interest, was approximately 27.5 million. After giving effect to the exchanges contemplated by the Early Conversion Agreements, an aggregate of $4.6 million of 9% Notes remain outstanding. The Company recorded a loss on early retirement of debt of $4.2 million in the third quarter of 2003 in conjunction with these transactions. During the nine months ended September 30, 2003, the holders of $12.7 million principal amount of the Series I 13-3/8% Convertible Senior Subordinated Notes due December 31, 2003 converted their notes, under their original terms, into a total of 9.6 million shares of common stock, including make whole interest payments. During the nine months ended September 30, 2003, the holders of the 6-3/8% Debentures due January 2004 exchanged $27.9 million principal amount for 17.1 million shares of common stock and holders of the 7-1/8% Debentures due October 2005 exchanged $2.1 million principal amount for 1.4 million shares of common stock. In connection with these exchanges, the Company reported a loss on the early retirement of debt of $29.6 million in the first nine months of 2003. At September 30, 2003, the Company had $86.9 million of cash and cash equivalents and approximately $5.7 million available under its working capital facility. Production ounces and production costs are near budget for the year. Management therefore believes that its existing and available cash and cash flow from operations will allow it to meet its obligations for the next twelve months. However, the Company may continue to seek various forms of financing in the future. * * * As reported in Troubled Company Reporter - Latin America's October 9, 2003 edition, Standard & Poor's Ratings Services revised its outlook on silver and gold mining company Coeur D'Alene Mines Corp., to positive from negative following the company's recently completed equity sale. At the same time, Standard & Poor's affirmed its 'CCC' corporate credit rating on the company. The Coeur D'Alene, Idaho-based company currently has about $19 million in total debt. ============= J A M A I C A ============= JPSCO: Senator Seeks Generating Capacity Details ------------------------------------------------ The Jamaican Government should provide a detailed account of the generating capacity of the Jamaica Public Service Company (JPSCo), the Jamaica Gleaner reports, citing a motion filed by Opposition Senator Bruce Golding. Furthermore, Golding's motion, filed at the October 17 sitting of the Senate, calls on the Government to establish a plan to ensure that there is adequate and reliable supply of electricity to meet the nation's requirements. In the motion, Golding stated that the island had been "plagued over the past several months with frequent disruption of electricity supply, causing inconvenience, loss of production and damage to equipment and appliances". "And whereas specific assurances given by the JPSCo to ensure a consistent and reliable supply of electricity have not been fulfilled, be it resolved that the Government provide a detailed account to the Honourable Senate of the current state of the JPSCo's generating capacity and the steps that are being taken to ensure an adequate and reliable supply of electricity to meet the nation's requirements," the motion added. =========== M E X I C O =========== GRUPO SIMEC: First Three Quarters 2003 Show Improved Results ------------------------------------------------------------ Grupo Simec, S.A. de C.V. announced Tuesday its results of operations for the nine-month period ended September 30, 2003. Net sales increased 26% to Ps. 1,997 million in the nine months ended September 30, 2003 compared to Ps. 1,591 million in the same period of 2002 due to higher finished product prices and increased production levels. Primarily as a result of the foregoing and significantly lower financial expense in the 2003 period, in the nine-month period ended September 30, 2003 Simec recorded net income of Ps. 281 million versus net income of Ps. 66 million for the comparable period of 2002. Simec sold 463,286 metric tons of basic steel products during the nine months ended September 30, 2003 as compared to 451,037 metric tons in the same period of 2002. Exports of basic steel products decreased to 54,047 metric tons in the nine-month period ended September 30, 2003 versus 61,853 metric tons in the September 30, 2002 period. Simec also sold 47,049 tons of billet in the first nine months of 2003 as compared to 21,476 tons of billet in the prior comparable period. Prices of finished products sold in the nine-month period ended September 30, 2003 increased 18% in real terms versus the same period of 2002. Simec's direct cost of sales was Ps. 1,308 million in the nine- month period ended September 30, 2003, or 65% of net sales, versus Ps. 1,067 million, or 67% of net sales, for the 2002 period. Indirect manufacturing, selling, general and administrative expenses (including depreciation) increased to Ps. 347 million during the nine-month period ended September 30, 2003, from Ps. 338 million in the September 30, 2002 period. Simec's operating income increased 84% to Ps. 342 million during the first nine months of 2003 from Ps. 186 million in the same period of 2002. Operating income was 17% of net sales in the nine-month period ended September 30, 2003 compared to 12% of net sales in the same period of 2002. Simec recorded no other income, net, in the nine-month period ended September 30, 2003 compared to other income, net, of Ps. 10 million in the same period of 2002. In addition, Simec recorded a provision for income tax and employee profit sharing of Ps. 37 million in the nine-month period ended September 30, 2003 versus a provision of Ps. 14 million in the same period of 2002. Simec recorded financial expense of Ps. 24 million in the nine- month period ended September 30, 2003 compared to financial expense of Ps. 116 million in the same period of 2002 as a result of (i) net interest expense of Ps. 14 million in the first nine months of 2003 compared to net interest expense of Ps. 45 million in the same period of 2002, reflecting lower debt levels in the 2003 period; (ii) an exchange loss of Ps. 9 million in the nine- month period ended September 30, 2003 compared to an exchange loss of Ps. 95 million in the same period of 2002, reflecting lower debt levels in the 2003 period and a decrease of 6% in the value of the peso versus the dollar in the 2003 period compared to a decrease of 11% in the value of the peso versus the dollar in the 2002 period; and (iii) a loss from monetary position of Ps. 1 million in the nine-month period ended September 30, 2003 compared to a gain from monetary position of Ps. 24 million in the same period of 2002, reflecting the domestic inflation rate of 2.3% in the 2003 period compared to the domestic inflation rate of 3.9% in the 2002 period and lower debt levels during the 2003 period. At September 30, 2003, Simec's total consolidated debt consisted of approximately $2 million of U.S. dollar-denominated debt, while at December 31, 2002, Simec had outstanding approximately $47.8 million of U.S. dollar- denominated debt. Simec's lower debt level at September 30, 2003 reflects the prepayment of $31.4 million of bank debt in the nine-month-period ended September 30, 2003, the conversion to common stock in March 2003 of $16.1 million of loans (plus accrued interest thereon) from Simec's parent company Industrias CH, S.A. de C.V. ("ICH") at a conversion price equivalent to U.S. $1.35 (Ps. 14.588) per American Depositary Share and a capital contribution from ICH to Simec in the amount of $14.5 million (the proceeds of which were used to retire debt owed to ICH) for capital stock to be issued in the fourth quarter of 2003. Simec currently owes no amounts to ICH. All figures were prepared in accordance with Mexican generally accepted accounting principles and are stated in constant Pesos at September 30, 2003. Simec is a mini-mill steel producer in Mexico and manufactures a broad range of non-flat structural steel products. GRUPO TMM: Reports Improvement in 3Q03, 9-Months 2003 ----------------------------------------------------- Grupo TMM, S.A., a Latin American multi-modal transportation and logistics company and owner of the controlling interest in Mexico's busiest railway, TFM, reported revenues from consolidated operations of $230.1 million for the third quarter of 2003, compared to $224.6 million for the same period of 2002. Improved revenues were reported across all divisions, except Specialized Maritime. The company continued to be negatively impacted in the third quarter by devaluation of the peso and by reduced levels of automotive manufacturing in Mexico. Peso devaluation was 8.2 percent quarter over quarter. Operating profit for the third quarter decreased 4.3 percent compared to the same period of 2002, due mainly to the slowdown of the Mexican automotive industry and to increased fuel costs. Revenues from consolidated operations for the first nine months of 2003 were $678.0 million, compared to $688.4 million for the same period of 2002. Operating profit for the nine months decreased 19.6 percent compared to the same period of 2002. The company had a net loss of $29.9 million, or approximately 53 cents per share, in the third quarter. Year-to-date net income was a loss of $20.4 million, or 36 cents per share. Net profit in the third-quarter and nine-month periods was impacted by one time charges totaling $10.9 million, including, $2.8 million for costs associated with employee severances; $2.4 million for amortization of warrants issued in connection with the convertible note paid earlier in the year; and $5.7 million in net book loss from the sale of the Anahuac tanker vessel. TFM's net income for the nine months was impacted by a one time charge of $18.3 million as part of VAT recovery expenses and by $38.5 million associated with the declining value of deferred tax credits primarily due to peso devaluation, $19.2 million of which was booked in the third quarter. In the nine-month period, unconsolidated TMM reduced financial obligations by $60.9 million, and TFM reduced debt by $45.3 million. At TFM, the company's rail subsidiary, nine-month revenue was negatively impacted by $45.7 million primarily due to declining auto production shipments and by continued peso devaluation of 8.2 percent for the quarter and 12 percent for the nine months. Revenue growth at TFM returned in the third quarter. In the third quarter, the company's Specialized Maritime reported decreased revenues due to the elimination of the maritime car carrier business. Absent this event, revenues would have increased quarter over quarter by 9 percent. Gross profit and operating profit for the division improved, increasing operating margin by 3.5 percent. The division recently added three extra vessels through a bidding process with PEMEX, which has improved revenue by $840,000 per month starting in August. The business unit is currently involved in a bidding process, which will be concluded in early November, for an additional eight offshore vessels. Chemical parcel tanker volume and revenue improved quarter over quarter by approximately 41 percent and 32 percent respectively. TMM's Logistics division's revenues increased in the third quarter compared to the same period of 2002 by 18.2 percent, due to new line-feeding operations with the Mexican automobile industry, additional volume in its trucking operations, increased RoadRailer and trailer movements and terminal expansions. Margins were impacted by imbalances of cargo, the introduction of new equipment and one-time start-up costs. In the Ports and Terminals division, revenues, gross profit and operating profit increased during the third quarter of 2003 primarily due mainly to seasonal passenger activity at Acapulco, in spite of a decrease in automobile handling. Javier Segovia, president of TMM said, "While issues surrounding our debt, the termination of the Acquisition Agreement with Kansas City Southern and the VAT lawsuit have been in the forefront, we achieved revenue improvement in all of our divisions, except Specialized Maritime, which did experience substantial margin improvements. Consolidated SG & A was reduced across all operations by $3.9 million net of restructuring costs during the last four months. "We are actively engaged in a dialogue with bondholders organized in an ad hoc committee and with their advisors," Segovia continued, "which we hope will lead to a successful resolution. The restructuring will allow us to focus on operations and successfully execute our business plan. "The termination by TMM's board of directors of the Acquisition Agreement with Kansas City Southern for the company's interest in TFM formalizes TMM's shareholders' decision to exercise the full extent of their rights and not approve the transaction. We remain confident that once all of the substantive issues are reviewed through arbitration, the company will be able to pursue all reasonable alternatives to restructure Grupo TMM and improve the company's financial profile. "Additionally, the courts in Mexico have resolved TFM's Valued Added Tax lawsuit and instructed the government to award TFM a tax certificate in an amount consistent with Article 22 of the Mexican Fiscal Code. Even though the Fiscal attorney has sought a revision and further clarification, we remain confident in the integrity of the Mexican legal system and in the eventual outcome." "Finally," Segovia concluded, "Grupo TFM has requested adherence to the specific process provided in the Purchase-Sales Agreement of TFM's stock for the exercising of the Mexican government's Put option for the 20 percent equity interest in TFM it retains. Grupo TFM and its partners acknowledges its commitment to acquire this remaining equity at TFM." ASSET SALES AND LEGAL PROCEEDINGS On April 22, the company announced it had entered into agreements to place its interest in Grupo TFM ("TFM") under common control with Kansas City Southern ("KCS") for $200 million in cash and 18 million shares of KCS common stock. TMM would have received an additional cash payment, not to exceed $180 million, upon the successful completion of certain events. Previously, the company announced, that at its General Ordinary Shareholders' meeting on August 18 shareholders unanimously did not approve the sale of TMM's interests in Grupo TFM to KCS. As was made public, approval of the company's stockholders was required under the terms of the Acquisition Agreement for the sale to proceed. As a result of the unanimous vote, TMM's board of directors formally notified KCS of the termination of the proposed sale. Subsequently, the Mexican Foreign Investment Commission was also formally notified by TFM of the termination of the application before the Commission to permit KCS's participation in more than 49 percent of TFM's equity. On August 25, the Mexican Foreign Investment Commission notified TFM that its resolution to close the administrative process had been initiated before the Commission. On August 29, TFM announced it had given notice to KCS of the exercise of its right to repurchase shares representing an aggregate 51 percent interest in Mexrail, Inc. ("Mexrail") that were sold to KCS in May 2003. The shares were being held in a voting trust pending the receipt of approval of the United States Surface Transportation Board ("STB") of KCS's application to assume control of Mexrail. Under the terms of the Stock Purchase Agreement entered into in April 2003, TFM had the unilateral right to repurchase the shares of Mexrail for the same amount received by TFM in May 2003 upon closing of the sale of the shares to KCS. On September 4, the company announced that KCS had initiated a lawsuit in Delaware state court seeking a preliminary injunction against TMM, seeking to impose restrictions on TMM pending the outcome of arbitration or other dispute resolution process under the Acquisition Agreement. On October 22, the court granted the preliminary injunction to KCS requiring the parties to preserve the status quo pending resolution of the arbitration process. TMM had previously requested KCS to commence the arbitration process as quickly as possible, and expects that process to begin in the next few weeks. On September 23, the U.S. STB issued a decision finding no need to rule on the transfer back to TFM of the 51 percent interest in Mexrail. On October 1, the company announced that TFM completed the repurchase of the shares in Mexrail from KCS, upon which TFM again owned 100 percent of Mexrail. The repurchase effectively unwound the prior sale to KCS and did not affect the operations of TFM or Mexrail. The company's board of directors has also directed management to pursue all reasonable alternatives to restructure TMM's outstanding indebtedness and improve the company's financial profile. LIQUIDITY AND DEBT PROFILE During late 2002 and early 2003, TMM presented various offers to holders of its bonds due on May 15, 2003, and November 15, 2006, in order to extend the maturity date of the issues through a Bond Exchange. After numerous extensions and amendments of the company's exchange offer, with the goal of encouraging its creditors to grant TMM the necessary time to finalize the sale of assets and be able to fulfill its obligations, the company was unable to obtain the percentage of support required for the Bond Exchange to be completed on terms that were commercially reasonable for the company. The company remains committed to honoring its financial obligations while preserving its businesses, and has re-initiated the negotiation process with its creditors, engaging Miller, Buckfire, Lewis and Ying LLC to assist in the restructuring of the company's debt. With the company's support, an informal committee of holders of its Notes has been formed. The committee is now represented by a substantive amount of the principal holders of the Notes. The law firm of Akin, Gump, Strauss, Hauer & Feld LLP, and the financial advisory firm of Houlihan Lokey Howard & Zukin have been retained to represent the committee. On August 22, the company announced it had completed the refinancing of the outstanding amounts under its existing receivables securitization program. After giving effect to the amendments to the transaction, there will be approximately $54 million of outstanding certificates issued by the securitization trust. The new certificates require monthly amortization of principal and interest and mature in three years. This refinancing improves the company's overall liquidity by allowing the release of excess cash retained in the securitization trust and significantly improves the maturity profile of the payments due under the receivables securitization program, which had become payable in June. In the nine-month period of 2003, TMM reduced its financial obligations by approximately $60.9 million primarily from the debt repayment from the net proceeds of certain asset sales, and TFM reduced its debt by approximately $45.3 million. As a result, consolidated debt reduction was approximately $106.2 million. VAT LAWSUIT On August 26, the company announced that TFM was formally notified by the Mexican Federal Tribunal of Fiscal and Administrative Justice ("Fiscal Court") of its resolution regarding TFM's Value Added Tax (VAT) Lawsuit initiated by TFM in 1997 (valued at $2,111 million pesos as of December 1996). The resolution is the result of the unanimous vote of the nine magistrates present at the public session, and was issued in compliance with the June 11, 2003, ruling (amparo) of the Court of the First Circuit (the "Federal Court"). With this new resolution, the Fiscal Court has resolved to vacate its previous resolution of December 6, 2002, considering the "ficta denial" (negativa ficta) claimed by TFM, and has also resolved that TFM proved its claim. The Fiscal Court has ordered the issuance of the VAT Certificate to TFM under the terms established by article 22 of the Mexican Fiscal Code. On October 3, the Tax Attorney of the Mexican Government filed for a review of the ruling. TFM PUT Grupo TFM has requested a federal judge in Mexico to provide an appropriate interpretation of the Purchase-Sale Agreement of TFM's common stock, requesting adherence to the specific process provided in the Agreement and its Amendments for the exercising of the Mexican government's Put option for the 20 percent equity interest in TFM it retains. Since none of the steps of this process have been completed; and the real value of the shares of TFM owned by the government cannot be determined because TFM has not received reimbursement of a Value Added Tax, although ordered by the Mexican Fiscal Court on August 13, there can be no condition that applies in order for the Mexican government to request that TFM acquire the equity stake held at TFM by the government. Grupo TFM acknowledges its commitment to acquire the equity interest that the Mexican government holds in TFM and has informed the government of its desire to comply once the pending steps from the original Agreement are completed. Headquartered in Mexico City, Grupo TMM is a Latin American multimodal transportation company. Through its branch offices and network of subsidiary companies, TMM provides a dynamic combination of ocean and land transportation services. TMM also has a significant interest in Transportacion Ferroviaria Mexicana (TFM), which operates Mexico's Northeast railway and carries over 40 percent of the country's rail cargo. Visit Grupo TMM's web site at www.grupotmm.com and TFM's web site at www.tfm.com.mx. Both sites offer Spanish/English language options. To see financial statements: http://bankrupt.com/misc/Grupo_TMM.htm CONTACT: GRUPO TMM Juan Fernandez, 011-525-55-629-8778 juan.fernandez@tmm.com.mx or Brad Skinner (IR) 011-525-55-629-8725 /203-247-2420 brad.skinner@tmm.com.mx or DRESNER CORPORATE SERVICES Kristine Walczak, 312-726-3600 kwalczak@dresnerco.com or AT PROA STRUCTURA Marco Provencio 011-525-55-629-8708 /011-525-55-442-4948 mp@proa.structura.com.mx TFM: Reports Consolidated 3Q03, YTD Results Through September ------------------------------------------------------------- Grupo Transportacion Ferroviaria Mexicana, SA. de C.V. and its subsidiaries ("TFM") reported financial results for the third quarter and first nine months of 2003. THREE MONTHS Consolidated net revenues for the three months ended September 30, 2003, were $178.2 million, which represents an increase of $2.9 million or 1.7 percent from revenues of $175.3 million for the same period in 2002. An 8.2 percent devaluation of the peso quarter to quarter affected revenues by $4.7 million, and a significant downturn in the Mexican automobile industry of 20 percent in unit production impacted revenues by $5 million. Conversion from truck to rail and growth in chemical, agroindustrial and cement and mineral product segments increased revenues by $8.3 million. Revenues include $13.6 million from Mexrail operations, consolidated with TFM since the second quarter 2002. Consolidated operating profit for the third quarter of 2003 was $36.0 million, including a $1.8 million operating loss from Mexrail operations, representing a decrease of $2.7 million from the third quarter of 2002. The operating ratio (operating expenses as a percentage of revenues) for the third quarter of 2003 was 79.8 percent including Mexrail operations and 76.6 percent without Mexrail. In spite of an increase of 15 percent, or $1.9 million, in fuel cost, operating expenses were lower in the third quarter compared with the same period in 2002: salaries, wages and fringe benefits down 3.8 percent, other employee expenses down 14.8 percent, and purchased services down 28 percent due to cost control measures in locomotive maintenance and a more efficient operation and renegotiation of contracts. NINE MONTHS Consolidated net revenues for the nine months ended September 30, 2003, were $523.4 million, which represents a decrease of $9.0 million, or 1.7 percent from the same period of 2002. TFM's revenues were negatively impacted by a 12.2 percent devaluation of the peso, representing $21.6 million less revenue than the same period of 2002, and by $24.1 million lower revenues from a significant downturn in the Mexican automobile industry. However, these losses in revenue were partially offset by increased volume in truck to rail conversion; chemical, agroindustrial and cement and mineral product segments; and Mexrail operations. Consolidated operating profit for the nine months ended September 30, 2003, was $99.9 million, resulting in an operating ratio of 80.9 percent with Mexrail and 78.2 percent without Mexrail. Operating expenses for the nine-month period reflected the benefit of cost control measures: salaries, wages and fringe benefit reduction of 6.4 percent, purchased services reduction of 3.5 percent due to savings in locomotive maintenance, and other employee expense reduction of 3.0 percent. Operating expenses also contained a 32.0 percent, or $10.6 million, increase in fuel costs due to the increased prices during the nine months of 2003. FINANCIAL EXPENSES Net financial expenses incurred in the nine-month period were $83.4 million, including $17.7 million related to the $180.0 million 2012 bond issued in July 2002. TFM recognized a $10.1 million foreign exchange loss resulting from the depreciation of the Mexican peso relative to the U.S. dollar. INCOME TAX Deferred income tax reflected a $37.8 million charge to the nine months results due to devaluation of the peso, which increased temporary differences of the base assets for tax and accounting purposes and reduced the balance of the NOL's are denominated in pesos. Net loss carry forward as of September 30, 2003, was $1.392 million. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 2003, accounts receivable had decreased to $190.2 million from $ 204.5 million at December 31, 2002, mainly due to the recovery of tax receivables. TFM made capital expenditures of $17.0 million in the third quarter of 2003 and $51.0 million in the nine months of 2003, invested in the improvement of TFM and Mexrail lines. During September 2003 the company repurchased from Kansas City Railroad 51 percent of the capital stock of Mexrail for $32.6 million, the same price received by TFM for the asset sale in May 2003. As of September 30, 2003, outstanding net debt balance was $969.6 million, a leverage of $23.2 million lower than at December 31, 2002. Debt includes $95.0 million of U.S. commercial paper, a term loan of $118 million and senior notes of $773.5 million. To see financial statements: http://bankrupt.com/misc/TFM.htm CONTACT: Grupo TFM Mario Mohar or Jacinto Marina Phone: 011-525-55-629-8866 Leon Ortiz Phone: 011-525-55-447-5836 =========== P A N A M A =========== CSS: Reports $25M Loss for 1H03 ------------------------------- Panama's state-run social security agency CSS registered a US$25- million for the first half of the year, reports Business News Americas. The negative result indicates that the Company is still struggling to regain its financial health. CSS saw its pension deficit increase by US$354 million in the year to June, says Business News Americas. Members of the medical fraternity, workers unions, teachers, CSS's administrative personnel and politicians from across the political spectrum have conducted a series of lightning strikes to protest over excessive government interference in the running of the agency and to press for the reinstatement of CSS executive Juan Jovane. Jovane was removed from his post at the CSS last month based on his failure to present a budget for 2004 within the specified timescale. Last week, Panama's cabinet reaffirmed the Jovane's departure, rejecting the executive's claims for unfair dismissal. ================= V E N E Z U E L A ================= PDVSA: CITGO Clarifies Recent Income Statements Reports ------------------------------------------------------- In light of certain published reports, CITGO Petroleum Corporation wishes to clarify that: For the nine-month period ending September 30, 2003 our net income is approximately $350 million. Operating income (i.e. income before interest and taxes) is approximately $640 million for the nine-month period ending September 30, 2003. We anticipate that earnings for the 4th Quarter of 2003 will be positive, but will be less than earnings for the third quarter 2003. On July 25, 2003 we made a $500 million dividend payment for the purpose of enabling our parent, PDV America to make the principal payment on $500 million, 7-7/8% senior notes due August 1, 2003. The declaration of additional dividends in 2003 is contingent upon future earnings. Through the nine months ended September 30, 2003, CITGO repurchased over $300 million of its bonds. Our revolving bank loan agreements with various banks consist of (i) a $260 million, three-year, revolving bank facility, maturing in December 2005; and (ii) a $260 million, 364-day, revolving bank facility, maturing in December 2003. As of September 30, 2003, there was no outstanding borrowing under these facilities. We do not intend to replace the $260 million, 364-day, revolving bank facility when it matures. CITGO, based in Tulsa, Okla., is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals, refined waxes, asphalt and other industrial products. The company is owned by PDV America, Inc., an indirect wholly owned subsidiary of Petroleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela. For more information on CITGO, visit www.citgo.com . CONTACT: CITGO Petroleum Corporation Kate Robbins Phone: 1-918-495-5764 Jennifer Hill, Phone: +1-918-495-4260 Fax: +1-918-495-5269 Home Page: http://www.citgo.com/ *********** 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. 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 * * *