/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/031117.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, November 17, 2003, Vol. 4, Issue 227 Headlines A R G E N T I N A AA2000: Suffers Loss in the First Nine Months of 2003 ACINDAR: To Maintain Focus Despite Belgo's Looming Takeover AKROM: Receiver Verifies Claims For Bankruptcy BIANAR: Enters Bankruptcy on Court Orders BOVINOS: Court Declares Company "Quiebra" CASULECO: Receiver Closes Verification Process Today CENTRAL MODEL: Enters Bankruptcy on Court Orders DAMARA: Court Assigns Receiver for Bankruptcy Process DECON: Credit Verifications in Bankruptcy Ends Today DERQUI REPUESTOS: Credit Verifications To End December 19 FIE KILLER: Voluntarily Files For Bankruptcy JULY SHOES: Receiver Verifies Creditor's Claims in Bankruptcy KLINEX: Receiver To Oversee Bankruptcy Process LENS EXPRESS: Individual Reports Due For Filing Today LUCE 10: Declared Bankrupt by Court MC ARTHUR: Court Approves Creditor's Motion for Bankruptcy NAGI-TEXT: To Undergo Bankruptcy Process QUIMETIL: Files "Concurso Preventivo" Motion TAZMIA: Court Orders Bankruptcy * Fitch Expects Economic Growth in Argentina to Reach 6.5% in '03 B E R M U D A ANNUITY & LIFE: Reports Black for the Quarter Ended Sep. 30 LORAL SPACE: Continues To Struggle In Economic Downturn B R A Z I L BANCO VOTORANTIM: S&P Rates $250M Eurobond 'B+' EMBRATEL: Shares Soar Following WorldCom's Sale Announcement C H I L E AES GENER: Sets Goal To Slash Debt by $300M by Dec. 31 C O L O M B I A MILLICOM INTERNATIONAL: Amends Consent Solicitation For Sr. Notes * Colombia Needs Viable Plan to Target Pension Problem - Fitch E C U A D O R PETROEUCADOR: To Award Two $46M Rig Contracts J A M A I C A JUTC: To Introduce Passenger Transfer Service - - - - - - - - ================= A R G E N T I N A ================= AA2000: Suffers Loss in the First Nine Months of 2003 ----------------------------------------------------- Argentine airport concessionaire Aeropuertos Argentina 2000 (AA2000) reported a first nine-month 2003 loss of ARS32.8 million (US$11.4mln), compared to a net profit of ARS10.3 million in the same year-ago period, Business News Americas reports, citing a company statement to the country's securities regulator, the CNV. AA2000, which operates 32 airports in Argentina, also revealed an operating loss of ARS76.9 million for the period. The airport concessionaire attributed this loss to continued high operating costs and an increase in administrative costs, as well as a 23.1% drop in sales to ARS233 million. In October, President Nestor Kirchner approved a decree that suspended former President Eduardo Duhalde's decision to end contract renegotiations with AA2000. Under former President Duhalde's decree - one of his last actions before handing the office over to Kirchner on May 25 - AA2000's annual canon to the government was cut by more than half. AA2000 is a multinational consortium formed by Corporacion America Sudamericana (35%), Societa Per Azioni Esercizi Aeroportuali (28%), Simest Spa (8%), Ogden Corporation (28%), and RIVA (1%). ACINDAR: To Maintain Focus Despite Belgo's Looming Takeover ----------------------------------------------------------- The recent announcement by Brazil's Belgo Mineira about plans to up its stake in Acindar Industria Argentina de Aceros SA will not derail the Argentine steel firm's current focus. Citing an unnamed Acindar official, Business News Americas reports that Acindar, despite the looming takeover, will maintain its focus on the production of iron for the construction industry, as well as its pipes and wire making divisions. Moreover, the Argentine firm will keep its presence in the domestic market and, with Belgo Mineira's help, attain an additional foothold in export markets. Early last week, Belgo Mineira's President in Brazil, Carlo Panunzi, confirmed the long steelmaker wants to increase its ownership in Acindar. Belgo Mineira picked up a 20.5% stake in Acindar in 2000, while founder and current controller, Argentina's Acevedo family, has another 20.5%, the World Bank's IFC has 7%, and the rest is traded on the Buenos Aires exchange. Belo Horizonte-based Belgo Mineira aims to up its stake in the Argentine company to 70% via a debt restructuring process within which it will inject up to US$30 million and capitalize US$25 million debt. But first, Acindar needs approval from private banks and the IFC to restructure US$240 million debt, which, according to Panunzi, is all but signed and sealed. "Once restructuring concludes we will chose the moment to increase our presence in Acindar," he said. The executive also said that Belgo Mineira would have to pay US$55 million to expand its ownership in Acindar. CONTACT: ACINDAR S.A. Jose I. Giraudo, Investor Relations Manager Tel: (54 11) 4719 8674 Andrea Dala, Investor Relations Officer Tel: (54 11) 4719 8672 AKROM: Receiver Verifies Claims For Bankruptcy ---------------------------------------------- The credit verification process for the bankruptcy of Buenos Aires-based Akrom S.A. ends next February 2. The Company's receiver, who verifies the claims, will then prepare the individual reports based on the results of the verification process. The city's Court No. 21, which handles the Company's case, instructed the receiver, Ms. Fany Juana Gutember, to submit the individual reports by March 16 next year. The general report, prepared after the individual reports are processed at court, is due on April 30, 2004. The Company's assets will be liquidated at the end of the process to pay off creditors. Payments will be based on the results of the credit verification process. CONTACT: Fany Juana Gutember Ave Callao 449 Buenos Aires BIANAR: Enters Bankruptcy on Court Orders ----------------------------------------- Buenos Aires-based company Bianar S.A. is entering bankruptcy on orders from the city's Court No. 23. Local news portal Infobae reports that Clerk No. 46 aids the court on the case. The Company's receiver, Ms. Mirta Calfun de Bendersky, will authenticate creditors' claims until December 29 this year. The receiver is also required to prepare the individual and general reports, which are to be submitted to the court on March 10, 2004, and April 26, 2004, respectively. CONTACT: Mirta A Calfun de Bendersky Humahuaca 4165 Buenos Aires BOVINOS: Court Declares Company "Quiebra" ----------------------------------------- Buenos Aires Court No. 4 declares local company Bovinos S.R.L. "Quiebra", effectively placing it in bankruptcy. Working with Clerk No. 7, the court assigned Ms. Silvia Ferrandina, as the Company's receiver. Local news portal Infobae relates that the deadline for credit verifications is February 17 next year. Creditors must present their proofs of claims to the receiver for authentication before the said date. The receiver's duties cover the preparation of the individual and general reports, but the source did not mention whether the court has set the deadlines for these reports. CONTACT: Bovinos S.R.L. Guatemala 4858 Buenos Aires Silvia Ferrandina Asuncion 4642 Buenos Aires CASULECO: Receiver Closes Verification Process Today ---------------------------------------------------- Ms. Eva Gords, receiver for the bankruptcy of local company Casuleco S.R.L., closes the credit verification process today. As ordered by the city's Court No. 15, which handles the Company's case, the receiver will prepare the individual reports, which are to be submitted on February 2 next year. The receiver will prepare the general report after the individual reports are processed at court. This report must be filed at the court on March 17 next year, according to the Troubled Company Reporter - Latin America in an earlier report. The Company's assets will be liquidated at the end of the process to reimburse its creditors. CONTACT: Eva M Gords Paraguay 1225 Buenos Aires CENTRAL MODEL: Enters Bankruptcy on Court Orders ------------------------------------------------ Argentine company Central Model S.A. is "Quiebra Decretada" (declared bankrupt), according to a ruling by Buenos Aires Court No. 26. Local news source Infobae reports that Clerk No. 51 assists the court on the case. The Company will undergo the bankruptcy process, which starts with the verification of creditors' claims to determine the characteristics of its debts. However, the source did not mention whether a receiver, who will oversee the bankruptcy process, has been chosen for the Company. CONTACT: Central Model S.R.L. Rodriguez Pena 1087 Buenos Aires DAMARA: Court Assigns Receiver for Bankruptcy Process ----------------------------------------------------- Buenos Aires Court No. 8, under Judge Gonzalez, assigned local accountant Santos Luparelli as receiver for the bankruptcy of Damara S.A., reports local newspaper La Nacion. The court ordered the receiver to check creditors' reports until February 25 next year. The Company entered bankruptcy after the court approved a creditor's petition for the Company's bankruptcy. Clerk No. 15, Dr. Lezaeta, assists the court on the case. CONTACT: Damara S.A. Ave Cordoba 1513 Buenos Aires Santos Luparelli 1st Floor, Office B Paraguay 2067 Buenos Aires DECON: Credit Verifications in Bankruptcy Ends Today ---------------------------------------------------- The credit verification process for the bankruptcy of Argentine company Decon S.A. ends today. Ms. Maria del Carmen Sabugal, receiver for the process, will prepare the individual reports based on the results of the verifications, which is due for filing on February 2 next year. An earlier report from the Troubled Company Reporter - Latin America revealed that the Company was declared "Quiebra" by the city's Court No. 17. The Court also ordered the receiver to prepare the general report, to be submitted March 15, 2004, after the individual reports are processed at court. The Company's assets are likely to be liquidated at the close of this process in order to pay its creditors. CONTACT: Maria del Carmen Sabugal Moreno 850 Buenos Aires DERQUI REPUESTOS: Credit Verifications To End December 19 --------------------------------------------------------- Mr. Daniel Erdocia, receiver for Buenos Aires-based Derqui Repuestos S.R.L., closes the credit verification process for the Company's bankruptcy on December 19 this year. This part of the bankruptcy process examines the nature and amount of the Company's debts. The results of the verifications will form the basis of the payments to be made after the Company's assets are liquidated. Argentine newspaper La Nacion relates that Judge Vassallo of Buenos Aires Court No. 5 issued the bankruptcy order. Clerk No. 10, Dr. Polo Olivera, aids the court on the case. CONTACT: Derqui Repuestos S.R.L. Zinny 1653 Buenos Aires Daniel Erdocia 7th Floor Paraguay 610 Buenos Aires FIE KILLER: Voluntarily Files For Bankruptcy -------------------------------------------- Fie Killer S.R.L, domiciled in Buenos Aires, voluntarily filed for bankruptcy, reports Argentine online newspaper La Nacion. According to documents submitted to the court, the Company ceased debt payments in March this year. Judge Kolliker Frers of Buenos Aires Court No. 16 handles the Company's case with assistance from Clerk No. 31, Dr. Ibarzabal. La Nacion, however, did not reveal whether the court is likely to approve the filing. CONTACT: Fie Killer S.R.L. 3rd Floor, Room 313 Ave Cordoba 679 Buenos Aires JULY SHOES: Receiver Verifies Creditor's Claims in Bankruptcy ------------------------------------------------------------- Buenos Aires accountant Domingo Vicente Marinkovich, receiver for local company July Shoes S.R.L., will verify creditors' claims for the Company's bankruptcy until February 2 next year. The Company's case is being handled by city Court No. 25, with assistance from Clerk No. 49. The court requires the receiver to hand in the individual reports on March 15 next year. These reports contain the results of the credit verification process. The receiver is also obliged to prepare the general report, a consolidation of the information from the individual reports after these are processed at court. This report comes due on April 29 next year. CONTACT: Domingo Vicente Marinkovich Oro 2381 Buenos Aires KLINEX: Receiver To Oversee Bankruptcy Process ---------------------------------------------- Klinex S.R.L., is placed in the hands of its receiver, Mr. Mario Aragon, who will oversee its bankruptcy process. Mr. Aragon will verify creditors' claims until February 19 this year. Argentine news portal Infobae relates that Clerk No. 3 aids the court on the case. However, it did not reveal whether the court has set the deadlines for the filing of the individual and general reports. CONTACT: Klinex S.R.L. Ave Las Heras 3353 Buenos Aires Mario Aragon Alsina 1535 Buenos Aires LENS EXPRESS: Individual Reports Due For Filing Today ----------------------------------------------------- The deadline for the filing of the individual reports on the reorganization of Buenos Aires-based Lens Express S.A. expires today, the Troubled Company Reporter - Latin America said in a previous report. The individual reports were prepared by the Company's receiver, Ms. Martal Estela Acuna, who also verified creditors' claims. The city's Court No. 22, which handles the Company's case, also requires the receiver to prepare the general report after the individual reports are processed. This report should be submitted on December 18. Working with Clerk No. 43, the court also set the informative assembly to be held on May 6 next year. CONTACT: Lens S.A. Montevideo 160 Buenos Aires Marta Estela Acuna Combate de los Pozos 129 Buenos Aires LUCE 10: Declared Bankrupt by Court ----------------------------------- Argentine company Luce 10 S.A., formerly known as Luce 10 S.R.L., will undergo the bankruptcy process after Buenos Aires Court No. 26 declared it "Quiebra", Infobae relates. Clerk No. 51 aids the court on the case, the source adds. The receiver assigned to the case is Mr. Hector Eduardo Palma, a local accountant. He will verify creditors' claims until December 19 this year. The receiver will also prepare the individual and general reports, which are due for filing on March 5 and April 21 next year, respectively. The Company's assets will be liquidated at the close of the bankruptcy process. Proceeds will be used to reimburse creditors based on the results of the verification process. CONTACT: Luce 10 S.A. Juan Bautista Alberdi 2385 Buenos Aires Hector Eduardo Palma Montevideo 734 Buenos Aires MC ARTHUR: Court Approves Creditor's Motion for Bankruptcy ---------------------------------------------------------- Judge Taillade of Buenos Aires Court No. 20 declares local company Mc Arthur S.A. bankrupt, approving a motion filed by the Company's creditor, Banco de la Ciudad de Buenos Aires. La Nacion relates that the bank filed the bankruptcy petition on grounds of the Company's failure to meet its financial obligations. With assistance from Clerk No. 39, Dr. Amaya, the court assigned Mr. Carlos Desseno, as receiver to oversee the bankruptcy process. The Company's creditors have until February 23 next year to have their claims validated in order to qualify for payments to be made from the liquidation of the Company's assets. La Nacion, however, did not mention the deadlines for the filing of the receiver's reports. CONTACT: Mc Arthur S.A. Estrada 756 Buenos Aires Carlos Desseno Tte. Gral. Juan Domingo Peron 1558 Buenos Aires NAGI-TEXT: To Undergo Bankruptcy Process ---------------------------------------- Nagi-tex S.R.L., which is based in Buenos Aires, entered bankruptcy on orders from the city's Court No. 25. Assisted by Clerk No. 50, the court assigned Ms. Fany Juana Gutember, a local accountant, to oversee the Company's bankruptcy process. The credit verification period expires on February 2 next year. Creditors must have their claims authenticated by then to qualify for payments to be made from the liquidation of the assets. The receiver will prepare the individual reports, which is due for filing on March 15 next year, upon completion of the verification process. The receiver will also prepare the general report, which must be filed on April 29, 2004. CONTACT: Fany Juana Gutember Ave Callao 449 Buenos Aires QUIMETIL: Files "Concurso Preventivo" Motion -------------------------------------------- Argentine chemical maker Quimetil S.A. is asking to undergo reorganization. Local newspaper La Nacion relates that the Company has submitted its motion for "Concurso Preventivo" at Buenos Aires' Court No. 9, which is under judge Favier Dubois. Clerk No. 17, Dr. Raisberg de Merenzon, assists the court on this case. The report adds that the Company, which specializes in thinners and diluters for industrial and agricultural use, stopped making debt payments in October last year. CONTACT: Quimetil S.A. 2nd Floor, Room A Ave Montes de Oca 1640 Buenos Aires TAZMIA: Court Orders Bankruptcy ------------------------------- Buenos Aires Court No. 26 declared Tazmia S.R.L. "Quiebra", reports Argentine news portal Infobae. Clerk No. 51 aids the court on the case, the source adds without revealing whether the court has assigned a receiver to the Company. The Company will undergo the bankruptcy process, which is will end in the liquidation of its assets. CONTACT: Tazmia S.R.L. Ave de Mayo 758 Buenos Aires * Fitch Expects Economic Growth in Argentina to Reach 6.5% in '03 ----------------------------------------------------------------- Fitch Ratings expects the Argentine economy to grow 6.5% for the year, according to a commentary published Thursday. While this is good news, much of the improvement on the growth front reflects a statistical bounce following four years of economic recession. An improved external environment, resulting in higher commodity prices and demand for Argentina's agricultural and energy exports have benefited growth. 'Unless the Argentine government is successful with the implementation of structural reforms, as outlined in its medium- term economic program supporting its Stand-by arrangement with the IMF, current growth rates will not be sustainable,' says Theresa Paiz Fredel, director at Fitch Ratings. 'Progress on structural reforms, combined with a debt restructuring that puts Argentina's debt burden on a sustainable path, could help maintain current investment growth and thus form the foundation for dynamic growth in the future. Normalizing relations with foreign creditors is the first step in attaining this goal.' Says Paiz Fredel. The new Fitch report acknowledges that the scope of Argentina's problems is large. Reaching the government's restructuring objectives will be a complicated and drawn out process, since the degree of debt relief needed may be too large to induce foreign bondholders and other creditors to participate in a restructuring agreement any time soon. 'Ultimately, the government may have to increase the size of its primary surplus target to the 4% to 5% range in order to normalize relations with creditors and put its debt burden on a sustainable path post-restructuring,' says Paiz Fredel. The new Fitch report acknowledges that given the degree of debt relief Argentina needs, the most appealing option for the bondholders is the idea of offering variants of these new bonds with a lower base coupon and a premium coupon that would be determined by the level of GDP growth. This option is currently under discussion by the authorities. 'Strong economic growth and peso appreciation will improve Argentina's debt ratios this year, however we do not expect negotiations to restructure the debt to be completed any time soon,' says Paiz Fredel. 'We expect the general government debt to GDP ratio to fall around 140% by the end of this year, from a peak of 171% at the end of 2002.' The new report studies three case debt dynamics scenarios. The key assumptions for Fitch's base case, pessimistic and optimistic scenarios are summarized in three tables. 'If Argentina is successful in renegotiating its debt, the country's credit profile will improve in line with its repayment capacity,' says Paiz Fredel. 'However, even post-restructuring, significant fundamental credit concerns will remain, which would restrain the sovereign's credit ratings to highly speculative categories.' CONTACT: Theresa Paiz Fredel Phone: +1-212-908-0534 Therese Feng, Ph.D. Phone: +1-212-908-0230 Media Relations: Matt Burkhard Phone: +1-212-908-0540 ============= B E R M U D A ============= ANNUITY & LIFE: Reports Black for the Quarter Ended Sep. 30 ----------------------------------------------------------- Annuity and Life Re (Holdings), Ltd. (NYSE: ANR) reported Thursday financial results for the three month period ended September 30, 2003. The Company reported a net income of $33,392 or $0.00 per fully diluted share for the three month period ended September 30, 2003 as compared to a net loss of $(19,147,017) or $(0.74) per fully diluted share for the three month period ended September 30, 2002. Net income in the third quarter of 2003 was primarily the result of a $9.0 million benefit resulting from a comprehensive settlement terminating all reinsurance relationships between XL Life and the Company (the "Comprehensive Settlement"), partially offset by losses on three life reinsurance agreements, litigation costs and compensation related expenses. Net realized investment losses for the three month period ended September 30, 2003 were $(52,025) or $(0.00) per fully diluted share, as compared with net realized investment gains of $9,297,351 or $0.36 per fully diluted share for the three month period ended September 30, 2002. Jay Burke, Chief Executive Officer and Chief Financial Officer of the Company, commented, "This quarter's results show a marked improvement over the recent past. Our results were favorably impacted by the Comprehensive Settlement with XL Life. While this is good news, it also means we still have losses in our remaining book of business. We have yet to fully reposition our investment portfolio and our expense reduction efforts will not completely take hold until the second quarter of 2004. "As of September 30, 2003 our unsecured letter of credit facility at Citibank stood at $26.7 million. Citibank has agreed that, provided the Company can reduce Citibank's unsecured letter of credit exposure to less than $17 million as of November 30, 2003, Citibank will renew all letters of credit outstanding at December 31, 2003 through December 31, 2004. "In addition, in the third quarter we were notified by the New York Stock Exchange that we are no longer facing delisting procedures and that the Exchange has removed the flag on our ticker symbol. "I continue to caution that not all of the Company's issues are resolved. Absent the net income benefit produced by the Comprehensive Settlement with XL Life we would have reported a loss for the quarter. While we believe the third quarter was impacted by some large claims and seasonal premium fluctuations, even adjusting for those items we still would have reported a loss. In addition, we still have significant issues to resolve involving our annuity reinsurance contract with Transamerica, pending shareholder litigation and GMIB / GMDB exposure through our reinsurance agreement with CIGNA. "Transamerica has alleged that the Company owes $14.9 million under its annuity reinsurance contract with Transamerica. The Company has not agreed that such amount is currently owed to Transamerica and the parties are attempting to resolve their disputes. Transamerica has indicated that if the parties cannot resolve their issues, it will attempt to put our Bermuda operating subsidiary into liquidation. "In addition to the discussions with Transamerica related to the alleged amounts owed to it, we have been attempting to engage Transamerica, and ultimately IL Annuity, in discussions aimed at improving investment returns from the convertible bond portfolio and potentially redesigning the VisionMark product to reduce the minimum guarantee exposures from the Transamerica agreement. If the Company is not successful in convincing Transamerica and IL Annuity to restructure the portfolio and/or to redesign the product, the Company may incur additional write downs of deferred acquisition costs in the future. "If we are able to reposition our general account investment portfolio to achieve a substantially higher yield within our investment guidelines, successfully defend ourselves against the shareholder class action suit, achieve a favorable outcome from the MetLife arbitration, and resolve our issues with Transamerica regarding our annuity reinsurance agreement, we can achieve a modest profit in 2004. While I am cautiously optimistic that we can accomplish these objectives, the Company continues to face significant challenges. Our failure to achieve any one of these objectives could have a material adverse effect on our financial condition and results of operations." Operating Results Our net income for the three months ended September 30, 2003 includes a net gain from reinsurance recaptures and terminations of approximately $7.9 million, which includes the impact of the Comprehensive Settlement with XL Life. Adverse mortality experience under the Company's largest life reinsurance treaty continued, resulting in a loss on that agreement of $(2,397,000) for the quarter. Another large life agreement included an unusually large claim for $900,000 and, coupled with the agreement's typically lower third quarter premiums, generated a loss of $(2,174,000). We also incurred $1,004,000 for litigation costs and $1,000,000 in compensation- related expenses, and added $800,000 to our reserves for guaranteed minimum death and income benefits. Embedded derivatives associated with certain of our modified coinsurance agreements produced a net gain of $2,808,427 million for three months ended September 30, 2003. Unrealized gains on the Company's investments declined to $2,211,223 as of September 30, 2003 from $2,641,227 at June 30, 2003. The Company's investment portfolio currently maintains an average credit quality of AA-. Cash used by operations for the nine month period ended September 30, 2003 was $(97,859,548) compared to cash provided from operations of $27,726,444 for the comparable period ending September 30, 2002. At September 30, 2003, virtually all of the Company's invested assets were pledged as collateral for the benefit of its U.S.-based cedents. Book value per share at September 30, 2003 and June 30, 2003 was $5.52 and $5.53, respectively. Tangible book value, which is GAAP book value excluding deferred acquisition costs, improved to $2.70 at September 30, 2003 as compared to $1.44 at June 30, 2003. Life Segment Results Life segment income for the three month period ended September 30, 2003 was $601,214, as compared with segment loss of $(9,938,836) for the comparable prior period of 2002. As mentioned above, major contributors to the current quarter's result include a net gain from recaptures of $5,637,000, offset by net losses of $(5,600,000) on three life reinsurance agreements, litigation and compensation related expenses. Annuity Segment Results Annuity segment income was $378,926 for the three month period ended September 30, 2003, as compared with a loss of $(18,253,644) for the three month period ended September 30, 2002. Segment income for the third quarter of 2003 is the result of a net gain from embedded derivatives of $2,808,000, partially offset by $(568,000) of losses from the recapture of two annuity reinsurance agreements during the quarter, an increase in our guaranteed minimum death benefit and guaranteed minimum income benefit reserve of $800,000 and expenses allocated to this segment. Annuity and Life Re (Holdings), Ltd. provides annuity and life reinsurance to insurers through its wholly owned subsidiaries, Annuity and Life Reassurance, Ltd. and Annuity and Life Reassurance America, Inc. To see financial statements: http://bankrupt.com/misc/Annuity_and_Life.htm LORAL SPACE: Continues To Struggle In Economic Downturn ------------------------------------------------------- Loral Space & Communications (OTC Bulletin Board: LRLSQ) filed Friday its quarterly report on Form 10-Q with the Securities and Exchange Commission in which it reported financial results for the periods ended September 30, 2003. Results for the third quarter and nine months continue to reflect the negative impact of the economic downturn on the space industry and Loral's business units. After the close of the third quarter, however, Space Systems/Loral (SS/L), Loral's satellite manufacturing unit, received orders for a total of three new satellites: two from DIRECTV, Inc. and one from PanAmSat with an option for an additional spacecraft. DIRECTV and PanAmSat have made a $25 million advance payment to Loral on each of their satellite orders, for an aggregate advance of $75 million. As a result, SS/L has received a total of four orders for new satellites so far this year (including an earlier order from Intelsat that includes an advance payment of $100 million at closing of the sale), a restart order from WildBlue Corporation and an order from Boeing NASA Systems for critical batteries and power systems for the International Space Station. In the fixed satellite services (FSS) business, industry-wide pricing pressure and decreased sales volume negatively affected the company's results for the period. Pricing in all regions seems to have stabilized, however, and the contract renewal rate remains at the 80 percent level. On July 15, 2003, Loral reached an agreement to sell its North American telecommunications satellites to Intelsat Ltd. In October, the U.S. Bankruptcy Court for the Southern District of New York approved the agreement to purchase the assets for up to $1.1 billion. Pending satisfaction of customary closing conditions, including approval by the Federal Communications Commission, the transaction between Loral and Intelsat is expected to close within the next three months. Loral's plans for the expansion of its international FSS fleet (post-Intelsat sale) remain on track. Estrela do Sul 1, serving Brazil and the Americas, is scheduled to be launched in the first quarter of 2004 and Telstar 18, offering services to a large portion of Asia, is set to launch in the second quarter of 2004, bringing the total number of satellites in the international fleet to five. Also on July 15, 2003, Loral and certain of its subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code. Loral intends to reorganize around its international satellite fleet and its manufacturing businesses and is in the process now of preparing its formal plan of reorganization. Consolidated Results for the Third Quarter of 2003 Compared to 2002 A reconciliation of all non-GAAP measures discussed in this news release is included in the financial tables attached to this release. For the three months ended September 30, 2003, revenues as reported were $47 million, compared with $211 million for the same period in 2002. The decline in sales this period was the result of several factors: a one-time reversal of $83 million in sales on the Telstar 18/APSTAR V project that was converted to a lease arrangement; the near completion of satellites in backlog at SS/L; an absence of satellite orders through the third quarter; and a $21 million year-over-year reduction in FSS sales for the period. Loral reported an Adjusted EBITDA loss of $25 million (see note accompanying table at end of release), compared to EBITDA of $31 million in the third quarter of 2002. Loral's net loss applicable to common shareholders was $128 million, or $2.90 per share for the period versus a net loss of $57 million or $1.53 per share. Basic and diluted weighted average shares were 44 million and 37 million for the periods ended September 30, 2003 and 2002, respectively. Loral ended the quarter with $103 million in cash. Net cash provided by operating activities in the first nine months of 2003 was $95 million. Business Segment Results for the Third Quarter of 2003 Compared to 2002 Continued pricing and volume softness in transponder leasing and network services resulted in FSS revenues declining to $73 million for the period versus $93 million last year. FSS Adjusted EBITDA was $30 million for the period, compared with $49 million. Depreciation and amortization in the third quarter was $36 million, compared with $38 million in the quarter last year. As a result, the FSS operating loss was $6 million, compared with operating income in last year's third quarter of $11 million. Sales at Space Systems/Loral before eliminations decreased to $99 million in the third quarter versus $208 million a year earlier, primarily due to satellite construction programs nearing completion. SS/L's Adjusted EBITDA for the third quarter was a loss of $30 million, compared with EBITDA of $7 million in the third quarter of 2002. Depreciation and amortization in the quarter was $7 million, compared with $8 million in the year ago quarter. As a result, SS/L had an operating loss of $37 million in the third quarter, compared to an operating loss of $1 million in the year ago quarter. Further details on the company's financial results for the third quarter and first nine months of 2003 are available in Loral's 10-Q statement available via the company's web site at www.loral.com. 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 communications service providers, resellers corporate and government customers for broadband data transmission, Internet services and other value-added communications services. Loral is also 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. To see financial statements: http://bankrupt.com/misc/Loral_Space.htm CONTACT: Jeanette Clonan John McCarthy (212) 697-1105 =========== B R A Z I L =========== BANCO VOTORANTIM: S&P Rates $250M Eurobond 'B+' ----------------------------------------------- Standard & Poor's Ratings Services said Thursday that it assigned its 'B+' foreign currency long-term credit rating to Banco Votorantim S.A.'s $250 million Eurobond to be issued in November 2003, maturing in two years. The local currency credit ratings on the bank are 'BB/Stable/B' and the foreign currency credit ratings are 'B+/Stable/B'. The ratings on Banco Votorantim S.A. benefit from the implicit support of the Votorantim Group (local currency, BBB-/Stable/-; foreign currency, B+/Stable/-); the group's strong brand-name recognition; the bank's experienced management team; and efficient decision-making processes. The ratings also consider the potential risks associated with the bank's treasury business, with its exposure to sovereign risk through its securities portfolio, a common issue for Brazilian banks; a relatively short operating track record on its consumer finance business; and the risks related to the economic environment in Brazil. The Votorantim Group is one of the largest and most influential industrial conglomerates in Brazil. Its brand-name recognition has helped the bank to leverage on its business, and the images of both organizations are closely linked. "The conglomerate supervises the bank's activities and operations, and its conservatism permeates the bank's activities. In Standard & Poor's opinion, the Group would provide support to the bank if needed," said Standard & Poor's credit analyst Tamara Berenholc. Banco Votorantim's management is made up of professionals with vast experience in the financial markets and the Group's companies. These executives are in the same location, which adds agility and allows flexibility for timely committee decisions. The stable outlook on Banco Votorantim reflects the sovereign outlook on the Federative Republic of Brazil and incorporates the balance between its financial profile and profitability and the risks inherent to its business profile. ANALYSTS: Tamara Berenholc, Sao Paulo (55) 11-5501-8950 Daniel Araujo, Sao Paulo (55) 11-5501-8939 EMBRATEL: Shares Soar Following WorldCom's Sale Announcement ------------------------------------------------------------ Shares of Embratel Participacoes SA soared 39% Thursday following an announcement by WorldCom Inc. that it will sell its controlling stake in the Brazilian long-distance phone company. The stake, according to Bloomberg, may be worth as much as US$765 million. Embratel saw its common shares gain BRL3.1 to BRL11 in Sao Paulo, the highest closing price since March 15, 2002. WorldCom controls 19% of Embratel, a stake that carries 52% of the voting rights in the Company. The No. 2 U.S. long-distance carrier plans to sell Embratel as part of Chief Executive Officer Michael Capellas' effort to unload unprofitable contracts and assets before WorldCom emerges from bankruptcy. For Embratel, the sale may help it fend off competition, according to money manager Samir Patel at London-based Pictet Asset Management. WorldCom may not be able to provide Embratel with resources to expand into local telephony and compete with Telefonica SA and Tele Norte Leste Participacoes SA, he said. 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 ========= C H I L E ========= AES GENER: Sets Goal To Slash Debt by $300M by Dec. 31 ------------------------------------------------------ AES Gener, the Chilean unit of U.S. utility AES Corp., plans to issue US$400 million in long-term international bonds by December 31, reports Business News Americas. At the same time, the Chilean generator, which earlier announced it would seek shareholder approval for an US$80-million capital increase on Nov. 21, also plans to sell shares in the Company to raise US$300 million. The funds raised from the bond issue, combined with capital increase and the cash from selling shares in the Company, will be used to launch a tender offer in Chile and the US to buy back US$700 million in convertible and Yankee bonds due 2005-2006. The refinancing aims to "reduce debt by US$300 million and extend the terms of the remaining debt," AES Gener's CEO Felipe Ceron said Thursday. "We will have greater financial flexibility for new investments, improve substantially the risk rating of our company, and make us more competitive," Ceron added. Inversiones Cachagua - the Company through which AES Corp owns 98.65% of AES Gener - will repay most of its US$290 million mercantile account by selling a non-controlling portion of the shares in AES Gener it currently owns to local and foreign investors. Depending on the sale of the shares, AES Corp will make up the difference with a capital injection, but the Company has not yet defined how much cash it will provide, Ceron said. AES Gener plans to complete its refinancing process by December 31. The Company also wants to extend the debt maturities of its Argentine subsidiaries TermoAndes and InterAndes, it said. =============== C O L O M B I A =============== MILLICOM INTERNATIONAL: Amends Consent Solicitation For Sr. Notes ----------------------------------------------------------------- On November 7, 2003, Millicom International Cellular S.A. ("Millicom") (Nasdaq: MICC) commenced a consent solicitation (the "Consent Solicitation") in respect of its 2% Senior Convertible Payable-In-Kind Notes due 2006 (the "Notes). Pursuant to the Consent Solicitation, Millicom is seeking the consent of the holders of the Notes to (i) the waiver of certain possible past defaults under the indenture governing the Notes (the "Indenture") and (ii) the waiver of compliance with the limitation on restricted payments covenant in the Indenture in connection with Millicom's proposed redemption or repurchase of its 13.5% Senior Subordinated Notes due 2006, which are subordinated to the Notes, with the proceeds of a proposed financing by Millicom (collectively, the "Proposed Waivers"). Millicom announces that it has amended the terms and conditions of the Consent Solicitation as follows. Subject to (i) receipt of the consent of the holders of at least a majority of the principal amount of the Notes outstanding (the "Requisite Consents") and (ii) effectiveness of the Proposed Waivers, Millicom will agree pursuant to a supplemental indenture that, if on or prior to 60 days following the effectiveness of the Proposed Waivers it has not filed a shelf registration statement with the U.S. Securities and Exchange Commission covering resales by holders of the Notes and the common stock issued upon conversion of the Notes, then additional interest (the "Additional Interest") will accrue on the Notes at the rate of 0.25% per annum until such Registration Statement is filed. The Additional Interest shall accrue in addition to the stated interest on the Notes and special interest, if any, to which the holders of the Notes are entitled pursuant to the terms of the Notes and the Indenture dated May 8, 2003 with respect to the Notes. The Consent Solicitation is conditioned upon, among other things, the receipt of the Requisite Consents. If the proposed financing by Millicom is completed and the Requisite Consents are not received, then Millicom intends to redeem any outstanding Notes in accordance with their terms. Millicom will not pay any fee to holders of Notes who consent to the Proposed Waivers. The Consent Solicitation will expire at 5:00 p.m., New York City time, on November 18, 2003, unless terminated or extended by Millicom. Consents, once received, may not be revoked. Morgan Stanley & Co. Incorporated is acting as the solicitation agent for the Consent Solicitation. The trustee under the Notes is The Bank of New York. The Consent Solicitation is being made pursuant to a Consent Solicitation Statement dated November 7, 2003, and a related Letter of Consent, as amended by the Amendment to the Consent Solicitation Statement dated November 13, 2003. The Amendment to the Consent Solicitation Statement and the Consent Solicitation Statement more fully set forth the terms and conditions of the Consent Solicitation. Questions regarding the Consent Solicitation may be directed to Morgan Stanley & Co. Incorporated at (800) 624-1808. Requests for copies of the Amendment to the Consent Solicitation Statement, the Consent Solicitation Statement and related documents may be directed to D. F. King & Co., Inc. at (212) 269-5550. This announcement is not an offer to purchase, a solicitation of an offer to purchase, or a solicitation of consents with respect to the Notes. The Consent Solicitation is made solely by means of the Consent Solicitation Statement and any amendments thereto. Stabilisation: FSA/IPMA Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"). Securities may not be offered or sold in the United States or to, or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the Securities Act) except pursuant to a registration statement under, or an applicable exemption from the registration requirements of, the Securities Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Additionally, this press release shall not constitute a solicitation of consents or proxies in any jurisdiction in which it is unlawful to make such solicitation or grant such consents or proxies. Millicom International Cellular S.A. is a global telecommunications investor with cellular operations in Asia, Latin America and Africa. It currently has a total of 16 cellular operations and licenses in 15 countries. The Group's cellular operations have a combined population under license of approximately 382 million people. In addition, MIC provides high- speed wireless data services in five countries CONTACTS: MILLICOM INTERNATIONAL CELLULAR S.A., Luxembourg Marc Beuls President and Chief Executive Officer Telephone: +352 27 759 101 URL: www.millicom.com SHARED VALUE LTD, London Andrew Best, Investor Relations Telephone: +44 20 7321 5022 * Colombia Needs Viable Plan to Target Pension Problem - Fitch -------------------------------------------------------------- A downgrade for Colombia could be avoided if Colombian authorities articulate a viable plan addressing the looming pension problem and other structural rigidities in public finances early next year. It will also be critical for the government to pass its proposed 'Plan B' set of new taxes and capital spending cuts in order to make up for savings it would have achieved had the recent referendum passed, according to a new commentary on Colombia by Fitch Ratings. 'Fitch has expressed concern for some time about Colombia's mounting debt burden and the greater vulnerability that it brings to public finances,' says Morgan Harting, director at Fitch Ratings. 'Fitch maintained the country's Negative Outlook last May, on concerns that in spite of considerable reforms passed last year and the prospects for the referendum's passage, debt could continue to rise this year because of sluggish economic growth and potential fiscal slippage. The referendum's setback will indeed prevent original fiscal targets from being met and general government debt-to-GDP will now marginally exceed last year's 55% level.' According to Fitch, 'Plan B'-- the Colombian government's tax and spending cut plan-- is an inferior alternative from an efficiency and fiscal flexibility standpoint. If passed as proposed, the government estimates that Plan B could generate the same near- term savings as had been expected from the recent referendum. The plan may be contractionary, however, because it focuses on raising taxes and cutting investment spending during a period of economic sluggishness. Furthermore, the referendum's two-year freeze on wages was likely to have generated a permanent improvement in the structure of expenditures, as it would have lowered the reference spending level. 'Fitch could affirm Colombia's ratings if Plan B is passed without substantial modifications, if the government moves quickly to articulate a viable proposal to deal with the looming pension problem and large 2005 external debt maturities, and if private sector confidence is not shaken by the referendum failure,' says Harting. CONTACT: Morgan C. Harting Phone: +1-212-908-0820 Roger M. Scher Phone: +1-212-908-0240 Media Relations: Matt Burkhard Phone: +1-212-908-0540 ============= E C U A D O R ============= PETROEUCADOR: To Award Two $46M Rig Contracts --------------------------------------------- Petroproduccion, the production subsidiary of Ecuador's state oil company Petroecuador, was planning to award Friday two contracts to provide nine drilling rigs, reports Business News Americas. According to Petroproduccion spokesperson Roberto Freire, each contract is worth about US$46 million. The first contract, which is to provide three rigs to drill new wells on Petroecuador's main oil fields, has attracted bids from five companies, including US companies Hargrave, Pool International, Pride South America, HP and China's Sinopec Petroleum. The second contract, which is to provide six rigs to recondition existing wells on Petroecuador fields, has attracted bids from nine companies, including local companies Drillfor and Dygoil. In August, Petroecuador awarded Drillfor a contract as part of its emergency plan to rehabilitate its fields and carry out new drilling. The contract involved hiring two rigs from Drillfor to renew drilling activities in the Shushufindi and Lago Agrio oil fields. However, Petroecuador annulled the contract, claiming that the Drillfor rigs did not pass its technical inspections. ============= J A M A I C A ============= JUTC: To Introduce Passenger Transfer Service --------------------------------------------- As part of an effort to improve efficiency at the Jamaica Urban Transit Company (JUTC), the management introduced a passenger transfer service, which is scheduled to start operating Sunday. The service, which will be in place on Sundays, will involve several buses, which normally terminate in downtown Kingston, says RadioJamaica. Speaking on RJR's Beyond the Headlines Wednesday, Manager of Service Planning at the JUTC, Jacqueline Darwood, explained that commuters travelling from Spanish Town and sections of Northern St. Andrew will be required to board special busses in Half Way Tree in order to complete the trip to Cross Roads or Downtown Kingston. The decision, according to Darwood, was based on analysis conducted by personnel from the Company. *********** 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 * * *