/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/031125.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, November 25, 2003, Vol. 4, Issue 233 Headlines A R G E N T I N A AGINEL: Individual Reports Due for Filing Today AUXI-THERAPIA: Files "Concurso Preventivo" Motion CORREO ARGENTINO: Likely To End In Bankruptcy, Asset Liquidation CORREO ARGENTINO: Govt.'s Decision May Indirectly Affect Sideco CRESER CREDITO: Court Reschedules Reorganization DESIGN COMPANY: Court Assigns Receiver for Bankruptcy DIRECTV LA: File Second Joint Motion To Extend Exclusive Periods EMERGENCIAS: Seeking Court's Approval on Reorganization EMERNORT: Submits "Concurso Preventivo" Motion To Court HILASA: Court Orders Bankruptcy JUAN SALE: Court Approves Reorganization Petition MEMBRILLAR: Enters Bankruptcy on Court Orders NORTE LOGISTICA: Court Sets Bankruptcy Proceedings Schedule ORGANIZACION FUTURA: Receiver Closes Verification Process SOCIEDAD INTERNACION: Files for "Concurso Preventivo" TANGO FURS: Court Declares the Company "Quiebra" TEXTIL ARIES: Individual Reports Filing Deadline Today TRAINING CENTER: General Report Filing Deadline Expires Today B R A Z I L AES CORP.: Govt. Moves To Push Through Debt Deal With BNDES CFLCL: Issues Stockholders Report For 3Q03 ELETROPAULO METROPOLITANA: Increasing Investments in 2004 & 2005 VARIG: Makes First Quarterly Profit Since 1995 C H I L E LE MANS: Auction To Take One Year, Says Auditor MADECO: Fitch Ups Bond Rating to `BB+' VIDA PLENA: Needs At Least $9M Capital Injection, Says Regulator C O L O M B I A * Colombia Amends Procedures, Extends Bonds Offer Deadline D O M I N I C A N R E P U B L I C * IDB Approves $6M Loan To Dominican Republic - - - - - - - - ================= A R G E N T I N A ================= AGINEL: Individual Reports Due for Filing Today ----------------------------------------------- The individual reports for the reorganization of Argentine company Aginel S.R.L. are due for submission today. The Company's receiver, Mr. Antonio Elias Am, was required to prepare the reports after the credit verifications ended earlier this year. The receiver will prepare the general report, which must be filed on February 24, 2004, after the individual reports are processed at court. The reorganization will then proceed with the informative assembly, which will be held on August 12 next year. The Company entered bankruptcy after Civil and Commercial Tribunal of Las Flores in Cordoba approved the Company's motion for "Concurso Preventivo", the Troubled Company Reporter - Latin America reported earlier. CONTACT: Aginel S.R.L. Napoles 3110 Las Flores Cordoba Antonio Elias Am Avenida Velez Sarsfield 468 Cordoba AUXI-THERAPIA: Files "Concurso Preventivo" Motion ------------------------------------------------- Buenos Aires-based Auxi-Therapia S.A. asked the court's permission to undergo reorganization by filing a motion for "Concurso Preventivo" at the city's Court No. 3. Argentine news portal Infobae relates that Clerk No. 6 aids the court on the case. CORREO ARGENTINO: Likely To End In Bankruptcy, Asset Liquidation ---------------------------------------------------------------- Now that the Argentine government has rescinded Correo Argentino's national postal service concession, it seems that the first parties to be affected will be the creditors that are included in Correo's formal restructuring proceeding. The government took out the firm's main asset, the concession, and it is now an empty company, with no cash flow at all to meet its commitments. According to lawyers and accountants polled by daily El Cronista, the most probable ending for the company is the bankruptcy and liquidation of assets. The problem in this case remains the lack of assets. Correo's main creditors are the State (ARS296 million), the Inter-American Development Bank and the World Bank (ARS341 million between both of them), a group of banks led by Galicia, Citibank and Rio (ARS163.4 million) and Sideco (its controlling company, with ARS84.3 million). "A company making a formal restructuring proceeding needs the acceptance of its creditors and then some activity to generate cash and comply with the payment offer, which means that if the company has no activity the most likely path would be the bankruptcy," said Enrique Kiperman, a specialist in bankruptcies at the Economic Sciences Professional Association of the Buenos Aires city. Correo Argentino made two restructuring proposals, both of which were rejected by the State. And the term of its formal restructuring proceeding expired last month. CORREO ARGENTINO: Govt.'s Decision May Indirectly Affect Sideco --------------------------------------------------------------- Sideco, the holding that groups most of Francisco Macri's interests (including 69.2% of Correo Argentino), may be indirectly affected by the government's decision to rescind Correo's national postal concession. Sideco is owned by Socma, a firm controlled by Macri, which owns 95%, and the International Finance Corporation, with 4.4%. It has already made a restructuring proposal regarding its US$400 million debt. Even though it hasn't yet achieved the necessary majorities to subscribe an "acuerdo preventivo extrajudicial" (APE), negotiations would be quite advanced. An acuerdo preventivo extrajudicial, or APE, is an out-of-court agreement that needs two-thirds of the creditors' approval to proceed. A report issued by Deutsche Bank earlier said, "if Sideco loses the postal concession, it is possible that [there would be] some negative effects" during the debt restructuring process. Sideco billed ARS1.2 billion (US$417.39 million) in 2002, 45% of which were contributed by Correo Argentino. Excluding the postal operator's debt, Sideco's liabilities fell from US$400 million to US$170 million. The holding's restructuring offer had been qualified as one of "the most imaginative ones", since it put shares in Sideco Brazil as a guarantee, and the most satisfactory to creditors, amongst all offers made by Argentine firms after the devaluation of the Argentine peso. CRESER CREDITO: Court Reschedules Reorganization ------------------------------------------------ Buenos Aires Court No. 22 reset the reorganization schedule of Creser Credito y Servicio S.A., reports local news portal Infobae. The city's Clerk No. 43 assists the court on this case. The credit verification period is extended until December 15 this year. The Company retains its receiver, Ms. Cecilia Beatriz Montelvetti, who will authenticate claims and prepare the necessary reports. The receiver will prepare the individual reports after the verification process is closed. These reports must be submitted to the court on February 27 next year, followed by the general report on April 13. The general report is a consolidation of the individual reports after they are processed at court. The informative assembly will be held on September 24, 2004. This is one of the last parts of the reorganization process. CONTACT: Ceicila beatriz Montelvetti General Urquiza 2134 Buenos Aires DESIGN COMPANY: Court Assigns Receiver for Bankruptcy ----------------------------------------------------- Court No. 18 of Buenos Aires assigned Ms. Elba Bengoechea as receiver for the bankruptcy of Design Company S.A., reports local news source Infobae. The receiver will authenticate creditors' claims until April 9 next year. The individual reports, which are due for filing May 11, 2004, are to be prepared upon completion of the verification process. The receiver will also prepare a general report due for submission on June 23 next year, after the individual reports are submitted to the court. CONTACT: Elba Bengoechea Jose Evaristo Uriburu 1010 Buenos Aires DIRECTV LA: File Second Joint Motion To Extend Exclusive Periods ---------------------------------------------------------------- On October 14, 2003, DirecTV Latin America LLC, the Official Committee of Unsecured Creditors and Hughes Electronics Committee jointly filed a request to extend the Debtor's exclusive period to file and solicit acceptances of a Chapter 11 plan. The Parties asked the Court to extend the Exclusive Proposal Period to November 12, 2003 and the Exclusive Solicitation Period to January 12, 2004. Since the filing of the Joint Extension Motion, the Parties continued their negotiation and made substantial progress in terms of a consensual reorganization plan. In this regard, the Parties agree that further extensions are necessary to enable them to complete these negotiations and, to the extent an agreement is reached, to document the agreement in a plan and to prepare an appropriate disclosure statement. The Parties are hopeful that a consensual reorganization plan and an accompanying disclosure statement can and will be filed by the deadline. At the Parties' behest, the Court extended the Exclusive Proposal Period to and including November 26, 2003 and the Exclusive Solicitation Period to and including January 26, 2004. Upon the Agreement by the Parties before November 26, 2003, the Court held that the Exclusive Proposal Period will be extended to and including a date no later than December 20, 2003. Accordingly, the Exclusive Solicitation Period will be extended to and including a date no later than February 18, 2004 without the need for the Parties to file another Extension Motion. (DirecTV Latin America Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) EMERGENCIAS: Seeking Court's Approval on Reorganization ------------------------------------------------------- Emergencias San Miguel S.A. is requesting permission to undergo reorganization. Argentine news source Infobae reports that the Company has submitted its motion for "Concurso Preventivo" at the city's Court No. 3. Clerk No. 6 assists the court on the case. CONTACT: Emergencias San Miguel S.A. Avenida Roque Saenz Pe¤a 868 Buenos Aires EMERNORT: Submits "Concurso Preventivo" Motion To Court ------------------------------------------------------- Court No. 12 of Buenos Aires received a motion for "Concurso Preventivo" filed by local company Emernort S.A., relates local news portal Infobae. Clerk No. 23 assists the court on the case. If the motion is approved, the court will assign a receiver to oversee the reorganization process. The receiver will verify creditors' claims and prepare the individual and general reports. CONTACT: Emernort S.A. Gabriela Mistral 2884 Buenos Aires HILASA: Court Orders Bankruptcy ------------------------------- Argentine plastics manufacturer Hilasa S.A. entered bankruptcy on orders from Buenos Aires Court No. 6, which is under Judge Ferrario's jurisdiction. The ruling comes after the Company's creditor filed a bankruptcy petition for nonpayment of debt. The court assigned Ms. Sanda Dallo as the Company's receiver. She will verify creditors' claims until March 9 next year. She is also in charge of the preparation of the individual and general reports. However, the source did not reveal whether the court has set the filing deadlines for these reports. CONTACT: Hilasa S.A. 2nd Floor, Office 17 Ave Corrientes 4006 Buenos Aires Sandra Dallo 8th Floor, Office C Tucuman 1711 Buenos Aires JUAN SALE: Court Approves Reorganization Petition ------------------------------------------------- Juan Sale Agricola Motor S.A. will undergo reorganization after its "Concurso Preventivo" motion is approved by Court No. 1 of the Civil and Commercial Tribubal of La Plata in Argentina. The court assigned Mr. Juan Mauricio Siesaransky as the Company's receiver. The credit verification period ends December 23 this year. Creditors are advised to present their claims to the receiver for authentication before the said date. The receiver will prepare the individual reports upon completion of the verification process. These reports must be presented to the court on March 30 next year. The receiver will also prepare the general report, due on May 12 next year, after the individual reports are processed at court. The court has set the informative assembly to be held on July 27, 2004, Infobae adds without revealing the specific time and venue of the said meeting. CONTACT: Juan Sale Agricola Motor S.A. Del Carmen 800 Ca¤uelas La Plata Juan Mauricio Siesaransky Calle 12 Nro. 718 La Plata MEMBRILLAR: Enters Bankruptcy on Court Orders --------------------------------------------- Buenos Aires Court No. 20 ordered the bankruptcy of local company Membrillar 66 S.R.L., relates Infobae. The Company's receiver, Mr. Luis Maria Rementeria, will oversee the bankruptcy process. The credit verification period ends December 22 this year. This is done to ascertain the nature and amount of the Company's debts. After verifications are closed, the receiver will prepare the individual reports, which are due for filing on March 5 next year. The receiver is also required to prepare a general report after the individual reports are processed at court. This report must be filed on April 21, 2004. The bankruptcy process will end with the liquidation of the Company's assets afterwards. CONTACT: Luis Maria Rementeria Piedras 1319 Buenos Aires NORTE LOGISTICA: Court Sets Bankruptcy Proceedings Schedule ----------------------------------------------------------- Buenos Aires Court No. 2 sets the schedule of the bankruptcy process of local company Norte Logistica S.R.L., relates Infobae. The Company's receiver, Mr. Antonio Gargiulo, will prepare the individual reports after the credit verification is closed on December 30 this year. Working with Clerk No. 4, the court ordered the receiver to hand in the individual reports on March 24, 2004, followed by the general report on May 5. The general report is prepared after the individual reports are processed at court. The Company's assets are liquidated at the end of the process to reimburse its creditors. Payment distribution will be determined by the results of the credit verifications. CONTACT: Norte Logistica S.R.L. Superi 3583 Buenos Aires Antonio Gargiulo Uruguay 385 Buenos Aires ORGANIZACION FUTURA: Receiver Closes Verification Process --------------------------------------------------------- Mr. Mario Grieco, receiver for bankrupt ice cream dealer Organizacion Futura S.A., closes the credit verification process today. As ordered by Buenos Aires Court No. 4, which handles the Company's case, the receiver will prepare the individual reports. Judge Ottolenghi handles the Company's case with assistance from Dr. Anta, the city's Clerk No. 8, the Troubled Company Reporter - Latin America reported previously. Local sources, however, did not reveal the deadlines for the filing of the receiver's reports. CONTACT: Organizacion Futura S.A. Perdriel 1278 Buenos Aires Mario Grieco 2nd Floor Ave de Mayo 1260 Buenos Aires SOCIEDAD INTERNACION: Files for "Concurso Preventivo" ----------------------------------------------------- Sociedad Internacion de la Costa S.A., which is based in Buenos Aires, filed a motion for "Concurso Preventivo" at the city's Court No. 3, according to a report by local news source Infobae. Clerk No. 6 aids the court on the case. The source, however, did not mention whether the court is likely to approve the petition or not. CONTACT: Sociedad Internacion de la Costa S.A. Leandro N Alem 449 Buenos Aires TANGO FURS: Court Declares the Company "Quiebra" ------------------------------------------------ Buenos Aires Court No. 18 declared Tango Furs S.R.L. "Quiebra". Infobae related that the court, working with Clerk No. 35, assigned Mr. Gustavo Daniel Micciulo, to oversee the bankruptcy process. The court instructed the receiver to verify creditors' claims until next April 5, and determine the nature and amount of the Company's debts. The results of the verification process will be presented to the court through the individual reports, which are due for filing on May 18, 2004. After the individual reports are processed at court, the receiver will consolidate the data into a general report, which must be submitted to the court on June 30 next year. The Company's assets will then be liquidated afterwards to repay creditors. Payments will be based on the results of the verification process. CONTACT: Gustavi Daniel Micciulo Ave Cordoba 1417 Buenos Aires TEXTIL ARIES: Individual Reports Filing Deadline Today ------------------------------------------------------ Today, November 25, 2004, is the deadline for the filing of the individual reports for the bankruptcy of Buenos Aires-based Textil Aries S.R.L., the Troubled Company Reporter - Latin America reported earlier. The reports were to be prepared by the receiver, Mr. Jorge Juan Gerchkovich, after the verification process was closed. After the individual reports are processed at court, the receiver will prepare a general report. This report is due for submission on February 12, 2004. The Company's assets will then be liquidated to reimburse its creditors. Buenos Aires Court No. 17 issued the bankruptcy order, the TCR-LA said earlier. Clerk No. 34 assists the court on the case. CONTACT: Jorge Juan Gerchkovich Lavalle 1882 Buenos Aires TRAINING CENTER: General Report Filing Deadline Expires Today ------------------------------------------------------------- Mr. Jose M. Nullo, receiver for Buenos Aires-based Training Center S.A., must submit the general report for the Company's reorganization today. This report was prepared after the individual reports were submitted to the court earlier this year. The city's Court No. 17 handles the Company's case. The court ordered the informative assembly to be held on June 3 next year, the Troubled Company Reporter - Latin America earlier revealed. CONTACT: Jose M. Nullo Suipacha 612 Buenos Aires =========== B R A Z I L =========== AES CORP.: Govt. Moves To Push Through Debt Deal With BNDES ----------------------------------------------------------- Top-ranking Brazilian government officials are working to make sure that legal hurdles won't interfere with a debt-rescheduling agreement between AES Corp. and Brazil's development bank BNDES. Luiz Pinguelli Rosa, the chief executive of Brazil's federal electricity holding, Centrais Eletricas Brasileiras, or Eletrobras, is expected to meet with Mines and Energy Minister Dilma Rousseff in the next few days to find a final solution for a legal dispute involving AES assets in Brazil, a spokeswoman at the ministry said Friday. Next week, BNDES and AES officials will likely conclude the deal to reschedule AES' US$1.2 billion financial obligations with the federally-owned bank. The accord involves the creation of a joint venture to run AES' power companies in the country, so the deal could only go through if all AES assets in Brazil were free of legal hurdles. Although a Brazilian state court last Tuesday ruled to suspend the seizure of shares that AES Corp. holds in power utilities here, paving the way for the conclusion of the debt deal, a key player said it intends to appeal the decision. Seeking to get some of their cash back, creditors of broadband services provider Eletronet SA, a bankrupt AES unit here, in May filed for the seizure of AES-owned shares in AES Tiete, Eletropaulo, and in Companhia Energetica de Minas Gerais, or Cemig, in which AES holds a minority stake. The U.S. power group, which owns 51% of the company, allowed Eletronet to default on several payments earlier this year, leading it to bankruptcy. The remaining 49% is in the hands of Lightpar, a unit of Eletrobras, which started bankruptcy proceedings in Eletronet in late April. During the bankruptcy proceedings, the U.S. power group was held responsible for BR$ 550 million in debt Eletronet owes to its creditors. Eletronet owes nearly 90% of its debt to suppliers, Lucent Technologies Inc. and Furukawa Cabos de Energia, a unit of Japans Furukawa Electric Co. As AES refused to pay its debts, Eletronet's creditors, through a bankruptcy administrator, decided to take legal action in May. Back then, the court ruled in favor of the creditors, and seized shares in some AES assets. After this week's suspension of the seizure of AES-owned shares, the court also suspended bankruptcy proceedings in Eletronet, which removes from AES the obligation to pay its debts with Lucent and Furukawa. Lightpar will appeal the decision because it believes AES must foot the BR$ 550 million bill. However, Eletrobras' Pinguelli said the government will intervene in the case and try to find an alternative solution. "Eletrobras has minority shareholders and won't be hit with this BR$ 550 debt, because that's AES' responsibility," Pinguelli said, according to a spokeswoman at Eletrobras. "But there may be other solutions that will respect the interests of BNDES (in concluding the debt-rescheduling deal with AES) and Eletrobras," the executive said, declining to provide details on the alternative options to avoid further legal hurdles. CFLCL: Issues Stockholders Report For 3Q03 ------------------------------------------ Upon conclusion of the first nine months of 2003, CFLCL stated it believes it is important to point out the following facts: CONSOLIDATED ENERGY SALES GREW 8.6% Consolidated electric energy sales to final consumers of Cataguazes-Leopoldina (CFLCL) and its subsidiaries CENF, Energipe, CELB and Saelpa grew 8.6% (3.6% in the concession area of CFLCL) in the nine-month period ended September 30, 2003, compared to the same period in 2002, reaching 4,359 GWh. This volume of energy sold is 2.9% higher than that recorded in the nine-month period ended September 30, 2000 (period without the effects of electric energy rationing). It is important to point out that the volume of energy sales in the Northeast, specifically by the subsidiaries Energipe, CELB and Saelpa, showed stronger market recovery after rationing, compared to sales by CFLCL and CENF, operating in the Southeast. In relation to the period from January to September 2000 (without rationing), consolidated sales during the same nine months in 2003 by the subsidiaries operating in the Northeast were 5.2% higher. In the Southeast, for its part, the volume of energy sold by CFLCL and CENF was 4.7% lower in relation to the same period in 2000, without rationing. REVENUES, CONTROLLABLE EXPENSES AND OPERATING CASH FLOW Gross Revenue from Sales and/or Services Grew 21.7%: Although consolidated electric energy sales were 1.7% lower in the 3rd quarter, compared to the volume recorded in the 2nd quarter of the current year, CFLCL's consolidated gross revenue from sales and/or services in the 3rd quarter was R$26,246 thousand higher, increasing 8.5% from the prior quarter. This performance is basically due to increases in tariffs by CFLCL, CENF, and partial increases by Saelpa, whose tariff recomposition took place on August 28, therefore not having the full effect on CFLCL's consolidated revenues in the 3rd quarter of 2003. CFLCL's and CENF's tariffs were readjusted by 33.86% and 35.78%, respectively, as of June 18, while Saelpa's tariffs were adjusted by an average 33.40%. This subsidiary's tariff increases vary between 31.65% (residential) and 37.42% (industrial - high voltage). In the nine-month period ended September 30, 2003, CFLCL's consolidated gross revenue from sales and/or services reached R$925,274 thousand (R$194,107 thousand in the parent company), representing a 21.7% increase in relation to the same period in 2002. Consolidated Controllable Expenses Fell 4.5%: CFLCL and its subsidiaries have made efforts to rationalize their controllable operating costs (personnel, material and third-party services) and added new operating standards. Thus, it was possible to achieve reductions in these consolidated costs: 10.5% in the 3rd quarter and 4.5% in the nine-month period ended September 30, 2003, compared to the same periods in 2002, respectively. Please note that Energipe's controllable expenses in the 1st quarter of 2003 are affected by extraordinary costs and indemnities resulting from the staff restructuring program, in the amount of approximately R$ 2.0 million. Consolidated Operating Cash Flow Increased 16.7%: In the nine- month period ended September 30, 2003, CFLCL's consolidated operating cash flow, measured by EBITDA, was 16.7% greater compared to the same period in 2002, totaling R$196,196 thousand, which represents an EBITDA margin of 28.0%. For purposes of comparing EBITDA in 2003, two facts are worth highlighting: 1) the consolidated result of CFLCL in the 3rd quarter of 2002 is increased by R$26,284 thousand, due to the adjustments in the final amounts of the extraordinary tariff recomposition and energy transactions in the Wholesale Energy Market (MAE), which is why EBITDA in the 3rd quarter of 2003 is 7.9% lower in relation to the same period in 2002. Disregarding these adjustments made in the 3rd quarter of 2003, EBITDA in that quarter would be 48.1% higher than that recorded in the 3rd quarter of 2002; 2) Saelpa's result in the 1st quarter de 2003 was increased by the reversal of a provision for contingencies and doubtful debtors in the amount of R$19,040 thousand. This reversal resulted from debt negotiations with consumers, especially city governments, which, after the approval of the public lighting fee, achieved financial capacity to pay their electric energy bills. CONSOLIDATED LOSS FALLS 37%, ALTHOUGH THE DEBT PROFILE STILL IMPAIRS RESULTS Cataguazes-Leopoldina reduced its consolidated loss by 37% (by 36% in the parent company CFLCL) in the nine-month period ended September 30, 2003, compared to that recorded in the same period last year, reaching R$33,042 thousand (R$34,317 thousand in the parent company CFLCL). Despite the improvements in operations, the consolidated result of Cataguazes-Leopoldina still suffered from financial expenses arising from its indebtedness. Consolidated net financial expenses in the nine-month period ended September 30, 2003 were R$138,744 thousand, compared to R$165,753 thousand in the same period in 2002. Conclusion of Debt Restructuring Program: CFLCL and its subsidiaries Energisa, CENF, Energipe, CELB and Saelpa published, on October 29, 2003, a Significant Matter Notice, announcing the conclusion of the program to restructure its debts, in the amount of approximately R$750 million, which will allow for making the maturities of its short-term debts compatible with the respective cash flows and reduce the current spreads on financial operations. This program involved the issuance of debentures (R$130 million), lengthening of bank, supplier and tax debts (R$14 million), subordinating shareholder debts (R$26 million) and a capital increase through a private share subscription (R$20 million) in the parent company CFLCL, as well as lengthening of its subsidiaries' bank, supplier and tax debts, in the amount of approximately R$560 million, of which R$9 million is owed by CENF, R$328 million by Energipe, R$8 million by CELB and R$215 million by Saelpa. Payment of renegotiated short-term bank debts, in the amount of approximately R$490 million, will be made in up to 54 months (average of 45 months). Interest on 57% of this amount will be equivalent to the Brazilian Long-Term Interest Rate (TJLP) + 7% p.a., and the remaining 43% will be adjusted at an average rate approximately equal to the Interbank Deposit Certificate rate (CDI) + 6% p.a. Debts with energy suppliers and tax debts, in the amount of approximately R$215 million, were lengthened to up to 120 months, with an average maturity of 95 months. Of this total, 47% will be adjusted according to the Broad Consumer Price Index (IPCA), 14% according to the TJLP - both without interest -, and the remaining 39% will be adjusted according to the General Market Price Index (IGP-M) plus interest of 12% p.a. The current debt restructuring should reestablish short-term liquidity, necessary for the operations of the Cataguazes Leopoldina System, substantially reducing the need for refinancing in coming year. CONSOLIDATED INVESTMENTS SURPASSED R$153 MILLION AND CAT-LEO ENERGIA STARTED UP COMMERCIAL OPERATION OF THREE SMALL HYDROELECTRIC PLANTS (PCHs) In the nine-month period ended September 30, 2003, CFLCL and its subsidiaries CAT-LEO Energia, Usina Termel‚trica de Juiz de Fora, CENF, Energipe, CELB and Saelpa invested R$153,790 thousand in the expansion of their electric systems (R$120,303 thousand in the nine-month period ended September 30, 2002), prioritizing investments in power generation (R$94,475 thousand in the nine- month period ended September 30, 2003, compared to R$59,622 thousand in the same period in 2002) and reducing commercial losses. An effort was also made to rationalize investments in reducing technical losses and in electric systems' reliability. PERFORMANCE OF SHARES LISTED ON THE SAO PAULO STOCK EXCHANGE (BOVESPA) In the nine-month period ended September 30, 2003, CFLCL's class A preferred shares rose 14.2% on Bovespa, compared to a 36.6% climb in the Energy Industry Index (IEE). At the end of September, CFLCL's class "A" preferred shares were quoted at 57.8% of their book value of R$2.37 per thousand shares. ELETROPAULO METROPOLITANA: Increasing Investments in 2004 & 2005 ---------------------------------------------------------------- Eletropaulo Metropolitana, Brazil's largest power distributor, will up its investments for next year and in 2005, Gazeta Mercantil. The Company, a subsidiary of U.S. power giant AES Corp., which invested BRL206 million this year, said it intends to invest BRL300 million next year and BRL400 million in 2005. Investments will be mainly directed at the construction of distribution lines and substations - including facilities. According to Ricardo Lima, the vice-chairman of the commercial division, Eletropaulo also plans to join the support project for distributors outlined by the national development bank BNDES (Banco Nacional de Desenvolvimento Economico e Social). Eletropaulo holds short-term debts of BRL2.5 billion. Between January and September, the group posted a profit of BRL131 million against a loss of BRL533 million in the same period in 2002. The utility said net revenue totaled BRL4.61 billion in the first nine months of the year, an 8.4% rise from the same period of 2002. As of the end of September, Eletropaulo's net equity was BRL2.24 billion. Eletropaulo supplies electricity to more than 14 million residents in the metropolitan area of Sao Paulo. CONTACT: ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes Gonzalves Jr., VP Finance/Investor Relations VARIG: Makes First Quarterly Profit Since 1995 ---------------------------------------------- Brazilian airline Varig posted its first quarterly operating profit since 1995, following a reduction in the size of its fleet, a stable currency and an increase in the number of passengers on its jets, says Reuters. Varig, which is in the process of working out a merger with its main rival TAM, made an operating profit of BRL137 million (US$47 million) in the third quarter. The airline company did not provide a net profit for the quarter, but considering that it reported a net loss of BRL291 million for the first half, the carrier made a loss of about BRL242 million in the June to end- September period, the report suggests. For the nine months through September, Varig posted an operating loss of BRL519.3 million and a net loss of BRL533.4 million, a vast improvement on the BRL2.1 billion it lost in the same period last year. CONTACT: Viacao Aerea Rio Grandense SA Rua 18 Novembro, 800 2 - Andar Navegantes 90240-040 Porto Alegre - RS Brazil Phone: +55 51 358-7039 Fax: +55 51 358-7001 Home Page: http://www.varig.com.br ========= C H I L E ========= LE MANS: Auction To Take One Year, Says Auditor ----------------------------------------------- The auditor appointed by Chile's insurance and securities controlling bureau, SVS, at troubled life insurance company Le Mans Desarrollo will take a year to auction its life annuities portfolio, informed SVS' leader Alejandro Ferreiro. Fernando Perez, who has been in charge of auditing the company from when the SVS noticed it had a net asset deficit of CLP10 billion until the watchdog decided to liquidate the firm, will be in charge of the auction process. Le Mans belonged to the bankrupt financial holding Inverlink, who became involved in a corruption scandal and a number of frauds. Ferreiro said that according to SVS' calculations, Le Mans' resources are only enough pay pensions during 12 to 14 years and so the insurance company that offers to manage and pay these pensions during the longest term possible will be awarded the portfolio. MADECO: Fitch Ups Bond Rating to `BB+' -------------------------------------- Fitch Ratings upgraded the bonds issued by Chilean copper and aluminum products manufacturer Madeco (NYSE: MAD) to BB+ from BB, reports Business News Americas. The outlook on the bonds remains stable, Fitch added. The upgrade came after the Company narrowed its losses in the third quarter to CLP454 million (US$700,000) from last year's third-quarter loss of CLP18.6 billion. According to its third quarter filing, the Company has about US$95 million of bonds outstanding. The improved financial status of the Company is the result of an equity increase, and the reduction and rescheduling of its debt, the agency said. Madeco, controlled by Chile's Luksic group, began a long-term plan this year to restructure itself at home as well as at its Brazilian and Argentine units. The Company also has operations in Peru. VIDA PLENA: Needs At Least $9M Capital Injection, Says Regulator ---------------------------------------------------------------- The affiliates of Chilean health insurer Vida Plena are now faced with financial trepidation due to the ongoing ailing condition of Vida Plena, Business News Americas indicates. As of end-October, Vida Plena held a deficit totaling CLP1.8 billion (US$2.86mn) with debts estimated at over CLP10 billion. Chile's health care regulator Manuel Inostroza suggested that the insurer's financial condition is set to deteriorate unless a minimum capital injection of US$9 million is forthcoming. If no capital injection is determined in the short-term, the regulator will look for a definitive solution to halt the " uncertainty affecting the affiliates," Inostroza added. Vida Plena is the former health insurance subsidiary of Chilean financial group Inverlink, the focus of ongoing corporate theft and corruption-related legal proceedings. The group is being liquidated as part of the process to reimburse creditors. Inverlink trustees agreed to sell Vida Plena to investment consortium Issis in September, basing their decision on the consortium's financial credibility. However, the consortium, made up of local group Larchmont and Swedish investors, reneged on the terms of the acquisition based on its failure to comply with the payment quotas and to come through with a promised US$2.9 million capital increase. Chile's private health care regulator subsequently intervened Vida Plena based on its then CLP1.2 billion peso equity shortfall. In October, Inverlink trustees announced the renewed sale of Vida Plena. =============== C O L O M B I A =============== * Colombia Amends Procedures, Extends Bonds Offer Deadline ---------------------------------------------------------- Colombia has amended the procedures and extended the deadline for its invitation to the holders of its 9.75% Puttable or Mandatorily Exchangeable Bonds due 2009 (the "Old Bonds") to submit, in a modified Dutch auction, offers to exchange up to U.S. $250,000,000 principal amount of Old Bonds for an equal amount of its 9.75% Global Bonds due 2009 (the "New Bonds") and a U.S. dollar amount of cash (the "Invitation"). The Invitation procedures are amended so that if noncompetitive offers are submitted with respect to greater than U.S. $250,000,000 principal amount of Old Bonds, Colombia will accept all of the noncompetitive offers submitted, if it accepts any offers. In order to provide investors with additional time to submit their offers, Colombia has decided to extend the Invitation so that offers to exchange may be submitted or withdrawn until 5:00 P.M., New York City time, on Wednesday, November 26, 2003. The results of the auction will be announced at or around 5:00 P.M., New York City time, on November 28, 2003. The Settlement Date for the Invitation is expected to be December 5, 2003. Copies of the prospectus; prospectus supplement; supplement to the prospectus supplement, the prospectus and the letter of transmittal; and the related letter of transmittal may be obtained from the exchange offer website at http://www.ubs.com/colombia-exchange,or from D.F. King & Co. Inc., 48 Wall Street, 22nd floor, New York, NY 10005, as the Information Agent or from UBS Securities LLC, as the dealer manager, 677 Washington Boulevard Stamford, CT, 06901 attention: Liability Management Group. The securities codes for the Old Bonds are: CUSIP ISIN Common Code 195325AT2 US195325AT29 010465834 CONTACT: Tom Long of D.F. King & Co., Inc. Phone: +1-212-493-6920 Homepage: http://www.dfking.com/ =================================== D O M I N I C A N R E P U B L I C =================================== * IDB Approves $6M Loan To Dominican Republic --------------------------------------------- The Inter-American Development Bank announced Thursday the approval of a $6 million loan to the Dominican Republic to support policy measures to strengthen its financial system, including inspections of all Dominican banking institutions. The loan will assist the Dominican government's efforts to define a financial support program with the IDB and the World Bank. It will also support a Dominican macroeconomic program that will facilitate an agreement with the International Monetary Fund to bolster the economy after a financial crisis triggered by the collapse of one of the country's biggest banking groups. The inspections will assess the Dominican banking groups' structure and solvency, as well as the quality of their accounting practices. The Dominican Banking Superintendency, supported by specialists, will analyze the integrity of the financial institutions' information systems, their internal controls on deposits, cancelled or non-performing loans and loans granted to banking group affiliates. The program will be carried out by the Central Bank of the Dominican Republic, the Banking Superintendency and Banco Nacional de la Vivienda, a state-owned housing bank, which will receive technical assistance to facilitate its transformation into a second-tier institution. The new loan reflects the IDB strategy of supporting programs to strengthen bank supervision, the information systems used by monetary authorities and the Dominican financial system's prudential regulations. The loan was granted for a 20-year term, with a three-year grace period and at a variable interest rate. The local counterpart funds will total $600.000 for this program. *********** 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. 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