/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/031212.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 Friday, December 12, 2003, Vol. 4, Issue 246 Headlines A N T I G U A & B A R B U D A LIAT: Considering Alternative Measures Survival Insurance A R G E N T I N A ADISON: Seeks Court Permission to Reorganize ADMINISTRACION LA BUENA VISTA: Court Orders Bankruptcy AGUAS ARGENTINAS: Initiates Governmental Contract Talks ANGEL ESTRADA: Chase Manhattan To Grant 20% Debt Write-off AR-CINT: Receiver Prepares Individual Reports in Bankruptcy BANCO DE GALICIA: Analysts Share High Expectations CASA BORGES: Individual Reports Due Today At Bankruptcy Court CONTRULEC: Court Sets Timeline for Receiver's Reports DENT SUR: Court Approves Creditor's Bankruptcy Petition DISCO: Hits Another Obstacle In Ahold's Sale Efforts ESTABLICIMIENTO DIESEL: Enters Official Reorganization Process FEGITOM: Court Sets Schedule for Bankruptcy Process FELTA: Claims Review for Reorganization Ends Today GAZETA MERCANTIL: Court Order Declares Company Bankrupt GEROM: Receiver Closes Claims Check in Bankruptcy Process GRUPO AUT: Bankruptcy Initiated By Court Order LACEY: Receiver Oversees Bankruptcy Process MACH: Court Authorizes Official Reorganization MOLPLAST: Company's Bankruptcy Now Offical by Court Ruling NAYCA: Receiver Verifies Claims in Bankruptcy PUERTO TRINIDAD: Enters Bankruptcy on Court Orders SANTA CATALINA: Court Declares Company Bankrupt VANLAY: Proof of Bankruptcy Claims Due by February 20 B R A Z I L AES TIETE: Fitch Drops Grantor Trust to 'CC'; Outlook Negative TELEMAR: Issues $300M Bond With 8% Annual Coupon C H I L E VESPUCIO NORTE: Renegotiates Debt With Citibank H O N D U R A S WARNACO GROUP: To Sell Production Facility In Honduras J A M A I C A AIR JAMAICA: Seeks 25% Pay Cut From Pilots BEACHES GRANDE: Sandals Seeks To Buy Property M E X I C O GRUPO MEXICO: Issues $89M In New Debt * ESTADO DE MEXICO: `mxBB' Rating Affirmed But Outlook Negative N I C A R A G U A ENITEL: Bid Deadline Expires Today - - - - - - - - - - ================================= A N T I G U A & B A R B U D A ================================= LIAT: Considering Alternative Measures Survival Insurance --------------------------------------------------------- Antigua-based carrier LIAT 1974 Ltd believes that a merger with Trinidad carrier BWIA is the best option for the survival of both carriers, the Trinidad Guardian suggests. On Monday night, LIAT chief operations officer Patrick Kelly said LIAT is still committed to Caribbean Airlines Holding Ltd (CAHL), the company, which was meant to hold shares within BWIA and LIAT as regional governments prepared to reorganize both airlines. CAHL was supposed to have been formed in July but progress on CAHL has not been as quick as everyone would have wanted, Mr. Kelly said. As such, LIAT is looking at other alternatives to expand its operations. "One of the reasons I have been put into the job of chief operations officer is to allow our CEO Mr. Cullen to look at the wider issues to protect the survival of LIAT in the future. So I have no doubt he will be looking at all the options available," Mr. Kelly said. ================= A R G E N T I N A ================= ADISON: Seeks Court Permission to Reorganize -------------------------------------------- Adison S.A., which is based in Buenos Aires, seeks court permission to undergo reorganization. Local newspaper La Nacion indicates that the Company filed its motion for "Concurso Preventivo" at the city's Court No. 13, which is under Judge Villar. The Company, which distributes drinks and treats, filed the reorganization petition under pressure from debt. Clerk No. 26, Dr. Casina, assists the court on the case, La Nacion adds. CONTACT: Adison S.A. 7th Floor, Room 4 Parana 489 Buenos Aires ADMINISTRACION LA BUENA VISTA: Court Orders Bankruptcy ------------------------------------------------------ Court No. 2 of Buenos Aires declared local company Administracion La Buena Vista S.A. bankrupt. Infobae relates that Clerk No. 3 assists the court on the case. The court-appointed receiver, Mr. Daniel Altman, will authenticate creditors' claims until March 19 next year. He is also required to prepare the individual and general reports, whose deadlines were not indicated in the Infobae article. CONTACT: Administracion La Buena Vista S.A. Avenida Callao 1515 Buenos Aires Daniel Altman Parana 774 Buenos Aires AGUAS ARGENTINAS: Initiates Governmental Contract Talks ------------------------------------------------------- The Argentine government and local water utility Aguas Argentinas SA held a meeting Wednesday, the first in a series of meetings aimed at renegotiating Aguas' concession contract. Citing officials from the Planning Ministry, Dow Jones reports that during the meeting, the government asked the water utility to provide it with a formal plan of investments for 2004. It is especially interested in seeing what plans the Company has for investments in areas where water contamination remains a problem. The parties didn't discuss in the meeting issues regarding water rates, which have been frozen since January 2002. Aguas' parent, French conglomerate Suez (SZE), has filed a complaint over this matter with the International Center for the Settlement of Investment Disputes, or ICSID, a World Bank unit, arguing that the rate freeze amounts to a breach of contract. For its part, the government has at times argued that Aguas is in breach of contract, mainly for not fulfilling predetermined investment schedules. Recent news reports have said the government is considering rescinding its contract if the Company doesn't boost investments. The government is also expected to demand that Suez drop its ICSID complaint as a precondition to favorably renegotiating its contracts. ANGEL ESTRADA: Chase Manhattan To Grant 20% Debt Write-off ---------------------------------------------------------- Argentine paper company Angel Estrada y Cia. announced that Chase Manhattan Bank would be about to authorize a 20% write-off in the amount of its debt to the bank and to refinance 30% of the rest. However, Estrada would still lack funds to repay the other 50%. As a consequence, the Company's board of directors decided to call fall an extraordinary meeting in order to raise its capital stock through the subscription of US$49.5 million worth of new shares. AR-CINT: Receiver Prepares Individual Reports in Bankruptcy ----------------------------------------------------------- The bankruptcy process of Buenos Aires-based Ar-Cint S.R.L. continues with the conclusion of the credit verification process today. Ms. Norma Haydee Fernandez, the Company's receiver, will prepare the individual reports, which are due for submission on February 26 next year. The general report, which is prepared after the individual reports are processed at court, must be filed on April 13, 2004. This contains a summary of the individual reports, which hold the results of the verification process. Court No. 6 of Buenos Aires handles the Company's case, according to an earlier report from the Troubled Company Reporter - Latin America. CONTACT: Norma Haydee Fernandez Carlos Pellegrini 465 Buenos Aires BANCO DE GALICIA: Analysts Share High Expectations -------------------------------------------------- Argentine analysts believe Banco de Galicia y Buenos Aires is poised to regain its traditional leadership among private banks in the local financial system next year. Business News Americas relates that Galicia defaulted on US$1.2 billion worth of debt amid Argentina's severe economic and financial crisis in 2001 and last year. However, the bank has announced it will issue bonds worth up to US$2 billion in the future to exit its default status. A Galicia source also revealed that negotiations with its many international creditors are nearing an agreement, which should be wrapped up during the first half next year. Interest among the Buenos Aires-based investor community is likely to be strong because the bank enjoys a positive business outlook and financial instruments are still limited on the local market, partner Hernan Fardi at Argentine consultancy Maxinver said. The lack of an international parent helped to erode the public's confidence in Galicia during the crisis came but since the international banks in Argentina acted no differently than the local banks, Galicia has come out on top, Fardi said. Although all local banks benefited from the international banks' indifference in helping their Argentine clients, Galicia is the only one that "has what it takes" to become the leading private bank in Argentina, said the bond analyst, who asked not to be named. Galicia has a strong brand, a nationwide distribution network and local know-how to take advantage of Argentina's economic recovery, Fardi said. CASA BORGES: Individual Reports Due Today At Bankruptcy Court ------------------------------------------------------------- The individual reports for the bankruptcy Casa Borges S.A. are due for filing at the court today. The reports were prepared by the Company's receiver, Mr. Juan Carlos Guaita, after the credit verification process was completed earlier in this year. 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 CONTRULEC: Court Sets Timeline for Receiver's Reports ----------------------------------------------------- Buenos Aires Court No. 10, which handles the bankruptcy of Construlec S.R.L., issued deadlines for the submission of the individual and general reports. Infobae relates that the individual reports are due on April 20, 2004, followed by the general report on June 2. The Company's receiver, Juan Carlos Pitrelli, will prepare the individual reports after the credit verifications are completed on March 4 next year. The general reports are prepared after the individual reports are processed at court. CONTACT: Construlec S.R.L. Tinogasta 4780 Buenos Aires Juan Carlos Pitrelli Ave de Mayo 1260 Buenos Aires DENT SUR: Court Approves Creditor's Bankruptcy Petition ------------------------------------------------------- Judge Gonzalez of Buenos Aires Court No. 8 approved a petition for the bankruptcy of local company Dent Sur S.A., according to Argentine newspaper La Nacion. The Company's creditor filed the petition on the Company's failure to pay its debts. Working with Clerk No. 15, Dr. Lezaeta, the court appointed Ms. Sara Maria Rey de Lavolpe as the Company's receiver. She will authenticate creditors' claims until April 6 next year. She will also prepare the individual and general reports, as required by the court. The Company's assets will likely by liquidated at the end of the process to repay creditors. CONTACT: Dent Sur S.A. Hidalgo 857 Buenos Aires Sara Maria Rey de Lavolpe 9th Floor Cerrito 1136 Buenos Aires DISCO: Hits Another Obstacle In Ahold's Sale Efforts ---------------------------------------------------- Dutch retailer Ahold NV's efforts to offload its troubled Argentine supermarket chain Disco SA are thrown into limbo once again. Dow Jones reports that an Argentine judge has granted a Uruguayan judge's request to temporarily block Ahold's sale of Disco to Chile's Cencosud. A spokesman at the Argentine commercial court who received the Uruguayan request said that the Argentine judge imposed the cautionary measure Tuesday but he declined to give further details on the terms. Reports by the local media suggest that the stay will block Disco's sale for a period of 90 days. But it still remains unclear whether the Uruguayan and Argentine court rulings will delay Cencosud's expected acquisition of Disco. Disco released a statement late Tuesday saying neither it nor its parent, Ahold, had received notification of a cautionary measure that can affect the sale of Discos shares. The Disco press statement added that an Argentine commercial court has already rejected a request for a stay. However, the Argentine court named in the Disco communique is different from the one that considered the latest Uruguayan request. Disco said it knows only that Cencosud has received notification from Uruguayan parties that there is a "supposed cautionary measure" against Disco. "There exists no circumstance that affects the capacity of Ahold to dispose of its shares of Disco SA," Disco concluded. ESTABLICIMIENTO DIESEL: Enters Official Reorganization Process -------------------------------------------------------------- Court No. 1 of the Civil and Commercial Tribunal of La Matanza approved a petition for reorganization filed local company Establicimiento Diesel Buenos Aires S.A.. The Company is now in the hands of local accountant, Angel Veno Vazquez, who was designated receiver for the process. Argentine news portal Infobae reveals that the credit verification period ends on February 5 next year. The receiver, who will examine creditors' claims, will prepare the individual reports after the said date. The court requires these reports to be filed on March 18, 2004, followed by the general report on May 5. The informative assembly, one of the last processes in a bankruptcy, will be held on October 21 next year. CONTACT: Establecimiento Diesel Buenos Aires S.A. Avenida Arieta 4027/4041 San Justo Angel Veno Vazquez Cristiania 2563 Isidro Casanova FEGITOM: Court Sets Schedule for Bankruptcy Process --------------------------------------------------- Court No. 4 of the Civil and Commercial Tribunal of Mar del Plata has set the schedule for the reorganization of local company Fegitom S.R.L.. A report by Argentine news source Infobae indicates that the individual and general reports must be submitted to the court on March 24, and May 7 next year, respectively. The Company's receiver, Mr. Horacio J. Redolati, will prepare the individual reports after credit verifications are closed on February 6, 2004. The court also set October 5 next year as the date for the informative assembly, one of the last processes in a reorganization. CONTACT: Horacio Redolati Rawson 2271 Mar del Plata FELTA: Claims Review for Reorganization Ends Today -------------------------------------------------- The credit verification process for the reorganization of Buenos Aires company Felta S.A. will end today. The Company's receiver, Mr. Claudio Jorge Haimovichi, examined and authenticated creditors' claims to ascertain the nature and amount of the Company's debts. The receiver will prepare the individual reports on the results of the verification process and submit these to the court on March 1 next year. He is also tasked with the preparation of the general report, which is due for filing on April 16, 2004, after the individual reports are processed at court. The Troubled Company Reporter - Latin America earlier reported that the Company started reorganization after the city's Court No. 2 approved its petition for "Concurso Preventivo". Clerk No. 3 assists the court on the case, which will end after the informative audience on October 8 this next year. CONTACT: Claudio Jorge Haimovichi Sarmiento 3843 Buenos Aires GAZETA MERCANTIL: Court Order Declares Company Bankrupt ------------------------------------------------------- Gazeta Mercantil Mercosur S.A. entered bankruptcy on orders from Buenos Aires Court No. 17. Clerk No. 33, assists the court on the case, which will close with the liquidation of the Company's assets to reimburse creditors. Argentine news source Infobae relates that the court assigned Mr. Jose Manuel Montana as receiver for the process, with instructions to examine and authenticate creditors' claims until March 25 next year. The receiver must submit the individual reports to the court on April 28, followed by the general report on June 10. The results of the verification process will determine the payment distribution after the Company's assets are liquidated. CONTACT: Jose Manuel Montana Paraguay 2081 Buenos Aires GEROM: Receiver Closes Claims Check in Bankruptcy Process --------------------------------------------------------- Creditors of Buenos Aires-based Gerom S.A. must present their claims to the Company's receiver for authentication as the deadline expires today. The Company's receiver, Mr. Carlos Eduardo Foresti, will now prepare the individual reports on the verification results. Court No. 11, which handles the Company's case, set February 25, 2004 as the deadline for the filing of the individual reports, the Troubled Company Reporter - Latin America said in an earlier report. The receiver will summarize the information in the individual reports after these are processed at court into a general report, which is due on April 7 next year. The bankruptcy process will end with the liquidation of the Company's assets to pay off creditors. Payments will be gauged on the results of the verification process. CONTACT: Carlos Eduardo Foresti Avenida Callao 449 Buenos Aires GRUPO AUT: Bankruptcy Initiated By Court Order ---------------------------------------------- Argentine company Grupo Aut S.R.L. will now enter bankruptcy after Buenos Aires Court No. 20, approved a bankruptcy petition filed by the Company's creditor for nonpayment of debt. Jude Taillade handles the case with assistance from Clerk No. 40, Dr. Perillo. The court-appointed receiver is Ms. Maria Mercante, a local accountant, reports La Nacion. Her duties include the verification of creditors' claims until February 24 next year and the preparation of the individual and general reports. The Company's assets will be liquidated at the end of the process. Proceeds will be used to repay creditors, based on the results of the credit verification process. CONTACT: Grupo Aut S.R.L. 6th Floor, Office B San Martin 575 Buenos Aires Maria Mercante 1st Floor, Office 212 Uruguay 772 Buenos Aires LACEY: Receiver Oversees Bankruptcy Process ------------------------------------------- Ms. Patricia Monica Narduzzi will oversee the bankruptcy of Buenos Aires company Lacey S.A., relates Infobae. She will examine and authenticate creditor's claims until February 26 next year. This is done to determine the nature and amount of the Company's debts. Court No. 21, orders the receiver to file the individual reports on April 9 next year. These reports contain results of the verification process. The general report, prepared after the individual reports are processed at court, is due for filing on May 21, 2004. CONTACT: Patricia Monica Narduzzi Rivadavia 666 Buenos Aires MACH: Court Authorizes Official Reorganization ---------------------------------------------- March S.R.L., which is based in La Plata, will undergo reorganization after the Province's Civil and Commercial Tribunal approved its motion for "Concurso Preventivo". Infobae reports that Court No. 22 handles the case. However, the source did not indicate whether the court has chosen a receiver or set the schedule for reorganization, yet. MOLPLAST: Company's Bankruptcy Now Offical by Court Ruling ---------------------------------------------------------- Buenos Aires Court No. 18 declared local company Molplast S.A. "Quiebra", placing the Company under bankruptcy protection with Mr. Luis Maria Guastavino as receiver. Clerk No. 35 assists the court on the case, reports Infobae. The credit verification period ends on February 12 next year. Creditors must present their proofs of claims to the receiver for verification before the said date in order to qualify for payments to be made after the Company's assets are liquidated. The individual reports on the results of the verification process are due for filing on April 28 next year. The receiver is also required to prepare a general report, due on June 10, 2004, after the individual reports are processed at court. CONTACT: Luis Maria Guastavino Nicolas Repetto 1115 Buenos Aires NAYCA: Receiver Verifies Claims in Bankruptcy --------------------------------------------- Mr. Hugo Pantaleo, receiver for Argentine company Nayca S.R.L., verifies creditors' claims for the Company's bankruptcy. A report by local newspaper La Nacion indicates that the verification period ends on February 24 next year. Judge Ojea Quintana of Buenos Aires Court No. 12 issued the bankruptcy order in approval of a petition filed by the Company's creditor for nonpayment of debt. Dr. Perea, the city's Clerk No. 23, assists the court on the case. CONTACT: Nayca S.R.L. Santa Fe 5180 Buenos Aires Hugo Pantaleo 9th Floor, Office D Ave Corrientes 1450 Buenos Aires PUERTO TRINIDAD: Enters Bankruptcy on Court Orders -------------------------------------------------- Puerto Trinidad S.A., which is based in Buenos Aires, entered bankruptcy on orders from the city's Court No. 3. Infobae reports that the court, working with Clerk No. 6, assigned Mr. Santiago Manuel Quieben as the Company's receiver. Creditors are required to have their claims authenticated by the receiver before the March 19, 2004 deadline expires. This part of the bankruptcy process determine the nature and amount of the Company's debts and will be used as basis for payments to be made from the liquidation of the Company's assets. The individual reports on the verification results must be presented to the court on May 5 next year, followed by the general report on June 17. The Company's assets may then be liquidated to reimburse creditors. CONTACT: Puerto Trinidad S.A. Reconquista 657 Buenos Aires Santiago Manuel Quiben Esmeralda 783 Buenos Aires SANTA CATALINA: Court Declares Company Bankrupt ----------------------------------------------- Court No. 5 of the Civil and Commercial Tribunal of Mercedes in Argentina declares local company Santa Catalina S.C.A. bankrupt, reports Argentine news portal Infobae. The Company's receiver, Mr. Juan Angel Cavatorta, will oversee the bankruptcy process, which will end with the liquidation of the Company's assets. The credit verification period ends on February 27 next year. Creditors must have their claims authenticated by the receiver before the said date in order the receive reimbursement. The receiver's duties cover the preparation of the individual and general reports. Infobae, however, did not reveal the deadlines for the submission of these documents. CONTACT: Santa Catalina S.C.A. Cuartel VII 25 de Mayo Mercedes Juan Angel Cavatorta Ave 19 No. 664 Mercedes VANLAY: Proof of Bankruptcy Claims Due by February 20 ----------------------------------------------------- The credit verification process for the bankruptcy of Buenos Aires company Vanlay S.A. ends February 27 next year. Creditors are to present their proofs of claims to the Company's receiver, Ms. Nelida Cunarro, for authentication before the said date. The city's Court No. 26 issued the bankruptcy order relates local news source Infobae. Clerk No. 51 assists the court on the case the report adds. In the meantime, the source did not mention whether the court has set filing deadlines for the receiver's reports. CONTACT: Vanlay S.A. Lavalle 1123 Buenos Aires Nelida Cunarro Paraguay 1269 Buenos Aires =========== B R A Z I L =========== AES TIETE: Fitch Drops Grantor Trust to 'CC'; Outlook Negative -------------------------------------------------------------- Fitch Ratings downgraded the AES Tiete Certificates Grantor Trust (certificates) to 'CC' from 'B-' Rating Watch Negative. The downgrade reflects near term concerns that negotiations between the issuer (AES IHB Cayman, Ltd.'s, IHB) and certificate holders regarding debt service payments in December 2003 and possibly, June 2004, will result in either a payment default on Dec. 15, 2003 or a distressed debt exchange of the certificates. IHB is not expected to be able to meet all of its financial obligations scheduled in December 2003, which include the replenishment of the debt service reserve account (DSRA) of approximately US$22 million, the repayment of approximately BRL70 million of intercompany debt with AES Tiete S.A. (Tiete), the operating company, and scheduled interest and principal of US$22 million due under the certificates. CONTACT: Jason Todd Chicago Phone: +1-312-368-3217 Sam Fox Chicago Phone: +1-312-606-2307 Jayme Bartling Sao Paulo Phone: +55 11-287-3177 Media Relations: James Jockle New York Phone: +1-212-908-0547 TELEMAR: Issues $300M Bond With 8% Annual Coupon ------------------------------------------------ Tele Norte Leste Participacoes S.A. (NYSE:TNE; Ibovespa: TNLP3 and TNLP4), a leading Brazilian public telecommunications company and parent company of Telemar Norte Leste, Oi and Contax, concluded a US$300 million offering of ten-year bonds with an annual coupon of 8.0%, which represents a return of 8.25% annually. This rate is 35 basis points below that of the sovereign bond with a similar term. The issue has interest payments over the first 18 months insured against political risk and has a pre-payment clause that allows it to be called starting in the fifth year. JP Morgan managed the offering. CONTACT: TNE - INVESTOR RELATIONS Roberto Terziani Email: terziani@telemar.com.br Tel: 55 21 3131 1208 Carlos Lacerda Email: carlosl@telemar.com.br Tel: 55 21 3131 1314 Fax: 55 21 3131 1155 GLOBAL CONSULTING GROUP Kevin Kirkeby Email: kkirkeby@hfgcg.com Mariana Crespo Email: mcrespo@hfgcg.com Tel: 1 646.284.9416 Fax: 1 646.284.9494 ========= C H I L E ========= VESPUCIO NORTE: Renegotiates Debt With Citibank ----------------------------------------------- Concessionaire Vespucio Norte Express, which is building an expressway in Chile's capital Santiago, informed the country's securities regulator, the SVS, that is has reprogrammed debt with Citibank, says Business News Americas. In a statement to the SVS, the Company revealed that the operation involved some US$95.3 million of debt that expires next March, of which US$81.3 million is in Chile's inflation-indexed currency, the UF, and the remainder in US dollars. Vespucio Norte Express picked up a US$250 million, 30-year contract in 2002 to build the northern portion of Santiago's Americo Vespucio beltway, construction on which began earlier this year. =============== H O N D U R A S =============== WARNACO GROUP: To Sell Production Facility In Honduras ------------------------------------------------------ The Warnaco Group, Inc. (NASDAQ: WRNC) announced Wednesday that it will undertake additional restructuring initiatives in order to further lower costs and improve efficiency. The initiatives announced Wednesday include: -- Further outsourcing of North American intimate apparel production following the sale of the Company's Honduran production facility; -- The closure of Warnaco's 44 remaining Speedor Authentic Fitnessr retail stores; and -- Rationalization of its Warner'sr brand organization in the United Kingdom and other European countries. As part of Warnaco's ongoing strategy to source product from lower-cost third-party providers, the Company has entered into a binding agreement to sell its intimate apparel production facility in Honduras to an investor group led by the current manager of the operation. The Company noted that the agreement to sell the facility will not include a long-term production commitment. As a result of the sale and attendant reductions in U.S. payroll associated with the Company's manufacturing operations, Warnaco expects to realize annualized expense savings of over $5 million as well as reductions in inventory of over $20 million and significant gross margin improvements. In order to better focus on its core Speedor wholesale business, Warnaco said that it will close its remaining Speedor Authentic Fitnessr retail stores in the United States; however, the Company will continue to operate its e-commerce site located at www.SPEEDOUSA.com. The Speedor Authentic Fitnessr retail stores account for less than five percent of overall sales of Warnaco's Swimwear Group. The Company believes that the closure of these stores will allow its Swimwear Group to focus on maximizing organic growth and product extension opportunities in the wholesale sector, which has experienced approximately 20 percent growth in the first nine months of 2003. The Company expects the closures to begin in January 2004 and be completed by April 2004. The Company expects to convert certain of these existing retail stores to Calvin Kleinr underwear stores in 2004. The Company also announced that it has commenced a consultation process with employees associated with its Warner'sr brand in the United Kingdom and Europe to rationalize that organization. The process is expected to conclude by fiscal year-end and may result in significant job reductions. Combined, the Company anticipates that these restructuring initiatives will result in a total pre-tax restructuring charge of between $18 million and $26 million. The Company expects that approximately one-half of the total charges will be non-cash. Separately, Warnaco announced that it has entered into an agreement to sell its White Stagr trademark to Wal-Mart Stores, Inc. Wal-Mart had licensed the trademark on an exclusive basis from Warnaco since 1993. Warnaco will continue to design the White Stag women's sportswear line at Wal-Mart's expense through 2006. Joe Gromek, President and Chief Executive Officer of Warnaco, said, "We are committed to continually working to reduce costs, improve efficiency and enhance margins to enable our brands to compete more effectively. It is also important that we focus our energy and resources on the development and expansion of our core brands. We believe we are taking the right steps to accomplish these strategic objectives." About The Warnaco Group, Inc. The Warnaco Group, Inc., headquartered in New York, is a leading manufacturer of intimate apparel, menswear, jeanswear, swimwear, men's and women's sportswear and accessories sold under such owned and licensed brands as Warner'sr, Olgar, Lejabyr, Body Nancy GanzT, Chaps Ralph Laurenr, Calvin Kleinr men's and women's underwear, men's accessories, men's, women's, junior women's and children's jeans and women's and juniors swimwear, Speedor men's, women's and children's swimwear, sportswear and swimwear accessories, Anne Cole Collectionr, Cole of Californiar, Catalinar and Nauticar swimwear. ============= J A M A I C A ============= AIR JAMAICA: Seeks 25% Pay Cut From Pilots ------------------------------------------ Air Jamaica asked all of its pilots to take a 25% reduction in overall pay, the Jamaica Gleaner reports, citing the airline's deputy chairman and CEO Christopher Zacca. The measure, according to the Jamaica Gleaner, is part of an effort to cut operational costs and secure financing from the Government. Mr. Zacca clarified that it was not a straight salary cut. "Air Jamaica, as everybody knows, has been forced to maximize its efficiency and reduce its cost per seat mile ratio," Mr. Zacca said. "The effects of competition and September 11th have given us no other option. And we have been successful in this drive. In four years, we have brought down the cost per seat mile from US$0.12 to a projected US$0.09 for 2004. We have looked at every area of the company and have cut costs to the tune of billions of Jamaican dollars. Now we are saying to the pilots that we need to cut the cost of flight operations." However, the Jamaican Airline Pilots Association (JAPA) indicated they are not ready to comply with the request yet. "As explained to us, the company is in a financial dilemma. To get additional loan guarantees from the Government, the pilots must take a pay cut. But no agreement has been reached as yet. We are waiting for the company to present additional documentation to us for consideration," an unnamed spokesman for the JAPA said. BEACHES GRANDE: Sandals Seeks To Buy Property --------------------------------------------- Gordon "Butch" Stewart's Sandals Group is now negotiating to buy the former Ciboney hotel in Ocho Rios from Finsac, the Observer Business Reporter says, citing Sandals Group financial director Patrick Lynch. The hotel now operates as Beaches Grande Sport at Ciboney under a lease/purchase agreement. "Yes, we have communicated our interest in buying the property and the lawyers are currently in discussions," Mr. Lynch confirmed Tuesday. He declined to give a timeframe for the possible consummation of the deal, or to divulge further details. Finsac gained control of Ciboney hotel in 1997, after the collapse of Paul Chen-Young's Eagle Financial Network, which was the principal shareholder in the hotel's parent firm -- Ciboney Group. Since December 2000, the hotel has been managed by Sandals through a lease agreement with the option to buy. Sandals' management officially ends December 31. The hotel bled red ink badly during the 1990s and racked up hundreds of millions of dollars in accumulated debt. Government sources told the Business Observer that once the sale money was collected, it would be used to settle the outstanding debt, and that Ciboney Group would likely have to be de-listed. With 546 million shares, the market values the Company for a mere $54 million. Seventy-two percent of the equity is owned by Finsac. =========== M E X I C O =========== GRUPO MEXICO: Issues $89M In New Debt ------------------------------------- Grupo Mexico, the world's No. 3 copper producer, issued MXN1 billion (US$89 million) in debt through its rail unit, reports Reuters. In a statement to the local bourse, the Company revealed that it issued the debt in two tranches of MXN500 million each, at maturities of three and five years. The net yield on the first, five-year tranche was 7.83 percent, while the yield on the second, three-year tranche was 7.60 percent, the Company said. "The intention is to basically turn our debt into pesos," a company spokesman said in reference to the issue. He said demand exceeded the amount issued. In April, Grupo Mexico completed a US$879.2-million credit restructuring, extending its debt maturities and buying time to take advantage of an improving copper market. According to the company source, the recent debt issue could be the first of several if market conditions prevailed. "If market conditions continue, with this attractive formula we would issue another package," he said. * ESTADO DE MEXICO: `mxBB' Rating Affirmed But Outlook Negative --------------------------------------------------------------- Standard and Poor's Rating Services said on Wednesday that it affirmed its 'mxBB-' national scale rating on Estado de M�xico, United Mexican States, and revised its outlook on the state to negative from positive. According to Credit Analyst Patricia Calvo, the outlook change is based upon Standard & Poor's expectation that the deterioration of Estado de M�xico's financial performance will likely continue, resulting in a liquidity crisis that could severely hamper the state's ability to fulfill its debt obligations. "The implementation of some structural reform, which included pension reform and a financial stabilization program sponsored by the World Bank and Banobras, have proved insufficient to contain the state's chronic operating deficit and external borrowing needs," said Ms. Calvo. 'The rating reflects the state's chronic operating and fiscal deficits, high level of debt, mounting expenditure pressures, and exposure to potential liabilities from its decentralized entities," she added. Estado de M�xico's financial position and performance have continued to deteriorate in spite of the 2001 implementation of a US$500 million fiscal stabilization program sponsored by the World Bank and Banobras. In 2002, the state posted a fiscal deficit of Mexican peso (MxP) 724.9 million or 1.2%, and accumulated a total of MxP2.5 billion in accounts payable. Extremely high growth of nearly 21% (in nominal terms) in operating expenditures outpaced the growth of 18.5% in operating revenue in 2002. "The negative outlook reflects Standard & Poor's concern that Estado de M�xico's trend of expenditure growth will continue at a steady pace, resulting in chronic operating deficits and the need to rely on increasingly scarce sources of external borrowing to fund the state's substantial infrastructure, operational and debt servicing needs," Ms. Calvo said. "The accumulation of debt on what is already a disproportionate debt burden will expose the state and lenders to liquidity and refinancing risks in the near term," she concluded. ANALYST: Patricia Calvo Mexico City Phone: (52) 55-5279-2073 Horacio Aldrete-Sanchez Dallas Phone: (1) 214-871-1426 Jane Eddy New York Phone: (1) 212-438-7996 ================= N I C A R A G U A ================= ENITEL: Bid Deadline Expires Today ---------------------------------- Today is the deadline for offers to buy the Nicaraguan government's stake in telecoms incumbent Enitel. The Troubled Company Reporter - Latin America earlier indicated that the government owns 49% of the beleaguered company. Enitel employees hold the remaining 11% of the Company. Business News Americas reported earlier that three companies were carrying out due diligence on Enitel. These are Mexican holding company America Movil, Central American banking group Grupo Uno, and the Megatel consortium, which already owns 40% of Enitel. *********** 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 * * *