/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040130.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, January 30, 2004, Vol. 5, Issue 21 Headlines A R G E N T I N A AGRO-INDUSTRIAL: Individual Reports Expected March 15 ALTO MOLINO: Reorganizational Reports Due March 22 AT&T LATIN AMERICA: Telmex Purchase to Include Name Change AUTOPISTAS DEL SOL: Moody's Rates $380M of Bonds `D' BANCO DE LA PAMPA: Fitch Rates $10M of Bonds `BB(arg)+' DASSO: March 29 Deadline Set for General Report DISCO: Another Lawsuit Pending HIDRO DINAMICA: Seeks Court Authorization for Reorganization HIDROAL: Files Files Reorganization Motion at Court MITANIA: Court Reviews Reorganization Motion * IMF Completes First Review of Argentina's Performance * ARGENTINA: Morgan Stanley, Goldman Withdraw Advisory Proposals B E R M U D A FOSTER WHEELER: Appoints New Officers GLOBAL CROSSING: Underwriters Sue Over Accounting Fraud B R A Z I L PARMALAT BRASIL: FIDC Senior Shares Redeemed Early, S&P Details PARMALAT BRASIL: Seeks Court OK for Reorganization PARMALAT PARTICIPACOES: Preventative Bankruptcy Proceeding C H I L E AES GENER: Extends Tender Offer Expiration Dates ENERSIS: Net Profits Up in 2003 Despite Shrinking Sales INVERLINK: Completes Magister Sale C O L O M B I A FIBRATOLIMA: Struggles To Meet Debt Payments E C U A D O R PETROECUADOR: Creditors Concerned Over Ability to Repay Debts M E X I C O CNI CANAL: Supreme Court Invalidates Contract With TV Azteca COPAMEX: Fitch Details Confidence in Copamex, S.A. de C.V. TV AZTECA: Lasky & Rifkind, Ltd. Files Class Action Lawsuit V E N E Z U E L A PDVSA: Government Scrutiny Continues Over Fuel Pricing - - - - - - - - - - ================= A R G E N T I N A ================= AGRO-INDUSTRIAL: Individual Reports Expected March 15 ----------------------------------------------------- Court No. 2 of the Civil and Commercial Tribunal of Salta required the receiver for local company Agro-Industrial S.A. to file the individual reports for the Company's reorganization on March 15. These reports are prepared after the credit verification is completed. The receiver, Ms. Mabel Susana Vargas, is also required to prepare a general report after the individual reports are processed at court. The deadline for this report is April 30. The Company started its reorganization process after the court approved its motion for "Concurso Preventivo". CONTACT: Agro-industrial S.A. 20 de Febrero esq Bs.As. H Irigoyen Salta Mabel Susana Vargas Necochea 619 Salta ALTO MOLINO: Reorganizational Reports Due March 22 -------------------------------------------------- Court No. 2 of the Civil and Commercial Tribunal of Salta required the receiver of local company Alto Molino S.R.L. to file the individual reports on March 22, relates Argentine news portal Infobae. These reports contain the results of the credit verification process, which was done to determine the nature and amount of the Company's debts. The Company is undergoing the reorganization process, after the court approved its motion for "Concurso Preventivo". The source, however, did not mention the name of the receiver assigned to the case. AT&T LATIN AMERICA: Telmex Purchase to Include Name Change ---------------------------------------------------------- Regional corporate communications provider AT&T Latin America will have a change of name come Feb. 1 following Telmex's purchase, says Business News Americas. The purchase is yet to formally close but a Telmex spokesperson said a name change is imperative, adding that the AT&T trademark was not included in the purchase of ATTL's assets. Telmex presented the highest bid for ATTL's assets in a court- sponsored auction on October 23 last year. The Mexican company beat out Brazil's Embratel and Argentina's Impsat with an offer to pay US$171 million in cash and assume US$36 million in debt for ATTL's assets. ATTL said it expects to receive regulatory and other government approvals in early 2004, and would then be able to complete the transaction. Once the transaction closes, the Company will reveal ATTL's new name and strategy, the spokesperson said. ATTL filed for bankruptcy in April 2003 after parent company AT&T decided to cut off funding. Telmex is the largest telecommunications company in Mexico, providing local service, public telephony, domestic and international long-distance, data transmission, Internet access and directory services. It is indirectly controlled by Carlos Slim and his family via its control of Carso Global Telecom, which owns 72.5% of the controlling shares of Telmex. AUTOPISTAS DEL SOL: Moody's Rates $380M of Bonds `D' ---------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. assigned default ratings to corporate bonds issued by Argentine company Autopistas del Sol S.A. last Friday. The Company's finances as of the end of September last year were used as basis for the issued ratings. The rating applies to US$170 million of bonds, which the Comision Nacional de Valores, the country's securities regulator described as "Obligaci¢n Negociable - Serie A". This set of bonds, classified under "Simple Issue", will mature on August 1. The same rating applies to US$210 million of bonds called "Obligaci¢n Negociable - Serie B", due on August 1, 2009. The rating issued is assigned to financial commitments that are in payment default. BANCO DE LA PAMPA: Fitch Rates $10M of Bonds `BB(arg)+' ------------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. assigned a `BB(arg)+' rating to corporate bonds issued by Baco de La Pampa. The rating, issued last Friday, denotes a fairly weak credit risk relative to others issues in the same country. Within the context of the country, payment of these financial commitments is uncertain to some degree and capacity for repayment remains more vulnerable to adverse economic change over time. The rating applies to bonds, which the Comision Nacional de Valores described as "Obligaciones Negociables Subordinadas", due on December 22 next year. The bonds, worth a total of US$10 million, are classified under "Simple Issue". DASSO: March 29 Deadline Set for General Report ----------------------------------------------- The general report for the reorganization of Argentine company Dasso S.A. is due for filing at the court on March 29 this year. Court No. 2 of the Civil and Commercial Tribunal of San Luis in Argentina handles the Company's case. The informational meeting, which is one of the last parts in a reorganization process, will be held on September 21 this year, local news source Infobae reports. DISCO: Another Lawsuit Pending ------------------------------ Royal Ahold's Argentine supermarket chain Disco SA is facing a new lawsuit. Former depositors at Trade Commerce Bank - owned by Ahold's former joint-venture partner in Disco, the Velox Group - filed a lawsuit in Argentina. Just like a group of depositors affected by Velox in Uruguay, these depositors want Disco to be banned from selling its shares. Trade Commerce Bank's creditors, as well as their Uruguayan counterparts, want Velox's sale of Disco shares to Ahold to be annulled by court. Then, they want to reorganize Disco's share ownership to the way it was when Velox owned 33% of the capital stock. If they managed to obtain this, this portion may be transferred to them. HIDRO DINAMICA: Seeks Court Authorization for Reorganization ------------------------------------------------------------ Buenos Aires-based company Hidro Dinamica S.A. filed a petition for "Concurso Preventivo" at the city's Court No. 2. A report by Argentine news portal Infobae indicates that Clerk No. 3 assists the court on the case. However, it did not mention whether the court has assigned a receiver of set the deadlines for the required reports. HIDROAL: Files Files Reorganization Motion at Court --------------------------------------------------- Buenos Aires company Hidroal S.A. filed a petition for "Concurso Preventivo", seeking court permission to undergo reorganization, says Argentine news source Infobae. The report, however, did not mention whether the city's Court No. 2, which works with Clerk No. 3 on the case, has decided to approve the petition. MITANIA: Court Reviews Reorganization Motion -------------------------------------------- Buenos Aires Court No. 2 is studying a petition for reorganization filed by local company Mitania S.A., according to Argentine news portal Infobae. Clerk No. 3 assists the court on the case, the source adds without revealing whether the court is likely to approve the petition. * IMF Completes First Review of Argentina's Performance ------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) completed Wednesday the first review of Argentina's performance under a three-year SDR 8.98 billion (about US$13.3 billion) Stand-By Arrangement that was approved in September 20, 2003. Completion of the review will entitle Argentina to a disbursement of the equivalent of SDR 241 million (about US$358 million). In completing the review, the Executive Board approved waivers for the nonobservance and applicability of certain performance criteria. Following the Executive Board discussion on Argentina, Horst K”hler, Managing Director and Chairman, stated: "Argentina's ongoing economic recovery has been strong, with growth of real GDP expected to be at least 7« percent in 2003. Inflation has remained low, and the unemployment and the poverty situation have gradually improved. This performance reflects disciplined fiscal and monetary policies, the strengthening of consumer confidence, as well as favorable external conditions and continued official international support. "Federal and provincial fiscal performance has been evolving more strongly than programmed. Extending this performance and building sustainability are key objectives of the authorities under the program. In the near term, for the coming review, a key task is to develop further the reforms of the tax structure and of intergovernmental financial relations envisaged under the program. "The financial performance of banks has also strengthened over the past year. Looking forward, the authorities intend to sustain this performance and, to this end, as envisaged in their program, should take steps that would strengthen bank capital, ensure tight prudential supervision, reduce the distortive financial transactions tax, and commence diagnostic reviews of the two largest public banks. "The restructuring of Argentina's sovereign defaulted debt remains the most critical task for the coming period. The authorities' intention is to launch a debt exchange offer that aims at attracting broad creditor support and, toward this end, they are expected to deepen their dialogue with private creditors in order to reach a collaborative, comprehensive, and sustainable sovereign debt restructuring. "The much improved economic outlook gives Argentina an important opportunity to put in place policies that will strengthen domestic and international confidence, thereby sustaining growth and allowing the authorities' employment and poverty reduction goals to be achieved. The key commitments under the program relate to steps to restore fiscal sustainability, strengthen the banking system further, address the issues confronting the utilities, and build a business environment that encourages investment. It is hoped that completion of the first review will be used by the authorities as an opportunity to move forcefully forward in these areas, as well as in deepening their relations with private creditors, ahead of the second program review. The Fund continues to stand ready to help Argentina achieve these goals. "The success of Argentina's program will depend on good understanding and cooperation between Argentina, the Fund, and Argentina's creditors in a spirit of mutual trust and improved communications," Mr. K”hler said. CONTACT: INTERNATIONAL MONETARY FUND 700 19th Street, NW Washington, D.C. 20431 US IMF EXTERNAL RELATIONS DEPARTMENT Public Affairs: 202-623-7300 - Fax: 202-623-6278 Media Relations: 202-623-7100 - Fax: 202-623-6772 * ARGENTINA: Morgan Stanley, Goldman Withdraw Advisory Proposals ---------------------------------------------------------------- Morgan Stanley and Goldman Sachs Group Inc., the second- and third-largest securities firms, cancelled proposals to advise Argentina on restructuring US$99.4 billion of defaulted bonds. The move was followed concerns that bondholders would reject the terms of the restructuring. The Argentine government refuses to improve its offer to bondholders and according to people familiar with the talks, Morgan Stanley and Goldman Sachs don't expect investors to accept the government's offer of new securities worth US$250 per US$1,000 face value of debt "Being part of this restructuring is just too risky for a bank's reputation," said Nicholas Field, who helps manage US$650 million of emerging-market debt at WestLB Asset Management in London and sold his Argentine bond holdings before the government defaulted in late 2001. "The offer is just not sellable to international investors and they know it will be rejected totally. They may fear that investors would take umbrage at the banks involved." Argentina is refusing to improve its offer to bondholders because it has no incentive to back down, said investors such as Ashmore Investment Management Ltd.'s Jerome Booth. The government says the economy grew more than 7% last year, the budget is in surplus and the International Monetary Fund keeps providing financing to the country despite threats that it will stop should the debt negotiations drag on. ============= B E R M U D A ============= FOSTER WHEELER: Appoints New Officers ------------------------------------- Foster Wheeler Ltd. (OTCBB:FWLRF) announced Wednesday the appointment of Thierry Desmaris as vice president and treasurer. The company has also appointed Brian K. Ferraioli to serve as acting chief financial officer. Previously, Mr. Desmaris was vice president, finance and Mr. Ferraioli was vice president and controller. Kenneth Hiltz who served as chief financial officer and Ryan Esko who served as treasurer, both of AlixPartners, LLC, have resigned their positions in conjunction with the completion of AlixPartners' assignment with the company. The appointments are effective January 30, 2004. The company expects to appoint a permanent chief financial officer by the mid-year. "Thierry has an excellent background in financial and operational controls and has provided important financial leadership during his tenure at Foster Wheeler Continental Europe. He is well versed in our international treasury operations and will be a key member of our senior financial team as we move forward," stated Raymond J. Milchovich, Chairman, President and CEO of Foster Wheeler. "Brian is a complete financial professional who brings a broad accounting, financial management and planning expertise to his new position. His experience as CFO of a number of our subsidiaries coupled with his deep understanding of Foster Wheeler's global operations will serve the Company well as we complete our restructuring efforts." "I want to thank AlixPartners for their fine work over the past year helping manage our financial operations and assisting in our restructuring efforts," continued Mr. Milchovich. "The AlixPartners team helped us significantly improve our cash management, tighten our financial and project controls and implement more rigorous contracting standards. They have been integral to the progress we have made in building a better and stronger company." Mr. Desmaris has been with Foster Wheeler for 17 years and was most recently vice president, Finance of Foster Wheeler Ltd., in which function he has been working on the ongoing corporate restructuring. Prior to that, he served as chief financial officer of Foster Wheeler Continental Europe. His previous assignments included assistant controller and director of project finance, Foster Wheeler Ltd., as well as various financial roles with the company's international subsidiaries. Mr. Desmaris began his career as an operations research analyst with McDermott, Inc. He holds a bachelor's degree in economics from Columbia University and an M.B.A. from Syracuse University. Mr. Ferraioli, a 25-year veteran of Foster Wheeler, most recently served as vice president and controller of Foster Wheeler Ltd. worldwide. Among his previous assignments, he was vice president and chief financial officer of Foster Wheeler USA and Foster Wheeler Power Systems, and vice president of Project Finance at Foster Wheeler International, Reading, UK. In addition to serving in various corporate finance roles, he was also CFO of Foster Wheeler Iberia, Madrid, as well as assistant controller of Foster Wheeler Italiana, Milan. Mr. Ferraioli is a Certified Public Accountant, and holds an M.B.A. from Columbia University, as well as a bachelor's degree in accounting from Seton Hall University. Foster Wheeler Ltd. is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, oil and gas, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. CONTACT: FOSTER WHEELER LTD. Media Contact: Richard Tauberman, 908-730-4444 or Other Inquiries: 908-730-4000 Web site: www.fwc.com GLOBAL CROSSING: Underwriters Sue Over Accounting Fraud ------------------------------------------------------- Global Crossing Ltd.'s founder and former chairman Gary Winnick and other former top company officials face a lawsuit filed in the United States District Court in New York by the underwriters of its $1 billion security offering in April 2000, Dow Jones Business News reports. In the legal proceeding, Citigroup Inc., Goldman Sachs Group Inc. and Merrill Lynch & Co. allege that the defendants, including Global Crossing founder and former Chairman Winnick, should have known about the firm's plot to misstate financial results. The underwriters asserted that they relied upon the signed statements of Mr. Winnick, former Chief Financial Officer Dan J. Cohrs, former Chief Operating Officer David L. Lee and other former executives and directors in agreeing to facilitate the $1 billion preferred stock offering. The Company and the underwriters were named as defendants in a shareholder class action filed shortly after the Company's filing for Chapter 11 bankruptcy in January 2002. Shareholders allege that those signed statements attesting to the accuracy of the company's books were false. In their lawsuit, the underwriters argue that any fault lies with the Global Crossing executives and directors they have sued. The underwriters deny any liability in the class action suit, but if they are "found liable in that action, such liability will have been caused by the actions or omissions" of the Global Crossing officials, according to their new lawsuit. The suit seeks reimbursement from Winnick and the other former officials if Citigroup, Goldman Sachs and Merrill Lynch are ordered to pay damages in the class-action suit. It also seeks unspecified damages and legal costs beyond that conditional reimbursement, Dow Jones reports. =========== B R A Z I L =========== PARMALAT BRASIL: FIDC Senior Shares Redeemed Early, S&P Details --------------------------------------------------------------- Standard & Poor's Ratings Services announced Wednesday that the shareholders of Parmalat - Fundo de Investimento em Direitos Creditorios (the Parmalat FIDC) voted for an early redemption of their senior shares of the fund during the January 19, 2004, shareholders' meeting. On the same day, these investors received their original invested amount plus the respective targeted return on their investment (the Brazilian Spot Depositos Interfinanceiros index plus 1.7%). The shareholders received Brazilian reais (BrR) 112.8 million, the fund's holdings on its senior shares, out of a total BrR132 million (including the subordinated shares). The originators of the credit receivables, Parmalat Brasil S.A. and Batavia S.A., in Brazil, retained BrR19.2 million in subordinated shares. During the shareholders' meeting, the fund's sponsor, Intrag DTVM Ltda, and the servicer of the fund, Banco Itau S.A., announced that the originators, both indirectly controlled subsidiaries of Parmalat SpA, will not be repaid their original investment in the subordinated shares until the fund is fully liquidated. Intrag DTVM and Banco Itau also decided during the shareholders' meeting to maintain the legal structure of the fund by retaining a symbolic senior share equivalent to BrR21,250 and having the originators retain an additional subordinated share equal to BrR3,750, until a new shareholder meeting takes place. At that meeting, the shareholders will decide whether to change the terms and conditions of the fund (regulamento) to adapt it for other investment purposes or, instead, to redeem the remainder of the shares in their entirety. The remaining holdings of the Parmalat FIDC comprise permitted investments not related to Parmalat SpA or any of its subsidiaries. These permitted investments consist of overnight investments in 'brAA' rated financial institutions, government bonds, or shares of other fixed-income funds rated or assessed by Standard & Poor's. Following the early redemption, Standard & Poor's 'brAAAf' rating on the senior shares of the Parmalat FIDC will be maintained until the fund is either formally liquidated (Standard & Poor's would then withdraw its rating) or the fund's investment objectives are changed (Standard & Poor's would likely change its rating). The Parmalat FIDC is a closed-ended fund whose main underlying assets originally consisted of trade receivables directly originated by Parmalat Brasil and Batavia (through the sale of shipped products to specified obligors), cash, and other specified investments. Senior shares of the fund originally totaled BrR110.5 million and were sold to investors Nov. 27, 2003, while the subordinated shares (originally BrR19.5 million) were retained by the originators. The fund had an original defined final maturity of three years from Nov. 27, 2003. CONTACT: Juan P. De Mollein, Structured Finance Latin America New York Phone: (1) 212-438-2536 Email: juan_demollein@standardandpoors.com Diane Audino, Structured Finance Latin America New York Phone: (1) 212-438-2388 Email: diane_audino@standardandpoors.com Sergio Garibian, Investment Services Sao Paulo Phone: (55) 11-5501-8944 Email: sergio_garibian@standardandpoors.com PARMALAT BRASIL: Seeks Court OK for Reorganization --------------------------------------------------- Parmalat Brasil SA Industria de Alimentos, a unit of Italy's biggest food company Parmalat Finanziaria SpA, requested admission to "Concordata Preventiva" from Sao Paulo state's 29th District Court, reports Bloomberg News. The procedure is similar to the Italian "Controlled Administration" through which it is possible to obtain the necessary protection of the company's assets in the interest of all creditors. Parmalat Brasil, the country's second-biggest milk buyer, decided to embark on the measure, saying it no longer has access to credit or ability to pay its US$1.8 billion in debt. The Sao Paulo state court will appoint one of the unit's biggest creditors to oversee the Company after protection from creditors is granted, said Luiz Fernando Valente de Paiva, a bankruptcy lawyer who represents Banco Sumitomo Mitsui Brasileiro SA, one of Parmalat's creditors. Under the law, the Company is expected to pay 40% of its debts at the end of the first year in reorganization and pay the remaining 60% at the end of the second year, Paiva said. Standard Chartered Plc., Citigroup Inc., Bank of America Corp., Banco Itau SA, Uniao de Bancos Brasileiros SA and Banco do Brasil SA are among the main creditors of Parmalat's Brazilian units, Parmalat has said. PARMALAT PARTICIPACOES: Preventative Bankruptcy Proceeding ---------------------------------------------------------- Parmalat Participacoes do Brasil Ltda., a holding company that controls Parmalat Brasil SA, also filed for bankruptcy protection, reports Bloomberg News. The controlling company decided to seek protection in the 4th District court in Sao Paulo after a judge threatened to declare the Company insolvent on a petition by Banco Fribra SA, which is trying to collect BRL1 million in debt. ========= C H I L E ========= AES GENER: Extends Tender Offer Expiration Dates ------------------------------------------------ AES Gener S.A. (the "Company") announced Wednesday that it has extended the expiration dates for its previously announced separate cash tender offers (the "Tender Offers") for any and all of its (i) 6% U.S. Senior Convertible Notes due 2005 (the "U.S. Convertible Notes"), (ii) 6% Chilean Convertible Bonds due 2005 (the "Chilean Bonds") and (iii) 6«% Notes due 2006 (the "Yankee Notes"). The Company's offers for the U.S. Convertible Notes and the Yankee Notes have been extended to and will each now expire at 5:00 p.m., New York City time (7:00 p.m., Santiago time), on February 20, 2004, unless further extended or earlier terminated pursuant to the terms of each respective offer. The Company's offers for the U.S. Convertible Notes and the Yankee Notes were each previously scheduled to expire at 5:00 p.m., New York City time, on January 30, 2004. The Company's offer for the Chilean Bonds has been extended to and will now expire at 10:00 a.m., Santiago time (8:00 a.m., New York City time), on February 20, 2004, unless further extended or earlier terminated pursuant to the terms of such offer. The Company's offer for the Chilean Bonds was previously scheduled to expire at 10:00 a.m., Santiago time, on January 28, 2004. As of 5:00 p.m., New York City time, on January 27, 2004, approximately $53.1 million principal amount of U.S. Convertible Notes had been tendered, representing 71.85% aggregate principal amount of U.S. Convertible Notes outstanding as of such time, and approximately $143.6 million principal amount of Yankee Notes had been tendered, representing 71.78% aggregate principal amount of Yankee Notes outstanding as of such time. The terms of the offers for the U.S. Convertible Notes and the Yankee Notes are described in separate Offers to Purchase and Consent Solicitation Statements, each dated and mailed to noteholders on November 24, 2003. The terms of the offer for the Chilean Bonds are described in certain advertisements that were published in Chile in El Mercurio on November 25, 2003 and December 18, 2003, and in an advertisement that will also be published in Chile in El Mercurio on January 28, 2004, and the offer for the Chilean Bonds will only be made pursuant to such advertisements. The Company has retained Deutsche Bank Securities, Inc. and its affiliates to act as the exclusive Dealer Manager in connection with the Tender Offers and as Solicitation Agent in connection with the consent solicitation. Questions concerning the terms of the offers for the U.S. Convertible Notes and the Yankee Notes (collectively, the "U.S. Tender Offers") and the consent solicitation for the U.S. Convertible Notes and the Yankee Notes (collectively, the "U.S. Consent Solicitation") may be directed to Deutsche Bank Securities, attention: Jenny Lie, at (866) 627-0391 (US toll- free) or (212) 250-7445 (collect). Deutsche Securities Corredores de Bolsa Limitada is acting as Administrator in connection with the tender offer of the Chilean Bonds. Questions concerning the terms and procedures of the tender offer of the Chilean Bonds may be directed to the Administrator at (562) 337-7700. The Company has engaged D.F. King & Co., Inc. to act as the Information Agent in connection with the U.S. Tender Offers and the U.S. Consent Solicitation. Documents relating to the U.S. Tender Offers and the U.S. Consent Solicitation may be obtained by contacting the Information Agent at (888) 644-5854 (US toll free) or (212) 269-5550 (collect). Deutsche Bank Trust Company Americas is the Tender Agent in connection with the U.S. Tender Offers and the U.S. Consent Solicitation. CONTACT: Daniel Aninat, AES Gener S.A.: (562) 686-8938 Vanessa Thiers, AES Gener S.A.: (562) 686-8948 ENERSIS: Net Profits Up in 2003 Despite Shrinking Sales ------------------------------------------------------- Chilean utilities holding Enersis reported a net profit of US$20.99 million in 2003, reversing a loss of US$380.58 million in 2002, reports Dow Jones. Pre-tax profit in 2003 was US$136.73 million compared to a loss of US$448.85 million in 2002, said Enersis. However, sales in 2003 dropped 6.3% to US$3.96 billion from US$4.23 billion in 2002 and operating profit slipped 1.3% to US$894.41 million from US$905.98 million. The declines resulted from the divestment of several units as part of a massive US$2.10-billion capital increase that the Company embarked last year to address mounting debts. The divestments totaled US$757 million, the Company said. The sharply stronger Chilean peso also ate into earnings at non- Chilean holdings, it added. Eliminating the forex effect, operating profit would have risen 12.4%, it said. Debt reduction helped it cut financial expenses 2.8%, but acceleration fees it had to pay to restructure its debt limited the savings. The full amount of refinancing operations totaled US$4.02 billion. Overall, the capital increase shaved 28.7% off the debt load to US$6.41 billion from US$8.98 billion, Enersis said. Additionally, it cut administrative costs by 24.8%. Enersis, a unit of Endesa Spain, is the largest private electricity distribution group in Latin America. CONTACT: Enersis SA Avenida Kennedy Vitacura No 5454 Santiago Chile 1557 Phone: +56 2 353 4400 Fax: +56 2 378 4768 Home Page: http://www.enersis.cl Contacts: Engr Alfredo Llorente Legaz, Chairman Engr Rafael Miranda Robredo, Vice Chairman INVERLINK: Completes Magister Sale ---------------------------------- The sale of intervened Chilean financial group Inverlink's 64.6% stake in its former pension fund manager AFP Magister to local competitor AFP Planvital obtained approval from Inverlink's creditors. Business News Americas suggests that the price tag for Magister is nearly US$10 million. Last year, Planvital's parent company, Italian banking group Banco Della Svizzera Italiana (BSI), made an offer to buy the stake. In late 2003, Chile's state industry development agency Corfo and Marcos Sanchez - acting as Magister's majority shareholder and Inverlink bankruptcy director, respectively, accepted the offer. Local financial daily El Diario indicates that Inverlink's creditors were inspired to approve the sale by the Italian bank's proposal to immediately forward a US$6.5-million down payment. The said payment was scheduled to be transferred to the group's ailing vaults Wednesday (Jan.28). =============== C O L O M B I A =============== FIBRATOLIMA: Struggles To Meet Debt Payments -------------------------------------------- Fibratolima, a Colombian textile company, is having a hard time paying some of its financial obligations, says Portafolio. The Company, which is currently in bankruptcy protection under the rules of the Colombian Law 550, is facing overdue payments for the rent of its office building. Duff & Phelps Colombia considers the Company in default. However, the directors of Fibratolima are expecting a capital infusion shortly, which will allow them to meet their current obligations. ============= E C U A D O R ============= PETROECUADOR: Creditors Concerned Over Ability to Repay Debts ------------------------------------------------------------- Ecuador's state-owned oil company Petroecuador is now struggling to meet its payment obligations ever since the government slashed its budget by US$57 million. Dow Jones reports that the Company is having a hard time paying US$36 million in past-due obligations to 25 companies, which provide it with badly needed services. Now, these companies are threatening to halt all work until they get paid, according to Bolivar Araujo, general manager of Petroproduccion, the production unit of Petroecuador. The government's decision to slash the Company's budget is also taking a toll on output. Petroecuador currently is producing 198,000 barrels a day, down from 204,000 b/d in December. Ecuador's lawmakers reduced Petroecuador's budget in an effort to narrow a fiscal gap in the 2004 budget. =========== M E X I C O =========== CNI CANAL: Supreme Court Invalidates Contract With TV Azteca ------------------------------------------------------------ Lawyers for CNI Canal 40 claimed that TV Azteca, Mexico's second- largest broadcaster, has no jurisdiction over the debt-laden channel, the Daily Variety relates. The lawyers made their claim based on a court decision handed down in September by the Superior Court of Justice in Mexico City. According to the court's decision, which the lawyers made public Monday, the disputed production and advertising contract that Canal 40 signed with TV Azteca in 1998 was null and void. The developments on the dispute come just days after Azteca said it would take Canal 40 to the Intl. Court of Arbitration to enforce an option it claims it holds in the privately held channel. The contract reportedly entitles TV Azteca to the rights to buy 51% of Canal 40 should the channel fail to uphold its obligations. "As there is no contract, there is no option to buy, there's no nothing, therefore what TV Azteca's lawyers say before the Intl. Court in Paris is meaningless," said Javier Quijano, attorney for Canal 40. COPAMEX: Fitch Details Confidence in Copamex, S.A. de C.V. ---------------------------------------------------------- Over the past several months, Fitch Ratings has closely monitored the initiatives undertaken by Copamex, S.A. de C.V. (Copamex) to meet the upcoming maturity on its senior notes 11.375% due April 30, 2004. The senior notes have an outstanding balance of US$146 million. Fitch currently rates Copamex's senior unsecured foreign debt including the senior notes at 'BB-'. Copamex's local currency rating is also rated 'BB-'. Fitch also rates Copamex's Ps. 1,000 million program of domestic medium-term notes at 'A- '(mex) and Ps. 500 million short-term notes at 'F2'(mex) on the national scale rating. All the ratings have a Stable Rating Outlook. Last June 2003, the International Finance Corporation (IFC) approved a financing package totaling US$175 million, including a US$50 million loan directly from the IFC, a US$100 million loan to be syndicated among a group of banks and a US$25 million quasi-equity loan structure directly from the IFC. These transactions are expected to be completed by the end of March. Copamex also announced last December 2003 the sale of its multiwall bag and paper sack business to an Austrian packaging manufacturer for US$52 million in cash and US$7 million in working capital recovery. Copamex already received a US$25 million cash payment which it applied to repay debt. The remaining US$27 million of cash are expected by the end of February upon approval by local antitrust authorities. Fitch Ratings is confident that Copamex's management as well as the IFC officials and bankers involved in the refinancing transactions are undertaking all necessary efforts to ensure the completion of the transactions as scheduled and the timely payment of the senior notes. However, any unexpected delay on the timetable for these transactions may result in the deterioration of Copamex's credit quality and ratings and the company's inability to amortize the 11.375% senior notes when due. Fitch Ratings is closely monitoring these processes and the various milestones necessary for their successful completion. Copamex is one of Mexico's largest producers of paper-based consumer and industrial products. The company participates in three major paper-product segments: packaging (kraft paper, corrugated boxes and specialty paper), printing and writing paper (bond and copy paper) and consumer products (tissue, feminine hygiene and diapers). CONTACT: Giovanna Caccialanza, CFA New York Phone: +1-212-908-0898 Sergio Rodriguez, CFA Monterrey, Mexico Phone: +528-18-335-7239 Media Relations James Jockle New York Phone: +1-212-908-0547 TV AZTECA: Lasky & Rifkind, Ltd. Files Class Action Lawsuit ----------------------------------------------------------- Lasky & Rifkind, Ltd., a law firm with offices in New York and Chicago, announces that a lawsuit has been filed in the United States District Court for the Southern District of New York, on behalf of persons who purchased or otherwise acquired publicly traded securities of TV Azteca S.A. de C.V. ("TV Azteca" or the "Company") (NYSE:TZA - News) between October 6, 2003 and January 7, 2004, inclusive, (the "Class Period"). The lawsuit was filed against TV Azteca and certain officers and directors. Members of this class who wish to view a copy of a complaint and join this class action, may send e-mail to the firm at investorrelations@laskyrifkind.com and request a copy of the complaint and a plaintiff certification. Members of the Class may move the Court no later than March 23, 2004 to serve as a lead plaintiff for the Class. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. The complaint alleges that during the Class Period defendants failed to disclose certain related-party transactions between a privately held company jointly owned by the Company's Chairman, Ricardo Salinas Pliego ("Salinas") and the Company's President, M. Saba Masri ("Saba") and one of the Company's affiliates - Unefon Corporacion RBS ("Unefon"). Specifically, Defendants denied any affiliation with the "white Knight" group of investors that had saved Unefon from bankruptcy back in June of 2002. Defendants withheld disclosure of the true facts until a spine off of Unefon was completed in December 2002. Then on January 9, 2004, Defendants shocked the markets by admitting that the "white Knight" investors were in fact Salinas and Saba, who made a profit of $218 million when their privately held company bought Unefon's debt for $107 million and then sold it back for $325 million. The market reaction to this announcement was severe. By January 12, 2004, the first day of trading following the admonition, TV Azteca securities fell 14.9% to $7.76 per share. CONTACT: THE LAW FIRM OF LASKY & RIFKIND, LTD. Leigh Lasky, Esq., 800-495-1868 ================= V E N E Z U E L A ================= PDVSA: Government Scrutiny Continues Over Fuel Pricing ------------------------------------------------------ Venezuela continues to probe into alleged illegal fuel sales at state oil company Petroleos de Venezuela SA, reports Bloomberg News. Illegal sales of gasoline and diesel fuels have caused annual losses of about US$300 million. According to Energy and Mines Minister Rafael Ramirez, perpetrators will be punished regardless of position. Venezuela's domestic gasoline and diesel prices are among the lowest in the world, and are subsidized by the state. "This is all very troubling," said National Assemblyman Conrado Perez in a telephone interview. Mr. Perez said his comptroller commission plans to probe whether PDVSA fired one of its own officials for investigating the sales, among other accusations. The Company fired most of its finance department during a two- month strike last year, which has led to delays in producing its financial results and accusations by former managers of irregularities. *********** 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 2004. 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. 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