/raid1/www/Hosts/bankrupt/TCRLA_Public/040326.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, March 26, 2004, Vol. 5, Issue 61
Headlines
A R G E N T I N A
AGUACOR: Concession Revocation Upheld By Court
BANCO DE GALICIA: Evaluadora Initiates Ratings on Various Bonds
CENTRAL COSTANERA: Southern Cone Sells Stake
CORREO ARGENTINO: Argentina Considers Full Privatization
DIRECTV LA: ADVERSARY PROCEEDING--Raven Media vs. Hughes, et al.
GARAVAGLIA Y COMPANIA: Court Approves Bankruptcy Petition
LEISURE SRL: Court Declares Company Officially Bankrupt
L. G. EDICIONES: Court Approves Creditor's Bankruptcy Petition
NEW MAQ'S SA: Creditor's Bankruptcy Petition Gets Court OK
PETROBRAS ENERGIA: Acquires Ethylene Plant
TRANS SERVIS: Declared Bankrupt After Failing to Pay Debts
TGN: Local Standard & Poor's Maintains `raD' Ratings on Bonds
* Argentina to Hold Debt Talks With Small Creditors
B R A Z I L
EMBRATEL: Senate Commission Schedules Sale Hearing
EMBRATEL: Complaint vs. Brasil Telcom "Cartel" Expected Soon
C H I L E
AES GENER: Financial Restructuring Draws Near Close
TELEFONICA CTC: Agrees to Sell its 9% Stake in Publiguias
TELEFONICA CTC: Chilesat Request for Injunction Scrapped
C O L O M B I A
BELLSOUTH COLOMBIA: Concludes Debt Refinancing; Issues Bonds
D O M I N I C A
IMF Completes First Review of Dominica's PRGF Arrangement
M E X I C O
CORPORACION DURANGO: Reaches Agreement With Key Creditors
GRUPO SIMEC: Repays Outstanding Bank Debt
INTERNATIONAL WIRE: Files Voluntary Chapter 11 Petitions
TFM: Arbitrator's Ruling Does Not Affect KCS' Ratings
P A R A G U A Y
MILLICOM INTERNATIONAL: Updates Subscriber Status
- - - - - - - - - -
=================
A R G E N T I N A
=================
AGUACOR: Concession Revocation Upheld By Court
----------------------------------------------
A September 2003 decision by Chile's waterworks industry
regulator SISS to revoke a waterworks concession for company
Aguacor has been upheld by Santiago's appeals court, Business
News Americas reports, citing the La Segunda newspaper.
In a unanimous decision, the court ruled the SISS did not act
illegally or arbitrarily in revoking Aguacor's concession for
its alleged failure to comply with its obligations and service
requirements, the La Segunda reported. Before the SISS ruling,
Aguacor had a concession to supply drinking water and collect
and dispose of wastewater for the Coronel Industrial Park and an
area around San Pedro in Region VIII, BNamericas reported at the
time.
BANCO DE GALICIA: Evaluadora Initiates Ratings on Various Bonds
---------------------------------------------------------------
Evaluadora Latinoamericana S.A. Calificadora ed Riesgo assigned
a `BB+' rating to corporate bonds issued by Argentine bank Banco
de Galicia y Buenos Aires. The Comision Nacional Valores,
Argentina's securities regulator relates that the rating applies
to the following bonds:
- US$2 billion described as "obligaciones negociables de mediano
plazo" and classified under "Program." The maturity date of the
bonds was not disclosed.
- US$43 million described as "Programa Global Clase 7" that came
due on June 25, 2003 and classified under "Program."
- US$73 million worth of "Programa Global Clase 6" that came due
March 22, 2004 and classified under "Program."
The rating, based on the Company's finances as of December 31,
2003, denotes that the bonds possess some risk of nonpayment.
At the same time, Evaluadora Latinoamericana assigned a `D'
rating to the following bonds:
- US$62 million worth of "Obligacioones Negociables (con
garant¡a MIGA)," classified under "Simple Issue." The maturity
of the bonds was not disclosed.
- US$150 million worth "Obligaciones Negociables" classified
under "Simple Issue." The maturity of the bonds was not
disclosed.
- US$200 million worth of "Obligaciones Negociables a Largo
Plazo" that came due on March 22, 2004 and classified under
"Simple Issue."
The rating, which was given based on the Company's financial
status as of December 31, 2003, is issued to bonds that are in
default, said the ratings agency.
CONTACT: BANCO DE GALICIA Y BUENOS AIRES
Tte Gral Juan D Peron 407
Buenos Aires
Argentina
C1038AAI
Phone: +54 11 6329 0000
Fax: +54 11 6329 6100
Home Page: http://www.bancogalicia.com.ar
Contact:
Juan Martin Etchegoyhen, Chairman
Antonio R. Garces, Vice Chairman
CENTRAL COSTANERA: Southern Cone Sells Stake
--------------------------------------------
A source from Southern Cone Power confirmed that the US company
has sold its 6.84% stake in Argentine thermoelectric generator
Costanera to a group of Chilean businessmen led by politician
Sebastian Pinera, relates Business News Americas.
According to the source, Southern Cone Power's Bermuda-based
unit sold its 1.34% stake in Costanera on Tuesday through the
Buenos Aires stock market and Southern Cone Power's Argentine
unit planned to sell its 5.5% direct stake on Wednesday. The
value of the operation was not disclosed. However, media reports
estimate the deal is worth about US$10 million.
Southern Cone's shareholders are Britain's CDC Globeleq (68%),
New York-based Scudder Latin Power Fund (30%), and Houston-based
Hart Energy International (2%).
The sale comes amid a troubling time for Argentina's energy
sector. Like other generators, Central Costanera has been hurt
by the government's two-year freeze on utility rates. A freeze
on the prices distributors can charge electricity users has
reduced generators' incomes, while a freeze on the at-well price
of natural gas has caused fuel shortages and higher generating
costs.
The government said in February that it is raising gas and power
rates for industrial and large-scale users. The new system,
which has yet to take effect, will compensate generators through
higher prices paid by these consumers.
However, the threat of an energy crisis for the upcoming winter
months still looms, and talk of shortages and outages has grown
stronger in recent weeks.
CORREO ARGENTINO: Argentina Considers Full Privatization
--------------------------------------------------------
The Argentinean government is now changing its plans regarding
its stake in postal services operator Correo Argentino, reports
El Cronista. Instead of selling its majority stake to investors
and retain a minority stake in Correo Argentino, as what was
initially planned, the government is now considering Correo's
full privatization and adopt a "golden share" model.
Under the "golden share" rule, the government-appointed
representative on the Company's board has the right to overrule
majority shareholders and veto important decisions.
Word on the market suggests that five groups have already shown
interest in Correo Argentino, including Clarin and the Canadian
postal service operator.
DIRECTV LA: ADVERSARY PROCEEDING--Raven Media vs. Hughes, et al.
----------------------------------------------------------------
DirecTV Latin America, Galaxy Entertainment Argentina, SA, and
Hughes Electronics Corporation, on one hand, and Grupo Clarin
SA, Raven Media Investments LLC and other related parties, on
the other hand, have agreed to resolve their dispute pursuant to
a comprehensive agreement.
The Court-approved Settlement resolves all claims that the
Clarin Parties may be able to assert against Hughes. Joel A.
Waite, Esq., at Young, Conway, Stargatt & Taylor, LLP, in
Wilmington, Delaware, relates that not only has the Debtor
resolved all of the outstanding issues related to the claims
asserted by Hughes, but more importantly, the Debtor has
restructured virtually all of its uneconomic agreements with its
programmers.
Pursuant to the Settlement, the Debtor agreed to release the
Clarin Parties and JP Morgan Chase Bank, as security interest
holder in Raven's equity interest in DTVLA and put agreement
claims, from any claims the Debtor or its estate may have
against them. While the Debtor does not believe that it has any
claims against the Clarin Parties, the Clarin Parties requested
the releases to provide closure to its pre-restructuring
relationship with the Debtor so that they can move forward in a
cooperative manner following the restructuring.
Hughes will provide all of the cash consideration to be received
by the Clarin Parties under the Settlement. Hughes' cash payment
will be exchanged for:
(a) an assignment to Hughes by Raven of a general unsecured
claim under the Put Agreement of not less than
$189,000,000 and any Old DTVLA Membership Interests
currently held by Raven or any of the Clarin Parties;
(b) a release of any claims the Clarin Parties may have
against Hughes and its affiliates;
(c) most importantly, the agreement of the Clarin Parties to
amend certain critical programming and other contracts
with, among other parties, the Debtor and Galaxy; and
(d) the release from JP Morgan with respect to its security
interest and liens on Raven's equity interest in DTVLA
and the Put Agreement Claims.
Hughes will have no claims against the Debtor with respect to
any of the amounts to be paid to the Clarin Parties under the
Settlement and Hughes will receive no distribution on account of
the Put Agreement Claim under the Plan.
The Clarin Parties agreed to release Hughes, the Debtor and
Galaxy from any claims that it may have against them, except
with respect to the Put Agreement Claim and Old DTVLA Membership
Interests, which are being assigned to Hughes and other amended
claims. The Clarin Parties have further agreed to dismiss the
Adversary Proceeding with prejudice. (DirecTV Latin America
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
GARAVAGLIA Y COMPANIA: Court Approves Bankruptcy Petition
---------------------------------------------------------
Buenos Aires Court No. 18 declared Garavaglia y Compania SA
"Quiebra," granting a petition filed by one of the Company's
creditors. La Nacion reports that Stenfar Saici y E. sought to
have Garavaglia y Compania declared bankrupt on failure to pay
debts amounting to US$5,817.32.
With assistance from Dr. Vivono, Clerk No. 36, the court
assigned Mr. Alfredo Rodriguez as receiver who will authenticate
creditors' claims until May 28, 2004. Creditors must have
submitted their claims by the said date in order to qualify for
payments to be made after the Company's assets are liquidated.
CONTACT: Garavaglia y Compania SA
Establecida de 25 de Mayo 158, local "19"
Buenos Aires
Alfredo Rodriguez, Receiver
Marcelo T. de Alvear 1775, piso 9ø "B"
Buenos Aires
LEISURE SRL: Court Declares Company Officially Bankrupt
-------------------------------------------------------
Buenos Aires Court No. 18 declared textile company Leisure SRL
"Quiebra" reports La Nacion. The Company will undergo the
bankruptcy process, which will end with the liquidation of its
assets to repay creditors. The court's ruling comes in approval
of a bankruptcy petition filed by the Company's creditor, AFIP
DGI for nonpayment of US$157,415.81 in debts.
Working with Clerk No. 35, Dr. Alconada, the court assigned Ms.
Alicia Kurlat as receiver. Her duties include the verification
of creditors' claims until May 12 and the preparation of the
individual and general reports.
CONTACT: Leisure SRL
Zapiola 4732
Buenos Aires
Alicia Kurlat, Receiver
Carlos Pellegrini 1079, piso 10ø "A"
Buenos Aires
L. G. EDICIONES: Court Approves Creditor's Bankruptcy Petition
--------------------------------------------------------------
L. G. Ediciones Buenos Aires SA enters bankruptcy after Judge
Fernandez of Buenos Aires Court No. 19 declared it "Quiebra,"
reports La Nacion. The declaration approves a petition filed by
Donnelley Cochrane Argentina SA to whom L.G. Ediciones owes some
unpaid debts amounting to US$71,036.79.
With assistance from Dr. Johnson, Clerk No. 38, the court
appointed Mr. Jose Cueli as receiver who will verify creditors'
claims until May 10 and will then submit the individual and the
general reports afterwards.
The Company's bankruptcy case will culminate with the
liquidation of its assets to repay creditors.
CONTACT: L. G. Ediciones
Pena 2580, piso 2ø "F"
Buenos Aires
Jose Cueli, Receiver
Maza 100, piso 8ø "C"
Buenos Aires
NEW MAQ'S SA: Creditor's Bankruptcy Petition Gets Court OK
----------------------------------------------------------
Necta Vending Solutions SA successfully sought for the
bankruptcy of New Maq's SA, Argentine daily La Nacion indicates.
Judge Fernandez of Buenos Aires Court No. 19 approved Necta's
petition to declare New Maq's bankrupt. Necta filed the petition
after New Maq's failed to pay debts of US$11,337.18.
Clerk No. 37, Dr. Mazzoni, assists the court on the case, which
will close with the liquidation of the assets of New Maq's to
repay its creditors. The credit verification process runs until
June 12. Creditors must have their claims authenticated by the
receiver, Mr. Manuel Arias before the said date in order to
qualify for payments to be made after the Company's assets are
liquidated.
CONTACT: New Maq's SA
Juramento 2149, piso 5ø "28"
Buenos Aires
Manuel Arias
Conesa 3518, piso 8ø "B"
Buenos Aires
PETROBRAS ENERGIA: Acquires Ethylene Plant
------------------------------------------
An official of Petrobras Energia (PECO.BA) confirmed Wednesday
the Argentine oil and gas company's purchase of an ethylene
plant in Santa Fe province for US$700,000, Dow Jones Business
News reports. The sale is a result of months of talks between
Petrobras Energia and ICI Argentina, which owned the plant. ICI
Argentina is the local unit of the U.K.'s Imperial Chemical
Industries PLC (ICI).
Petrobras Energia, the main asset of Petrobras Energia
Participaciones (PZE), which in turn is a unit of Brazilian
energy giant Petroleo Brasileiro SA (PBR), or Petrobras, said it
plans to increase the Santa Fe plant's output to 180,000 tons of
ethylene annually, a 50% increase from the 120,000 tons of
ethylene it currently produces. The company also plans to build
an ethylene pipeline between its newly acquired plant and
another facility. The pipeline will have a capacity of 20,000
tons per year.
The petrochemical operations of Petrobras Energia
Participaciones (PZE) generated a gross profit of ARS88 million
in the fourth quarter of 2003. Total sales volume for this
division rose 29.1% from the same period in 2002 amid a recovery
in local demand. The Argentine parent company said it plans to
make investments in petrochemical production in the upcoming
year.
TRANS SERVIS: Declared Bankrupt After Failing to Pay Debts
----------------------------------------------------------
Judge Favier Dubois of Buenos Aires Court No. 9 declared fuels
company Trans Servis Combustibles SA bankrupt, according to a
report by local newspaper La Nacion. The ruling comes in
approval of a petition filed by the Company's creditor, Verba
Oil Supli & Trading SA, for nonpayment of debt totaling
US$6,000.
The court, which is assisted by Clerk No. 18 Dr. Taricco Edge,
appointed Mr. Miguel Troisi as receiver, who will verify
creditors' claims until June 16, 2004. The receiver will also
prepare the individual and general reports on the bankruptcy
proceedings. Deadlines for the submission of these reports will
be determined at a later date.
The process will close with the liquidation of the Company's
assets to repay creditors.
CONTACT: Trans Servis Combustibles SA
Uspallata 748
Buenos Aires
Miguel Troisi
Cerrito 146, piso 6
Buenos Aires
TGN: Local Standard & Poor's Maintains `raD' Ratings on Bonds
-------------------------------------------------------------
The Argentine arm of Standard and Poor's International Ratings,
Ltd. maintains an `raD' rating on bonds issued by Transportadora
de Gas del Norte, according to the official web site of the
National Securities Commission of Argentina. The rating, which
is issued to obligations in default and based on the Company's
financial health as of the end of December 2003, affects the
following bonds:
-- US$24 million worth of "Serie V, con vencimiento en junio de
2003, emitada bajo el programa Global de Ons simples (USD300
Mio) vencido en 03.99" coming due on June 1, 2004 and classified
as "Simple Issue."
-- US$60.5 million worth of "Serie Vi emitada bajo el Prorama
Global de Ons Simples por un monto de US$320 mm" coming due on
September 1, 2008, and classified under the type "Series and/or
Class."
-- US$20 million worth of "Serie VII, con vencimiento en marzo
de 2003, emitada bajo el Programa Global de Ons simples (US$300
Mio)," which came due on March 3, 2003 and classified under
"Simple Issue."
-- US$20 million worth of "Serie I emitada bajo el Programa
Global de Ons Simples por un monto de US$320 million" coming due
on July 1, 2009 and classified under "Series and/or Class."
-- US$154.5 million worth of "Serie II emitada bajo el programa
Global de Ons Simples por un monto de US$320 million" coming due
on August 1, 2008 and classified under "Series and/or Class."
-- US$10.7 million worth of "Serie III emitada bajo el programa
Global de Ons Simples por un monto de US$320 million" coming due
on July 1, 2009 and classified under "Series and/or Class."
-- US$50 million worth of "Serie III, con vencimiento en octubre
de 2004, emitada bajo el Programa Global de Obligaciones simples
(USD 300 Mio) vencido en 03.99", coming due this October 1, 2004
and classified under "Simple Issue."
-- US$9.3 million worth of "Serie IV emitada bajo el Programa
Global de Ons Simples por un monto de US$320 mm" due on July 1,
2009 and classified under "Series and/or Class."
-- US$46 million worth of "Serie IV, con vencimiento en junio de
2002, emitida bajo el Programa Global de ONs simples (USD 300
Mio) vencido en 03.99" which came due on June 3, 2002 and
classified under "Simple Issue."
CONTACT: TRANSPORTADORA DE GAS DEL NORTE (TGN)
Don Bosco 3672, (C120ABF) Buenos Aires, Argentina.
Phone: (+54 11) 4959-2000
Fax: (+54 11) 4959-2242
Home Page: www.tgn.com.ar/
* Argentina to Hold Debt Talks With Small Creditors
---------------------------------------------------
Small creditors, led by the country's association of pension
fund managers (UAFJP), will meet Thursday with Argentina's
economy ministry as part of a series of negotiations with
holders of over US$80 billion in defaulted government debt,
reports Business News Americas, citing local daily Clarin.
According to economy minister Roberto Lavagna, the UAFJPs will
be first in line to meet with ministry officials. AFJPs hold a
significant portion of local government debt and are keen to
negotiate new terms.
Two years have passed since Argentina's government defaulted on
its debt in late 2001 but it has yet to reach an agreement with
creditors. Last year, the bondholders immediately spurned the
government's offer of an equivalent of seven cents on the
dollar. The IMF has conditioned its financial assistance on
Argentina negotiating in good faith with its creditors.
===========
B R A Z I L
===========
EMBRATEL: Senate Commission Schedules Sale Hearing
--------------------------------------------------
The Brazilian senate's oversight and control commission will
discuss the sale of local telco Embratel (NYSE: EMT) on March
30, in a public hearing, Business News Americas reports, citing
local news agency Agencia Estado. The scheduled hearing comes in
approval of a proposal filed Wednesday by Bahia state senator
Ney Suassuna. Topics to be discussed at the hearing include the
politics of investment in the telecoms sector.
Communications minister Eun¡cio Oliveira has been invited to the
hearing, as well as representatives from the national
development bank BNDES, and three agencies which are part of the
acquisition approval process: the regulator Anatel, the
antitrust authority Cade, and the Economic Defense Department
(SDE) at Brazil's justice ministry.
CONTACT: EMBRATEL
Silvia M.R. Pereira, Investor Relations
Tel: (55 21) 2121-9662
Fax: (55 21) 2121-6388
Email: silvia.pereira@embratel.com.br
invest@embratel.com.br
EMBRATEL: Complaint vs. Brasil Telcom "Cartel" Expected Soon
------------------------------------------------------------
Embratel Participacoes SA (EMT) is planning to file a complaint
against Tele Norte Leste Participacoes SA (TNE), or Telemar, a
Brazil unit of Spain's Telefonica SA (TEF); and Brasil Telecom
Participacoes (BRP) for forming a "cartel" which challenged the
sale of Brazil's leading long-distance carrier to Mexican fixed-
line giant Telefonos de Mexico SA (TMX), reports Dow Jones
Newswires.
The Embratel complaint follows a recommendation last Wednesday
by Brazil's top antitrust authority, Cade, that the SDE and
Brazil's telecommunications watchdog, Anatel, investigate the
three carriers for possible violations of competition laws.
A spokesman for the Company said that Embratel vice president
Purificacion Carpinteyro is set to make the complaint during a
meeting Wednesday afternoon in Brasilia, at the Secretary of
Economic Rights or SDE, an antitrust unit of Brazil's Ministry
of Justice.
Last year, the three carriers formed a consortium to bid for a
controlling share of Embratel from MCI (MCIAV), formerly
WorldCom Inc. (MCWEQ). Through a company called Calais, the
three carriers last week bid US$550 million for 51.8% of MCI's
voting shares. However MCI chose Telefonos de Mexico SA (TMX) or
Telmex as the winner despite a bid $190 million less than
Calais.'
For their part, MCI officials said that potential regulatory
roadblocks to the purchase by the consortium were a major factor
in the decision to reject the bid by Calais. Brazilian rules
prevent one telecommunications provider from buying another in
the same business in the same region.
Telcomp, a group formed of Brazilian telecommunication companies
and service providers to promote competition in the sector, also
alleged in a complaint to Cade that the formation of the
consortium to buy Embratel was a violation of laws against
cartels and anticompetitive practices in Brazil's
telecommunications industry.
Telcomp claimed that if the consortium succeeded in purchasing
Embratel, it would have a 71% to 96% share of the markets for
local, long distance, data transmission and Internet connection
services across large swathes of Brazil.
Last Friday MCI asked the U.S. Bankruptcy Court of the Southern
District of New York to approve the sale of Embratel to Telmex.
The court is scheduled to consider the request at an April 13
hearing in New York.
MCI put the company on the sale block last November as part of
its bid to exit bankruptcy protection.
=========
C H I L E
=========
AES GENER: Financial Restructuring Draws Near Close
---------------------------------------------------
AES Gener, the Chilean unit of U.S. utility AES Corp., is close
to wrapping up its financial restructuring announced in November
2003. Offers to acquire 20% of the electricity company will be
received until Wednesday, according to what was established by
AES Corp. The auction sale will take place two days later and
AES Gener may collect up to US$200 million.
These resources would be allocated to fund Gener's previously
announced US$125 million capital increase in April. This is the
last step of the debt overhaul plan that will lead Gener to a
US$300 million reduction in its liabilities.
Market analysts feel the hardest part of this debt clean-up plan
has already been overcome.
The recent bond placement in international financial markets,
through which Gener raised US$400 million, brought relief to the
Company. Gener obtained US$100 million more than expected, which
shows it has regained confidence.
In the meantime, Gener informed the country's securities
regulator, the SVS, that it bought back US$156.83 million, or
38.9%, of its US$403 million locally issued convertible bonds on
Wednesday through an auction on the Santiago stock market.
Citing a company statement, Business News Americas reports that
Gener received acceptance from bondholders on March 23 for
US$209.7 million, or 52%, of its total L series of bonds. Gener
bought back bonds corresponding to US$8.83 million of sub-series
LA3 and US$148 million of sub-series LA5.
Third parties unrelated to AES Gener bought the remaining
US$52.87 million, offered in the other series, the statement
said.
The repurchase price was 105.02% of the original price fixed by
Gener when the bonds were issued, the statement said.
AES Gener's tender offer for its US$73.9 million US convertible
notes expires on April 1.
TELEFONICA CTC: Agrees to Sell its 9% Stake in Publiguias
---------------------------------------------------------
Compania de Telecomunicaciones de Chile S.A. (NYSE: CTC)
("Telefonica CTC Chile" or the "Company") agreed to sell the its
9% stake in Publiguias to Telefonica Publicidad e Informacion
S.A. (TPI). With this transaction TPI will control 100% of
Publiguias in Chile.
The estimated sale price will be approximately US.8 million,
considering the referential exchange rate of the offer of Ch per
US. The sale price is subject to a variation in the exchange
rate of +/- 7%. If the transaction materializes under the
referential exchange rate, the estimated impact on the Company's
results would be approximately Ch,900 million (close to Ch,600
million after taxes).
There is term of 30 days, starting March 23, 2004, for both
parties to sign the corresponding agreement.
Compania de Telecomunicaciones de Chile S.A., the first South
American company to list shares on the New York Stock Exchange,
is the largest telecommunications enterprise in Chile, providing
local service, as well as domestic and international long
distance services throughout the country. Additionally, the
Company provides equipment marketing, data transmission, value-
added services and information systems services and operates a
nationwide cellular network.
CONTACT: Sofia Chellew
schelle@ctc.cl
Veronica Gaete
vgaete@ctc.cl
M.Jose Rodriguez
mjrodri@ctc.cl
Florenci Acosta
macosta@ctc.cl
Kevin Kirkeby
kkirkeby@hfgcg.com
Mariana Crespo
mcrespo@hfgcg.com
TELEFONICA CTC: Chilesat Request for Injunction Scrapped
--------------------------------------------------------
The request for injunction filed by fixed-line operator Chilesat
against the government's proposed tariff decree for dominant
telecommunication company Telef¢nica CTC Chile (NYSE: CTC) has
been dismissed by Chile's appeals court, Business News Americas
reports, citing local newspaper reports.
The legal counsel for Chilesat, Jose Tomas Errazuriz, was quoted
as saying the court's rejection was based on the form rather
than the substance of Chilesat's argument. The company, he
added, is evaluating other available avenues after the
rejection.
Chilesat had filed for protection from the decree, arguing that
the government erred in calculating a 9.3% increase in
interconnection rates CTC can charge its competitors for
terminating calls on its network.
===============
C O L O M B I A
===============
BELLSOUTH COLOMBIA: Concludes Debt Refinancing; Issues Bonds
------------------------------------------------------------
BellSouth Corp.'s unit in Colombia concluded the refinancing of
US$337 million in debts owed to 27 banks, reports Portafolio.
The recently concluded transaction, which gives BellSouth
Colombia an extension of the terms of the debt to 2007, will
serve to diminish the apprehensions felt by some market analysts
about the Company's debts, in light of its recent sale to
Telefonica.
The deal was prepared in December 2003, but was only confirmed
in the third week of March following a meeting of the Company's
shareholders.
Besides the renegotiation of its debts, BellSouth has announced
a bond issue of 100 million shares to convert into equity
US$176.5 million of its debt with its shareholders, Portafolio
reveals.
===============
D O M I N I C A
===============
IMF Completes First Review of Dominica's PRGF Arrangement
---------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
completed Wednesday the first review under the SDR 7.69 million
(about US$11.3 million) Poverty Reduction and Growth Facility
(PRGF) arrangement for Dominica. In addition, the Executive
Board completed the financing assurances review under Dominica's
PRGF arrangement, which is required in accordance with the IMF
Guidelines on Conditionality to ensure adequate safeguards of
IMF resources.
Completion of these reviews makes SDR 308,000 (about US$455,000)
immediately available to Dominica, and would bring total
disbursements under the arrangement to SDR 2.67 million (about
US$3.9 million). The current PRGF arrangement was approved on
December 22, 2003 for a period of three years (see Press Release
No. 03/228).
The PRGF is the IMF's credit facility for low-income countries.
PRGF-supported programs are based on country-owned poverty
reduction strategies adopted in a participatory process
involving civil society and development partners and articulated
in a Poverty Reduction Strategy Paper (PRSP). This is intended
to ensure that PRGF-supported programs are consistent with a
comprehensive framework to foster growth and reduce poverty.
PRGF loans carry an annual interest rate of 0.5 percent and are
repayable over 10 years with a 5 «-year grace period on
principal payments.
In commenting on the Executive Board's decision, Agust¡n
Carstens, Deputy Managing Director, and Acting Chair said:
"The Dominican authorities' implementation of the economic
program, supported first by an extended Stand-by Arrangement and
currently by the Poverty Reduction and Growth Facility, has been
strong. On the macroeconomic front, inflation remains low and
there are indications of an early recovery of economic activity.
The authorities need to persevere with fiscal consolidation,
implementation of the comprehensive reform agenda, and efforts
to restructure the external debt in order to bring Dominica back
to a sustainable growth path.
"The authorities are strengthening their fiscal consolidation
efforts. The fiscal targets of the program have been observed
with wide margins, although this outturn reflects special
budgetary developments that are not expected to be sustained.
The authorities are preparing a budget for FY 2004/05 that will
include front-loaded measures to improve the fiscal balance, and
they are committed to continued fiscal adjustment over the
medium term. Attainment of fiscal sustainability will also
require vigorous implementation of fiscal reforms, including
downsizing the civil service, rationalizing the pension system,
streamlining tax exemptions, introducing the value added tax,
implementing the Fiscal Responsibility Law, and improving the
budgetary framework. The authorities plan to undertake a
comprehensive review of tax exemptions by end-June 2004.
"Dominica's economic growth prospects are likely to depend
mostly on investment and export growth. Thus the authorities are
placing considerable emphasis on structural reforms to improve
the investment climate, enhance competitiveness, deregulate the
economy, and strengthen the financial sector. As the reform
agenda is demanding and capacity constraints faced by the
authorities are pressing, Dominica will continue to rely
substantially on timely and coordinated technical assistance. It
will also be essential that the reforms be properly prioritized
and sequenced.
"The authorities have entered into good faith negotiations with
Dominica's external creditors, based on international best
practices. With the help of their debt advisors, they are
putting together a comprehensive debt restructuring proposal as
a first step toward achieving debt sustainability. The
negotiations with creditors are expected to be concluded
shortly. A rigorous debt management policy is needed to prevent
the re-emergence of debt sustainability problems.
"The structural reform agenda will be implemented in tandem with
the authorities' poverty reduction strategy, as articulated in
their Interim Poverty Reduction Strategy Paper, with a view to
preserving essential social spending and reducing unemployment-
related poverty. Progress has been made toward preparation of a
full Poverty Reduction Strategy Paper, which is expected to be
finalized by end-2004," Mr. Carstens said.
CONTACT: INTERNATIONAL MONETARY FUND
700 19th Street, NW
Washington, D.C. 20431 USA
IMF EXTERNAL RELATIONS DEPARTMENT
Public Affairs: 202-623-7300 - Fax: 202-623-6278
Media Relations: 202-623-7100 - Fax: 202-623-6772
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M E X I C O
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CORPORACION DURANGO: Reaches Agreement With Key Creditors
---------------------------------------------------------
Corporacion Durango, S.A. de C.V. (NYSE: CDG / BMV: CODUSA)
("Corporacion Durango"), announced Wednesday that it had reached
an agreement in principle with its bank lenders and members of
the Ad Hoc Bondholders Committee, who collectively hold a
substantial portion of its outstanding unsecured indebtedness.
Under the terms of the agreement in principle, the creditors
will support a comprehensive restructuring of Corporacion
Durango's unsecured financial debt.
The agreement in principle is subject to certain conditions,
including the execution and delivery of definitive
documentation. Corporacion Durango intends to seek additional
creditor support to the terms of the proposed restructuring as
soon as practicable.
Miguel Rincon, Chairman of Corporacion Durango commented: "We
are pleased that our key financial creditors have provided
Corporacion Durango with the support necessary to negotiate the
final terms of this proposed restructuring.
This support will permit us to pursue a recapitalization plan in
an orderly manner that ultimately is expected to result in a
more adequate capital structure for Corporacion Durango. The
reduced debt and financing costs produced by the proposed
recapitalization will enhance the liquidity and financial
flexibility of Corporacion Durango and its operating
subsidiaries. It is our opinion that the operating subsidiaries
and their stakeholders will not be adversely affected by this
process, which will take place at the holding company level. We
are confident that we will conclude this process as soon as
possible."
Corporacion Durango expects in the coming weeks to file a Report
of Foreign Issuer on Form 6-K with the Securities and Exchange
Commission that contains the terms of the proposed
restructuring.
Corporacion Durango is the largest producer of containerboard in
Mexico through its division Grupo Industrial Durango, is the
largest Mexican national producer of newsprint through its
division Pipsamex, is the largest manufacturer of corrugated
containers in Mexico through its division Empresas Titan, is the
largest Mexican national company of wood products through its
division Ponderosa, is the Mexican paper company with the
largest industrial operations in the U.S. through its division
McKinley Paper and is also one of the largest manufacturers in
Mexico of uncoated free-sheet and multi-wall sacks.
CONTACTS: Corporacion Durango, S.A. de C.V.
Mayela R. Velasco
Tel: +52 (618) 829 1008
E-mail: mrinconv@corpdgo.com.mx
The Global Consulting Group
Mariana Crespo
Tel: (646) 284 9407
E-mail: mcrespo@hfgc.com
Miguel Antonio R.
Tel: +52 (618) 829 1070
E-mail: rinconma@corpdgo.com.mx
GRUPO SIMEC: Repays Outstanding Bank Debt
-----------------------------------------
Grupo Simec, S.A. de C.V. (Amex: SIM) ("Simec") announced
Wednesday the repayment in full of its outstanding bank debt
which was restructured in 2000 and of which approximately $1.7
million remained outstanding. This payment will permit Simec to
cancel the industrial mortgage securing the bank debt and no
longer comply with various bank covenants including a limitation
on asset dispositions and required application of proceeds from
such dispositions. Simec increased sales and operating income
recorded in January and February of 2004 to levels that were 40%
and 60% higher, respectively, than the same period of 2003.
Simec is a mini-mill steel producer in Mexico and manufactures a
broad range of non-flat structural steel products.
CONTACT: Grupo Simec S.A. de C.V.
Adolfo Luna Luna
Jose Flores Flores
TEL: +011-52-33-1057-5740
INTERNATIONAL WIRE: Files Voluntary Chapter 11 Petitions
--------------------------------------------------------
International Wire Group, Inc. announced Wednesday that it has
reached an agreement with an ad hoc committee of its bondholders
and its largest equity holder on the terms of a comprehensive
debt restructuring. The deal will allow International Wire to
decrease its debt from $389 million to approximately $163
million, exchanging approximately $305 million of principal
amount of International Wire's senior subordinated notes for 96%
of the common stock of Reorganized International Wire and $75
million of new 10% unsecured notes. The transaction will be
implemented through a pre-negotiated plan of reorganization.
Upon completion of the reorganization, International Wire's
annual cash interest costs will be reduced by approximately $31
million. International Wire Group has entered into a lock-up and
voting agreement with holders of greater than a majority of
International Wire's 11.75% Senior Subordinated Notes and 14%
Senior Subordinated Notes to effect such plan of reorganization.
In order to consummate its reorganization, International Wire
and certain of its subsidiaries filed voluntary petitions under
Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court
in the Southern District of New York. As of result of the lock-
up and voting agreement, International Wire has secured support
from its creditors to the plan of reorganization towards the
requirements of the Bankruptcy Code for confirmation of the
plan. The pre-negotiated plan of reorganization will enable
International Wire to complete its reorganization in an
expeditious and efficient manner.
International Wire has secured commitments from a group of
senior lenders led by Highbridge/Zwirn Special Opportunities
Fund, L.P. for $140 million of Debtor-in- Possession financing.
The Debtor-in-Possession financing will be used by International
Wire to repay its $82 million of 10 3/8% senior secured notes
and to provide working capital financing during the
reorganization process, which will permit the Company to
continue business as usual. Consequently, it is anticipated that
customers, employees and suppliers will not be affected by the
restructuring.
"The recapitalization will dramatically improve International
Wire's capital structure, significantly increasing free cash
flow and resulting in a substantially stronger balance sheet,
which will permit the Company to focus on its business and
customers," said CEO Joseph M. Fiamingo. "We are grateful to our
noteholders who have agreed to support our plan of
reorganization. Their support is truly a vote of confidence in
the Company, its employees and our prospects."
About International Wire Group, Inc.
International Wire Group, Inc., headquartered in St. Louis,
Missouri, is a leading manufacturer and marketer of wire
products, including bare and tin-plated copper wire and
insulated copper wire. The Company's products include a broad
spectrum of copper wire configurations and gauges with a variety
of electrical and conductive characteristics that are utilized
by a wide variety of customers primarily in the appliance,
automotive, electronics/data communications and general
industrial/energy industries. The Company manufactures and
distributes its products in 22 facilities strategically located
in the United States, Mexico, France, Italy and the Philippines.
CONTACT: David Webster, Chief Restructuring Officer
314-746-2280
TFM: Arbitrator's Ruling Does Not Affect KCS' Ratings
-----------------------------------------------------
An arbitrator in the dispute between U.S. rail company Kansas
City Southern (BB-/Negative/--) and Mexican rail company Grupo
TMM S.A. (TMM; rated 'D') over Kansas City Southern's proposal
to take control of TFM S.A. de C.V. (B/Watch Neg/--) has ruled
in Kansas City Southern's favor.
Standard & Poor's Ratings Services said Wednesday the ruling has
no impact on its ratings on Kansas City Southern. According to
the arbitrator, the agreement entered into by TMM and Kansas
City Southern remains in force and is binding. Kansas City
Southern and TMM will now move on to the second phase of the
arbitration process, which will decide the remaining issues,
including remedies and damages due Kansas City Southern. Kansas
City Southern's relationship with its 46%-owned affiliate, Grupo
TFM, remains strained at this time, and the outcome of its
proposal to take control of TFM is uncertain.
Ratings incorporate room for Kansas City Southern to complete
the TFM transaction as originally proposed. However, if
financial performance at Kansas City Southern or TFM weakens
from expected levels, if the TFM deal goes forward under more
onerous terms, or if Kansas City Southern is required to fund
the full amount of an option under which the Mexican Government
can put its indirect 20% ownership stake in TFM to other owners,
ratings could be reviewed for a downgrade.
ANALYST: Lisa Jenkins, New York (1) 212-438-7697
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P A R A G U A Y
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MILLICOM INTERNATIONAL: Updates Subscriber Status
-------------------------------------------------
Millicom International Cellular S.A. (Nasdaq:MICC) ("MIC"), the
global telecommunications investor, announces the completion of
a review of its subscriber base. This review was undertaken to
ensure that MIC was consistent in the way it accounted for
subscribers on a global basis, so tightening MIC's strict
subscriber definition. The effect of the review is that some
243,000 subscribers have been churned out bringing the total
subscriber number to 5,748,508 and the proportional subscribers
number to 4,011,465 today, still slightly ahead of the year end
2003 reported subscriber numbers.
This review has minimal revenue impact and MIC's revenue growth
for the first quarter of 2004 is expected to be higher than the
revenue growth for the fourth quarter of 2003. The results will
be reported on April 20.
The largest impact came from the regulatory authority in
Paraguay introducing a new ruling on 15th November 2003 that
instructs operators to remind customers that leaving a voicemail
has a cost to the caller. As a result, in March 2004 MIC has
seen an increasingly significant churn from low revenue
generating subscribers. MIC anticipates the subscriber base in
Paraguay being reduced by approximately 150,000 and this will
result in a revenue loss of approximately $200,000 per month.
Following these adjustments in Paraguay MIC undertook a review
for all other markets to ensure compliance with the stricter
definition used for subscriber reporting, leading to another
93,000 subscribers being churned. This subsequent review will
not impact revenues.
Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa. It currently has a total of 16
cellular operations and licenses in 15 countries. The Group's
cellular operations have a combined population under license of
approximately 382 million people. In addition, MIC provides
high-speed wireless data services in five countries.
CONTACTS: MILLICOM INTERNATIONAL CELLULAR S.A., Luxembourg
Marc Beuls, President and Chief Executive Officer
Telephone: +352 27 759 327
SHARED VALUE LTD., LONDON
Andrew Best, Investor Relations
Telephone: +44 20 7321 5022
Web site: http://www.millicom.com
***********
S U B S C R I P T I O N I N F O R M A T I O N
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Copyright 2004. All rights reserved. ISSN 1529-2746.
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