/raid1/www/Hosts/bankrupt/TCRLA_Public/040419.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, April 19, 2004, Vol. 5, Issue 76
Headlines
A R G E N T I N A
DIAGI: Court Approves Creditor's Request for Bankruptcy
MULTICANAL: Market Relations Head Writes Letter to Regulator
PARMALAT ARGENTINA: Kraft "Not Interested"
TRIOMPHE SA: Files Petition to Reorganize
YANIBRIAN: Court OKs Creditor's Involuntary Bankruptcy Motion
* Argentina Moves Publication Of Gas Deal Details To May
* World Bank Announces New Support Program For Argentina
B E R M U D A
LORAL SPACE: Unit Successfully Completes SkyReach Trials
B R A Z I L
CEMAR: Union Stops GP Takeover
COPEL: To Call For US$6M in Substation Bids
GAZETA MERCANTIL: Declared Bankrupt By Court
GERDAU: Issues Stock Dividends to Shareholders
TELEMAR: Oi Reaches 4.4 Million Subscribers in March
USIMINAS/COSIPA: Moody's Assigns B2 rating to $500M of Notes
C H I L E
ENDESA CHILE: Gets Favorable Court Ruling on Insurance Suit
ENERSIS: Refinances, Prepays US$150M Debt
TELEFONICA CTC: Refunds Fixed-To-Mobile Phone Call Charges
C O L O M B I A
CHIQUITA BRANDS: Cyrus Freidheim to Retire from Board
COLOMBIA TELECOMUNICACIONES: To Borrow Money To Pay Partners
M E X I C O
DESC: Informs about Documentation Presented to the SEC
TV AZTECA: Shareholders Approve $55M In Cash Distributions
- - - - - - - -
=================
A R G E N T I N A
=================
DIAGI: Court Approves Creditor's Request for Bankruptcy
-------------------------------------------------------
Diagi SA entered bankruptcy after Judge Chomer of Buenos Aires
Court No. 10 approved a bankruptcy motion filed by Eduardo
Peternoli, reports La Nacion. The Company's failure to pay
US$7134.03 in debt prompted the filing of the petition.
Working with Dr. D'Alesandri, the city's Clerk No. 20, the court
assigned Mr. Juan Carlos Pitrelli as receiver for the bankruptcy
process. The receiver's duties include the authentication of the
Company's debts and the preparation of the individual and
general reports. Creditors are required to present their proofs
of claims to the receiver before June 3, 2004.
The Company's assets will be liquidated at the end of the
bankruptcy process to repay creditors. Payments will be made
based on the results of the verification process.
CONTACT: Diagi SA
Tucuman 602
Buenos Aires
Juan Carlos Pitrelli
Avenida de Mayo 1260, 5ĝ "A"
Buenos Aires
MULTICANAL: Market Relations Head Writes Letter to Regulator
------------------------------------------------------------
Buenos Aires, April 14, 2004
Messrs.
Argentine Securities Commission
Reference: MULTICANAL S.A.
Acuerdo Preventivo Extrajudicial ("APE") Proceeding
Dear Sirs,
Martin G. Rios, in my capacity as Person in Charge of Market
Relations on behalf of Multicanal S.A. (the "Company"), proof of
such representation previously filed, with a registered domicile
established at Hip˘lito Yrigoyen 1628, 2nd Floor, Federal
Capital City, addresses this letter to the Commission to let you
know that today the Company was notified of the contents of the
ruling dated April 14, 2004 issued in the case captioned
"Multicanal S.A. s/ Acuerdo Preventivo Extrajudicial" under the
jurisdiction of the National Court of First Instance in
Commercial Matters N§ 4, Clerk's Office N§ 8, rejecting the
oppositions filed and confirming the Acuerdo Preventivo
Extrajudicial filed by the Company.
In addition, the Court resolved: "summoning those present at the
meeting held on December 10, 2003 under the provisions of
Section 45 bis of the Argentine Insolvency Law, who voted
against or abstained from voting, as well as those who were
absent.within 30 days from the last publication of legal notices
(to be carried out for the term and in the locations noted for
the meeting held under Section 45 bis of the Argentine
Insolvency Law) to exercise the right granted to the rest of the
creditors to elect.[among the three options presented, under the
same conditions as those who have already made such
election].directly with the debtor; provided that in the case of
silence such creditor's holdings shall be allocated to the
Available Options."
The Company shall keep this Commission informed of all relevant
facts with respect to the APE.
Yours sincerely,
Martin G. Rios
PARMALAT ARGENTINA: Kraft "Not Interested"
------------------------------------------
Contrary to media reports, a source inside U.S.-based company
Kraft Foods Inc. (KFT) said Thursday it is not buying the
Argentine unit of collapsed Italian dairy giant Parmalat
Finanziaria SpA (PRF.MI), stressing it is "absolutely not
interested," a Dow Jones report reveals. The source also said
the company has never been in talks for the acquisition of all
Parmalat Argentina assets.
The Italian parent, which is divesting non-core assets in
Argentina and 19 other countries as part of its global
restructuring plan, was reported Thursday by local business
daily El Cronista to have approached Kraft as a possible buyer.
The Associated Press, meanwhile, picked up Italian media reports
later in the day saying that Parmalat and Kraft were in "an
advanced stage" of negotiations for the Argentine assets. The
unidentified source said Kraft categorically denies all of these
reports.
TRIOMPHE SA: Files Petition to Reorganize
-----------------------------------------
Triomphe SA filed a "Concurso Preventivo" motion, reports La
Nacion. The Company is seeking to reorganize its finances
following cessation of debt payments since December 2003. The
Company's case is now pending before Buenos Aires Court No. 17,
under Judge Bavastro Modet, who is
assisted by Clerk No. 33, Dr. Trebino Figueroa.
CONTACT: Triomphe SA
Av. Cordoba 875, 1ĝ "D"
Buenos Aires
YANIBRIAN: Court OKs Creditor's Involuntary Bankruptcy Motion
-------------------------------------------------------------
Judge Taillade of Buenos Aires Court No. 20 declared Yanibrian
SA bankrupt, reports Argentine newspaper La Nacion. The ruling
comes in approval of the bankruptcy petition filed by the
Company's creditor, Union Cortadores de la Indumentaria SA, for
nonpayment of US$5935.64 in debt.
Clerk No. 39, Dr. Amaya, assists the court on the case, the
source adds.
Court-appointed receiver, Roberto Mazzarella, will examine and
authenticate creditors' claims until July 12, 2004. This is done
to determine the nature and amount of the Company's debts.
Creditors must have their claims authenticated by the receiver
by the said date in order to qualify for the payments that will
be made after the Company's assets are liquidated.
CONTACT: Yanibrian SA
Paso 584
Buenos Aires
Roberto Mazzarella
Laprida 1411, 9ĝ "A"
Buenos Aires
* Argentina Moves Publication Of Gas Deal Details To May
-------------------------------------------------------
A spokesman for Argentina's Planning Ministry said Thursday that
until a public is hearing is held, Argentina will not publish
the details of its major accord with gas providers, according to
Dow Jones.
This contrasts with the government's announcement two weeks ago
that the deal's particulars will be published in the Official
Bulletin last week. As it turned out, the public will have to
wait until the public hearing scheduled on May 6.
"After the public hearing is held, we will immediately publish
the details," said the spokesman, Alfredo Scoccimarro.
The accord is part of the government's efforts to avoid a
widespread energy crisis during the winter and encourage higher
investment from gas companies that will prevent problems in
future years. This explains the interest of consumer groups and
analysts on the details of the deal, which they have been
demanding since the accord was announced.
For their part, analysts are anxious to know what the accord
commits the companies to in terms of output and investment and
what price rises it guarantees gas producers and when.
In return for promises from producers to satisfy most domestic
demand, the accord is to allow gas rate rises for large-scale
consumers. This is the essence of the deal, which private-
sector officials have already given basic information on but
declined to elaborate, saying the government has asked them not
to go into its details.
According to those officials, the government will lift well-head
gas rates by an average of 40% for large-scale gas consumers.
Three further rises will also be agreed to over the next 15
months, officials say.
The gas rate increase would be the first since a previous
government converted utility rates from dollars to pesos in
January 2002 and then froze them.
* World Bank Announces New Support Program For Argentina
--------------------------------------------------------
The World Bank Group launched Thursday its new Country
Assistance Strategy (CAS) for Argentina, which will guide the
Bank Group's program in the country from April 2004 through
December 2005. The new CAS provides for US$2 billion in new
financing for Argentina in support of country efforts to achieve
sustained economic growth with equity, social inclusion, and
improved governance. The World Bank Group support will include
financing from both the International Bank for Reconstruction
and Development (IBRD) and the International Finance Corporation
(IFC), the private sector arm of the World Bank Group.
The CAS was prepared within the context of broader discussions
and consultations among the Argentine authorities, civil
society, and the Bank covering the period through June 2008.
The program elements, projections, and other references in the
CAS for the period beyond end-2005 are indicative and will be
taken into account for the next strategy to be prepared by the
end of 2005 for Board consideration.
At Thursday's discussion, the Board of Directors recognized the
increasingly favorable economic conditions in the country and
supported the strategy to leverage and scale up the impact of
the World Bank's program in Argentina, mainly through investment
operations. The new CAS provides the framework for the Bank to
help Argentina consolidate the recovery already underway and to
pursue a long-term strategy based on sustained and more broadly
shared economic growth, greater social inclusion and improved
governance.
"This assistance strategy, although exceptional in the normal
timeframe of a CAS, is an essential step towards continuing with
the Bank's long-term support to Argentina," said Axel van
Trotsenburg, World Bank Country Director for Argentina, Chile,
Paraguay and Uruguay. "Extensive consultations with the
government and civil society have allowed us to develop a plan
to move away from short-term crisis management and back to a
sustained framework of assistance that will help the country in
its economic and social recovery efforts. We remain committed to
a strong partnership with Argentina in the years to come."
New Country Assistance Strategy
The fundamental objective of the CAS is to help Argentina
reverse the high poverty levels that prevailed as a result of
the deep economic crisis in 2002. The CAS is built on three
pillars: sustained economic growth with equity, social
inclusion, and improved governance. Achieving these objectives
will help create an environment in which Argentine businesses
and industry can expand their activities. At the same time,
vulnerable groups such as the indigent poor and young unemployed
school dropouts will receive focused attention from government
programs, and the transparency and effectiveness of public
agencies will improve substantially.
To achieve sustained economic growth with equity so that all
segments of the Argentine population can see notable improvement
in their lives and livelihoods, Argentina will need to
significantly improve the investment climate in order to restore
investors' and creditors' confidence and attract much needed
investment, particularly in infrastructure and productive
activities. For this to happen, Argentina needs to concentrate
on ensuring that all restructuring processes (debt, concessions,
etc.) be conducted in a way that is perceived as fair,
transparent and a fair burden sharing among all parties. At the
same time, concerns about inequality in the distribution of the
economy's benefits in the past, which has become a salient issue
for Argentina today, will need to be addressed.
In support of social inclusion, the CAS concentrates on the need
for strengthened and more effective efforts to reach the most
vulnerable groups - the indigent poor, the elderly, the rural
poor, indigenous populations and the large number of youth who
are neither employed nor in school. In addition, basic social
services have to be restored for millions of Argentines, and
setbacks in the coverage and quality of education and health
need to be rectified.
The CAS stresses the need for sustainable improvements in
governance through institutional and structural reforms over
time. Such improvement will entail determined efforts to:
improve the effectiveness of provincial governments, fight
corruption, increase the transparency of public institutions
(including the judiciary), and establish the organizational and
institutional infrastructure to administer property rights.
In preparing the strategy, World Bank staff held extensive
discussions with government officials, civil society and members
of the business sector. Civil society consultations involved a
series of meetings with representatives of 20 of Argentina's 24
provinces that drew more than 1,500 people. Talks and
consultations ensured that the CAS took into account the
experiences and opinions of Argentines from all walks of life.
"Our planned assistance program seeks to support the governments
reform agenda for sustaining economic growth, improving human
development and enhancing governance. To this end we are ready
to assist the authorities with financial support, including
investment operation in the social areas as well as in
infrastructure, technical assistance and with sharing of
international best practice," said van Trotsenburg.
As part of the World Bank Group activities in Argentina, the IFC
will continue to work with its clients to arrest, to the extent
possible, the adverse effects of the economic crisis as well as
to focus its support on export-oriented investments. In
addition, considering pending resolution of structural issues
that still affect investors' and creditors' confidence, IFC will
focus on selective opportunities to provide long-term financing
where it could play a catalytical role in stimulating investment
flows into Argentina.
The Provincial Maternal-Child Health Investment Loan
The Board also approved Thursday a $135.8 million loan for
Argentina to support the implementation of the Maternal and
Child Insurance Program (MCHIP), with immediate attention to the
health needs of poor mothers and children. "The Provincial
Maternal-Child Health Investment Loan is a vital part of the
Bank's effort to help Argentina reduce the currently increased
rate of infant mortality that is affecting the
poorernorthernprovinces of the country ", says Cristian Baeza,
World Bank Task Manager of the project.
The Provincial Maternal-Child Health Investment Loan aims to
reach the most vulnerable people -those without health insurance
coverage today - who are mostly poor mothers and their children.
Implementation will start in the poorest nine provinces of the
country, accompanied by special outreach activities to the
indigenous population. With such features, it is an important
building block of the Bank's new Country Assistance Strategy.
The project aims to help Argentina substantially reduce the rate
of infant mortality. After recent increases due to the impact of
the economic and social crisis, infant mortality has reached
16.8 deaths per 1,000 live births today, with rates being
considerably higher in the northern provinces of the country.
The goal of Argentina's program supported by the project is to
reduce the national rate by at least twenty percent and the rate
in the poorer northern provinces by thirty percent. The
insurance uses innovative financing mechanisms which introduce
performance and accountability mechanisms for participating
provinces and also health providers.
The US$135.8 million Adaptable Program Loan (APL) from the IBRD
is a LIBOR-based, fixed-spread loan, repayable in 15 years, and
has a five-year grace period.
CONTACT: Yanina Budkin (54-11) 4316-9724
Ybudkin@worldbank.org
Alejandra Viveros (202) 473-4306
Aviveros@worldbank.org
Web site: www.worldbank.org.ar
=============
B E R M U D A
=============
LORAL SPACE: Unit Successfully Completes SkyReach Trials
--------------------------------------------------------
Loral Skynet announced Thursday that it has successfully
completed service trials with several customers on SkyReach,
Skynet's Internet Protocol (IP) enabled product that provides
two-way broadband services for secure private networks or high-
speed Internet access.
"SkyReach allows large organizations to create an instant
infrastructure for a network that can connect users within a
city or around the globe and extend the WAN to 100 percent
coverage in areas underserved by broadband terrestrial
communications," said Terry Hart, president, Loral Skynet.
"Skynet is one of the few companies that can offer this carrier
class service completely on its own integrated network of
satellites, teleports and fiber resources, providing quality
service and network reliability."
During 2003 and early 2004, Loral Skynet partnered with numerous
users, including large corporations and government agencies, to
test and deliver applications such as:
-- Multicasting of large media files -- effectively delivered at
rates of 2 Mbps on the forward link and 128 Kbps on the return
channel.
-- Security and surveillance -- remotely monitored video signals
using forward link rates of up to 2 Mbps with 64 Kbps return
link.
-- Remote office connectivity -- delivered corporate
communications over the Internet using Virtual Private Network
(VPN) and Voice over IP
(VoIP).
-- Distance learning -- utilized satellite-based multicast and
unicast features over the Internet to enable troop
communications between military bases using high-bandwidth
rates.
Loral Skynet will conduct demonstrations of SkyReach at next
week's 2004 National Association of Broadcaster's show in Las
Vegas. Visit Loral Skynet at the Las Vegas Convention Center
(booth number C12339) during NAB 2004 from April 19-22, 2004.
SkyReach will offer a number of services that complement
existing frame relay and multi-protocol label switching (MPLS)
networks and offer efficient network management. SkyReach is
optimized to provide a common platform on which to converge
data, voice and video needs onto a single secure IP network.
This SkyReach service uses a digital video broadcast-return
channel via satellite (DVB-RCS) hub platform from EMS
Technologies, an open-standards platform that has the advantages
of higher return speeds and interoperability of equipment.
Designed for companies that need broadband communications over
the Internet or secure private networks, SkyReach overcomes the
limitations of terrestrial systems to extend the wide-area
network (WAN) to office locations in areas with limited
terrestrial connectivity. Flexible, scaleable and easily
deployed, SkyReach offers both one-way and two-way services to
support high- speed IP applications, access to local area
network resources and Internet services across the entire WAN.
The rollout of SkyReach's two-way services is scheduled for the
second quarter of 2004, and will offer forward speeds up to 2
Mbps and return speeds of up to 512 Kbps throughout the Americas
on Telstar 12 and IA-7 (formerly Telstar 7). Higher return speed
options will be available in later versions. Skynet will roll
out SkyReach services in Europe and Asia later in 2004.
A pioneer in the satellite industry, Loral Skynet continues to
deliver the superior service quality and range of satellite
solutions that have made it an industry leader for more than 40
years. Through the broad coverage of the Telstar satellite
fleet, and in combination with its established hybrid VSAT/fiber
global network infrastructure, Skynet is a source for all
broadcast, data network, Internet access, IP and systems
integration needs. Headquartered in Bedminster, New Jersey,
Loral Skynet is dedicated to providing secure, high-quality
connectivity and communications. For more information, visit
www.loralskynet.com.
In addition to being the parent company of Loral Skynet, Loral
Space & Communications (OTC Bulletin Board: LRLSQ) is a world-
class leader in the design and manufacture of satellites and
satellite systems for commercial and government applications
through its Space Systems/Loral subsidiary.
CONTACT: John McCarthy
(212) 338-5345
Web site: www.loral.com
===========
B R A Z I L
===========
CEMAR: Union Stops GP Takeover
------------------------------
A spokesman for Brazilian group GP Investimentos said its
takeover of bankrupt power distributor Companhia Energetica do
Maranhao, or Cemar, has been blocked by an injunction granted to
a workers' union in Brazil's northeastern state of Maranhao, Dow
Jones relates.
GP was expected to take the helm of Cemar Thursday at a general
assembly in which GP partner Octavio Pereira Lopes would be
announced chief executive of the utility. But Cemar's workers'
union Wednesday afternoon filed for and was granted an
injunction blocking the transfer of control.
However, the spokesman expressed optimism that "the injunction
will be lifted very soon and the process will proceed as
expected."
Control of Cemar fell into the hands of GP after the group
successfully rescheduled the utility's BRL820 million debt.
There were delays in the sale process with court challenges
filed by interested buyers, who had to present a plan to get
Cemar, which distributes power to 5.7 million Maranhao
residents, up and running again.
GP's proposal to renegotiate the debt of Cemar, which came under
the administration of Brazil's power sector regulator Aneel
after filing the Brazilian equivalent of Chapter 11 bankruptcy
in August 2002, was approved by the regulator early this year.
For the utility, GP paid U.S.-based PPL Corp. (PPL), Cemar's
then-parent, a symbolic price of BRL1.0. At the time, the
distributor failed to renegotiate its debt with creditors. PPL
wrote off its US$317 million investment in Brazil, but still
held Cemar's concession license until Aneel could find a new
buyer.
Aneel said GP, which is set to inject BRL100 million into Cemar,
managed to reduce the utility's debt to BRL460 million and
lengthen maturities. Main creditor Centrais Eletricas
Brasileiras (ELET6.BR) or Eletrobras, to which Cemar owes BRL350
million, converted BRL55 million of that debt into a 35% stake
in the utility, and at the same time lengthened the maturities
on about BRL200 million of Cemar's debt. Cemar also owed
Eletronorte, a subsidiary of Eletrobras, BRL104 million in
short-term debt. Maturities on that debt were also stretched
over 12 years.
COPEL: To Call For US$6M in Substation Bids
-------------------------------------------
Companhia Paranaense de Energia or Copel (NYSE: ELP / LATIBEX:
XCOP / BOVESPA: CPLE3, CPLE6), the Brazilian integrated power
company that generates, transmits, and distributes electric
power to the State of Parana, announced in a statement that
bidding for the BRL17.5 million (US$6.03mn) substation it plans
to put up in the town of Rolandia will soon be open, says a
BNamericas report.
Diogenes Marquez, Copel transmission superintendent, said the
new substation is expected to meet future demand growth and
improve the quality of power supply to the town of Rolandia.
GAZETA MERCANTIL: Declared Bankrupt By Court
--------------------------------------------
A Brazilian court has declared publishing company Gazeta
Mercantil (GZM) bankrupt, reports Valor Economico.
The ruling comes in approval of the bankruptcy petition filed by
the Company's creditor, Semab Industria e Comercio de Papel, for
nonpayment of BRL272.3 million in debt. Semab, the paper
supplier for Gazeta Mercantil, was also appointed as the
bankruptcy trustee.
Gazeta Mercantil was given five days to appeal the decision.
GERDAU: Issues Stock Dividends to Shareholders
----------------------------------------------
This stock dividend is made possible due to the incorporation of
reserves in a total of BRL1.7 billion at Gerdau S.A. and of
BRL384 million at Metalurgica Gerdau S.A., with the issuance of
the corresponding shares
The Boards of both Gerdau listed companies in Brazil -Gerdau
S.A. and Metalurgica Gerdau S.A. - will propose a stock dividend
to shareholders at the general meetings to be held on the 29th
and the 30th of April. This stock dividend is made possible due
to the incorporation of reserves in a total of BRL1.7 billion at
Gerdau S.A. and of BRL384 million at Metalurgica Gerdau S.A.,
with the issuance of the corresponding shares.
With this stock dividend, the number of Gerdau S.A shares
outstanding will double reaching the total of 296.7 million. At
Metalurgica Gerdau S.A, the doubling of outstanding shares to
83.2 million will result from the stock dividend of 30% and a 2-
for-1 split 70%. The current shareholders will have more shares
as indicated in percentages of increases in each company.
Metalurgica Gerdau S.A. shares were quoted at BRL82,00 and
Gerdau S.A. at BRL67,50 this past Monday
These stock dividends will increase the number of shares of both
companies and should allow for greater liquidity and access to
the stock. On Monday 12th, the shares of Metalurgica Gerdau S.A.
were being quoted at BRL82.00, and those of Gerdau S.A. at
BRL67.50.
Gerdau S.A. shares are traded at the Sao Paulo, at the New York
and at the Madrid Stock Exchanges (Latibex), whereas Metalurgica
Gerdau S.A., is traded at Bovespa.
The shareholders meetings of Gerdau S.A. and of Metalurgica
Gerdau S.A. will also discuss the approval of the fiscal year
2003 numbers and will elect the board members and substitutes,
members of the Fiscal committees and their substitutes among
other relevant issues.
CONTACT: Press Office +55(51) 3323-2170
imprensa@gerdau.com.br
Web site: www.gerdau.com.br
TELEMAR: Oi Reaches 4.4 Million Subscribers in March
----------------------------------------------------
At the end of March Oi had reached a level of 4.4 million
subscribers within the 16 Brazilian states where it operates. In
under two years, the Company has reached an estimated 20% market
share in its region and is now the second largest wireless
provider in six states. The subscriber base of Oi has now
surpassed that of its other B Band competitors in Minas Gerais,
Rio Grande do Norte, and ParaĦba, in addition to Cear and
Alagoas where it had achieved this ranking in December of last
year.
CONTACT: TNE - INVESTOR RELATIONS
Roberto Terziani
terziani@telemar.com.br
55 21 3131 1208
Carlos Lacerda
carlosl@telemar.com.br
55 21 3131 1314
Fax: 55 21 3131 1155
GLOBAL CONSULTING GROUP
Kevin Kirkeby
kkirkeby@hfgcg.com
Mariana Crespo
mcrespo@hfgcg.com
Tel: 1-646-284-9416
Fax: 1-646-284-9416
Web site: www.telemar.com.br/ir
USIMINAS/COSIPA: Moody's Assigns B2 rating to $500M of Notes
------------------------------------------------------------
Moody's Investors Service assigned a B2 foreign currency rating
to the Usinas Siderurgicas de Minas Gerais S.A. (Usiminas) and
Companhia Siderurigica Paulista (Cosipa) US$ 500 million Global
Medium Term Note program.
Notes under the program can be issued by Usiminas or by its
subsidiary, Cosipa. Notes issued by Cosipa automatically have
the benefit of an unconditional and irrevocable guarantee from
Usiminas. Notes issued by Usiminas may or may not be guaranteed
by Cosipa.
The outlook is stable.
For notes issued by Cosipa or notes issued by Usiminas and
guaranteed by Cosipa, the B2 rating reflects the
creditworthiness of the Usiminas System and additionally
incorporates convertibility risk of the Brazilian Real. As such,
the rating is a function of the group's underlying credit
strength, the probability of a sovereign default implied by the
Brazilian government's B2 foreign currency bond rating and the
likelihood that, give a sovereign default, the government would
impose a debt moratorium generally to companies domiciled in
Brazil and specifically to debt issued by the Usiminas System,
says Moody's.
For notes issued by Usiminas without a guarantee from Cosipa,
the B2 rating is principally constrained by structural
subordination caused by the significant percentage of total debt
and cash flow located at the Cosipa subsidiary. Moody's
generally expects that the operating subsidiary's creditors
would have to be satisfied before the parent company's senior
unsecured creditors could realize any value from subsidiary
assets. Moody's believes that the significant guarantees
provided by Usiminas for nearly all of Cosipa's debt may also
significantly increase the loss severity for senior unsecured
creditors at the Usiminas level.
=========
C H I L E
=========
ENDESA CHILE: Gets Favorable Court Ruling on Insurance Suit
-----------------------------------------------------------
In a statement, a Chilean court announced it has ruled as valid
the insurance policy of power generator Endesa Chile (NYSE: EOC)
with insurance firm AGF/Allianz Chile, with a separate court
hearing currently in progress to determine the amount
AGF/Allianz Chile must pay Endesa for accidents that occurred
during the construction of its 570MW Ralco hydroelectric
project, says BNamericas, citing a source inside Endesa.
The four-year AGF/Allianz insurance policy was taken out by
Endesa in May 1999 to cover risks related to the construction of
the Ralco project, but the insurer refused to pay for certain
accidents during the plant's construction, claiming that it was
not aware of certain clauses in the contract related to
perceived project risks.
The accidents in question included the damage sustained by an
access road to the Ralco site caused by the overflowing of the
Bio Bio river due to heavy rains in May 2001.
On March 30, the judge dismissed AGF/Allianz Chile's appeal to
terminate the policy, effectively ordering the insurance company
to pay for the accidents, the source said.
From the very beginning, the Ralco project has always been mired
in controversy, with members of the indigenous population taking
legal action after legal action against it for years. Twenty-
seven former executives of Endesa subsidiary Pangue have also
joined in, filing a separate lawsuit that calls for a halt in
the plant's construction.
Local newspaper El Sur reported that the former executives of
Pangue, which is the next plant downstream from Ralco, claim
that Endesa's decision to transfer water rights from Pangue to
Ralco detracted from the value of shares they had been given as
part of their wages.
With a Santiago civil court judge agreeing to hear the lawsuit,
civil construction on Ralco is likely to be halted. But the
power company has appealed the injunction, with the judge
expected to rule on the appeal within 10 days, the source said.
Nevertheless, the Endesa source said the company is confident
Ralco will be operational by July despite the possible delays.
Ralco construction is 98% complete and the reservoir is due to
start being filled in May.
ENERSIS: Refinances, Prepays US$150M Debt
-------------------------------------------
Enersis SA (ENI), the Chilean utilities holding company,
announced Thursday it has prepaid US$150 million in debt on a
US$500 million loan signed in November as part of overall debt
restructuring, Dow Jones reports.
The move allowed Enersis to refinance and extend repayment on
the loans' US$350 million balance, which is set to mature in
November 2008 and includes a two-year grace period. Enersis, the
holding vehicle for Spanish utility Endesa SA's (ELE) Latin
American operations, signed the loan November 14 with banks
Santander Central Hispano, Banco Bilbao Vizcaya Argentaria, San
Paolo IMI, Bank of Tokyo Mitsubishi, Caja Madrid, and Deutsche
Bank.
The loan, according to Enersis, was financed with funds from the
2003 capital increase the company completed in December, as well
as from cash flow. Enersis managed to raise some US$2.1 billion
in fresh funds last year. Of the amount, Endesa contributed
US$1.22 billion, while minority shareholders came up with the
remaining US$885 million. Enersis said it is the largest-ever
contribution in this type of operation in Latin America.
Enersis has been restructuring its finances after being battered
by economic crises in Argentina and Brazil. Enersis'
consolidated debt dropped by some US$2.56 billion as of December
to US$6.42 billion from US$8.98 billion at 2002's end as a
result of the restructuring.
The company operates in Chile, Argentina, Brazil, Peru and
Colombia.
TELEFONICA CTC: Refunds Fixed-To-Mobile Phone Call Charges
----------------------------------------------------------
Chilean telecommunications company Compania de
Telecomunicaciones de Chile SA (CTC) said Thursday it has
started the process of refunding fees it charged to users who
called mobile telephones from CTC fixed-line phones, Dow Jones
relates. The company also said the reimbursement will be
completed by June, but did not say how much it will return.
Subtel, Chile's telecommunications regulator, cut in late
January the regulated access fees cell phone carriers can charge
other companies for dialing into their grids. CTC, however, had
not passed the cut on to customers. The Subtel action also
elicited complaints from smaller players in the market who claim
these fees take up roughly 40% of their earnings.
Earlier, competitors had complained that CTC was charging them
the old access fees, while reimbursing them at the new lower
rates.
CTC, 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.
===============
C O L O M B I A
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CHIQUITA BRANDS: Cyrus Freidheim to Retire from Board
-----------------------------------------------------
Chiquita Brands International, Inc. (NYSE: CQB) announced last
week that Cyrus F. Freidheim, Jr., 68, will retire as chairman
and director at Chiquita's May 25 Annual Meeting of
Shareholders.
Fernando Aguirre, 46, president and chief executive officer,
will assume responsibilities as chairman of the board.
"Cyrus has provided strong leadership over the past two years,"
Aguirre said. "His contributions have helped Chiquita deliver on
our financial turnaround and have provided a solid foundation
for our continuing transformation and growth. After I joined the
company in January, Cyrus ensured a smooth transition by
generously sharing his knowledge, expertise, contacts and
guidance.
"We thank Cyrus for his leadership, without which Chiquita would
not be where it is today," Aguirre said.
"A few years ago, I was asked by the board to lead Chiquita as
it emerged from bankruptcy,'' Freidheim said. "We had three
major tasks: (1) put Chiquita in a strong financial and
profitable position; (2) set a new direction for profitable
growth; and (3) establish a new leadership team for the future.
We have delivered on those commitments. The board and I have
concluded that the transition to new leadership has been
successfully completed, and I believe the time is now right for
me to retire.
"I have the fullest confidence in Chiquita's future under
Fernando as a more consumer- and marketing-centric
organization," Freidheim said. "In fact, I firmly believe the
company is well-positioned to achieve greater success than ever.
"It has been a privilege to serve as chairman and CEO of
Chiquita," Freidheim said. "I have enjoyed the challenges of the
turnaround, and I will miss working with Chiquita's dedicated
and talented employees."
Freidheim joined Chiquita's board in March 2002 as he was
retiring as vice chairman of Booz Allen Hamilton, a consulting
firm, and was immediately elected chairman, CEO and president of
Chiquita.
The restricted stock and stock options previously granted to
Freidheim will vest immediately upon his retirement in
accordance with a prior arrangement. The remaining noncash
expense of these awards of approximately $3.6 million will be
recorded in the first quarter 2004 instead of over the course of
the original vesting periods.
Chiquita Brands International is a leading international
marketer, producer and distributor of high-quality bananas and
other fresh produce sold primarily under the premium Chiquitar
brand. The company is one of the largest banana producers in the
world and a major supplier of bananas in Europe and North
America. The company also distributes and markets fresh-cut
fruit and other branded, value-added fruit products.
CONTACT: News Media: Michael Mitchell
513-784-8959
mmitchell@chiquita.com
Investors: Monique Wise
513-784-8935
mwise@chiquita.com
Web site: www.chiquita.com
COLOMBIA TELECOMUNICACIONES: To Borrow Money To Pay Partners
------------------------------------------------------------
The Colombian government said Friday that state-owned
telecommunications company Colombia Telecomunicaciones is
seeking a loan of up to COP900 billion (US$340 million) over the
next two years to pay debts it owes to former joint-venture
partners, according to Reuters. The government has also said it
will guarantee the loan.
In a document, the National Planning Department added that
Colombia Telecomunicaciones, the country's largest telco firm,
is taking out the loan according to market conditions.
The former partners that are seeking around US$1.6 billion from
the company in compensation for low returns from joint ventures
to install telephone lines include France's Alcatel, Siemens AG
of Germany, Japan's NEC Corp. and Itochu Corp.
Earlier this year, the government reached a preliminary
agreement with Canada's Nortel Networks Corp., which has filed a
lawsuit against Colombia Telecomunicaciones, for the payment of
US$80 million. The government did the same thing with Sweden's
Ericsson for US$56 million.
Colombia Telecomunicaciones was created by the government from
the ashes of the defunct Telecom, which it liquidated due to
unsustainable pension and wage bills, and pressures caused by
lawsuits.
===========
M E X I C O
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DESC: Informs about Documentation Presented to the SEC
------------------------------------------------------
DESC, S.A. de C.V. (NYSE: DES; BMV: DESC) informs about certain
documentation presented today to the "Securities and Exchange
Commission" (SEC) in the United States of America, which
contains the principal proposals to be submitted for
consideration of the shareholders of Desc, S.A. de C.V. ("Desc")
at the Annual General Ordinary Shareholders Meeting of Desc
("Shareholders' Meeting") to be held on April 26, 2004.
1. Presentation of the report of the Board of Directors, as
provided in article 172 of the Mexican General Corporations Law,
and the report of the audit committee of the board of directors,
regarding the fiscal year ended December 31, 2003 ("FY 2003"),
and resolutions regarding such reports.
These items will be presented at the Shareholders' Meeting.
2. Ratification of the actions undertaken by the board of
directors and the board committees during FY 2003.
Based principally on the documents referred in the first item
above, Desc's shareholders will vote on the ratification of the
actions undertaken by the board of directors and the board
committees during FY 2003.
3. Discussion, approval or modification, if appropriate, of the
financial statements of Desc as of December 31, 2003, with the
prior reading of the report of the statutory examiner.
These items will be presented at the Shareholders' Meeting.
4. Resolutions on the application of results.
The shareholders of Desc will be asked to approve at the
Shareholders' Meeting the application of Desc's net loss for FY
2003, which is equal to pesos $2,240,386,163.23 (Mexican
Currency), against Desc's Accumulated Profit Account.
5. Election or reelection, as the case may be, of the members of
the board of directors, as well as the board's committee
members, and of the statutory examiners.
a) The following persons are the nominees for election as the
Proprietary Directors of Desc:
SERIES "A" DIRECTORS
Fernando Senderos Mestre
Carlos Gomez Y Gomez
Ernesto Vega Velasco
Alberto Bailleres Gonzalez
Federico Fernandez Senderos
Pablo Jose Cervantes Belausteguigoitia
SERIES "B" DIRECTORS
Ruben Aguilar Monteverde
Valentin Diez Morodo
Carlos Gonzalez Zabalegui
Prudencio Lopez Martinez
Luis Tellez Kuenzler
b) The following directors are nominees for election as members
of the Board of Directors' Committees:
EVALUATION AND COMPENSATION COMMITTEE
Ernesto Vega Velasco Chairman
Carlos Gonzalez Zabalegui
Valentin Diez Morodo
AUDIT COMMITTEE
Prudencio Lopez Martinez Chairman
Ruben Aguilar Monteverde
Ernesto Vega Velasco
FINANCE AND PLANNING COMMITTEE
Fernando Senderos Mestre Chairman
Carlos Gomez Y Gomez
Federico Fernandez Senderos
Ernesto Vega Velasco
c) The reelection of Jose Manuel Canal Hernando y Daniel Del
Barrio Burgos, as Statutory Auditor and Alternate Statutory
Auditor, respectively, will be submitted for the consideration
of Desc's shareholders at the Shareholders' Meeting.
d) The dissolution of the Executive Committee will be submitted
for the consideration of Desc's shareholders at the
Shareholders' Meeting. If this proposal is approved, the Chief
Executive Officer of Desc will assume the duties of the
Executive Committee.
6. Resolution on the compensation to the directors and the
statutory examiners.
It will be proposed that the members of the Board of Directors,
and the Statutory Auditors, whether or not Alternates, of DESC,
S.A. de C.V., receive a fee of pesos $25,000.00, Mexican
Currency (TWENTY-FIVE THOUSAND AND 00/100 PESOS, MEXICAN
CURRENCY) for each meeting of the Board of Directors that they
attend, and for each meeting that they attend of the Evaluation
and Compensation, Audit, and Finance and
Planning Committees.
7. Report of the board of directors, as provided in article 60,
Section III of the General Provisions Applicable to Stock
Issuers and Other Participants in the Stock Market issued by the
Mexican National Banking and Securities Commission.
As required by Article 60, Section III of the General Provisions
Applicable to Stock Issuers and Other Participants in the Stock
Market issued by the Mexican National Banking and Securities
Commission, Desc will report that it did not repurchase any of
its shares during FY 2003.
8. Designation of deputies to formalize the resolutions adopted
at the shareholders' meeting.
Messrs. Fernando Senderos Mestre, Ernesto Vega Velasco, Juan
Marco Gutierrez Wanless, Arturo D'Acosta Ruiz, Ramon F. Estrada
Rivero and Fabiola G. Quezada Nieto will be proposed as
Delegates of this Shareholders Meeting to, jointly or severally,
perform the acts necessary to formalize and effectuate the
resolutions adopted at the Shareholders' Meeting, including,
without limitation, having the minutes formalized by a Notary
Public and recording the minutes with the Mexican Public
Registry of Commerce.
9. Reading and approval of the minutes of the shareholders'
meeting.
This item will be presented at the Shareholders' Meeting.
DESC, S.A. de C.V. (NYSE: DES; BMV: DESC) is one of the largest
industrial groups in Mexico, with 2003 sales of approximately
US$ 2 billion and nearly 14,000 employees, which through its
subsidiaries is a leader in the Automobile Parts, Chemical, Food
and Property sectors.
CONTACTS: Marisol Vazquez Mellado
Jorge Padilla Ezeta
Tel: (5255) 5261-8044
jorge.padilla@desc.com.mx
Maria Barona
Melanie Carpenter
Tel: 212-406-3692
desc@i-advize.com
Web site: www.desc.com.mx
TV AZTECA: Shareholders Approve $55M In Cash Distributions
----------------------------------------------------------
TV Azteca, S.A. de C.V. (NYSE: TZA; BMV: TVAZTCA), one of the
two largest producers of Spanish language television programming
in the world, announced that its Annual Ordinary Meeting of
Shareholders, held April 15 at its corporate offices in Mexico
City, approved distributions to shareholders for an aggregate
amount of US$55 million to be paid during 2004. Of the total
sum, US$52 million is planned to come from capital reductions
approved by the board of directors on February 24, and Ps.32
million (approximately US$3 million) from the company's
preferred annual dividends.
A payment of US$33 million is scheduled to be made on May 13,
and another of approximately US$22 million on November 11. Funds
are expected to be available to ADR holders on May 24 and on
November 22, respectively.
The cash distributions are part of the company's ongoing plan to
allocate a substantial portion of TV Azteca's expected cash
generation to reduce the company's debt by approximately US$250
million, and to make cash distributions to shareholders of over
US$500 million by 2008.
Shareholders also approved the appointment of three new board
members: Francisco MurguĦa, as an independent director, and
Mario San Rom n and Francisco Borrego, as internal board
members.
Francisco MurguĦa (56) is a leading producer of commercials and
short-length films in Latin America. Mr. MurguĦa has been
president of the Mexican Association of Film Makers (AMFI), the
National Counsel of Advertising (CNP) and the Mexican
Association of Advertising Agencies (AMAP).
Mario San Rom n (46) has been TV Azteca's Chief Operating
Officer since 2002. He joined TV Azteca in 1998, and was
initially in charge of Azteca 13 network. He was soon promoted
to responsibilities that include the company's distribution
channels. His experiences, methods and approach to audience
preferences have been key in strengthening the company's
programming decision processes. Mr. San Rom n holds a B.A. in
communication and marketing studies from the Universidad
Iberoamericana. Mr. San Rom n substitutes Jos Ignacio Morales,
an esteemed member of the board who passed away on February 15.
Francisco Borrego (39) has served as General Counsel and Legal
Director of the company since 1993. Mr. Borrego also serves on
the board of directors of Azteca Holdings. Mr. Borrego received
a degree in law from the Escuela Libre de Derecho.
With Thursday's shareholders' approval, the company's board is
comprised of 13 members, from 11 directors within the prior
structure. The proportion of independent board members to total
directors is 46%, above the regulatory 25%.
Company Profile
TV Azteca is one of the two largest producers of Spanish
language television programming in the world, operating two
national television networks in Mexico, Azteca 13 and Azteca 7,
through more than 300 owned and operated stations across the
country. TV Azteca affiliates include Azteca America Network, a
new broadcast television network focused on the rapidly growing
US Hispanic market, and Todito.com, an Internet portal for North
American Spanish speakers.
CONTACT: Investor Relations:
Bruno Rangel
5255 3099 9167
jrangelk@tvazteca.com.mx
Omar Avila
5255 3099 0041
oavila@tvazteca.com.mx
Tristan Canales
5255 3099 5786
tcanales@tvazteca.com.mx
Daniel McCosh
5255 3099 0059
dmccosh@tvazteca.com.mx
***********
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
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Copyright 2004. All rights reserved. ISSN 1529-2746.
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