/raid1/www/Hosts/bankrupt/TCRLA_Public/040429.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
Thursday, April 29, 2004, Vol. 5, Issue 84
Headlines
A R G E N T I N A
AMERICAN TRANSPORT: Court Order Initiates Bankruptcy Process
AUTOPISTAS DEL SOL: Moody's Maintains `D' Rating on $380M Bonds
BUENASIA: Reorganization Deteriorates into Liquidation
CASA NIZZO: Court Deems Bankruptcy Necessary
COLORIN INDUSTRIA: Moody's Maintains `D' Rating on $47M Bonds
CO MAR: Court Declares Company Bankrupt
CONSTRUCCIONES ELECTROMAR: Court Favors Creditor's Petition
DINAR LINEAS: Total Bankruptcy Follows Reorganization Attempt
DONNER: Court Approves Creditor's Involuntary Bankruptcy Motion
EL HALCON: Court Will Oversee Reorganization Process
ENRON: TGS Stake Projected To Go To Creditors
GANADERA PAMPEANA: Reorganization Concluded
GESAL: Commences Proceedings For Orderly Liquidation
KORTEC: Court Sets Deadline for Required Reports
KRATOS: Court Outlines Report Submission Schedule
LABOR MED: Court Rules Company is Bankrupt
LA CITE: Court Deems Bankruptcy Appropriate
NII HOLDINGS: Files Resale Registration Statement
SCP: Default Level on Corporate Bonds Unchanged
SERVI CHACO: Individual Reports Slated for September 2004
STOP CAR: Individual Reports Expected by September
SWISS: Initiates Bankruptcy Proceedings
TELENET: Court Converts Reorganization to Bankruptcy
*ARGENTINA: Creditors Demand Disclosure of Non-U.S. Assets
B E R M U D A
LORAL SPACE: MBSAT Satellite Completes In-Orbit Testing
TYCO INTERNATIONAL: Extends Exchange Offer On 6% Notes Due 2013
B R A Z I L
AMBEV: Labatt Exclusion From Merger Deal Possible
CEMIG: BNDES Sues Shareholder Over Loan Payments
EMBRATEL: Judge Oks Embratel-Telmex Deal
TELEMAR: Proposes Treasury Stock, Share Grouping Cancellation
TCP: Reduces Losses by 80% in 1Q04
VARIG: Resumes Johannesburg Flights
C H I L E
ENDESA CHILE: Net Profit Drops 66.5% 1Q04
C O L O M B I A
AVIANCA: Efromovich Issues Ultimatum
M E X I C O
ALFA: Indelpro Plans to Build Polypropylene Plant
DESC: Registers Higher Income in 1Q04
TV AZTECA: 1Q04 EBITDA Up 8% to a Record MXN601 Mln
P A R A G U A Y
* PARAGUAY: S&P Affirms Ratings, Removes CreditWatch
V E N E Z U E L A
SIDOR: Suffering US$3 Million Daily Loss on Strike
SIDOR: Signs Deal With Tenaris to Purchase Venezuelan HBI Plant
- - - - - - - - - - -
=================
A R G E N T I N A
=================
AMERICAN TRANSPORT: Court Order Initiates Bankruptcy Process
------------------------------------------------------------
Buenos Aires Court No. 14 declared American Transport Service
S.R.L. "Quiebra," reports online newspaper Infobae. The
declaration signals the Company to proceed with the bankruptcy
process, which will terminate with the liquidation of its
assets.
The court, assisted by Clerk No. 27, appointed Ms. Adriana
Beatriz Elisii as receiver who will verify creditors' claims
until June 29, 2004. After verifying creditors' claims, the
receiver will submit the results to court on August 26, 2004 via
individual reports. After the individual reports are processed
in court, the receiver will consolidate all these reports into a
general report then submit it to court on October 7, 2004.
CONTACT: Adriana Beatriz Elisii, Receiver
Av Cabildo 2040
Buenos Aires
AUTOPISTAS DEL SOL: Moody's Maintains `D' Rating on $380M Bonds
---------------------------------------------------------------
Moody's Latin America Calificadora de Riesgo S.A. maintains a
`D' rating on corporate bonds issued by Argentine company
Autopistas del Sol S.A., says the Comision Nacional de Valores.
The action, which was taken based on the Company's finances as
of the end of December 31, 2003, affects these bonds that were
issued under `Simple Issue:'
- US$210 million worth of "Obligaci˘n Negociable - Serie B"
maturing on August 1, 2009
- US$170 million worth of "Obligaci˘n Negociable - Serie A"
maturing on August 1, 2004.
A `D' rating is assigned to financial commitments that are in
payment default.
BUENASIA: Reorganization Deteriorates into Liquidation
------------------------------------------------------
Buenasia S.A., which was undergoing reorganization, entered
bankruptcy on orders from Buenos Aires Court No. 14. Infobae
relates that the court, which is assisted by Clerk No. 27,
appointed Mr. Angel Vello Vazquez to be the receiver on the
case. The receiver will conduct the credit verification process
"por via incidental."
CONTACT: Angel Vello Vazquez, Receiver
Viamonte 1592
Buenos Aires
CASA NIZZO: Court Deems Bankruptcy Necessary
--------------------------------------------
Cordoba Civil and Commercial Court No. 8 declared local company
Casa Nizzo S.R.L. bankrupt, reports Infobae. The Company was
undergoing reorganization when the ruling was issued.
The receiver, Mr. Jose Maria Rivarola, will verify claims "por
via incidental", as the court ordered. The receiver will also be
responsible for the individual and general reports.
CONTACT: Casa Nizzo S.R.L.
Av Alem 201
Cordoba
Jose Maria Rivarola, Receiver
Coronel Olmedo 51
Cordoba
COLORIN INDUSTRIA: Moody's Maintains `D' Rating on $47M Bonds
-------------------------------------------------------------
Moody's Latin America Calificadora de Riesgo S.A. maintains a
`D' rating on corporate bonds issued by Colorin Industria de
Materiales Sintet., according to data presented by the CNV on
its Web site. The action, taken by Moody's based on Colorin's
finances as of the end of December 2003, affects US$47 million
worth of "Obligaciones Negociables" issued under `Simple Issue.'
CO MAR: Court Declares Company Bankrupt
---------------------------------------
Judge Ballerini of Buenos Aires Court No. 24 declared local
company Co Mar S.A. "Quiebra", relates local daily La Nacion.
The court approved the bankruptcy petition filed by Aga S.A. to
which the Company failed to pay debts amounting to US$8652.54.
The Company will undergo the bankruptcy process with Mr. Roque
Alberto Pepe as its receiver. Creditors are required to present
their proofs of claims to the receiver for verification before
June 21, 2004. Creditors who fail to have their claims
authenticated by the said date will be disqualified from the
payments that will be made after the Company's assets are
liquidated at the end of the bankruptcy process.
Clerk No. 48, Dr. Diaz assists the court on the case.
CONTACT: Co Mar SA
Peru 345, Piso 8§ "D"
Buenos Aires
Roque Alberto Pepe, Receiver
Avenida Argentina 5785
Buenos Aires
CONSTRUCCIONES ELECTROMAR: Court Favors Creditor's Petition
-----------------------------------------------------------
Mr. Miguel Angel Olejnik successfully sought for the bankruptcy
of Construcciones Electromar S.R.L. after Judge Chomer of Buenos
Aires No. 10 declared the Company "Quiebra," reports La Nacion.
As such, Construcciones Electromar will now start the bankruptcy
process with Mr. Jacobo Beker as receiver. The Company's
creditors must submit their proofs of claim to the receiver
before June 9, 2004 for authentication. Failure to do so will
mean a disqualification from the payments that will be made
after the Company's assets are liquidated.
The bankruptcy petition was filed after the Company failed to
pay Mr. Olejnik debts amounting to US$11,063.38. Dra.
D'Alessandri, Clerk No. 19, assists the court on the case, which
will culminate in the liquidation of all of its assets.
CONTACT: Construcciones Electromar S.R.L.
Jovellanos 1225, Piso 2§
Buenos Aires
Jacobo Beker, Receiver
Salguero 2244, Piso 8§ "A"
Buenos Aires
DINAR LINEAS: Total Bankruptcy Follows Reorganization Attempt
-------------------------------------------------------------
Dinar Lineas Aereas S.A., a Salta-based company that was
undergoing reorganization, was declared bankrupt. Argentine news
source Infobae relates that Salta Civil and Commercial Court No.
2 ruled that the Company is "Quiebra Decretada".
The report adds that the court assigned Estudio Gauffin Fassini
y Asociados as receiver, which will verify creditors' proofs of
claim until June 7, 2004. The court also ordered the receiver to
prepare individual reports after the verification process is
completed, and have them ready by August 6, 2004.
CONTACT: Dinar Lineas Aereas S.A.
Mitre 101
Salta
Estudio Gauffin Fassini y Asociados
General Guemes 1587
Salta
DONNER: Court Approves Creditor's Involuntary Bankruptcy Motion
---------------------------------------------------------------
Judge Villanueva of Buenos Aires Court No. 23 declared Donner
S.R.L., a producer of plastic containers, bankrupt, says La
Nacion. The ruling comes in approval of the bankruptcy petition
filed by the Company's creditor, Carlos Gomez, for nonpayment of
US$17,500 in debt. Clerk No. 45, Dra. Timpanelli, assists the
court on the case, which will conclude with the liquidation of
the Company's assets.
The Company's receiver, Ms. Isabel De Francesco, will examine
and authenticate creditors' claims until June 14, 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: Donner S.R.L.
Somellera 895
Buenos Aires
Isabel De Francesco
Pasteur 154, piso 1§ "D"
Buenos Aires
EL HALCON: Court Will Oversee Reorganization Process
----------------------------------------------------
Tribunal civil y comercial No. 1 of Villa Mercedes (San Luis)
authorized local company El Halcon S.R.L. to start a
reorganization process. According to Infobae, the court granted
the Company's "Concurso Preventivo" motion, appointing Ms.
Graciela Susana Funes as receiver.
Creditors have until May 31, 2004 to submit their proofs of
claim to the receiver, who will verify these claims and submit
them to court as individual reports on July 27, 2004. After
these reports are processed in court, the receiver will then
prepare the general report and submit it to court on September
8, 2004.
The informative assembly, the last stage of a reorganization
process, will be held on March 17, 2005.
CONTACT: El Halcon S.R.L.
Junin 216
Villa Mercedes (San Luis)
Graciela Susana Funes, Receiver
Italia 810
Villa Mercedes (San Luis)
ENRON: TGS Stake Projected To Go To Creditors
---------------------------------------------
In exchange for the cancellation of a debt owed by the
controlling shareholder of Argentine natural gas transporter
Transportadora de Gas del Sur (TGS), bankrupt U.S. energy firm
Enron Corp. will pass its remaining stake in TGS to its
creditors, Dow Jones reveals, citing a source identified only as
an official of Petrobras Energia.
The source confirmed a report published Tuesday in Argentine
business daily El Cronista saying that Enron plans to hand those
holdings over to its creditors, who would then cancel the
defaulted debt of Compania de Inversiones de Energia SA (CIESA)
totaling US$220 million plus interest. The creditors could then
immediately sell the TGS holdings in secondary markets in Buenos
Aires and New York.
Earlier this month, TGS had said that Enron subsidiaries will
divest their collective 50% stake in CIESA through a two-part
process. After the transaction, Enron would still hold some
common shares in TGS. The parties involved did not give any
timeframe for the share transfers, and also did not define the
nature of the trust that will receive Enron's holdings. Enron
subsidiaries and Petrobras Energia Participaciones subsidiaries
- including Petrobras Energia - each own 50% of CIESA, which
controls 53.3% of TGS. Enron and Petrobras Energia also each
directly control 7.35% of TGS. The rest of TGS' shares float.
TGS clarified that "at no time will" Petrobras units control
more than 50% of CIESA. It added that under the deal, the
Petrobras and Enron units will agree to drop any claims
resulting from their partnership in CIESA and TGS.
The agreement still has to be approved by the Argentine gas
regulator and the U.S. court overseeing Enron's bankruptcy
proceedings.
GANADERA PAMPEANA: Reorganization Concluded
-------------------------------------------
Ganadera Pampeana S.A. concluded its reorganization process,
reports Infobae. The process was completed after Buenos Aires
Court No. 1, which is aided by Clerk No. 2, homologated the debt
agreement reached by the Company and its creditors.
GESAL: Commences Proceedings For Orderly Liquidation
----------------------------------------------------
Tribunal civil y comercial de Villa Mercedes (San Luis) No. 1
declared Gesal S.A. "Quiebra," reports Infobae. The declaration
signals the Company to proceed with the bankruptcy process,
which will close with the liquidation of its assets.
The court appointed Ms. Adriana Noemi Piccolo as receiver who
will authenticate proofs of claim until June 25, 2004.
Afterwards, the receiver will prepare the individual reports
based on the results of the authentication and then submit these
reports to court on August 24, 2004. After these results are
processed in court, the receiver will then submit the general
report on October 20, 2004.
CONTACT: Adriana Noemi Piccolo, Receiver
Hipolito Irigoyen 215
Villa Mercedes (San Luis)
KORTEC: Court Sets Deadline for Required Reports
------------------------------------------------
Buenos Aires Court No. 16 ordered Mr. Carlos Alberto Rivas, the
receiver tasked to oversee the bankruptcy proceedings of Kortec
S.A., to submit the individual reports to court on August 18,
2004. Individual reports contain the results of the claims
verification process that's expected to be completed by June 17,
2004. After submitting these reports to court, the receiver will
consolidate all of it into a general report and submit it to
court on September 30, 2004.
Kortec was declared bankrupt earlier this month by the court,
which is assisted by Clerk No. 32, granting approval to a
bankruptcy petition filed by the Company's creditor, Servicios
de Logistica SA, for nonpayment of US$1,240 in debt.
The case will conclude with the liquidation of all of its assets
to repay creditors. Repayment will be made based on the results
of the verification process.
CONTACT: Kortec SA
Humboldt 269
Buenos Aires
Alberto Rivas, Receiver
Uruguay 239
Buenos Aires
KRATOS: Court Outlines Report Submission Schedule
-------------------------------------------------
After recently declaring Kratos S.A. bankrupt, Buenos Aires
Court No. 20 ordered Mr. Bernardo Mazer, the receiver, to submit
individual reports on August 30, 2004. The submission of the
said reports follows the completion of the verification process,
a stage of the bankruptcy process wherein the receiver
determines the names of creditors who will be eligible for
repayment. The receiver is expected to complete verifications by
July 5, 2004.
After submitting the individual reports, the receiver will
prepare the general report and hand it to court on October 11,
2004. The case will culminate in the liquidation of all of the
Company's assets to repay creditors.
CONTACT: Kratos SA
Defensa 840
Buenos Aires
Bernardo Mazer, Receiver
Avenida Corrientes 4434, Piso 8 "24"
Buenos Aires
LABOR MED: Court Rules Company is Bankrupt
------------------------------------------
Labor Med S.R.L. will now enter bankruptcy after Buenos Aires
Court No. 9 declared it "Quiebra," reports Infobae. With
assistance from Clerk No. 27, the court named Mr. Pedro Luis
Santa Maria as receiver. He will verify creditors' claims until
May 3, 2004.
Following claims verification, the receiver will submit the
individual reports, which were prepared based on the
verification results, to court on May 31, 2004. The general
report is due for submission on July 12, 2004.
The Company's bankruptcy case will close with the liquidation of
its assets to pay its creditors.
CONTACT: Labor Med S.R.L.
Talcahuano 438
Buenos Aires
Pedro Luis Santa Maria, Receiver
Lavalle 1430
Buenos Aires
LA CITE: Court Deems Bankruptcy Appropriate
-------------------------------------------
La Cite de Buenos Aires S.A., which was undergoing
reorganization, entered bankruptcy on orders from Buenos Aires
Court No. 14. Infobae relates that the court, which is assisted
by Clerk No. 27, appointed Ms. Adriana Beatriz Elisii to be the
receiver on the case. The receiver will conduct the credit
verification process in the ordinary course. The court ordered
the receiver to submit the general report on October 5, 2004.
CONTACT: Adriana Beatriz Elisii
Av Cabildo 2040
Buenos Aires
NII HOLDINGS: Files Resale Registration Statement
-------------------------------------------------
NII Holdings, Inc. (Nasdaq: NIHD) announced Tuesday that it
filed with the Securities and Exchange Commission a registration
statement on Form S-3 for the resale by selling security holders
of notes and underlying shares of common stock relating to its
$300 million aggregate principal amount 2 7/8% convertible notes
due 2034. The notes were privately placed in January and
February 2004 and are subject to a registration rights
agreement. NII anticipates that the registration statement will
become effective on or before July 28, 2004, as required by the
registration rights agreement.
About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in Reston,
Va., is a leading provider of mobile communications for business
customers in Latin America. NII Holdings, Inc. has operations in
Argentina, Brazil, Mexico and Peru, offering a fully integrated
wireless communications tool with digital cellular service,
text/numeric paging, wireless Internet access and Nextel Direct
Connect(R), a digital two-way radio feature. NII Holdings, Inc.
trades on the NASDAQ market under the symbol NIHD. Visit the
Company's website at http://www.nii.com.
Nextel, the Nextel logo, Nextel Online, Nextel Business Networks
and Nextel Direct Connect are trademarks and/or service marks of
Nextel Communications, Inc.
CONTACT: Investor Relations: Tim Perrott
(703) 390-5113
tim.perrott@nii.com
Media Relations: Claudia E. Restrepo
(786) 251-7020
claudia.restrepo@nii.com
SCP: Default Level on Corporate Bonds Unchanged
-----------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintains an `raD' rating on various corporate bonds issued by
Sociedad Comercial del Plata S.A., according to the Comision
Nacional de Valores, CNV. The action, which was taken based on
the Company's financial status as of December 31, 2003, applies
to the following bonds:
- US$25 million of "Serie 8, emitida bajo el Progr. Global de
Obligaciones Negociables por un monto de US$400 Millones," under
Series and/or Class. The bonds matured on August 12, 2002.
- US$40 million of "Serie 7, emitida bajo el Progr. Global de
Obligaciones Negociables por un monto de US$400 Millones," under
Series and/or Class. The maturity of the bonds was not
disclosed.
- US$125 million of "Serie 6, emitida bajo Progr. Global de
Obligaciones Negociables por un monto de US$400 Millones," under
Series and/or Class. The maturity of the bonds was not
disclosed.
- FRF60 million of "Serie 4, emitida bajo Progr. Global de
Obligaciones Negociables por U$S 400 Millones," under Series
and/or Class. The bonds matured on December 21, 2002.
- US$400 million of "obligaciones negociables" under Program.
The maturity of the bonds was not disclosed.
According to S&P, an obligation is rated `raD' when it is in
payment default, or the obligor has filed for bankruptcy. The
rating is used when interest or principal payment are not made
on the date due even if the applicable grace period has not
expired, unless the ratings agency believes that such payments
will be made during such grace period.
SERVI CHACO: Individual Reports Slated for September 2004
--------------------------------------------------------
Buenos Aires Court No. 5 ordered Ms. Zulma Ghigliano, the
receiver tasked to oversee the bankruptcy proceedings of Servi
Chaco S.A., to submit the individual reports to court on
September 3, 2004. Individual reports contain the results of the
claims verification process that's expected to be completed by
June 6, 2004.
After submitting these reports to court, the receiver will
consolidate all of it into a general report and submit it to
court on October 18, 2004. Servi Chaco S.A. was declared
bankrupt by the court, which is assisted by Clerk No. 10,
granting approval to a bankruptcy petition filed by Gulf Oil
Argentina SA.
The case will conclude with the liquidation of all of its assets
to repay creditors. Repayment will be made based on the results
of the verification process.
CONTACT: Servi Chaco SA
Avenida Presidente Roque Saenz Pena 651, Piso 5
Buenos Aires
Zulma Ghiliano
Pasaje Cipolletti 554
Buenos Aires
STOP CAR: Individual Reports Expected by September
--------------------------------------------------
After recently authorizing Stop Car S.A. to undergo a
reorganization process, Buenos Aires Court No. 7 ordered Ms.
Alicia Rita Romeo, the receiver, to submit individual reports on
September 16, 2004.
The submission of the said reports follows the completion of the
verification process, a stage of the bankruptcy process wherein
the receiver determines the names of creditors who will be
eligible for repayment. The receiver is expected to complete the
verifications by August 4, 2004.
After submitting the individual report, the receiver will
prepare the general report and hand it to court on October 29,
2004. The court, which is assisted by Clerk No. 13, scheduled
the informative assembly for February 10, 2005.
CONTACT: Stop Car SA
Talcahuano 1071
Buenos Aires
Alicia Romeo, Receiver
Rodriguez Pena 694, piso 5o "G"
Buenos Aires
SWISS: Initiates Bankruptcy Proceedings
---------------------------------------
Buenos Aires Court No. 23 declared Swiss S.R.L. "Quiebra,"
reports Infobae. Clerk No. 46 assists the court on the case,
which will close with the liquidation of the Company's assets to
repay creditors.
Ms. Susana Haydee Vacchelli, the court-appointed receiver, will
verify creditors' claims until June 7, 2004 and then prepare the
individual reports based on the results of the verification
process.
The individual reports will then be submitted to court on August
3, 2004 followed by the general report on September 15, 2004.
CONTACT: Swiss S.R.L.
Uruguay 546
Buenos Aires
Susana Haydee Vacchelli, Receiver
Montevideo 571
Buenos Aires
TELENET: Court Converts Reorganization to Bankruptcy
----------------------------------------------------
Telenet S.A., which was undergoing reorganization, entered
bankruptcy on orders from tribunal civil y comercial de Cordoba
No. 1, according to Infobae. The court assigned Mr. Raul Ribotta
as the Company's receiver. The credit verification process will
be done "por via incidental", the report adds.
CONTACT: Telenet S.A.
Dean Funes 501
Cordoba
Raul Ribotta, Receiver
Rivera Indarte 350
Cordoba
*ARGENTINA: Creditors Demand Disclosure of Non-U.S. Assets
----------------------------------------------------------
Creditors claiming US$735 Million in attachment orders related
to Argentina and the Province of Buenos Aires' US$100 billion
bond default in December 2001 have filed a motion in New York
demanding that these governments divulge their non-U.S.
commercial assets, relates Dow Jones.
The creditors have asked the court to "sanction Defendants for
their refusal to provide discovery" about the transferring of
assets and "their attempts to avoid this discovery by making
false statements, and otherwise misleading the court."
This motion comes more than a month after Judge Thomas Griesa
postponed ruling on whether Argentina should be forced to reveal
its non-U.S. commercial assets to foreign creditors, so as to
give the country time to prepare a proper brief on the matter.
This deferment came after Judge Griesa upheld a ruling he made
earlier this year that creditors holding judgments be permitted
to locate the government's financial assets worldwide.
Meanwhile, Argentina is trying to prepare a complex and
controversial restructuring offer including a 75% cancellation
on the defaulted debt as it faces almost $1 billion in default-
related litigation to date.
Argentina's Economy Minister has issued a statement on Tuesday
saying a final debt-restructuring offer will be presented to the
Securities and Exchange Commission in early June.
=============
B E R M U D A
=============
LORAL SPACE: MBSAT Satellite Completes In-Orbit Testing
-------------------------------------------------------
The MBSAT broadcast communications satellite, built by Space
Systems/Loral (SS/L) for Mobile Broadcasting Corporation (MBCO)
of Japan and SK Telecom of Korea, has successfully completed its
in-orbit testing and was officially delivered on orbit Tuesday.
The satellite was formally accepted during a signing ceremony at
MBCO's Tokyo headquarters.
After its successful launch on March 13, 2004, SS/L engineers
put the MBSAT satellite through a rigorous test and check out
program and maneuvered the spacecraft to its final orbital
location at 144 degrees East longitude. Engineers also
successfully demonstrated the transmission of broadcast signals
through the satellite to small handheld user terminals.
The MBSAT platform incorporates a number of innovative
technology applications with SS/L's highly reliable and space-
proven 1300 bus:
-- A state-of-the-art electric propulsion system has been
incorporated for orbital stationkeeping maneuvers. This system,
using flight-proven Stationary Plasma Thrusters (SPT),
significantly extends the satellite's useful lifetime.
-- A 12-meter unfurlable reflector provides exceptional coverage
and quality of service. The reflector, built by Northrop Grumman
Astro Aerospace, is a key component of SS/L's proprietary S-band
antenna system. Signal verification tests confirmed accurate
deployment of the reflector with excellent correlation between
measured antenna performance and pre-launch predictions.
-- Satellite pointing accuracy and overall performance has been
enhanced by an improved attitude control system based on four
active reaction wheels and Ring Laser Gyros for three-axis body-
stabilization.
-- Next generation triple junction gallium arsenide solar cells
provide an efficiency improvement of 50 percent over previous
generation silicon solar cells.
"The successful delivery of MBSAT has again demonstrated SS/L's
ability to combine innovation with flight-proven heritage to
satisfy our customer's unique requirements," said C. Patrick
DeWitt, president, Space Systems/Loral. "The MBSAT satellite
will serve as a model platform for similar direct-to-user
services around the world."
The MBSAT payload consists of four high power transponders for
direct broadcast services and terrestrial repeater networks
covering Japan and Korea. The satellite will deliver high-
quality music, video and data to mobile users in Japan and Korea
through a variety of mobile terminals, including those in cars,
ships, trains as well as handheld terminals, personal digital
assistants, cellular phones and home portables. A very small
antenna will be sufficient to receive these broadcast signals
even inside buildings and in vehicles moving at high speeds.
Mobile Broadcasting Corporation was established to provide cars
and mobile terminals with digital satellite broadcasting for
audio, video and data services throughout Japan. MBCO's new
broadcasting system was authorized by the Japanese Government
and registered with the ITU. MBCO's major shareholders are
Toshiba, SK Telecom, Sharp, Toyota, Yokogawa, Matsushita, NTT
Data, Yusen, Nippon TV, Mitsui Sumitomo Insurance, Fujitsu, and
Panasonic. So far 77 Japanese companies are MBCO partners.
Several foreign companies own significant interests in the MBCO
business venture, while many others are currently considering
investment. For more information, visit MBCO's web site at
www.mbco.co.jp.
SK Telecom Co., Ltd. is Korea's leading wireless
telecommunications services provider and a pioneer in the
commercial development and provision of high-speed wireless data
and Internet services. The company serves nearly 18 million
subscribers throughout Korea, the majority of whom own data-
capable handsets. SK Telecom has established a new company, TU
Media Corp. with more than 150 investor companies. TU Media
Corp. will provide mobile digital multimedia broadcasting
services throughout the Korean Peninsula. For more information,
visit SK Telecom's web site at www.sktelecom.com and TU Media
Corp's web site at www.tu4u.com.
Space Systems/Loral, a subsidiary of Loral Space &
Communications (OTC Bulletin Board: LRLSQ), is a premier
designer, manufacturer, and integrator of powerful satellites
and satellite systems. SS/L also provides a range of related
services that include mission control operations and procurement
of launch services. Based in Palo Alto, Calif., the company has
an international base of commercial and governmental customers
whose applications include broadband digital communications,
direct-to-home broadcast, defense communications, environmental
monitoring, and air traffic control. SS/L satellites have
amassed more than 1000 years of reliable on-orbit service. SS/L
is ISO 9001:2000 certified. For more information, visit
www.ssloral.com.
Loral Space & Communications is a satellite communications
company. In addition to Space Systems/Loral, Loral, through its
Skynet subsidiary, owns and operates a fleet of
telecommunications satellites used to broadcast video
entertainment programming, and for broadband data transmission,
Internet services and other value-added communications services.
CONTACT: Loral Space & Communications
John McCarthy
212/338-5345
Web site: http://www.loral.com
TYCO INTERNATIONAL: Extends Exchange Offer On 6% Notes Due 2013
---------------------------------------------------------------
Tyco International Ltd. announced Tuesday that Tyco
International Group S.A. has extended its offer to exchange (the
"Exchange Offer") an aggregate principal amount of
$1,000,000,000 of its outstanding 6% Notes due 2013 (the "Old
Notes") that were issued on Nov. 12, 2003 for its new 6% Notes
due 2013 (the "Exchange Notes") that have been registered under
the Securities Act of 1933.
The current Exchange Offer, scheduled to expire at 5 p.m., EDT,
on April 26, 2004, has been extended until 5 p.m., EDT, on May
3, 2004. Tenders with respect to approximately $957,742,000
aggregate principal amount of the Old Notes, which represents
95.77% of the total outstanding principal amount of the Old
Notes, have been received to date.
This announcement is not an offer to sell any securities or a
solicitation of any offer to buy any securities. The exchange
offer is being made solely by means of a prospectus dated March
26, 2004.
Tyco International Ltd. is a diversified manufacturing and
service company. Tyco is the world's leading provider of both
electronic security services and fire protection services; the
world's leading supplier of passive electronic components; a
world leader in the medical products industry; and the world's
leading manufacturer of industrial valves and controls. Tyco
also holds a strong leadership position in plastics and
adhesives. Tyco operates in more than 100 countries and had
fiscal 2003 revenues from continuing operations of approximately
$37 billion.
===========
B R A Z I L
===========
AMBEV: Labatt Exclusion From Merger Deal Possible
-------------------------------------------------
The CEO of Belgian brewing giant Interbrew SA said that if the
company fails to reach an agreement in its court case with
Mexico's second-largest brewer Grupo Femsa, it is possible that
its U.S. unit Labatt USA would not be included in its proposed
merger with Brazilian brewing company Cia de Bebidas das
Americas (AmBev), relates AFX.
Interbrew CEO John Brock said, "The worst-case scenario would be
if the court grants an injunction or if it didn't reach an
agreement with Femsa." "If we didn't reach an agreement, Labatt
USA would be excluded from the transfer of Labatt to AmBev," he
said. However, he added that "this is such a small percentage of
the overall volume that it wouldn't affect our majority
ownership of AmBev."
Under the terms of the merger, Interbrew will acquire 100% of
AmBev for EUR3.2 billion, while AmBev will get Interbrew's North
American assets worth EUR4.6 billion. These assets include
Interbrew's 70% interest in Labatt USA and its 30% stake in
Femsa Cerveza SA.
Femsa challenged Interbrew's right to sell AmBev 70% of Labatt
USA, which distributes both Labatt and Femsa beers in the U.S.
Analysts say the tough stance suggests Femsa might also want to
buy back Interbrew's share of Femsa Cerveza, which it appears is
allowed to do under its contract with Interbrew.
Brock, however, said he is "confident that there remains a
negotiated settlement to be done," that this could involve
either "a redefinition of the relationship with Femsa" or a
parting.
CEMIG: BNDES Sues Shareholder Over Loan Payments
------------------------------------------------
A minority shareholder of Brazilian integrated power company
Companhia Energetica de Minas Gerais (Cemig) is the subject of a
lawsuit filed by Brazil's development bank Banco Nacional de
Desenvolvimento Economico e Social (BNDES), Dow Jones relates,
citing a report by local newswire Agencia Estado. The suit is
seeking US$750 million in overdue loan payments from Southern
Electric Brasil Participacoes (SEB), which holds 33% of voting
shares in Cemig.
"Negotiations were in the backburner for a long time, but we
decided to make it a priority now, so we're taking the group to
court," BNDES's chief financial officer Roberto Timotheo da
Costa was quoted by the Estado report as saying. He added that
BNDES might seek to take the place of SEB, which counts U.S.
power group AES Corp. as one of its important stakeholders, in
Cemig's capital structure, although that's not the best solution
in the bank's view, the report said.
In 1997, BNDES loaned SEB US$600 million when a minority stake
in Cemig was put on the block, but for the consortium to acquire
the control and decision-making power on Cemig's board, it had
to shell out US$1.05 billion overall. However, Cemig has been
under the control of the state of Minas Gerais since former
Governor Itamar Franco broke off in 1999 a shareholders'
agreement that allowed SEB to control Cemig despite having just
a 33% stake. Since then, the dispute has been tied up in court,
and SEB hasn't paid any installments on its debt to federally
run BNDES. All initial payments were rescheduled by BNDES owing
to the confusion over Cemig's ownership.
EMBRATEL: Judge Oks Embratel-Telmex Deal
----------------------------------------
The bitter bidding war for Brazil's largest long-distance
carrier Embratel Participacoes has come to an end after a U.S.
bankruptcy judge approved Tuesday a deal to sell the 52% voting
stake of U.S. long-distance firm MCI Inc. in Embratel to Mexican
communications giant Telmex, says Reuters. Brazilian consortium
Calais Patricipacoes, which engaged Telmex in a fierce bidding
war that stretched on for weeks, expressed dismay at the
decision.
"We are naturally very disappointed with the court's decision
and the outcome of this process. We regret the loss of value for
MCI's shareholders, and the lost business opportunity," Calais
said in a statement.
However, Judge Arthur Gonzalez of the U.S. Bankruptcy Court in
Manhattan rejected Calais' claim that its bid was not
considered, and said the sales process was "entirely fair."
Despite a much higher bid of US$550 million for Embratel, MCI
went for Telmex's US$400 million offer because Brazilian
regulators are highly likely to block a Calais-MCI deal on
antitrust grounds.
TELEMAR: Proposes Treasury Stock, Share Grouping Cancellation
-------------------------------------------------------------
Management of Tele Norte Leste Participacoes and its
subsidiary Telemar Norte Leste have each called Extraordinary
Shareholders Meetings for May 13, 2004 in order to cancel a
portion of their existing treasury stock with no share capital
reduction, and simultaneously to change the number of shares
representing a round lot from 1,000 shares to one share of the
same type and class.
TNL- Tele Norte Leste Participacoes - Management proposes
canceling 100% of the 4,624,336,826 preferred shares currently
held in treasury, and 2,312,168,000 of the common shares,
representing a portion of total common shares held in treasury
(4,156,100,000) thus maintaining the ratio of 1/3 common shares
to 2/3 preference shares, pursuant to Company by-laws.
TMAR- Telemar Norte Leste - Management proposes canceling
4,211,694,719 class "A" preferred shares (TMAR5), representing a
portion of current treasury stock (4,435,184,358). Those shares
that are not canceled (223,489,639) will become restricted
shares on behalf of Sudene, until such time as the tax incentive
projects are completed which gave rise to the shares.
Share Grouping - Management of both Tele Norte Leste (TNE) and
Telemar Norte Leste (TMAR) will submit proposals at each of
their Extraordinary Shareholders Meetings to change the grouping
of their respective shares from the ratio of 1,000 shares per
round lot to one share of the same type and class.
Using Tele Norte Leste Participacoes as an example, the number
of shares outstanding would be converted, after the respective
cancellations, on the effective date from 129,306,291,613 common
shares to 129,306,291 and 258,612,581,399 preference shares to
258,612,581 shares. The underlying value and the price quoted on
the stock exchange would change under same ratio.
Taking the quote from April 26, 2004, TNLP4 closed at R$38.13
per thousand shares. After the proposed share grouping, that
stock quote of R$38.13 would represent a per share price.
The grouping of shares does not impact Tele Norte Leste
Participacoes ADRs (TNE), which are already traded on the basis
of 1:1,000 preferred shares.
The share grouping has as its goal:
a) to reduce administrative and operating costs to the Company
and its shareholders;
b) to increase the efficiency of reporting controls, as well as
the disclosure of information;
c) to improve clarity of the company's shares in relation to the
company's capitalization and the stock market, through the
adoption of one share per trading unit and
d) to reduce the potential for information or disclosure
mistakes, thereby being more responsible to the Company's
shareholders.
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
TCP: Reduces Losses by 80% in 1Q04
----------------------------------
Telesp Celular Participacoes S.A. (NYSE: TCP) (BOVESPA: TSPP3
(ON) TSPP4 (PN) (TCP), one of the companies of the largest
mobile telephony group in the southern hemisphere, announced
Tuesday its consolidated results from the first quarter 2004
(1Q04).
Highlights:
1Q04 4Q03 % 1Q03 % 1Q03
Brazilian reals TCO
(millions)
Net operating
income 1,718.6 1,877.3 -8.5% 927.2 85.4% 413.1
Net operating
income from
services 1,472.4 1,495.3 -1.5% 820.7 79.4% 375.7
Net operating
income from
sale of
goods 246.2 382.1 -35.6% 106.5 131.2% 37.4
Total operating
costs (1,019.8) (1,255.4) -18.8% (519.6) 96.3% (250.9)
EBITDA 698.8 621.9 12.4% 407.6 71.4% 162.2
EBITDA
margin (%) 40.7% 33.1 7.6 pts 44.0% -3.3 pts 39.3%
Depreciation and
Amortization (295.5) (335.8) -12.0% (248.5) 18.9% (46.9)
EBIT 403.3 286.1 41.0% 159.1 153.4% 115.2
Profit (loss)
for the
period (**) (35.3) (177.5) -80.1% (131.5) -73.2% 92.2
1Q03
Brazilian reals (millions) TCP + TCO %
Net operating income 1,340.3 28.2%
Net operating income from services 1,196.4 23.1%
Net operating income from sale of goods 143.9 71.0%
Total operating costs (770.5) 32.4%
EBITDA 569.8 22.6%
EBITDA margin (%) 42.5% -1.8pts
Depreciation and amortization (295,4) 0.0%
EBIT 274.4 47.0%
Profit (loss) for the period (**) (104.2) (66.1%)
1Q04 4Q03 % 1Q03 %
Total subscribers
(thousands) 7,970 7,495 6.3% 6,102 30.6%
Post-paid 1,495 1,475 1.4% 1.431 4.5%
Pre-paid 6,475 6,020 7.6% 4.671 38.6%
Market
share *(%) 61.5% 62.1% (0.6%) 65.5% (4.0%)
Net new
subscribers
(thousands) 475 810 (41.4%) 42 1,031.0%
Post-paid 20 28 (28.6%) 4 400.0%
Pre-paid 455 782 (41.8%) 38 1,097.4%
Market share of net
new subscribers*
(%) 53.1% 53.0% 0.1% 23.9% 29.2 %
Market
penetration
(%) 33.0% 31.2% 1.8% 24.4% 8.6 %
TCP closed the quarter with 14.295 million customers, which
represents growth of 36.4% over its total customer base in 1Q03
(including TCO) and 7.5% compared with 4Q03. TCP claimed at
54.1% share of new subscribers for 1Q04 in the Brazilian states
where it operates. Net additions for 1Q04 totaled 997,000 new
customers, 460.2% more than the additions recorded in the same
period of the previous year (272% excluding the purge of the
customer base performed in 1Q03).
TCP recorded losses of BRL35.3 million in 1Q04, a reduction of
80% from a net loss of BRL177.5 million in 4Q03. EBITDA reached
BRL698.8 million, 22.6% greater than that achieved in 1Q03
(including TCO), producing an EBITDA margin of 40.7%.
Net income from services was BRL1,472.4 million in 1Q04,
representing an increase of 23.1% over 1Q03, and 32.1% if the
effect of SMP is excluded. Revenues from data showed strong
growth, registering an 141% increase over 1Q03 and constituting
4.7% of net income from services in 1Q04 (2.4% in 1Q03).
Web site: http://www.vivo.com.br/ri
VARIG: Resumes Johannesburg Flights
-----------------------------------
After a five-year absence, Brazil's leading airline Varig has
resumed flights to South Africa, reports Africa News Services.
Varig is now under a code-sharing scheme with South African
Airways (SAA) on the Johannesburg-Sao Paulo route. The code-
share agreement is fashioned to allow each carrier to book
passengers on each other's flights. Under this scheme, SAA will
offer six flights weekly to Sao Paulo from Johannesburg while
Varig will fly into Johannesburg four times weekly from Sao
Paulo.
SAA President Andrer Viljoen said that the Johannesburg - Sao
Paulo route has shown tremendous growth as trade between Brazil
and South Africa has increased 151% between 1999 and 2003. The
partnership between Varig and SAA would boost business
opportunities and increase tourism potential between Brazil and
South Africa, he added.
This development is in line with the trilateral agreement
between South Africa, Brazil and India which promises greater
cooperation in the southern hemisphere. With this agreement in
place, Sao Paulo would act as the main gateway from where South
African passengers could connect to various other South American
cities in anticipation of the free trade zone planned for
implementation toward the end of 2005.
=========
C H I L E
=========
ENDESA CHILE: Net Profit Drops 66.5% 1Q04
-----------------------------------------
Chilean electrical generation company Endesa announced in a
statement to Chile's stock market regulator Tuesday that its net
profits for the 1st quarter have dropped by 66.5% to CLP8.033
billion from the CLP23.98 billion the company registered for the
same period in 2003, according to Reuters.
In its statement, Endesa singled out tax provisions, exchange
rate differences and lower electricity rates in Chile as reasons
for the poor performance, adding that lower revenues from
affiliated companies are also to blame.
Revenues fell 1.05% to CLP243.33 billion while operating profit
-- defined in Chile as earnings before interest, taxes,
extraordinary items and noncash financial charges -- slid 7.6%
to CLP89.73 billion compared with a year earlier but was an
improvement on the fourth quarter of 2003.
Endesa is a unit of Chile-based energy group Enersis (ENE)(ENI),
which in turn is controlled by Spain's Endesa (ELE). It has
operations in Chile, Argentina, Brazil, Peru and Colombia.
===============
C O L O M B I A
===============
AVIANCA: Efromovich Issues Ultimatum
------------------------------------
Calling the bidding war for Colombian airline Avianca a "dumb
game", Brazilian oil entrepreneur German Efromovich said Tuesday
he is giving the owners of the bankrupt airline until May 31 to
decide on his offer or he walks, Reuters reports.
In a display of impatience, Mr. Efromovich said, "We're not
going to spend our entire lives in this dumb game. It's not
happening. We have other investment options and we can't stick
around waiting." The Brazilian businessman, who also controls
regional Brazilian airline Ocean Air, threatened to abandon his
March bid on May 31 unless the carrier's 50-50 owners, Valores
Bavaria and Colombian Coffee Growers' Federation, make a
decision on the bids. He also said his US$20 million guarantee
to Avianca to follow through with acquisition expires on that
date. "We extended (the guarantee) until May 31. But that's as
long as it is going to go on," Efromovich said.
Mr. Efromovich had offered through his Brazilian company Sinergy
to buy 75% of Avianca with a US$64 million capital infusion and
the assumption of its debt totaling US$300 million. In fact, Mr.
Efromovich and Avianca's shareholders have already announced a
final agreement at a press conference in Bogota. A few days
later, however, a partnership between Continental Airlines and
Panama's Copa Airlines dampened Mr. Efromovich's bid when it
announced its US$360 million offer for Avianca. The partnership,
however, has yet to reveal details of their bid. Its owners say
they are studying both proposals.
But for Mr. Efromovich, "there is only one proposal, there
aren't two," because he has yet to see an official Copa-
Continental offer. He insisted that he is still in the thick of
the fight for Avianca, and said he might review his bid if and
when Copa-Continental makes its offer public. He had said
earlier this month that he would not up his bid. "I don't deal
with fortune-telling. I deal with events as they happen. When
there is a change ... (we) will meet, evaluate and see what to
do," he said.
Avianca is in the middle of bankruptcy proceedings in a U.S.
court, which has to approve any bid for the airline.
===========
M E X I C O
===========
ALFA: Indelpro Plans to Build Polypropylene Plant
-------------------------------------------------
Indelpro, S.A. de C.V., the leading Mexican producer of
polypropylene, announced Tuesday plans for a new plant to be
built with 350 thousand tons per year of polypropylene capacity.
The plant is scheduled to begin operations during the third
quarter of 2006.
Based in Mexico, Indelpro is a subsidiary of Alpek S.A. de C.V.,
the petrochemical unit of ALFA and the largest producer of
petrochemicals in Mexico, and of Basell, the world's largest
producer of polypropylene and advanced polyolefin products, a
leading supplier of polyethylene and catalysts, and a global
leader in the development and licensing of polypropylene and
polyethylene processes.
The new plant, which will be one of the largest in the Americas,
would give Indelpro a combined capacity of 570 thousand tons per
year .The current site would then be one of the largest
polypropylene complexes in North America. Increased production
and the greater efficiencies derived from better utilization of
the overall production infrastructure will also improve the
competitiveness of Indelpro.
The recent signing of a long term contract with PEMEX
Refinaci˘n, a subsidiary of Petr˘leos Mexicanos, ensures raw
material supplies. This agreement makes possible to use domestic
hydrocarbons in creating higher value added products, converting
them to high-quality polymers that will support the growth of
the Mexican plastics industry.
Raul Millares, President oflndelpro, commented, "The new plant
strengthens our position in the most dynamic and demanding
segments of the Mexican market. The improved product
capabilities available with the newest and successful1y proven
technology from Basel1, along with our excel1ent customer
service orientation, wil1 al1ow us to continue as the supplier
of choice for Polypropylene consumers. Furthermore, we wil1 be
able to access new market sectors and broaden the uses of
polypropylene beyond the current inter-product frontier of
polymers. This is our response to the great support we have
received from our customers through our more than 10 years of
operations".
Polypropylene is one of the highest growth thermoplastics in
Mexico and the world, with an average annual growth rate often
percent in the last ten years. Its physical properties and ease
of processing make it very versatile and have lead to its use in
a wide range of products from bags and sacks to packaging films
on covers and boxes used for beverages, food and cosmetics. It
is also used in toys and plastic containers, threads and fabrics
for diapers. Likewise, due to its lightweight characteristic it
is the material of choice in the manufacture of many automobile
parts, like fascias and dashboards. Indelpro is present in the
market for polypropylene resins under the Valtec r and Profax r
brands.
CONTACT: Rodolfo Garcˇa V.
(52 833) 229 3900 and 229 3980
rgarci@indelpro.com
DESC: Registers Higher Income in 1Q04
-------------------------------------
Desc, S.A. de C.V. (NYSE: DES; BMV: DESC) announced Tuesday its
results for the first quarter ended March 31, 2004 (1Q04). All
figures were prepared according to generally accepted accounting
principles in Mexico.
Highlights
- Sales and exports were 3.1% and 7.6% higher, respectively,
when compared to 1Q03.
- Operating income was 12.4% higher than in 1Q03.
- Desc successfully concluded a capital increase for
approximately US $248 million.
- The funds generated by the capital increase will be used to
reduce the Company's debt.
Sales
During 1Q04 total sales in dollars increased 3.1% compared to
1Q03, from US$471 million to US$486 million, primarily due to
higher revenue from the Automotive, Food and Real Estate
Sectors.
The Automotive Sector registered a 10.2% recovery in dollar
sales when compared to 1Q03 due to higher requirements from the
Tractor Project, higher part sales in the gear business for BMW
North America, higher export sales volumes in the transmission
business and the integration of new products in the domestic
parts market.
In the Food Sector, sales volume increased 10.7% in the domestic
market when compared to 1Q03. This resulted from higher sales in
practically all our product lines, primarily "Del Fuerte" brand
tomato paste, "Zuko" brand powdered beverage mix and "Blason"
brand coffee, as well as higher export sales to the U.S. and the
increase in sales in the pork business due to higher prices.
In the Real Estate Sector, sales reached US$27 million mainly
due to sales in the North C building project, within the Arcos
Bosques development, and the Punta Mita project.
Exports
Total exports for the first quarter of 2004 reached US$232
million, which represented an increase of 7.6% when compared to
1Q03. This result was primarily due to the increase in export
sales of the Automotive and Food Sectors, which were 14.5% and
5.9% higher, respectively, when compared to 1Q03.
Operating Income
Consolidated operating income in dollars was US$22 million in
1Q04, which represent an increase of 12.4% with respect to 1Q03.
This result is attributable to the improvements in the
Automotive and Food Sectors.
EBITDA
Consolidated EBITDA in dollars reached US$51 million in 1Q04, an
increase of 1.0% compared to 1Q03. This result is attributed to
the improvements in the Automotive and Food Sectors.
However, after divesting the aluminum wheel and adhesive and
waterproofing material businesses, EBITDA was US$48 million in
1Q03, therefore the increase is actually 6.25%.
Taxes
During the quarter, US$8.7 million was provisioned for income
tax, asset tax and employee profit sharing, which was below the
US$1.5 million reported in 1Q03. In addition, US$3.2 million in
deferred taxes was reported.
Debt Structure
In 1Q04 the Company registered a net debt decrease of US$3
million when compared to 4Q03 reaching US$987 million, mainly
due to the depreciation of the Mexican peso against the dollar,
which partially offset the US$11 million payment realized to
International Finance Corporation during the period.
At the close of 1Q04, the debt mix was 69% dollar-denominated,
11% peso-denominated and 20% in UDIS. The maturity profile at
the close of 1Q04 was 97% long-term and 3% short-term. The
average cost of debt on March 31, 2004 was 5.58% for dollar-
denominated debt and 8.72% for peso-denominated debt.
Desc successfully concludes capital increase
On April 20, 2004, Desc announced that it had successfully
completed the capital increase approved at the Annual Ordinary
and Extraordinary Shareholders Meeting held on March 8.
100% of the 912,719,584 ordinary shares were subscribed and
issued for this capital increase, equivalent to Ps.
2,738,158,752. The funds generated by the capital increase will
be used during 2Q04 to reduce the Company's debt. Upon
expiration of the rights offering, 502,544,745 shares or 55% of
the total shares issued were subscribed, and the actions taken
by the shareholders show their commitment with the future of the
Company.
Subsequent to and in accordance with the Stock Subscription
Cooperation Agreement with Inversora Bursatil, S.A. de C.V. Casa
de Bolsa, 410,174,839 shares were placed which corresponded to
the number of shares unsubscribed in the rights offering.
Therefore, due to the response from shareholders in the rights
offering, only Ps. 1,230 million of the Ps. 2,000 million
established in this Agreement with Inbursa were utilized.
Results by Sector
Automotive Sector
During the first quarter of 2004 sales and operating income in
dollars increased by 10.2% and 20%, respectively, compared to
the first quarter of 2003 due to:
a) Higher requirements from the Tractor Project in the forge,
cardan shaft and axle businesses whose application is in light
trucks and SUVs.
b) Higher part sales in the gear business to BMW North America
for the X5 platform.
c) Increase in the export sales volume of the transmission
business.
d) Integration of new products in the domestic parts business.
These factors helped offset:
a) Lower sales in the constant velocity joint business due to
lower production by VW in Mexico.
b) The decline in sales in the valve lifters business in the
export market.
During the quarter increases were registered in the prices of
raw materials which were offset by new contracts, additional
volumes and plans for reduction of costs, thereby achieving
results above those obtained in 4Q03, with operating income 132%
higher and EBITDA 30.9% higher.
Additionally, the Company is working on plans for productivity,
the replacement of suppliers and the passing on of increases to
clients so that the impact is distributed along the chain.
In recent weeks the price of steel has increased significantly.
Nevertheless, this did not significantly affect the Automotive
Sector during 1Q04.
Export sales were US$133 million, 14.5% higher than the first
quarter of 2003, in-line with the expansion in demand, primarily
in the US market.
Average capacity utilization during the first quarter was 63%,
an increase of 10.5% compared to 1Q03. Sales per employee
reached US$113 thousand, above the US$111 thousand reported in
the first quarter of 2003, thanks to the combined effect of the
increase in sales and the lay-off of 663 employees.
The Tractor I and II Project, which consist of the production
and sale of parts for axles, semiaxles and output-shafts for
Dana, increased its sales by over 100% when compared to 1Q03, to
US$29 million due to the successful conclusion of the project.
The US $4.5 million investment in assets were allocated to the
following projects:
1. Gears -- Enco (US $1.6 million)
2. Tractor I and II Project (US$0.70 million)
3. Pistons (US$0.40 million)
4. Constant Velocity Joints (US$0.19 million)
5. Other minor projects (US$1.61 million)
The divestitures completed during the quarter reached US$15.7
million, primarily in the aluminum wheel business.
Other Events
Divestiture of the Aluminum Wheel Business
On January 16, 2004, Desc announced the sale of assets in the
aluminum wheel business to Hayes Lemmerz International, Inc. and
the simultaneous purchase of their stake in Hayes Wheels Acero,
S.A. de C.V. Through this transaction, the association with
Hayes Lemmerz International, Inc. was concluded.
Chemical Sector
Given that the adhesives and waterproofing business, which
generated sales of US$19.3 million in 1Q03, is no longer a part
of Desc, the results that stand out during 1Q04 include the
sales growth in the carbon black, rubber solution and acrylics
businesses, mainly due to the recovery experienced in these
markets in Mexico and the U.S.
These factors helped offset:
a) The decline in sales of synthetic rubber as a result of the
strength of the Euro against the dollar and the increased level
of competition in the European market by both local producers as
well as Asian producers.
b) The decline in sales in the phosphate business due to the
adverse effect of over-stocked levels at some clients, a
situation which occurred at the end of 2003.
c) Lower sales in the polystyrene business where there was lower
volume compared to the previous year due to lower demand
associated with the decline in economic activity, which
continues to be observed in Mexico, and oversupply conditions
stemming from international producers.
These operations reached average production levels above 90% of
installed capacity.
The behavior of monomer prices was highly linked to the behavior
of oil and equivalents; the price of butadiene monomer, the main
raw material for producing synthetic rubber, has remained flat
for 10 months without any important changes while styrene and
acrylonitile monomers have suffered significant increases
compared to what was seen in 2003. In addition, the supply has
been affected by higher demand and operating problems at the
most important suppliers in the world. While a low supply level
is expected in 2Q04, the Company is guaranteed a continuous
supply without contingencies by its contractors.
The sales prices at the beginning of 2004 were greatly pressured
by the global economic situation and the continuing presence of
competition, offering very low prices, in our markets, resulting
in the oversupply at a global level, which we expect will begin
to level out in the immediate future. Additionally, the
unexpected increase in monomer prices during the first part of
the year and the resistance of our clients to absorb these
differences, great affected the operating margin of many of our
businesses, thus creating a significant lag in the transfer of
these increases the markets. However, prices have reached
historical highs, which is why we expect them to decline in the
medium term.
Since the adhesive and waterproofing material business no longer
forms part of the Company, the adopted measures in terms of
savings and costs and expenses, as well as the achievement of
higher productivity levels, have allowed operating income and
EBITDA for the quarter to reach levels equivalent to those of
the same period of the previous year, which was even reached
with lower sales volumes.
Investment in fixed assets reached US$2.7 million, of which the
majority was allocated towards meeting future demand in the
elastomer sector as well as maintenance measures in the
phosphate plants.
Food Sector
Branded Products
During 1Q04 sales increased 10.7% in the domestic market
compared to 1Q03, due to higher sales in practically all our
product lines, primarily "Del Fuerte" brand tomato paste, "Zuko"
brand powdered beverage mix and coffee "Blason", as well as
higher export sales to our affiliate in the U.S. The increase in
the U.S. market is due mainly to the foodservice segment.
The operating results had significant increases due to the
improved utilization of the plants and the correction of
problems in the U.S. plant operations, as well as the use of
fresh tomatoes intead of tomato paste, which has generated an
improvement in costs and in the operating margin.
Another relevant factor was the acquisition of 40% of the shares
of the companies that make up Grupo Nair, which focus on the
fishing and canning of tuna, whereby the ownership of Grupo
Corfuerte in Nair is 100%. Through this, Desc expects to obtain
greater economies of scale and synergies throughout the group.
On November 11, 2003, the minority partner in the branded
products business formally notified the Company that they would
exercise their put option to sell their shares. As a result, the
Company paid US$12.3 million and US$2 million for 18.6% of
Corfuerte and of ASF, respectively, on January 30, 2004.
Consequently, Desc increased its shareholder stake to 96.1% in
Corfuerte and 99.9% in ASF. Pork Business Pork prices have
demonstrated a favorable trend during 1Q04, increasing over
4Q03. On the other hand, the price of the main raw materials,
such as grain and soy paste, have also increased during the
period. The increases in sales and margins was mainly derived
from the price level realized.
The sales volume for the quarter suffered a decline of 16.3%
when compared to the same period of the previous year due to the
effects of the closing of three Bajio locations.
The capacity utilization rate remains 100% in the southeast
region given the strong demand levels.
Capex for the quarter reached US$0.11 million, allocated to farm
equipment and infrastructure.
Investment in fixed assets during the quarter reached US$0.21
millions and was allocated to to farm equipment and
infrastructure.
Sales prices in Mexico improved when compared to the previous
year to Ps. 19.98 per Kg., which represents an increase of
26.5%.
Real Estate Sector
Sales in 1Q04 reached US$27 million, a 24.3% increase when
compared to the sales for 1Q03, primarily due to the increase in
sales of the North C Building project, within the Arcos Bosques
development, and the Punta Mita project.
Sales within the Punta Mita project represented 64%, while the
North C building within the Arcos Bosques development
represented 22%, the Bosques de Santa Fe project 9%, and the
remaining 5% was related to the sale of commercial lots and
finished inventory.
During the period, operating income reached US$4 million, which
was US$1 million below the figure obtained in 1Q03, mainly as a
result of an increase in the selling expenses of the North C
Building within the Arcos Bosques development, where 2,829 m2
was sold during the quarter, thereby achieving the sale of 69%
of available space. During the quarter, the construction of the
building was completed within budget and the Company invested
US$1.7 million in this project.
In Bosques de Santa Fe, the exclusive residential development in
western Mexico City, 4 residential lots were sold. With these,
the sale of 89% of the residential lots and 57% of apartment
units have closed.
The construction of the club house continues according to
schedule and within budget and is expected to be inaugurated in
October 2004. Investment in this project reached US$2.7 million
during 1Q04.
Lastly, at Punta Mita, the tourist development located at Bahˇa
de Banderas in the state of Nayarit, the sale of 5 beachfront
lots, 3 golf course lots and 3 villas were completed. The
commercialization and urbanization of the remaining residential
beachfront and golf course lots and the villas under
construction continues. Investment in this project reached US
$1.4 million during 1Q04.
CONTACTS: Marisol Vazquez-Mellado Mollon/Jorge Padilla Ezeta
Tel.: (5255) 5261 8044
jorge.padilla@desc.com.mx
TV AZTECA: 1Q04 EBITDA Up 8% to a Record MXN601 Mln
---------------------------------------------------
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 Tuesday all-time high first quarter net
sales of MXN1,539 million (US$138 million), up 8% from the same
period of 2003. First quarter EBITDA was MXN601 million (US$54
million), 8% above the same period a year ago. EBITDA represents
a six-year record high for a first quarter. EBITDA margin for
the quarter was 39%, the same as the prior year period.
"Our solid fundamentals translate into robust profitability and
ongoing tangible benefits for our stakeholders," said Pedro
Padilla, Chief Executive Officer of TV Azteca. "In adherence to
our plan for uses of cash, shareholders approved cash
distributions of US$55 million for this year. During the quarter
we also fully amortized our US$125 million note due February 15,
and we expect further capital structure improvements in coming
quarters."
The company's plan for uses of cash entails reducing TV Azteca's
debt by approximately US$250 million, and making cash
distributions to shareholders above US$500 million by 2008.
First Quarter Results
Net sales grew 8% to an all-time high level of MXN1,539 million
(US$138 million), up from MXN1,422 million (US$127 million) for
the same quarter of 2003. Total costs and expenses rose 8% to
MXN938 million (US$84 million), from MXN865 million (US$78
million) for the same period of last year. As a result, the
company reported EBITDA of MXN601 million (US$54 million), 8%
higher than MXN557 million (US$50 million) in the first quarter
of 2003, and a six-year record. Net income for the quarter was
MXN183 million (US$16 million), 136% higher than net income of
MXN78 million (US$7 million) for the same period of 2003.
Millions of pesos(1) and dollars(2) except percentages and per
share amounts.
1Q 2003 1Q 2004 Change
US$ %
Net Sales
Pesos MXN 1,422 MXN 1,539
US$ US$ 127 US$ 138 10 +8%
EBITDA(3)
Pesos MXN 557 MXN 601
US$ US$ 50 US$ 54 4 +8%
Net Income
Pesos MXN 78 MXN 183
US$ US$ 7 US$ 16 9 +136%
Income per ADS(4)
Pesos MXN 0.41 MXN 0.96
US$ US$ 0.04 US$ 0.09 0.05 +136%
(1) Pesos of constant purchasing power as of March 31, 2004.
(2) Conversion based on the exchange rate of MXN11.15 per US
dollar as of March 31, 2004.
(3) EBITDA is Profit Before Depreciation and Amortization under
Mexican GAAP.
(4) Calculated based on 191 million ADSs outstanding as of
March 31, 2004.
Net Sales
"Our compelling programming grid effectively reached the target
audiences of our domestic clients, which was fundamental in
achieving our 8% overall sales growth during the quarter," said
Mario San Roman, Chief Operating Officer of TV Azteca.
"Throughout the three month period our sales force experienced
consistent advertising demand, and was successful in closing
sizeable ad contracts for major brands in Mexico."
First quarter net revenue also includes sales from Azteca
America -- the company's wholly-owned broadcasting network
focused on the U.S. Hispanic market -- of MXN65 million (US$6
million), compared with MXN3 million (US$0.3 million) of the
same period a year ago. Azteca America revenue is composed of
MXN38 million (US$3 million) in sales from the Los Angeles
station KAZA-TV, and MXN27 million (US$2 million) from network
sales.
During the quarter, TV Azteca also reported sales of programming
abroad of MXN36 million (US$3 million), compared with MXN42
million (US$4 million) of the first quarter of the prior year.
The primary programs sold abroad during the quarter were the
company's novelas Mirada de Mujer el Regreso, sold mostly in
Central America, and La Hija del Jardinero, sold in Europe and
Latin America.
During the first quarter, TV Azteca reported content and
advertising sales to Todito.com of MXN70 million (US$6 million),
and MXN32 million (US$3 million) in advertising sales to Unefon.
In the first quarter of 2003, sales to Todito and Unefon were
MXN38 million (US$3 million) and MXN29 million (US$3 million),
respectively.
In accordance with the terms of the advertising contract between
Unefon and TV Azteca, during the first quarter Unefon paid to TV
Azteca in cash the MXN35 million (US$3 million) of advertising
purchases placed within the prior three month period.
During the quarter, barter sales were MXN52 million (US$5
million), compared with MXN24 million (US$2 million) in the same
period of the prior year. Inflation adjustment of advertising
advances was MXN51 million (US$5 million), compared with MXN34
million (US$3 million) for the first quarter of 2003.
Costs and Expenses
The 8% increase in first quarter costs and expenses resulted
from the combined effect of a 12% increase in programming,
production and transmission costs to MXN665 million (US$60
million), from MXN593 million (US$53 million) in the prior year
period, and constant administration and selling expense at
MXN273 million (US$24 million).
"Strategic production efforts at the Los Angeles station and
Azteca America Network to optimally capture growing ad
opportunities contributed to cost increases during the quarter,"
commented Carlos Hesles, Chief Financial Officer of TV Azteca.
"The specific content production significantly boosts loyalty
from target audiences within entire key day parts, resulting in
superior revenue and solid prospects for sustained sales and
profitability expansion."
"Adding to the initiatives to capture U.S. Hispanic
opportunities, not present in the prior year, we experienced
difficult comparables domestically," added Mr. Hesles. "A year
ago we substituted a prime-time novela with La Academia, our
musical reality show, with the costs of its facilities fully
amortized in prior periods, whereas this quarter we built a
standard programming grid, which included an additional prime-
time novela, and its associated costs."
Congruent with the growing production efforts, TV Azteca
increased its overall number of hours of internally produced
programming during the quarter, to 2,093 from 1,960 in the same
period of the previous year.
The constant administration and selling expense at TV Azteca
reflects controlled personnel, travel, services and operating
expenses, despite increased domestic and international
operations.
EBITDA and Net Income
The 8% increase in first quarter net sales, combined with the 8%
growth in costs and expenses, resulted in EBITDA of MXN601
million (US$54 million), up 8% from MXN557 million (US$50
million) a year ago.
First quarter net income increased 136% to MXN183 million (US$16
million) from MXN78 million (US$7 million). The increase was
primarily influenced by a MXN23 million (US$2 million) exchange
gain following a 1% peso appreciation against the dollar during
the quarter, compared with a MXN96 million (US$9 million)
exchange loss resulting from a 3% depreciation of the peso in
the same quarter of 2003.
During the quarter, the company recorded other expenses of
MXN102 million (US$9 million), compared with MXN85 million (US$8
million) a year ago. Other expenses for the quarter were
primarily composed of MXN35 million (US$3 million) of charitable
donations, MXN36 million (US$3 million) of advisory fees, MXN26
million (US$2 million) from the recognition of 50% of the net
loss of Todito.com in TV Azteca's financial statements, and MXN5
million (US$0 million) of the net effect of the recognition of
gains from Monarcas, TV Azteca's soccer team, and other
expenses.
Loss on monetary position was MXN44 million (US$4 million)
compared with a loss of MXN14 million (US$1 million) for the
same period of 2003. The rise in monetary loss is explained by
an increase in the company's net asset monetary position.
Generation and Uses of Cash
"Our sound financial results translated into robust free cash
generation during the quarter, which is a solid step towards our
goal of US$150 million in free cash creation for the full year
2004," Mr. Hesles added.
As was previously detailed, on March 10 TV Azteca collected
US$17 million in cash from the 2001 credit support agreement in
favor of Unefon. The remaining debt from Unefon to TV Azteca
under the credit agreement, after the cash payment, is US$10
million. The company noted it has been released from any
outstanding contingent liability related to the credit support
agreement.
Adhering to the timetable of the company's plan for uses of
cash, during the quarter, TV Azteca fully amortized its US$125
million 101/8% note due February 15, 2004. The payment was
composed of US$60 million from TV Azteca's cash position and
US$65 million of unsecured financing obtained from financial
institutions, on market terms.
The company noted the solid fundamentals together with its
strict adherence to the plan for uses of cash results in overall
debt reduction, which translates into stronger capital
structure, benefiting both shareholders and noteholders.
On April 15, the company's shareholders approved US$55 million
in cash distributions to be paid during 2004. A payment of US$33
million is scheduled to be made on May 13, and another of
approximately US$22 million on November 11.
Debt Outstanding
As of March 31, 2004, the company's total outstanding debt was
MXN6,056 million (US$543 million). TV Azteca's cash balance was
MXN1,975 million (US$177 million), resulting in net debt of
MXN4,081 million (US$366 million). The total debt to last twelve
months (LTM) EBITDA ratio was 1.7 times, and net debt to EBITDA
was 1.2 times. LTM EBITDA to net interest expense ratio was 6.1
times.
The company noted that excluding -- for analytical purposes --
US$120 million debt due 2069, total debt was MXN4,720 million
(US$423 million), and total debt to EBITDA ratio was 1.4 times.
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.
To see financial statements:
http://bankrupt.com/misc/TV_AZTECA.txt
===============
P A R A G U A Y
===============
* PARAGUAY: S&P Affirms Ratings, Removes CreditWatch
----------------------------------------------------
Standard & Poor's Ratings Services said Tuesday that it affirmed
its 'SD' long-term foreign and 'CCC' long-term local currency
sovereign credit ratings on the Republic of Paraguay. At the
same time, Standard & Poor's removed its 'CCC' local currency
rating on Paraguay from CreditWatch with positive implications,
where it was placed on Dec. 23, 2003. The outlook on the local
currency rating is positive.
"The removal from CreditWatch reflects a delay in the
implementation of the government's plan to regularize public
debt management, which has postponed Paraguay's exit from
default," said Standard and Poor's credit analyst Sebastian
Briozzo. "It also indicates that future rating actions may be
less imminent than normally signaled by a CreditWatch
designation," he added.
Standard & Poor's lowered Paraguay's foreign currency sovereign
credit ratings to 'SD' on Feb. 13, 2003. The government is in
the process of curing the default through an exchange offer
affecting several dollar-denominated domestic debt instruments
totaling US$138 million. The exchange has been delayed by
difficulties in locating all affected debt holders and by
operational problems with the central bank, the paying agent.
The government reports that the acceptance level on the exchange
has already reached 70%. This ratio is expected to increase
significantly during the final stages of the exchange, during
which time the government will be able to identify small holders
of government paper who are also included in the restructuring.
"Once the government and the central bank begin to perform on
the new bonds Standard & Poor's will view the default as cured
and will raise the foreign currency rating to a level
commensurate with a forward-looking view of the government's
credit standing," Mr. Briozzo explained. "Among other factors
that will affect Paraguay's rating are its administrative
capacity to service its foreign and local debt in a timely
fashion," he concluded.
ANALYSTS: Sebastian Briozzo, New York 212-438-7342
Lisa M Schineller, New York (1) 212-438-7352
=================
V E N E Z U E L A
=================
SIDOR: Suffering US$3 Million Daily Loss on Strike
--------------------------------------------------
A worker's strike over disputed bonuses is costing Siderurgica
del Orinoco (Sidor), Venezuela's biggest steelmaker, US$3
million a day in losses, Bloomberg reports. Union members from
Sutiss have paralyzed Sidor's operations since Thursday when it
blocked company gates, forcing Sidor to call on the National
Guard to protect its installations. Aside from the Sutiss union
members, the strike has also idled an estimated 6000 workers due
to intimidations from the union, a Sidor spokesman revealed.
In an effort to take advantage of the growing demand for steel
in China, Sidor is spending US$75 million this year to increase
output by 13%. However the union strike is affecting the
company's efforts to raise output and earn profit. Sidor has
undergone three debt restructurings in seven years.
Sidor has asked the Labor Ministry to declare the strike illegal
and has filed a court injunction ordering the strikers to return
to their posts.
Sixty percent of Sidor is owned by Argentina's Siderar, Mexico's
Hylsamex, Tubos de Acero de Mexico SA, Brazil's Usinas
Siderurgica de Minas Gerais and Venezuela's Siderurgica
Venezolana Sivensa SA, while the remaining 40% is under the
control of the Venezuelan government.
SIDOR: Signs Deal With Tenaris to Purchase Venezuelan HBI Plant
---------------------------------------------------------------
Tenaris S.A. (NYSE:TS) (Buenos Aires:TS) (BMV:TS) (MTA
Italy:TEN) announced Tuesday that, together with Sidor, a
Venezuelan steel producer in which it has an indirect
investment, it has signed an agreement with Posven, a Venezuelan
company in which Posco of Korea has a 60% shareholding, for the
sale and purchase of its assets -- principally an industrial
facility for the production of pre-reduced hot briquetted iron,
or HBI, located in Ciudad Guayana, Venezuela -- for a price of
US$120 million.
The acquisition, that will be effected by a newly-formed
company, of which Tenaris will hold 55% and Sidor 45%, remains
subject to a number of closing conditions including the transfer
of operating contracts on satisfactory terms. The facility,
which has a nominal annual design capacity of 1.5 million tons
of HBI and was constructed by Raytheon Engineers & Constructors
using technology developed by Hylsamex, a Mexican steel
producer, has been shut down since 2001 shortly after commencing
operations.
This investment, which complements a previous investment in the
Comsigua HBI plant also located in Ciudad Guayana, Venezuela,
will allow Tenaris to secure a further low-cost source of high
quality ferrous raw material. Tenaris also operates a pre-
reduced iron, or DRI, facility in Campana, Argentina.
Tenaris is a leading global manufacturer of seamless steel pipe
products and provider of pipe handling, stocking and
distribution services to the oil and gas, energy and mechanical
industries and a leading regional supplier of welded steel pipes
for gas pipelines in South America. Domiciled in Luxembourg, it
has pipe-manufacturing facilities in Argentina, Brazil, Canada,
Italy, Japan, Mexico and Venezuela and a network of customer
service centers present in over 20 countries worldwide.
***********
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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co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
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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
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Information contained herein is obtained from sources believed
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