/raid1/www/Hosts/bankrupt/TCRLA_Public/040512.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
Wednesday, May 12, 2004, Vol. 5, Issue 93
Headlines
A R G E N T I N A
ACINDAR: Posts Drop in 1Q04 Net Profit
ACINDAR: Bonds Remain at Junk Level
BANCO DE GALICIA: Posts Restructuring Results
BELLSOUTH CORP.: Telefonica Moviles Wraps Up Due Diligence
CABLEVISION: Fitch Maintains Junk Rating on $1.5B in Bonds
CLISA: Fitch Assigns Below Investment Grade Bond Ratings
CTI HOLDINGS: $300M in Bonds Maintain Junk Status
FULL CORP: Court Orders Bankruptcy
HARAS MANQUEHUE: Court OKs "Concurso Preventivo" Petition
IMAGEN SATELITAL: Fitch Retains Bonds' Default Ratings
I.N.C.I.E.N.: Court Issues Bankruptcy Rulings
MANICORD: Bankruptcy Process Begins by Court Order
MASTELLONE HERMANOS: Debt Offer Extended, Modified
METROGAS: Posts 1Q Profit Amidst Rates Freeze, Money Troubles
MULTICANAL: $1.3B in Bonds Receive `D(arg)' Rating from Fitch
PETROBRAS ENERGIA: Reports P$82M Net Earnings in 1Q04
PETROBRAS ENERGIA: Fitch Affirms International Ratings at 'B-'
PETROBRAS ENERGIA: Posts Changes in the Board Of Directors
QUIMETIL: Court Grants Request for Reorganization
SARGELI: Court Issues Bankruptcy Ruling
SIDECO AMERICANA: $200M in Bonds Still At Junk Level
TELECOM ARGENTINA: Sees Reduction in 1Q04 Net Profit
TOURNET: Files for Bankruptcy
VELSUR: Creditor Petitions for Involuntary Bankruptcy
WELAND: Reorganizes to Pay Debts
B E R M U D A
GLOBAL CROSSING: Faces Another Securities Lawsuit
LORAL SPACE: Files First Quarter 2004 Form 10-Q
B R A Z I L
AMBEV: Analysts Predict Lower 1Q Profit, Sales
BANCO ITAU: S&P Affirms Ratings
C H I L E
TELEFONICA CTC: S&P Says Outlook Is Stable
C O L O M B I A
CHIQUITA BRANDS: Reports Net Income Of $20 Million In 1Q04
D O M I N I C A N R E P U B L I C
* IMF Issues Mission Statement to the Dominican Republic
E C U A D O R
PACIFICTEL: To Hold Insurance Bidding This Week
M E X I C O
GRUPO TMM: Extends Bondholder Committee Agreement
TV AZTECA: Shares Plummet Amid Board Resignations
P A R A G U A Y
MILLICOM INTERNATIONAL: Passes 6 Million Subscriber Mark
U R U G U A Y
SUDAMTEX: Workers and Creditors Mull Industrialist's Bid
V E N E Z U E L A
SIDOR: Strike Sputters, Production Resumes
- - - - - - - -
=================
A R G E N T I N A
=================
ACINDAR: Posts Drop in 1Q04 Net Profit
--------------------------------------
Despite higher sales volume and revenue in the first quarter,
Argentine steelmaker Acindar Industria Argentina de Aceros SA
(ACIN.BA) reported a drop in its net profit for the first
quarter to ARS130.8 million, compared to the ARS199.6 million
net profit it posted for the same period last year, reported Dow
Jones. The company said increased income taxes and a smaller
financial holdings gain kept the company's bottom line from
surpassing last year's net profit.
Net sales in the first quarter of 2004 reached ARS419.6 million,
up from ARS297.4 million. In terms of volume, domestic sales
shot up to 252,900 tons from 191,200 tons a year earlier.
Acindar shipped 52,200 tons abroad in the latest quarter, down
from 82,200 tons in 2003. A loss of ARS223.1 million was
generated by cost of sales, widening the ARS167.3 million loss
from the first quarter of 2003. The company said its production
costs rose 19.5% on the year. International prices for raw
materials and freight have risen dramatically over the last
year.
Operating profit totaled ARS164.5 million, compared with ARS98.3
million in the first quarter of 2003. Acindar reported a gain of
ARS19.5 million in its financial holdings, down significantly
from an ARS87.2 million gain a year earlier. Pre-tax profit then
totaled ARS182.8 million, falling behind the ARS187.7 million
posted in 2003.
But the biggest year-on-year difference was generated by income
tax. Acindar posted a loss of ARS52.0 million, compared with a
gain of ARS11.9 million in the year-ago period.
CONTACT: ACINDAR INDUSTRIA ARGENTINA DE ACEROS SA
2739 Estanislao Zeballos Beccar
Buenos Aires
Argentina B1643AGY
Phone: +54 11 4719 8500
Fax: +54 11 4719 8501
Home Page: http://www.acindar.ar.com
Jose I. Giraudo, Investor Relations Manager
Tel: (54 11) 4719 8674
Andrea Dala, Investor Relations Officer
Tel: (54 11) 4719 8672
ACINDAR: Bonds Remain at Junk Level
-----------------------------------
Fitch Argentina Calificadora de Riesgo S.A. maintains a `D(arg)'
rating on a total of US$100 million of corporate bonds issued by
Acindar Industria Argentina de Aceros. Comision Nacional Valores
(CNV), Argentina's securities regulator, relates that the rating
was based on the Company's finances as of the end of December
2003.
The bonds affected were described as "Obligaciones Negociables
simples, no convertibles en acciones, autorizadas por AGO y E de
fecha 5.8.96." and were classified under "simple issue". The
bonds matured on February 16, 2004.
A `D(arg)' rating is assigned to financial commitments that are
currently in default.
BANCO DE GALICIA: Posts Restructuring Results
---------------------------------------------
Banco de Galicia y Buenos Aires S.A., a corporation organized
under the laws of the Republic of Argentina (Buenos Aires Stock
Exchange: GALI, the "Bank" or "Banco Galicia"), announced
Thursday the results of its concurrent bank debt restructuring
and exchange offer to holders of its 9% Notes due 2003 and Step
Up Floating Rate Notes due 2002. The bank debt restructuring,
together with the exchange offer, are referred to as the
"restructuring". Settlement of the restructuring is expected to
occur on May 18, 2004.
In the restructuring, the Bank offered its creditors the ability
to exchange their existing debt for units in a par-for-par first
step exchange offer and, in an optional second step to the
exchange, to receive cash, Bonos del Gobierno Nacional due
August 3, 2012, issued by the Republic of Argentina ("Boden
2012"), new instruments of the Bank or preferred shares of Grupo
Financiero Galicia S.A. ("Grupo Galicia"), in each case, subject
to proration and certain other conditions. Creditors holding
US$1,320.9 million of the Bank's debt participated in the
restructuring, representing 98.2% in aggregate principal amount
of all debt that was subject to the restructuring.
The Bank announced that, of the elections made by creditors in
the second step exchange offer and the concurrent bank debt
restructuring, the only election that was oversubscribed was the
equity participation offer and the similar offer in the
concurrent bank debt restructuring. As a result, the equity
participation offer and the similar offer in the concurrent bank
debt restructuring will be subject to a proration factor of
approximately 45.6%.
After prorationing, creditors participating in the equity
participation offer and the similar offer in the concurrent bank
debt restructuring will receive a combination of medium term
instruments and preferred shares (or, in lieu of preferred
shares, cash, if any, paid to Grupo Galicia by existing
shareholders electing to subscribe preferred shares in the
rights offering described in the pricing supplement for the
offers). In addition, if such creditors did not select an
alternative tender option, they will receive a combination of
long term instruments and subordinated instruments for units not
accepted in the equity participation offer and the similar offer
in the concurrent bank debt restructuring as a result of
prorationing. Creditors participating in the equity
participation offer that did select the alternative tender
option will receive cash (and not Boden 2012) in respect of
units not accepted in the equity participation offer as a result
of prorationing.
The specific amount of preferred shares and cash to be received
by creditors participating in the equity participation offer and
the similar offer in the concurrent bank debt restructuring
depends on the outcome of the preemptive and accretion rights
offering by Grupo Galicia to its existing shareholders, which is
set to expire on May 17, 2004.
The Bank also announced that on the settlement date, the Bank
will apply US$ 42.4 million not used in the cash tender offer
and the similar offer in the concurrent bank debt restructuring
to prepay at par (plus accrued interest) on a pro rata basis the
long term instruments to be issued to creditors participating in
the restructuring.
Based on the final amounts validly tendered, the Bank will issue
the following new instruments on the settlement date:
US$ 635.7 million of long term instruments, of which US$ 452.1
million will be U.S. dollar denominated notes due 2014;
US$ 400.0 million of medium term instruments, of which US$ 349.8
million will be U.S. dollar denominated notes due 2010; and
US$ 225.9 million of subordinated instruments, of which US$
214.2 million will be U.S. dollar denominated subordinated notes
due 2019.
Finally, the Bank announced that a total of US$ 13.6 million
will be paid to creditors participating in the cash tender offer
and the similar offer in the concurrent bank debt restructuring,
and US$ 57.1 million of Boden 2012 will be transferred to
creditors participating in the Boden tender offer and the
similar offer in the concurrent bank debt restructuring. In
accordance with the terms of the restructuring, the Bank will
make a payment equal to US$ 16.4 million on account of accrued
interest.
Founded in 1905, the Bank is one of the largest private-sector
banks in the Argentine financial system and a leading financial
services provider in the country. As a universal bank, through
affiliated companies and a variety of distribution channels,
Banco Galicia offers a full spectrum of financial services to
individuals and corporations.
CONTACT: BANCO DE GALICIA Y BUENOS AIRES
Tte Gral Juan D Peron 407
Buenos Aires
Argentina
C1038AAI
Phone: +54 11 6329 0000
Fax: +54 11 6329 6100
Home Page: http://www.bancogalicia.com.ar
Contact:
Juan Martin Etchegoyhen, Chairman
Antonio R. Garces, Vice Chairman
BELLSOUTH CORP.: Telefonica Moviles Wraps Up Due Diligence
----------------------------------------------------------
Telefonica Moviles' CEO Antonio Viana-Baptista announced
Thursday that the group's audit of BellSouth's Latin American
subsidiaries, for which the Spanish telecommunications group
offered to pay US$5.85 billion, ended April 30.
He went on to say that he expects to close the acquisition
process by year-end. Viana-Baptista also stated that, even
though the final conclusions of the due diligence are not ready
yet, he can say he's pleased with the way in which the
subsidiaries are being managed.
The next stage of the deal is the approval by regulation
authorities.
CABLEVISION: Fitch Maintains Junk Rating on $1.5B in Bonds
----------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. maintains a `D(arg)'
rating to corporate bonds issued by Cablevision S.A., the
largest Argentine cable operator.
In its official Web site, Argentina's securities regulator, the
CNV, reveals that the rating action affects US$1.5 billion worth
of bonds described as "obligaciones negociables simples" and
were classified as "Program." The securities regulator didn't
indicate the maturity date of the issue.
The rating action was taken based on the Company's finances as
of December 31, 2003.
CONTACT: Santiago Pena
(5411) 4778-6520
E-mail: spena@cablevision.com.ar
Martin Pigretti
(5411) 4778-6546
E-mail: mpigretti@cablevision.com.ar
Web site: http://www.cablevision.com.ar
CLISA: Fitch Assigns Below Investment Grade Bond Ratings
--------------------------------------------------------
Argentine company CLISA obtained a `CCC(arg)' rating from the
local arm of Fitch Ratings agency for its US$120 million worth
of bonds issued under "Simple Issue," the CNV reports.
The bonds, described as "Obligaciones Negociables con garantia
(AGO 21-01-03, AD 23-01-03)," are set to mature on June 1, 2012.
A `CCC(arg)' rating is assigned to bonds which possess
significant risk of non-payment.
At the same time, Fitch assigned a `D(arg)' rating to US$100
million worth of bonds issued under "Simple Issue." The bonds,
described as "Obligaciones Negociables con garantia," are set to
mature on June 1 this year. A `D(arg)' rating is given to issues
that are currently in default or whose obligor has filed for
bankruptcy.
Fitch took the rating actions based on CLISA's financial status
as of December 31, 2003.
CTI HOLDINGS: $300M in Bonds Maintain Junk Status
-------------------------------------------------
A total of US$300 million worth of CTI Holdings S.A.'s corporate
bonds remain at junk status, the CNV indicates. In its Web site,
the Argentine securities regulator reveals that the local arm of
Fitch Ratings maintains a `D(arg)' rating to the US$300-million
bonds described as "Obligaciones Negociables con Cupon Diferido,
autorizadas por AGOyE de fecha 6.11.97". These bonds were
classified under "Simple Issue" and will mature on April 1,
2008. Fitch is maintaining its rating on the bonds based on the
Company's financial health as of the end of December 2003.
FULL CORP: Court Orders Bankruptcy
----------------------------------
Judge Fernandez of Buenos Aires Court No. 19, with the
assistance of Clerk No. 37, Dr. Mazonni, approved the petition
of Argentina Sacifia requesting the liquidation of Full Corp
S.A. after the latter failed to pay debts amounting to
US$4,049.15.
La Nacion reports that Ms. Mabel Herrera will act as receiver
on this case. The court has set the deadline for the
verification of creditors' claims on June 25, 2004.
CONTACT: Full Corp S.A.
Sarmiento 522, piso No. 2.
Buenos Aires
Ms. Mabel Herrera, Receiver
Rodriguez Pena 694, piso No. 7 "E".
Buenos Aires
HARAS MANQUEHUE: Court OKs "Concurso Preventivo" Petition
---------------------------------------------------------
Buenos Aires Court No. 7 approved Haras Manquehue S.A.'s
petition to start a reorganization process, relates Infobae.
The Court, assisted by Clerk No. 13, appointed Mr. Carlos Manuel
Carrescia as receiver. He will authenticate creditors' proofs of
claim until May 17, 2004.
Important dates, such as the deadline for the submission of the
necessary reports, as well as the schedule for the informative
assembly will be announced shortly.
CONTACT: Carlos Manuel Carrescia, Receiver
Tucuman 1621
Buenos Aires
IMAGEN SATELITAL: Fitch Retains Bonds' Default Ratings
------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. maintains a default
rating on Imagen Satelital S.A.'s corporate bonds called
"obligaciones negociables". The CNV indicated that Fitch
maintained a `D(arg)' rating on the bonds worth a total of US$80
million. The bonds, whose maturity date was not disclosed, were
classified as "Simple Issue". Fitch retains a junk rating on the
bonds based on the Company's financial status as of December 31,
2003.
I.N.C.I.E.N.: Court Issues Bankruptcy Rulings
---------------------------------------------
I.N.C.I.E.N. S.A. will now enter bankruptcy after Buenos Aires
Court No. 3 declared it "Quiebra," reports Infobae. With
assistance from Clerk No. 6, the court named Mr. Moises Gorelik
as receiver. He will verify creditors' claims until June 7,2004.
Following claims verification, the receiver will submit the
individual reports, which were prepared based on the
verification results, to the court on August 9, 2004. The
general report is due for submission on September 21, 2004.
The Company's bankruptcy case will close with the liquidation of
its assets to pay its creditors.
CONTACT: I.N.C.I.E.N. S.A.
Garay 492
Buenos Aires
Mr. Moises Gorelik, Receiver
Av Cordoba 850
Buenos Aires
MANICORD: Bankruptcy Process Begins by Court Order
--------------------------------------------------
Manicord S.A. of Buenos Aires will begin to liquidate its assets
after Court No. 2 approved a petition to declare the Company
bankrupt.
Infobae reports that the court, assisted by Clerk No. 3,
appointed Mr. Daniel Ernesto Altman as receiver who will
authenticate proofs of claim until May 21, 2004.
Afterwards, the receiver will prepare the individual reports
based on the results of the authentication and then submit these
reports to court on July 6, 2004. After these results are
processed in court, the receiver will then submit the general
report on September 9, 2004.
CONTACT: Manicord S.A.
Cerrito 774
Buenos Aires
Mr. Daniel Ernesto Altman, Reciever
Parana 774
Buenos Aires
MASTELLONE HERMANOS: Debt Offer Extended, Modified
--------------------------------------------------
Mastellone Hermanos, the Argentine company that owns the dairy
product brand La Serenisima, announced an extension and
modifications to its offer to restructure US$329.1 million in
debt, according to a Dow Jones Business News report.
The offer, which was launched March 5, will now expire on May
21, a day that is both a New York and Argentine business day
after local securities regulators approve the issuance of bonds
for one component of its debt swap.
Mastellone is seeking to restructure payment terms on US$104.1
million in commercial bank debt and US$225 million in defaulted
bonds. As of May 7, the previous expiry date, the Company had
secured agreement from creditors representing US$128.3 million
of its total debt burden, which is a little more than the
US$127.9 million that had approved the offer as of April 20.
Mastellone Hermanos continues to extend its deadline as it waits
for Argentine securities regulators to approve new notes with an
interest rate of 7% and maturity of 2014. Creditors can also
choose to accept a cash payment worth 60% of their original
holdings or another bond with a floating interest rate and 2011
maturity. Neither the 2014 nor the 2011 bond carry a nominal
haircut.
The Company, which ceased debt payments since early 2002, also
said Monday it has tweaked its debt restructuring proposal by
allowing creditors who accept the early tender offer to choose
between dollars, euros or Argentine pesos for the three swap
options.
Previously, holders of peso- or euro-denominated debt couldn't
get dollars in the cash offer. They also could only get the 2014
bond in dollar-denominated notes and the 2011 bond in their
original currency.
Under the modified proposal, creditors that miss the early
tender offer will receive $100, ARS100 or EUR100 less in cash or
principal than they would have if they had made the early
deadline.
CONTACT: Mr. Pascual Mastellone, President
MASTELLONE HERMANOS S.A.
Av. Leandro N. Alem 720
(1001) - Buenos Aires
Argentina
Phone: 54 1 318-5000
Fax: 54 1 313-6822
METROGAS: Posts 1Q Profit Amidst Rates Freeze, Money Troubles
-------------------------------------------------------------
Metrogas S.A. of Argentina managed to post a profit of ARS1.9
million ($1=ARS2.9725) for the first quarter this year despite
the gas rates freeze implemented by the Argentine government
which had limited the companies profits to distribution charges
for the use of their networks. The rates freeze prohibited
energy distributors to place markups on their gas sales, Dow
Jones reports.
The rates freeze is not the only problem the company faces.
Argentine authorities revealed two weeks ago the government's
energy conservation measures which, in effect, will offer
cheaper rates for those who reduce their gas consumption levels
from 2003 levels, while fining those who burn more natural gas
this year. This plan could translate into a reduction of
Metrogas' sales since the government expects to cut overall
energy demand by 5% to 7%.
Metrogas also faces a debt of US$440 million that it has
repeatedly attempted to restructure. Restructuring proposals the
company made has failed to generate sufficient bondholder
support. This dollar debt makes the company sensitive to
exchange movements. However, with the peso appreciating by 2.5%
during the first quarter of 2004, the currency markets likely
helped the company's bottom line by reducing the peso equivalent
of Metrogas' dollar debts.
MULTICANAL: $1.3B in Bonds Receive `D(arg)' Rating from Fitch
-------------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. assigned a `D(arg)'
rating to US$1.3 billion worth of corporate bonds issued by
Multicanal S.A., the CNV reports.
The bonds affected are:
- US$1.05 billion worth of "obligaciones negociables." These
bonds, with undisclosed maturity date, were classified under
"Program;"
- US$125 million worth of "obligaciones negociables simples."
These bonds, still with undisclosed maturity date, were
classified under "Simple Issue;"
- US$125 million worth of "obligaciones negociables." These
bonds, also with undisclosed maturity date, were classified
under "Simple Issue."
Fitch gave the rating based on Multicanal's financial condition
as of the end of December 2003.
PETROBRAS ENERGIA: Reports P$82M Net Earnings in 1Q04
-----------------------------------------------------
Petrobras Energia Participaciones S.A. announced the results for
the first quarter ended March 31, 2004.
- The Company posted a P$82 million gain in 2004 first quarter
net income compared to a P$160 million gain in 2003 first
quarter. The reduction in 2004 quarter net income compared to
that recorded in 2003 quarter was mainly attributable to:
- P$81 million reduction in exploration investments in Block 31,
Ecuador. Following the successful effort method implemented by
the Company in its oil and gas exploration and production
activities, the Company charged to income capitalized
investments in this block having a duration of over one year.
- A P$178 million loss in 2004 quarter attributable to the
valuation at market value of the hedging contracts accounted for
as non-hedge instruments, in line with the significant increase
of 86% in the future curve of crude oil reference prices. In
2003 quarter, such charge amounted to P$52 million.
- The impact of the different exchange rate evolution in both
quarters. The peso appreciation was 11.3% and 2.7% in 2003 and
2004 quarters, respectively. The effect of such appreciation on
the net borrowing position accounted for exchange difference
gains in the amount of P$55 million in 2004 quarter and P$140
million in 2003 quarter.
- In 2004 quarter, the assets, liabilities, income and cash
flows of Compania de Inversiones de Energia S.A. (CIESA) were
proportionately consolidated on a line by line basis as it falls
within the category of companies under joint control.
In 2003 quarter, under accounting standards consistent with the
Company's standards, the value under the equity method would
have accounted for a positive value. However, when compared with
the recoverable value, such value was negative. Since the
Company did not assume commitments to making capital
contributions or providing financial assistance to its
affiliates, such shareholding was valued at zero value, limiting
the recognition of related losses to the pertinent book value.
For such reason the Company has not consolidated on a line by
line basis the assets, liabilities, income and cash flow of
Compania de Inversiones de Energia S.A. (CIESA)
- Sales increased to P$1,445 million or 20.1% in 2004 quarter.
- In 2004 quarter gross profit was P$584 million compared to
P$474 million in 2003 quarter. Gross margin was 40.4% and 39.4%
in 2004 and 2003 quarters, respectively.
- Operating income recorded a P$316 million gain in 2004 quarter
compared to a P$318 million gain in 2003 quarter.
- In 2004 quarter, the Company's Shareholders' Equity increased
1.7%.
Net Sales
In 2004 quarter net sales increased P$242 million or 20.1% to
P$1,445 million. The 2004 quarter includes P$123 million and
P$127 million attributable to our interest in CIESA and
Distrilec, respectively. The 2003 quarter includes P$110 million
attributable to the proportional consolidation of Distrilec.
Excluding net sales of affiliates under joint control, 2004
quarter net sales rose P$106 million or 9.7% to P$1,199 million.
The Oil and Gas Exploration and Production business segment
recorded the highest net sales increase with an P$80 million
improvement to P$780 million in 2004 quarter, boosted by a 12.4%
increase in sales volumes of oil equivalent, thus reflecting
that the effects derived from the National Oil Strike that took
place early in 2003 in Venezuela were definitively overcome. In
addition, net sales for the Refining business segment increased
P$65 million to P$375 million in 2004 quarter mainly due to the
17% sales volumes average increase.
Intersegment sales rose P$135 million to P$413 in 2004 quarter
reflecting the growing integration of the company's businesses.
Gross Profit
Gross profit increased P$110 million or 23.2% to P$584 million
in 2004 quarter. The 2004 quarter includes P$66 million and P$20
million attributable to our interest in CIESA and Distrilec,
respectively. The 2003 quarter includes P$17 million
attributable to our interest in Distrilec.
Excluding gross profit for affiliates under joint control, gross
profit in 2004 quarter rose P$41 million or 9% to P$498 million
mainly due to the crude oil volumes increase. In such respect,
gross profit for the Oil and Gas Exploration and Production
business segment rose P$37 million to P$408 million in 2004
quarter.
Administrative and Selling Expenses
Administrative and selling expenses rose P$58 million or 43.6%
to P$191 million in 2004 quarter. The 2004 quarter includes P$7
million and P$17 million attributable to our interest in CIESA
and Distrilec, respectively. The 2003 quarter includes P$18
million attributable to our interest in Distrilec.
Excluding administrative and selling expenses of affiliates
under joint control, administrative and selling expenses
increased P$53 million or 46.1% to P$168 million. Such rise was
mainly due to expenses related to compliance with the ship or
pay contract with OCP in Ecuador.
Exploration Expenses
Exploration expenses totaled P$81 million in 2004 quarter and
P$13 million in 2003 quarter. Following the successful effort
method implemented by the Company in its oil and gas exploration
and production activities, in 2004 quarter the Company charged
to income investments in Block 31 exploratory wells having a
duration of over one year.
Other Operating Results
Other operating results accounted for a P$4 million gain in 2004
quarter compared to a P$10 million loss in 2003 quarter. Other
operating results in 2004 quarter include a P$4 million loss
attributable to our interest in Distrilec, but no significant
results were recorded in CIESA. Distrilec did not record other
operating results in 2003 quarter.
Excluding other operating expenses of affiliates under joint
control, other operating results accounted for a P$9 million
gain in 2004 quarter and a P$10 million loss in 2003 quarter.
Operating Income
Operating income for 2004 quarter decreased P$2 millions or 0.6%
to P$316 million. The 2004 quarter includes a P$59 million gain
and a P$1 million loss attributable to our interest in CIESA and
Distrilec, respectively. In 2003 quarter, operating income
includes a P$1 million loss attributable to our interest in
Distrilec.
Excluding operating income of affiliates under joint control,
operating income declined P$61 million or 19.1% to P$258
million, mainly due to exploration charges attributable to
operations in Ecuador and the increase in selling and
administrative expenses.
Equity in Earnings of Affiliates
Financial income (expense) and holding gains (losses) accounted
for a P$258 million loss, recording a P$249 million increase in
2004 quarter. The 2004 quarter includes a P$2 million loss
attributable to our interest in CIESA, with no significant
results in Distrilec. The 2003 quarter includes a P$33 million
gain attributable to our interest in Distrilec.
Excluding financial income (expense) and holding gains (losses)
of affiliates under joint control, the increase amounted to
P$214 million. Such increase mainly derived from:
- The 86% increase in the future curve of crude oil prices,
which resulted in losses attributable to the valuation at market
value of derivative instruments, which do not qualify for hedge
accounting in the amount of P$178 million and P$52 million in
2004 and 2003 quarters, respectively.
- The different evolution of the exchange rate in both quarters:
2.7% and 11.3% appreciation in 2004 and 2003, respectively,
which given the net borrowing position in US dollars resulted in
exchange difference gains of P$15 million and P$106 million,
respectively.
- Inflation evolution during 2003 first quarter accounted for a
P$35 million gain in 2003 period. Adjustment for inflation was
discontinued as from March 1, 2003.
Such effects were partially offset by a P$12 million reduction
in net interest expense from P$116 million in the 2003 quarter
to P$104 million in 2004 quarter, derived from the peso
appreciation compared to the 2003 period and the 3% reduction of
average dollar-denominated indebtedness.
Other Income (Expense), net
Other income (expense), net accounted for a P$7 million gain in
2004 quarter compared to a P$54 million loss in 2003 quarter.
The 2004 quarter includes a P$18 million gain attributable to
our interest in Distrilec, with no significant results in CIESA.
The 2003 quarter did not record significant results attributable
to our interest in Distrilec.
Excluding other income (expense), net of affiliates under joint
control, other income (expense), net totaled P$11 million and
P$54 million losses in 2004 and 2003 quarters, respectively.
Other income (expense) for 2004 quarter mainly includes charges
attributable to the closing of the forestry business sale
transaction.
Other income (expense) for 2003 quarter mainly includes:
- A P$50 million allowance for operations in Ecuador related to
the Ship or Pay contract with OCP.
- A P$27 million loss as a result of the sale of the Catriel
Oeste area.
- A P$34 million gain from refinancing of banking debts.
Balance Sheet
The Consolidated General Balance Sheet as of March 31, 2004
includes the following amounts attributable to Affiliates under
Joint Control:
- P$3,470 million for Property, Plant and Equipment.
- P$2,088 million for Short-Term Debt.
- P$113 million for Long-Term Debt.
Statement of Cash Flows
In the Statement of Cash Flows as of December 31, 2003, the 2003
quarter includes the following amounts attributable to
Affiliates under Joint Control:
- P$47 million for depreciation
- P$19 million for acquisition of property, plant and equipment
- P$449 million for cash at closing
Oil and Gas Exploration and Production
Oil and Gas Exploration and Production
Net sales for 2004 quarter rose to P$780 million or 11.4% mainly
as a consequence of increased oil sales volumes.
Combined oil and gas daily sales volumes increased to 160.9
thousand boe or 12.4% in 2004 quarter. The 2003 quarter was
affected by the National Oil Strike in Venezuela. At the
conclusion of the national strike, the situation was gradually
reversed and finally overcome.
Oil sales volumes increased to 115.2 thousand barrels per day or
18% in 2004 quarter mainly due to the beforementioned effect of
the production in Venezuela. Gas sales volumes were similar in
both quarters amounting to 274.5 million cubic feet per day in
2004 quarter.
During 2004 quarter, the oil average price, including the
effects of hedging transactions and taxes on exports, decreased
to P$69 per barrel or 5.5%. The reduction in the average sales
price in 2004 quarter was mainly attributable to:
- The effect of the strike in Venezuela at the beginning of 2003
which resulted in increased prices in the second round
Oritupano-Leona area, due to accrual of the Capital Fee
(reimbursement of investments made), which is independent of the
volumes delivered.
- The 8.5% peso appreciation against the U.S. dollar which was
partially offset by a 3.5% increase in international oil prices
(WTI).
The crude oil price hedging policy accounted for a P$28 million
opportunity cost in 2003 quarter. Since no derivative
instruments qualified for hedge accounting in 2004 quarter, no
results were recorded in such respect.
Taxes on crude oil exports in Argentina accounted for P$3
million and P$16 million lower revenues in 2004 and 2003
quarters, respectively. Such reduction results from increased
sales in the local market in 2004 quarter.
In Argentina, sales increased to P$418 million or 4.5% in 2004
quarter mainly due to the following:
- The sales price per barrel of oil increased to P$85.2 or 7.8%
in 2004 quarter mainly as a consequence of the effect derived
from changes in the hedging policy, reduced taxes on exports and
increased crude oil international prices. Such effects were
mitigated by the peso appreciation.
- The 3.5% drop in sales volumes of oil equivalent to 83.6
thousand barrels in 2004 quarter as a result of the field
natural decline. Crude oil sales volumes decreased to 49.8
thousand barrels per day or 3.7% in 2004 quarter. Gas daily
sales volumes decreased to 202.6 million cubic feet or 3.4% in
2004 quarter.
Combined oil and gas sales outside of Argentina increased to
P$362 million or 20.3% in 2004 quarter. Oil and gas sales
volumes increased to 77.4 thousand barrels of oil equivalent per
day or 36.7% in 2004 quarter. Crude oil average sale price per
barrel in 2004 quarter decreased to P$56.6 or 14.4% mainly due
to the high prices recorded in Venezuela during 2003 quarter as
a consequence of the effects of the strike mentioned above, the
peso appreciation which was partially offset by the WTI price
increase, and the fact that no results were recorded as a
consequence of hedging.
In Venezuela, oil and gas sales in 2004 quarter increased to
P$189 million or 36%. Crude oil average price per barrel
decreased to P$43.7 or 12.6% in 2004 quarter. Such price drop
results from the strike in Venezuela in 2003 which derives in
increased prices in the second round service agreements due to
accrual of the Capital Fee which is independent of the volume
delivered.
Daily sales volumes of oil equivalent in 2004 quarter increased
to 51.2 thousand barrels or 54.2 % as a result of the strike in
2003 quarter, which affected the production in the eastern area
and temporarily stopped operations at the Oritupano-Leona, Acema
and Mata oil fields.
In Ecuador, sales in 2004 quarter increased to P$47 million or
86.9%. The approval of the Development Plan for Block 18 was
effected during 2002 first quarter. As from such date, the
Company started drilling activities, especially at Palo Azul
field. Daily crude oil sales volumes in 2004 quarter, net of the
Government`s interest, rose to 5.7 thousand barrels per day or
119% at a price of P$90.32 per barrel.
Gross profit for 2004 quarter increased to P$408 million or 10%
mainly due to an increase in sales volumes. Gross margin on
sales decreased to 52.3% in 2004 quarter from 53% in 2003
quarter.
Administrative and selling expenses in 2004 quarter totaled P$93
million accounting for a P$47 million increase compared to 2003
quarter. Such improvement results from the rise in selling
expenses on account of the start of operations of OCP in
Ecuador.
Exploration expenses totaled P$81 million in 2004 quarter and
P$13 million in 2003 quarter. Following the successful effort
method implemented by the Company in its oil and gas exploration
and production activities, in 2004 quarter the Company charged
to income investments in Block 31 exploratory wells having a
duration of over one year.
Instruments that do not qualify for hedge accounting
Changes in the accounting measurement of derivative instruments
that do not qualify for hedge accounting are recognized in the
Income Statement under "Financial Income (Expense) and Holding
Gains (Losses)". In 2004 and 2003 quarters, the Company
recognized for crude oil derivative financial instruments that
do not qualify for hedge accounting P$178 million and P$52
million losses, respectively.
Refining
Expected Maturity
(1) The transactions included herein are swap options exercised
by the counterparties.
(2) The transactions included herein are sold swap options.
As from this fiscal year, allocation of product sales among
business units was subject to a series of changes. As a result,
the Refining business segment commercializes oil brokerage
service operations, previously commercialized by the Hydrocarbon
Marketing and Transportation business unit. Such operations
accounted for P$19 million sales revenues in 2004 quarter with a
P$1 million contribution margin.
Operating income for the Refining business segment declined P$9
million from P$7 million in 2003 quarter, accounting for a P$2
million loss in 2004 quarter, mainly attributable to a reduction
in the business contribution margins.
Gross profit dropped P$9 million or 41% to P$13 million in 2004
quarter, due to a reduction in contribution margins partially
offset by increased sales volumes. Consequently, gross margin
decreased to 4% in 2004 quarter from 7% in 2003 quarter.
The 2004 quarter reduced margins were attributable to the
combined effect of lower sales prices that shrank an average of
4% and to the 3% increase in crude oil average cost to P$92.5
per barrel in 2004 quarter from P$89.7 per barrel in 2003
quarter.
Net sales of refinery products increased P$65 million or 21% to
P$375 million in 2004 quarter due to the combined effect of
increased sales volumes and reduced prices. Net sales for 2004
quarter include P$19 million attributable to crude oil trading
and brokerage operations.
In 2004 quarter, in line with the strategy designed to maximize
the business's global contribution, crude oil refining was
prioritized, thus significantly increasing operating integration
with the Oil and Gas Exploration and Production business
segment. As a result, crude oil volumes processed increased to
35,500 bbl/d or 26% in 2004 quarter.
Total sales volumes increased 17% in 2004 quarter. With a view
to optimizing marketing margins, changes were made in the mix of
products sold and distribution channels. In such respect,
domestic sales increased 29%, mainly due to diesel oil and
gasoline sales to other oil companies while exports recorded a
5% decrease compared to 2003 quarter.
Total diesel oil sales volumes increased 16% to 214 thousand
cubic meters, with a 23% increase in the domestic market,
partially offset by a 22% drop in exports, especially to
Paraguay. The diesel oil domestic market increased 6.9% in 2004
quarter compared to the same period of previous year, boosted by
a higher demand from the farming sector. Sales volumes increased
3.2%, with a 4.2% market share.
Total gasoline sales volumes rose 94%, with a 600% increase in
exports and a 64% increase in the domestic market. Except for
sales among oil companies, the domestic market did not show any
changes; however, the company's sales volume increased 24% with
a market share amounting to 3.7%.
Asphalts sales volumes increased 93% and the market share rose
to 38% in 2004 quarter from 24% in 2003 quarter. Domestic market
sales climbed 82% mainly due to the upturn of the road asphalt
market. In addition, exports recorded a 121% average growth,
especially to Bolivia.
As regards the other products, aromatics and paraffins sales
volumes also increased 21% and 19%, respectively, mainly as a
result of increased exports to bordering countries and the
United States. Conversely, heavy products sales volumes fell 6%,
due to the 30% drop in exports on account of reduced fuel oil
sales to the United States, offset by a 120% increase in
domestic sales.
In 2004 quarter, sales average prices dropped 4%, 24%, 15%, 8%
and 5% for diesel oil, asphalt, paraffins, gasoline and heavy
products, respectively, mainly due to the impact of the peso
appreciation.
Administrative and selling expenses increased to P$15 million in
2004 quarter from P$13 million in 2003 quarter, mainly as a
consequence of higher selling expenses boosted by the gas
station network expansion. Ratio on sales amounted to 4% in 2004
quarter and 4.2% in 2003 quarter.
Petrochemicals
Petrochemicals
Operating income for the Petrochemical business segment
increased P$7 million or 16% to P$52 million in 2004 quarter.
Gross profit rose P$12 million or 11.1% to P$80 million in 2004
quarter. Gross margin on sales increased to 25.4% in 2004
quarter from 23.5% in 2003 quarter. As regards the styrenics
business in Argentina, the increase in gross margin from 24.7%
in 2003 quarter to 25.5% in 2004 quarter was mainly attributable
to a price improvement. Regarding operations in Brazil, gross
margin increased to 23% in 2004 quarter from 18% in 2003 quarter
due to the combined effect of a sales price improvement and, to
a lesser extent, a reduction in raw material costs and operating
costs.
In Argentina, styrenics sales did not record significant
changes. In 2004 quarter, average sales prices were in line with
dollar-denominated international prices which were higher than
those recorded in 2003. In spite of that, the impact on sales
was mitigated by the peso appreciation.
In 2004 quarter, sales volumes totaled 46 thousand tons, in line
with volumes recorded in 2003 quarter.
Reflecting the Argentine market's recovery, the sales mix
changed, with a strong positioning in the domestic market to the
detriment of exports. Styrene and polystyrene domestic sales
grew 19% and 6%, respectively, while exports dropped 21% and
22%, respectively. Domestic volumes of synthetic rubber
increased an average of 56%, due to an increased demand for
products in the domestic market derived from import substitution
of manufactured products and increased exports of pneumatics.
In Brazil, Innova sales were similar in both quarters. Innova
sales prices in 2004 quarter rose 3%, in line with international
prices which increased 6% in dollars compared to 2003 quarter,
partially offset by the peso appreciation.
Fertilizer sales in 2004 quarter increased 19% to P$51 million
mainly due to a 10% price increase and a 9% sales volume
increase. This improvement reflects the strong recovery of the
farming industry which boosted the use of more fertilizers and
the commercial restructuring which allowed for the expansion the
sales area.
Sales prices were in line with international prices which were
higher than in 2003 quarter. In addition, there is a greater
incidence of resale products with prices higher than those of
the Company`s own manufactured products.
Administrative and selling expenses increased to P$29 million in
2004 quarter from P$27 million in 2003 quarter mainly as a
result of higher selling expenses incurred by Innova. The ratio
of administrative and selling expenses to sales accounted for
9.2% and 8.8% in 2004 and 2003 quarters, respectively.
Hydrocarbon Marketing and Transportation
As from the first quarter of 2004, allocation of product sales
among business units was subject to a series of changes. As a
result, the Hydrocarbon Marketing and Transportation business
unit sells the gas produced in Argentina by the Company and the
liquids obtained from gas processing, which products are
transferred from the Oil and Gas Exploration and Production
business segment on an arm length's basis. In addition, the
business segment's operations include gas and LPG brokerage
services while as from this fiscal year oil brokerage operations
are commercialized by the Refining business segment.
Excluding CIESA's proportional consolidation, sales revenues
significantly increased to P$85 million in 2004 quarter from P$9
million in 2003 quarter, due to the marketing changes mentioned
above.
In 2004 quarter, sales revenues for the gas and liquids produced
by the Company account for P$36 million and P$48 million,
respectively. Sales volumes of gas produced by the Company in
Argentina total 215.2 million cubic feet per day and liquids
sales volumes total 62.7 thousand tons.
Brokerage services accounted for P$1 million and P$9 millions
income for 2004 quarter and 2003 quarter respectively.
Electricity
Net sales of electricity generation increased to P$51 million or
16% in 2004 quarter.
Net sales attributable to Genelba Power Plant in 2004 quarter
increased to P$42 million or 17%, due to the increase in energy
delivered to the wholesale electric market in answer to the
increased demand and a higher demand from thermal plants on
account of the lower water flow contribution in the different
basins during 2004 quarter, and due to the effects of the high
water supply recorded in 2003 quarter which resulted in lower
energy deliveries by the Power Plant during such period.
Consequently, energy delivered increased to 1,289 GWh or 18%
from 1,091 GWh in 2003 quarter, as a result of an increase in
the plant factor from 71.5% in 2003 quarter to 92.3% in 2004
quarter. In March 2004 scheduled major maintenance works started
according to manufacturer's specifications, which fact had an
impact on the Power Plant's availability factor which fell to
93.3% or 6.2% in 2004 quarter from 99.5% in 2003 quarter. The
average price of energy and power delivered was similar in both
periods, averaging P$32.5 per MWh in 2004 quarter.
Net sales attributable to Pichi Pic£n Leuf£ Hydroelectric
Complex increased to P$9 million or 28.6% in 2004 period due to
the increase in sales average prices which allowed to reverse
the negative effects of a reduction in generation volumes. The
price increased to P$39.2 or 28% per MWh. Energy delivered
decreased to 219 GWh or 9% in 2004 quarter
from 241 GWh in 2003 quarter, as a consequence of decreased
water supply levels recorded in 2004 quarter compared to water
flows recorded in 2003 quarter which were 20% higher than
historic average values.
Gross profit from the generation business decreased to P$1
million in 2004 quarter from P$12 million in the previous
quarter, mainly boosted by the impact of higher costs derived
from the Power Plant's shutdown on account of scheduled major
maintenance works.
CONTACTS: Daniel E. Rennis
E-mail: drennis@petrobrasenergia.com
Alberto Jankowski
E-mail: ajankows@petrobrasenergia.com
Tel: (5411) 4344-6655
PETROBRAS ENERGIA: Fitch Affirms International Ratings at 'B-'
--------------------------------------------------------------
Fitch Ratings affirmed the international local and foreign
currency ratings of Petrobras Energia S.A. (PE) at 'B-' and
upgraded the Argentine national scale rating to 'A (Arg)' from
'BBB (Arg)'. Fitch Ratings has also upgraded the short-term
national rating to 'A2 (Arg)' from 'A3 (Arg)'. All ratings have
a Stable Rating Outlook.
The national scale upgrade reflects the Company's improved
financial ratios resulting from an increased cash generation.
The ratings also reflect the company's improved liquidity and
added financial flexibility as well as continued achievement of
productivity and efficiency gains. The company's strong level of
dollar denominated revenues and significant cash generation
outside of Argentina provide further support for the ratings.
Notwithstanding these strengths and improvements, the company's
credit profile continues to reflect fallout from Argentina's
sovereign crisis. The ongoing sovereign default, the shift in
government policies away from market-oriented frameworks, recent
heightened concerns regarding the integrity of the local energy
market (specifically natural gas) and the government's continued
lack of addressing systemic sector problems remain as
constraints, primarily on the international rating. PE also
remains subject to the combination of sizable capital
expenditure requirements and a debt structure largely
denominated in hard currencies. A degree of implicit parent
support from Petrobras is incorporated in the ratings.
PE has also reported a recovery in financial ratios with EBITDA-
to-interest improving to 3.6 times (x) for 2003 from 2.5x for
2002, primarily reflecting stable operating income and lower
interest expense due to more favorable interest rates. The
company also has maintained stronger than historical operating
margins due to the positive effect of the devaluation of the
local currency given the high proportion of dollar denominated
sales and its cost structure in pesos, which has allowed PE to
maintain an EBITDA margin greater than 40%.
At December 2003, the consolidated financial debt of PE
increased to US$2.824 billion from US$2.276 billion in 2002,
primarily due to changes in accounting principles that resulted
in the incorporation of its subsidiaries, Compania de
Inversiones de Energia S.A. (CIESA) and Districlec Inversora
S.A., in the consolidating process. Currently, approximately 67%
of total debt is attributed directly to PE (US$1.893 billion).
Virtually all of the company's long-term obligations are
denominated in U.S. dollars. The average life of debt is 3.9
years, although the company's strategy is to lengthen maturities
via refinancing efforts. The company has taken steps to improve
its financial flexibility through 2003 and first quarter of
2004.
For 2004, PE has scheduled debt maturities of US$361 million,
interest expense of approximately US$150 million and estimated
capital expenditures of approximately US$350 million. Assuming
similar operating performance for 2004, the company will require
additional external financing sources to meet its total
obligations. In the first quarter of 2004, the company repaid
approximately US$80 million and in April accessed the local
capital markets with a US$100 million issuance. Debt maturities
for the rest of the year (May through December 2004) are
approximately US$150 million, which should be manageable given
the company's recent financing successes and strong forecasted
oil prices. In 2005 and 2006, the company has amortizations of
debt by US$328 million and US$163 million, respectively.
The prospective cash flow generation of PE will continue to be
pressured by the strong reduction of capital investments during
2002 and 2003 to an average of US$280 million, versus an annual
average of US$640 million resulting in a delay in the
monetization of reserves. This impact has been reflected in the
fall in the daily production volumes. During 2003, the company
produced 161 thousand bbl/d (71% oil, 29% gas) with 58%
concentrated in Argentina. Production levels were 8% lower than
in 2002 (representing a 13% decline in gas and a 4% decline in
oil) primarily due to reduced activity in Venezuela during the
first quarter of 2003 and reflecting decline rates in Argentina
that are not being offset with sufficient new investment. The
company anticipates increasing gradually its volumes and
production, focusing this growth in Venezuela. The future level
of activities of the company is subject at the level of the
investments, being considered in US$350 million for 2004, with
levels of production near 170 thousand boe/d. It is important to
note, however, that expectations for the company's medium-term
evolution will have to incorporate Petrobras strategic plans for
PE. Petrobras is expected to announce its new strategic plan in
the near term.
PE participates in various public service electric and gas
companies, which have suffered materially from the effects of
the Emergency Law since January 2002, which established the
pesification and freezing of tariffs. Tariffs of the regulated
businesses in which PE participates not yet have been indexed,
anticipating some type of adjustment of the same ones towards
year-end. Regardless, Fitch does not anticipate that PE will
receive dividends or management fees from these entities in the
near term. The negotiations between the public service companies
and the government have been delayed and are not likely to be
addressed prior to December 2004.
PE is one of the most vertically integrated energy conglomerates
in Latin America with operations encompassing virtually all
segments of the energy value chain. Core business activities, in
order of importance, include oil and gas exploration and
production; refining and marketing; petrochemicals; and
electricity. PE is controlled by Petrobras Energia Participacoes
S.L. (Participacoes), a holding company controlled by Brazil's
national oil company, Petrobras. PE constitutes Participacoes'
sole operating asset. PE is consolidated as a Petrobras
subsidiary and its obligations are non-recourse to the Brazilian
parent. Fitch rates Petrobras' senior unsecured foreign currency
obligations 'B+' with a Stable Rating Outlook.
CONTACTS: Fitch Ratings
Jason Todd, +1-312-368-3217, Chicago
Ana Paula Ares, +5411-4327-2444, Buenos Aires
James Jockle (Media), +1-212-908-0547, New York
PETROBRAS ENERGIA: Relates Changes in the Board Of Directors
------------------------------------------------------------
Petrobras Energia Participaciones S.A. (Buenos Aires: PBE,
NYSE:PZE), controlling company with a 98.21% stake in Petrobras
EnergĦa S.A. (Buenos Aires: PESA), announced that on Friday,
Carlos M. Alvarez resigned from the position of Director of
Petrobras Energia S.A. and Petrobras Energia Participaciones
S.A. for personal reasons.
On the same grounds, Carlos M. Alvarez resigned from the
position of Chief Financial Officer of Petrobras Energia S.A..
At a meeting held Friday, the Boards of Directors of both
companies accepted the respective resignations from the
positions of director and Chief Financial Officer and Luis M.
Sas was appointed to fill such positions.
Luis M. Sas was also appointed Chief Financial Officer of
Petrobras Energia S.A..
Luis M. Sas (41) has been with Petrobras Energia for 20 years
and has performed varying executive functions in financial
areas. He has also served as Corporate Finance Manager at
Telecom Argentina and as Chief Financial Officer at Edesur for
two years. He is a member of the Board of Directors of several
affiliates. In 2002 he led the successful Company's debt
refinancing in the amount of US$2,000 million and he presently
conducts similar processes for other affiliates. He maintains a
strong relationship with both national and international
financial entities and bodies. He graduated as Certified Public
Accountant at the Buenos Aires University and was granted an MBA
by the IAE, Austral University.
QUIMETIL: Court Grants Request for Reorganization
-------------------------------------------------
Buenos Aires Court No. 9, with the assistance of Clerk No. 17,
granted the petition of Quimetil S.A. for a reorganization
following the company's failure to pay its debts, Infobae
reports.
Reorganization or "Concurso Preventivo" is an option available
for Argentine companies to prevent a straight liquidation.
The court appointed Mr. Pedro Luis Santa Maria to supervise the
reorganization process. He will verify creditors claims until
May 28, 2004. These claims will be the basis of the individual
reports that will be submitted to court on July 12, 2004. A
general report will also be presented on September 6, 2004.
The informative assembly, the last stage of a reorganization,
will be held on November 9, 2004.
CONTACT: Pedro Luis Santa Maria, Receiver
Lavalle 1430
Buenos Aires
SARGELI: Court Issues Bankruptcy Ruling
---------------------------------------
Buenos Aires Court No. 24 declared Sargeli S.R.L. bankrupt. This
declaration will divest the Company of assets that will then be
administered and eventually disposed by the receiver, Mr.
Eduardo Pedro Lavagnino, in accordance with Argentine law in
order to pay creditors.
Infobae reports that Mr. Lavagnino will verify creditors' claims
until June 30, 2004. Following claims verification, he will
submit the individual reports, which were prepared based on the
verification results, to the court on August 16, 2004. The
general report is due for submission on September 17, 2004.
CONTACT: Mr. Eduardo Pedro Lavagnino, Receiver
Florida 165
Buenos Aires
SIDECO AMERICANA: $200M in Bonds Still At Junk Level
----------------------------------------------------
Some US$200 million worth of corporate bonds issued by Argentine
company Sideco America S.A. remain at junk level, the CNV
indicates.
In its Web site, the Argentine securities regulator reveals that
Fitch Argentina Calificadora de Riesgo S.A maintains a `D(arg)'
rating on the bonds described as "Obligaciones Negociables." The
bonds, issued under "Program," matured on June 30, 2000.
The Company's financial health as of December 31, 2003,
determined the action taken by Fitch.
TELECOM ARGENTINA: Sees Reduction in 1Q04 Net Profit
----------------------------------------------------
Telecom Argentina, the country's leading fixed-line provider,
saw its net profit plummet to ARS124 million in the first
quarter of 2004 from ARS907 million in the same year-ago period,
reports Dow Jones Business News.
Sales, however, grew 20% from ARS851 million in the first
quarter of 2003 to ARS1.02 billion in the corresponding period
of the current year. This growth comes amid a recovery in the
company's mobile telephony business. Telecom Argentina now
registers 3.4 million cellular customers in both Argentina and
Paraguay, up 23% from a client base of 2.75 million customers
last year. Average revenue per user was ARS34, higher than ARS28
in the year-earlier period.
Telecom Argentina revealed its operating costs rose
significantly from ARS875 million a year earlier to ARS952
million during the latest quarter. Company officials indicated
marketing and commissions are the two areas where spending was
expected to be higher this year as competition heats up in the
mobile telephony sector. Publicity costs spiked 340% to ARS22
million and sales commissions totaled ARS52 million, up 44% from
a year earlier.
"It should be noted that in the first quarter of 2004, the level
of competition in cellular service has risen significantly
following the launch of GSM services by market operators,"
Telecom Argentina said, referring to a series of network
expansions by its competitors, Spanish-owned Telefonica's Unifon
brand and Mexican-owned CTI Movil.
In the meantime, Dow Jones also reveals that Telecom Argentina
booked a financial holdings gain of ARS95 million, much smaller
than the ARS961 million gain of a year earlier, as the peso's
appreciation during the first quarter of 2004 had been slower
than in the same quarter last year.
CONTACT: TELECOM ARGENTINA S.A.
Alicia Moreau de Justo 50, 10th Floor
Capital Federal (1107) Republica Argentina
Phone: +54 11 4968 4000
Home Page: http://www.telecom.com.ar
Contacts:
Alberto J. Ricciardi, Chief Financial Officer
Elvira Lazzati, Finance Director
Pedro Insussarry, Investor Relations Manager
Phone: (5411) 4968-3626/3627
Fax: (5411) 4313-5842/3109
E-mail: inversores@intersrv.telecom.com.ar
TOURNET: Files for Bankruptcy
-----------------------------
Tournet LTD, an Internet service provider based in Buenos Aires,
filed a petition for bankruptcy after failing to pay its
liabilities since August of 2003.
The Company's case is pending before Court No. 9, under Judge
Favier Dubois, who is assisted by Clerk No. 18, Dr. Tarrico
Vera.
CONTACT: Tournet S.A.
Viamonte 723
Buenos Aires
VELSUR: Creditor Petitions for Involuntary Bankruptcy
-----------------------------------------------------
Judge Braga of Buenos Aires Court No. 22 declared Velsur SACI
bankrupt, says La Nacion. The ruling comes in approval of the
bankruptcy petition filed by the Company's creditor, Mr. Eduardo
Fonda, for nonpayment of US$63,952.98 in debt.
Clerk No. 43, Dr. Mata, assists the court on the case, which
will conclude with the liquidation of the Company's assets.
The Company's receiver, Ms. Ines Clos, will examine and
authenticate creditors' claims until June 15, 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: Velsur SACI
Avenida Corrientes 1670
Buenos Aires
Ms. Ines Clos
Lavalle 715, piso No. 6 "A"
Buenos Aires
WELAND: Reorganizes to Pay Debts
--------------------------------
Buenos Aires-based Weland S.A. enters reorganization as part of
the measures the Company will take in the coming months to repay
its creditors. The City's Court No. 10, with the assistance of
Clerk No. 19, appointed Mr. Abella Fernandez Martinez as
receiver on this case.
Infobae reports that creditors have until June 22, 2004 to
submit their proofs of claim to the receiver, who will verify
these claims and submit them to court as individual reports on
August 26, 2004. After these reports are processed in court, the
receiver will then prepare the general report and submit it to
court on October 7, 2004. The informative assembly is scheduled
on April 7, 2004.
CONTACT: Weland S.A.
Pasaje Las Tunas 11174
Buenos Aires
Mr. Abella Fernandez Martinez, Receiver
Av Gaona 5050
Buenos Aires
=============
B E R M U D A
=============
GLOBAL CROSSING: Faces Another Securities Lawsuit
-------------------------------------------------
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has
filed a lawsuit on behalf of its client and on behalf of
purchasers of the securities of Global Crossing Limited ("Global
Crossing" or the "Company") (Nasdaq:GLBCE - News) between
December 24, 2003 and April 26, 2004, inclusive (the "Class
Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The action is pending in the United States District Court for
District of New Jersey against defendants Global Crossing, John
Legere (CEO) and Dan O'Brien (CFO). According to the complaint,
defendants violated sections 10(b) and 20(a) of the Exchange
Act, and Rule 10b-5 by issuing a series of material
misrepresentations to the market during the Class Period.
The complaint alleges that throughout the Class Period, Global
Crossing reported positive results in publicly disseminated
press releases and SEC filings. Defendants attributed these
purportedly positive results to the Company's emergence from
bankruptcy protection on December 9, 2003, and decreases in fees
the Company paid to other carriers for use of their lines. Such
fees are referred to in the industry as "cost of access." In
addition, the complaint charges that defendants represented that
they actively monitored the Company's system of estimating its
costs of access, and further, that these estimates were adjusted
as invoices received from access providers.
The complaint alleges defendants knew or recklessly disregarded
that: (i) Global Crossing lacked adequate internal controls,
(ii) Global Crossing's costs of access were materially
understated in Global Crossing's financial statements, and, as a
result, (iii) Global Crossing's reported earnings were at all
relevant times, artificially inflated.
On April 27, 2004, minutes after the market opened, defendants
disclosed that Global Crossing would restate its previously
issued financial statements as far back as fiscal 2002 because
defendants had understated the accrued cost of access liability
by $50 million to $80 million. The Company stated that the
understatement of its cost of access liability was due to
"incorrect estimates of cost of access expenses and the failure
to reconcile these expenses to vendor invoices," that there were
material weaknesses in its internal controls, and that investors
should disregard the Company's financial statements for fiscal
2002 and 2003, including interim periods. The Company further
stated that investors should disregard defendants' previous
guidance with respect to Global Crossing's 2004 results. In
reaction to this news, the price of Global Crossing common stock
fell $5.00, or 27.4%, from its previous day's closing price of
$18.20 per share, to close on April 27, 2004 at $13.20.
If you bought the securities of Global Crossing between December
24, 2003 and April 26, 2004, inclusive, and sustained damages,
you may, no later than June 29, 2004, request that the Court
appoint you as lead plaintiff. There are certain legal
requirements to serve as Lead Plaintiff. Any member of the
purported class may move the court to serve as Lead Plaintiff
through counsel of their choice or may choose to remain an
absent class member. Your ability to share in any recovery is
not, however, affected by the decision whether or not to serve
as Lead Plaintiff. To be a member of the class, you need not
take any action at this time.
CONTACT:
Steven J. Toll, Esq.
Hadiya Alemu
COHEN, MILSTEIN, HAUSFELD & TOLL, P.L.L.C.
1100 New York Avenue, N.W.
West Tower - Suite 500
Washington, D.C. 20005
Telephone: 888-240-0775 or 202-408-4600
E-mail: stoll@cmht.com or halemu@cmht.com,
LORAL SPACE: Files First Quarter 2004 Form 10-Q
-----------------------------------------------
Loral Space & Communications (OTC Bulletin Board: LRLSQ) filed
Monday its report on Form 10-Q with the Securities and Exchange
Commission in which it reported financial results for the first
quarter ended March 31, 2004.
To see 10-Q: http://bankrupt.com/misc/FORM_10-Q.htm
Loral Space & Communications is a satellite communications
company. It 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. Loral also is a world-class
leader in the design and manufacture of satellites and satellite
systems for commercial and government applications including
direct-to-home television, broadband communications, wireless
telephony, weather monitoring and air traffic management.
CONTACT: Jeanette Clonan
John McCarthy
(212) 697-1105
===========
B R A Z I L
===========
AMBEV: Analysts Predict Lower 1Q Profit, Sales
----------------------------------------------
A weak economy, intense competition in Brazil's beer market as
well as price discounts made in some parts of the country will
likely influence Companhia de Bebidas das Americas' first
quarter results, reports Reuters.
Mr. Pedro Galdi of Sudameris Brokerage forecasts that the first
quarter results for the domestic market will continue to reflect
the weak economic scenario. Poor summer weather in Brazil,
traditionally one of the strongest periods for beer sales, also
affected overall sales during the period.
Stiff competition in the Brazilian beer market, where companies
often have to resort to price discounts to win costumers, also
played a key role in Ambev's revenue figures for the recent
quarter.
Merill Lynch reports that while Ambev recovered 1.7 percent of
market share during the quarter from rivals Schinariol and
Molson these levels are still short of last year's figures when
the company boasted of a 69.4 percent stake in the beer market.
AmBev is expected to publish a first-quarter net profit of about
351 million reais ($112 million) as opposed to a net income of
509 million reais in the same period of last year. However,
analysts are optimistic that AmBev's first-quarter operating
earnings and revenue should be higher than last year due to
price rises in mid-2003 and lower financial expenses from a
reduced currency hedge position.
BANCO ITAU: S&P Affirms Ratings
-------------------------------
Standard & Poor's Ratings Services affirmed Monday its 'BB/B'
local currency and 'B+/B' foreign currency credit ratings on
Banco Itau S.A. (Itau). The stable outlook on the local currency
and national scale ratings, as well as the positive outlook on
the foreign currency rating, were maintained.
The ratings on Itau incorporate its exposure to the economic
risk of the Brazilian financial system. The ratings benefit from
the bank's strong, well-diversified business profile,
professional management team, focused strategy, and above-
average profitability.
Itau continues to be one of the most creditworthy institutions
not only in Brazil but among all banks in Latin America. With
BrR127.0 billion in assets ($43.7 billion at BrR2.91 to $1) at
March 2004, Itau maintains its position as the second-largest
private bank in Brazil and has an extensive branch network to
service approximately 9.1 million active clients. "The bank
continues to focus on the delivery of financial services within
Brazil and internationally. In addition, with the acquisition of
Banco BBA Creditanstalt, the group reinforced its position as a
wholesale bank by incorporating Banco BBA's track record and
expertise in this segment," said Standard & Poor's credit
analyst Tamara Berenholc.
The stable outlook on Banco Itau's local currency credit rating
incorporates the economic risks of the Brazilian banking
industry and balances the bank's good business profile and
superior profitability with the maintenance of adequate asset
quality indicators.
The positive outlook on Banco Itau's foreign currency credit
rating reflects the outlook on the sovereign credit rating of
the Federative Republic of Brazil. At current levels, a change
in the foreign currency sovereign credit rating would lead to a
similar action on Banco Itau's foreign currency rating.
=========
C H I L E
=========
TELEFONICA CTC: S&P Says Outlook Is Stable
------------------------------------------
Standard & Poor's Ratings Services removed its 'BBB' long-term
counterparty credit ratings on Compania de Telecomunicaciones de
Chile S.A. (CTC) from CreditWatch, where they had been placed on
March 10, 2004. The outlook is now stable.
The action follows the publication of the final tariff decree
resulting from the scheduled five-year fixed telephony revision
process for 2004-2009. "The decree contemplates a much milder
tariff scenario for CTC compared to the original proposal
submitted by the Subtel in March 2004," said Standard & Poor's
credit analyst Ivana Recalde.
According to the Subtel, the final decree establishes a
reduction in CTC's measured local services tariffs of about
14.4%, offset, to a great extent, by an increase in fixed
charges and in access charges of about 7% and 39.6%,
respectively (compared to a reduction in fixed charges and
variable tariffs of about 19.2% and 36.2%, respectively, of the
original proposal). According to the company's estimations and
considering the redistribution of traffic toward lower tariff
levels, regulated local telephony revenues would decrease by
about 3% to 5%. Growth of the company's mobile subscriber base,
further penetration of value-added services, and moderate debt,
investments, and dividends levels are expected to help mitigate
the impact of tariff revision and increased competition in most
of the segments.
The ratings on CTC also reflect the company's leading
competitive position in the Chilean telecommunications sector
and its moderate financial policy, enhanced by the strength and
expertise of its major owner, Telefonica de Espana S.A. These
strengths are partially offset by regulatory risk and tariff
revisions, which can result in aggressive interference in CTC's
local-service pricing strategy, as seen during 1999. In
addition, CTC faces increasing competition in most segments.
With a network of about 2.4 million lines in service and 2.5
million mobile subscribers as of March 2004, CTC is Chile's
largest telecommunications provider, operating nationwide. The
company provides local, long-distance, mobile, and data
services. During first-quarter 2004, 43% of its revenues came
from fixed telephony, 33% from mobile services, 9% from
corporate services, and 8% from long-distance traffic.
The stable outlook reflects Standard & Poor's expectations that
CTC's solid market position and moderate debt, investments, and
dividends levels will allow the company to significantly offset
the effects of the new tariff revision and maintain robust
financial indicators. The rating and outlook also assume that
any potential merger-operating or organizational-between CTC's
mobile division and Bellsouth's Chilean operations will be
carried out without significantly affecting CTC's operating
cash-flow generation.
===============
C O L O M B I A
===============
CHIQUITA BRANDS: Reports Net Income Of $20 Million In 1Q04
----------------------------------------------------------
Chiquita Brands International, Inc. (NYSE: CQB) reported Friday
first-quarter net income of $20 million, or $0.46 per diluted
share. The company earned $25 million, or $0.62 per diluted
share, in the year-ago quarter.
FINANCIAL HIGHLIGHTS
Net sales for the quarter were $793 million, up $322 million
from $471 million in the first quarter of 2003. Atlanta AG, a
German fresh produce distributor acquired at the end of March
2003, accounted for $283 million of the increase. The remainder
resulted from favorable European exchange rates and increased
other fresh produce sales, partially offset by lower local
banana pricing.
Operating income from continuing operations in the first quarter
of 2004 was $32 million, compared to $38 million in the year-ago
period.
Operating income in the first quarter of 2004 included the
following: a $4 million charge related to stock options and
restricted stock previously granted to the company's chairman
and former CEO that will vest immediately upon his retirement as
chairman on May 25, 2004; $3 million of operating losses related
to the start-up of the company's fresh cut fruit operation; $2
million of costs associated with higher legal and professional
fees; and $2 million of expenses associated with investment
spending.
Operating income in the first quarter of 2003 included the
following: $2 million of income from equity method joint
ventures sold in 2003; and $6 million of charges related to
restructuring at Atlanta and severance associated with cost-
reduction programs.
"We had a strong quarter," said Fernando Aguirre, president and
chief executive officer. "In spite of difficult market
conditions, our underlying business performance was on par with
the strong results posted in the year-ago period. We faced lower
local pricing in North America and Europe, but we realized
benefits from currency exchange and Atlanta's restructuring.
Moreover, pricing has improved since the end of the quarter."
QUARTERLY SEGMENT RESULTS
(All comparisons below are to the first quarter of 2003, unless
otherwise specified.)
Bananas
First-quarter 2004 net sales for the company's banana segment
rose to $419 million, up $41 million. The acquisition of Atlanta
accounted for $36 million of the sales increase.
First-quarter operating income for the company's banana segment
was $28 million, compared to $35 million last year.
Banana operating results were favorably affected by:
$5 million of net European pricing and currency benefit,
comprised of a $23 million net increase from currency, partially
offset by $18 million in lower local European pricing (see
Exhibit B for details); and
The absence of charges related to restructuring at Atlanta and
severance, compared to $3 million of such charges in the year-
ago quarter.
These items were offset by:
$7 million adverse effect of North American banana pricing, due
both to higher spot market prices in last year's first quarter
after flooding in Costa Rica and Panama had limited supply, and
to lower prices on contracts negotiated in 2003;
$4 million charge related to stock options and restricted stock
that were previously granted to the company's chairman and
former CEO and will vest immediately upon his retirement in May
2004;
$2 million of costs associated with increased legal and
professional fees; and
$2 million of expenses associated with investment spending.
For further details on banana volume and pricing, see Exhibits A
and B.
Other Fresh Produce
The company's other fresh produce segment includes the marketing
and distribution of fresh fruits and vegetables other than
bananas. The segment also includes Chiquita's new fresh-cut
fruit business.
First-quarter 2004 net sales for other fresh produce were $360
million, compared to $81 million in the 2003 first quarter.
Approximately $247 million of the increase was due to the
acquisition of Atlanta.
First-quarter 2004 operating income for the other fresh produce
segment was $3 million, compared to operating income of $2
million in the first quarter of 2003. The results included $3
million of losses associated with the start-up of Chiquita Fresh
Cut Fruit in 2004, and $3 million of charges at Atlanta,
primarily related to severance and asset write-downs, in 2003.
DEBT
As of March 31, 2004, the company had $380 million of total debt
and $121 million of cash. Total debt at Dec. 31, 2003 was $395
million. Details on the first-quarter debt reduction can be
found in Exhibit C.
DEPARTMENT OF JUSTICE INVESTIGATION
In April 2003, the company's management and audit committee, in
consultation with the board of directors, voluntarily disclosed
to the U.S. Department of Justice that the company's banana
producing subsidiary in Colombia has been forced to make
"protection" payments to certain groups in that country which
have been designated under United States law as foreign
terrorist organizations. The company's sole reason for
submitting to these payment demands has been to protect its
employees from the risks to their safety if the payments were
not made.
The voluntary disclosure to the Justice Department was made
because the company's management became aware that these groups
had been designated as foreign terrorist organizations under a
U.S. statute that makes it a crime to support such an
organization. The company requested the Justice Department's
guidance. Following the voluntary disclosure, the Department
undertook an investigation. The company has cooperated with that
investigation.
Recently, the Department advised that, as part of the
investigation, it will be evaluating the role and conduct of the
company and some of its officers. The company cannot predict the
outcome of the investigation or its possible effect on the
company or its Colombian subsidiary.
Chiquita Brands International is a leading international
marketer, producer and distributor of high-quality bananas and
other fresh produce, which are 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 North
America and Europe. The company also distributes and markets
fresh-cut fruit and other branded, value-added fruit products.
To see financial statements:
http://bankrupt.com/misc/Chiquita_Brands.txt
CONTACT: News Media: Michael Mitchell,
513-784-8959, mmitchell@chiquita.com
Investors: Monique Wise,
513-784-8935, mwise@chiquita.com
Web site: http://www.chiquita.com
===================================
D O M I N I C A N R E P U B L I C
===================================
* IMF Issues Mission Statement to the Dominican Republic
--------------------------------------------------------
The following statement was issued Friday in Santo Domingo by
Jose Fajgenbaum, Deputy Director of the Western Hemisphere
Department of the International Monetary Fund, at the end of a
planned first round of discussions with the authorities of the
Dominican Republic, as part of the second review of the
country's Stand-By Arrangement with the IMF:
"During this visit to Santo Domingo, we assessed recent
developments in the economy of the Dominican Republic, and we
discussed with the Dominican authorities their recent and
planned policy efforts to support their economic program for
2004.
"Although the program was adversely affected earlier this year
by higher-than-expected inflation, a major increase in oil
import prices, and renewed weakness of the peso, the authorities
took steps that tightened monetary conditions and brought down
base money. This in turn helped stabilize the exchange rate and
led to a sharp drop in inflation in March and April. The
authorities intend to continue to hold a firm monetary stance in
order to consolidate confidence in the peso and the reduction of
inflation. Fiscal policy also has been affected by the
developments mentioned above, but the authorities remain
committed to achieving the program's fiscal objectives.
"After recently negotiating almost US$200 million in debt
service relief from the Paris Club, the authorities are about to
approach other bilateral creditors and are examining
alternatives for private financing, with a view to completing
the external financing of the program for 2004. At the same
time, the authorities continue to move forward in the important
area of banking sector reforms, broadly consistent with the
agenda established under their program.
"The discussions of the second program review will continue in
the coming weeks, after the authorities have had an opportunity
to further develop and evaluate policy options consistent with
recent developments and the program's objectives for 2004. We
look forward to continuing these discussions," Mr. Fajgenbaum
stated.
CONTACT: INTERNATIONAL MONETARY FUND
700 19th Street, NW
Washington, D.C. 20431 USA
IMF EXTERNAL RELATIONS DEPARTMENT
Public Affairs: 202-623-7300 - Fax: 202-623-6278
Media Relations: 202-623-7100 - Fax: 202-623-6772
=============
E C U A D O R
=============
PACIFICTEL: To Hold Insurance Bidding This Week
-----------------------------------------------
A report by local daily El Universo quoted Chairman Alberto
Perez of Ecuadorian state telecoms firm Pacifictel as saying
that the Company will be holding a public bidding this week for
an insurer that will handle the company's assets, relates
BNamericas.
"We hope that all insurers in the market participate as there
are safeguards to guarantee transparency in this issue," Mr.
Perez said.
The bidding comes after Pacifictel cancelled in March its
insurance contract with local insurer La Union due to a
controversy surrounding the terms of La Union's coverage.
Banking regulator SB had forbid La Union from selling fire
insurance policies for six months because of alleged anomalies
involving fire policies issued for Pacifictel by La Union, which
was accused of overcharging the telecoms company by as much as
US$1 million. The controversy had forced Mauricio Galindo to
step down as president of Pacifictel.
An Ecuadorian court has overturned the SB's decision on La Union
recently.
===========
M E X I C O
===========
GRUPO TMM: Extends Bondholder Committee Agreement
-------------------------------------------------
Grupo TMM, S.A. (NYSE: TMM - News; BMV: TMM A ("TMM") reached an
agreement on an extension of the target dates for effectuating
its previously announced agreement on the principal terms of a
restructuring with an ad hoc committee of bondholders
representing more than 69 percent of its 9 1/2 percent Notes due
2003 and its 10 1/4 percent Senior Notes due 2006 (together, the
"Existing Notes"), in the aggregate principal amounts
outstanding of $176.9 million and $200 million, respectively.
The restructuring will be accomplished through a registered
exchange offer of new senior secured notes due 2007 for the
Existing Notes, together with a consent solicitation and
prepackaged plan solicitation. TMM has submitted a Report on
Form 6-K to the U.S. Securities and Exchange Commission, which
includes the First Amendment to Voting Agreement setting forth
the extended dates, and interested parties are referred to such
filing and its exhibits for a more complete description thereof.
This announcement is neither an offer to purchase nor a
solicitation of an offer to sell Grupo TMM Notes. The exchange
offer and consent solicitation, when made, will not be made to,
nor will tenders be accepted from, or on behalf of, holders of
Existing Notes in any jurisdiction, in which the making of
exchange offers and consent solicitations or the acceptance
thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where securities, blue sky
laws or other laws require exchange offers and consent
solicitations to be made by a licensed broker or dealer, the
exchange offers and consent solicitations will be deemed to be
made on behalf of Grupo TMM by the dealer manager or one or more
registered brokers or dealers licensed under the laws of such
jurisdiction.
CONTACT: Grupo TMM
Investor Relations
Brad Skinner, 011-525-55-629-8725 or 203-247-2420
brad.skinner@tmm.com.mx
Dresner Corporate Services
General Investors, Analysts and Media
Kristine Walczak, 312-726-3600
kwalczak@dresnerco.com
Proa/StructurA
Media Relations
Marco Provencio, 011-525-55-629-8708
011-525-55-442-4948
mp@proa.structura.com.mx
Web Site: www.TMM.com.mx
TV AZTECA: Shares Plummet Amid Board Resignations
-------------------------------------------------
Shares of Mexican broadcaster TV Azteca plunged Monday on
reports that two of its prominent independent directors have
resigned.
Reuters reports that Mexico City-traded shares of TV Azteca
extended their losses to close at MXN5.18, down 17.7% while its
U.S.-traded shares tumbled 19.2% to US$7.03.
In a brief statement released late Friday, TV Azteca informed
that Mr. James R. Jones - a former chairman of the American
Stock Exchange and former ambassador to Mexico - and Mr. Gene F.
Jankowski - a former chairman of CBS Broadcasting Group and an
investment banker, had resigned from the board.
The resignations came as Azteca's owner and chairman, Ricardo
Salinas Pliego, is under investigation by market regulators in
Mexico and the US over allegations of irregularities in a
business deal he made last year with another of his companies,
the wireless operator Unefon.
The announcement raises fresh doubts over a deal in which Mr.
Salinas and a Mexican partner each earned US$109 millio by
buying Unefon debt at a discount, then selling it back to the
same company at its nominal value.
Azteca then owned 46.5% of Unefon but neither company was
informed at the time of Mr. Salinas's involvement in the deal.
That involvement first came to light in December when it was
revealed that Azteca's New York lawyers, Akin Gump Strauss Hauer
& Feld, had argued that Mr. Salinas had a duty to disclose it.
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
===============
P A R A G U A Y
===============
MILLICOM INTERNATIONAL: Passes 6 Million Subscriber Mark
---------------------------------------------------------
Marc Beuls, President and CEO of Millicom International Cellular
commented: "Since the end of the first quarter we have seen
strong subscriber growth in all clusters and especially in our
operations in Vietnam, Cambodia, Paraguay, Guatemala and
Senegal."
Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa. It currently has a total of 16
cellular operations and licenses in 15 countries. The Group's
cellular operations have a combined population under license of
approximately 387 million people.
CONTACT: Marc Beuls
President and Chief Executive Officer
Millicom International Cellular S.A., Luxembourg
Telephone: +352 27 759 327
Andrew Best
Investor Relations
Shared Value Ltd, London
Telephone: +44 20 7321 5022
Web Site: www.millicom.com
=============
U R U G U A Y
=============
SUDAMTEX: Workers and Creditors Mull Industrialist's Bid
---------------------------------------------------------
Former workers and creditors of Sudamtex, a Uruguayan textile
concern that went bankrupt and was taken over by state-owned
BROU and Citibank, are evaluating the offer of industrialist Mr.
Daniel Soloducho to acquire the company's assets.
Local daily El Pais reports that Mr. Soloducho has proposed to
give the workers of Sudamtex wages equal to those being given at
Dancotex, another textile plant owmed by the industrialist.
=================
V E N E Z U E L A
=================
SIDOR: Strike Sputters, Production Resumes
------------------------------------------
The strike that has paralyzed operations at Venezuelan steel
maker Siderurgica del Orinoco (Sidor) for almost three weeks has
fizzled out as some 3,000 unionized and contractual employees
returned to work Monday, reports Dow Jones.
With the workers back on the job, Sidor said in a statement
Monday production has reached 25% of normal levels, and it has
resumed deliveries to international and domestic clients. The
steel maker exports approximately 2.1 million metric tons of
steel annually to dozens of countries, including the U.S.,
Mexico, China and Colombia.
Sidor had been suffering daily losses of US$3 million due to the
strike, while the labor ministry said it cost the country an
estimated US$165 million in production losses, mainly due to
shortages of automobile parts, tubing, and manufacturing
components.
Some 11,000 members of the labor union Sutiss joined the strike,
which started April 22, with demands for back pay and 20% of
Sidor's stock, which was promised to them under a 1998
privatization agreement.
Sidor is jointly owned by Mexico's Hylsamex SA (HLEFTY),
Argentina's Siderar SA (ERAR.BA), Venezuela's Sivensa (E.SVS)
and Brazil's Usiminas (USIM5.BR).
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
Lucilo Junior M. Pinili, Editors.
Copyright 2004. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
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Information contained herein is obtained from sources believed
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The TCR Latin America subscription rate is $575 per half-year,
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subscription or balance thereof are $25 each. For subscription
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