/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040531.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, May 31, 2004, Vol. 5, Issue 106 Headlines A R G E N T I N A ADSUM: Prepares for Reorganization DOSO: Verification Deadline Fixed ESTABLECIMIENTO INDUSTRIAL: Verification Deadline Approaches FEDERATIVA DE CENTROS: Declared Insolvent by Court FRIO NORTE: Court Converts Bankruptcy to Reorganization HALYO HERMANOS: Get Court's Ok for Reorganization INDUSTRIAS EUROMODA: Court Orders Liquidation IMTEK: Court Schedules Verifications Cut-off MAGNA PLAST: Creditors Bankruptcy Motion Gets Court's Nod MECANIZAR: Readies Settlement Proposal for Approval MONTAESCALERAS: Court Approves Creditor's Bankruptcy Call OESTE FABRIL: Initiates Reorganization SOLSER: Seeks Reorganization Approval From Court TE INSTALCOM: Court OKs Creditor's Bankruptcy Call TEXUL: Court Appoints Trustee for Reorganization TRANSENER: Creditor Files Involuntary Bankruptcy Petition VIALCOM: Enters Bankruptcy Process YACYRETA: Newly Created Group To Tackle Financial Woes *Argentina to Present Final Offer to Bondholders This Week B R A Z I L CSN: S&P Assigns `BB' Local-Currency Corporate Credit Rating CSN: Fitch Rates Export Receivables Master Trust Certificates CSN: CSN Islands VI Corp. 2004-1 Notes Assigned Prelim Rating ENRON: Obtains Enough Votes to Confirm Reorganization Plan MRS LOGISTICA: Cuts Debt to R$623.6 Mln in 1Q04 C H I L E TELEFONICA CTC: No Easy Sale for Mobile Division J A M A I C A KAISER ALUMINUM: Debtors Seeks to Delay Alpart Sale M E X I C O AEROMEXICO: Signs Code-Sharing Deal With Spanish Airline GRUPO MEXICO: Rail Companies Agree to Restructure Corporate Debt HYLSAMEX: Mulls Various Options to Facilitate Debt Refinancing SATMEX: Managers Scramble To Strike Agreement With Creditors P U E R T O R I C O CARIBBEAN RESTAURANTS: Proposed Bank Loan Gets B2 Rating T R I N I D A D & T O B A G O CDC: T&T Labor Minister Moves to Put an End to Dispute - - - - - - - - ================= A R G E N T I N A ================= ADSUM: Prepares for Reorganization ---------------------------------- Buenos Aires Judge No. 3, with assistance from Clerk No. 5, issued a resolution beginning the reorganization of Adsum S.R.L. This pronouncement authorizes the company to draft a settlement proposal with its creditors in order to prevent the liquidation of the company. The reorganization allows Adsum to retain control of its assets subject to certain conditions imposed by Argentine law and the oversight of the court appointed trustee. Infobae reports that Mr. Santiago Manuel Quiben will serve as trustee during the course of the reorganization. He will be validating creditors' proofs of claims until July 14, 2004. The results of the verification will be presented in court as individual reports on September 9, 2004. The trustee is also obligated to give the court a general report of the case on October 22, 2004. The general report summarizes events relevant to the reorganization and provides an audit of the company's accounting and business records. Adsum will present the completed settlement proposal to its creditors during the informative assembly scheduled on April 25, 2004. CONTACT: Adsum S.R.L. Malabia 2174 Buenos Aires Mr. Santiago Manuel Quiben, Trustee Esmeralda 783 Buenos Aires DOSO: Verification Deadline Fixed --------------------------------- The verification of creditors' claims for the Doso S.R.L. insolvency case is set to end on August 3, 2004, stated Infobae. Mr. Jose Andres Sabuqui, the court-appointed trustee tasked with examining the claims, will submit the validation results as individual reports on September 15, 2004. He will also present a general report in court on October 28, 2004. On April 27 next year, the company's creditors will vote on the settlement proposal prepared by the company. Infobae added the company's reorganization is handled by Buenos Aires Court No. 5. Clerk No. 10 assists the court in the proceedings. CONTACT: Doso S.R.L. Viamonte 1592 Buenos Aires Mr. Jose Antonio Sabuqui, Trustee Bernardo de Irigoyen 330 Buenos Aires ESTABLECIMIENTO INDUSTRIAL: Verification Deadline Approaches ------------------------------------------------------------ The verification of claims for the Establecimiento Industrial Suizo Argentino S.A. bankruptcy will end on August 10, 2004 according to Infobae. Creditors with claims against the bankrupt company must present proof of the liabilities to Mr. Luis Abranzon, the court-appointed trustee, before the deadline. Buenos Aires Court No. 15 handles the company's case with the assistance of Clerk No. 29. The bankruptcy will conclude with the liquidation of the company's assets to pay its creditors. CONTACT: Mr. Luis Abranzon, Trustee Pringles 835 Buenos Aires FEDERATIVA DE CENTROS: Declared Insolvent by Court -------------------------------------------------- Cordoba Commercial and Civil Court No. 4 issued a resolution initiating the reorganization of Union Federativa de Centros de Jubilados y Pensionados de la Provincia de Cordoba U.Fe.Cen.Cor. on May 27, 2004, reports Infobae. The court's insolvency declaration will permit the Union to formulate a settlement plan with its creditors. Mr. Angel Jose Pedano will oversee the reorganization as the court-appointed trustee. CONTACT: Mr. Angel Jose Pedano, Trustee Coronel Olmedo 51 Cordoba FRIO NORTE: Court Converts Bankruptcy to Reorganization ------------------------------------------------------- Salta Court No. 2 commuted its bankruptcy ruling for Frio Norte S.R.L. into a preventive reorganization, Infobae relates. The new reorganization case will still be subject to all the substantive and procedural requirements for insolvency filings. Mr. Alejandro Jose Karanicolas will serve as trustee during the reorganization proceedings. He will verify creditors' claims until June 23, 2004. The court also requires the trustee to submit the individual reports on August 23, 2004 and the general report on October 6, 2004. CONTACT: Frio Norte S.R.L. Aniceto Latorre 699 Salta Mr. Alejandro Jose Karanicolas, Trustee Avenida Belgrano 1277 Salta HALYO HERMANOS: Get Court's Ok for Reorganization ------------------------------------------------ Buenos Aires-based Company Halyo Hermanos S.R.L. begins the insolvency process after the city's court No. 16 granted its motion for reorganization. Clerk No. 32 will assist the court during case's run. According to Infobae, Mr. Nestor Raul Rozemberg will supervise the reorganization as the company's trustee. He will be accepting creditors' claims for verification until September 1, 2004. The verification phase is a crucial part in the reorganization since it determines the creditors who will be included in the company's settlement proposal. Mr. Rozemberg will present the accepted claims in court as individual reports on October 14, 2004. The submission of the case's general report follows on November 25, 2004. The court's acceptance of the general report and endorsement of the individual claims will pave the way for the informative assembly on July 13, 2005. CONTACT: Mr. Nestor Raul Rozemberg, Trustee Mansilla 3696 Buenos Aires INDUSTRIAS EUROMODA: Court Orders Liquidation --------------------------------------------- Industrias Euromoda S.R.L. prepares to wind-up its operations following the bankruptcy pronouncement issued by Buenos Aires Court No. 9 on May 27, 2004. The declaration effectively prohibits the company from administering its assets, control of which will be transferred to a court-appointed trustee. Infobae reports that the court appointed Mr. Juan Alberto Krimerman as trustee. He will be reviewing creditors' proofs of claims until July 14, 2004. The verified claims will be the basis for the individual reports to be presented for court approval on September 6, 2004. Afterwards, the trustee will also submit a general report on October 26, 2004. Clerk No. 17 assists the court on this case, which will end with the disposal of the company's assets to cover its liabilities. CONTACT: Mr. Juan Alberto Krimerman, Trustee Uruguay 594 Buenos Aires IMTEK: Court Schedules Verifications Cut-off -------------------------------------------- Mr. Jorge Eduardo Oddi, trustee for the Imtek S.A. bankruptcy, will accept creditors' claims for validation until August 18, 2004. Claims forwarded after the validation period will not be included in the payments to be made once the company is liquidated. Infobae states that Buenos Aires Judge No. 15, with assistance from Clerk No. 29, handles Imtek's bankruptcy case. CONTACT: Mr. Jorge Eduardo Oddi, Trustee Libertad 293 Buenos Aires MAGNA PLAST: Creditors Bankruptcy Motion Gets Court's Nod --------------------------------------------------------- Ipab S.R.L. successfully sought for the bankruptcy of Magna Plast S.A. after Judge Taillade of Buenos Aires Court No. 20 declared the Company "Quiebra," reports La Nacion. As such, the plastic-molding company will now start the bankruptcy process with Mr. Roberto Leibovicius as trustee. Creditors of the Company must submit their proofs of claim to the trustee before August 30,2004 for authentication. Failure to do so will mean a disqualification from the payments that will be made after the Company's assets are liquidated. Ipab sought for the Company's bankruptcy after the latter failed to pay debts amounting to US$ 4,520.68. Dr. Amaya, Clerk No. 39, assists the court on the case, which will culminate in the liquidation of all of its assets. CONTACT: Magna Plast S.A. Hipolito Yrigoyen 434 Buenos Aires Mr. Roberto Leibovicius, Trustee Tucuman 1585 Buenos Aires MECANIZAR: Readies Settlement Proposal for Approval --------------------------------------------------- Mecanizar S.R.L. will present the settlement proposal drafted for its creditors during the Company's bankruptcy proceedings at the informative assembly on July 24, 2004. The informative assembly, the final stage of a reorganization, will be held at the Commercial and Civil Court of San Jose de Metan in Salta. Infobae reports that Salta Court No. 2 is handling Mecanizar's insolvency case. CONTACT: Mecanizar S.R.L. San Jose de Metan Salta MONTAESCALERAS: Court Approves Creditor's Bankruptcy Call --------------------------------------------------------- Judge Garibotto of Buenos Aires Court No. 2 declared Montaescaleras S.A. bankrupt, says La Nacion. The ruling comes in approval of the bankruptcy petition filed by the Company's creditor, Instituto Saint Michel S.R.L., for nonpayment of US% 6,500 in debt. Clerk No. 4, Dr. Romero, assists the court on the case, which will conclude with the liquidation of the Company's assets. The court-appointed trustee, Mr. Claudio Haimovici, will examine and authenticate creditors' claims until August 12, 2004. This is done to determine the nature and amount of the Company's debts. Creditors must have their claims authenticated by the trustee by the said date in order to qualify for the payments that will be made after the Company's assets are liquidated. CONTACT: Montaescaleras S.A. Murillo 1082 Buenos Aires Mr. Claudio Haimovici, Trustee Sarmiento 3843 Buenos Aires OESTE FABRIL: Initiates Reorganization -------------------------------------- Oeste Fabril S.A., a textile company operating in Buenos Aires, received authorization from the court to proceed with its planned reorganization. La Nacion informs that Judge Ojea Quintana of the city's Court No. 12, with the assistance of Clerk No. 24 Dr. Medici Garrot, issued the ruling. Records provided by Oeste Fabril indicate that the company claims assets of US$ 217,800.89. The company also reported liabilities amounting to US$ 444,000.00. Ms. Norma Balmes will oversee the reorganization as the court's trustee. Creditors must submit proof of the company's indebtedness to the trustee before August 9, 2004 to qualify for the settlement proposal being drafted by the company. The informative assembly, the final stage of the reorganization, is scheduled on May 10, 2005. CONTACT: Oeste Fabril S.A. Armenian 1356 Buenos Aires Ms. Norma Balmes, Trustee Av. Presidente Roque S enz Pe�a 1185 Buenos Aires SOLSER: Seeks Reorganization Approval From Court ------------------------------------------------ Judge Fernandez of Buenos Aires Court No. 19 is currently reviewing the merits of the reorganization petition filed by Solser S.R.L. Argentine daily La Nacion reports that the company filed the request after defaulting on its debt payments since March 18, 2004. The reorganization petition, if granted by the court, will allow Solser to negotiate a settlement with its creditors in order to avoid a straight liquidation. Dr. Johnson, Clerk No., 38 assists the court on this case. CONTACT: Solser S.R.L. Sarmiento 647 Buenos Aires TE INSTALCOM: Court OKs Creditor's Bankruptcy Call -------------------------------------------------- Te Instalcom S.A. entered bankruptcy after Judge Ballerini of Buenos Aires Court No. 24 approved a bankruptcy motion filed by Hijos de Roberto C. De Monte S.A., reports La Nacion. Working with Dr. Diaz, the city's Clerk No. 48, the company assigned Mr. Enrique Battellini as trustee for the bankruptcy process. The trustee's duties include the authentication of the Company's debts and the preparation of the individual and general reports. Creditors are required to present their proofs of claims to Mr. Battellini before August 3, 2004. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. Payments will be based on the results of the verification process. CONTACT: TE Instalcom S.A. Hipolito Yrigoyen 455 Buenos Aires Mr. Enrique Battellini, Trustee Parana 774 Buenos Aires TEXUL: Court Appoints Trustee for Reorganization ------------------------------------------------ Texul S.A., a company operating in Buenos Aires, is ready to start its reorganization after Court No. 1 appointed Mr. Juan Carlos Rico to supervise the proceedings as trustee. Clerk No. 2 assists the court on this case. An Infobae report states that Mr. Rico will verify creditors claims until September 2, 2004. Afterwards, he will present these claims as individual reports for the court's final review on October 18, 2004. He will also provide the court with a general report pertaining to Texul's reorganization on November 29, 2004. The court has scheduled the informative assembly for June 1, 2005. CONTACT: Texul S.A. Reconquista 1016 Buenos Aires Mr. Juan Carlos Rico, Trustee Viamonte 1546 Buenos Aires TRANSENER: Creditor Files Involuntary Bankruptcy Petition --------------------------------------------------------- Ailing Argentine high-voltage power transporter Compania de Transporte de Energia Electrica de Alta Tension Transener SA (TRAN.BA) faces yet another dilemma, reports Dow Jones Newswires. On Wednesday, Transener informed the Buenos Aires stock exchange that a creditor has filed a bankruptcy petition against the company in a local commercial court. This "individual holder" possesses 40,627 bonds, Transener said, without revealing the name of the creditor nor how much money those obligations represent. Transener said it would use all defenses at its disposal to protect its rights and "continues actively with the process of the restructuring of its financial debt." Barely two weeks ago, Transener said about US$11.5 million in payments due from the national grid operator, Cammesa, will be blocked as part of a commercial court ruling in favor of Financiera Ludicor SA, a Transener creditor. The Company said it would use its own resources to pay for operating costs during the approximate one-month period covered by the Cammesa payments. CONTACT: Paseo Colon 728 6th Floor (1063) Buenos Aires Republica Argentina Tel: (54-11) 4342-6925 Fax: (54-11) 4342-7147 Email: info-trans@transx.com.ar Web site: http://www.transener.com.ar VIALCOM: Enters Bankruptcy Process ---------------------------------- Vialcom S.R.L. entered bankruptcy on orders from Buenos Aires Court No. 19, reveals Infobae. Working with Clerk No. 37, the court assigned Ms. Beatriz del Carmen Muruaga as trustee. She is to verify creditors' claims until August 4, 2004. Creditors who fail to have their claims validated before the deadline will be disqualified from receiving any payments to be made after the Company's assets are liquidated. The individual reports, which are due on September 15, 2004, are to be prepared upon completion of the verification process. The court also requires the trustee to prepare a general report and file it on October 27, 2004. This report contains a summary of the results in the individual reports. CONTACT: Mr. Beatriz del Carmen Muruaga, Trustee Aguero 1290 Buenos Aires YACYRETA: Newly Created Group To Tackle Financial Woes ------------------------------------------------------ Paraguay created a group, whose task is to negotiate with Argentina the financial future of the Yacyreta hydroelectric dam, a joint venture project between the two countries. Business News Americas reports that the group, together with Argentina, will tackle the restructuring of the debt of the project's operator - Entidad Binacional Yacyreta (EBY), electric power rates and the co-management of the entity's financial administration. The creation of the group follows an agreement signed by the two governments earlier this month to complete infrastructure projects at Yacyreta. The accord commits the two countries to keep EBY afloat and help it secure the necessary financing to complete US$600 million in works which would allow the dam to reach its 83m-design target. *Argentina to Present Final Offer to Bondholders This Week ---------------------------------------------------------- Argentina's Cabinet Chief Alberto Fernandez said that the government will have a final offer for bondholders this week to restructure US$99.4 billion in debt, relates Bloomberg. Last year, the government said it would pay 25 cents per $1 in face value on the defaulted bonds, an offer that was rejected by bondholders and spurred dozens of lawsuits. But reports are rife that the government will improve the offer. In response to these reports, the Cabinet Chief said: "I prefer not to make any speculation on what the offer will be until then." Argentina needs to restructure its debt to boost investor confidence and meet the terms of a US$13.3 billion aid agreement with the International Monetary Fund that enables the country to roll over debt payments with multilateral organizations. =========== B R A Z I L =========== CSN: S&P Assigns `BB' Local-Currency Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said Thursday that it assigned its 'BB' local-currency corporate credit rating to Brazilian steel maker Companhia Siderurgica Nacional (CSN). At the same time, the 'B+' foreign currency corporate credit rating assigned to CSN, as well as to the guaranteed notes issued by its offshore subsidiaries, was affirmed. The outlook on the local-currency corporate credit rating is stable. The outlook on the foreign-currency corporate credit rating is positive. The local-currency rating reflects CSN's exposure to the volatile and cyclical global steel industry, which despite its current favorable price environment, has continually suffered from strong price oscillations in the past; the company's relative exposure to the volatile (and until recently sluggish) Brazilian economy; and a still heavy leverage profile (for analytical purposes, Standard & Poor's adds up debts at the controlling shareholder level, as described below). Despite its improved duration, current debt levels still pose some risks to CSN in the future, as there is still some debt maturity concentration in specific years. Finally, the ratings incorporate the risks of CSN's significant capital expenditure program for the next three to four years, aimed at bringing the production capacity of its Casa de Pedra iron ore mine up to a pace of 40 million tons per year. These risks are offset by CSN's sound operating and business profiles, evidenced by its distinguished positioning in the global steel industry (as a low-cost, highly integrated carbon flat steel producer), strong export capabilities, and increasing business diversification in the years ahead with the addition of an iron ore export operation. The ratings also factor CSN's strong liquidity in the form of high cash reserves, and resilient and robust positive free operating cash flow. "Prospects for CSN in the medium term are positive," said Standard & Poor's credit analyst Reginaldo Takara. "The company is expected to continue reporting very robust operating cash generation in the following quarters, benefiting from a favorable (though not necessarily extremely strong) steel price environment and a gradually improving domestic economy in Brazil," Mr. Takara said. While high coal and coke costs should continue adding some pressure to CSN's cost structure, they are not expected to hurt the fundamentals and sustainability of the company's strong operating performance (especially considering that CSN is able to obtain 100% of its iron ore requirements from its own corporate mine, which provides it with more operational flexibility). The addition of exports of more than 20 million tons per year of iron ore products (starting in 2005 and reaching capacity in 2007) is also a positive for CSN's business profile, as the iron ore seaborne market tends to be considerably more stable than is the global steel market. While capital expenditures are substantial to raise production at Casa de Pedra, they do not impose significant technical challenges to the company. Nevertheless, it does involve the exploration of a new pit that has not been opened yet. Total capital commitment is expected to reach $780 million, if the company decides to go ahead with an investment of $340 million in a six million-ton per year pelletizing plant as part of the mine expansion project. CSN is one of the largest integrated flat steel makers in Brazil. The company produced 1.4 million tons of crude steel in first-quarter 2004, selling 1.1 million tons of steel products in the same period. Approximately 32% of CSN's total shipments through March 2004 were destined for exports. The stable outlook on CSN's local-currency corporate credit rating reflects Standard & Poor's expectations that CSN will manage to preserve reasonably strong liquidity in the future thanks to its strong cash generation and despite capital commitments already announced. The outlook also assumes that CSN will be able to maintain sound operating results through the steel industry cycle thanks to its favorable cost position and reasonably fair access to global steel markets. Acquisitions or further capital commitments that could potentially hurt this condition or add financial leverage were not assumed by Standard & Poor's and could potentially lead to a negative revision of the ratings. The positive outlook on the foreign currency rating reflects that of the sovereign currency rating of the Federative Republic of Brazil. CSN: Fitch Rates Export Receivables Master Trust Certificates ------------------------------------------------------------- Fitch Ratings assigned a preliminary rating of 'BBB-' to Companhia Siderurgica Nacional (CSN) Export Receivables Master Trust 2004-1 issuance. The rating applies to an issuance of US$150 million fixed-rate certificates. The series 2004-1 certificates add to the existing program made up of the 2003-1 series of $142 million and 2003-2 series of $125 million, all representing senior undivided interest in the Trust assets. Additionally, the ratings for both 2003 series are affirmed at 'BBB-'. The certificates are backed by the receivables generated by the future sale of certain steel products, specifically slabs, hot and cold rolled products, tinplate and galvanized products, produced by CSN and sold to CSN Export Co., a Cayman Islands entity. CSN will sell steel products to CSN Export Co. in exchange for the proceeds, and CSN Export Co. will then sell the products to buyers outside Brazil. These exports are diversified and have proven to be a strategic business line to the company. Total annual export volumes have historically ranged between 20%-40% of total sales. In 2003 exports represented 37% of total sales. The assigned 'BBB-' preliminary rating is higher than CSN's foreign currency rating of 'B+,' as the transaction mitigates certain sovereign and corporate risks associated with CSN. All buyers of products being sold through CSN Export Co. will receive irrevocable notices to make payments into the collection account, and CSN will covenant that 60% of these buyers will sign Notice & Consent (N&C) agreements that obligate them to deposit collections into an offshore collection account controlled by the Indenture Trustee. At closing, approximately 75% of all customers (including affiliates) and 20% of end users have signed N&C agreements. Additionally, there will be a required Debt Service Coverage Ratio (DSCR) of 3.0 times (x) and 2.25x at the three and six month reporting dates, respectively. The total debt size of these future flow issuances will represent a relatively small share of the company's overall debt outstanding. Fitch estimates coverages will be in excess of 4.0x and will average well over 10x. Fitch used a variety of stress case scenarios and believes that CSN's current and future steel export business is adequate to support the future flow certificates. CSN is one of Brazil's largest fully integrated steel manufacturers in Latin America. Over the past decade, CSN has increased its presence in the local Brazilian market, while maintaining a significant presence in export markets as well. The company holds a large market for the products involved in this securitization. Specifically, CSN holds approximately one third of the market share for hot and cold rolled products, two thirds for galvanized products, and dominates the market for tin-plate products. Additionally, in the past two years, CSN has modernized its production facilities and shifted a greater portion of sales volume to the export markets to take advantage of high prices. CONTACT: Greg Kabance +1-312-368-2052, Chicago Jennifer Conner +1-312-368-2080, Chicago Anita Saha +1-312-368-3179, Chicago Jayme Bartling +55-11-287-3177, Sao Paulo MEDIA RELATIONS: James Jockle +1-212-908-0547, New York CSN: CSN Islands VI Corp. 2004-1 Notes Assigned Prelim Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned Thursday its preliminary 'BBB-' rating to Brazil's Companhia Siderurgica Nacional's (CSN) US$150 million series 2004-1 fixed-rate notes due 2012, to be issued by CSN Islands VI Corp. Steel exports are the underlying collateral supporting the notes. The preliminary rating is based on information as of May 27, 2004, and is subject to receipt of program and series documentation and related legal opinions satisfactory to Standard & Poor's. Subsequent information may result in the assignment of a final rating that differs from the preliminary rating. Series 2004-1 notes will be the third issuance out of the program that originally issued two series of notes in 2003. Standard & Poor's has not assigned a rating to the series 2003-1 and 2003-2 notes. Similar to the previous series, the series 2004-1 notes will be securitized, through a true sale structure, by all of CSN's steel exports with eligible buyers to CSN Export Corp. CSN Export subsequently sold the rights to the receivables to the issuer. Steel products include hot-rolled, cold-rolled, slabs, tin mill, and galvanized steel products. The receivables are predominantly U.S. dollar denominated. CSN is one of the largest integrated flat steel makers in Brazil. CSN's local currency rating reflects CSN's exposure to the volatile and cyclical global steel industry, which, despite its current favorable price environment, has continually suffered from strong price oscillations in the past; the company's relative exposure to the volatile (and, until recently, sluggish) Brazilian economy; and a still-heavy leverage profile. These risks are offset by CSN's sound operating and business profiles, evidenced by its distinguished positioning in the global steel industry (as a low-cost, highly integrated carbon flat steel producer), strong export capabilities, and increasing business diversification with the addition of an iron ore export operation in the next few years. The company produced 1.4 million tons of crude steel in the first quarter of 2004, selling 1.1 million tons of steel products in the same period. Approximately 32% of CSN's total shipments through March 2004 were destined for exports. Standard & Poor's does not view CSN as a natural exporter. The preliminary rating reflects several structural and credit characteristics of the issuance that mitigate originator bankruptcy risk, sovereign interference risk, and other risks pertinent to a cross-border steel-export future flow securitization. This mitigation allows the transaction to achieve a rating two notches higher than CSN's local currency rating(BB/Stable) and four notches higher than its foreign currency rating (B+/Positive). The preliminary rating is also four notches above the long-term foreign currency sovereign rating of Brazil (B+/Positive). The preliminary rating addresses the ability of the issuer to pay timely interest and principal on the notes. The preliminary rating does not address the payment of a make-whole premium or additional amounts to noteholders. The key factors that Standard & Poor's considered in the assignment of the preliminary rating include: -- The expected ability of CSN to operate even during a time of decreased global demand for steel products and low international pricing; -- A strong level of credit enhancement in the form of overcollateralization of expected future export receivables. Debt service coverage (DSC) is expected to average 11.1x, with a minimum coverage of 5.07x. Under Standard & Poor's stress case scenarios, including one which assumed a 40% reduction in 2003 export levels and the lowest eight-year historical price per product, DSC averaged 4.88x, with a minimum coverage level of 2.23x. Standard & Poor's cash flow analysis includeds the two outstanding series of notes. Scheduled debt service payments were adjusted for the series 2003-2 floating-rate tranche using Standard & Poor's stochastic interest rate model in recognition of the risk that interest rates could be significantly higher in the future. The stress testing also takes into account that the transaction pays principal according to an amortization schedule; -- Offshore payment mechanism. Eligible buyers are required to make payments into a collection account controlled by The Bank of New York, the trustee, on behalf of the noteholders. Eligible buyers must meet eligibility criteria, which includes being no more than 30 days past due in payment; being rated at least investment grade; or being at least 80% insured by credit insurance or fully backed by a direct pay or stand-by LOC from investment-grade institutions. More than 60% of eligible buyers have signed notice and consent agreements acknowledging the payment instructions; -- Sovereign interference risk mitigation. Standard & Poor's assessed the risk as mitigated by the relatively long history of noninterference by the Brazilian authorities in the steel industry, in general, and in CSN, in particular. The steel industry is now fully privatized, there are no steel export quotas, and steel prices and volumes are freely determined. CSN has been privatized since 1993 and is one of the market leaders in steel products in Brazil. A renationalization of CSN is viewed as very unlikely. In addition, the risk of sovereign interference is also mitigated by the fact that domestic demand for the product is met. At current levels, it would take approximately 10 years at a compound annual growth rate of 5% for domestic demand to equal production capacity; -- The importance of the steel industry to Brazil and CSN. The Brazilian steel industry is a net exporter. Crude steel production totaled 31.1 million tons in 2003, while apparent domestic consumption was 16 million tons. CSN accounts for about 1% of Brazil's exports; and -- Other credit risk features. These include DSC triggers (2.25x quarterly, 3x semiannually), a three-month principal and interest reserve account to cover any shortfalls in payments, and provisions for an early amortization of debt service if certain adverse events occur. The notes will pay a fixed rate of interest quarterly, and principal will be paid according to a controlled amortization schedule after the expiration of the interest-only period. The issuer can issue additional series of notes if certain requirements are met, including, among other things, rating agency affirmation and a DSC ratio test of 4x. ANALYSTS: Gary Kochubka, New York (1) 212-438-2514 Reginaldo Takara, Sao Paulo (55) 11-5501-8932 ENRON: Obtains Enough Votes to Confirm Reorganization Plan --------------------------------------------------------- Enron Corp. said Thursday that it and its affiliates have filed with the U.S. Bankruptcy Court the certification of the vote by creditors for Enron's Joint Chapter 11 Plan. Enron revealed that of the creditor classes that voted on the plan, 104 accepted it and seven rejected it. All seven of the classes that rejected the plan were unsecured creditor classes. "We are pleased that we have sufficient votes to confirm the plan," said Stephen F. Cooper, Enron's acting CEO and chief restructuring officer. "We will continue to work with these few dissenting classes to address their issues, answer their questions, and hopefully reach a positive resolution by our June 3 confirmation hearing." Should no resolution be reached, the dissenting classes will have an opportunity to present their case to the bankruptcy court. The bankruptcy judge will make the final approval of the Company's Chapter 11 bankruptcy plan. Enron, which filed for bankruptcy in December 2001, said it expects to file an amended certification of the vote on or before the beginning of the confirmation hearing. Enron owns several assets in the Caribbean, Central and South America. MRS LOGISTICA: Cuts Debt to R$623.6 Mln in 1Q04 ----------------------------------------------- MRS released the following 1Q04 financial information to the public: Production: MRS transported 21.8 million tons in 1Q04, 4.3% lower and 16% higher when compared with 4Q03 and 1Q03, respectively. The reduction in volumes in 1Q04 was caused by the decrease in iron ore shipments as a consequence of the rainy season and stoppages caused by accidents throughout the period. The production loss reached 1.3 million tons in 1T04. The Company quickly recovered its regular production rhythm, achieving a new transportation record of 7,812 thousand tons shipped in April. Revenues, Costs and EBITDA: Gross revenue in 1Q04 reached R$334.8 million, 7.5% lower than 4Q03 and 13.7% higher when compared to 1Q03. The decrease in revenue was caused by the lower production recorded in the quarter. Cost of services in 1Q04 were 15% higher than in 1Q03, as a result of the increase in the maintenance of locomotives and wagons, due to the larger volumes shipped throughout the period. Cost of materials in the quarter grew 26.4% compared to 1Q03 also due to the intensification in the maintenance of locomotives and wagons. EBITDA in 1Q04 reached R$119 million, 22 % lower than 4Q03 due to the lower production and the cost increases mentioned above. In relation to 1Q03, EBITDA was 12% higher. Operating cash flow totaled R$147.1 million in 1Q04, increasing by 43.8% the figure achieved in 1Q03. Net Income: The Company showed a net income of R$34.9 million in 1Q04, 20% superior than net income registered in 1Q03. Consequently, shareholders' equity improved from a negative R$101 million at 1Q03 to R$315 million in 1Q04. Net Debt: Net debt at 1Q04 was reduced to R$623.6 million, 5.5% lower than the R$659.5 million recorded in December 2003 and 33% less than at 1Q03, as a result of the strong cash generation during the period. The net debt/EBITDA ratio was reduced to 1.11x from 1Q03 to 1Q04, a remarkable improvement in the Company's capacity to meet its financial obligations. Capital Expenditures: In February, MRS received 12 GE C-36-7, 3,600 HP locomotives, imported from the U.S., that will join its operational fleet in May, after mechanical adjustments. The Company is currently negotiating with suppliers the acquisition of 20 similar locomotives in order to meet the strong increase in demand forecasted for the 2nd half of 2004. In the same way, MRS placed a purchase order for 630 new GDT gondola cars with Amsted-Maxion, with the purpose of increasing its iron ore shipping capacity. This R$70 million investment will be financed through a 5-year period. Commercial/Operational Highlights: - Agreement with Companhia Vale do Rio Doce (CVRD), to transport 2.7 million tons of iron ore from CVRD's mines in Belo Horizonte (MG) to its Patrag terminal in Ouro Branco (MG) for export through the Port of Tubarao (ES). In addition, MRS will ship 1.7 million tons of iron ore for export through the Port of Sepetiba (RJ). Agreements with Companhia de Fomento Mineral (CFM) and Minera�ao Rio Verde in order to ship 1.2 million tons of iron ore for export also through the Port of Sepetiba. - Joint venture among MRS, Brasil Ferrovias and Coinbra Trading - a subsidiary of Louis Dreyfuss in order to transport soy beans and corn from Sao Simao (GO), initially through the Tiete-Parana waterway to Pederneiras (SP), and from there through MRS trains until the Port of Santos for export. - Initial tests for a new shipping of tubes for Vallourec & Mannesmann Tubes (V&M Tubes), from its plant in Belo Horizonte to Macae (RJ), to supply Petrobras. MRS will ship the cargo until its terminal in Arara in the Port of Rio and from there the tubes will follow by trucks to Macae. Total volumes should reach 30,000 tons/year. - MRS will provide transportation for Cosipa regarding the supply of steel products from Cosipa's plant in Cubatao to two shipyards located in the State of Rio de Janeiro. In the 1st project, MRS will ship the products from Cosipa's plant until Arara (RJ) and from there the cargo will be shipped through trucks until EISA's yard in Rio. In the 2nd project, the products will be shipped until Barra Mansa (RJ) and from there through trucks until BrasFells' yard in Angra dos Reis (RJ). With these new agreements, MRS expects to transport 96 million tons in 2004. To see financial statements: http://bankrupt.com/misc/MRS_Logistica.pdf CONTACT: Mr. Eduardo Cassinelli, Treasurer Mr. Marco Andre Guimaraes, Financial Manager Ms. Maria Lucia Silveira, Financial Analyst Praia de Botafogo, 228/1201-E 22250-906 Rio de Janeiro Fax: 55-21-2552-2635 Tel: 55-21-2559-4600 E-mail: daf@mrs.com.br Web Site: www.mrs.com.br ========= C H I L E ========= TELEFONICA CTC: No Easy Sale for Mobile Division ------------------------------------------------ Spain's Telefonica Moviles (TEM), a unit of Telefonica SA (TEF), will likely find it hard to carry out its plan to acquire Chilean telco Telefonica CTC Chile's (NYSE: CTC) mobile division, Dow Jones indicates. TEM announced plans earlier to acquire Telefonica CTC's subsidiary, Telefonica Movil Chile S.A. for US$1 billion, plus the assumption of US$243 million in debt. Telefonica has a controlling stake in CTC and, since 2000, TEM has been managing CTC's mobile phone unit. However, Empresa Nacional de Telecomunicaciones SA (Entel), Chile's leading wireless telecommunications service provider, has asked the anti-monopoly watchdog TDLC to block the deal. Local newspaper El Diario relates that Entel, owned by Telecom Italia (TI), argues that it [deal] can't proceed until regulators authorize Telefonica's acquisition of wireless assets owned by BellSouth Corp. (BLS). Telefonica agreed to purchase BellSouth's Latin America assets for US$5.85 billion in March. Once the BellSouth and CTC assets are under the Telefonica umbrella, the Spanish-owned company has said it would have a 48% share of Chile's wireless market, making it the largest wireless company in the country. Entel claims that TEM would have more than 50% of the local wireless communications market, adding to the already-dominant position of its parent company in the fixed-line market. Meanwhile, Business News Americas reports that CTC's minority shareholders are beginning to express apprehensions about the mobile division's sale. Local pension fund Cuprum, which has a 4.4% stake in CTC, is upset that the Company's board decided the sale price without consulting minority shareholders or conducting independent valuations, according to Cuprum investments manager Marco Comparini. Cuprum and five other pension funds together have a 27% stake in CTC, but their investment is expected to lose about 25% of its value if the mobile division is sold. CTC shareholders are scheduled to vote before mid-July on the board's sale proposal. CONTACT: TELEFONICA CTC CHILE Sofia Chellew E-mail: schelle@ctc.cl Tel.:56-2-691 3867 Veronica Gaete E-mail: vgaete@ctc.cl Tel.:56-2-691 3867 M.Jose Rodriguez E-mail: mjrodri@ctc.cl Tel.:56-2-691 3867 Florencia Acosta E-mail: macosta@ctc.cl Tel.:56-2-691 3867 ============= J A M A I C A ============= KAISER ALUMINUM: Debtors Seeks to Delay Alpart Sale --------------------------------------------------- In the latest legal development on the bankruptcy case of Kaiser Aluminum Corp., Kaiser's debtors seek to reopen the auction process for the Alpart alumina plant in Jamaica. The emergency motion, which was filed Thursday in U.S. bankruptcy court for the District of Delaware, asks the court to set aside its April 26 sale order for Alpart and to reopen the auction at a June 1 hearing scheduled on the case or by June 4 at the latest. The motion said the creditors believe the highest price for the assets has not yet been achieved. Houston-based Kaiser has been selling off some assets including the 1.5 million tonne per year Alpart alumina mine and refinery as part of its plan to emerge from bankruptcy. On April 26, the bankruptcy court authorized Kaiser's creditors to enter an agreement to sell their interests in Alpart to Rusal through RUAL Trade Limited. On May 25, Norway's Norsk Hydro Aluminium announced that it had exercised its right of first refusal to buy 65% of Alpart from Kaiser and agreed to sell it to Swiss-based metals trader Glencore. Later that same day, Rusal sweetened its bid for Alpart by US$10 million to US$316.2 million. Much later that day, Norsk Hydro said it would pay US$295 million plus an additional US$11.2 million after contract adjustments. The Norwegian energy and metals group owns 35% of Alpart, and said it was entitled by a partnership with co-owner Kaiser to intervene in any change of ownership by matching an outsider's bid. Rusal then filed a motion with a U.S. court to halt the sale to Norsk Hydro pending a challenge of the original right of first refusal. The debtors motion filed Thursday asks the court to set aside the April 26 sale order to RUAL and to open the auction process again for Alpart assets. =========== M E X I C O =========== AEROMEXICO: Signs Code-Sharing Deal With Spanish Airline -------------------------------------------------------- Spanish airline Air Europa and Mexican airline Aeromexico signed a code-sharing agreement, reports EFE. Under the agreement, which is scheduled to take effect June 15, flights operated by Air Europa on the Madrid to Cancun route will have the AM code of Aeromexico. Earlier, Delta Airlines discarded intentions to acquire the assets of the Aeromexico, saying it will just continue the partnership with Aeromexico, currently being managed by IPAB, into Star Alliance. Aeromexico serves over 40 cities in Mexico and 17 gateway cities in the United States and six countries in Europe and South America. Founded in 1988, AeroMexico has become the leading carrier in the region by maintaining the highest service levels, which have earned the airline numerous top rankings in the industry. The airline's corporate headquarters are in Mexico City and its U.S. operations are based in Houston. GRUPO MEXICO: Rail Companies Agree to Restructure Corporate Debt ---------------------------------------------------------------- Mexican copper miner Grupo Mexico SA informed Mexico City's bourse that its rail divisions - Ferrocarril Mexicano (Ferromex) and GFM (Grupo Ferroviario Mexicano)- have together agreed to restructure MXN2.5 billion (US$219 million) in corporate debt. Citing a statement to the bourse, Business News Americas reported that the agreement, struck with Mexican bank Banco Inbursa, extends payment deadlines by two and 26 months while providing "an important spread" in interest rates. Under the agreement, Ferromex will pay MXN349-million instalments in December 2007, June 2008, December 2008, June 2009 and December 2009 for a total of MXN1.75 billion, while GFM will pay MXN151-million installments on the same dates for a total of MXN756 million. CONTACT: GRUPO MEXICO S.A. DE C.V. Avenida Baja California 200, Colonia Roma Sur 06760 Mexico, D.F., Mexico Phone: +52-55-5264-7775 Fax: +52-55-5264-7769 Home Page: http://www.gmexico.com Contacts: Germ n Larrea Mota-Velasco, Chairman and CEO Xavier Garca de Quevedo Topete, President and COO Alfredo Casar Perez, COO, Ferrocarril Mexicano Daniel Chavez Carren, COO, Industrial Minera Mexico Daniel Tellechea Salido, VP and Administration and Finance President HYLSAMEX: Mulls Various Options to Facilitate Debt Refinancing -------------------------------------------------------------- Mexican steelmaker Hylsamex is mulling a bond issue, capital increases or sale of a division, reports Business News Americas. All these plans are part of the Company's efforts to refinance its US$962 million debt. Carlos Hermosillo, an analyst with Vector Casa de Bolsa, sees bond issue as the most viable option considering that the Company's strong financial performance this year will reduce the cost of such a move. Hylsamex reported US$63 million in net profits first quarter this year, reversing losses of US$35 million year-on-year, while sales volumes grew 9% during the period to 788,000t, helping revenues soar 30% to US$461 million. Last week, Hylsamex announced that Hylsa, its main unit, has extended a line of revolving credit for US$40 million by a year. The Company said that it will use the credit line for working capital, and that it would strengthen Hylsa's liquidity. Hylsamex is 51%-owned by Alfa. CONTACT: Hylsamex S.A. de C.V. 101 Ave Munich Cuauhtemoc 66452 San Nicolas de los Garza Nuevo Leon Mexico Phone: +52 81 8865 2828 Fax: +52 81 8865 1210 Home Page: http://www.hylsamex.com.mx Contact: Engr. Dionisio Garza Medina, Chairman Alejandro Elizondo Barragan, Chief Executive Engr SATMEX: Managers Scramble To Strike Agreement With Creditors ------------------------------------------------------------ Satmex managers are hoping to get creditors' approval before mid-June over its debt offer for more than US$500 million, which does not include government-contracted liabilities totaling US$188 million. The Mexican satellites company faces a June expiry of a principal payment of a US$205-million syndicated debt, and the Company's managers are aiming to strike an agreement with creditors soon, as the application of a preventive bankruptcy doesn't seem to be a good prospect. Negotiation with creditors is facing rough sailing with the withdrawal of Eximbank (US) of its guarantees that would have allowed Satmex to obtain a loan relieving it of some of the pressure. The loan, which would have given the Company a window to launch its Satmex 6 sattelite, would have allowed Satmex to pay off its commitments at a floating rate for US$205 million. ===================== P U E R T O R I C O ===================== CARIBBEAN RESTAURANTS: Proposed Bank Loan Gets B2 Rating -------------------------------------------------------- Moody's Investors Service took various rating actions on Caribbean Restaurants, LLC ("Caribbean"), which operates 165 Burger King restaurants in Puerto Rico. Moody's said it assigned a B2 rating to Caribbean's proposed $210 million secured bank loan, raised the Company's Issuer Rating to B3 from Caa1 and affirmed the Senior Implied rating at B2. Limiting the ratings are the Company's highly leveraged financial condition, the weak asset coverage for nominally secured debt, and the challenges in maintaining the positive performance differential between Burger King stores in Puerto Rico versus the mainland United States. Supporting the ratings are Caribbean's leading average unit volume and restaurant margin within the Burger King system, the company's established position as the leading QSR restaurant operator in Puerto Rico, and the extended history of stability in operating strategy. The rating outlook is stable. ================================= T R I N I D A D & T O B A G O ================================= CDC: T&T Labor Minister Moves to Put an End to Dispute ------------------------------------------------------ Trinidad and Tobago's Labor Minister Anthony Roberts met with officials of the National Union of Government and Federated Workers (NUGFW) Thursday to discuss the dispute between beer and bottle manufacturer Caribbean Development Co. (CDC) and more than 800 striking workers. The Trinidad Guardian reports that during a break in that meeting, Roberts contacted CDC officials requesting that the Company join the talks. However, Roberts said CDC indicated that it was too short notice. "We would want them to start talking so we could get an amicable solution," Roberts said. Violence brought about by the strike escalated Thursday morning when striking workers broke the rear windscreen of a vehicle seeking entry to the compound. A number of protesting workers threw bottles and blocked the entrance to the compound. That particular incident followed acts of violence earlier last week including one which left a female worker nursing injuries to her face caused by a stone hurled though the window of a car that was transporting her into CDC compound. *********** 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 prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *