/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040611.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, June 11, 2004, Vol. 5, Issue 115 Headlines A R G E N T I N A 4966 S.R.L.: Court Orders Liquidation BANCO HIPOTECARIO: Endorses Out of Court Settlement Plan BOM PAN S.A.: Drops Reorganization Motion, Liquidation Follows CONTACT CENTRE: Trustee Assigned for Liquidation Process DESARROLLOS TECNOLOGICOS: Court Declares Bankruptcy Official DITTEM S.A.: Court Decides on Liquidation GUBBIO S.A.: Initiates Liquidation Process FERROMEC: Court Orders Company to Wind Up HACIA TODOS LOS MUNDOS: Liquidates Assets to Pay Debts HIDROELECTRICA PIEDRA: APE Gets Adequate Creditor Approval M.D. UNIFORMES: Initiates Bankruptcy Proceedings MEWA S.R.L.: Claims Verification Deadline Approaches PAQUEAR S.A.: Schedule for Reports Submission Set RENT AND WASH: Court Orders Bankruptcy, Liquidation Follows RUEDAS ZONDA: Verification Deadline Fixed SOCDEL S.A.: Judge Rules Bankruptcy TECIA S.A.: Court Issues Bankruptcy Ruling * IMF Insists Argentina Agree With Creditors B E R M U D A ALPHASTAR INSURANCE: May File Suit Against Founder B R A Z I L ELETROPAULO METROPOLITANA: Additional BNDES Payment Expected EMBRATEL: President, General Counsel Resign INVITEL: Moody's Assigns Proposed Debenture Issue Ratings OPPORTUNITY MEM: Moody's Assigns Ratings to Debentures OPPORTUNITY ZAIN: Moody's Issues New Debentures `C.br' PARMALAT BRAZIL: Positive Cash Flow Expected By September G U Y A N A * IDB Approves $28M Soft Loan To Guyana H O N D U R A S * IDB Approves $30.6M Loan To Honduras M E X I C O HYLSA: S&P Raises Ratings To B; Outlook Stable P E R U * IMF Approves 26-Month $422.8M Stand-By Arrangement for Peru T R I N I D A D & T O B A G O BWIA: Gives Shareholder Rights Offer for Additional Shares V E N E Z U E L A CANTV: Foreign Dividend Payments Set for Distribution - - - - - - - - - - ================= A R G E N T I N A ================= 4966 S.R.L.: Court Orders Liquidation ------------------------------------- 4966 S.R.L. prepares to wind-up its operations following the bankruptcy pronouncement issued by Buenos Aires Court No. 12. 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 Ms. Norma A Balmes as trustee. She will be reviewing creditors' proofs of claim until June 28, 2004. The verified claims will be the basis for the individual reports to be presented for court approval on August 24, 2004. Afterwards, the trustee will also submit a general report on October 19, 2004. Clerk No. 23 assists the court on this case, which will end with the disposal of the Company's assets to cover its liabilities. CONTACT: Ms. Norma A Balmes, Trustee Roque Saenz Pe¤a 1185 Buenos Aires BANCO HIPOTECARIO: Endorses Out of Court Settlement Plan -------------------------------------------------------- Banco Hipotecario S.A. has endorsed the details of an extra- judicial arrangement it had entered with creditors at the First- Instance National Commercial Court No. 14, Secretary's Office No. 28 reports Infobae. Once approved by the court, pre-existing or future creditors cannot collaterally attack the settlement proposal in the event that the debtor subsequently liquidates. CONTACT: Banco Hipotecario S.A. San Martin 140 Buenos Aires BOM PAN S.A.: Drops Reorganization Motion, Liquidation Follows -------------------------------------------------------------- Buenos Aires-based company Bom Pan S.A. withdrew its petition to convert a recent bankruptcy ruling into reorganization. Accordingly, the Company will continue with the liquidation process. Infobae relates that Mr. Luis Alberto Guevara supervises the bankruptcy as the court-appointed trustee. He will be accepting creditors' proofs of claims for verification until August 26, 2004. CONTACT: Mr. Luis Alberto Guevara, Trustee Ayacucho 242 Beunos Aires CONTACT CENTRE: Trustee Assigned for Liquidation Process -------------------------------------------------------- Court-appointed trustee, Mr. Anibal Daniel Osuna, will preside over the liquidation of Buenos-Aires based Contact Centre S.A. states Infobae. The trustee will verify creditors' claims against the Company until August 23,2004. Following claims verification, individual reports will be presented for court approval on October 4, 2004. A general report on the case will also be submitted on November 16, 2004. Court No. 23, with the assistance of Clerk No. 46, handles the bankruptcy proceedings. CONTACT: Mr. Anibal Daniel Osuna, Trustee Mercedes 3259 Buenos Aires DESARROLLOS TECNOLOGICOS: Court Declares Bankruptcy Official ------------------------------------------------------------ Desarrollos Tecnologicos S.A. begins the liquidation process after Buenos Aires Court No. 26 decreed the Company's bankruptcy, says Infobae. The court's bankruptcy order transfers control of the Company to a court-appointed trustee during the course of the liquidation. The case will end with the disposal of the Company's assets to repay debts. CONTACT: Desarrollos Tecnologicos S.A. Avda Pueyrredon 886 Buenos Aires DITTEM S.A.: Court Decides on Liquidation ----------------------------------------- Buenos Aires Court No. 15 has decreed the bankruptcy of Dittem S.A., reports Infobae. The Company will begin the process with Ms. Eva Malvina Gorsd as trustee. She will verify creditors' claims until August 9, 2004. The Company's case will conclude with the liquidation of its assets to repay creditors. Clerk No. 30 assists the court in handling the proceedings. CONTACT: Ms. Eva Malvina Gorsd, Trustee Paraguay 1225 Buenos Aires GUBBIO S.A.: Initiates Liquidation Process ------------------------------------------ Gubbio S.A. of Buenos Aires will begin liquidating its assets after the city's Court No. 7 declared the Company bankrupt. Infobae reveals that the bankruptcy process will commence under the supervision of court-appointed trustee, Ms. Alicia Rita Romeo. The trustee will review claims forwarded by the Company's creditors until August 3, 2004. After claims verification, Ms. Romeo will submit the individual reports for court approval on September 14, 2004. The submission of the general report will follow on October 26, 2004. Clerk No. 14 assists the court on this case. CONTACT: Ms. Alicia Rita Romeo, Trustee Rodriguez Pe¤a 694 Buenos Aires FERROMEC: Court Orders Company to Wind Up ----------------------------------------- Ferromec S.A. will enter bankruptcy protection after Buenos Aires Court No. 21, with the assistance of Clerk No. 42, ordered the Company's liquidation. Infobae reports that the court selected Mr. Armando Esteban Bozzini as trustee. He will be verifying creditors' proofs of claim until the end of the verification phase on November 23, 2004. Argentine bankruptcy law requires the trustee to provide the court with individual reports on the forwarded claims and a general report containing an audit of the company's accounting and business records. The individual reports will be submitted on March 8, 2005 followed by the general report, which is due on April 28, 2005. CONTACT: Mr. Armando Esteban Bozzini, Trustee Vidal 3375 Buenos Aires HACIA TODOS LOS MUNDOS: Liquidates Assets to Pay Debts ------------------------------------------------------ Hacia Todos Los Mundos S.A. will begin liquidating its assets following the pronouncement of the city's Court No. 26 that the Company is bankrupt, Infobae reports. The bankruptcy ruling places the Company under the supervision of court-appointed trustee, Ms. Maria Silvia Cosoli. She will verify creditors' claims until August 20, 2004. The validated claims will be presented in court as individual reports on October 1, 2004. Ms. Cosoli will also submit a general report, containing a summary of the Company's financial status as well as relevant events pertaining to the bankruptcy, on November 15, 2004. The bankruptcy process will end with the disposal of company assets in favor of its creditors. CONTACT: Hacia Todos Los Mundos S.A. Dorrego 2699 Buenos Aires Ms. Maria Silvia Cosoli, Trustee Uruguay 750 Buenos Aires HIDROELECTRICA PIEDRA: APE Gets Adequate Creditor Approval ---------------------------------------------------------- Argentine generator Hidroelectrica Piedra del Aguila SA informed the local stock exchange Wednesday that it has struck an out-of- court-agreement (APE) with its creditors to restructure about US$268 million in debt, relates Dow Jones Newswires. In a statement to the bourse, the Company, which is a unit of French company Total SA, revealed it received approval from creditors representing US$246.3 million, or 92% of its debt. The percentage is more than the required two-thirds agreement under Argentine law for this kind of out-of-court debt restructuring. HPDA can now submit its proposal for legal approval, which will then make the new repayment terms binding on all creditors. HPDA ceased debt payments at the end of June 2002 and started talks with creditors in October of that year. After launching its offer in February 2003, it extended the proposal once and modified the terms in April. It then extended the offer once more in late April. The revised proposal carries three options: a cash option worth 45% of the original nominal value of the old bonds; a bond coming due in 2013 with a fixed interest rate of 4%; and a bond coming due in 2013 with an interest rate that varies according to the company's cash position. M.D. UNIFORMES: Initiates Bankruptcy Proceedings ------------------------------------------------ Buenos Aires Court No. 21 declared M.D. Uniformes S.A. "Quiebra," reports Infobae. Clerk No. 42 assists the court on the case, which will close with the liquidation of the Company's assets to repay creditors. Mr. Armando Esteban Bozzini, who has been appointed as trustee, will verify creditors' claims until October 27, 2004 and then prepare the individual reports based on the results of the verification process. The individual reports will be submitted in court on December 15, 2004, followed by the general report on March 14, 2005. CONTACT: M.D. Uniformes S.A. Jean Jaures 695 Buenos Aires Mr. Armando Esteban Bozzini, Trustee Vidal 3375 Buenos Aires MEWA S.R.L.: Claims Verification Deadline Approaches ---------------------------------------------------- The verification of claims for the Mewa S.R.L. bankruptcy will end on August 9, 2004 according to Argentine news source Infobae. Creditors with claims against the bankrupt company must present proof of the liabilities to Mr. Ernesto Oscar Puerta, the court-appointed trustee, before the said deadline. Buenos Aires Court No.15 handles the Company's case with the assistance of Clerk No. 30. The bankruptcy will conclude with the liquidation of the Company's assets to pay its creditors. CONTACT: Mr. Ernesto Oscar Puerta, Trustee Juan B Alberdi 1145 Buenos Aires PAQUEAR S.A.: Schedule for Reports Submission Set ------------------------------------------------- Mr. Pablo Kainsky, the trustee assigned to supervise the liquidation of Paquear S.A., will submit on October 1, 2004 the validated individual claims for court approval following the completion of the verification period on August 20, 2004. The trustee will also submit a general report on November 15, 2004. Infobae reports that Buenos Aires Court No. 26 is handling the Company's bankruptcy case with assistance from Clerk No. 51. CONTACT: Paquear S.A. Bucarelli 941/943 Buenos Aires Pablo Kainsky, Trustee Reconquista 715 Buenos Aires RENT AND WASH: Court Orders Bankruptcy, Liquidation Follows ----------------------------------------------------------- Buenos Aires Court No. 26, with the assistance of Clerk No. 51, declared Rent and Wash S.A. bankrupt, reports Infobae. The liquidation order comes after the Company's default in debt payments. Under bankruptcy protection, the Company will turn over its assets to a court-appointed trustee tasked with supervising the liquidation process. The court has not provided the name of the trustee or the deadline of the verification period. CONTACT: Rent And Wash S.A. Pichincha 1486 Buenos Aires RUEDAS ZONDA: Verification Deadline Fixed ------------------------------------------ Local news source Infobae announces that the verification of creditors' claims for the Ruedas Zonda S.A. bankruptcy will close on August 20, 2004. Creditors with outstanding claims against the bankrupt company must submit proofs of these debts to Mr. Carlos Alberto Lausi, the court-appointed trustee, before the stated date. Buenos Aires Court No. 15, with the assistance of Clerk No. 30, handles this case. CONTACT: Mr. Carlos Alberto Lausi, Trustee Avda Cordoba 456 Buenos Aires SOCDEL S.A.: Judge Rules Bankruptcy ----------------------------------- Judge Uzal of Buenos Aires Court No. 26 denied the reorganization petition of Socdel S.A., thereby opening the Company for liquidation. With the bankruptcy order in place, the court-appointed trustee, Ms. Clara Auerhan, will assume control of the Company's assets for eventual sale in favor of its creditors. Infobae reminds that creditors with claims against the real- estate company must present proofs of the Company's indebtedness to the trustee before August 25, 2004. After the verification period, Ms. Auerhan will provide the court with individual reports pertaining to the submitted claims on October 6, 2004. She will also present a general report on November 18, 2004. CONTACT: Ms. Clara Auerhan, Trustee Uruguay 872 Buenos Aires TECIA S.A.: Court Issues Bankruptcy Ruling ------------------------------------------ Tecia S.A. will now enter bankruptcy after Buenos Aires Court No. 14 declared it "Quiebra," reports Infobae. With assistance from Clerk No. 14, the court named Mr. Abel Alexis Latendorf as trustee. He will verify creditors' claims until July 14, 2004. Following claims verification, the trustee will submit the individual reports, which were prepared based on the verification results, to the court on September 9, 2004. The general report is due for submission on October 22, 2004. CONTACT: Mr. Abel Alexis Latendorf, Trustee Piedras 153 Buenos Aires * IMF Insists Argentina Agree With Creditors --------------------------------------------- The International Monetary Fund new Managing Director Rodrigo Rato said that the accomplishment of an agreement with all creditors is one of the "very important" steps the Argentine authorities have to complete to leave behind the economic crisis and have Argentina completely integrated into international financial markets. Speaking in his first press conference as IMF Managing Director Mr. Rato recalled that precisely for that reason the question of debt negotiations with all Argentine creditors was included in the IMF-Argentina program and the provision that "those negotiations will be sustained in good faith". "We recognize clearly that the evolution of the Argentine economy has been better than expected, that the management of the monetary policy and the fiscal policy has been good, but we also see that to achieve progress in certain areas we have to keep working at it. To mention a few, a fiscal agreements with the provinces, the closing of an agreement with all creditors, the strengthening of the financial system, and finally designing a legal and administrative environment that will be helpful for private investment", highlighted Mr. Rato. "I have spoken with Mr. Roberto Lavagna about it, that the work of the Argentine Government moves in that direction, and we are very much interested that those negotiations are completed so that step for the normalization of the Argentine situation can become a fact". Insisting that an agreement with "all creditors is very important", Mr. Rato said he was confident in Argentine authorities to reach an agreement since "it's one of the key issues to leave the crisis behind and so allow the Argentinean society to have full access to international capital markets. We follow closely negotiations between Argentine authorities and creditors", however the IMF will make no comments about specifics of those negotiations. As to world economic prospects and the challenges of oil prices and a rise in United States interest rates as anticipated by Federal Reserve Alan Greenspan, Mr. Rato indicated that "as we have expressed in our review of the American economy, we don't see signs of risk of inflation. And I think that that appreciation is shared by most institutions, including certainly the Federal Reserve. So we think that (US) monetary policy will follow the path the US authorities have already expressed". Regarding oil Mr. Rato revealed that the IMF world economy assessment is under review, "but I can tell you that we don't see a downward risk right now. So although it's true that the price of oil that we are predicting today will be in the realm of $5 higher than we anticipated a few months ago, the evolution of the world economy in some areas and the demand in the world economy will more than compensate that effect. So we are looking at a clear recovery of the world economy and the IMF forecast of a 4,6% growth is not at risk of being reviewed downwards". ============= B E R M U D A ============= ALPHASTAR INSURANCE: May File Suit Against Founder -------------------------------------------------- Bankrupt company AlphaStar Insurance Group has included Mr. Nicholas Brown, one of its founders, in a list of parties against whom the Company is considering filing a claim. Citing the May 31 issue of finance industry newsletter InsideBermuda, the Royal Gazette reports that AlphaStar may press the lawsuit on the basis of his alleged mismanagement of the Company prior to his resignation on October 1999. A report filed by AlphaStar, formerly Stirling Cooke Brown Holdings Ltd., with the U.S. Bankruptcy Court on April 21 noted these possible claims against Mr. Brown under the Company's "Contingent Claims and Other Interests." The contingent claims listed by the Company also involve several other parties. Among them are KPMG for alleged failure to complete audit work on several AlphaStar subsidiaries; American Insurance Managers Inc., American Insurance Management Group Inc. and Atlanta Insurance Marketing Inc. for their issuance of unauthorized certificates of insurance allegedly on behalf of Realm National Insurance Company, and a failed attempt to purchase that company; and John Hancock Financial Management Company for alleged intentional breach of contract. However, these claims have not been valued and consequently are not part of the Company's $4.75 million stated assets in the form of inter-company loans to Bermuda and UK affiliates. Alphastar also disclosed estimated liabilities of $2.6 million, which does not include any contingent liabilities arising from the reported fraudulent activity of the group. =========== B R A Z I L =========== ELETROPAULO METROPOLITANA: Additional BNDES Payment Expected ------------------------------------------------------------ The president of Eletropaulo Metropolitana Eletricidade de Sao Paulo SA is confident that the Brazilian power distributor would get BRL270 million (US$87 million) in credits from Brazil's national development bank BNDES within 60 days, says Reuters. Eletropaulo President Eduardo Bernini said that the Company, an affiliate of U.S. power company AES Corp., would use the money to pay off its creditors as part of a debt restructuring agreement. The expected disbursement from BNDES follows last week's BRL521.4-million (US$168 million) payment also from BNDES to Eletropaulo. This payment was part of the CVA financing program instituted by the federal government in November 2003 to anticipate the uncontrollable costs element of the power rate adjustment, which was withheld for 12 months from April 2003 as an anti-inflation measure. The BRL270-million is related to federal aid for losses during the government-imposed energy rationing of 2001-2002, when a drought depleted Brazil's hydroelectric power generation capacity. "That will possibly be the last financing we get this year" from the BNDES, Bernini said. CONTACT: ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes Gonzalves Jr., VP Finance/Investor Relations EMBRATEL: President, General Counsel Resign ------------------------------------------- Embratel Participacoes S.A. (Embrapar) announces that Jorge Rodriguez, President of Embratel Participacoes S.A. submitted his resignation to the Board of Directors in a Board of Directors Meeting which occurred on June 7, 2004. The resignations of Jorge Luis Rodriguez, President of Embratel Participacoes S.A. and Claudia de Azeredo Santos, officer and General Counsel, were presented by them and were accepted by the Board of Directors. These resignations will take effect only on the later of (i) the date in which the shares that represent the control stake of Embratel Participacoes S.A. are transferred to Telefonos de Mexico S.A. de C.V. (Telmex) or (ii) July 31, 2004, but in any event no later than November 8, 2004. Embratel is the premium telecommunications provider in Brazil and offers and ample variety of telecom services -local and long distance telephony, advanced voice, high-speed data transmission, Internet, satellite data communications, and corporate networks. The company is a leader in the country for data services and Internet, and is highly qualified to be an all-distance network carrier in Latin America. Embratel's network spreads countrywide, with almost 29 thousand kms of optic cables, which represents about one million and sixty-nine thousand km of fiber optics. CONTACT: Ms. Silvia M.R. Pereira Investor Relations Tel: (55 21) 2121-9662 Fax: (55 21) 2121-6388 E-mail: silvia.pereira@embratel.com.br invest@embratel.com.br Web Site: www.embratel.com.br INVITEL: Moody's Assigns Proposed Debenture Issue Ratings --------------------------------------------------------- Moody's America Latina Ltda. assigned Ca.br rating and Ca rating to Invitel S.A.'s Brazil National Scale and Global Local Currency Scale, respectively. The ratings assigned affect Invitel's proposed BRL160 - BRL260 million in local subordinated debentures due 2010. The rating outlook is stable. Moody's assigned the ratings in view of the fact that Invitel is a holding company, with cash flow solely originated from dividends and interest on own capital ("dividends") paid by Brasil Telecom S.A. ("BRT"; rated Aa1.br on the Brazil National Scale and Baa3 of the Global Local Currency Scale), which is ultimately controlled by Invitel. The ratings reflect the rating agency's expectation that dividends received by Invitel will not provide cash flow sufficient to service the debentures and the remaining BNDES secured debt located at Invitel and Techold ParticipacC5es S.A. ("Techold"), Invitel's 100% owned subsidiary. Thus, the ratings are pegged entirely to ultimate anticipated recovery levels for Invitel's creditors. The Ca.br and Ca ratings reflect Moody's expectation of loss severity of 30% or greater for debenture holders under an assumed restructuring of the company's balance sheet that would allow it to service its debt obligations. Finally, the assigned ratings consider the possibility that Invitel will be capitalized by its shareholders, thus improving its capital structure. OPPORTUNITY MEM: Moody's Assigns Ratings to Debentures ------------------------------------------------------ The proposed issuance of BRL100 million - BRL200 million in local subordinated debentures due 2010 by Opportunity MEM S.A. obtained a Brazil National Scale rating of Ca.br and a Global Local Currency Scale Rating of Ca from Moody's America Latina Ltda. The agency assigned a stable outlook on the ratings. Moody's took the action in view of the fact that Opportunity MEM is a holding company, with cash flow solely originated from dividends and interest on own capital ("dividends") paid by operating companies Telemig Celular S.A. and Amazonia Celular S.A., which are ultimately controlled by Opportunity MEM. The ratings reflect Moody's expectation that dividends received by Opportunity MEM will not provide cash flow sufficient to service the debentures. Thus, the ratings are pegged entirely to ultimate anticipated recovery levels for Opportunity MEM's creditors. Moreover, the Ca.br and Ca ratings reflect Moody's expectation of loss severity of 30% or greater for debenture holders under an assumed restructuring of the Company's balance sheet that would allow it to service its debt obligations. Finally, the assigned ratings consider the possibility that Opportunity MEM will be capitalized by its shareholders, thus improving its capital structure. OPPORTUNITY ZAIN: Moody's Issues New Debentures `C.br' ------------------------------------------------------ Moody's America Latina Ltda. assigned C.br rating and C rating to Opportunity Zain's Brazil National Scale and Global Local Currency Scale, respectively. The assigned ratings affect Opportunity Zain's proposed issuance of BRL160 million - BRL350 million in local subordinated debentures due 2010. The rating outlook is stable. Moody's took the action considering that Opportunity Zain is a holding company, with cash flow solely originated from dividends and interest on own capital ("dividends") paid by Brasil Telecom S.A. ("BRT"; rated Aa1.br on the Brazil National Scale and Baa3 of the Global Local Currency Scale), which is ultimately controlled by Opportunity Zain. The ratings reflect the rating agency's expectation that dividends received by Opportunity Zain will not provide cash flow sufficient to service the debentures. Thus, the ratings are pegged entirely to ultimate anticipated recovery levels for Opportunity Zain's creditors, says Moody's. The C.br and C ratings reflect Moody's expectation of loss severity of 80% or greater for debenture holders under an assumed restructuring of the Company's balance sheet that would allow it to service its debt obligations. PARMALAT BRAZIL: Positive Cash Flow Expected By September --------------------------------------------------------- Parmalat Brasil Industria de Alimentos should generate neutral or positive cash flows by September, Mr. Nelson Bastos, the head of the local operations, said, echoing comments made earlier by its Italian parent Parmalat Finanziaria S.p.A. Citing local daily Valor Economico, Dow Jones reports that Parmalat Brazil billed BRL39 million in May, more than any other month since an accounting scandal engulfed its Italian parent in December. Parmalat Brazil is working to sign sales contracts and restart local milk processing operations that nearly ground to a halt after Parmalat Italy descended into crisis. =========== G U Y A N A =========== * IDB Approves $28M Soft Loan To Guyana --------------------------------------- The Inter-American Development Bank announced Wednesday the approval of a $28 million soft loan to Guyana to support a reform agenda aimed at ensuring continued fiscal sustainability and the transparent and efficient management of public finances. The project is the result of a close process of dialogue between the Bank and the Guyanese authorities and will support a series of legislative and administrative steps designed to increase efficiency and equity of the tax system and improve public expenditure management and transparency. These measures were agreed upon by the Guyanese government and the international community on the basis of the recommendations of a series of technical assessments conducted by international agencies over the past two years. The steps were taken within the framework of the Enhanced HIPC Initiative - the international effort to provide debt relief to heavily indebted poor countries, including Guyana. The IDB-financed program, whose implementation will be led by the Ministry of Finance*, takes the form of a hybrid lending operation consisting of a policy-based financing component and an investment component. With respect to the first, the initial phase of the program is aimed at establishing a modern legislative framework for fiscal and financial management, with subsequent phases supporting the effective implementation of the reforms. The IDB, through its dialogue with the authorities, has provided substantial assistance and guidance with respect to the prioritization and sequencing of the various reforms. For the investment component, resources will be invested in the development and implementation of a comprehensive modernization plan for the Guyana Revenue Authority, as well as in the expansion of an integrated financial management system recently installed with the support of the Canadian Development Agency. At the same time, in supporting the implementation of constitutional reforms adopted in 2001 in the areas of public audit and financial and fiduciary oversight, the program will strengthen the role of parliament in the oversight of fiscal and financial management. The program reflects the IDB strategy of assisting Guyana in maintaining a sound macroeconomic framework and modernizing the state. The IDB loan is for a 40-year term, with a 10-year grace period, at a 1 percent annual interest rate during the grace period and 2 percent thereafter. Local counterpart funds total $1.5 million. =============== H O N D U R A S =============== * IDB Approves $30.6M Loan To Honduras -------------------------------------- The Inter-American Development Bank announced Wednesday the approval of a $30.6 million concessional loan to Honduras to support the country in its achievement of the goals of a Poverty Reduction Strategy, increasing the coverage of quality secondary education and improving the job skills of youth and adults. According to IDB Project Team Leader Carlos Miranda, the program is expected to help more young Hondurans gain access to better jobs or go on to higher education. About 52 percent of Honduras' 6.5 million people are under 20 years old. The project consists of two subprograms, one dedicated to secondary education and the other to job training through public-private service intermediation. The secondary education subprogram, to be carried out by the Ministry of Education*, will increase the coverage of grades 7 through 12. School buildings will be refurbished to make room for more students in areas with high levels of unsatisfied demand for education. Distance learning programs with proven track records will also be expanded to serve more young people in rural areas. Another component will provide technical assistance and training to improve schools with high dropout and grade repetition rates. The Ministry of Education's human resources management capabilities will be strengthened to improve the allocation of teachers to meet unsatisfied demand for secondary education. Public information activities will seek to raise popular demand for education and solidarity with young people left out of the school system. The labor subprogram, which will be carried out by the Ministry of Labor and Social Security (STSS)**, is aimed at increasing the employment opportunities of the unemployed or underemployed. It also seeks to involve the private sector in developing workplace job training mechanisms tailored to the specific demands of the Honduran labor market. To that end, the Labor Ministry will engage CADERH, a not-for- profit organization established by business, labor and professional leaders to improve technical and vocational education in Honduras, and it will also enlist the collaboration of COHEP, a private sector federation. Trainees will receive a stipend for up to three months and insurance for work-related accidents. The government and the private sector will establish a job placement service to link people looking for work with organizations in need of workers. COHEP already runs an electronic jobs database that will be a key tool for the new service. The IDB will coordinate this program with other initiatives to increase the quality and coverage of Honduran education financed by the World Bank, the U.S. Agency for International Development, the European Union and other donors. The loan is for a 40-year term, with a 10-year grace period. The annual interest rate will be 1 percent during the first decade and 2 percent thereafter. Local counterpart funds will total $3.4 million. =========== M E X I C O =========== HYLSA: S&P Raises Ratings To B; Outlook Stable ---------------------------------------------- Standard & Poor's Ratings Services raised its local currency and foreign currency corporate credit ratings on Hylsa S.A. de C.V. (Hylsa) to 'B' from 'CCC+.' The senior unsecured debt rating on Hylsa was also raised to 'CCC+' from 'CCC-'. The outlook is stable. "The rating action is based on the company's increasing revenues due to a better product mix and higher price environment, effective cost control, positive free cash flow generation, and significant debt reduction of 11.6% so far this year," said Standard & Poor's credit analyst Juan P. Becerra. The ratings on Mexican steel producer Hylsa reflect Hylsa's high leverage, the challenges posed by industry cyclicality, very competitive steel markets, and significant exposure to the automotive and construction industries. The ratings also reflect the company's position as one of the largest steel makers in Mexico, improved local market demand, improving cost position, and expected debt reduction with cash flows from the improved pricing environment in global steel markets. The stable outlook is supported by an improved financial profile as a result of Hylsa's debt prepayments and improving operating performance. The ratings could be raised over time if Hylsa continues to significantly reduce debt. The ratings could be lowered if the decrease in prices is steeper than anticipated or if debt levels are not reduced as expected. ANALYSTS: Juan P Becerra, Mexico City (52) 55-5081-4416 Santiago Carniado, Mexico City (52) 55-5081-4413 ======= P E R U ======= * IMF Approves 26-Month $422.8M Stand-By Arrangement for Peru ------------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) Wednesday approved a 26-month SDR 287.3 million (about US$422.8 million) Stand-By Arrangement for Peru to support the country's economic program through mid-2006. The approval enables the release of a first drawing of SDR 80 million (about US$118 million) under the arrangement. However, the authorities have indicated their intention to treat this arrangement as precautionary. Following the Executive Board discussion, on Peru, Rodrigo de Rato, Managing Director and Chairman of the Board, said: "Peru's recent economic performance has been favorable, with solid growth and low inflation. Substantial buffers, including a high level of international reserves and a well-capitalized banking system, have been built up to further reduce vulnerabilities associated with high dollarization and public debt, and there has been progress with structural reforms. The authorities' program for 2004-06 aims at consolidating macroeconomic stability, fortifying confidence, strengthening the basis for sustainable growth and employment creation so as to reduce poverty, and further reducing financial vulnerabilities. It focuses on the consistent implementation of their inflation-targeting framework and on fiscal consolidation, with a view to continue improving public debt dynamics and increasing the scope for priority social and infrastructure investment. "The program also includes a broad set of growth-enhancing reforms aimed at reducing the high levels of unemployment and poverty. In 2004, the authorities plan to foster private investment by establishing commercial courts and improving collateral registries. They also plan to grant operating concessions to the private sector and enter into targeted public-private partnerships (PPPs), which will be implemented in a prudent manner and accounted for transparently in the budget. The reform program will also improve public resource management, modify public pension regimes-including the preferential Cedula Viva-reduce labor costs, and strengthen bank supervision and the legal framework for fiscal decentralization. "The authorities' firm commitment to implementing prudent economic polices in the context of a challenging political and social environment is commendable. Strengthening political consensus for critical reforms will be crucial to press forward with the reform momentum of recent years and reduce the vulnerabilities facing the economy and reinforce confidence in the continuity of prudent policies. This will help boost broad- based and sustainable growth and employment and reduce poverty, while strengthening the basis for Peru's successful exit from the series of Fund-supported programs," the Managing Director said. Recent economic developments Peru made progress in stabilizing its economy and adopting growth-enhancing structural reforms, under the 2002-03 Stand-By Arrangement with the Fund. Economic growth averaged 4.5 percent a year, inflation remained low under the inflation targeting framework of the central bank, and substantial buffers were built to mitigate financial vulnerabilities. These buffers included a high level of international reserves and a well- capitalized banking system. Progress was also made in structural reforms, including in the areas of decentralization, pension reform, clarifying fiscal rules, strengthening the financial system, and reorienting the privatization program towards granting concessions. In 2003, Peru's GDP grew by 4 percent in real terms and inflation was limited to 2.5 percent. Fiscal consolidation was in line with the government's target-the deficit of the combined public sector was reduced from 2.2 percent of GDP in 2002 to 1.7 percent of GDP. Revenues were boosted by tax measures introduced in mid 2002 and mid 2003. Peru's external position also strengthened in 2003 and financial indicators improved. The external current account deficit fell from more than 2 percent of GDP in 2002 to about 1.75 percent, driven by commodity export growth. Private capital inflows remained strong, particularly foreign direct investment in the natural resource sector. Gross international reserves rose by about US$500 million during 2003 and by a further US$250 million during the first four months of 2004, to US$10.5 billion at end-April 2004. The Lima stock exchange index surged by 75 percent during 2003, reflecting higher mineral product prices. Peru's sovereign spread continues to be among the lowest in the region. Program summary The objectives of the program for 2004-2006 are to maintain macroeconomic stability, foster robust growth and employment, further reduce vulnerabilities, and diminish poverty. The program aims at enhancing the basis for strong economic growth, which is projected to average about 4.5 percent a year during 2004-06. It focuses on the continued implementation of the inflation-targeting framework and on fiscal consolidation, with a view to lowering the debt-to-GDP ratio from about 47.5 percent in 2003 to about 41 percent in 2006. Successful implementation of the program will enhance the basis for defining Peru's exit strategy from Fund supported programs. The fiscal program is based on reducing the overall deficit of the combined public sector from 1.7 percent of GDP in 2003 to 1.4 percent in 2004, and to 1 percent a year in 2005-06. Over this period, about one third of the adjustment effort of the central government is to be achieved through higher revenue, and the remainder through a containment in current expenditure growth. Monetary policy will continue to be managed within the inflation-targeting framework. While preserving its floating in the exchange rate regime, the authorities intend to maintain a solid cushion of foreign reserves to mitigate potential external shocks and political uncertainties in the period up to the 2006 elections. Boosting economic growth and employment creation depends critically on the sustained implementation of a broad set of reforms. The program includes growth enhancing reforms aimed at strengthening the investment climate, including the establishment of commercial courts to speed up contract enforcement and improvements in the functioning of collateral registries. To bolster infrastructure investment, the authorities plan to grant operating concessions to the private sector and enter into Public-Private Partnerships in a fiscally prudent and transparent manner. Also, the authorities intend to improve resource management in the public sector, modify public pension regimes, reduce labor costs, and strengthen the legal framework for decentralization. The program includes efforts aimed at further strengthening the regulation and supervision of financial intermediaries. Peru joined the IMF on December 31, 1945, and its current quota is SDR 638.4 million (about US$939 million). Its outstanding use of IMF financing currently totals SDR 80.3 million (about US$118 million). 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 ================================= T R I N I D A D & T O B A G O ================================= BWIA: Gives Shareholder Rights Offer for Additional Shares ---------------------------------------------------------- British West Indies Airways (BWIA), the national carrier of Trinidad and Tobago, announced in a press advertisement Wednesday that shareholders now have the opportunity to increase their share in the airline, the Trinidad Guardian relates. Shareholders are given a Rights Issue of 27 ordinary shares for every one ordinary share held at an issue price of 20 cents a share. BWIA said the issue will open on June 28th. BWIA announced in April that the airline intended to issue a rights issue to raise approximately US$40 million. The announcement came just 10 days after Government decided to give the airline a lifeline valued at the same amount. Also during that month, Bourse Securities managing director Subhas Ramkhelawan, and West Indies Stockbrokers Ltd CEO Peter Clarke said Government would probably end up buying the new shares as it was doubtful the carrier's other shareholders would want to increase their shareholding in the troubled airline. CONTACT: BRITISH WEST INDIES AIRWAYS Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, CFO (Trinidad) ================= V E N E Z U E L A ================= CANTV: Foreign Dividend Payments Set for Distribution ----------------------------------------------------- Venezuela's biggest telephone company, CA Nacional Telefonos de Venezuela (CANTV) is now ready to pay dividends on its American Depositary Receipts after it gained approval from state-run Cadivi currency agency to buy US$108.9 million at the official exchange rate. CANTV said the dividends would be paid to investors who held ADRs before April 13. Venezuela introduced strict currency controls and a fixed exchange rate in February last year to shore up the bolivar currency and bolster reserves after months of political conflict over the rule of leftist President Hugo Chavez. Private companies must apply to CADIVI for access to dollars they need for imports and foreign debt payments. CONTACT: Gregorio Tomassi CANTV Investor Relations 011-58-212-500-1831 FAX: 011-58-212-500-1828 E-Mail: invest@cantv.com.ve *********** 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. 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