/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040623.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, June 23, 2004, Vol. 5, Issue 123 Headlines A R G E N T I N A EAGLESTAR: Verification Deadline Approaches FRIO NORTE: Claims Verification Ends Today ILBOR: Trustee Closes Verification Phase LA BATUTA: Credit Validation Period Ends Today LG EDICIONES: Reports Submission Set SIARDECOM: Court Schedules Reports Submission TELECOM ARGENTINA: Issues APE Solicitation Statement TRANSENER: Fitch Confirms `D(arg)' Rating on $525M Debentures * GCAB Retains Bear, Stearns as Financial Advisor B E R M U D A GLOBAL CROSSING: Auditors Complete Cost of Access Issue Query B R A Z I L ELETROPAULO METROPOLITANA: S&P Raises Ratings To 'CCC-' TELEMAR: BBVA to Provide $73M Loan for Amazonas Construction * Brazil Commences $750M, 5-Yr Notes Issue C H I L E AES GENER: Completes Restructuring Process TELEFONICA CTC: Seeks Foreign Investors' Support on Unit's Sale D O M I N I C A N R E P U B L I C AES DOMINICANA: Blames Government For Shutdown M E X I C O EMPRESAS ICA: JV Signs Contracts To Build Drilling Platforms GRUPO IUSACELL: Posts Information on Principal Payments HYLSAMEX: Financial Group Sees Improvement in Financial Standing SATMEX: In Negotiations for Maturing $205M Loan V E N E Z U E L A PDVSA: Allocates $20B for This Year's Taxes, Dividends PDVSA: High Accident Rate Puts Operations in Question * Republic of Venezuela Announces Tender Results - - - - - - - - ================= A R G E N T I N A ================= EAGLESTAR: Verification Deadline Approaches ------------------------------------------- The verification of claims for the Eaglestar S.A. bankruptcy case is set to end today. All creditors were expected to present proofs of the Company's indebtedness before today to participate in the payments that will be made after its assets are liquidated. Mr. Jose Maria Larrory serves as trustee for the bankruptcy case. CONTACT: Mr. Jose Maria Larrory, Trustee Viamonte 1348 Buenos Aires FRIO NORTE: Claims Verification Ends Today ------------------------------------------ Mr. Alejandro Jose Karanicolas, the court-appointed trustee serving the Frio Norte S.R.L. reorganization, will stop accepting creditors' proofs of claim for verification after today, June 23, 2004. Troubled Company Reporter - Latin America reports that the trustee is scheduled to submit the individual reports from the verified claims on August 23, 2004 followed by the general report on October 6, 2004. The case is under the jurisdiction of the Salta civil and commercial tribunal court no. 2. CONTACT: Frio Norte S.R.L. Aniceto Latorre 699 Salta Mr. Alejandro Jose Karanicolas, Trustee Avenida Belgrano 1277 Salta ILBOR: Trustee Closes Verification Phase ---------------------------------------- Mr. Hector G. Caferatta, the trustee serving in Ilbor S.A.'s bankruptcy case, will end the verification of creditor's claims today. All creditors were expected to submit their respective claims before today to qualify for the payments to be distributed after the Company's liquidation. Buenos Aires Court No. 1, assisted by Clerk No. 2, has jurisdiction over the bankruptcy case. CONTACT: Mr. Hector G. Caferatta, Trustee Laprida 1898 Buenos Aires LA BATUTA: Credit Validation Period Ends Today ---------------------------------------------- The authentication of creditors' claims for the La Batuta de B.A. S.A. bankruptcy case will end today. All creditors of the Company were expected to present proofs of their claim before today to qualify for the payments scheduled after the liquidation of the Company's assets. Judge Fernandez of Buenos Aires Court No. 19, with the assistance of Clerk No. 37 Dr. Mazzoni, handles the bankruptcy case while Mr. Juan Poggio serves as the court-appointed trustee. CONTACT: La Batuta de B.A. SA Avenida Santa Fe 3295 Buenos Aires Juan Poggio Cavia 3037, piso 9o "A" Buenos Aires LG EDICIONES: Reports Submission Set ------------------------------------ The individual reports pertaining to the bankruptcy of LG Ediciones Buenos Aires S.A. is due for court submission today. The court-appointed trustee, Mr. Jose Luis Cueli, prepared these reports from the claims submitted by the Company's creditors during the validation period. In addition, the trustee is also obligated to provide the court with a general report on the ongoing bankruptcy. The report will be submitted on August 20, 2004. Court No. 19 of the Buenos Aires Civil and Commercial Tribunal has jurisdiction over the liquidation. CONTACT: LG Ediciones Buenos Aires S.A. Pena 2580 Buenos Aires Mr. Jose Luis Cueli, Trustee Junin 55 Buenos Aires SIARDECOM: Court Schedules Reports Submission --------------------------------------------- Buenos Aires Court No. 22 expects to receive the individual reports pertaining to the Siardecom S.A. on August 19, 2004. The court-appointed trustee, Mr. Alberto Antonio Vilela, will submit these reports after wrapping-up the bankruptcy's verification phase today. A general report, containing an audit of the Company's accounting and business records, will also be presented in court on September 30, 2004. CONTACT: Mr. Alberto Antonio Vilela, Trustee Rodriguez Pe a 431 Buenos Aires TELECOM ARGENTINA: Issues APE Solicitation Statement ---------------------------------------------------- Telecom Argentina S.A., a sociedad anonima organized under Argentine law ("Telecom," "us" or "we") is conducting a solicitation of powers of attorney or commitments to approve and execute an Acuerdo Preventivo Extrajudicial, an out-of-court restructuring agreement governed by Argentine law which we refer to as the "APE". Pursuant to the APE, we propose to restructure all of our outstanding debt (except for our commercial obligations, as described herein) by issuing notes with new payment terms, and/or by paying cash consideration, in accordance with the options described herein. Our outstanding debt is comprised of outstanding notes and outstanding loans. As of December 31, 2003, our unconsolidated outstanding debt (not including our commercial obligations) was the equivalent of US$2,801 million (including accrued but unpaid interest, penalties and post- default interest rate increases). As more fully described in this solicitation statement, holders of our outstanding notes and outstanding loans will receive at their option, for each 1,058 denominated in dollars, euro, Japanese yen or Argentine pesos aggregate principal amount of outstanding debt and principal face amount adjustment (computed as described in this solicitation statement), either - an option, which we refer to as "Option A," to receive 1,058 principal amount of step-up notes due 2014, which we refer to as the "series A notes"; or - an option, which we refer to as "Option B," to receive step-up notes due 2011, which we refer to as the "series B notes" (holders whose underlying outstanding debt is denominated in dollars will receive US$1,000 principal amount of series B notes and holders whose underlying outstanding debt is denominated in euro, pesos and yen will receive an amount of series B notes equal to the dollar equivalent of 94.5% of their principal and principal face amount adjustment); or - an option, which we refer to as "Option C," to receive a cash payment in equivalent U.S. dollars, which we refer to as the "cash consideration" at a price not greater than 850 nor less than 740, to be determined pursuant to a "Modified Dutch Auction." We will also make interest payments to holders of our outstanding debt who elect Option A, Option B and Option C for part of the accrued but unpaid interest. Participation in Option B and Option C will be subject to specified limits as more fully described in this solicitation statement. If one or both of these options is oversubscribed, participation in the oversubscribed option will be prorated based on the maximum amount of outstanding debt that may be retired under the applicable option. If either Option B or Option C is oversubscribed, holders electing these options may have a portion of their outstanding debt allocated to Option A. In addition, if Option C is undersubscribed, holders who elect to receive Option B will have up to 37.5% of their outstanding debt allocated to Option C. Holders of our outstanding notes will receive notes in the form of global notes in registered form. Holders of our outstanding loans will receive a separate series of notes in the form of certificated notes in registered form. If the APE is approved by the reviewing court, holders who do not consent to the APE or who do not participate in this solicitation will receive series A notes and cash interest payments determined as described in this solicitation statement. No holders will be permitted to retain their outstanding notes and outstanding loans if the APE is executed and subsequently approved by the reviewing court. For purposes of the APE, all holders of our outstanding debt will constitute a single category (class). This solicitation will expire at 3:00 p.m., New York City time, 4:00 p.m., Buenos Aires time, on July 21, 2004, unless we extend it in our sole discretion. We refer to such time and date, as they may be extended, as the "expiration date." The execution of the APE is subject to holders of our outstanding debt electing a minimum required participation in Option A, to a minimum level of creditor consent, and to certain other conditions (or the waiver thereof) as described in this solicitation statement. We encourage you to consider carefully the risk factors beginning on page 54 of this solicitation statement. We will apply to have the notes issued to holders of outstanding notes listed on the Buenos Aires Stock Exchange or the Mercado Abierto Electronico S.A. and, in the case of notes denominated in euro, on the Luxembourg Stock Exchange. The notes issued to holders of outstanding loans will not be listed on any exchange. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this solicitation statement is truthful or complete. Any representation to the contrary is a criminal offense. The notes issued outside the United States have not been registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to a registration statement under the Securities Act or in certain transactions exempt from the registration requirements of the Securities Act. The solicitation agents for this APE solicitation are: MORGAN STANLEY MBA BANCO DE INVERSIONES S.A. We are soliciting from the holders of our outstanding debt powers of attorney in favor of The Bank of New York, as settlement agent, or the commitment of holders of outstanding loans, to approve and execute the APE, including holders of the following outstanding notes: Series C Medium Term Notes Due 2002 (ISIN No. US879273AE01, CUSIP No. 879273AE0); - Series E Medium Term Notes Due 2005 (ISIN No. XS0076226942); - Series 1 Medium Term Notes Due 2003 (ISIN No. XS0109260686); - Series 2 Medium Term Notes Due 2004 (ISIN No. XS0131485624); - Series I Medium Term Notes Due 2004 (ISIN No. XS0096148779); - Series K Medium Term Notes Due 2002 (ISIN No. XS0099123712); - Series F Medium Term Notes Due 2007 (ISIN No. XS0076689024); and - Series H Medium Term Notes Due 2008 (ISIN No. XS0084707313). In order to grant a power of attorney to execute the APE on their behalf, or commit to execute the APE directly, holders of outstanding debt must return to the settlement agent a duly executed letter of transmittal setting forth their preferred consideration among the options offered. If the APE is executed and subsequently approved, or homologado , in the form that we have proposed by a commercial court of the City of Buenos Aires, Argentina, we will make available to each consenting holder of our outstanding debt, at that holder's option, subject to proration and the other terms and conditions of the APE, the notes and/or cash consideration, as applicable, and payments of a portion of accrued but unpaid interest as described in this solicitation statement. If the APE is approved by the reviewing court, holders who do not consent to the APE or who do not participate in this solicitation also will receive series A notes and cash interest payments determined as described in this solicitation statement. No holders will be permitted to retain their outstanding notes and outstanding loans if the APE is executed and subsequently approved by the reviewing court. Concurrently with this APE solicitation, our 99.99% owned subsidiary, Telecom Personal S.A., is proposing to restructure its outstanding indebtedness, including intercompany obligations. As of December 31, 2003, Telecom Personal's unconsolidated outstanding debt and intercompany obligations amounted to the equivalent of US$599 million (including US$27 million principal amount of intercompany obligations owed to Telecom, accrued but unpaid interest, penalties and post-default interest rate increases). Telecom's APE is not conditioned upon the completion of the Telecom Personal restructuring; however, Telecom has the right, in its sole discretion, to terminate the APE at any time prior to March 31, 2005 if Telecom Personal has not executed its APE agreement, unless Telecom has already received court approval for the APE. CONTACT: TELECOM ARGENTINA S.A. Alicia Moreau de Justo 50, 10th Floor Capital Federal (1107) Republica Argentina Phone: +54 11 4968 4000 Home Page: http://www.telecom.com.ar Contacts: Alberto J. Ricciardi, Chief Financial Officer Elvira Lazzati, Finance Director Pedro Insussarry, Investor Relations Manager Phone: (5411) 4968-3626/3627 Fax: (5411) 4313-5842/3109 E-mail: inversores@intersrv.telecom.com.ar TRANSENER: Fitch Confirms `D(arg)' Rating on $525M Debentures ------------------------------------------------------------- Fitch Argentina Calificadora de Reisgo S.A. confirmed the `D(arg)' rating on US$525 million debentures issued by transmission company Transener, reports Business News Americas. Transener, Argentina's leading transporter of high voltage electricity, has seen its finances dwindle because of pesofied income while virtually all debt and a large part of costs are dollar-linked. At end-March 2004, Transener's total financial debt was US$548 million, of which 70% was expired and unpaid. 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 * GCAB Retains Bear, Stearns as Financial Advisor ------------------------------------------------- The Steering Committee of the Global Committee of Argentina Bondholders (GCAB) announced Monday that it has retained Bear, Stearns & Co. Inc. (Bear Stearns) as exclusive financial advisor to assist it in negotiations with the Argentine Government. Notwithstanding Argentina's recent statements and its filing with the US Securities and Exchange Commission on June 10, 2004 of a unilateral proposal that was not negotiated with its creditors and which GCAB finds unacceptable, GCAB remains fully committed to starting serious negotiations directly with Argentina. Commenting on the engagement, Hans Humes and Nicola Stock, Co- Chairmen of the Steering Committee for GCAB, stated, "GCAB believes that the retention of Bear Stearns will facilitate the good faith negotiations mandated by the International Monetary Fund. With the assistance of Bear Stearns, GCAB intends to present a comprehensive response that is consistent with Argentina's economic growth and debt sustainability goals and will accelerate the country's ability to return to the global capital markets. GCAB strongly urges the country's authorities to consider this forthcoming response seriously and to begin meaningful negotiations promptly. Any filing by Argentina or the commencement of an exchange offer that does not take into account the forthcoming GCAB response through good faith negotiations is inconsistent with Argentina's agreement with the IMF and greatly compromises the restructuring process. Furthermore, GCAB firmly believes that Argentina has not provided creditors with the information required to properly assess the outlook for the country's economy, the amount of debt the country can sustain or the proposed terms for a restructuring. We are hopeful that GCAB and Argentina, with the active assistance of their respective financial advisors, will be able to expeditiously achieve an equitable, consensual and mutually beneficial solution that allows the nation's leadership to successfully pursue its economic growth program." About GCAB GCAB was formally established in January 2004 by representatives of all the major foreign bondholder constituencies of defaulted Argentine debt, and consists of a broad-based group of holders. The Steering Committee represents holders from Germany, Italy, Japan, Switzerland, the USA and other countries. Its retail and institutional members hold approximately US$37 billion in defaulted debt of Argentina, accounting for 45% of the principal amount of US$82 billion in outstanding Argentine debt and 73% of all outstanding Argentine debt held outside Argentina. About Bear, Stearns & Co Inc. Founded in 1923, Bear, Stearns & Co. Inc. is a leading investment banking and securities trading and brokerage firm, and the major subsidiary of The Bear Stearns Companies Inc. (NYSE:BSC). With approximately $40 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales, trading and research, liability management, restructuring, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear Stearns Securities Corp., it offers financing, securities lending, clearing and technology solutions to hedge funds, broker-dealers and investment advisors. Headquartered in New York City, the company has approximately 10,500 employees worldwide. ============= B E R M U D A ============= GLOBAL CROSSING: Auditors Complete Cost of Access Issue Query ------------------------------------------------------------- Global Crossing (NASDAQ: GLBCE) announced Monday that Deloitte & Touche LLP has completed an independent investigation of the facts and circumstances giving rise to the company's previously announced understatement of cost of access liabilities and expenses. Deloitte & Touche reported that the investigative procedures it performed did not reveal any management integrity issues related to the cost of access accrual and expenses, or any knowledge by management of an understatement related to the year-end 2003 financial statements until after the filing of such financial statements in March 2004. "We're pleased that Deloitte & Touche has been able to finish its investigation and has reported that there was no finding of prior knowledge by Global Crossing employees of the understatement and nothing within the scope of their cost of access investigation that raises concerns with management integrity," said John Legere, Global Crossing's CEO. "The company has responded to the situation appropriately and expeditiously -- we uncovered a problem, made prompt public disclosure, addressed the problem with both internal and independent investigations, and are ensuring the implementation of more stringent controls in the future." Deloitte & Touche was retained by Global Crossing's independent audit committee in May 2004 to conduct this investigation after the company announced on April 27, 2004 that its previously reported 2002 and 2003 financial statements should be disregarded because of an understatement of its accrued cost of access liability at year-end 2003. Deloitte & Touche recently reported the results of its investigation to Global Crossing's audit committee and board of directors. Deloitte & Touche's findings were based upon an investigation of the company's existing processes and procedures for accounting for cost of access expenses in North America and included reading more than 90,000 e-mails and numerous other documents and interviewing 26 employees. Based upon the investigative procedures it performed, Deloitte & Touche observed that the issues surrounding cost of access in North America do not appear to exist in Global Crossing's operations in the UK and Europe. Deloitte & Touche observed that the company had in place detailed processes and procedures for its cost of access accounting. Consistent with the previously reported results of the company's internal review, Deloitte & Touche identified weaknesses in these processes, procedures and controls in North America, including the failure to reconcile estimates of cost of access expenses to vendor invoiced amounts. Based in part on Deloitte & Touche's observations regarding the internal control weaknesses related to cost of access, Global Crossing's board has directed management, under the oversight of the audit committee, to continue implementation of appropriate interim and long-term remediation measures to ensure accurate reporting of financial information regarding cost of access. These remediation measures include, among other things, adding systems and procedures for reconciling vendor invoices to accruals for cost of access expenses; conducting a required skill level analysis for cost of access-related functions and supplementing resources accordingly; developing comprehensive documentation of cost of access expense and accrual processes and procedures; hiring of an industry expert to assess organizational structures and their relationship to reporting risk; and improving support tools for estimating and disputing cost of access expenses and training personnel on the use of such tools and on cost of access processes. As previously announced, the audit committee has retained Grant Thornton LLP to evaluate the understated cost of access liability and determine whether it can re-issue its previously withdrawn audit reports dated March 8, 2004, December 23, 2003 and September 10, 2003 or whether a restatement of some or all of the related financial statements is required. As part of its audit procedures, Grant Thornton will review Global Crossing's estimate that the understatement ranged from approximately $50 million to approximately $80 million, of which approximately $10 million reflects an erroneous classification within Global Crossing's emergence balance sheet under fresh start accounting rules. The results of Deloitte & Touche's investigation satisfy one of the conditions placed on availability of the remaining funds under Global Crossing's bridge loan facility with Singapore Technologies Telemedia. Global Crossing (NASDAQ: GLBCE) provides telecommunications solutions over the world's first integrated global IP-based network. Its core network connects more than 300 cities and 30 countries worldwide, and delivers services to more than 500 major cities, 50 countries and 6 continents around the globe. The company's global sales and support model matches the network footprint and, like the network, delivers a consistent customer experience worldwide. Global Crossing IP services are global in scale, linking the world's enterprises, governments and carriers with customers, employees and partners worldwide in a secure environment that is ideally suited for IP-based business applications, allowing e- commerce to thrive. The company offers a full range of managed data and voice products including Global Crossing IP VPN Service, Global Crossing Managed Services and Global Crossing VoIP services, to more than 40 percent of the Fortune 500, as well as 700 carriers, mobile operators and ISPs. CONTACTS: Press Contacts Ms. Becky Yeamans + 1 973-937-0155 PR@globalcrossing.com Ms. Tisha Kresler + 1 973-937-0146 PR@globalcrossing.com Ms. Fernanda Marques Latin America + 55 21-3820-4712 LatAmPR@globalcrossing.com Analysts/Investors Contact Ms. Mitch Burd +1 800-836-0342 glbc@globalcrossing.com Web Site: www.globalcrossing.com =========== B R A Z I L =========== ELETROPAULO METROPOLITANA: S&P Raises Ratings To 'CCC-' ------------------------------------------------------- Standard & Poor's Ratings Service raised its foreign and local currency corporate credit rating on Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. (Eletropaulo) to 'CCC-' from 'SD' (selective default) on its global scale, and raised its corporate credit rating to 'brCCC-' from 'SD', and its issue credit rating on Eletropaulo's BrR700 million debenture issue (original amount) to 'brCCC-' from 'brCC' on its national scale. At the same time, the ratings were placed on CreditWatch with positive implications. The rating action follows the conclusion of Eletropaulo's debt exchange. After renegotiating BrR2.3 billion of its debt with banks in March 2004, the company was still in default on a US$2.3 million portion of an original US$100 million euro commercial paper transaction because note holders had not accepted the tender offers to exchange these notes made by the company in December 2002, December 2003 and February 2004. However, this US$2.3 million portion was resolved on June 15, 2004. With this exchange offer completed on June 2004, Eletropaulo reached acceptance on total debt exchanges with the vast majority of debt holders (over 99.9%). The CreditWatch with positive implications indicates that the ratings can potentially be raised depending on the reassessment of Eletropaulo's financial profile considering the amortization schedule of its debt after concluding the renegotiation, as well as the consolidated debt amortization requirements at the holding company (Brasiliana Energia S.A. (Brasiliana)) level. Eletropaulo holds an important position in the Brazilian energy distribution market (12% of the market), operates in a high- density region, and is a strong cash generator (funds from operations of BrR441 million in December 2003). In addition, the company is significantly less exposed to refinancing and currency mismatch risks. Short-term debt was BrR826 million in March 2004 after the refinancing of the bulk of its debt, compared to BrR2.8 billion in March 2002. Financial exposure to exchange rate has been reduced to 20% of total debt, down from 42% in late 2002. Nevertheless, Eletropaulo will remain relatively leveraged considering the debt portion at Brasiliana to be incorporated for analytical purposes into Eletropaulo's debt amortization requirements. Brasiliana carries total debt of US$510 million. As it is a non-operating holding company, Standard & Poor's will consider that Brasiliana repayment capacity comes from cash upstreamed from its subsidiaries: Eletropaulo, AES Tiete and AES Uruguaiana. The CreditWatch should be resolved within the next month, after the evaluation of financial projections for Eletropaulo and the consolidated entity Brasiliana. Eletropaulo is the utility responsible for the distribution of electricity in the metropolitan area of Sao Paulo, under a 30- year concession contract that began in 1998. The company sold 32,774 gigawatt hours in 2003 to roughly 5 million clients. Eletropaulo is the second-largest distributor in the Brazilian electricity market. ANALYSTS: Marcelo Costa, Sao Paulo (55) 11-5501-8955 Milena Zaniboni, Sao Paulo (55) 11-5501-8945 TELEMAR: BBVA to Provide $73M Loan for Amazonas Construction ------------------------------------------------------------ Hispamar, a joint venture between Spain's Hispasat (80%) and Brazilian telco Telemar (20%), is poised to get a EUR60-million (US$73mn) loan from Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA). Business News Americas reports that the loan is for the construction of Hispasat's US$350 million Amazonas satellite. Launching of the satellite is scheduled for the second half of July. The satellite will be launched by Russian-US joint venture International Launch Services (ILS) from the Baikonour base in Kazakhstan. Commercial operations on Amazonas, which will operate Ku-band and C-band transponders, should start in August and the company aims to reach 25% of capacity by the end of the year, reaching full capacity within three or four years. CONTACT: TNE - INVESTOR RELATIONS GLOBAL CONSULTING GROUP Roberto Terziani (terziani@telemar.com.br) 55 21 3131 1208 Kevin Kirkeby (kkirkeby@hfgcg.com) Carlos Lacerda (carlosl@telemar.com.br) 55 21 3131 1314 Fax: 55 21 3131 1155 1 646 284 9494 Tel: 1-646-284-9416; Website: www.telemar.com.br/ir * Brazil Commences $750M, 5-Yr Notes Issue ------------------------------------------ Brazil launched Monday a US$750 million five-year floating rate note issue to refinance maturing debt before the Federal Reserve starts raising interest rates, reports Reuters. "It was correct to offer floating-rate notes at a time when the market expects an increase in U.S. rates," Felipe Brandao, a manager at Lopez Leon brokerage in Sao Paulo, said in a telephone interview. "Demand will be high." Investors fear a Federal Reserve interest rate hike expected at a June 29-30 meeting could push down emerging market debt prices, as higher yields on safe haven U.S. Treasuries make riskier debt less attractive. Goldman Sachs Group Inc. and Merrill Lynch & Co. are managing the sale, Brazil's central bank said in a statement. Jocimar Nastari, a spokesman at the central bank, which runs the government's foreign bond sales, declined to give other details of the sale. The sale is Brazil's first of floating-rate bonds in the U.S. since 1996, according to Bloomberg data. ========= C H I L E ========= AES GENER: Completes Restructuring Process ------------------------------------------ AES Gener reported on Monday, in connection with the previously announced capital increase, that 714,084,243 new shares of the company were subscribed for a total of Ch$ 62,268,145,957. As reported on May 25, 2004, 713,000,000 of these shares were subscribed by Inversiones Cachagua Ltda., a subsidiary of the AES Corp that controls the company, thereby increasing AES Gener's ownership of the company from 98.65% to 98.79%. As previously announced, the Primary Offering commenced on May 20, 2004 and remained open to shareholders for thirty days from the date of commencement, expiring on June 19, 2004. This capital increase completes AES Gener's the financial restructuring process through which it reduced debt by US$302 million and extended the maturity of its principal liabilities. CONTACT: AES Gener S.A. Mr. Daniel Aninat (562) 686-8938 OR Vanessa Thiers (562) 686-8948 Web Site: www.aesgener.cl TELEFONICA CTC: Seeks Foreign Investors' Support on Unit's Sale --------------------------------------------------------------- Telefonica CTC Chile chairman Bruno Philippi and chief executive Claudio Munoz are meeting with foreign shareholders who own CTC's American Depositary Receipts (ADRs) in order to get them to vote in favor of Spain's Telefonica Moviles' (TEM) purchase of CTC's mobile division. TEM plans to acquire the mobile division, Telefonica Movil S.A., from CTC for US$1 billion, plus a compromise to take on US$243 million in debt. However, minority shareholders are seeking a higher purchase price or shares of the spun-off unit, saying that gaining 100% of the payment is a minor detail compared to the loss of the mobile unit. The minority shareholders have already exercised a clause forcing TEM to require the approval of a two-thirds majority of shareholders for the deal to pass, but the number of shareholders who have so far confirmed they will vote against the sale is not enough to swing the vote. Much therefore depends on foreign shareholders who own CTC's ADRs. Exactly the reason why Mr. Philippi and Mr. Munoz are meeting with US investors to convince them of the benefits of the deal. The CTC board must schedule an extraordinary shareholders' meeting before July 17 so that all shareholders can vote. 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 =================================== D O M I N I C A N R E P U B L I C =================================== AES DOMINICANA: Blames Government For Shutdown ---------------------------------------------- Officials of AES Dominicana, a subsidiary of AES Corporation, have accused the Dominican Republic government of withholding payments for a US$22-million debt that has resulted in the shutting down of its power plant beginning Monday. Mr. Kevin Manning, an analyst working for AES Dominicana, said in an Associated Press interview that the Company would resume its operations "if the government pays the generators." The Dominican government faces claims totaling US$413 million from power generators for back payments. However, it has hotly contested this issue and has in fact stated that some of the companies owe the government money. In particular, Secretary of Finance Rafael Calderon cites AES's alleged US$21.4 million debt for plant upgrades. The Dominican Republic has suffered prolonged blackouts in the past three weeks. The worsening electricity problems in the country have forced many businesses to close and are steadily fueling complaints from the population. =========== M E X I C O =========== EMPRESAS ICA: JV Signs Contracts To Build Drilling Platforms ------------------------------------------------------------ ICA Fluor, the industrial engineering company jointly owned by Empresas ICA Sociedad Controladora (NYSE: ICA) and Fluor Corporation (NYSE: FLR), announced Monday that it has signed four separate contracts, each for the fabrication of an offshore drilling platform to be installed in the Gulf of Mexico, northeast region of the Campeche Bay. The contracts, worth nearly $169 million dollars, were awarded by Pemex Exploraci�n y Producci�n to a subsidiary of ICA Fluor, Industria del Hierro (IH), located in Mata Redonda and Empalme, Veracruz, Mexico. The contracts are for the engineering, procurement, construction, load out, sea-fastening and technical assistance during installation of the platforms. Total weight of the four platforms, which are scheduled for completion in August 2005, is approximately 30,000 tons. The four drilling platforms will help to increase the oil production in the sea field of Ku-Maloob-Zaap, in the Gulf of Mexico, to replace production from the Cantarell Field. "These four projects confirm the ICA Fluor and Industria del Hierro positioning, competitiveness and success in the offshore fabrication business," said Jorge Borja, ICA Fluor's general director. Pemex Exploraci�n y Producci�n is a subsidiary of Pemex, the Mexican state-owned petroleum company. ICA Fluor is the leading industrial engineering company in Mexico, dedicated to the engineering, procurement, and construction of telecommunication installations and chemical, petrochemical, automotive, refinery and electricity generation plants. Industria del Hierro (IH) has fabrication yards located in Mata Redonda and Empalme, Veracruz, and is 100% owned by ICA Fluor. With more than 35 years of experience in the off-shore market, IH has executed more than 60 marine projects; platforms from 30 to 70 meters of water, and processing of up to 40 thousand tons per year. Founded in 1947, ICA has completed construction and engineering projects in 21 countries. ICA's principal business units include Civil Construction, and Industrial Construction. Through its subsidiaries, ICA also manages airports and operates tunnels, highways, and municipal services under government concession contracts and/or partial sale of long-term contract rights. Fluor Corporation (NYSE:FLR) provides services on a global basis in the fields of engineering, procurement, construction, operations, maintenance and project management. Headquartered in Aliso Viejo, Calif., Fluor is a FORTUNE 500 company with revenues of nearly $9 billion in 2003. For more information, visit www.fluor.com. CONTACT: Empresas ICA Sociedad Controladora S.A. de CV Mineria No. 145, Edificio Central 11800 Mexico, D.F., Phone: (212) 688-6840 Email: jose.guerrero@ica.com.mx inversionistas@ica.com.mx Web Site: www.ica.com.mx www.fluor.com GRUPO IUSACELL: Posts Information on Principal Payments ------------------------------------------------------- Grupo Iusacell, S.A. de C.V. (NYSE: CEL - News; BMV: CEL) informed the public on June 18 that: 1. In respect of a financing made by BNP Paribas for the purpose of purchasing microwave transmission equipment entered into in July 2000 by its subsidiary Iusacell Infraestructura S.A. de C.V., it did not make a US$3.7 million principal payment due on June 15. This non-payment is in addition to non-payments of US$3.7 million of principal that were due on each of June 16 and December 16, 2003. 2. In respect of a credit line granted by Harris S.A. de C.V. in August 2000 for the purchase, construction, installation and financing of microwave transmission equipment, it did not make a US$1.0 million principal and interest due on June 15. This non- payment is in addition to non-payments of US$0.4 million of principal that was due on June 16, 2003, of US$0.2 million of interest in the aggregate that were due on July and December, 2003, of US$0.8 million of principal that was due on December 15, 2003, and of US$0.2 million of principal and interest that was due on January 30, 2004. Grupo Iusacell, S.A. de C.V. (NYSE: CEL - News; BMV: CEL) is a wireless cellular and PCS service provider in seven of Mexico's nine regions, including Mexico City, Guadalajara, Monterrey, Tijuana, Acapulco, Puebla, Leon and Merida. The Company's service regions encompass a total of approximately 92 million POPs, representing approximately 90% of the country's total population. CONTACTS: Grupo Iusacell SA de CV Prolongacion Paseo, De La Reforma 1236 Mexico, D.F., 05348 Phone: (525) 109-4400 Web Site: www.iusacell.com.mx HYLSAMEX: Financial Group Sees Improvement in Financial Standing ---------------------------------------------------------------- Mexican financial group Monex Casa de Bolsa is painting an optimistic second quarter for local steelmaker Hylsamex ((BMV: HLYSAMXB), according to a Milenio.com report. Monex believes that the Company, one of Mexico's largest steelmakers, will be able to produce more than 800,000t of steel in the second quarter this year compared to 706,000t in the same period 2003. Higher sales and the Company's projections of US$190 million - US$210 million in second quarter Ebitda will allow Hylsamex to continue paying debt and increase its financial standing. Hylsamex ended 1Q04 with a net debt of nearly US$962 million. It reported US$63 million in net profits in 1Q04, reversing losses of US$35 million year-on-year. 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: In Negotiations for Maturing $205M Loan ----------------------------------------------- Satmex, the Mexican communications satellite company, is confident that it will be able to negotiate successfully with creditors of a US$205-million syndicated loan before the principal payment expires next week. According to a report from El Financiero, Satmex would probably reach a compromise with its creditors allowing for the restructuring of the current debt by exchanging it with a new long-term liability. The Company could also surrender a portion of its capital to sweeten the deal. Eximbank and Cofase financed a US$226-million credit for the ailing company a few weeks ago to cover the debt payment due this month. However, access to this amount has been suspended due to ongoing negotiations with another group holding US$320 million in company bonds. On August 2003, Satmex missed service payments totaling US$16.2 million for the US$320 million loan due in November. Apart from this debt and the one maturing this month, the Company also faces a US$188-million debt with the Mexican government maturing in December. Last year, the Company's sales dipped to US$85 million after the failure of its Solidaridad 1 satellite further hurting its restructuring efforts. ================= V E N E Z U E L A ================= PDVSA: Allocates $20B for This Year's Taxes, Dividends ------------------------------------------------------ Venezuela's state-run oil company Petroleos de Venezuela SA will pay US$20 billion in taxes and dividends this year, far more than the government's expectation of US$7.5 billion, the Associated Press reports. The increase, according to PDVSA president, Ali Rodriguez, is the result of record oil prices, which have recently topped US$40 a barrel on the world market and remained high. The average price for the year of Venezuela's crude oil is over US$30 a barrel, compared with the US$18.50 a barrel that lawmakers used to calculate the 2004 budget. Venezuelan crude, which is heavy in sulfur and difficult to refine, sells for a few dollars less than the West Texas Intermediate, or WTI, benchmark crude price. Venezuelan President Hugo Chavez has used the windfall oil revenue to increase spending on social programs for the poor ahead of a presidential recall referendum in August. PDVSA: High Accident Rate Puts Operations in Question ----------------------------------------------------- Mr. Alyskair Albino, former maintenance inspector of PdVSA's gas producer, PdVSA Gas, describes the record of accidents at the state oil company as "alarming," El Universal relates. Between January and May of this year, PdVSA has publicly reported seven incidents and accidents within or around its facilities, and this does not include minor technical failures and system shutdowns. The situation has resulted in sanctions against the firm by the international insurance companies and organizations defending the workers' rights. However, PdVSA announced in April that three of these companies - American International Group, AON, and Willis Limited - described its operations as showing a "high security standard." Shortly after that, it also announced the gradual certification of its harbors, under the International Ship and Port Facilities Security Code imposed by the International Maritime Organization. This requires an audit performed by the National Institute of Aquatic Spaces. * Republic of Venezuela Announces Tender Results ------------------------------------------------ The Bolivarian Republic of Venezuela (the "Republic" or "Venezuela") announced Monday that it expects to purchase for cash approximately US$928,755,000 in aggregate original principal amount of its 1.15% Notes due September 30, 2004 (the "Notes"), pursuant to its previously announced offer (the "Offer"), on the terms and subject to the conditions set forth in the Offer to Purchase dated June 7, 2004 (the "Offer to Purchase"), at the price per U.S.$500 original principal amount of Notes tendered of U.S.$500, plus accrued and unpaid interest up to, but not including, the settlement date. All tenders validly submitted in accordance with the Offer to Purchase were accepted by the Republic. At the commencement of the Offer, Notes in an aggregate principal amount of U.S.$1,029,000,000 were outstanding. As a result of the Offer, approximately 90% of the outstanding Notes will be retired by the Republic. The Offer is part of an ongoing strategy initiated by the Republic in November 2002 to improve the maturity profile of its debt obligations. The early redemption of the Notes tendered pursuant to the Offer will reduce Venezuela's debt service costs for the second half of 2004. The Offer expired on June 18, 2004 at 12:00 P.M., New York City time. The Offer is scheduled to settle on June 25, 2004. The Common Code and ISIN numbers for the Notes are 018905655 and XS0189056558, respectively. Notwithstanding any other provisions of the Offer, the settlement of the Offer is conditioned upon there not having been threatened, instituted or pending, on or prior to the settlement date, any action or proceeding before any court or governmental, regulatory or administrative body that (1) makes or seeks to make illegal the acceptance of payment of, or payment for, any of the Notes pursuant to the Offer, (2) would or might result in a delay in, or restrict, the ability of Venezuela to accept for payment or pay for any of the Notes, or (3) imposes or seeks to impose limitations on the ability of Venezuela to purchase the Notes. CONTACT: Georgeson Shareholder (in the Americas) Tel: (212) 440-9800 (in the U.S.) Toll-Free (888) 897-6149 (in the United Kingdom and Europe) Tel: +44 (0) 870 703 6357 INFORMATION AGENT: Deutsche Bank AG (London Office) Tel: +44 (0) 207 547 5000 The dealer managers for the Offer are: ABN-AMRO 55 East 52nd Street New York, New York 10025 United States Inside the U.S.: Toll-Free (866) 409-7643 Outside the U.S.: Call Collect (212) 409-6255 Barclays Capital 200 Park Avenue New York, New York 10166 United States Inside the U.S.: Toll-Free (866) 307-8991 Outside the U.S.: Call Collect (212) 412-4072 *********** 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 * * *