/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040722.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, July 22, 2004, Vol. 5, Issue 144 Headlines A R G E N T I N A AEROPUERTOS ARGENTINA: Court Ruling Clouds Planned IPO CABLEVISION: Judge Wants Company to Schedule New Debt Offer Vote FAHOA S.R.L.: Court Orders Liquidation GATIC: Five Factories Returning To Operation MAKLAYR: Initiates Bankruptcy Proceedings MANUEL NEIRA: Reorganization Concluded MENSAJET: Declared Bankrupt by Court OA'HIGGINS PUBLICIDAD: Liquidates Assets to Pay Debts PLAN MEDICO: Claims Verification Deadline Set SIDECO AMERICANA: Judge Authorizes APE VANGUARDIA TEXTIL: Moves To Liquidate Assets VOLWAR: Court Converts Bankruptcy to Reorganization ZELKOVA: Court Outlines Report Submission Schedules B E L I Z E * Outlooks on Belize Long-Term Ratings Revised to Negative B E R M U D A ANNUITY & LIFE: To Pay $5M to Settle Shareholder Suit GLOBAL CROSSING: Details Retirement Plan Settlements SEA CONTAINERS: Declares Cash Dividends on Common Shares B R A Z I L CEMIG: Analyzing JV Proposals for Transmission Bidding EUCATEX: Creditors Draft Debt Plan PARMALAT: Italian Government OKs Settlement Plan VARIG: BNDES Presents Restructuring Plan for Airline C H I L E ENERSIS: Fires-Up Ralco Plant D O M I N I C A * Debt Restructuring For Dominica H A I T I * Haiti Secures Over $1B in Pledges M E X I C O AHMSA: Directors to Remain Locked Up in Spain CINTRA: Forges Code-Share Alliance With Alianza LAN GRUPO IMSA: S&P Puts Local Currency On CreditWatch Positive GRUPO MEXICO: Projects $6.3M Losses After One Week Of Strike UNEFON: Second Quarter 2004 Ends in Red Ink UNEFON: Sale Plans Include Talks With Nextel, Others V E N E Z U E L A PDVSA: $170M Gas Pipeline Completion Expected in 2006 - - - - - - - - - - ================= A R G E N T I N A ================= AEROPUERTOS ARGENTINA: Court Ruling Clouds Planned IPO ------------------------------------------------------ An Argentine lower court ruled last week that airport operator Aeropuertos Argentina 2000 erroneously charged a dollar fee to air travelers. Therefore, the airport operator must return the excess amount charged to customers, according to a Dow Jones. The issue dates back to February 2002, when Argentina converted loans, deposits and utility rates, among other things, from dollars into devalued pesos amid an economic crisis. In the following months, the government exempted several areas from the pesification, including most items connected with international travel and foreign trade. The government then ordered the airport tax, which varies from US$8 to US$18, to remain in dollars. Sergio Resumil, head of communications at Aeropuertos, said the airport operator will appeal the ruling. He wouldn't say how much Aeropuertos would have to pay if the ruling is upheld but according to an unnamed consumer group, the total would be ARS120 million ($1=ARS2.9425). The court's ruling comes at a very inopportune time for the Company, which last month said it planned to float up to 33% of its capital on the local stock exchange when it launches its long-awaited initial public offering. Resumil has said the ruling would have no immediate financial impact on Aeropuertos until the matter was fully resolved in the courts. However, potential investors are likely to be flustered by any financial uncertainties overhanging the firm. CABLEVISION: Judge Wants Company to Schedule New Debt Offer Vote ---------------------------------------------------------------- The Argentine commercial judge overseeing Cablevision SA's out- of-court debt restructuring ruled on July 6 that the cable television operator must organize a creditor assembly to count approval votes for the offer, reports Dow Jones Newswires. In early March, Cablevision held a vote for its US$725 million debt-restructuring offer and said it received the two-thirds majority required under Argentine bankruptcy law to submit its proposal for legal approval. In this kind of restructuring process, known as an APE, two-thirds agreement from creditors clears the offer for judicial approval, which then makes the terms binding on all creditors. In April however, Cablevision said it discovered a "holder of a substantial amount" of its debt had erroneously voted twice for its debt restructuring, effectively doubling this creditor's representation in the calculation of the approval majorities. In May, after checking over the documentation and clearing up the error, the Company filed its APE in the courts. It also said it was able, under the bankruptcy law, to "exclude some debt holders" when it comes to APE voting rights. In its latest ruling, the judge didn't set a date for the new meeting, nor did he say whether the resulting vote would replace the first one. But the court did say the votes would be tabulated from those creditors that attend a meeting - not from the entire universe of creditors. FAHOA S.R.L.: Court Orders Liquidation -------------------------------------- Fahoa S.R.L. prepares to wind-up its operations following the bankruptcy pronouncement issued by Buenos Aires Court No. 6. 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. Roberto Boffa as trustee. He will be reviewing creditors' proofs of claims until October 6, 2004. Individual reports to be presented for court approval on November 18, 2004 will be based from these claims. The trustee will also submit a general report on February 1 next year. Clerk No. 11 assists the court on this case, which will end with the disposal of the company's assets to cover its liabilities. CONTACT: Mr. Roberto Boffa, Trustee Uruguay 390 Buenos Aires GATIC: Five Factories Returning To Operation -------------------------------------------- Some 2,700 workers of Gatic are expected to return to work when the bankrupt Argentine textile company reopens five factories in Buenos Aires province this month. According to a just-style.com report, these factories, which owe the Buenos Aires province ARS50 million (US$17m), have been closed since 2003. The factories are set to return to operation under the management of US-based company Indular, which is headed by Argentine businessmen Guillermo Gotelli. Last month Mr. Gotelli said he would invest US$25 million in Gatic. MAKLAYR: Initiates Bankruptcy Proceedings ----------------------------------------- Court No. 23 of the Buenos Aires Civil and Commercial Tribunal declared Maklayr S.A. "Quiebra," reports Infobae. Ms. Laura Marletta, who has been appointed as trustee, will verify creditors' claims until September 10, 2004 and then prepare the individual reports based on the results of the verification process. The individual reports will be submitted in court on October 27, 2004, followed by the general report on December 10, 2004. Clerk No. 46 assists the court on the case, which will close with the liquidation of the Company's assets to repay creditors. CONTACT: Ms. Laura Marletta, Trustee San Jose de Calasanz 530 Capital Federal MANUEL NEIRA: Reorganization Concluded -------------------------------------- The settlement plan proposed by Manuel Neira S.A.I.C.F. for its creditors acquired the number of votes necessary for confirmation. As such, the plan has been endorsed by the court and will now be implemented by the company. CONTACT: Manuel Neira S.A.I.C.F. Entre Rios 1457 Buenos Aires MENSAJET: Declared Bankrupt by Court ------------------------------------ Mensajet S.R.L. will begin liquidation proceedings after Court No. 26 of Buenos Aires' Civil and Commercial Tribunal authorized the Company's bankruptcy, says Infobae. Under bankruptcy protection, the company's assets will be placed under the control of a trustee. The report did not reveal the name of the trustee or the schedules for the required bankruptcy submissions. Clerk No. 52 assists the court on this case, which will close with the sale of the company's assets to repay debts. CONTACT: Mensajet S.R.L. Montevideo 665 Buenos Aires OA'HIGGINS PUBLICIDAD: Liquidates Assets to Pay Debts ----------------------------------------------------- OA'Higgins Publicidad S.A. will begin liquidating its assets after Court No. 23 of Buenos Aires' Civil and Commercial Tribunal issued a bankruptcy declaration against the Company. The ruling places the company under the supervision of court- appointed trustee, Mr. Pedro Alfredo Valle. The trustee will verify creditors' proofs of claims until September 8, 2004. Afterwards, the validated claims will be presented in court as individual reports on October 21, 2004. The trustee will also submit a general report, containing a summary of the company's financial status as well as relevant events pertaining to the bankruptcy, December 2, 2004. CONTACT: OA' Higgins Publicidad S.A. Conesa 3751 Buenos Aires Mr. Pedro Alfredo Valle, Trustee Avda de Mayo 1260 Buenos Aires PLAN MEDICO: Claims Verification Deadline Set --------------------------------------------- Official validation of claims for the Plan Medico Personal Oroville S.A. bankruptcy will end on October 11,2004 according to Infobae. Creditors with claims against the bankrupt company must present proof of the liabilities to Mr. Miguel Angel Tregob, 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. Miguel Angel Tregob, Trustee Lima 287 Buenos Aires SIDECO AMERICANA: Judge Authorizes APE -------------------------------------- Argentine public service and infrastructure conglomerate Sideco Americana SA obtained endorsement from a commercial court judge on its out-of-court agreement to restructure US$125 million in debt. Under the proceeding, known in Spanish as Acuerdo Preventivo Extrajudicial (APE), a Company must secure two-thirds approval from creditors before it can submit its offer to a court for legal clearance that would then make the restructuring terms binding on all creditors. In Sideco Americana's case, the Company secured about 91% agreement from its creditors in December 2003 and submitted its APE for legal approval in May. It is offering three options: a cash payment worth 35% of the original amount, five-year secured notes and 10-year unsecured notes. The holding company has pressed ahead with its debt restructuring despite financial and legal problems with its unit, national postal service Correo Argentino SA. Currently, the unit is being run by trustee managers as it goes through bankruptcy proceedings. The government rescinded Correo Argentino's contract to run the national mail system in November and claims a debt of ARS400 million ($1=ARS2.9475) in missed royalty payments. VANGUARDIA TEXTIL: Moves To Liquidate Assets -------------------------------------------- Vanguardia Textil S.A. of Buenos Aires will begin to liquidate its assets after the city's Court No. 15 declared the company bankrupt. Infobae reveals that the bankruptcy process will commence under the supervision of court-appointed trustee, Mr. Carlos Alberto Lausi. The trustee will review claims forwarded by the company's creditors until August 24, 2004. CONTACT: Mr. Carlos Alberto Lausi, Trustee Avda Cordoba 456 Buenos Aires VOLWAR: Court Converts Bankruptcy to Reorganization --------------------------------------------------- Volwar S.A. will proceed with reorganization after Bahia Blanca Court No. 2 converted the Company's ongoing bankruptcy case into a "concurso preventivo", states Infobae. Under Insolvency protection, the Company will be able to draft a proposal designed to settle its debts with creditors. The reorganization also prevents the Company's outright liquidation. A court-appointed trustee will verify creditors' proofs of claims until August 13, 2004. Creditors with unverified claims cannot participate in the Company's settlement plan. CONTACT: Volwar S.A. Lavalle 327 Bahia Blanca ZELKOVA: Court Outlines Report Submission Schedules --------------------------------------------------- Court No. 2 of the Buenos Aires Civil and Commercial Tribunal released a schedule of relevant dates pertaining to the Zelkova S.A. bankruptcy, says Infobae. The verification period, where creditors submit proofs of their claims for validation, will end on September 9, 2004. Afterwards, the trustee, Mr. Claudio Jorge Haimovici, is expected to submit individual reports on November 4, 2004. He is also scheduled to present a general report of the case on December 16, 2004. Clerk No. 4 assists the court on the resolution of this case. CONTACT: Mr. Claudio Jorge Haimovici, Trustee Sarmiento 3843 Buenos Aires =========== B E L I Z E =========== * Outlooks on Belize Long-Term Ratings Revised to Negative ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlooks on its 'B+' long-term foreign and 'BB-' long-term local currency sovereign credit ratings on Belize to negative from stable. According to Standard & Poor's Ratings Services credit analyst Olga Kalinina, the change in outlooks reflects the increasing challenges in tightening the government's fiscal stance, coupled with mounting external liquidity pressures. "On the fiscal front, results may fall short of the original projection of a 0.9% general government deficit (including a social security surplus of 0.7%) in fiscal year 2004-2005, due to delays in levying a new one-time land tax and in eliminating some tax exemptions," explained Mrs. Kalinina. "Past high deficits have led to a rapidly rising debt level. Public-sector debt will increase to an estimated 98% of GDP at year-end 2004, up from 75% of GDP at year-end 2000," she added. On the external side, the country's growing financing needs (defined as current account deficit, medium- and long-term amortizations, and short-term debt) are estimated to total 436% of reserves in 2004, up from 326% in 2003. "The government's amortization of US$38 million (to be repaid in the second half of the year) is high compared with the US$70 million in net international reserves held by the central bank as of the beginning of July 2004, although the government's plans to tap the international markets should help to ease external pressure," Mrs. Kalinina said. "Additional financing needs for 2004 include the projected current account deficit net of foreign direct investment, estimated at US$90 million, and the amortization needs of the private sector," she added. The negative outlooks indicate that downward pressure on the ratings exceeds upward pressure. "Should the government falter in effecting its fiscal consolidation or should the country's external liquidity position become more stretched, Belize's ratings could fall," Mrs. Kalinina noted. "Firm government resolve on the fiscal front and adept debt management on the external side will be required to maintain the ratings at their current levels," she concluded. ANALYSTS: Olga Kalinina, CFA, New York (1) 212-438-7350 John Chambers, CFA, New York (1) 212-438-7344 ============= B E R M U D A ============= ANNUITY & LIFE: To Pay $5M to Settle Shareholder Suit ----------------------------------------------------- Annuity & Life Re (Holdings), Ltd. announced Tuesday that it has reached an agreement in principle with plaintiffs to settle the shareholder lawsuit pending against it and certain of its present and former directors and officers in the United States District Court for the District of Connecticut. The settlement is without any admission of liability or wrongdoing. The Company's directors and officers' liability carrier, and another defendant have agreed to pay an aggregate of $16.5 million. The Company's share of the settlement is $2.5 million in cash and an additional $2.5 million in common stock, although it has reserved the right to elect to pay this portion in cash. The settlement is subject to final Board approval, full documentation among the parties to the settlement, notice to the class, Court approval and other steps required to consummate a class action settlement. CONTACT: Mr. John Lockwood Annuity & Life Re (Holdings), Ltd. Phone: 441-298-9902 GLOBAL CROSSING: Details Retirement Plan Settlements ---------------------------------------------------- U.S. Secretary of Labor Elaine L. Chao announced Tuesday settlements with former directors and officers of Global Crossing stemming from the Department's investigation of the Global Crossing Retirement Savings Plan. The 401(k) plan lost tens of millions of dollars as a result of its extensive stock holdings in Global Crossing stock, which lost virtually all of its value. The settlement covers the two former inside directors of Global Crossing, Thomas Casey (former Chief Executive Officer) and Gary Winnick (former Chairman of the Board), as well as the three former members of the Employee Benefits Committee, Dan J. Cohrs, Joseph Perrone, and John Comparin. The Secretary entered into the agreements in connection with the proposed settlement of the private class action lawsuit brought on behalf of the participants of the plan. If the court approves the class-action settlement, the total recovery will be $79 million, including $25 million that Winnick placed in an irrevocable escrow account for the plan at the Secretary's behest, and an additional $54 million funded by defendants' insurance policies in the private action. "I am pleased that the Global Crossing workers, retirees and their families will receive a significant financial recovery," said U.S. Secretary of Labor Elaine L. Chao. "Fiduciaries have a serious and significant responsibility to protect the long term pension security of their workers. I hope this lesson gets through to others." Under the terms of the new agreements, the former Global Crossing fiduciaries are prohibited from acting as fiduciaries to ERISA-covered benefit plans for five years unless they first notify the Department of Labor of their intention to serve as fiduciaries, and the Department agrees. The agreements are predicated upon approval of the class action settlement, and may be terminated by the Department if the class action settlement is not approved. The settlement resulted from a comprehensive investigation conducted by the Los Angeles Regional Office of the Department's Employee Benefits Security Administration and the Office of the Solicitor. It was coordinated through President Bush's Corporate Fraud Task Force. SEA CONTAINERS: Declares Cash Dividends on Common Shares -------------------------------------------------------- The Board of Directors of Sea Containers Ltd. declared Tuesday quarterly cash dividends on the Company's Class A and Class B common shares. The dividend will be $0.025 per share on the Class A common shares and $0.0225 per share on the Class B common shares. Class B common shares are convertible at any time into Class A common shares. The dividends will be payable August 20, 2004 to shareholders of record August 5, 2004. The Class A and B common shares of Sea Containers Ltd. are listed on the New York Stock Exchange under the symbols SCRA and SCRB, respectively. =========== B R A Z I L =========== CEMIG: Analyzing JV Proposals for Transmission Bidding ------------------------------------------------------ Brazilian power company Cemig (NYSE: CIG) received a number of proposals from companies, which are interested to form a joint venture with the utility to bid in the upcoming tender of 2,862km of high-voltage transmission lines. "Cemig will now study the proposals for joint ventures and decide on which stretches it will bid for," a Cemig spokesperson told Business News Americas. The government will tender 12 transmission line stretches on September 30. Three of these stretches pass through Minas Gerais state, where Cemig produces and sells power. The three stretches are: the 811km Cuiaba-Itumbiara 500kV line, with estimated investments of BRL831 million; the 75km Furnas- Pimenta 345kV line, with estimated investment of BRL45.4 million; and the 140km Itutinga-Juiz de Fora 345kV line, with estimated investment of BRL74.1 million. The pre-qualified bidders will be announced on August 6. The spokesperson recalls that at the beginning of the year, Cemig set aside BRL105 million (US$35mn) for transmission sector investment in 2004. CONTACT: Luiz Fernando Rolla, Investor Relations Superintendencia de Relacoes com Investidores COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG Av. Barbacena, 1200 - Terreo 30190-131 - Belo Horizonte - MG - Brazil Phone: 55-31-3299.3930 Fax: 55-31-3299.3933 Web site: http://cemig.infoinvest.com.br/english/ Email Address: lrolla@cemig.com.br EUCATEX: Creditors Draft Debt Plan ---------------------------------- Creditors of bankrupt Brazilian company Eucatex are finalizing a debt management plan that could allow the Company to pay BRL200 million of its debt in installments to fall due over a ten-year period. Valor Economico says that Bradesco, Unibanco and Itau BBA are working together to complete the debt-restructuring plan. However any action taken by the creditors will have to be approved by Petros, who owns 70 percent of a BRL70 million debenture issued by Eucatex. Eucatex, engaged in furniture, construction and agribusiness, applied for bankruptcy protection in 2003. Its debt currently totals BRL285M. CONTACT: Eucatex S.A. Industria y Comercio Av. Pres Juscelino Kubichek, 1830 Torres I e II - 11� e 12� andares 04543-900 - Sao Paulo - SP Tel: ( 0xx11 ) 3049-2233 Fax: ( 0xx11 ) 3049-2222 E-mail : eucatex@eucatex.com.br Web Site : www.eucatex.com.br PARMALAT: Italian Government OKs Settlement Plan ------------------------------------------------ Italy's Industry Minister Antonio Marzano approved on Tuesday the debt for equity settlement plan submitted by bankrupt dairy group Parmalat Finanziaria. The proposal, drafted under the supervision of administrator Mr. Enrico Bondi, will give most of the company's creditors an estimated 10 percent return on their original investment, says the International Herald Tribune. Under the plan, all of Parmalat's 85,000 bondholders would get shares in the new company. Bondholders will also be given one warrant for each new share issued, up to a maximum of 500 warrants. Each warrant will give bondholders the right to buy additional shares 2005 and 2015. The company's creditors are expected to vote on the plan by year-end. Parmalat could face liquidation if the plan fails to get the requisite number of votes. Parmalat's gross debt is reported at EUR14.8 billion, or US$18.3 billion, with EUR9.4 billion in outstanding bonds, EUR4.2 billion in bank loans and EUR1.2 billion in other types of debt. VARIG: BNDES Presents Restructuring Plan for Airline ---------------------------------------------------- Brazilian development bank BNDES (Banco Nacional de Desenvolvimento Economico e Social) presented to the federal government a restructuring plan for the airline transportation company Varig, reports daily O Globo. Under the plan, the government will recognize the BRL5.5-billion credit Varig has been claiming to the Justice, convert this amount into company assets and then cancel part of the US$2.2- billion debt (around BRL6.6 billion) contracted with state-owned creditors like BR Distribuidora, Banco do Brasil, Infraero, INSS and the Federal Revenue. The airline has been appealing to the Justice for the payment of BRL4.5-billion indemnity for ticket prices that were frozen between 1986 and 1992 and on the payment of BRL1 billion for the improper collection of ICMS tax over the sales of tickets between 1989 and 1994. The new proposal would see a transfer of Varig's management from Fundacao Ruben Berta to the main creditors. CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.) Rua 18 de Novembro No. 800, Sao Joao 90240-040 Porto Alegre, Rio Grande do Sul, Brazil Phone: (51) 358-7039/7040 (51) 358-7010/7042 Fax: +55-51-358-7001 Home Page: www.varig.com.br/english/ Contacts: Dorival Ramos Schultz, EVP Finance and CFO E-mail: dorival.schultz@varig.com.br Investor Relations: Av. Almirante Silvio de Noronha, n 365-Bloco "B" - s/458 / Centro Rio de Janeiro, Brazil ========= C H I L E ========= ENERSIS: Fires-Up Ralco Plant ----------------------------- Chilean electricity generator Enersis S.A. expects to start its new Ralco hydroelectric power plant on August 5, 2005, says el Mercurio. The plant will initially utilize 5-7 percent of its 570MW capacity, producing an equivalent of 30-40MW of electricity. Generation will be gradually increased until it reaches full capacity in September. Enersis S.A., a subsidiary of the Spanish electricity group Endesa, serves over 10 million costumers in South America. The Company is a major private sector electricity generation company in the region in terms of installed capacity. =============== D O M I N I C A =============== * Debt Restructuring For Dominica --------------------------------- As part of a debt restructuring operation for Dominica, which is supported by a number of that country's domestic and foreign creditors, Carribbean Development Bank (CDB) is to provide a package of exceptional financial assistance to Dominica. The intervention is intended to help the country to regain fiscal sustainability. It would reduce Dominica's future debt service payments to CDB by USD13.2 million in Net Present Value terms. This package involves the reduction of interest rates and the extension of maturities on existing loans. It also includes the provision of a grant equivalent to USD6.4 million in support of the country's structural and fiscal policy reform agenda. The reforms are designed to reinvigorate growth and development and reduce the incidence of unemployment-related poverty. These arrangements should take effect from October 1, 2004 CONTACT: Caribbean Development Bank P.O. Box 408 Wildey St. Michael Barbados, W.I. Tel. No. (246)431-1600 Fax No. (246)426-7269 Email: info@caribank.org ========= H A I T I ========= * Haiti Secures Over $1B in Pledges ----------------------------------- International organizations and Governments pledged on Tuesday $1.085 billion towards Haiti's recovery over the next two years. Commenting on the amount raised, Interim Haitian Prime Minister Gerard Latortue said, "I am delighted with the result of this conference which demonstrates the level of solidarity of the international community with the people of Haiti." He added, "On behalf of the people of Haiti and of the government team, I heartily thank the friends of Haiti and I repeat here the Government's commitment to work in close collaboration with all sectors of Haitian society to make sure that these funds are used efficiently and transparently." The international community praised the significant accomplishments achieved by the Interim Haitian Government in a short time under difficult circumstances. These include a dramatic increase in power generation and visible improvements in urban sanitary conditions. They also endorsed Haiti's recent steps towards fiscal responsibility. Conference participants welcomed the government's commitment to restore the rule of law, respect human rights for all, and organize free and fair elections next year. Co-hosted by the European Union, Inter-American Development Bank, the United Nations and the World Bank, the Conference drew representatives from 30 countries and 32 international organizations. It sought $924 million to support the Haitian Government's Interim Co-operation Framework (ICF) outlining Haiti's priority needs and programs over the next two years. The ICF had identified $924 million as the two-year funding gap in an overall needs assessment totaling $1.37billion. Addressing the Conference, U.S. Secretary of State Colin Powell described this funding achievement as, "A testament to the importance that the international community places on Haiti's return to the path of democracy, stability and prosperity." Powell welcomed Haiti's new leaders as, "partners who are determined to seize this opportunity to shape a better future for their country." Conference participants all underscored the vital connection between ensuring security for every Haitian and fostering economic development. Special Representative of the UN Secretary General, Juan Gabriel Valdes, stated that, "Success in democracy and development requires all Haitian stakeholders to engage in an inclusive political dialogue." UN Secretary-General Kofi Annan transmitted a message to the conference, "I welcome the new partnership that has emerged between the international community and the transitional government in preparation of the ICF. It has truly been a cooperative endeavor." To support a process of national reconciliation and ensure a coordinated and rapid response to the country's urgent and medium term development needs, the Interim Cooperation Framework identifies four priority areas for action: 1) Improving political governance and promoting national dialogue 2) Strengthening economic governance and promoting institutional development 3) Promoting economic recovery 4) Improving access to basic services In his statement, Commissioner of the European Commission, Joe Borg, referred to the Government's commitments for the transition to constitutional democratic governance and for rapid progress on the development front and said, "You have set yourselves a very comprehensive and ambitious programme and high goals with tight deadlines, and we commend you for it." He added, "We wish you every success in your challenging journey, and I reconfirm to you that as you move towards the achievement of these objectives, we will accompany your efforts with substantial resources." The Government and the international community agreed to take steps to ensure that these assistance commitments translate into rapid and visible improvements in the lives of the Haitian people. Addressing the conference, World Bank President James D. Wolfensohn said, "We must measure our success not by the total amount raised today, but by our ability to translate these funds into tangible improvements in the everyday lives of the millions of Haitians who are pinning their hopes on all of us here today. We must not fail them" Quick impact programs identified by the ICF to meet the country's priority needs over the next two months include the creation of 44,000 jobs, the collection and disposal of 50 percent of garbage in urban areas, the upgrading of 500 slum dwellings in Port-au-Prince, and ensuring 12 hours per day of electricity services in Port au-Prince. These programs are aimed at restoring stability and improving the quality of life following the months of violence that earlier this year closed businesses, prevented children from going to school, shut off power and water services, and left piles of garbage in the streets. Over the next two years, in the social sector alone, the ICF outlines programs to improve nutrition for over one million poor children and their mothers, students, orphans, street children and destitute elderly, immunize 80 percent of children under age one against diphtheria-tetanus-pertussis (DPT3) in fifteen key districts, and rehabilitate 1,500 schools. Conference participants underscored the need to learn from past mistakes. Donors agreed to coordinate their respective activities more closely, and the Haitian government agreed to take steps to enable those responsible for implementation of projects to move forward expeditiously. All underscored the importance of focusing aid on measurable results. The Haitian government further acknowledged the importance of reaching out to the private sector and civil society in the development, monitoring and oversight of the process and in specific project implementation. In his statement Tuesday, Inter-American Development Bank President Enrique Iglesias said, "During implementation of the ICF, the emphasis should be on finding practical solutions to speed execution and simultaneously strengthen institutional capacity for the medium and long term, while emphasizing accountability and transparency." The central importance of Haitian ownership of the reconstruction and development of their country was underscored by all. To ensure timely assistance consistent with the priorities identified by the ICF, the government emphasized its intention to establish a process to co-ordinate implementation. The Government also announced its intention to host a follow-up meeting in September in Port-au-Prince to advance this objective. With an estimated per capita income of $361 in 2003, Haiti is the poorest country in the Western Hemisphere. Half of the urban population has no access to safe water, the incidence of HIV/AIDS is estimated at 5 percent, and the average Haitian can expect to live only 53 years. The effects of a three-year economic embargo in the early 1990s, followed by years of political upheaval, conflict and insecurity have hindered sustainable economic and social progress and contributed to increased violence. CONTACTS: The World Bank Mr. Lee Morrison (202)-458-8741 Lmorrison1@worldbank.org Inter-American Development Bank Mr. Peter Bate (202) 623-2609 PETERB@IADB.org The United Nations Ms. Deborah DeYoung (202) 454-2107 DDeYoung@unicwash.org European Commission Mr. Anthony Gooch (202)-862-9523 anthony.gooch@cec.eu.int =========== M E X I C O =========== AHMSA: Directors to Remain Locked Up in Spain --------------------------------------------- A former director of Mexican steelmaker Ahmsa (BMV: AHMSA) and his advisor, who were detained in Spain on July 12 on charges of tax evasion, will remain incarcerated while the extradition process continues. According to a Business News Americas report, Ahmsa former chairman Xavier Autrey Maza and his advisor Juan Carlos Carredano has been denied bail by a judge in Spain. Ahmsa has condemned the charges made against the two directors, saying these are politically motivated and driven by creditors such as Citibank-Banamex. Monclova, Mexico-based Ahmsa, one of the country's biggest steel producers, defaulted on US$1.8 billion in debt in 1999. The Company later reached a restructuring agreement with creditors, but reneged on the deal in an effort to secure better terms. CONTACT: AHMSA Prolongacion B. Juarez s/n, Monclova , Coahuila 25770 Mexico http://www.AHMSA.com Phone: +52 86 33 81 72 Fax: +52 86 33 65 66 Contacts: Alonso Ancira Elizondo, CEO, Vice Chairman, Pres/CEO Jorge Ancira Elizondo, Chief Financial Officer Manuel Ancira Elizondo, Chief Operating Officer CINTRA: Forges Code-Share Alliance With Alianza LAN --------------------------------------------------- Traveling to South America will become more convenient once CINTRA and Alianza LAN begins implementing a code-sharing agreement designed to develop links between Mexico and the Latin countries in the Southern Cone. The agreement, signed on Monday, will expand the reach of CINTRA's Mexicana and Aeromexico fleet allowing passengers to fly to destinations in South America by way of Santiago, Chile and Lima in Peru. Likewise, LAN clients will benefit from greater flight frequencies and schedules to Mexico. With the agreement, passengers will also benefit from free sales tickets, the accumulation of frequent flyer miles and the use of executive rooms. Alianza LAN operates Chilean carrier LAN and its subsidiaries in Ecuador, Peru and the Dominican Republic. GRUPO IMSA: S&P Puts Local Currency On CreditWatch Positive ----------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BBB-' long-term local currency corporate credit rating on Mexico-based company Grupo IMSA (IMSA) on CreditWatch with positive implications, following the announcement by the company that it has agreed to sell its 51% ownership in Enermex, the automotive battery division, to its partner in this joint venture, Johnson Controls (A/Stable/A-1). The 'BBB-' long-term foreign currency corporate credit rating on IMSA is affirmed. The outlook for the foreign currency rating is stable. "The CreditWatch listing reflects the likely improvement of IMSA's credit quality following its debt reduction," said Standard & Poor's credit analyst Juan P. Becerra. Although the company exposure to the steel cycles increases, the expected reduction in IMSA's debt could increase its free cash flow. Enermex represents 13% and 24% of IMSA's sales and EBITDA, respectively. The transaction is expecting the approval of the Antitrust Authorities in both Mexico and the U.S. With the transaction proceeds, IMSA will reduce debt by 50% or at least $450 million. IMSA is a diversified Mexican industrial company that participates in the steel industry through its steel-processing and construction divisions. With recorded annual sales in 2003 of $2,780 million, IMSA has facilities in the U.S., Central, and South America. GRUPO MEXICO: Projects $6.3M Losses After One Week Of Strike ------------------------------------------------------------ The strike at the La Caridad copper mine caused Grupo Mexico US$6.3 million in just one week. Citing Mexican stock exchange analyst Pablo Ruiz, the Editorial Milenio reported that of the Company's total sales of 240,000t of copper, some 140,000t are produced at La Caridad in Sonora state, representing a daily loss of EBITDA of US$900,000. Workers at the La Caridad mine and refinery have been on strike since July 12, demanding profit-sharing, payment of overtime and temporary promotions, as well as improved safety measures and a return in the size of work crews to between 11 and 14 workers from the current six or seven. Another strike looms at Grupo Mexico's Cananea complex, where workers are making similar demands as with the La Caridad workers. A work stoppage would halt the mine's production, adding to losses in output caused by the La Caridad shutdown. Combined, the strikes would paralyze all of Grupo Mexico's operations in northern Mexico and temporarily cut the Company's global output in half, said a Bloomberg report. CONTACT: Mr. German Larrea Mota Velasco Chairman & CEO GRUPO MEXICO Av. Baja California No. 200 Colonia Roma Sur 06760 Mexico, D.F. Tel. Conm. 52 (55) 5080-0050 UNEFON: Second Quarter 2004 Ends in Red Ink ------------------------------------------- Mexican wireless telco Unefon ended the second quarter of 2004 with a net loss of MXN109 million (US$9 million), compared to a net profit of MXN415 million in the year-earlier period, reports Business News Americas. Ana Gabriela Ocejo, an analyst at local investment firm Scotiabank Inverlat, told Business News Americas: "The principal effect on the margins is derived from the establishment of a new pricing policy for telephone equipment to put themselves in a better position to compete with other mobile firms," "This reduction in equipment prices contributed to an acceleration in new users," she added. Meanwhile, total sales rose 9% to MXN1.04 billion for the period, and the Company signed on 60,000 new users to end June with 1.3 million clients. It expects to sign on another 200,000 customers to end 2004 with around 1.5 million clients, chief executive Adrian Steckel told analysts during a conference call. "We're being conservative (with those estimates)", he said. Unefon recorded a comprehensive financing cost of MXN159 million, which was made up of a MXN121-million foreign exchange loss, a net interest cost of MXN57 million and a MXN19-million monetary gain. UNEFON: Sale Plans Include Talks With Nextel, Others ---------------------------------------------------- Unefon, owned by Mexican millionaire Ricardo Salinas via broadcaster TV Azteca and his business partner, Moises Saba, has held talks with several telecommunications companies as part of its plans to sell part or all of the firm. Citing a Unefon official, Reuters relates that these talks include U.S. carrier Nextel Communications Inc.. "There are talks with Nextel, but there's nothing official yet," said Peter Bauer, a spokesman for Saba, who is Unefon's chairman. "Talks have intensified over the past three weeks, particularly after (Unefon's) launch of the push-to-talk" service," Bauer added. "There are talks with them (Nextel) and with others." Nextel Communications Inc. is yet to comment on the report. Unefon competes in the Mexican market against leaders Telcel, owned by America Movil, and Telefonica MoviStar, a unit of Spain's Telefonica Moviles. Talk about a possible sale of Unefon, which is being spun-off from TV Azteca, has been around for several years. ================= V E N E Z U E L A ================= PDVSA: $170M Gas Pipeline Completion Expected in 2006 ----------------------------------------------------- Colombia will begin supplying natural gas to neighboring Venezuela once a 106-mile pipeline project connecting the two countries is completed in 2006. PDVSA President Ali Rodriguez stated in a Venpres interview that the pipeline's US$170 million cost will be financed by Colombia's Ecopetrol and ChevronTexaco Corporation. The pipeline is expected to supply 150-200 million cubic feet of Natural gas per day. This allocation will help to alleviate Venezuela's natural gas shortage and raise PDVSA's oil and petrochemical production. PDVSA uses natural gas as an important raw material for its petrochemical products. It is also injected into oil fields to push crude to the surface. *********** 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. 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