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/raid1/www/Hosts/bankrupt/TCRLA_Public/040726.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, July 26, 2004, Vol. 5, Issue 146 Headlines A R G E N T I N A AUTOMOTORES MILANESI: Court Orders Company to Liquidate BELL’S GROUP: Initiates Bankruptcy Proceedings BONITO: Liquidates Assets to Pay Debts CARLOS DULCE: Bankruptcy Initiated by Court Order CONTENEDORES: Court Elevates Bankruptcy to Reorganization DON GUMERSINDO: Court Order Makes Bankruptcy Official ESPRESSO BAR: Court Replaces Trustee LA ESPIGA: Court Rules for Liquidation LOGICA EMPRESARIA: Liquidation Proceedings to Commence LUBRISAN S.A.: Receives Bankruptcy Ruling MERITAR S.A.: Liquidation Result of Court Order NII HOLDINGS: Records 163% Subscriber Growth In 2Q03 SIAGRO: Bankruptcy Process Begins By Court Order TERAPIA INTEGRAL: Court Issues Bankruptcy Ruling YOSHIMOTO: Court Declares Company Bankrupt * Argentina Likely to Face Bondholders in Court B E R M U D A FOSTER WHEELER: New Director Tapped GLOBAL CROSSING: Inks Bilateral Voice Agreement With Telmex LORAL SPACE: Forecasts Units’ Chapter 11 Emergence by Year End B R A Z I L BRASKEM: Boosts Aromatics Plant’s Output KLABIN: S&P Raises Local Currency Rating to 'BB' C H I L E ENAMI: Senate Committee Authorizes Ventanas Transfer ENERSIS/ENDESA-CHILE: UBS Ups Equity Recommendation C O L O M B I A MILLONARIOS: Seeks New Plan to Stay in the Game M E X I C O AEROMEXICO: Expands Sales, Marketing to New Zealand, Paraguay BANORTE: S&P Raises Ratings To 'BB+/B' GRUPO MEXICO: Labor Authority Declares Strike Illegal P E R U AERO CONTINENTE: Secures New Policy, Resumes Domestic Flights T R I N I D A D & T O B A G O NWRHA: Health Ministry Seeks Probe Into Debt Scandal U R U G U A Y ANCAP: Upgraded to 'B' Following Uruguay Upgrade * Fitch Assigns Expected 'B' to Uruguay's UI, DPN Bonds V E N E Z U E L A PDVSA: Oil Tankers Headed to Argentina for Maintenance Repairs PDVSA: Standard & Poor’s Downgrade Warning Angers Company PDVSA: OPIC Seeks Formal Response to SAIC Dispute - - - - - - - - - - ================= A R G E N T I N A ================= AUTOMOTORES MILANESI: Court Orders Company to Liquidate ------------------------------------------------------- Automotores Milanesi S.A. prepares to wind-up its operations following the bankruptcy pronouncement issued by Salta Court No. 1. 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. Carlos Musaime as trustee. He will be reviewing creditors’ proofs of claims until August 3, 2004. The verified claims will be the basis for the individual reports to be presented for court approval on September 16, 2004. Afterwards, the trustee will also submit a general report on November 1, 2004. CONTACT: Automotores Milanesi S.A. San Martin y 20 de Febrero Tartagal (Salta) Mr. Carlos Musaime, Trustee San Martin y 20 de Febrero Tartagal (Salta) BELL’S GROUP: Initiates Bankruptcy Proceedings ---------------------------------------------- Court No. 1 of the Buenos Aires Civil and Commercial Tribunal declared local company Bell’s Group S.R.L. "Quiebra," reports Infobae. Clerk No. 2 assists the court on this case, which will close with the liquidation of the Company's assets to repay creditors. Mr. Ruben H. Faure, who has been appointed as trustee, will verify creditors' claims until October 15, 2004. Failure to present claims within the verification deadline will mean disqualification from the payments to be made once the Company’s assets are liquidated. CONTACT: Mr. Ruben H. Faure, Trustee Avda Rivadavia 1227 Buenos Aires BONITO: Liquidates Assets to Pay Debts -------------------------------------- Bonito S.A.C.I.I.F. of Buenos Aires will begin liquidating its assets following the bankruptcy order placed by city’s Court No. 11. Accounting firm "Pappalardo, Cardenes y Asociados" will supervise the company’s liquidation as trustee. The firm will verify creditors’ proofs of claims until September 22, 2004. The validated claims will then be presented in court as individual reports on November 4, 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, on December 17, 2004. CONTACT: "Pappalardo, Cardenes y Asociados", Trustee Tacuari 119 Buenos Aires CARLOS DULCE: Bankruptcy Initiated by Court Order ------------------------------------------------- Buenos Aires based Carlos Dulce S.R.L. will begin liquidating its assets after the city’s Court No. 5 declared the company bankrupt. Infobae reveals that the bankruptcy process will commence under the supervision of court-appointed trustee, Mr. Gustavo Vignale. The trustee will review claims forwarded by the company’s creditors until September 24, 2004. After claims verification, the trustee will submit the individual reports for court approval on November 8, 2004. The presentation of the general report will follow on December 21, 2004. Clerk No. 9 assists the court on this case. CONTACT: Carlos Dulce S.R.L. Deán Funes 1750 (1244) Buenos Aires Tel.: 4941-1229 Mr. Gustavo Vignale, Trustee Vuelta de Obligado 2717 Buenos Aires CONTENEDORES: Court Elevates Bankruptcy to Reorganization --------------------------------------------------------- Mar del Plata Civil and Commercial Court No. 2 informs that the bankruptcy of Contenedores Transportes y Servicios S.A. has been converted to reorganization. Infobae reports that the court selected Mr. Ruben Raul Bega to supervise the reorganization as trustee. CONTACT: Contenedores Transportes y Servicios S.A. Catamarca 1444 Mar del Plata Mr. Ruben Raul Bega, Trustee Rawson 2272 Mar del Plata DON GUMERSINDO: Court Order Makes Bankruptcy Official ----------------------------------------------------- Buenos Aires Court No. 15 declared Don Gumersindo S.A. bankrupt after the company defaulted on its debt payments. The bankruptcy order effectively places the company’s affairs as well as its assets under the control of court-appointed Trustee, Ms. Mabel Lopez. As trustee, Ms. Lopez is tasked with verifying the authenticity of claims presented by the company’s creditors. The verification phase is ongoing until October 6, 2004. Infobae reports that Clerk No. 10 assists the court on this case, which will end with the disposal of the company’s assets in favor of its creditors. CONTACT: Don Gumersindo S.A. 25 de Mayo 586 Buenos Aires Phone: 4893-2630 Ms. Mabel Lopez, Trustee Avda Cordoba 817 Buenos Aires ESPRESSO BAR: Court Replaces Trustee ------------------------------------ Ms. Silvia J. Kohan will replace Mr. Daniel Alfredo Erdosia as trustee in the liquidation of Buenos Aires based company Espresso Bar S.A., states Infobae. The change in trustees will not affect the verification of creditors’ claims, which will continue until September 9, 2004. Buenos Aires Court No. 5, assisted by Clerk No. 10, has jurisdiction over this case. CONTACT: Espresso Bar S.A. Viamonte 1454 Buenos Aires Ms. Silvia J. Kohan, Trustee Francisco Bilbao 2875 Buenos Aires LA ESPIGA: Court Rules for Liquidation -------------------------------------- Buenos Aires Court No. 24 ordered the liquidation of La Espiga de Oro S.A. after the company defaulted on its obligations, Infobae reveals. The liquidation pronouncement will effectively place the company’s affairs as well as its assets under the control of Mr. Jorge Emilio Basile, the court-appointed trustee. Mr. Basile will verify creditors’ proofs of claims until September 23, 2004. These claims will serve as basis for the individual reports to be submitted in court on November 5, 2004. The submission of the general report follows on December 20, 2004. Clerk No. 47 assists the court on this case, which will end with the disposal of the company’s assets in favor of its creditors. CONTACT: La Espiga de Oro S.A. Rivadavia 1157 Buenos Aires Mr. Jorge Emilio Basile, Trustee Parana 774 Buenos Aires LOGICA EMPRESARIA: Liquidation Proceedings to Commence ------------------------------------------------------ Argentine news source Infobae reports that Logica Empresaria S.R.L. has been placed under “concurso mercantil liquidatorio". The Company’s case is under the jurisdiction of Buenos Aires’ Civil and Commercial Tribunal Court No. 8 Ms. Sara Maria Rey de Lavolpe serves as trustee on this case. She will be accepting creditor’s claims for validation until September 20, 2004. The validated claims will be used as basis for the individual reports due for submission on November 2, 2004. The trustee will also prepare a general report and submit it in court on Decemer 15, 2004. CONTACT: Ms. Sara Maria Rey de Lavolpe, Trustee Cerrito 1136 Buenos Aires LUBRISAN S.A.: Receives Bankruptcy Ruling ----------------------------------------- Lubrisan S.A., a company operating in Buenos Aires, will begin liquidating its assets following the pronouncement of the city’s Court No. 3 that the company is bankrupt, reports Infobae. The bankruptcy ruling places the company under the supervision of court-appointed trustee, Mr. Juan Lewin. The trustee will verify creditors’ proofs of claims until August 27, 2004. After verification, the claims will be presented in court as individual reports on October 8, 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, on November 22, 2004. CONTACT: Lubrisan S.A. Lima 1031 Buenos Aires Mr. Juan Lewin, Trustee Quirno 353 Buenos Aires MERITAR S.A.: Liquidation Result of Court Order ----------------------------------------------- Meritar S.A. will enter bankruptcy protection after Buenos Aires Court No. 9, with the assistance of Clerk No. 17, ordered the company’s liquidation. Infobae reports that the court appointed Mr. Javier Marcelo Espineira to serve as trustee. She will be verifying creditors’ proofs of claims until the end of the verification phase on September 20, 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 November 10, 2004 followed by the general report, which is due on February 5 next year. CONTACT: Mr. Javier Marcelo Espineira, Trustee Viamonte 783 Buenos Aires NII HOLDINGS: Records 163% Subscriber Growth In 2Q03 ---------------------------------------------------- HIGHLIGHTS: - subscriber additions of 111,200, a 163% increase over second quarter 2003, resulting in quarter end subscribers over 1.66 million. - consolidated operating revenues of $304 million, a 35% increase over the second quarter of 2003. - consolidated operating income before depreciation and amortization (OIBDA) of $81 million, a 29% increase over the second quarter of 2003. - Quarter end consolidated cash and short-term investments of $401 million. - Launched International Direct ConnectSM in all markets. - Raising full year 2004 guidance for net subscriber additions by 40% to 400,000 and full year 2004 OIBDA guidance to $330 million. NII Holdings, Inc. [NASDAQ: NIHD] announced on Thursday its consolidated financial results for the second quarter of 2004. The Company reported consolidated operating revenues of $304 million, a 35% increase as compared to the second quarter of 2003, and consolidated operating income before depreciation and amortization (OIBDA) of $81 million, a 29% increase compared to the same period last year. The Company added about 111,200 net subscribers to its network during the quarter, an increase of 163% over the second quarter of 2003, resulting in approximately 1.66 million subscribers as of June 30, 2004. The Company generated consolidated operating income of $51 million during the quarter, a 19% increase over the second quarter of 2003. The Company reported consolidated net income of $25 million, or $0.36 per basic share. The Company ended the second quarter of 2004 with $401 million in consolidated cash, cash equivalents and short-term investments. "During the first half of the year, we have significantly accelerated the growth in our business while remaining true to our focus on profitability," said Steve Shindler, NII Holdings' Chairman and CEO. "Our differentiated wireless service and customer-focused approach have allowed us to attract and retain a growing base of high quality post-paid subscribers, generate strong cash flow, and position us to deliver long-term value to all of our stakeholders." NII Holdings' average monthly revenue per subscriber (ARPU) was approximately $56 for the quarter, up from $53 for the same period last year. The Company also announced its tenth consecutive quarter of churn reduction, reporting average consolidated churn of 1.8% in the quarter, a 70 basis point improvement from the 2.5% churn level reported in the second quarter of 2003. During the second quarter, the Company launched its International Direct Connect(SM) (IDC) service in each of its markets in cooperation with Nextel Communications, Nextel Partners, Telus Mobility in Canada and Motorola. Using International Direct Connect, the Company's subscribers can communicate instantly across national borders with other NII Holdings subscribers in Mexico, Argentina, Brazil and Peru and with over 15 million combined Nextel Communications and Nextel Partners subscribers in the U.S. The Company also expects that its customers will have the ability to Direct Connect with Telus Mobility subscribers in Canada beginning in the fourth quarter of 2004. "International Direct Connect, an industry first, further differentiates NII Holdings in the market by offering the convenience of communicating across borders at the touch of a button," said Steve Shindler. "The launch of International Direct Connect, the fruit of a shared commitment and a high degree of cooperation among the partners who have joined forces to develop, test and release the service, is the natural progression of our continuous commitment to deliver the most efficient communications solution to our customers. With IDC, NII Holdings customers will have access to an enhanced communications tool that provides them with instant access across national borders in Latin America and to the vast majority of the over 15 million iDEN subscribers in the United States and Canada.” The Company ended the quarter with approximately $640 million in long-term debt, which includes $480 million in convertible notes, $53 million in vendor debt and $107 million in tower financing obligations. With quarter-end consolidated cash, cash equivalents and short term investments balance of $401 million, the Company's net debt at the end of the quarter was $239 million, resulting in a net debt to 2004 operating income before depreciation and amortization guidance of about 0.7 times. On July 12, 2004, subsequent to the second quarter, the Company retired the remaining $53 million balance of its senior secured credit facility. "With the retirement of this credit facility, NII Holdings continues to strengthen the quality of its balance sheet by improving operational flexibility and reducing exposure to foreign exchange risks," said Byron Siliezar, Vice President and CFO. Consolidated capital expenditures, including capitalized interest, were $51 million during the second quarter of 2004. Raising 2004 Guidance Because of the positive sales trends in the business through the first half of the year, NII Holdings is raising its net subscriber additions guidance for 2004 from 285,000 to 400,000, a 40% increase over its previous guidance. Despite the 40% increase in subscriber growth and weaker local currency, the Company is also raising its 2004 OIBDA guidance for the full year to $330 million. This guidance is forward looking and is based upon management's current beliefs, as well as a number of assumptions concerning future events and, as such, should be taken in the context of the risks and uncertainties outlined in the SEC filings of NII Holdings, Inc., including NII's annual report on Form 10-K for the year ended December 31, 2003 and its subsequent quarterly report on Form 10-Q for the quarter ended March 31, 2004. In addition to the results prepared in accordance with accounting principles generally accepted in the United States (GAAP) provided throughout this press release, NII has presented consolidated [operating income before depreciation and amortization, ARPU, adjusted net income, net debt and cost per gross add (CPGA)], which are non-GAAP financial measures and should be considered in addition to, but not as substitutes for, the information prepared in accordance with GAAP. Reconciliations from GAAP results to these non-GAAP financial measures are provided in the notes to the attached financial table. NII Holdings, Inc., a publicly held company based in Reston, Va., is a leading provider of mobile communications for business customers in Latin America. NII Holdings, Inc. has operations in Argentina, Brazil, Mexico and Peru, offering a fully integrated wireless communications tool with digital cellular service, text/numeric paging, wireless Internet access and International Direct ConnectSM , an extension of Direct ConnectSM, a radio feature that allows Nextel subscribers to communicate instantly and across national borders. NII Holdings, Inc. trades on the NASDAQ market under the symbol NIHD. Nextel, the Nextel logo, Nextel Online, Nextel Business Networks and Nextel Direct Connect are trademarks and/or service marks of Nextel Communications, Inc. To review financial statements visit: http://bankrupt.com/misc/NIIFS_2Q04.doc CONTACTS: NII Holdings, Inc. 10700 Parkridge Blvd., Suite 600 Reston, Va. 20191 (703) 390-5100 Investor Relations: Mr. Tim Perrott (703) 390-5113 tim.perrott@nii.com Media Relations Ms. Claudia E. Restrepo (786) 251-7020 claudia.restrepo@nii.com Web Site: www.nii.com SIAGRO: Bankruptcy Process Begins By Court Order ------------------------------------------------ Buenos Aires Court No. 17 declared local company Siagro S.R.L. “Quiebra,” reports Infobae. The declaration signals the Company to proceed with the bankruptcy process, which will close with the liquidation of its assets. The court, assisted by Clerk No. 33, appointed Mr. Gustavo Horacio Manay, as trustee who will authenticate proofs of claim until October 27, 2004. Afterwards, the trustee will prepare individual reports based on the results of the authentication and then submit these reports in court on November 25, 2004. After these results are processed in court, the trustee will then submit the general report on December 27, 2004. CONTACT: Siagro S.R.L. Avda Diaz Velez 4192 Buenos Aires Mr. Gustavo Horacio Manay, Trustee Montevideo 666 Buenos Aires TERAPIA INTEGRAL: Court Issues Bankruptcy Ruling ------------------------------------------------ Terapia Integral S.A.C. will now enter bankruptcy after Court No. 10 of Buenos Aires ordered its liquidation, says Infobae. With assistance from Clerk No. 19, the court named Mr. Manuel Gonzalez as trustee. He will verify creditors' claims until September 3, 2004. Following claims verification, the trustee will submit the individual reports, which were prepared based on the verification results, to the court on October 18, 2004. A general report is also due for submission on November 29, 2004. CONTACT: Terapia Integral S.A.C. Avenida Santa Fe 136 Buenos Aires Mr. Manuel Gonzalez, Trustee Deheza 2357 Buenos Aires YOSHIMOTO: Court Declares Company Bankrupt ------------------------------------------ Yoshimoto S.A.C.I.F.I.A. entered bankruptcy on orders from Court No. 15 of the Buenos Aires Civil and Commercial Tribunal, reveals Infobae. Working with Clerk No. 29, the court assigned Ms. Marta Susana Serra as trustee. She is to verify creditors' claims until October 15, 2004. Creditors who fail to have their claims validated before the deadline will be disqualified from receiving any payments to be made after the Company’s assets are liquidated. CONTACT: Ms. Marta Susana Serra, Trustee Donato Alvarez 862 Buenos Aires * Argentina Likely to Face Bondholders in Court ----------------------------------------------- An adviser to the Global Committee of Argentine Bondholders (GCAB), the biggest group of Argentine creditors, said Wednesday that the bondholders are ready to go to court if Argentina fails to come up with better repayment terms. Reuters says the GCAB was anxious to negotiate terms but the group said Argentina's offer to repay roughly 34 cents in the dollar on its US$100 billion in defaulted sovereign debt amounted to an "egregious proposal". "If this process does not work ... all these bondholders will be very open to the idea, very vocal about the idea, of litigation," said Daniel Celentano, head of global financial restructuring at Bear Stearns, which represents GCAB. ============= B E R M U D A ============= FOSTER WHEELER: New Director Tapped ----------------------------------- Foster Wheeler Ltd. (OTCBB:FWLRF) announced Thursday that Giuseppe Bonadies has been appointed managing director, global sales, marketing and strategic planning, Foster Wheeler International Corporation, effective July 1, 2004. Mr. Bonadies succeeds Stephen J. Davies, who has been appointed to the position of chairman and chief executive officer of Foster Wheeler Energy Limited, headquartered in the UK. "In July 2003, Giuseppe was appointed executive vice president for worldwide sales of our E&C (Engineering & Construction) business. His appointment has already contributed to significantly improving our sales results. He has provided excellent leadership and is very deserving of this promotion," said Raymond J. Milchovich, chairman, president and chief executive officer, Foster Wheeler Ltd. Mr. Bonadies has been with Foster Wheeler for 39 years. During his career, he has been responsible for both sales and operating units. His sales responsibilities have included many years in international sales, most recently as executive vice president; his operational experience includes the positions of chief executive officer of Atlas Foster Wheeler (Mexico), president & chief executive officer of Foster Wheeler France and chairman of Foster Wheeler Italiana S.p.A. Mr. Bonadies is a chemical engineer and holds the title of Doctor in Chemical Engineering from Naples, Italy, Polytechnic University. Foster Wheeler Ltd. is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. CONTACT: Foster Wheeler Ltd. Media: Ms. Maureen Bingert: 908 730 4444 Ms. Anne Chong: +44 (0)118 913 2106 or Other Inquiries: 908 730 4000 Web Site: www.fwc.com GLOBAL CROSSING: Inks Bilateral Voice Agreement With Telmex ----------------------------------------------------------- Global Crossing (NASDAQ: GLBCE) and Telefonos de Mexico, Mexico's largest telecommunications company, announced Thursday a commercial agreement for bilateral voice interconnection. The agreement allows Global Crossing to send traffic to Mexico and TELMEX to transport long distance voice traffic to the United States. The deal affords both companies consistently high quality services, allowing them to better serve their customers while leveraging their individual strengths and creating significant advantages in terms of network reach and opportunities for increased market share. Voice traffic exchange has commenced in Los Angeles, where Global Crossing and TELMEX have collocated points of presence (POPs). "This agreement effectively leverages the opportunities between our companies to continue providing best-of-class service to our customers in the US, Mexico and around the world," said John Legere, chief executive officer of Global Crossing. Today's announcement expands an existing business relationship between the two companies: TELMEX has been Global Crossing's primary local access provider for data services in Mexico since 2001, and Global Crossing also has interconnection and renders services in Latin America to a number of TELMEX affiliates. Global Crossing's significant Mexican operations are headquartered in Mexico City, and the company has a redundant, terrestrial network connecting Mexico City, Monterrey, Guadalajara and Mazatlan. Through its subsea cable, Global Crossing connects facilities in Tijuana and the rest of its global network, delivering services to 500 cities in 50 countries around the world. This Mexican connectivity agreement further enhances Global Crossing's growing list of more than 50 bilateral and direct interconnect agreements to countries around the world. Global Crossing is committed to being a full service provider of voice, data and collaboration services over the world's largest commercially deployed SONUS network, providing unparalleled connectivity to fixed and mobile carriers and enterprise customers. 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. Fernanda Marques Latin America + 55 21-3820-4712 LatAmPR@globalcrossing.com Mr. Mish Desmidt Europe +44 (0) 7771-668438 EuropePR@globalcrossing.com Investors Contact: Mr. Mitch Burd +1 800-836-0342 glbc@globalcrossing.com LORAL SPACE: Forecasts Units’ Chapter 11 Emergence by Year End -------------------------------------------------------------- Loral Space & Communications Ltd. announced Thursday that it has reached an agreement with the Official Committee of Unsecured Creditors in its chapter 11 reorganization on the principal terms of a plan of reorganization that will lead to the early filing of a consensual plan for Loral and an exit from chapter 11 proceedings by the end of the year. The agreement provides for a reorganization that will leave Loral under current management, with its two businesses, Space Systems/Loral and Loral Skynet, intact and substantially debt- free. Loral will be a public company upon emergence and expects to be listed on a major exchange in due course. Space Systems/Loral is a world-class leader in the design and manufacture of satellites and satellite systems for commercial and government applications. It is one of only five such manufacturers in the world. Loral Skynet operates a global integrated fixed satellite and network/professional services business using its fleet of four telecommunications satellites. Under the proposed consensual plan of reorganization, all pre- petition institutional debt will be exchanged for substantially all of the equity of the reorganized company. It is contemplated that under the plan of reorganization, all other pre-petition general unsecured creditors will be offered an option to elect either a discounted cash payment or a payout over time. Loral is highly confident, given the support from the Official Creditors' Committee, that the plan will receive the required favorable vote from creditors and confirmation by the court. The plan does not provide for any recovery or participation in reorganized Loral by the holders of Loral's existing common or preferred stock. Bernard L. Schwartz, chairman and chief executive officer, said: "This agreement enables us to fulfill most of the core objectives we established one year ago at the start of the chapter 11 process. Space Systems/Loral and Loral Skynet have continued to serve customers and generate cash flow throughout the year. Further, relieved of the burden of debt, Loral will have the financial strength necessary to capitalize on an improving industry environment and expand its leadership role in the satellite services and manufacturing businesses. We deeply regret the unavoidable exclusion of the present equity holders. We believe that the plan that has been negotiated presents the best opportunity to maintain Loral's industry position over the long term. We are grateful to our employees, customers, suppliers and business partners for their loyalty and support during the chapter 11 process." Loral Space & Communications is a satellite communications company. It owns and operates a fleet of telecommunications satellites used to broadcast video entertainment programming, distribute broadband data, and provide access to Internet services and other value-added communications services. Loral also is a world-class leader in the design and manufacture of satellites and satellite systems for commercial and government applications including direct-to-home television, broadband communications, wireless telephony, weather monitoring and air traffic management. CONTACT: Ms. Jeanette Clonan Loral Space and Communications (212) 697-1105 =========== B R A Z I L =========== BRASKEM: Boosts Aromatics Plant’s Output ---------------------------------------- Brazilian petrochemical company Braskem expanded the output at its aromatics plant by 30% to 203,000 tonnes a year, reports Business News Americas. The recently concluded US$25-million expansion will also see Braskem supplying a significant part of the national demand for para-xylene, one of the components used in the production of PET. Braskem will use 50,000t/y, but most of production will supply the Brazilian unit of Italian chemical company Rhodia-Ster in Sao Paulo state, Latin America's largest PET manufacturer. As a result, PET supply in Brazil will increase to 11,500tonnes/month from 7,500t/m. Braskem, a world-class petrochemical company, is a leader in the thermoplastic resins segment in Latin America, and is among the five largest Brazilian privately-owned industrial companies. The Company operates 13 manufacturing plants located throughout Brazil, and it has a yearly production capacity of 5.0 million of tons of petrochemical products. CONTACT: Vasco Barcellos Investor Relations - Manager Phone: (55 11) 3443 9178 E-mail: vasco.barcellos@braskem.com.br Jose Marcos Treiger Investor Relations - Director Phone: (55 11) 3443 9529 E-mail: jm.treiger@braskem.com.br Luiz Henrique Valverde Investor Relations - Manager Phone: (55 11) 3443 9744 E-mail: luiz.valverde@braskem.com.br KLABIN: S&P Raises Local Currency Rating to 'BB' ------------------------------------------------ Standard & Poor's Ratings Services raised its local currency global scale corporate credit ratings on Brazilian paper goods company Klabin S.A. (Klabin) to 'BB' from 'BB-'. The foreign currency rating was affirmed at `B+´. The outlook on the local currency rating is stable, and the outlook on the foreign currency rating is positive. "The rating action reflects Klabin's commitment to maintaining a prudent financial policy, even when considering the feasibility of a more robust capital expenditure program to increase its paper and board production capacity from 2 million to 1.5 million tons/year," said Standard & Poor's credit analyst Milena Zaniboni. "However, the decision on the expansion project will depend on the arrangement of proper long-term financing. As a consequence, Standard & Poor's does not expect deterioration of the company's capital structure or an increase of refinancing risks." The local currency rating on Klabin reflects the company's increased focus on packaging products, and the strong correlation of sales to the performance of the volatile Brazilian economy, as well as a still-fragmented market for corrugated boxes that does not allow for rational pricing policies. These risks are partially offset by Klabin's very competitive cost position, which derives from high forest yields and full integration of forest and production plants, together with its more comfortable debt profile going forward. The positive outlook on the foreign currency rating mirrors that of the Republic of Brazil. The stable outlook on the local currency rating reflects Standard & Poor's expectation that Klabin will continue to present low debt position and strong operating margins despite uncertainties on the level of local consumption and a relatively more aggressive capital expenditure and dividends distribution programs. The ratings could go under downward pressure if the company decides to implement its capital program without proper long- term funding or if it fails to maintain its conservative financial, which would translate into ratios of net debt to EBITDA higher than 1.5x, and EBITDA to interest lower than 4x. On the other hand, the outlook of the local currency rating could be changed to positive if the current conservative financial measures are maintained throughout the implementation of the expansion project and after further testing of Klabin's capacity to deal successfully with the volatilities of the Brazilian market. ========= C H I L E ========= ENAMI: Senate Committee Authorizes Ventanas Transfer ---------------------------------------------------- Chile obtained green light from the senate mining committee on its plans to transfer ownership of the Ventanas copper smelter- refinery from state minerals company Enami to state copper corporation Codelco. Business News Americas reports that the senate committee’s approval came after the executive branch improved the financial conditions of the switch. The improvements include a reduction in Enami’s post-sale debt to US$27 million from the originally proposed US$79 million and an increase in sale price from US$373 million to US$393 million. The Chilean government had proposed the ownership transfer in order to cut Enami's US$500 million debt, which had began to cripple the Company's finances. CONTACT: ENAMI (Empresa Nacional de Mineria) MacIver 459, Santiago, Chile Phone: 637 52 78 637 50 00 Fax: 637 54 52 Email: webmaster@enami.cl Home Page: www.enami.cl/ Contact: Jorge Rodriguez Grossi, President ENERSIS/ENDESA-CHILE: UBS Ups Equity Recommendation --------------------------------------------------- Investment bank UBS raised its recommendations on shares of Chilean electricity company Enersis and its local unit Endesa Chile, reports Dow Jones Newswires. UBS raised Enersis to neutral from reduce and Endesa Chile to buy from neutral. The move came after the investment bank increased its 2004-2006 node price forecasts for gas rates by 12% to $39/MWh and its 2007 forecast by 7.6% to $35.5/MWh. UBS recently met with Chilean utilities and their regulators to discuss the uncertainty of natural gas supply from neighboring Argentina. "While the situation still is fluid, we are now more confident that Chile will try to stick to gas as the primary source of expansion and we adjusted our forecasts to that effect," UBS said in a research note. UBS also said that its medium-term forecast reflects its view that the regulator will continue to consider gas supply restrictions in 2005 and that its long-term forecast assumes higher gas prices but no restrictions. Enersis S.A. is an electricity utility company primarily engaged, through its principal subsidiaries and related companies, in the generation, transmission and distribution of electricity in Chile, Argentina, Brazil, Colombia and Peru. Endesa Spain acquired control of Enersis in April 1999, and owned 60.6% of Enersis' outstanding shares at December 31, 2003. The Company operates its electricity generation business through Endesa Chile. Enersis remained focused on the electricity sector, although it also has small operations in other businesses, such as real estate, electrical parts procurement, computer services and infrastructure projects. =============== C O L O M B I A =============== MILLONARIOS: Seeks New Plan to Stay in the Game ----------------------------------------------- Key Officers at Bogota soccer club Millonarios met on Thursday to draw-up a battle plan that would save Bogota’s ailing soccer club from mounting debt. The Associated Press reports that the refusal from Colombia’s anti-narcotics agency, DNE, to surrender its stake in Millonarios prompted the emergency conference. The club’s management had earlier proposed to raise much needed funding by issuing company stock, including those owned by the state through DNE. "We have information that there is still dirty money in the club," DNE Chief Col. Luis Alfonso Plazas said while defending DNE’s decision to hold on to its Millonarios stocks. The agency, he added, needs to stay with the club to ensure that it does not revert to drug lords. He also suggested bankruptcy as one avenue that the club could take in order to gain time to come up with new funding. Contact with the cocaine underworld turned the tides for the one-time Colombian soccer powerhouse. DNE gained control of Millonarios in 1999 through a confiscated 30 percent share that had belonged to notorious cocaine cartel boss Gonzalo Rodriguez Gacha. Mr. Gacha had used the club to launder his drug money. Under DNE’s stewardship however, the club accumulated US$3 million in debt. It has since been unable to pay many of its staff, players and coaches. =========== M E X I C O =========== AEROMEXICO: Expands Sales, Marketing to New Zealand, Paraguay ------------------------------------------------------------- Aeromexico, the largest airline in Mexico, obtained its first sales and marketing representation in New Zealand and Paraguay through Discover the World Marketing, the world's largest travel trade representation company. Discover now handles the sales and marketing for Aeromexico in 25 countries, including eight in Latin America. "New Zealand and Paraguay represents revenue growth opportunities for Aeromexico and a means to enhance the awareness of our product and services," said Flor Gomez, director international market sales for Aeromexico. "In Paraguay, the main focus will be to help feed our service from Sao Paulo to Mexico City. It's our partnership with Discover the World Marketing that plays an important role in our efforts to expand our sales and marketing worldwide." "We have a strong relationship with Aeromexico that continues to be successful," said Jenny Adams, CEO of Discover the World Marketing. "Aeromexico will receive the same quality service and excellent understanding of the marketplace in New Zealand and Paraguay that is the hallmark of all Discover's operations throughout the world." About Discover the World Marketing Established in 1981, Discover the World Marketing has 74 offices in 52 countries. Headquartered in Scottsdale, Ariz., Discover is the world's largest travel representation company with annual client revenues approaching one-half billion dollars. The company represents 46 major travel corporations. About Aeromexico Aeromexico serves 43 cities in Mexico, more than any other airline; and the 16 U.S. gateway cities of Atlanta, Chicago, Dallas/Ft. Worth, El Paso, Houston, Las Vegas, Los Angeles, Miami, New York City, Ontario, Orlando, Phoenix, Salt Lake City, San Antonio, San Diego and Tucson -- and six countries in Europe and South America. Web site: http://www.aeromexico.com BANORTE: S&P Raises Ratings To 'BB+/B' -------------------------------------- Standard & Poor's Ratings Services raised its foreign and local currency counterparty credit, senior unsecured debt, and CD ratings on Banco Mercantil del Norte (Banorte) to 'BB+/B' from 'BB/B'. The outlook is stable. "The upgrade reflects improvements in Banorte's business profile including a higher market share in retail lending, improved cross-selling ratios, and increased client base," said Standard & Poor's credit analyst Ursula M. Wilhelm. "The bank's financial profile has also been strengthened through a better asset mix with maintenance of good asset quality indicators and improvements on revenues and operating efficiencies." The stable outlook is based on the expectation that the bank will maintain its market position while maintaining good profitability and asset quality. Should the bank be unsuccessful in maintaining its positive performance trend, good asset quality indicators, and adequate capitalization, its creditworthiness could be negatively affected. On the other hand, improvement in financial standing, mainly in profitability, funding, and operating costs with no detriment on asset quality indicators, should improve Banorte's creditworthiness. GRUPO MEXICO: Labor Authority Declares Strike Illegal ----------------------------------------------------- Mexican labor officials on Thursday declared illegal a strike, which started July 12 at Grupo Mexico’s La Caridad copper mine. With the declaration, Grupo Mexico, the world's third- biggest copper producer, hopes to resume operations at the mine that produces 140,000 tons a year of copper in concentrates and about 250,000 metric tons of refined copper. Mr. Juan Rebolledo, Grupo Mexico’s vice president for international affairs, said the union was informed of the court decision at 1900 GMT Thursday. He said workers had 24 hours to comply with the ruling. According to Bloomberg, the ruling also blocked a possible strike by another 1,200 workers at the Cananea mine. The strike scheduled for Friday would have halted output of an additional 180,000 metric tons of annual production at the Cananea mine, temporarily cutting the Company's global output in half. The union's workers were scheduled to meet Friday to vote on whether to respect the ruling, Consuelo Aguilar, a union spokeswoman, said. Bloomberg reports that the union has said in an emailed release that it “condemns the submissive and subservient attitude of the labor authority to favor Grupo Mexico.” 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 ======= P E R U ======= AERO CONTINENTE: Secures New Policy, Resumes Domestic Flights ------------------------------------------------------------- Peruvian airline Aero Continente was able to secure a new insurance policy, allowing it to resume domestic flights under its new name Nuevo Continente. The new policy was secured with British insurer Holders Insurance Services. Flights will be insured for US$15 million with coverage for damages and third parties as required by the Peruvian government. The new policy is in addition to one for US$50 million already in effect for loss of baggage, legal assistance for passengers and search and rescue operations in case of accidents. The airline was originally suspended because its policy only covered the crew and passengers and not third parties, carry-on luggage, check-in luggage, cargo or search and rescue operations as are stipulated under industry regulations. ================================= T R I N I D A D & T O B A G O ================================= NWRHA: Health Ministry Seeks Probe Into Debt Scandal ---------------------------------------------------- Health Minister John Rahael ordered a probe into the more than $100 million arrears owed by the North-West Regional Health Authority (NWRHA) to the Board of Inland Revenue, The Trinidad Express says. NWRHA, which is responsible for the Eric Williams Medical Sciences Complex, Port of Spain General Hospital, St Ann's Hospital, Arima District Hospital, Caura Chest Hospital and 36 health centres, reportedly failed to pay the BIR of $103,727,262 for PAYE and health surcharge of $3,520,114 for the period May 2002 to June 2004. The money has been deducted from the pay of some 1,600 employees but has not been paid to the BIR. PAYE (pay as you earn) and health surcharge are to be paid by the 15th of every month. Non- payment attracts 15% interest. Now, Mr. Rahael is demanding to know why the deductions were not paid to the BIR, who was responsible for not remitting it, whether the board was aware of the situation and why was the Ministry not advised of the matter. The NWRHA is asking money from the Ministry to bail it out of that debt. But the Health Ministry was not prepared to bail out the NWRHA and "something has to be done with its management which is going to be held responsible for the debt," Mr. Rahael said. The Express quoted a source at the Ministry of Health as saying, "The Ministry gave them (NWRHAs) more than $89 million last year to assist in paying its creditors and the allocation for this year was increased by $40 million. In addition, they were given $32 million to finance another shortfall." ============= U R U G U A Y ============= ANCAP: Upgraded to 'B' Following Uruguay Upgrade ------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Uruguay's 100% state-owned fuel, alcohol, and cement company, Administracion Nacional de Combustibles Alcohol y Portland (ANCAP), to 'B' from 'B-'. The outlook is stable. The rating action is in line with the recent upgrade of the Republic of Uruguay to 'B' from 'B-'. As of March. 31, 2004, ANCAP had approximately US$133 million in financial debt that represented about 25% of total capitalization. "ANCAP's credit quality continues to be conditioned by that of the Republic of Uruguay, its 100% owner. Therefore, an improved fiscal situation for the Republic within the context of an improving economy and policy continuity should positively affect ANCAP," said Standard Z& poor's credit analyst Marta Castelli. "The stable outlook indicates the linkage of ANCAP's credit quality to the sovereign's financial health and incorporates a successful extension of the company's maturity profile that will alleviate its financial profile," Ms. Castelli said. The upgrade on Uruguay reflects ongoing expenditure restraint that, coupled with an improving economy, will underpin a further reduction in the fiscal deficit and debt stock. The new ratings also incorporate the expectation that sufficient policy continuity under the next government (presidential elections will be held in October/November 2004) will keep Uruguay's fiscal trajectory on an improving trend in 2005 and beyond. The ratings on ANCAP reflects the risks inherent in operating as a single-asset refiner, the challenging economic environment of Uruguay, the ownership by the Republic of Uruguay, and the potential effects of the deregulation of the Uruguayan fuels market. The rating also incorporates Standard & Poor's expectations that ANCAP will maintain its dominant market position. The stable outlook indicates the linkage of ANCAP's credit quality to the sovereign's financial health. The outlook also incorporates a successful extension of the company's maturity profile that will alleviate its financial profile. ANALYSTS: Marta Castelli, Buenos Aires (54) 114-891-2128 Luciano Gremone, Buenos Aires (54) 11-4891-2143 Pablo Lutereau, Buenos Aires (54) 114-891-2125 * Fitch Assigns Expected 'B' to Uruguay's UI, DPN Bonds ------------------------------------------------------- Fitch Ratings assigned Uruguay's forthcoming UI Bond payable in 2007 and its DPNs due in 2006 expected long-term foreign currency ratings of 'B' with Stable Rating Outlooks. Principal and interest payments on both bonds are payable in US dollars. For UI Bonds, payments will be adjusted for Uruguayan inflation. Payments on the DPN bonds may be adjusted for movements in the USD/UYU exchange rate. The ratings are equal to the long-term foreign currency ratings of Uruguay's senior unsecured debt. The Rating Outlook is Stable. The Uruguayan economy has rebounded smartly since its deep recession in 2002 that precipitated a sovereign debt restructuring in June, 2003. Against a low base, first quarter GDP expanded by 14% on a sharp increase in beef production and a pickup in tourism-related services. Whether recent growth can be sustained will hinge critically on expectations about the continuity of policy related to the October presidential and parliamentary elections. The Frente Amplio, which leads in recent polls, has indicated that it will reverse certain market- oriented reforms and has questioned recent policies of fiscal austerity. On the other hand, certain of its representatives have also recently indicated that it would honor the terms of last year's debt restructuring, a commitment that had not been clear at the time of the transaction. As the balance of payments and local confidence have continued to improve, resident bank deposits have likewise risen, reaching US$7 billion at May 31 from US$6.5 billion at year-end. These continue to be held largely (89%) in foreign currency, however, leaving the system more vulnerable to shocks than would be the case if the central bank were not limited in its ability to provide emergency liquidity. International reserves reached US$2.36 billion at May 31, versus US$2.1 billion at year-end, including US$646 million in disbursements from the IMF during the last year's banking crisis and US$1.2 billion in voluntary deposits from the banking system. The increase in international reserves this year has boosted its coverage of the monetary base to 5.3 in May from 4.3 at year-end and 1.8 and end-2002. The public sector generated an overall deficit of 3.2% of GDP last year and a primary surplus of 2.9%, significant improvements on performance the prior year. This year, the government has targeted a slightly lower overall deficit of 3.0% of GDP and a somewhat higher primary surplus equal to 3.2%, goals that appear achievable in light of strong economic growth. Meeting these targets will help to stabilize public debt, which reached about 110% of GDP at end-2003, one of the highest in the 'B' category. Low average coupon rates on bond debt help to contain debt service costs, but bringing debt levels into line with peers will take many years of fiscal prudence and consistent economic growth. The amortization schedule on bond debt is quite light through 2010 as a result of last year's rescheduling, implying that it could be sustainable assuming multilateral lenders maintain level of positive net positions and that modest market issuance continues both locally and abroad. CONTACT: Morgan C. Harting +1-212-908-0820 Roger M. Scher +1-212-908-0240, New York MEDIA RELATIONS: James Jockle +1-212-908-0547, New York ================= V E N E Z U E L A ================= PDVSA: Oil Tankers Headed to Argentina for Maintenance Repairs -------------------------------------------------------------- Petroleos de Venezuela (PDVSA) President Ali Rodriguez announced Wednesday that the state oil monopoly will send two large oil tankers to Argentina for maintenance work this year. According to a Dow Jones Newswires report, the move is part of a new alliance between PDVSA and Argentina's energy company ENARSA designed to help each country's energy needs. PDVSA will send the first tanker to Argentina's Rio Santiago shipyard in September, Rodriguez told Dow Jones Newswires. He declined to specify how much the repair work would cost, but according to him, maintenance contracts usually amount to "various millions of dollars." Venezuela and Argentina are looking to create a South American oil company called Petrosur. PDVSA: Standard & Poor’s Downgrade Warning Angers Company --------------------------------------------------------- PDVSA President Ali Rodriguez condemned a warning by Standard & Poor’s Ratings that it could downgrade the oil company’s outstanding debt, says Dow Jones Newswires. On Wednesday, S&P said that it may cut PDVSA Finance Ltd.'s outstanding debt to 'B' from 'B+' pending completion of the tender and consent offer that was proposed by PDVSA in late June. “The expected downgrade stems from S&P's view that amendments to be made to the transaction upon completion of the tender will reduce the structural protection afforded to investors who continue to hold PDVSA Finance debt," the rating agency had said in a statement. But Rodriguez criticized the rating agency's move, saying it is out of touch with reality. "It's curious to see how when you pay (your debts) and you meet your obligations they decide to bring down your rating. The decision to downgrade is not based on real (fundamental) reasons," Rodriguez told Dow Jones Newswires late Wednesday. "We're paying our debt because we have the ability to pay it," Rodriguez said. PDVSA decided to buy back US$2.6 billion in bonds, a move that will free up cash flow and lower the Company's foreign debt to around US$3 billion. PDVSA: OPIC Seeks Formal Response to SAIC Dispute ------------------------------------------------- The Overseas Private Investment Corporation (OPIC) is anxious to get a formal response from PDVSA on the former’s decision to award US tech firm SAIC US$6 million in an insurance claim against the state oil company. OPIC spokesperson Larry Spinelli told Business News Americas that under the memorandum of determination which OPIC published on July 12, PDVSA must express its willingness either to negotiate with OPIC directly or go to neutral arbitration in the Hague to resolve the case. PDVSA has done neither. Instead, PDVSA has publicly criticized the decision and said that it will not pay "one cent" of the claim because the OPIC decision is "unfounded" and "politically motivated." If PDVSA does not respond to OPIC's ruling, OPIC will no longer insure investments in Venezuela, and the dispute could impact bilateral relations between the two countries, Spinelli said. However, according to Oil and Gas Journal, Tom Wilner, outside counsel for PDVSA in the dispute, said PDVSA still is studying OPIC's decision and will respond to the agency shortly. *********** 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 * * *