/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/040826.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, August 26, 2004, Vol. 5, Issue 169 Headlines A R G E N T I N A ASTILLEROS RIO BRAVO: Reports Submission Set AUTOPISTAS DEL SOL: S&P Issues `argB+' Ratings to Several Bonds CUIDAR SALUD: Debt Payments Halted, Set To Reorganize DISGAL S.A.: Court Orders Liquidation FABRIBOLS S.R.L.: Court Favors Creditor's Bankruptcy Call HALL STARTS: Gets Court OK for Reorganization HERMAR S.R.L.: Court OKs Creditor's Bankruptcy Request LABORATORIO LISTER: Begins Liquidation Proceedings LERWAI S.R.L.: Asks to Restructure Debt LICARI S.A.: Local Court OKs "Concurso Preventivo" Motion LYNX S.R.L.: Liquidating Assets to Pay Debts MADERIN S.A.: Initiates Bankruptcy Proceedings MERCADO DE MATERIALES: Enters Bankruptcy on Court Orders MOLINOS RIO: Yet to Decide on Poo Acquisition ROLDAN Y CIA: Court Rules In Favor of Liquidation SKM S.A.: Court Approves Creditor's Bankruptcy Motion SOLSER S.R.L.: Gears for Reorganization SUERTE S.A.: Court Declares Company Bankrupt TELECOM ARGENTINA: 94.4% of Creditors Accept Debt Offer TRANSENER: Makes ARS8.7Mln Payment to Financiera Ludicor B E R M U D A LORAL SPACE: Analyst Predicts Bright Prospect B R A Z I L BANCO VOTORANTIM: S&P Rates Notes B+ CEMIG: Deloitte Touche Tohmatsu Presents Audit Report SKY BRASIL: S&P Upgrades Issuer Credit Rating To B- VARIG: Gains Case Support From Second Justice * S&P Affirms Ratings, Foreign Currency Outlook On Brazil * BRAZIL: Gets $505M World Bank Loan for Environmental Projects C O L O M B I A AVIANCA: Restructuring Plan Obtains US Judge's Approval * Colombia: Not Seeking to Extend IMF Loan Agreement D O M I N I C A N R E P U B L I C AES-ANDRES: Hounds Government for $23Mln Debt J A M A I C A C&WJ: President Moves to London to Take on Senior Position P E R U ROYAL SHELL: Bay Named Exploration Director for EP Americas T R I N I D A D & T O B A G O BWIA: Cuts Losses to $6.5M in 1H04 V E N E Z U E L A BANCO DE DESARROLLO: Group Holding Venezuelan Government Liable PDVSA: Completes Construction of Jose Terminal Dock - - - - - - - - ================= A R G E N T I N A ================= ASTILLEROS RIO BRAVO: Reports Submission Set -------------------------------------------- Mr. Santiago Manuel Quiben, the trustee assigned to supervise the liquidation of Astilleros Rio Bravo S.A., will verify creditors' proofs of claims until September 23, 2004. After the verification period, the trustee will then submit validated individual claims for court approval on November 5, 2004. These reports explain the basis for the accepted and rejected claims. He will also submit a general report on December 20, 2004. Infobae reports that Court No. 3, assisted by Clerk No. 6, has jurisdiction over this bankruptcy case. CONTACT: Astilleros Rio Bravo S.A. Pasteur 117 Buenos Aires Mr. Santiago Manuel Quiben, Trustee Esmeralda 783 Buenos Aires AUTOPISTAS DEL SOL: S&P Issues `argB+' Ratings to Several Bonds --------------------------------------------------------------- Standard & Poor's International Ratings, Ltd. Sucursal Argentina assigned a `argB+' rating to the following corporate bonds issued by Autopistas del Sol S.A.: - US$112,334,466 worth of bonds described as "Obligaciones Neg. con descuento con cotizaci¢n a 5 a¤os de vencimiento, monto original" with undated maturity. - US$49,306,639 worth of bonds described as "Obligaciones Neg. con descuento sin cotizaci¢n a 5 a¤os de vencimiento, monto original" with undated maturity. - US$215,225,419 worth of bonds described as "ONS a tasa de inter‚s escalonada creciente a 10 a¤os de vencimiento, monto original" with undated maturity. The ratings, posted by securities regulator Comision Nacional de Valores(CNV) in its web site, were based on the Company's financial standing as of June 30, 2004. S&P explains that bonds with `argB+' ratings face exposure to adverse business or economic conditions that could lead to an issuer's inadequate capacity to meet its obligations. CUIDAR SALUD: Debt Payments Halted, Set To Reorganize ----------------------------------------------------- Judge Ottolenghi of Buenos Aires' Civil and Commercial Tribunal Court No. 4 is reviewing the merits of the reorganization petition filed by Cuidar Salud S.A. La Nacion recalls that the health service provider filed the petition following cessation of debt payments since May 28, 2004. Reorganization will allow the company to avoid bankruptcy by negotiating a settlement with its creditors. Dr. Juarez, Clerk No. 7, assists the court on this case. CONTACT: Cuidar Salud S.A. Avenida Santa Fe 1971 Buenos Aires DISGAL S.A.: Court Orders Liquidation ------------------------------------- Disgal S.A., a company operating in Buenos Aires, prepares to wind-up its operations following the bankruptcy pronouncement issued by Court No. 13 of the city's Civil and Commercial Tribunal. 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. Omar Sergio Vazquez as trustee. He will be reviewing creditors' proofs of claims until October 1, 2004. Clerk No. 25 assists the court on this case, which will end with the disposal of the company's assets to cover its liabilities. CONTACT: Mr. Omar Sergio Vazquez, Trustee Avda Santa Fe 1127 Buenos Aires FABRIBOLS S.R.L.: Court Favors Creditor's Bankruptcy Call --------------------------------------------------------- Papelera Orlando S.R.L. successfully sought for the bankruptcy of Fabribols S.R.L. after Judge Favier Dubois of Buenos Aires' Civil and Commercial Tribunal Court No. 9 declared the Company "Quiebra," reports La Nacion. As such, the Company will now start the bankruptcy process with Ms. Marcela Folco as trustee. Creditors of the Company must submit their proofs of claim to the trustee before October 15, 2004 for authentication. Failure to do so will mean a disqualification from the payments that will be made after the Company's assets are liquidated. Dr. Taricco Vera, Clerk No. 18, assists the court on the case, which will culminate in the liquidation of all of its assets. CONTACT: Fabribols S.R.L. Carlos Calvo 2654 Buenos Aires Ms. Marcela Folco, Trustee Rivadavia 1044 Buenos Aires HALL STARTS: Gets Court OK for Reorganization --------------------------------------------- Hall Starts S.A. will begin reorganization following the approval of its petition by Court No. 4 of Buenos Aires' Civil and Commercial Tribunal. The opening of the reorganization will allow the company to negotiate a settlement with its creditors in order to avoid a straight liquidation. Mr. Oscar Alfredo Arias will oversee the reorganization proceedings as the court-appointed Trustee. He will verify creditors' claims until November 9, 2004. Next, the validated claims will be presented in court as individual reports on December 22, 2004. The trustee is also required by the court to submit a general report essentially auditing the company's accounting and business records as well as summarizing important events pertaining to the reorganization. This report will be presented in court on March 7, 2005. The Informative Assembly, the final stage of a reorganization where the settlement proposal is presented to the company's creditors for approval, is scheduled on September 6, 2005. CONTACT: Mr. Oscar Alfredo Arias, Trustee Carlos Pellegrini 1063 Buenos Aires HERMAR S.R.L.: Court OKs Creditor's Bankruptcy Request ------------------------------------------------------ Hermar S.R.L. entered bankruptcy after Judge Paez Castaneda of Buenos Aires' Civil and Commercial Tribunal Court No. 21 approved a bankruptcy motion filed by Mr. Marcelo Frutos, reports La Nacion. The Company's failure to pay US$64,427.14 in debt prompted the liquidation plea. Working with Dr. Barreiro, Clerk No. 42, the court assigned Mr. Jose Salem Ini as trustee for the bankruptcy process. The trustee's duties include the authentication of the Company's debts and the preparation of the individual and general reports. Creditors are required to present their proofs of claims to the trustee before November 26, 2004. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. Payments will be based on the results of the verification process. CONTACT: Hermar S.R.L. Gaboto 867 Buenos Aires Mr. Jose Salem Ini, Trustee Teniente General Juan Domingo Peron 1730 Buenos Aires LABORATORIO LISTER: Begins Liquidation Proceedings -------------------------------------------------- Laboratorio Lister S.R.L. of Cordoba will begin liquidating its assets after Court No. 1 of the city's Civil and Commercial Tribunal declared the company bankrupt, says Infobae. No trustee has been assigned to the case although the court has set the verification of claims to end on August 27, 2004. Individual reports are scheduled for court submission on September 29, 2004 followed by the general report on November 22, 2004. CONTACT: Laboratorio Lister S.R.L. Emilio Castelar 380 (BA§ Alta) Cordoba LERWAI S.R.L.: Asks to Restructure Debt --------------------------------------- Lerwai S.R.L., a company operating in Buenos Aires, requested permission to reorganize after failing to pay its liabilities. The reorganization petition, once approved by the court, will allow the company to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending before Court No. 2 of the city's Civil and Commercial Tribunal. Clerk No. 4, assists the court on this case. CONTACT: Lerwai S.R.L. Avda Callao 322 Buenos Aires LICARI S.A.: Local Court OKs "Concurso Preventivo" Motion --------------------------------------------------------- Court No. 2 of Bell Ville's Civil and Commercial Tribunal approved the reorganization petition filed by Licari S.A., reports Infobae. The court, assisted by Clerk No. 3, appointed Mr. Hector L.V. Cornaglia as Trustee. Important dates, such as the deadline for the submission of the necessary reports, as well as the schedule for the informative assembly will be announced shortly. CONTACT: Mr. Hector L.V. Cornaglia, Trustee Cordoba 649 Bell Ville (Cordoba) LYNX S.R.L.: Liquidating Assets to Pay Debts -------------------------------------------- Buenos Aires-based Lynx S.R.L. will begin liquidating its assets following the pronouncement of the city's Court No. 11 that the company is bankrupt, Infobae reports. The bankruptcy ruling places the company under the supervision of court-appointed trustee, Mr. Hugo Adriano Zaragoza. The trustee will verify creditors' proofs of claims until October 13, 2004. The validated claims will be presented in court as individual reports on November 24, 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 February 8 next year. The bankruptcy process will end with the disposal of company assets in favor of its creditors. CONTACT: Mr. Hugo Adriano Zaragoza, Trustee 25 de Mayo 596 Buenos Aires MADERIN S.A.: Initiates Bankruptcy Proceedings ---------------------------------------------- Court No. 26 of Buenos Aires' Civil and Commercial Tribunal declared Maderin S.A. "Quiebra," reports Infobae. Mr. Pablo Kainsky, who has been appointed as trustee, will verify creditors' claims until October 12, 2004 and then prepare the individual reports based on the results of the verification process. The individual reports will then be submitted in court on November 23, 2004 followed by the general report on February 7, 2005. Clerk No. 52 assists the court on the case, which will close with the liquidation of the Company's assets to repay creditors. CONTACT: Maderin S.A. Junin 425 Buenos Aires Mr. Pablo Kainsky, Trustee Reconquista 715 Buenos Aires MERCADO DE MATERIALES: Enters Bankruptcy on Court Orders -------------------------------------------------------- Court No. 2 of Buenos Aires' Civil and Commercial Tribunal declared local company Mercado de Materiales S.A. bankrupt after the company defaulted on its debt payments. The order effectively places the company's affairs as well as its assets under the control of court-appointed trustee, the accounting firm "Estudio Amaya y Asociados". As the trustee, the firm is tasked with verifying the authenticity of claims presented by the company's creditors. The verification phase is ongoing until October 26, 2004. Following claims verification, the trustee will submit the individual reports based on the forwarded claims for final approval by the court on December 21, 2004. A general report will also be submitted on March 2 next year. Infobae reports that Clerk No. 4 assists the court on this case, which will end with the disposal of the company's assets in favor of its creditors. CONTACT: "Estudio Amaya y Asociados" - Trustee Sarmiento 1586 Buenos Aires MOLINOS RIO: Yet to Decide on Poo Acquisition --------------------------------------------- Argentine food company Molinos Rio de la Plata is analyzing whether to buy local condiment and vinegar maker Poo from investment fund Sabores Argentinos. According to local news source El Cronista, Sabores Argentinos holds a 66.7% stake in Poo, while the Poo family holds the remaining stake. Molinos Rio is particularly interested in Poo's Omega and Huser vinegar brands, with which it would be able to strengthen its position in the domestic vinegar segment. Poo has about 38% of the vinegar market, whereas Molinos' Cocinero brand has a 10% share. Like Molinos Rio, Poo has also suffered from financial difficulties. But Poo has emerged from bankruptcy protection and managed to obtain a 25% reduction in its debt of more than ARS11 million after carrying out successful renegotiations with its main creditors Banco Rio, Societe Generale, Banco Frances and Banco Sudameris. The approved proposal involved a 2-year grace period and the payment of 75% of the debt over the period of 10 years. Poo has also undertaken a deep restructuring process aimed at reducing fixed costs. It involved a number of measures, including the reduction of its workforce, the closure of its Caballito plant and the concentration of its spice and vinegar divisions at the Mataderos plant. Meanwhile, Molinos Rio posted losses of ARS11.7 million in the first half of the year. It is seeking to return to black by the end of year. CONTACT INFO: Molinos Rio de la Plata S.A. Uruguay 4075 CP (B1644HKG) Victoria Pcia. de Buenos Aires Argentina Telephone: 54-11-4340-1100 Contacts: Maria Soledad Kern Investors Service Tel: (0054)-(11)-4340-1592 E-mail: maria.soledad.kern@molinos.com.ar ROLDAN Y CIA: Court Rules In Favor of Liquidation ------------------------------------------------- Court No. 22 of Buenos Aires' Civil and Commercial Tribunal ordered the liquidation of Roldan y Cia Objetos de Arte, Moblaje y Antiguedades 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 Ms. Marta Estela Acuna, the court-appointed trustee. Ms. Acuna will verify creditors' proofs of claims until September 27, 2004. The verified claims will serve as basis for the individual reports to be submitted in court on November 9, 2004. The submission of the general report follows on December 22, 2004. Clerk No. 44 assists the court on this case, which will end with the disposal of the company's assets in favor of its creditors. CONTACT: Ms. Marta Estela Acuna, Trustee Combate de los Pozos 129 Buenos Aires SKM S.A.: Court Approves Creditor's Bankruptcy Motion ----------------------------------------------------- Judge Villar, serving for Court No. 13 of Buenos Aires' Civil and Commercial Tribunal declared SKM S.A. bankrupt, says La Nacion. The ruling comes in approval of the bankruptcy petition filed by the Company's creditor, Banco R¡o de la Plata S.A., for nonpayment of US$26,987.04 in debt. Trustee Jose Kahane will examine and authenticate creditors' claims until September 24, 2004. This is done to determine the nature and amount of the Company's debts. Creditors must have their claims authenticated by the trustee by the said date in order to qualify for the payments that will be made after the Company's assets are liquidated. Clerk No. 25, Dr. Guerri, assists the court on the case, which will conclude with the liquidation of the Company's assets. CONTACT: SKM S.A. Vuelta de Obligado 4047 Buenos Aires Mr. Jose Kahane, Trustee Reconquista 715 Buenos Aires SOLSER S.R.L.: Gears for Reorganization --------------------------------------- Court No. 19 of Buenos Aires' Civil and Commercial Tribunal, with assistance from Clerk No. 38, issued a resolution opening the reorganization of Solser S.R.L., says Infobae. The pronouncement authorizes the Company to begin drafting a settlement proposal with its creditors in order to avoid liquidation. The reorganization further allows the Company to retain control of its assets subject to certain conditions imposed by Argentine law and the oversight of the court appointed trustee. Ms. Irma Aguilera will serve as trustee during the course of the reorganization. She will be validating creditors' proofs of claims until September 15, 2004. The results of the verification will be presented in court as individual reports on October 28, 2004. The trustee is also obligated to give the court a general report of the case on December 10, 2004. The general report summarizes events relevant to the reorganization and provides an audit of the Company's accounting and business records. Solser will present the completed settlement proposal to its creditors during the informative assembly scheduled on June 16 next year. CONTACT: Solser S.R.L. Sarmiento 647 Buenos Aires Ms. Irma Aguilera, Trustee Luis Saenz Pe¤a 1690 Buenos Aires SUERTE S.A.: Court Declares Company Bankrupt -------------------------------------------- Judge Gutierrez Cabello of Buenos Aires' Civil and Commercial Tribunal Court No. 7 declared local company Suerte S.A. "Quiebra", relates La Nacion. The order comes in approval of the bankruptcy petition filed by Walker Hermanos S.A. The tea distributor will undergo the bankruptcy process with Mr. Lucian Melegari as its trustee. Creditors are required to present their proofs of claims to the trustee for verification before October 20, 2004. Creditors who fail to have their claims authenticated by the said date will be disqualified from the payments that will be made after the Company's assets are liquidated at the end of the bankruptcy process. Dr. Giardinieri, Clerk No. 14, assists the court on the case. CONTACT: Suerte S.A. Rivadavia 969 Buenos Aires Mr. Luciano Melegari, Trustee Bartolome Mitre 1131 Buenos Aires TELECOM ARGENTINA: 94.4% of Creditors Accept Debt Offer ------------------------------------------------------- Fixed-line carrier Telecom Argentina announced Monday that its proposal to restructure US$2.63 billion of debt has been accepted by creditors representing 94.4% of the total amount, reports Dow Jones. As what Telecom Argentina officials have expected, the final result exceeded the 87% figure the company released two weeks ago after the close of the offer period for its out-of-court debt proposal, known in Spanish as an APE. Argentine bankruptcy laws require two-thirds agreement from creditors before APEs can be submitted to a local judge for legal approval, which then makes the repayment terms binding on all creditors. Telecom Argentina chief executive Carlos Felices earlier predicted that the company should complete its debt swap in the first quarter of 2005. CONTACT: TELECOM ARGENTINA S.A. Alicia Moreau de Justo 50, 10th Floor Capital Federal (1107) Republica Argentina Phone: +54 11 4968 4000 Home Page: http://www.telecom.com.ar Contacts: Alberto J. Ricciardi, Chief Financial Officer Elvira Lazzati, Finance Director Pedro Insussarry, Investor Relations Manager Phone: (5411) 4968-3626/3627 Fax: (5411) 4313-5842/3109 E-mail: inversores@intersrv.telecom.com.ar TRANSENER: Makes ARS8.7Mln Payment to Financiera Ludicor -------------------------------------------------------- Argentine electricity transporter Transener SA (TRAN.BA) informed the local stock exchange Friday that it has paid ARS8.7 million to a creditor that won a commercial court ruling against the company in May, relates Dow Jones Newswires. In May, the creditor, Financiera Ludicor SA, successfully persuaded the court to block two payments totaling about ARS11.5 million that Transener was due to collect from Cammesa, the national grid operator. The amount covered about one month's worth of billings by Transener to Cammesa for wholesale power delivery. The transporter used its own resources to cover its operating costs for that month. Dow Jones suggests that the ARS8.7 million that Transener had to pay out poses a dangerous precedent for the ailing utility, which has about US$520 million in debt but hasn't made any significant advances with its creditors on new repayment terms. Without progress on a restructuring deal, Transener leaves itself especially vulnerable to lawsuits or bankruptcy petitions that could result in further payouts. CONTACT: Paseo Colon 728 6th Floor (1063) Buenos Aires Republica Argentina Tel: (54-11) 4342-6925 Fax: (54-11) 4342-7147 Email: info-trans@transx.com.ar Web site: http://www.transener.com.ar ============= B E R M U D A ============= LORAL SPACE: Analyst Predicts Bright Prospect --------------------------------------------- Patrick Fuhrmann, an independent satellite analyst, said that the business prospects for a restructured Loral Space & Communications Ltd. [LRLSQ] appear "very good," relates Satellite News/Access Intelligence. Loral and certain of its subsidiaries last week filed a proposed plan of reorganization with the U.S. Bankruptcy Court for the Southern District of New York. The Plan is supported by the Official Committee of Unsecured Creditors appointed in Loral's chapter 11 case. The company expects to exit chapter 11 under current management before the end of the year. The Plan, which is subject to confirmation by the bankruptcy court, provides, among other things, that: - Loral's two businesses, Space Systems/Loral and Loral Skynet, will emerge intact as separate subsidiaries of reorganized Loral (New Loral). - Space Systems/Loral, the satellite design and manufacturing business, will emerge debt-free. The common stock of New Loral will be owned by Loral bondholders, Loral Orion bondholders and other unsecured creditors. In addition, bondholders and other creditors of Loral Orion will receive an aggregate of US$200 million in new senior secured notes to be issued by reorganized Loral Skynet, New Loral's satellite services subsidiary. New Loral will emerge as a public company and will seek listing on a major stock exchange. Existing common and preferred stock will be cancelled and no distribution will be made to current shareholders. To view Loral's reorganization plan: http://bankrupt.com/misc/loral.pdf CONTACT: Ms. Jeanette Clonan Mr. John McCarthy Loral Space & Communications 212/697-1105 =========== B R A Z I L =========== BANCO VOTORANTIM: S&P Rates Notes B+ ------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' foreign- currency long-term credit rating to Banco Votorantim S.A. (Nassau Branch)'s $100 million fixed-rate notes (under its Euro MTN program), to be issued in the beginning of September 2004 and maturing in September 2007. The repayment of these notes will be in full at maturity. The local-currency credit ratings on the bank are 'BB/Stable/B' and the foreign-currency credit ratings are 'B+/Positive/B'. "The ratings on Banco Votorantim S.A. reflect the potential risks associated with the bank's treasury business and its exposure to sovereign risk through its securities portfolio, a common issue for Brazilian banks, and the risks associated with the economic environment in Brazil, which may affect asset quality," said Standard & Poor's credit analyst Daniel Araujo. The ratings benefit from the implicit support of the Votorantim Group (foreign currency: B+/Positive/--; local currency: BBB- /Stable/--); the group's image and strong brand name recognition; and the bank's good profitability, experienced management team, and efficient decision-making processes. The Votorantim Group is one of the largest and most influential industrial conglomerates in Brazil. Its brand-name recognition has helped the bank to leverage on its business, and the images of both organizations are closely linked. The conglomerate supervises the bank's activities and operations, and its conservatism permeates the bank's activities. Banco Votorantim's management is made up of professionals with vast experience in the financial markets and the Group's companies. The positive outlook on Banco Votorantim's foreign currency issuer credit rating mirrors that of the foreign currency sovereign credit rating of Brazil. The stable outlook on the bank's local-currency issuer credit rating incorporates the economic risks of the Brazilian banking industry and the balance between its good business profile, good management, high profitability, and the potential risks related to the quality of its growing private loan portfolio, especially its consumer loans segment and its government securities. CEMIG: Deloitte Touche Tohmatsu Presents Audit Report ----------------------------------------------------- Deloitte Touche Tohmatsu released the following audit statement in its review of Companhia Energetica de Minas Gerais'(CEMIG) financial statements for the quarter and semester ended June 30, 2004: INDEPENDENT AUDITORS' REVIEW REPORT To the Shareholders and the Board of Directors of Companhia Energetica de Minas Gerais-CEMIG, Belo Horizonte-MG 1. We have performed a special review of the quarterly information, presented in Brazilian reais, of Companhia Energ‚tica de Minas Gerais-CEMIG and subsidiaries (Company and Consolidated) for the quarter and semester ended on June 30, 2004, prepared under the responsibility of the Company's management, in accordance with accounting practices adopted in Brazil, consisting of the balance sheets, statements of operations and management's discussion and analysis. 2. We conducted our review in accordance with specific standards established by the Brazilian Institute of Independent Auditors (IBRACON), together with the Federal Accounting Council, which consisted principally of: (a) inquiries and discussions with management responsible for the accounting, financial and operating areas of the Company and its subsidiaries as to the principal criteria adopted in the preparation of the quarterly information, and (b) review of the information and subsequent events that had or might have had significant effects on the Company's and its subsidiaries' financial positions and results of operations. 3. Based on our special review, we are not aware of any material modifications that should be made to the quarterly information referred to in paragraph 1 above for it to be in conformity with accounting practices adopted in Brazil and accounting standards issued by the Brazilian Securities Commission (CVM), specifically applicable to the preparation of mandatory quarterly financial information. 4. As mentioned in the quarterly information as of June 30, 2004, the Company and its subsidiaries have recorded assets, liabilities, revenues and expenses related to energy sales, purchases and other transactions occurred on the Wholesale Energy Market-MAE. Such amounts were recorded based on calculations prepared and information made available by MAE regarding transactions through June 30, 2004. Those amounts are subject to change, depending on the outcome of claims currently in progress in court, filed by electric energy companies, concerning the interpretation of the market rules in force at the time that those transactions occurred. 5. The balance sheets (Company and Consolidated) as of March 31, 2004, presented for comparative purposes, were reviewed by us as set forth in our special review report dated April 30, 2004, issued without qualification and including emphasis regarding the matter discussed in paragraph 4 above. The statements of income (Company and Consolidated) for the quarter and semester ended on June 30, 2003, presented for comparative purposes, were reviewed by us as set forth in our special review report dated on July 31, 2003 without qualification and including emphasis regarding the matter discussed in paragraph 4 above. DELOITTE TOUCHE TOHMATSU Auditores Independentes Mr. Gilberto Grandolpho GILBERTO GRANDOLPHO Engagement Partner CONTACT: Cemig-Companhia Energetica AV. Barbacenda 1200 Bello Horizonte MG 30161-970 Brazil Web Site: www.cemig.infoinvest.br SKY BRASIL: S&P Upgrades Issuer Credit Rating To B- --------------------------------------------------- Standard & Poor's Rating Services raised its issuer credit rating on Brazil-based pay-TV provider Sky Servicos Ltda. to 'B- ' from 'CCC+'. The outlook is positive. The rating action reflects the successful refinancing of the company's $200 million Senior Notes due on Aug. 5, 2004. To fund this payment, the company borrowed under a long-term credit facility with Citibank and JP Morgan. "The rating on Sky reflects the still-challenging market environment for pay-TV in Brazil, given income constraints, economic volatility and uncertain growth prospects, and the company's weak financial measures and dependence on shareholders' support," said Standard & Poor's credit analyst Milena Zaniboni. The ratings incorporate Standard & Poor's assumption that shareholders, mainly News Corp. Ltd., will continue to support Sky. Standard & Poor's believes that there are stronger incentives now for News Corp. to contribute to Sky as the subsidiary continues to increase its subscriber count and market share, and as it gradually approaches financial sustainability, thus reducing the risk to News Corp. of any capital allocated to the Brazilian subsidiary. Sky Brasil has been systematically adding subscribers to its base, which reached 805,800 in second-quarter 2004, a 6% increase compared to the same period in 2003. Sky is estimated to have a 60% share of the Brazilian DTH market, and 23% of the total pay-TV industry. Accordingly, operational results have been stronger and more consistent as the company showed its capacity to pass through cost increases, lowered consumer equipment subsidies, and successfully converted programming contract pricing from U.S. dollars to local pricing terms. Sky Brasil's noteworthy financial improvements still do not enable the company to absorb its current debt and financial expense burden. In the first half of 2004, shareholders contributed $14.7 million, mostly to cover interest payments on the Senior Notes in February. Nevertheless, the need for financial support from shareholders has decreased in the past two years as Sky demonstrates stronger financial results. The company's capacity to grow and eventually produce cash flow is dependent on shareholders' willingness to continue funding its subscriber acquisition costs (SAC). Despite Sky Brasil's significant efforts to reduce SAC during the past several quarters, attracting subscribers is particularly expensive for DTH providers due to the high costs of the set-top boxes. Since 2002, News Corp. has been the major contributing shareholder to Sky, and shareholders are expected to negotiate new terms for the shareholders' agreement to reflect the dilution of Globopar S.A.'s interest in Sky. Sky Brasil is the largest provider of Ku-band satellite services in Brazil, with more than 800,000 digital subscribers as of June 2004. Its footprint covers the entire country, reaching areas not passed by cable, MMDS, or other DTH operators. The company markets its service under the Sky brand, and is controlled by News Corp., Globopar S.A., and Liberty Media Corp. The company has many competitive advantages compared with other major pay-TV providers, such as a fully digital platform and capacity to offer fee-based interactive products and services, and exclusive DTH programming, which together should represent significant growth opportunities. The positive outlook reflects that the rating on Sky could be further improved if the company is able to maintain its trend of improving financial performance, and begins to present positive FFO and EBITDA-to-interest coverage stronger than 1x. It also takes into consideration that Standard & Poor's expects the company will continue to need financial support from shareholders to support its growth and SAC costs, but Standard & Poor's believes that there are stronger incentives to continue to support the company as Sky's operations become more sustainable. Conversely, the rating would stabilize at the current category if the expected improvement in financial measures does not materialize, and it could come under downward pressure if there is a change in perception of shareholders' support. VARIG: Gains Case Support From Second Justice --------------------------------------------- Justice Luiz Fux of Brazil's Appeals Court (STJ) voted Tuesday that the government acted illegally by imposing price freezes on Viacao Aerea Rio Grandense SA (Varig), the country's largest airline. According to Dow Jones Newswires, Justice Fux is the second STJ justice to decide on the case. In May, before voting was suspended, Justice Francisco Falcao voted to support the case brought by Varig against the government. Varig is suing the government for freezing prices between 1985 and 1993. The company had originally requested US$1.5 billion in damages but Justice Falcao ruled in May to adjust the calculation of potential liabilities to about BRL1.9 billion. Three judges are yet to hand down their decisions. The third judge, Justice Teori Albino Zavascki, has requested more time to examine the case, a court spokesman said, adding that the hearing would restart as soon as possible, although there is no time limit. If Varig wins this case, it would gain temporary respite from the burden of its BRL6 billion of debts, says Dow Jones. A ruling either way is likely to trigger a long-term solution for the struggling airline. 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 * S&P Affirms Ratings, Foreign Currency Outlook On Brazil --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' long-term foreign, 'BB' long-term local, and 'B' short-term local and foreign currency sovereign credit ratings on the Federative Republic of Brazil. Standard & Poor's also affirmed the positive outlook on the long-term foreign currency rating, assigned Dec. 11, 2003, which reflects declining external vulnerability underpinned by ongoing marked improvement in Brazil's trade balance amid continued fiscal and monetary discipline. The stable outlook on the long-term local currency rating was also affirmed. "Continued progress in reducing Brazil's fiscal and external vulnerabilities and policies to support moderate GDP growth of 3.5%-4.0% beyond the 2004-2005 cyclical recovery would support improved creditworthiness," said Standard & Poor's Ratings Services credit analyst Lisa M. Schineller. "Brazil's medium- term growth outlook remains somewhat vulnerable unless bolstered by increased private sector investment." Ms. Schineller explained that, given Brazil's large fiscal debt burden (projected net general government debt of 63% of GDP and interest/revenue of 20% in 2004), improved creditworthiness will require continued delivery of the targeted nonfinancial sector primary (noninterest) surplus of 4.25% of GDP over the next several years. In addition, continued advances in domestic debt management are critical to further insulate the fiscal accounts and debt burden from interest- and exchange-rate fluctuations. "Steps to encourage private sector domestic and foreign investment would bolster confidence that Brazil could grow 3%-4% annually beyond 2004-2005 (in contrast with Brazil's average annual GDP growth of 1.7% during 1999-2003)," Ms. Schineller noted. "Toward that end, evidence of an improving business climate-such as passage and/or implementation of reform pending in Congress (bankruptcy, regulatory, and judicial) and recent tax measures-could trigger an upgrade," she concluded." * BRAZIL: Gets $505M World Bank Loan for Environmental Projects --------------------------------------------------------------- The World Bank Board of Executive Directors approved Tuesday the First Programmatic Reform Loan for Environmental Sustainability, in the amount of US$505 million, to support Brazil's goal of balancing economic growth with social development and the maintenance and improvement of environmental quality. In line with the Bank's Country Assistance Strategy (CAS) for Brazil, the loan seeks to contribute to a more sustainable Brazil, helping to reduce poverty and achieve a higher quality of life in rural and urban areas and building on the country's comparative advantage in natural resources while helping conserve them. "One of the most important features of the Government's environmental strategy, recognized and supported by this loan, is its strong focus on involving all relevant players around key issues in the sector, something unprecedented in Brazil," said Marina Silva, Brazil's Environment Minister. In few countries is the national environment as crucial to development and people's welfare as in Brazil. Brazil has one third of the world's tropical rain forests, the largest reservoir of fresh water (20 percent), one of the longest coastal lines with over 8,500 km, and the savanna with the highest biodiversity in the world. A significant part of Brazil's economy relies on the use of natural resources for production inputs or to store waste. Despite the importance of its natural resource base, Brazil faces major challenges to reverse a trend of unsustainable use of its natural resources. Over the past two decades Brazil has done a great deal to improve environmental management at both the national and sub- national levels. The loan recognizes the current administration's efforts and achievements to better integrate environmental objectives with social and economic ones, including policy and institutional changes leading to more effective environmental management and the improvement of environmental conditions in the medium and long term. The loan will not generate additional spending on the part of the Government and will support the country's external currency needs. Overall, the program aims to help increase the efficiency and effectiveness of Brazil's environmental management system (SINAMA), and mainstream environmental and sustainable use of natural resources in the government's policy decisions, especially in economic planning. "The costs to society from environmental destruction are high, rough estimates placing them at as much as 4% of the country's GDP," said Vinod Thomas, World Bank Director for Brazil. "The gains to society from environmental protection accrue especially to the poor, because their incomes are primarily derived from environmental assets." Improving environmental management, monitoring and regulation: The loan supports fundamental first steps by the Government to modernize the environmental management system in light of the broader growth agenda, improvements in the business environment, and better quality of life for Brazilians. The set of policy and institutional reforms covered by the loan are based on the Government's Environmental Reform Agenda and Multi-Year Plan (PPA) and include: (i) increasing the transparency and social control of the environmental management system (SISNAMA); (ii) improving the effectiveness of SISNAMA through better coordination and clearer definition of responsibilities among the three levels of government; (iii) promoting sustainable development in the Amazon and the protection of other key ecosystems; and (iv) improving water resources management through increased decentralization, improved local management and increased financial autonomy. The loan has also promoted a process for bridging the gap between the views of various sectors in government, the private sector, and civil society in a way that will facilitate the modernization of SISNAMA and open the way for the mainstreaming of environmental issues in the Government. Mainstreaming environmental issues in governmental policy: A second focus of the loan is the "mainstreaming" of environmental concerns in and with other sectors. Poor integration of environmental policies in sector and macroeconomic policies often causes environmental aspects to be considered too late in project planning and sector policy design, leading to high social and economic costs for the country. Highlighting the upstream inclusion of environmental sustainability concerns in sector policies and programs, six important sector ministries (Finance, Mines and Energy, Agrarian Development, National Integration, Cities and Tourism), in addition to the Environment, signed the loan's Letter of Development Policy. The initial priority themes for mainstreaming include support for environmentally sustainable development in the Amazon, urban planning, regional land use and development planning, fiscal and financial policies, licensing for energy and infrastructure, agrarian reform and eco-tourism. "There are many win-win opportunities for policies that are good for the poor, the environment, and growth,"said Luiz Gabriel Azevedo, World Bank Sector Leader for Environmentally and Socially Sustainable Development and Task Manager of the Program. "They will depend on the capacity of ministries and other economic sectors to incorporate environmental considerations in their sector and macro policies." The loan approved Tuesday is the first of a program of three loans over a four-year period, totaling up to US$ 1.2 billion. The loans complement existing programmatic approaches involving both investment and capacity building in key priority areas such as public sector environmental management at the national and sub-national levels. Two technical assistance projects will help develop Government capacity for the second and third phases of the program. This fixed-spread loan in US dollars has a repayment period of 17 years, including five years of grace. The World Bank's current investment portfolio in Brazil includes 50 projects, totaling more than US$4.5 billion in commitments. Since 1949, the Bank has made more than 300 loans and invested more than US$33 billion to promote poverty reduction, social and economic development in Brazil. CONTACTS: In Washington Ms. Angela Furtado (202) 473 1909 Afurtado@worldbank.org In Brasilia: Mr. Mauro Azeredo (55-61) 329-1059 mazeredo@worldbank.org Web Site: http://www.worldbank.org =============== C O L O M B I A =============== AVIANCA: Restructuring Plan Obtains US Judge's Approval ------------------------------------------------------- Colombian flagship airline Avianca announced Tuesday that a US bankruptcy judge has approved a restructuring plan based on the sale to Brazil's Sinergy, says Dow Jones Newswires. Sinergy, which wants Avianca to complement its Brazilian regional carrier, Ocean Air, has offered to make a US$64-million cash injection into Avianca and assume its debt of about US$300 million. Judge Allan L. Gropper in Manhattan has also extended by 60 days, through Oct. 31, the airline's exclusive period for soliciting creditor support for the restructuring plan. The company, currently owned by the National Federation of Coffee Growers and local conglomerate Valores Bavaria (VALBAVARI.BO), said it will provide a complete disclosure statement to creditors with voting rights on Sept. 3. An Avianca press officer said 280 creditors will now have to endorse the restructuring plan. Avianca filed for Chapter 11 bankruptcy protection in March last year, pressured by rising fuel and insurance costs and slow economies in Colombia and Venezuela. Because it has a subsidiary in the United States, the airline was able to take advantage of US bankruptcy law, which allowed it to keep operating while negotiating with creditors. Founded in 1919, Avianca says it is the world's second-oldest airline after Dutch carrier KLM. It is Colombia's biggest commercial carrier, with 290 flights a day and service to 17 destinations abroad. After years of losses, Avianca reported a net profit of US$6.9 million in the first half of 2004, compared to a loss of US$23.5 million in the first half of last year. * Colombia: Not Seeking to Extend IMF Loan Agreement ---------------------------------------------------- Mr. Robert Rennhack, who leads an International Monetary Fund mission to Colombia, told reporters Tuesday that the IMF has not yet received any information from Colombia regarding the extension of a loan. Dow Jones reveals that Colombia currently has a two-year stand- by loan for US$2.1 billion, which expires in December. Finance Minister Alberto Carrasquilla said that he would like to extend the agreement with the IMF, but that no decision has been made yet. "The agreement is convenient for the country, but we don't know yet if we are going to extend the program or to begin a new loan with the IMF," said Carrasquilla. Colombia's foreign debt is heading lower. The central bank revealed late Monday that foreign debt held by the government and the private sector stood at US$37.86 billion in May, down 1.9% from US$38.57 billion in the year-earlier month. Analysts said the lower debt load is largely explained by the strength of the peso, the country's economic rebound and a growing policy of substituting foreign debts with liabilities denominated in the local currency. =================================== D O M I N I C A N R E P U B L I C =================================== AES-ANDRES: Hounds Government for $23Mln Debt --------------------------------------------- AES-Andres stated that its operations in the Dominican Republic could be seriously compromised unless the government pays back debts totaling US$23 million. Local daily El Caribe says that AES needs the government's money to buy the liquid natural gas used in powering its plants. A low fuel supply, according to AES, will force the plants to shutdown and it could only be reopened in February next year. AES's generators recently went back online after the company secured US$15 million shipload of LNG for its facilities. The 362MW of power that the plant produces has eased the country's energy situation. However, this is seen as a temporary solution because the purchase was funded by internal sources. ============= J A M A I C A ============= C&WJ: President Moves to London to Take on Senior Position ---------------------------------------------------------- Gary Barrow is quitting his job as president of Cable & Wireless Jamaica to take up a position with the parent company in the UK, The Jamaica Observer reports. In a statement, Cable & Wireless said Barrow will have a senior director's job "with responsibility for regulations, communications and strategy for many of the C&W national telecoms operations across the world." He is to take up his new job on October 1. A successor will be named within two weeks. Barrow has headed Cable & Wireless' operations in Jamaica for the past three-and-a-half years. His new appointment fuelled speculations that the parent company was not fully satisfied with the way in which C&W Jamaica was faring in the local market. But Barrow said the parent company gave him the London job to utilize his skills closer at the top of the organization. ======= P E R U ======= ROYAL SHELL: Bay Named Exploration Director for EP Americas ----------------------------------------------------------- Shell Exploration & Production (Shell) has named Annell Bay regional exploration director for EP Americas. In this position, Bay will lead exploration activities in the Americas including current areas of activity in the Gulf of Mexico, onshore North America and offshore Brazil, as well as new venture opportunities throughout the Americas. Bay joins Shell from Kerr-McGee, where she was vice president of worldwide exploration. Previous positions held by Bay at Kerr- McGee include: vice president North America exploration, exploration manager US onshore and director of international exploration. Prior to joining Kerr-McGee, Bay worked as an exploration geologist with Shell, Chevron, Sohio/BP and Oryx Energy. Her experience in exploration includes ventures in onshore United States, Gulf of Mexico, Ecuador, Russia, Australia, Southeast Asia and Kazakhstan. She holds a master's degree in geology from the University of Texas at Austin and a bachelor's degree in geology from Trinity University in San Antonio. She is currently a member of the Advisory Council for the University of Texas at Austin Geology Foundation, the Corporate Advisory Committee for the American Association of Petroleum Geologists and the Houston Geological Society. Shell companies have been exploring for and producing hydrocarbons for more than a century. Our Exploration and Production business searches for and recovers oil and gas around the world and is active in 34 countries. CONTACT: Media Relations Shell Centre London SE1 7NA UK Ms. Lisa Givert Tel +44 (0)20 7934 2914 Ms. Stuart Bruseth Tel +44 (0)20 7934 6238 ================================= T R I N I D A D & T O B A G O ================================= BWIA: Cuts Losses to $6.5M in 1H04 ---------------------------------- Trinidad and Tobago's BWIA posted a sharp cut in losses for the first half of 2004 as the troubled airline continues to stabilize its operations. The Trinidad Guardian reports that despite a fuel hike, BWIA managed to bring down its loss to US$6.5 million for the six- month period ended June 30, 2004 from US$14.6 million a year earlier. BWIA has been in dire straits since the September 11 terror attacks that had caused a significant drop in passengers. Last year, the Company retrenched a fourth of its 2,400 workers in a move to reduce operating costs. However, the airline continues to struggle with its massive debt, estimated at US$100 million. The Trinidad Government recently raised its stake in BWIA to 75 percent after a failed debt-for-equity swap that it had underwritten. The Government plans to discharge its BWIA holdings once the carrier once again becomes attractive to investors. CONTACT: BRITISH WEST INDIES AIRWAYS Phone: + 868 627 2942 E-mail: mailto:mail@bwee.com Home Page: http://www.bwee.com/ Contacts: Conrad Aleong, President and CEO (Trinidad) Beatrix Carrington, VP Marketing and Sales (Barbados) Paul Schutz, CFO (Trinidad) ================= V E N E Z U E L A ================= BANCO DE DESARROLLO: Group Holding Venezuelan Government Liable --------------------------------------------------------------- Venezuela could be liable for the US$100 million worth of notes issued in 1981 by the defunct government-sponsored bank Banco de Desarrollo Agropecuario S.A. The Associated Press reveals that Syke Ventures, an investment group holding US$100 million of the US$1 billion total bond issue, has filed the charges at a U.S. District Court. Columbus attorney Luis Alcalde explains that the suit stems from the Venezuelan government's moves to delay the maturity of the 10-year notes. In addition, the country's finance minister has also refused to repay the debt despite the attorney general's confirmation of the validity of the instruments. Remaining note holders from Europe and South America could also join the lawsuit, the report adds. PDVSA: Completes Construction of Jose Terminal Dock --------------------------------------------------- Mr. Felix Rodriguez, vice president of Petroleos de Venezuela SA, told Venpres state news agency Tuesday that the state oil company has completed construction of a dock at the Jose terminal, Dow Jones Newswires relates. The new platform, according to Rodriguez, "will allow us to dock three tankers simultaneously and increase the capacity for shipping crude and derivatives to the United States and Europe." The dock was constructed by PDVSA and the Ameriven heavy crude joint venture. Ameriven is a joint venture between ConocoPhillips (COC), ChevronTexaco Corp. (CVX) and PDVSA. Venezuela loaded 46 ships at the terminal in April. Officials have said the new dock, which cost an estimated $300 million to build, will increase monthly loading to 55 ships a month. *********** 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 * * *