/raid1/www/Hosts/bankrupt/TCRLA_Public/041126.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, November 26, 2004, Vol. 5, Issue 235
Headlines
A R G E N T I N A
AGROPECUARIA PIEDRA: Debt Payments Halted, Set To Reorganize
COEUR D'ALENE: Finalizes Public Stock Offering
EDITEC S.A.: Court Declares Company Bankrupt
GRUPO SIRI: Proceeds With Liquidation Following Court Order
IMPSAT FIBER: Morgan Stanley, Huff Acquire Securities
NAVILLUS S.A. Court Approves Creditor's Bankruptcy Plea
S.A.S.Y.O. S.A.: Liquidates Assets to Pay Debts
SEGURIDAD INTERMUNDO: Court Favors Bankruptcy Petition
* ARGENTINA: Delays Global Debt Exchange Offer Until Jan. 17
B E R M U D A
ABBOTT BERMUDA: Wind-Up Initiated; Liquidation Process Starts
DELTA NEWCO: Members Agree to Wind-Up Operations
DELTA NEWCO II: Final General Meeting Set for December 30
GE CAPITAL FUNDING: Names Robin Mayor as Liquidator
WARD FSC: Appoints Liquidator to Oversee Wind-Up
B R A Z I L
AHOLD: Loss Widens In Third Quarter 2004
CEMIG: To Purchase 100% Interest in Rosal Energia
COPEL: Details Bovespa Inquiry
NET SERVICOS: Globopar to Transfer Preferred Shares to RBS
C H I L E
AES GENER: Commences $400M Debt Swap Offer
C O L O M B I A
EMCALI: Forecasts 1500 Public Phones in 2005; Seeks Bids
D O M I N I C A N R E P U B L I C
* DOMINICAN REPUBLIC: Pursues New Stand-By Arrangement With IMF
M E X I C O
MINERA MEXICO: Moody's Ups Ratings to B1 from Ca
TV AZTECA: Shareholders Approve $130M Cash Distribution
P A N A M A
* Statement by an IMF Article IV Staff Mission to Panama
P E R U
TDP: Moody's Cuts Ratings As Settlement Rates Drop
T R I N I D A D & T O B A G O
BWIA: Customer Demand Prompts Hubs Expansion
V E N E Z U E L A
BANCO EXTERIOR: Fitch Upgrades Individual, National Ratings
BANCO MERCANTIL: Ratings Affirmed by Fitch
BANCO PROVINCIAL: Fitch Affirms Ratings
- - - - - - - - - -
=================
A R G E N T I N A
=================
AGROPECUARIA PIEDRA: Debt Payments Halted, Set To Reorganize
------------------------------------------------------------
Judge Ojea Quintana, working under Court No. 12 of Buenos Aires'
civil and commercial tribunal, is currently reviewing the merits
of a petition to reorganize filed by Agropecuaria Piedra Pintada
S.A.. Reorganization will allow the Company to avoid bankruptcy
by negotiating a settlement with its creditors. La Nacion
recalls that the agribusiness company filed the petition
following cessation of debt payments in August this year.
Dr. Medici Garrot, the city's Clerk No. 24, assists the court on
this case.
CONTACT: Agropecuaria Piedra Pintada S.A.
Maipu 879
Buenos Aires
COEUR D'ALENE: Finalizes Public Stock Offering
----------------------------------------------
Coeur d'Alene Mines Corporation (NYSE: CDE) announced Wednesday
the closing of its previously announced public offering of
25,000,000 shares of common stock, which Coeur sold to the
public at $4.50 per share. Coeur expects to receive net
proceeds, after payment of the underwriters' discount, of
approximately $106.9 million prior to any exercise of the over
allotment option.
CIBC World Markets and JP Morgan acted as joint book-running
managers for the common stock offering, with Bear Stearns & Co.,
Inc. and Harris Nesbitt acting as co-managers.
Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile and Bolivia.
CONTACT: Tony Ebersole
Director of Investor Relations
800-523-1535
EDITEC S.A.: Court Declares Company Bankrupt
--------------------------------------------
Judge Villanueva, serving for Court No. 23 of Buenos Aires'
civil and commercial tribunal, declared local company Editec
S.A. "Quiebra", relates La Nacion. The court approved the
bankruptcy petition filed by Mr. Julio Wainerman, whom the
Company has liabilities totaling US$11,231.55. The Company will
undergo the bankruptcy process with Mr. Hugo D'Ubaldo as
trustee. Creditors are required to present proofs of claims to
the trustee for verification before February 7, 2005.
Creditors who fail to have their claims authenticated by the
scheduled date will be disqualified from payments that will be
made after the Company's assets are liquidated. Dr. Ovadia, the
city's Clerk No. 45, assists the court on the case.
CONTACT: Editec S.A.
Rodriguez Pena 770
Buenos Aires
Mr. Hugo D'Ubaldo, Trustee
Adolfo Alsina 1535
Buenos Aires
GRUPO SIRI: Proceeds With Liquidation Following Court Order
-----------------------------------------------------------
Grupo Siri S.A. entered bankruptcy after Court No. 18 of Buenos
Aires' civil and commercial tribunal approved a motion filed by
Ms. Norma Boledi, reports Clarin. The Company's failure to pay
US$28,086 in debt prompted the creditor to file the petition.
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.
The city's clerk no. 36 assists the court with the proceedings.
CONTACT: Grupo Siri S.A.
Avda. Cordoba 1255
Buenos Aires
IMPSAT FIBER: Morgan Stanley, Huff Acquire Securities
-----------------------------------------------------
IMPSAT Fiber Networks, Inc. (the "Corporation") has been
informed by Morgan Stanley & Co. Incorporated ("Morgan Stanley")
and WRH Partners Global Securities, L.P. ("Huff"), both
affiliates of the Corporation, that, on November 18, 2004,
pursuant to a bidding procedure and directly or through one of
more of their respective affiliates, they acquired from Nortel
Networks Limited ("Nortel") all of the following outstanding
loans and securities:
- $35,040,000 principal amount of term loans borrowed by the
Corporation's Argentine subsidiary, IMPSAT S.A. ("IMPSAT
Argentina), under the Amended and Restated Financing Agreement
dated as of March 25, 2003 by and among IMPSAT Argentina, as
Borrower, Nortel, as Administrative Agent, Deutsche Bank Trust
Company Americas, as Collateral Agent, and the lenders party
thereto from time to time;
- $3,713,000 principal amount of term loans borrowed by IMPSAT
Argentina under the Financing Agreement dated as of March 25,
2003 by and between IMPSAT Argentina, as Borrower, and Nortel,
as Lender;
- $91,200,000 principal amount of term loans borrowed by the
Corporation's Brazilian subsidiary, IMPSAT Comunicacoes, Ltda.
("IMPSAT Brazil"), under the Amended and Restated Financing
Agreement dated as of March 25, 2003 by and between IMPSAT
Brazil, as Borrower, Nortel, as Administrative Agent and
Collateral Agent, and the lenders party thereto from time to
time; and
- $17,627,000 original principal amount of Series B 6% Senior
Guaranteed Convertible Notes due 2011 issued by the Corporation
under the Senior Guaranteed Notes Indenture dated as of March
25, 2003 among the Corporation, as Issuer, IMPSAT Argentina, as
Guarantor, and The Bank of New York, as Trustee, Registrar,
Paying Agent and Conversion Agent.
The Corporation expects that Morgan Stanley and Huff have
amended (or in due course will amend) their respective Schedules
13D on file with the Securities and Exchange Commission with
additional information regarding the terms of these transactions
with Nortel.
CONTACT: IMPSAT Fiber Networks, Inc.
Elivra Rawson de Dellepiane 150
Piso 8
Buenos Aires, C1107BCA
Argentina
Phone: 54-11-5170-0000
Website: http://www.impsat.com
NAVILLUS S.A. Court Approves Creditor's Bankruptcy Plea
-------------------------------------------------------
Court No. 8 of Buenos Aires' civil and commercial tribunal
declared Navillus S.A. bankrupt, says La Nacion. The ruling
comes in approval of the bankruptcy petition filed by the
Company's creditor, Ms. Graciela Pallone, for nonpayment of
US$10,791.03 in debt.
The city's Clerk No. 16 assists the court on the case that will
conclude with the liquidation of the Company's assets.
CONTACT: Navillus S.A.
Juramento 3653
Buenos Aires
S.A.S.Y.O. S.A.: Liquidates Assets to Pay Debts
-----------------------------------------------
Sociedad Argentina de Sistemas y Organizacion (S.A.S.Y.O. S.A.)
initiates the liquidation process following the bankruptcy
pronouncement issued by Court No. 2 of Buenos Aires' civil and
commercial tribunal, Infobae reports.
The ruling places the company under the supervision of court-
appointed trustee Fernando Ezequiel Aquilino. Mr. Aquilino will
verify creditors' proofs of claims until December 27. The
validated claims will be presented in court as individual
reports on March 10, 2005.
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 April 25, 2005.
The bankruptcy process will end with the disposal company assets
in favor of its creditors.
CONTACT: Mr. Fernando Ezequiel Aquilino, Trustee
Lavalle 1474
Buenos Aires
SEGURIDAD INTERMUNDO: Court Favors Bankruptcy Petition
------------------------------------------------------
Mr. Jose Escalante successfully sought a bankruptcy ruling for
Seguridad Intermundo S.A. after Judge Fernandez of Buenos Aires
civil and commercial Court No. 19 declared the Company
"Quiebra," reports La Nacion. Subsequently, the security agency
will start the bankruptcy process with Ms. Susana Ventura as
trustee.
Creditors of the Company must submit proofs of their claim to
the trustee before February 4, 2005 for authentication. Failure
to do so will mean a disqualification from the payments that
will be made after the Company's assets are liquidated.
The creditor sought for the Company's bankruptcy after the
latter failed to pay debts amounting to US$11,039.
Dr. Johnson, the city's Clerk No. 38, assists the court on the
case that will culminate in the liquidation of all of its
assets.
CONTACT: Seguridad Intermundo S.A.
Avenida San Juan 1981
Buenos Aires
Ms. Susana Ventura, Trustee
Argerich 3369
Buenos Aires
* ARGENTINA: Delays Global Debt Exchange Offer Until Jan. 17
------------------------------------------------------------
Argentina will put off until Jan. 17 a global debt exchange to
restructure US$103 billion in defaulted debt due to last-minute
logistical and regulatory setbacks.
"The government announces that January 17 is the date for the
global swap, unifying the national and international processes,"
Economy Ministry spokesman Armando Torres confirmed to reporters
late Wednesday.
Creditors will have until Feb. 25 to trade in their old debt for
up to US$41.8 billion in new bonds, the government said in a
statement.
The government had said last week it would proceed with the Nov.
29 launch of the debt exchange when it first learned of problems
with its timing and cost-overrun problems with its designated
exchange agent, the Bank of New York (BNY), and learned of
delays by Italian regulators in approving the offering.
However, with the BNY contract effectively canceled and the
government having to search for a replacement, it became clear
that the only place where the offering would launch would be in
Argentina, where 38% of the US$81.8 billion face in value of
defaulted bonds are held.
The remaining US$50 billion of face value in defaulted bonds,
held elsewhere, would have been effectively excluded from this
local swap, which analysts said would likely have prejudiced
some bond holders. This would have been of special concern to
450,000 Italian retail investors who would have had their access
to a preferential bond access plan compromised.
=============
B E R M U D A
=============
ABBOTT BERMUDA: Wind-Up Initiated; Liquidation Process Starts
-------------------------------------------------------------
IN THE MATTER OF THE COMPANIES ACT 1981
and
IN THE MATTER OF Abbott Bermuda Overseas Businesses Limited
The Members of Abbott Bermuda Overseas Businesses Limited,
acting by written consent without a meeting on November 11, 2004
passed the following resolutions:
1) THAT the Company be wound up voluntarily, pursuant to the
provisions of the Companies Act 1981; and
2) THAT Robin J. Mayor be and is hereby appointed Liquidator for
the purposes of such winding-up, such appointment to be
effective forthwith.
The Liquidator informs that:
- Creditors of Abbott Bermuda Overseas Businesses Limited, which
is being voluntarily wound up, are required, on or before
December 8, 2004 to send their full Christian and Surnames,
their addresses and descriptions, full particulars of their
debts or claims, and the names and addresses of their lawyers
(if any) to Robin J. Mayor at Messrs. Conyers Dill & Pearman,
Clarendon House, Church Street, Hamilton, HM DX, Bermuda, the
Liquidator of the said Company, and if so required by notice in
writing from the said Liquidator, and personally or by their
lawyers, to come in and prove their debts or claims at such time
and place as shall be specified in such notice, or in default
thereof they will be excluded from the benefit of any
distribution made before such debts are proved.
- A final general meeting of the Members of Abbott Bermuda
Overseas Businesses Limited will be held at the offices of
Messrs. Conyers Dill & Pearman, Clarendon House, Church Street,
Hamilton, Bermuda on December 30, 2004 at 9:30 a.m., or as soon
as possible thereafter, for the purposes of:
1) receiving an account laid before them showing the manner in
which the winding-up of the Company has been conducted and its
property disposed of and of hearing any explanation that may be
given by the Liquidator; and
2) by resolution determining the manner in which the books,
accounts and documents of the Company and of the Liquidator
shall be disposed of; and
3) by resolution dissolving the Company.
CONTACT: Mr. Robin J. Mayor, Liquidator
Clarendon House
Church Street
Hamilton, Bermuda
DELTA NEWCO: Members Agree to Wind-Up Operations
------------------------------------------------
IN THE MATTER OF THE COMPANIES ACT 1981
and
IN THE MATTER OF Delta Newco Ltd.
The Members of Delta Newco Ltd., acting by written consent
without a meeting on November 11, 2004 passed the following
resolutions:
1) THAT the Company be wound up voluntarily, pursuant to the
provisions of the Companies Act 1981; and
2) THAT Robin J. Mayor be and is hereby appointed Liquidator for
the purposes of such winding-up, such appointment to be
effective forthwith.
The Liquidator informs that:
- Creditors of Delta Newco Ltd., which is being voluntarily
wound up, are required, on or before December 8, 2004 to send
their full Christian and Surnames, their addresses and
descriptions, full particulars of their debts or claims, and the
names and addresses of their lawyers (if any) to Robin J Mayor
at Messrs. Conyers Dill & Pearman, Clarendon House, Church
Street, Hamilton, HM DX, Bermuda, the Liquidator of the said
Company, and if so required by notice in writing from the said
Liquidator, and personally or by their lawyers, to come in and
prove their debts or claims at such time and place as shall be
specified in such notice, or in default thereof they will be
excluded from the benefit of any distribution made before such
debts are proved.
- A final general meeting of the Members of Delta Newco Ltd.
will be held at the offices of Messrs. Conyers Dill & Pearman,
Clarendon House, Church Street, Hamilton, Bermuda on December
30, 2004 at 9:30 a.m. or as soon as possible thereafter, for the
purposes of:
1) receiving an account laid before them showing the manner in
which the winding-up of the Company has been conducted and its
property disposed of and of hearing any explanation that may be
given by the Liquidator; and
2) by resolution determining the manner in which the books,
accounts and documents of the Company and of the Liquidator
shall be disposed of; and
3) by resolution dissolving the Company.
CONTACT: Mr. Robin J. Mayor, Liquidator
Clarendon House
Church Street
Hamilton, Bermuda
DELTA NEWCO II: Final General Meeting Set for December 30
---------------------------------------------------------
IN THE MATTER OF THE COMPANIES ACT 1981
and
IN THE MATTER OF Delta Newco II, Ltd.
The Members of Delta Newco II, Ltd., acting by written consent
without a meeting on November 11, 2004 passed the following
resolutions:
1) THAT the Company be wound up voluntarily, pursuant to the
provisions of the Companies Act 1981; and
2) THAT Robin J. Mayor be and is hereby appointed Liquidator for
the purposes of such winding-up, such appointment to be
effective forthwith.
The Liquidator informs that:
- Creditors of Delta Newco II, Ltd., which is being voluntarily
wound up, are required, on or before December 8, 2004 to send
their full Christian and Surnames, their addresses and
descriptions, full particulars of their debts or claims, and the
names and addresses of their lawyers (if any) to Robin J. Mayor
at Messrs. Conyers Dill & Pearman, Clarendon House, Church
Street, Hamilton, HM DX, Bermuda, the Liquidator of the said
Company, and if so required by notice in writing from the said
Liquidator, and personally or by their lawyers, to come in and
prove their debts or claims at such time and place as shall be
specified in such notice, or in default thereof they will be
excluded from the benefit of any distribution made before such
debts are proved.
- A final general meeting of the Members of Delta Newco II, Ltd.
will be held at the offices of Messrs. Conyers Dill & Pearman,
Clarendon House, Church Street, Hamilton, Bermuda on December
30, 2004 at 9:30 a.m., or as soon as possible thereafter, for
the purposes of:
1) receiving an account laid before them showing the manner in
which the winding-up of the Company has been conducted and its
property disposed of and of hearing any explanation that may be
given by the Liquidator; and
2) by resolution determining the manner in which the books,
accounts and documents of the Company and of the Liquidator
shall be disposed of; and
3) by resolution dissolving the Company.
CONTACT: Mr. Robin J. Mayor. Liquidator
Clarendon House
Church Street
Hamilton, Bermuda
GE CAPITAL FUNDING: Names Robin Mayor as Liquidator
---------------------------------------------------
IN THE MATTER OF THE COMPANIES ACT 1981
and
IN THE MATTER OF GE Capital Funding Bermuda
The Members of GE Capital Funding Bermuda, acting by written
consent without a meeting on November 11, 2004 passed the
following resolutions:
1) THAT the Company be wound up voluntarily, pursuant to the
provisions of the Companies Act 1981; and
2) THAT Robin J. Mayor be and is hereby appointed Liquidator for
the purposes of such winding-up, such appointment to be
effective forthwith.
The Liquidator informs that:
- Creditors of GE Capital Funding Bermuda, which is being
voluntarily wound up, are required, on or before December 8,
2004 to send their full Christian and Surnames, their addresses
and descriptions, full particulars of their debts or claims, and
the names and addresses of their lawyers (if any) to Robin J.
Mayor at Messrs. Conyers Dill & Pearman, Clarendon House, Church
Street, Hamilton, HM DX, Bermuda, the Liquidator of the said
Company, and if so required by notice in writing from the said
Liquidator, and personally or by their lawyers, to come in and
prove their debts or claims at such time and place as shall be
specified in such notice, or in default thereof they will be
excluded from the benefit of any distribution made before such
debts are proved.
- A final general meeting of the Members of GE Capital Funding
Bermuda will be held at the offices of Messrs. Conyers Dill &
Pearman, Clarendon House, Church Street, Hamilton, Bermuda on
December 30, 2004 at 9:30 a.m., or as soon as possible
thereafter, for the purposes of:
1) receiving an account laid before them showing the manner in
which the winding-up of the Company has been conducted and its
property disposed of and of hearing any explanation that may be
given by the Liquidator; and
2) by resolution determining the manner in which the books,
accounts and documents of the Company and of the Liquidator
shall be disposed of; and
3) by resolution dissolving the Company.
CONTACT: Mr. Robin J. Mayor, Liquidator
Clarendon House
Church Street
Hamilton, Bermuda
WARD FSC: Appoints Liquidator to Oversee Wind-Up
------------------------------------------------
IN THE MATTER OF THE COMPANIES ACT 1981
and
IN THE MATTER OF Ward FSC, Ltd.
The Members of Ward FSC, Ltd., acting by written consent without
a meeting on November 11, 2004 passed the following resolutions:
1) THAT the Company be wound up voluntarily, pursuant to the
provisions of the Companies Act 1981; and
2) THAT Robin J. Mayor be and is hereby appointed Liquidator for
the purposes of such winding-up, such appointment to be
effective forthwith.
The Liquidator discloses that:
- Creditors of Ward FSC, Ltd., which is being voluntarily wound
up, are required, on or before December 8, 2004 to send their
full Christian and Surnames, their addresses and descriptions,
full particulars of their debts or claims, and the names and
addresses of their lawyers (if any) to Robin J Mayor at Messrs.
Conyers Dill & Pearman, Clarendon House, Church Street,
Hamilton, HM DX, Bermuda, the Liquidator of the said Company,
and if so required by notice in writing from the said
Liquidator, and personally or by their lawyers, to come in and
prove their debts or claims at such time and place as shall be
specified in such notice, or in default thereof they will be
excluded from the benefit of any distribution made before such
debts are proved.
- A final general meeting of the Members of Ward FSC, Ltd. will
be held at the offices of Messrs. Conyers Dill & Pearman,
Clarendon House, Church Street, Hamilton, Bermuda on December
30, 2004 at 9:30 a.m., or as soon as possible thereafter, for
the purposes of:
1) receiving an account laid before them showing the manner in
which the winding-up of the Company has been conducted and its
property disposed of and of hearing any explanation that may be
given by the Liquidator; and
2) by resolution determining the manner in which the books,
accounts and documents of the Company and of the Liquidator
shall be disposed of; and
3) by resolution dissolving the Company.
CONTACT: Mr. Robin J. Mayor, Liquidator
Clarendon House
Church Street
Hamilton, Bermuda
===========
B R A Z I L
===========
AHOLD: Loss Widens In Third Quarter 2004
----------------------------------------
Highlights of Q3 2004
-- Net loss EUR 166 million (Q3 2003: net loss EUR 100 million)
-- Net loss impacted primarily by an exceptional loss related
to the ICA AB share transactions of EUR 87 million and long-
lived asset impairments of EUR 130 million (Q3 2003: EUR 52
million)
-- Operating loss EUR 37 million (Q3 2003: operating income EUR
34 million)
-- Net sales EUR 12.0 billion, a decrease of 8.3% compared to
Q3 2003. Net sales growth was 0.8% excluding currency impact
and impact of divestments
-- Net cash flow from operating activities EUR 396 million (Q3
2003: EUR 195 million)
Ahold published Wednesday its third quarter 2004 results. "This
quarter again shows that 2004 is very much a year of
transition," commented Anders Moberg, Ahold President and CEO.
"Since the start of the third quarter, we've concluded several
open issues and continued to focus our business. In brief, we've
recently completed the ICA AB share transactions, reached final
settlement with the SEC and the Dutch Public Prosecutor,
divested our Spanish operations, transferred our controlling
interest in Disco to Cencosud and started divesting our
remaining 13 large Polish hypermarkets."
"Albert Heijn, Giant-Carlisle and U.S. Foodservice showed an
improved underlying performance in the third quarter," Anders
Moberg continued. "Our results at Stop & Shop and Giant-Landover
continue to reflect competitive pressure and integration issues.
However, we are pleased to say that the integration of Stop &
Shop, Giant-Landover and U.S. retail corporate functions into
one business arena has been substantially completed."
"Overall, we've made good progress on our Road to Recovery in
the third quarter," Anders Moberg concluded.
Summary Q3 2004
Lower net sales, mainly due to weaker U.S. dollar
In the third quarter of 2004, net sales amounted to EUR 12.0
billion, a decrease of 8.3% compared to the same period in 2003.
Net sales were significantly impacted by lower currency exchange
rates, in particular that of the U.S. dollar. Net sales
excluding currency impact decreased by 2.8%. Net sales growth
excluding currency impact and the impact of divestments was 0.8%
in the third quarter.
Operating loss impacted by exceptional loss related to the
purchase of additional shares in ICA AB, impairment charges and
an addition to the loss reserve for self-insurance
We recorded an operating loss of EUR 37 million in the third
quarter of 2004 (Q3 2003: operating income EUR 34 million). At
U.S. retail, operating income was lower compared to the third
quarter of 2003, due to higher self-insurance costs, higher
impairments of tangible and intangible fixed assets, intensive
competition and the integration activities. Our European retail
operations recorded a lower operating income, due to a write-off
of capitalized commercial expenses at Schuitema and impairments
of tangible and intangible fixed assets. U.S. Foodservice made
important strides on its recovery initiatives. This resulted in
a significant decline in the operating loss due to higher net
sales in U.S. dollars and higher margins compared to the third
quarter of 2003.
Our third-quarter 2004 results were negatively impacted by the
following items:
-- impairments of tangible and intangible fixed assets of EUR
87 million (Q3 2003: EUR 52 million)
-- an exceptional loss of EUR 87 million related to the ICA AB
share transactions, as announced on October 25, 2004
-- an addition to the loss reserve for self-insurance for our
U.S. operations amounting to EUR 43 million
-- EUR 43 million impairment charge in respect of a loan to
Luis Paez, our Spanish joint venture.
Net loss increased, despite lower net interest expenses In the
third quarter of 2004, we recorded a net loss of EUR 166 million
(Q3 2003: net loss EUR 100 million). Net interest expenses were
EUR 53 million lower in the third quarter of 2004 than in the
comparable quarter of 2003. This was primarily due to the early
repayment of debt in the second quarter of 2004 and during 2003.
Net debt slightly increased
Net debt increased slightly from EUR 7.4 billion at the end of
the second quarter of 2004 to EUR 7.5 billion at the end of the
third quarter of 2004, primarily as a result of the repurchase
of certain properties in previously sold leveraged lease
transactions and accounting treatment of capitalized lease
commitments in the U.S. retail operations.
Net cash flow
The net cash flow from operating activities increased from EUR
195 million in the third quarter of 2003 to EUR 396 million in
the third quarter of this year. In the third quarter of 2004 a
cash flow before financing activities of EUR 55 million was
reported (Q3 2003: EUR 181 million), mainly due to a lower cash
flow from divestments.
Ahold reiterates its outlook for 2004: a year of transition
This is a year focused on continued efforts to strengthen the
organization, and restructure and integrate the businesses in
order to build a solid platform for future growth and
profitability. Management remains focused on achieving our
previously announced Road to Recovery performance objectives by
the end of 2005 and beyond.
We continue to strengthen and improve our internal controls and
corporate governance, as well as solidify compliance with the
regulatory environment in 2004. All of these changes are
important cornerstones of our Road to Recovery program. They
have required and will continue to require considerable
resources and effort from our operations and corporate office in
2004.
Our retail operations, particularly in the U.S., continue to
face increased competition and promotional activity. Operating
income before impairment and amortization of goodwill and
exceptional items in U.S. dollars at U.S. Foodservice is
expected to be positive for 2004 and exceed the level of 2002 no
later than 2006.
Our operating expenses will continue to be impacted by costs
related to legal proceedings and investigations. In addition,
they will be impacted by initiatives underway to begin reporting
under International Financial Reporting Standards and ongoing
work to comply with the U.S. Sarbanes-Oxley Act.
As previously announced, the accumulated foreign currency
adjustments ("CTA losses") related to certain divestments, of
which a substantial portion was booked in the first quarter of
2004, will have a significant impact on net income for 2004.
However, this will have no net impact on equity or cash.
Our divestment program is on track to be completed as planned by
the end of 2005. Based on the current state of the processes
underway, we currently expect to close the divestment of our
operations in Spain later this year and also expect to announce
an agreement on the sale of BI-LO/Bruno's later this year.
Ahold prepares its financial statements in accordance with
accounting principles generally accepted in the Netherlands
("Dutch GAAP"). Dutch GAAP differs in certain material respects
from accounting principles generally accepted in the United
States ("US GAAP"). All financial information in this press
release is based on Dutch GAAP unless otherwise indicated.
The figures reported in this press release are unaudited.
Ahold's reporting is based on 13 periods of 4 weeks. The fiscal
year of Ahold's operations in Central Europe, Spain and South
America corresponds to the calendar year and ends on December
31. The quarters that these entities use for interim financial
reporting end on March 31, June 30 and September 30.
The following four non-GAAP financial measures appear in this
press release:
1. operating income (loss) before impairment and
amortization of goodwill and exceptional items
2. net sales excluding currency impact and the impact of
divestments
3. income (loss) before impairment and amortization of goodwill
and exceptional items before income taxes, and
4. the effective income tax rate, excluding the impact of
non-tax-deductible impairment and amortization of goodwill
and exceptional items.
The results for the third quarter of 2003 and the first three
quarters of 2003 presented in this press release have been
adjusted to make them comparable to the results for the third
quarter of 2004 and the first three quarters of 2004.
Ahold Q3 2004 Results
Net sales
Net sales growth of 0.8% excluding currency impact and the
impact of divestments
In the third quarter of 2004, net sales amounted to EUR 12.0
billion, a decrease of 8.3% compared to the same period in 2003.
Net sales were significantly impacted by lower currency exchange
rates, in particular that of the U.S. dollar. Net sales
excluding currency impact decreased by 2.8%. Additionally net
sales were impacted by divestments. Net sales growth excluding
currency impact and the impact of divestments was 0.8% in the
third quarter.
Net sales at our U.S. retail operations were negatively impacted
by integration activities and the related allocation of
resources to the integration of Stop & Shop, Giant-Landover and
U.S. retail corporate functions into one business arena. They
were also impacted by strong competitive promotional activity,
and incremental increases in square footage by competitors
during 2004. The integration was substantially completed at the
end of the third quarter of 2004. Most of our European retail
operations achieved healthy net sales growth resulting in an
overall net sales growth of 1.3% compared to the third quarter
last year.
Net sales at U.S. Foodservice increased in U.S. dollars by 2.9%
compared to the same quarter last year. This was mainly due to
food price inflation that was partly offset by the negative
impact of hurricanes in the southeastern U.S. and national
account customer rationalization.
Net sales in the first three quarters of 2004 amounted to EUR
39.6 billion, a decline of 8.5% compared to the same period last
year (2003: EUR 43.3 billion) mainly as a result of a weaker
U.S. dollar. Net sales growth excluding currency impact and the
impact of divestments was 1.7% in the first three quarters of
2004.
Operating income
Operating income before impairment and amortization of goodwill
and exceptional items
Operating income before impairment and amortization of goodwill
and exceptional items in the third quarter of 2004 amounted to
EUR 79 million (Q3 2003: EUR 184 million). Our third quarter
results were negatively impacted by the following items:
-- We recorded EUR 87 million of impairment charges for
tangible and intangible fixed assets, as a result of
quarterly testing, where we in accordance with applicable
GAAP, use individual stores as cash generating units
-- We recorded a charge of EUR 43 million (USD 54 million) as
a result of increasing the loss reserves in connection with
our self-insurance program for our U.S. operations. We manage
our operational insurance risk in the U.S. by purchasing
coverage through a captive insurance arrangement for fleet,
general liability and workers compensation. During the third
quarter of 2004, we re-evaluated the adequacy of the current
loss reserves. Due to adverse claim development we decided to
increase loss reserves. Related costs were allocated to our
U.S. retail operations, U.S. Foodservice and Corporate
-- We recorded a EUR 43 million impairment charge in respect
of a loan to Luis Paez, our Spanish joint venture. Luis Paez
is a sherry production company jointly owned by the Medina
Group and Ahold, which is managed separately from our retail
business in Spain
Besides the impairments of tangible and intangible fixed assets
and self-insurance costs described above, operating income
before impairment and amortization of goodwill and exceptional
items at the Stop & Shop/Giant-Landover Arena was affected by
weaker net sales. This was due to integration activities and
increased promotional activities and incremental increases in
square footage by competitors during 2004. At the end of the
third quarter the integration of Stop & Shop, Giant-Landover and
U.S. retail corporate functions into one business arena was
substantially completed.
Excluding the impairment charges of tangible and intangible
fixed assets and self-insurance costs described above, operating
income before impairment and amortization of goodwill and
exceptional items at the Giant-Carlisle/Tops Arena improved
significantly compared to the third quarter of 2003.
Operating income before impairment and amortization of goodwill
and exceptional items at our European retail operations
decreased, mainly due to impairments of tangible and intangible
fixed assets and a write-off of capitalized commercial expenses
at Schuitema. At our Albert Heijn Arena and Central Europe Arena
operating income before impairment and amortization of goodwill
and exceptional items (but excluding the impact of impairments
of tangible and intangible fixed assets) were better than in the
third quarter of 2003.
U.S. Foodservice showed significantly improved operating income
before impairment and amortization of goodwill and exceptional
items, due to higher net sales in U.S. dollars, higher margins
as a result of the national account customer rationalization
program and higher purchasing income from suppliers as a result
of improved relationships with suppliers.
Operating income before impairment and amortization of goodwill
and exceptional items for the first three quarters of 2004
decreased by 29.1% compared to the same period last year, partly
impacted by the lower U.S. dollar exchange rate.
Operating income
An operating loss of EUR 37 million was recorded in the third
quarter of 2004 (Q3 2003: operating income EUR 34 million). This
reflects the exceptional loss of EUR 87 million which was
incurred in connection with the purchase of additional shares in
ICA AB, as announced on October 25, 2004.
In the first three quarters of 2004 we recorded an operating
loss of EUR 13 million (first three quarters of 2003 operating
income: EUR 658 million), primarily as a result of the
exceptional losses of EUR 443 million related to the divestments
in the first quarter of 2004 of Bompreco in Brazil and the
operations in Thailand and the EUR 87 million related to the
purchase of additional shares in ICA AB.
Goodwill amortization
Goodwill amortization in the third quarter of 2004 amounted to
EUR 36 million compared to EUR 40 million in the same period
last year.
Exceptional items
In the third quarter of 2004, we recorded an exceptional loss of
EUR 87 million related to the ICA AB share transactions, as
announced on October 25, 2004. Further, we recorded additional
proceeds of EUR 7 million in the third quarter of 2004, related
to the sale of Bompreco in March 2004. In the third quarter of
2003, we recorded exceptional losses of EUR 110 million related
to the divestment of a number of foreign subsidiaries,
principally the Chilean activities.
In addition to the EUR 87 million related to the purchase of
additional shares in ICA AB, the exceptional losses of EUR 443
million in the first three quarters related to the divestments
of Bompreco and our operations in Thailand. Of these exceptional
losses, EUR 322 million related to accumulated foreign currency
translation adjustments and EUR 213 million to the partial
reversal of goodwill, both of which had previously been charged
to shareholders' equity. These negative impacts were partly
offset by a EUR 92 million gain representing the difference
between the selling price and the book value of certain assets.
Net income
We reported a net loss of EUR 166 million in the third quarter
of 2004 compared to a net loss of EUR 100 million in the third
quarter of 2003.
Net financial expense
Net financial expense declined substantially Our net financial
expense for the third quarter of 2004 was EUR 168 million
compared to EUR 223 million in the same period last year. Net
interest expenses amounted to EUR 168 million in the third
quarter, representing a decrease of 24.0% compared to the same
period last year. The decline was primarily attributable to the
net impact of lower costs of borrowing and substantially lower
gross debt as a result of the repayment of convertible
subordinated notes in September 2003 and convertible
subordinated notes in the second quarter of 2004 and the
replacement of a credit facility in December 2003. Further, net
interest expenses were favorably impacted by a significantly
higher cash balance.
Net financial expense for the first three quarters of 2004
amounted to EUR 555 million compared to EUR 741 million in the
same period last year, mainly due to the factors described above
in addition to the favorable impact of the lower U.S. dollar to
Euro exchange rate on net interest expenses.
Tax information
Income taxes
Our effective tax rate, excluding the impact of non-tax-
deductible impairment and amortization of goodwill and
exceptional items, decreased to -2.2% in the third quarter of
2004 compared to 15.4% in the third quarter of 2003, mainly as a
result of the impact of a different geographic mix of income and
the consequence of divestments.
Share in income of joint ventures and equity investees
Share in income of joint ventures and equity investees in the
third quarter of 2004 decreased as a result of a large sale and
leaseback transaction of warehouses by ICA in the third quarter
of 2003. JMR in Portugal improved operational results as a
result of a cost cutting program.
US GAAP result
For the first three quarters of 2004 we recorded a net loss of
EUR 199 million, compared to a net loss of EUR 216 million for
the first three quarters of 2003.
US GAAP reconciliation
Impairments of assets held for sale
The US GAAP guidance for impairment analysis of assets held for
sale differs from Dutch GAAP, particularly the inclusion of
currency translation adjustments. This led to differences in
impairment. For the first three quarters of 2004 this led to a
reconciling item of EUR 218 million (2003: EUR 9 million).
Divestments
The divestments of Bompreco and the operations in Thailand
resulted in a reconciling item of EUR 449 million under US GAAP
for the first three quarters of 2004, which is caused by
differences between Dutch GAAP and US GAAP in the carrying
values of the divestments, goodwill reversals previously charged
to shareholders' equity under Dutch GAAP and the reversal of
cumulative translation adjustments.
ICA put option
On October 11, 2004, the Swedish arbitration tribunal decided on
the premium of the ICA put option. On October 25, 2004, we
agreed with Canica AS the purchase price for Canica's 20%
interest in ICA AB. We consider these adjusting events after the
balance sheet date and have used this information in determining
the liability for the ICA put option. Under Dutch GAAP the ICA
put option settlement was considered an onerous contract. The
reconciling item for the first three quarters of 2004 reflects
the difference between the increase in the liability under US
GAAP and the EUR 87 million loss under Dutch GAAP.
Balance sheet
Balance sheet total increased
As of the end of the third quarter of 2004 the balance sheet
total amounted to EUR 22.3 billion, an increase of EUR 189
million compared to the balance sheet total at the end of the
second quarter of 2004. This increase primarily resulted from
our repurchase of certain properties in previously sold
leveraged lease transactions and accounting treatment of
capitalized lease commitments in the U.S. retail operations.
Shareholders' equity
In the third quarter of 2004 shareholders' equity decreased EUR
166 million as a result of a net loss in the third quarter of
2004.
Net debt
Net debt slightly increased
Net debt slightly increased from EUR 7.4 billion at the end of
the second quarter of 2004 to EUR 7.5 billion at the end of the
third quarter of 2004, primarily as a result of the repurchase
of certain properties in previously sold leveraged lease
transactions and accounting treatment of capitalized lease
commitments in the U.S. retail operations. The increase in the
current portion of long-term debt was further impacted by the
reclassification in the third quarter of a CZK 3,000 million
(EUR 95 million) note maturing September 14, 2005. The effect of
exchange rate changes on net debt was negligible, as the U.S.
dollar exchange rate remained substantially unchanged compared
to the end of the second quarter of 2004.
Cash flow
The net cash flow from operating activities increased from EUR
195 million in the third quarter of 2003 to EUR 396 million in
the third quarter of this year. In the third quarter of 2004 a
cash flow before financing activities of EUR 55 million was
reported (Q3 2003: EUR 181 million), mainly due to a lower cash
flow from divestments.
Operational information
U.S. Retail
Results at U.S. retail impacted by an addition to the loss
reserve for self-insurance, higher impairments of tangible and
intangible fixed assets, increased competitive pressure and
integration activities Net sales in U.S. dollars at our U.S.
retail operations decreased by 2.3% compared to the same period
last year. Excluding the impact of divestments, net sales in
U.S. dollars declined by 0.8% in the third quarter. (Note that
net sales at our U.S. retail operations were USD 62 million
lower than stated in the Q3 trading statement published on
October 21, 2004, resulting from a final adjustment at the
Giant-Carlisle/Tops Arena.)
Operating income before impairment and amortization of goodwill
and exceptional items for U.S. retail decreased to USD 116
million compared to USD 251 million in the same period last
year. An addition to the loss reserve for self-insurance for our
U.S. operations, of which USD 62 million was allocated to U.S.
retail, and higher impairments of tangible and intangible fixed
assets of USD 47 million (Q3 2003: USD 23 million), had a
significant negative effect on operating income before
impairment and amortization of goodwill and exceptional items in
the third quarter of 2004. At the end of the third quarter the
integration of Stop & Shop, Giant-Landover and U.S. retail
corporate functions into one business arena was substantially
completed, with USD 10 million of related costs incurred in the
third quarter.
Further, in the third quarter of 2004 a USD 3 million loss on
the sale of tangible fixed assets was recorded, compared to a
gain of USD 4 million in the third quarter of 2003.
Operating income before impairment and amortization of goodwill
and exceptional items was also impacted in the third quarter of
2004 by the integration activities and promotional activity by
competitors in most of the markets in which we operate.
In our Stop & Shop/Giant-Landover Arena, operating income before
impairment and amortization of goodwill and exceptional items
was affected by weaker net sales due to the allocation of
resources to integration activities and increased promotional
activity and incremental increases in square footage by
competitors during 2004. Further, net sales at Stop & Shop were
impacted by supply chain issues relating to the commencement of
operations at the new Freetown distribution facility. Net sales
at Giant-Landover were negatively impacted by the integration
activities, particularly in the area of supply chain management,
which also had a negative impact on operating income before
impairment and amortization of goodwill and exceptional items.
In our Giant-Carlisle/Tops Arena operating income before
impairment and amortization of goodwill and exceptional items
was slightly lower as compared to the third quarter of 2003.
This resulted from higher impairments for tangible and
intangible fixed assets and higher self-insurance costs. Net
sales remained strong at Giant-Carlisle, mainly as a result of
continued successful customer relationship marketing leading to
increased net sales per customer, which impacted operating
income before impairment and amortization of goodwill and
exceptional items positively.
Operating income before impairment and amortization of goodwill
and exceptional items in our BI-LO/Bruno's Arena declined
compared to the same quarter last year, mainly as a result of
lower leverage of fixed costs over net sales.
During the first three quarters of 2004 net sales amounted to
USD 20.5 billion (2003: USD 20.7 billion). Net sales growth
excluding the impact from divestments in U.S. dollars amounted
to 0.5%. Operating income before impairment and amortization of
goodwill and exceptional items was negatively impacted by
promotional activity and incremental increases in square footage
of competitors in 2004, impairment charges, increased health and
welfare costs, integration costs, an addition to the loss
reserve for self-insurance, and lower gains on the sale of
tangible fixed assets.
Europe Retail
Improved operational performance offset by higher impairments
for tangible and intangible fixed assets
In our European retail operations, net sales in the third
quarter of 2004 amounted to EUR 3.0 billion (Q3 2003: EUR 3.0
billion). Excluding currency impact and the impact of
divestments, net sales growth was 1.1% compared to the third
quarter of last year.
Operating income before impairment and amortization of goodwill
and exceptional items for our European retail operations
decreased in the third quarter of 2004 to EUR 58 million
compared to EUR 76 million in the same period of last year,
mainly impacted by impairments of tangible and intangible fixed
assets of EUR 39 million (Q3 2003: EUR 15 million) and a write-
off of capitalized commercial expenses at Schuitema. Further, in
the third quarter of 2004 a EUR 7 million gain on the sale of
tangible fixed assets was recorded, compared to a gain of EUR 19
million in the third quarter of 2003.
Excluding the effect of a restructuring charge in the third
quarter of 2003 our Albert Heijn Arena realized higher gross
profit and operating income before impairment and amortization
of goodwill and exceptional items compared to the same quarter
of last year. In the third quarter of 2004, Albert Heijn
continued its price repositioning in the Dutch market. This
overall price repositioning, including a complete redesign and
repositioning of the private label portfolio, resulted in
substantial volume and net sales growth versus last year. This
growth, in combination with tight cost control, resulted in an
improved performance.
At Schuitema, operating income before impairment and
amortization of goodwill and exceptional items was lower
compared to the same quarter last year, due to a write-off of
capitalized commercial expenses and impairments of tangible and
intangible fixed assets.
Operating income before impairment and amortization of goodwill
and exceptional items in the Central Europe Arena was negatively
impacted by impairments of tangible and intangible fixed assets,
particularly in Poland. Excluding this effect, our Central
Europe Arena showed improved operating income before impairment
and amortization of goodwill and exceptional items compared to
the third quarter of 2003. The main contributors to this
improved operational performance were reduced administrative
expenses, as a result of combined back-office functions, and
solid identical sales growth, partially due to a new pricing
policy. These positive effects were partly offset by a lower
average basket size, primarily resulting from intense
competitive pressure.
We expect to close the divestment of our Spanish operations in
the fourth quarter of 2004.
In the first three quarters of 2004, net sales for our European
retail operations amounted to EUR 9.8 billion (2003: EUR 9.8
billion). Excluding currency impact, we achieved net sales
growth of 0.3% compared to the same period last year.
Operating income before impairment and amortization of goodwill
and exceptional items in the first three quarters of 2004
decreased to EUR 202 million compared to EUR 203 million in the
same period of last year.
Foodservice
U.S. Foodservice showed improved results
At U.S. Foodservice net sales in U.S. dollars increased 2.9% for
the third quarter of 2004, compared to the same period last
year. The increase was driven mainly by food price inflation
that was partly offset by the negative impact of hurricanes in
the southeastern U.S. and national account customer
rationalization. Growth has slowed when compared with the second
quarter of 2004, due to the exit from certain underperforming
national account customer relationships in addition to a
slowdown in food price inflation.
Operating income before impairment and amortization of goodwill
and exceptional items at U.S. Foodservice in the third quarter
of 2004 was USD 16 million, compared to a loss of USD 44 million
in the same quarter last year. The improvement was primarily due
to an increase in gross profit as a percentage of net sales
resulting from improvements in supplier contracts as well as the
effects of national account customer rationalization. An
addition to the loss reserve for self-insurance for our U.S.
operations, of which USD 14 million was allocated to U.S.
Foodservice, had a negative effect on operating income before
impairment and amortization of goodwill and exceptional items at
U.S. Foodservice in the third quarter of 2004.
During the third quarter of 2004, U.S. Foodservice made further
progress in implementing its key initiatives. These included:
fortifying its governance and controls, renegotiating major
supplier contracts, improving its customer mix, controlling
operating expenses and improving working capital. In the area of
governance and controls, U.S. Foodservice provided ethics
training to over 28,000 of its associates during the third
quarter of 2004.
In the first three quarters of 2004, U.S. Foodservice achieved
net sales growth in U.S. dollars of 5.0% compared to the first
three quarters of 2003. This increase was primarily due to food
price inflation. Operating income before impairment and
amortization of goodwill and exceptional items during the first
three quarters of 2004 was USD 24 million compared to a loss of
USD 95 million during the same period of 2003. This improvement
was due to both an increased gross profit as a percentage of net
sales and to a decrease in operating expenses as a percentage of
net sales.
Europe Foodservice
On September 23, 2004, we announced that we intend to sell Deli
XL, our Benelux foodservice unit.
Other Business Areas
South America
In South America, net sales in the third quarter of 2004
amounted to EUR 220 million (Q3 2003: EUR 511 million), down
56.9% compared to the same period last year, mainly due to the
divestment of Bompreco in Brazil in the first quarter of 2004
and Santa Isabel in Chile, Peru and Paraguay in the second half
of 2003. Operating loss before impairment and amortization of
goodwill and exceptional items amounted to EUR 10 million in the
third quarter of 2004 compared to a loss of EUR 18 million in
the same period last year.
Corporate
Operating loss at Corporate amounted to EUR 165 million in the
third quarter of 2004, compared to a loss of EUR 41 million in
the third quarter of 2003. This increase was caused by the EUR
87 million exceptional loss related to the purchase of
additional shares in ICA AB and a EUR 43 million impairment
charge in respect of a loan to Luis Paez, our Spanish joint
venture.
In the first three quarters of 2004 the operating loss at
Corporate amounted to EUR 284 million, compared to an operating
loss of EUR 128 million in the first three quarters of 2003.
Besides the charges described above, operating loss at Corporate
in the first three quarters of 2004 was, among other things,
negatively impacted by the costs related to the settlement with
AIG, one of our insurance carriers.
The Corporate segment also includes the costs related to the
implementation of the International Financial Reporting
Standards ("IFRS") and the costs related to attaining compliance
with the Sarbanes-Oxley Act. Furthermore, it includes the
Business Support Organization, which is responsible for
harmonizing back-office processes and systems as part of the
Road to Recovery strategy.
As required under EU regulations, we will prepare consolidated
financial statements in compliance with IFRS as of the fiscal
year 2005. The application of IFRS is expected to have a
significant impact on our reported consolidated financial
position and consolidated results. The preparation of our
consolidated comparative figures for 2004 from Dutch GAAP to
IFRS is in progress.
CONTACT: Ahold Corporate Communications
+31.75.659.5720
CEMIG: To Purchase 100% Interest in Rosal Energia
-------------------------------------------------
Cemig (Companhia Energetica de Minas Gerais) ("Cemig"), a
company holding a public service concession and listed on the
stock exchanges of Sao Paulo, New York and Madrid, in accordance
with its commitment to implement the best corporate governance
practices, and in accordance with CVM Instructions 358 of 3
January 2002 and 359 of 22 January 2002, informed its
stockholders and the public that Cemig and Caiua Servicos de
Eletricidade S.A. ("Caiua") entered into a Share Sale Contract
("the Contract") for purchase by Cemig of 100% (one hundred per
cent) of the total and voting shares of ROSAL ENERGIA S.A.
("Rosal"), a company controlled by Caiua.
Completion of the transaction and final acquisition of the
shares by Cemig is still subject to performance of certain
conditions established in the Contract, including, among other
matters, approval of transfer of control of Rosal by the
Brazilian electricity regulator, Aneel (National Electricity
Agency-Agencia Nacional de Energia Eletrica).
CONTACT: Companhia Energetica de Minas Gerais - CEMIG
Av.Barbacena, 1200
Santo Agostinho - CEP 30190-131
Belo Horizonte - MG
Brazil
Fax:(0XX31)3299-3934
Phone: (0XX31)3299-4524
COPEL: Details Bovespa Inquiry
------------------------------
Below is a letter sent by Mr. Rubens Ghilardi, CFO and Investor
Relations Officer at COPEL, to the Bovespa clarifying rumors
about the company's plan to reduce tariff discounts granted to
customers:
By the Official Letter GAE 1,743/04, received at the Company's
headquarters today [Nov. 22, 2004], your honor asks the Company
for a justification for the volatility registered by the shares
issued by the Company recently.
In this regard, the Company enrolls that we acknowledge there
are market rumors about Copel's intention to reduce the tariff
discounts granted to due customers. On that, we repeat a passage
of the "Notice to the Market" filed at CVM (Brazilian Securities
and Exchange Commission) on November 12, 2004:
1. There is no substantial indication that the discount
exercised by Copel over the Company's tariff table authorized by
ANEEL, granted as premium to consumers who pay their bills on
its due date, will be reduced in the short term.
Also, another factor that could have caused such volatility were
news commenting the Company's third quarter 2004 earnings
results, about which, we repeat bellow a free translation of
part of news published on November 19, in Gazeta Mercantil
newspaper:
COPEL MAKES PROFITS EVEN WITHOUT FULL TARIFF READJUSTMENTS
The Company recorded net income of R$125 million in the last
quarter, even without full readjusting electric power tariffs.
With this performance, there was an R$1.09 appreciation of the
lot of 1,000 shares. From January to September, net income
reached R$297.7 million.
The Company's revenues between July and September 2004 totaled
R$984.9 million. With this performance, last nine months
revenues reaches R$2.734 billion, a 27% growth in comparison to
the same period of the previous year. In the first half revenues
reached R$1.749 billion.
Hoping to have clarified the question posed by this institution,
we are available for any additional information you consider
necessary.
NET SERVICOS: Globopar to Transfer Preferred Shares to RBS
----------------------------------------------------------
Net Servicos de Comunicacao S.A. (Nasdaq:NETC; Bovespa:PLIM4)
(Bovespa:PLIM3) (Latibex:XNET), the largest Pay-TV multi-service
operator in Latin America, and an important provider of bi-
directional broadband Internet access (Virtua), announces that,
in compliance with CVM Instruction # 358/02, the following
information was received Wednesday from the following Net
shareholders: Globo Comunicacoes e Participacoes S.A.
("Globopar"), Distel Holding S.A. ("Distel") (Globopar and
Distel, together, the "Globopar Parties") and RBS Participacoes
S.A. ("RBS").
On November 22, 2004, the Globopar Parties and RBS entered into
an agreement pursuant to which the Globopar Parties agreed to
transfer 51,704,008 (fifty-one million, seven hundred and four
thousand and eight) of the Company's preferred shares held by
the Globopar Parties to RBS, representing 2.55% of the Company's
total capital, and RBS agreed to transfer an equal number of the
Company's common shares held by RBS to the Globopar Parties,
representing 6.24% of Net's voting capital and 2.55% of its
total capital (the "Exchange Agreement"). Additionally, RBS has
agreed to grant the Globopar Parties RBS's preference rights
with respect to the subscription of any new common shares that
may be issued by Net. These preference rights relate to the
Company's common shares that will continue to be held by RBS
after the aforementioned share exchange.
The Globopar Parties have agreed to offer the above-mentioned
common shares and preference rights held by RBS to BNDES
Participacoes S.A. ("BNDESPAR"), the remaining shareholder under
Net's current Shareholders' Agreement. In the event BNDESPAR
exercises its preference rights, BNDESPAR will become a party to
the Exchange Agreement and both Globopar and BNDESPAR will share
proportionally with respect to the exercised preference rights
and in accordance with the terms of the Exchange Agreement.
The exchange will be concluded no later than December 23rd, 2004
and therefore all the rights and duties of RBS, as a party to
Net's current Shareholders' Agreement, will cease to exist. The
exchange will be communicated to the relevant government
agencies.
CONTACTS: Net Servicos de Comunicacao S.A.
Ms. Marcio Minoru or Mr. Rodrigo Alves
Phone: 55-11-5186-2811
e-mail: ri@netservicos.com.br
=========
C H I L E
=========
AES GENER: Commences $400M Debt Swap Offer
------------------------------------------
Chilean generator AES Gener has launched an offer to exchange
US$400,000,000 7.50% Senior Notes due 2014 that have been
registered under the Securities Act of 1933 for any and all
outstanding 7.50% Senior Notes due 2014 that have not been
registered under the Securities Act of 1933, according to a
filing with the US Securities and Exchange Commission (SEC).
The New Notes:
- The terms of the new notes are identical to those of the old
notes, except that the new notes have been registered under the
Securities Act, and will not contain terms with respect to
transfer restrictions. In addition, following completion of this
exchange offer, none of the old notes will be entitled to the
benefits of the registration rights agreement relating to
contingent increases in the interest rates applicable to the old
notes.
- We will pay interest on the new notes on March 25 and
September 25 of each year. The new notes will mature on March
25, 2014.
- The new notes will not be redeemable prior to maturity except
as provided herein. The new notes will rank equally in right of
payment with our other senior indebtedness.
The Exchange Offer
- The exchange offer will expire at 5:00 p.m., New York City
time, on January 7, 2005 unless extended.
- We will exchange all old notes that are validly tendered and
not validly withdrawn.
- You may withdraw tenders of old notes at any time before 5:00
p.m., New York City time, on the date of the expiration of the
exchange offer.
- We will pay the expenses of the exchange offer.
- We will not receive any proceeds from the exchange offer.
- No dealer-manager is being used in connection with the
exchange offer.
- The exchange of old notes for new notes will not be a taxable
exchange for U.S. federal income tax purposes.
===============
C O L O M B I A
===============
EMCALI: Forecasts 1500 Public Phones in 2005; Seeks Bids
--------------------------------------------------------
Cali's telecommunications infrastructure gets a major lift as
utilities firm Emcali sets aside US$1.4 million to install new
public telephones by June next year. Business News Americas
reports that the company is currently evaluating proposals from
Siemens and Celsa, both of whom have expressed their interest to
supply equipment for the expansion.
Emcali will buy 1,500 telephones from the winning bidder. 900
units will be earmarked to replace obsolete public phones while
the remaining 600 units will be distributed in new locations in
the city.
===================================
D O M I N I C A N R E P U B L I C
===================================
* DOMINICAN REPUBLIC: Pursues New Stand-By Arrangement With IMF
---------------------------------------------------------------
This statement was issued Wednesday in Washington, DC by Steven
Phillips, the International Monetary Fund's (IMF) mission chief
for the Dominican Republic:
"The IMF mission has reached broad agreement, at the staff
level, with the Dominican authorities on the main elements of a
program that could be supported by a new two-year Stand-By
Arrangement with the Fund. The mission will now initiate the
process for submitting the draft program documents for review by
the IMF's management.
"In the coming weeks, the authorities intend to move forward
with policies essential to the success of their program. These
steps include, among others, the adoption of a budget for 2005
consistent with program objectives, measures to improve
government expenditure control and debt management, and a
further strengthening of financial sector supervision and
regulation in line with international best practices."
"The authorities are also working to secure the necessary
financing for their program. Once these elements are in place,
and IMF management approves the proposed program, it is expected
that the authorities' Letter of Intent, describing their
economic and financial program and requesting a Stand-By
Arrangement from the Fund, can be circulated to the IMF's
Executive Board for its consideration."
The statement by Mr. Phillips was issued at the end of a visit
to Washington by a delegation of the economic policy authorities
of the Dominican Republic.
CONTACT: IMF External Relations Department
700 19th Street, NW
Washington, D.C. 20431 USA
Public Affairs:
Phone: 202-623-7300
Fax: 202-623-6278
Media Relations:
Phone: 202-623-7100
Fax: 202-623-6772
===========
M E X I C O
===========
MINERA MEXICO: Moody's Ups Ratings to B1 from Ca
------------------------------------------------
After assigning a B1 global local currency issuer rating to
Minera Mexico just recently, Moody's Investors Service upgraded
the ratings of the company's Guaranteed Senior Notes Series A
and B (Yankee Bonds) to B1 from Ca.
The complete rating actions are: (Upgraded To/From)
- U.S. $375,000,000 Series A B1 Ca
(Guaranteed Senior Notes)
- U.S. $125,000,000 Series B B1 Ca
(Guaranteed Senior Notes)
According to Moody's, the Guaranteed Senior Notes are direct,
unsecured obligations of Minera Mexico and the guarantors, which
include all of Minera Mexico's principal operating subsidiaries.
Minera Mexico, S.A. de C.V. is a majority owned, indirect
subsidiary of Grupo Mexico S.A. de C.V.
TV AZTECA: Shareholders Approve $130M Cash Distribution
-------------------------------------------------------
TV Azteca, S.A. de C.V. (NYSE: TZA; BMV: TVAZTCA; Latibex:
XTZA), one of the two largest producers of Spanish language
television programming in the world, held Wednesday a
shareholders' assembly at its corporate offices in Mexico City.
In the meeting, shareholders approved a cash distribution of
US$130 million to be made on December 14, 2004.
The distributions are part of TV Azteca's six-year plan for uses
of cash, which entails making disbursements to shareholders
above US$500 million and reducing the company's debt by
approximately US$250 million within a six-year period that
started in 2003.
The cash distributions made to date, when added to the upcoming
disbursement of US$130 million, represent an aggregate amount of
US$325 million, equivalent to a 17% yield on the November 23,
2004 ADR closing price. Prior distributions include: US$125
million on June 30, 2003, US$15 million on December 5, 2003,
US$33 million on May 13, 2004, and US$22 million on November 11,
2004.
In the assembly, shareholders also authorized an increase of
Ps.1,950 million in TV Azteca's repurchase fund to Ps.3,050
million, up from the prior amount of Ps.1,100 million.
On April 27, 2004, the board of directors approved an increase
in the company's repurchase fund up to the maximum permitted by
the Mexican securities' law, following a recommendation from TV
Azteca's investment committee.
Shareholders also approved the following measures for management
oversight, which were agreed by the company's board on October
19, 2004.
* The establishment of a new Audit Committee that will consist
of three independent directors. The new Audit Committee will
take over the current responsibilities of the Related Party
Transactions Committee, which will be dissolved. * The
implementation of an enhanced Ethics Program, and the
appointment of a Chief Oversight Officer. The new Program will
include the adoption of a rigorous Code of Business and Ethics
and will apply to directors, officers and employees of TV
Azteca. * The establishment of a Blue Ribbon Committee,
consisting of two prominent members of the Mexican business
community, to select prospective independent board members of TV
Azteca. * The preparation and publication on the TV Azteca
website of the company's management oversight guidelines. * The
implementation of rigorous disclosure controls through a
Disclosure Committee.
Shareholders also ratified the powers of attorney granted to
Ricardo B. Salinas, Chairman of the Board of TV Azteca.
Nevertheless, Mr. Salinas has committed to exercise his powers
of attorney in material or related party transactions,
consulting with the board of directors.
TV Azteca shareholders ratified the company's board members, and
accepted the resignations of two directors presented to the
company in May 2004. In addition, Mr. Othon Frias, prior
alternate secretary of the board, was named secretary of TV
Azteca's board of directors.
The shareholders assembly also received notice of the
appointment, by the board of directors, of Salles, Sainz-Grant
Thornton, S.C., as the new independent auditing firm for TV
Azteca, replacing PriceWaterhouseCoopers. The board believes
that the change is consistent with recent developments in
corporate governance that encourage rotation of independent
auditing firms of public companies, and considered appropriate
to replace its independent auditors after 11 years of continuous
service.
The Board of Directors expects that the appointment of Salles,
Sainz-Grant Thornton, S.C. will result in a healthy change in
the company's auditing practices. The company noted that Salles,
Sainz-Grant Thornton, S.C. is based in Mexico with more than 25
years of experience, and is registered with the U.S. Public
Company Accounting Oversight Board.
The company and its board of directors thank
PriceWaterhouseCoopers for the professional work provided to TV
Azteca over the past 11 years.
Company Profile
TV Azteca is one of the two largest producers of Spanish
language television programming in the world, operating two
national television networks in Mexico, Azteca 13 and Azteca 7,
through more than 300 owned and operated stations across the
country. TV Azteca affiliates include Azteca America Network, a
broadcast television network focused on the rapidly growing US
Hispanic market; and Todito.com, an Internet portal for North
American Spanish speakers.
===========
P A N A M A
===========
* Statement by an IMF Article IV Staff Mission to Panama
--------------------------------------------------------
The following statement was issued Wednesday in Panama City at
the conclusion of a visit by an International Monetary Fund
(IMF) staff mission:
"A mission of the IMF has visited Panama City since November 8
to hold the annual economic surveillance discussions under
Article IV of the IMF's Articles of Agreement. The mission
welcomed the rapid growth of the economy, and noted that output
would likely grow by about 6 percent in 2004, led by export-
oriented services and a boom in construction that has been
stimulated by temporary tax incentives.
"The mission commended the authorities for the emphasis that the
new administration has placed on strengthening public finances
and improving fiscal transparency. Early steps were taken to
contain the fiscal deficit for 2004; the recently approved
budget for 2005 calls for expenditure restraint; and a tax
reform bill is expected to be presented soon to the National
Assembly. The mission also welcomed the authorities' plan to
address the need for reform of the social security system.
"The mission observed that the government's commitment to
prudent fiscal policies is part of a broader strategy for
promoting sustained economic growth, including policies for good
governance, further integration in the regional and global
economy, and improving the international competitiveness of
Panama, particularly in the export-oriented service sectors.
"Discussions for the Article IV consultation will conclude in
the first half of December 2004 in a meeting to be held with the
Minister of Economy and Finance, Dr. Ricaurte V squez. The
mission would like to take this opportunity to thank the
authorities of Panama for their hospitality and open dialogue."
CONTACT: INTERNATIONAL MONETARY FUND
700 19th Street, NW
Washington, D.C. 20431 USA
IMF EXTERNAL RELATIONS DEPARTMENT
Public Affairs: 202-623-7300 - Fax: 202-623-6278
Media Relations: 202-623-7100 - Fax: 202-623-6772
=======
P E R U
=======
TDP: Moody's Cuts Ratings As Settlement Rates Drop
--------------------------------------------------
Moody's Investors Service (Moody's) slashed the rating of the
pass-through Certificates issued by Telefonica del Peru (TDP)
Grantor Trust to Ba2, from Baa3. The Certificates will remain on
review for possible downgrade.
The downgrade reflects the decline of the average settlement
rates paid to Telefonica del Peru by the international
designated carriers.
Moody's revealed that the average monthly settlement rate for
the first half of 2004 was $0.12, while the average monthly
settlement rate for the same period a year earlier was $0.13.
Though the decline is marginal, Moody's is concerned about the
downward pressure that declining average settlement rates
continue to place on the trust's cashflow, which have decreased
to historically low levels over the two most recent collection
periods.
Also, the downgrade reflects the low debt service coverage
ratios. The debt service coverage ratio for the most recent
collection period was 2.3x, just above the coverage shortfall
trigger of 2.1x. The debt service coverage ratio has remained
marginally above trigger levels for the last three collection
periods. The debt service coverage calculation takes into
account the reserve of 1.1x debt service. Furthermore, the
downward trend in and historical volatility of collections
suggest that there will continue to be downward pressure on the
cashflow.
=================================
T R I N I D A D & T O B A G O
=================================
BWIA: Customer Demand Prompts Hubs Expansion
--------------------------------------------
Trinidad-based airline BWIA has introduced two new hubs, Glasgow
Prestwick International and Belfast International, giving
European travellers more options to access Caribbean countries
including Barbados from next year. The Barbados Advocate reports
that the weekly service from Prestwick will fly non-stop to
Barbados, continuing to Port-of-Spain, Trinidad, with
connections available to Tobago. The introduction of the new
flights is BWIA's response to a growing customer demand.
The Belfast service will operate non-stop to Barbados and
continue to Port-of-Spain. Both flights are scheduled to operate
with an Airbus A340-300 aircraft in a two-class configuration,
with introductory fares starting at GBP299 in Economy and GBP999
in Business/First.
Peter Iland, BWIA's director marketing and sales United Kingdom
(UK) and Europe, said: "We are developing our UK operations
owing to the fact that we have been getting a lot of input that
people want something new."
As with all airlines BWIA felt the negative effects post 9/11,
things, however, were not as harsh in the UK.
"As any airline following 9/11 we have found things a little
difficult. Essentially our UK routes were not affected by the
down turn in business. We have continued to grow over the last
three years," Mr. Iland stated.
=================
V E N E Z U E L A
=================
BANCO EXTERIOR: Fitch Upgrades Individual, National Ratings
-----------------------------------------------------------
Fitch Ratings, the international rating agency, has upgraded the
individual rating of Banco Exterior to 'C/D' from 'D' and its
national long-term rating to 'AA-(ven)' from 'A+(ven)'.
The following ratings have been affirmed by Fitch:
--Long-term foreign currency 'B+' (Rating Outlook Stable);
--Short-term foreign currency 'B';
--Long-term local currency 'B+';
--Short-term local currency 'B';
--Support '5';
--National short-term 'F1(ven)'.
The rating action reflects Banco Exterior's consistently
superior overall performance in the past few years, despite the
economic and political turmoil in Venezuela, which only recently
has seen some improvement. The bank's ratings are constrained by
its small size and the need to further diversify revenue
sources. Furthermore, Banco Exterior's activities will also
continue to be held back by the volatile operating environment.
Banco Exterior was Venezuela's seventh largest bank in terms of
funds under management (assets + investments funds) at end of
June 2004, with a 3.1% market share. It holds a leading position
in the retail and credit card markets but also targets small-
and medium-sized firms. Spain's Grupo Bancario Industrial Fierro
(GBIF) has an 84% stake in Banco Exterior, with the remainder
being widely held among local shareholders. GBIF also controls
financial institutions in Curacao, Ecuador, Guatemala, Peru and
Miami, all of which operate as independent business units.
Contact: Franklin Santarelli, Carlos Fiorillo +58-212-286-3356,
Caracas, or Gustavo Lopez 1-212-908-0853, New York, or London
Ratings Desk +44-(0)-20-7417-6300.
Note to Editors:
Fitch's individual ratings assess how a bank would be viewed if
it were entirely independent and could not rely on external
support. Its support ratings deal with the question of whether a
bank would receive support from its owners or from the state if
it were to get into difficulty. These ratings are not debt
ratings but rather, respectively, an assessment of the intrinsic
strength of a bank and of any level of outside support that may,
or may not, be available to it. A support rating qualified by
the suffix 'T' indicates significant existing or potential
transfer risk of economic and/or political origin that might
prevent support for foreign currency creditors.
BANCO MERCANTIL: Ratings Affirmed by Fitch
------------------------------------------
Fitch Ratings, the international rating agency, has upgraded the
individual rating of Banco Mercantil to 'C/D' from 'D'. Fitch
also affirms the following ratings for Banco Mercantil:
--Long-term foreign currency 'B+' (Rating Outlook Stable);
--Short-term foreign currency 'B';
--Long-term local currency 'B+';
--Short-term local currency 'B';
--Support '5'.
The bank's national long-term and short-term ratings have also
been affirmed at 'AA(ven)' and 'F1(ven)', respectively. The
rating action reflects Banco Mercantil's consistent performance
in the past few years, despite the economic and political
turmoil in Venezuela, which only until recently has seen some
improvements. The bank's ratings also reflect its strong
franchise, broad and stable retail deposit base, and adequate
capital, which contribute to the bank's overall performance. The
bank's activities will continue to be constrained by the
volatile operating environment.
Banco Mercantil was the third largest universal bank in
Venezuela at the end of June 2004 in terms of invested funds
(assets plus investment funds) with a 12.8% market share.
Although the bank is a main player in every segment, it has
special leadership in middle market, mortgage lending, and trade
finance activities, as well as trust services nationwide. Banco
Mercantil is 99.7% owned by Mercantil Servicios Financieros, a
holding company with investments chiefly concentrated in
Venezuela and the U.S. At the end of 2003, four local economic
groups, led by several of Mercantil Servicios Financieros'
directors, controlled almost 50% of the holding company. In
turn, JP Morgan Chase controls 9% (with reduced voting rights),
while the rest is widely held in the Caracas Stock Exchange.
BANCO PROVINCIAL: Fitch Affirms Ratings
---------------------------------------
Fitch Ratings, the international rating agency, upgraded the
individual rating of Banco Provincial to 'C/D' from 'D'. Fitch
also affirms the following ratings for Banco Provincial:
--Long-term foreign currency 'B+' (Rating Outlook Stable);
--Short-term foreign currency 'B';
--Long-term local currency 'B+';
--Short-term local currency 'B';
--Support '5'.
The bank's national long-term and short-term ratings have also
been affirmed at 'AA(ven)' and 'F1(ven)', respectively. The
rating action reflects Banco Provincial's consistent performance
in the past few years, despite the economic and political
turmoil in Venezuela, which only until recently has seen some
improvements. The bank's ratings also reflect its strong
franchise, broad and stable retail deposit base and the
operational support of Spain's Banco Bilbao Vizcaya Argentaria
(BBVA), its majority shareholder. The bank's activities will
continue to be constrained by the volatile operating
environment.
Banco Provincial was Venezuela's second largest universal bank
at end June-2004 in terms of invested funds (assets + investment
funds) with a 13.6% market share. The bank has a leading
position in retail deposits, while it enjoys a significant
market share within corporate and consumer lending. BBVA
controls 55% of Banco Provincial, with Grupo Polar, a major
Venezuelan industrial group, being the second largest
shareholder with a 26% stake. The remainder is widely held in
the local stock market.
CONTACT: Franklin Santarelli +58 212 286 3356, Caracas
Carlos Fiorillo +58 212 286 3356, Caracas
Gustavo Lopez +1-212-908-0853, New York
MEDIA RELATIONS: Kenneth Reed +1-212-908-0540, New York
***********
S U B S C R I P T I O N I N F O R M A T I O N
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Copyright 2004. All rights reserved. ISSN 1529-2746.
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