/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050310.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, March 10, 2005, Vol. 6, Issue 49 Headlines A R G E N T I N A AERO VIP S.A.: Seeks Court Approval to Reorganize BANCO BANEX/BANCO SOCIETE: Moody's Ratings Updated on Merger CASA PUPE S.A.: Court Orders Liquidation CASTELLANO ALCIDES: Required Reports Deadlines Set COLORIN INDUSTRIA: $47M Worth of Bonds Remain in Default COPITOUR S.R.L.: Court Approves Creditor's Bankruptcy Plea EMPRESA DE TRANSPORTES: Debt Payments Halted, Set To Reorganize EUROMAYOR: Fitch Notes Weakness, Downgrades Bonds to 'C(arg)' HIDROELECTRICA EL CHOCON: $140M of Bonds Get 'BB-' Rating IMPRESIONES ARCO: Seeks Reorganization Protection from Court INSTITUTO COGHLAN: Opts to Restructure Debt IRSA: Noteholder Exercises Conversion Option LUICAR S.R.L.: Court Approves Concurso Motion MOLINOS RIO: Boosts Net Profit in 2004 NAVILLUS S.A.: Court Adjusts Liquidation Schedule REPSOL YPF: To Sell 50% Petroken Stake to Basell for $58M R.S.M. ARGENTINA: Court Names Trustee for Bankruptcy SANCOR COOP: $300M in Bonds Remain in Default TELECOM ARGENTINA: Debts, Net Loss Surge in FY04 TGS: Techint Nets Pipeline Expansion Contract VINTAGE PETROLEUM: Board Approves 2004 Performance Bonus * UTILITY COMPANIES: Govt. Schedules Public Hearings B R A Z I L BANCO INDUSVAL: Moody's Withdraws Ratings COPEL: Ratifies $43M Investment Program for Curitiba Region LOCALIZA: S&P Affirms 'BB-' LC, FC Rating; Ups Outlook C H I L E INVERLINK: Only $20M in Stolen Funds Recovered C O L O M B I A BANCAFE: Government Creates Two New Banks D O M I N I C A * DOMINICA: IMF Board Completes Review of PRGF Arrangement E C U A D O R EMELEC: Regulator Seeks to Recover $711M Debt H A I T I * HAITI: Gets $75M World Bank Financing M E X I C O AOL LATIN AMERICA: Announces Executive Bonus Details CINTRA: To Sell Mexicana With Repackaged Aerocaribe DIRECTV: Underwriters to Purchase Additional Company Shares VITRO: S&P Cuts Ratings; Outlook Improves to Stable V E N E Z U E L A PDVSA: Minister Clarifies Citgo As Partial Sale PDVSA: Clarifies Report on Small Oil Spill at El Palito - - - - - - - - - - ================= A R G E N T I N A ================= AERO VIP S.A.: Seeks Court Approval to Reorganize ------------------------------------------------- Court No. 16 of Buenos Aires' civil and commercial tribunal is currently reviewing the merits of a reorganization petition filed by Aero Vip S.A. Argentine daily La Nacion reports that the company filed the request after defaulting on its debt payments since October 28 last year. The petition, if granted by the court, will allow the plane charter company to negotiate a settlement with its creditors in order to avoid a straight liquidation. The city's Clerk No. 31 assists the court on this case. CONTACT: Aero Vip S.A. Ricardo Rojas 401 Buenos Aires BANCO BANEX/BANCO SOCIETE: Moody's Ratings Updated on Merger ------------------------------------------------------------ Moody's Investors Service affirmed Banco Banex S.A.'s Argentine National Scale Rating for local currency deposits of Aa3.ar. The rating action follows the announcement of the acquisition by Banco Banex S.A. of Banco Societe Generale Argentina S.A. Moody's also assigned to Banco Banex S.A. and to Banco Societe Generale Argentina S.A. new long and short term global local currency deposit ratings of B1 and Not Prime, long and short term global foreign currency deposit ratings of Caa2 and Not Prime, and bank financial strength ratings of E. In addition, Moody's assigned an Argentine National Scale Rating for local currency deposits of Aa3.ar to Banco Societe Generale Argentina S.A. and National Scale Ratings for foreign currency deposits of B1.ar to each bank. The outlook on the ratings is stable. Upon completion of the merger, the combined entity will be renamed Banco Supervielle S.A., which should have a broader deposit franchise and client base. Moody's noted that the global local currency deposit ratings reflect the bank's financial strength and its ownership characteristics as well as the relative importance of its deposit franchise within the Argentine financial system. The rating agency also explained that the global and National Scale foreign currency deposit ratings of the banks reflect foreign currency transferability and convertibility risks. National Scale Ratings (NSRs) for Argentine banks, which carry the identifier of ".ar", rank the likelihood of credit loss on local and foreign currency obligations of issuers in a particular country relative to other domestic issuers. The NSRs are intended for domestic use only and are not globally comparable. Moody's NSRs are not opinions on absolute default risks; therefore, in countries with overall low credit quality, even highly rated credits on the National Scale may be susceptible to default. Banco Banex S.A. is a specialized retail bank with $ 202 million in deposits and $ 310 million in assets as of December 31, 2004. Banco Societe Generale Argentina S.A. is a universal bank with $ 383 million in deposits and $ 504 million in assets. Both banks are headquartered in Buenos Aires, Argentina. The following rating was affirmed: Banco Banex S.A. -- National Scale Rating for Local Currency Deposits: Aa3.ar The following new ratings were assigned: Banco Banex S.A.: - Long -Term Global Local Currency Deposits: B1 - Short -Term Global Local Currency Deposits: Not Prime - Bank Financial Strength Rating: E - Long -Term Foreign Currency Deposits: Caa2 - Short- Term Foreign Currency Deposits: Not Prime - National Scale Rating for Foreign Currency Deposits: B1.ar Banco Societe Generale Argentina S.A.: - Long- Term Global Local Currency Deposits: B1 - Short -Term Global Local Currency Deposits: Not Prime - Bank Financial Strength Rating: E - Long -Term Foreign Currency Deposits: Caa2 - Short -Term Foreign Currency Deposits: Not Prime - National Scale Rating for Foreign Currency Deposits: B1.ar - National Scale Rating for Local Currency Deposits: Aa3.ar CASA PUPE S.A.: Court Orders Liquidation ---------------------------------------- Casa Pupe S.A. prepares to wind-up its operations following the bankruptcy pronouncement issued by Court No. 2 of Buenos Aires 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 Ms. Ana Maria Blugerman as trustee. She will be reviewing creditors' proofs of claims until April 15. The verified claims will be the basis for the individual reports to be presented for court approval on May 30. Afterwards, the trustee will also submit a general report on June 28. Clerk No. 3 assists the court on this case that will end with the disposal of the company's assets to repay its liabilities. CONTACT: Ms. Ana Maria Blugerman, Trustee Parana 774 Buenos Aires CASTELLANO ALCIDES: Required Reports Deadlines Set -------------------------------------------------- Mr. Guillermo Felix Spiller, the trustee assigned to supervise the liquidation of Castellano Alcides E., Abel Enrique y Omar A S.H., will submit the validated individual claims for court approval on March 18. These reports explain the basis for the accepted and rejected claims. The trustee will also submit a general report on April 29. Infobae reveals that Court No. 6 of Canada de Gomez's civil and commercial tribunal has jurisdiction over this bankruptcy case. CONTACT: Mr. Guillermo Felix Spiller, Trustee Espana 78 Canada de Gomez (Santa Fe) COLORIN INDUSTRIA: $47M Worth of Bonds Remain in Default -------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. maintained its 'D' rating on the US$47 million bond issued by Colorin Industria de Materiales Sintet. Comision Nacional de Valores (CNV), Argentina's securities regulator, reports that the action was based on the Company's financial status as of December 31, 2004. Moody's assigns `D' ratings to bonds that are in payment default and have a poor prospect of repaying all obligations. The bond issue, described as `Obligaciones Negociables', will mature on March 31, 2006. CONTACT: Colorin Industria de Materiales Sinteticos S.A. Av del Libertador 7400 Buenos Aires COPITOUR S.R.L.: Court Approves Creditor's Bankruptcy Plea ---------------------------------------------------------- Court No. 24 of Buenos Aires' civil and commercial tribunal declared Copitour S.R.L. bankrupt, says La Nacion. The ruling comes in approval of the bankruptcy petition filed by the Company's creditor, Mr. Jose Saiegh, for nonpayment of US$5,233 in debt. The court-appointed trustee, Mr. Salomon Wilhelm, will examine and authenticate creditors' claims until May 12. This is done to determine the nature and amount of the Company's debts. Creditors must have their claims authenticated by the said date in order to qualify for the payments that will be made after the Company's assets are liquidated. The city's Clerk No. 48 assists the court on the case that will conclude with the liquidation of the Company's assets. CONTACT: Copitour S.R.L. Suipacha 967 Buenos Aires Mr. Salomon Wilhelm, Trustee Lavalle 1290 Buenos Aires EMPRESA DE TRANSPORTES: Debt Payments Halted, Set To Reorganize --------------------------------------------------------------- The civil and commercial Court No. 1 of Buenos Aires is reviewing the merits of a reorganization petition filed by Empresa de Transportes Los Andes SAC. La Nacion recalls that the company filed the petition following cessation of debt payments since February 22 this year. The city's Clerk No. 1 assists the court in resolving this case. CONTACT: Empresa de Transportes Los Andes SAC Loyola 1628 Buenos Aires EUROMAYOR: Fitch Notes Weakness, Downgrades Bonds to 'C(arg)' ------------------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. downgraded bonds issued by Euromayor S.A. de Inversiones from 'CCC(arg)' to 'C(arg)', says local securities regulator, the CNV. The rating, based on the Company's finances as of October 31, 2004, was assigned to the following issues: - US$3.07 million of "Serie I Clase dolares," whose maturity was not disclosed; - US$3.07 million of "Serie II Clase dolares", which matured in June 10, 2003; - US$6.80 million of "Serie I Clase pesos," whose maturity was not disclosed; and - US$4.42 million of "Serie II Clase pesos", which matured in June 10, 2003. A 'C(arg)' rating from Fitch signals imminent default. HIDROELECTRICA EL CHOCON: $140M of Bonds Get 'BB-' Rating --------------------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. upgraded the 'C' rating previously given to bonds issued by Hidroelectrica El Chocon S.A. to 'BB-', according to data revealed by the Comision Nacional de Valores (CNV), Argentina's securities regulator. The bonds, worth US$140 million, were issued under "Simple Issue" and described as "Obligaciones Negociables." These bonds matured on Feb. 19, 2004. The rating action was taken based on the Company's financial health as of December 31, 2004. Bonds with a 'BB-' rating lack outstanding investment characteristics and have speculative characteristics as well, according to Moody's. IMPRESIONES ARCO: Seeks Reorganization Protection from Court ------------------------------------------------------------ Impresiones Arco Iris Cordoba S.A., a graphics company operating in Buenos Aires, has requested for reorganization after failing to pay its liabilities since February last year. The petition, once approved by the court, will allow the company to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending before Court No. 22 of the city's civil and commercial tribunal. Clerk No. 44 assists the court on this case. CONTACT: Impresiones Arco Iris Cordoba S.A. Condor 1755 Buenos Aires INSTITUTO COGHLAN: Opts to Restructure Debt ------------------------------------------- Court No. 4 of Buenos Aires' civil and commercial tribunal is now analyzing whether to grant Instituto Coghlan S.R.L. approval for its petition to reorganize. The city's Clerk No. 8 assists the court on the Company's case. La Nacion recalls that the company filed a "Concurso Preventivo" petition following cessation of debt payments since February 2 this year. CONTACT: Instituto Coghlan S.R.L. Pedro Ignacio Rivera 3975 Buenos Aires IRSA: Noteholder Exercises Conversion Option -------------------------------------------- Inversiones y Representaciones Sociedad Anonima (IRSA) informed the Bolsa de Comercio de Buenos Aires and the Comision Nacional de Valores that a holder of Company's Convertible Notes exercised its conversion right. Hence, the financial indebtedness of the Company shall be reduced in US$ 500,000 and an increase of 917,431 ordinary shares face value pesos 1 (V$N 1) each was made. The conversion was performed according to terms and conditions established in the prospectus of issuance at the conversion rate of 1.83486 shares, face value pesos 1 per Convertible Note of face value US$ 1. As a result of that conversion the amount of shares of the Company goes from 273,496,584 to 274,414,015. On the other hand, the amount of registered Convertible Notes is US$ 79,145,275. CONTACT: IRSA Inversiones y Representaciones S.A. Bolivar 108 Buenos Aires, Argentina Phone: 541-342-7555 LUICAR S.R.L.: Court Approves Concurso Motion --------------------------------------------- Court No. 9 of Buenos Aires' civil and commercial tribunal has approved a petition for reorganization filed by Luicar S.R.L., according to a report from Argentine daily La Nacion. The tour company will be under the supervision of trustee Ruben Kwasnyewsky who will verify claims until April 28. The informative assembly will be held on November 7. This is one of the last parts of the reorganization process. Clerk No. 17 assists the court on this case. CONTACT: Luicar S.R.L. Suipacha 871 Buenos Aires MOLINOS RIO: Boosts Net Profit in 2004 -------------------------------------- Molinos Rio de la Plata SA, Argentina's largest manufacturer of packaged food, announced net profits rose to ARS21.19 million last year compared to a profit of ARS1 million in 2003. Citing a statement from the company, Dow Jones Newswires reports that the results included a ARS34.9 million gain from the sale of its oil business in Russia, and a loss of ARS7.9 million the company booked from a fire in its plant in the Argentine city of Rosario. Sales revenue in 2004 rose 20% to ARS2.949 billion, Molinos said, adding operating profit for the year was ARS61 million, down from ARS116.5 million a year earlier. Meanwhile, Molinos told the local stock exchange that it isn't planning on a dividend payment for now because "it will continue with its conservative and prudent policy regarding debt levels, and will continue being very selective in its use of funds, taking especially into account restrictions in the area of credit for growth in investment." According to the company, the only financing it receives is for its export business, so it relies mostly on its own cash flow for its operations. Molinos' controlling shareholder is Perez Companc Family Group (PCFG) with a 64% stake. The remaining stock trades publicly in the local stock market. 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 NAVILLUS S.A.: Court Adjusts Liquidation Schedule ------------------------------------------------- Key events in the Navillus S.A. bankruptcy case have been moved to the following dates: - Claims Verification Deadline: April 19, 2005 - Individual Reports Submission: May 31, 2005 - General Report Submission: July 15, 2005 Mr. Alberto Francisco Romeo oversees the Company's liquidation proceedings as trustee. Proofs of claims must be submitted to the trustee by the stated deadline to qualify for any post- liquidation distributions. Court No. 8 of Buenos Aires' civil and commercial tribunal handles this case with the assistance of Clerk No. 15. CONTACT: Mr. Alberto Francisco Romeo, Trustee Parana 275 Buenos Aires REPSOL YPF: To Sell 50% Petroken Stake to Basell for $58M --------------------------------------------------------- Spanish oil company Repsol YPF (NYSE: REP) is selling its 50% stake in Argentine petrochemical company Petroquimica Ensenada (Petroken) to Dutch company Basell Ibericas Poliolefinas for US$58 million, Business News Americas reports, citing a company filing to the local bourse. The sale, which is part of Repsol YPF's strategy to concentrate its investments in companies in which it has majority control, requires approval from Argentina's antitrust regulator, the Comision Nacional de Defensa de la Competencia. In the filing, Repsol said the sale will not make a significant impact on the company's earnings. Basell, which is owned by Shell and BASF, already owns the remaining 50% of Petroken. According to Petroken's Web site, the company is the largest producer of polypropylene in Argentina. CONTACT: Repsol YPF, S.A. Paseo de la Castellana 278 Madrid, 28046 Spain Phone: 34-1-348-8100 Website: http://www.repsol.com R.S.M. ARGENTINA: Court Names Trustee for Bankruptcy ---------------------------------------------------- Buenos Aires accountant Santiago Manuel Quiben was assigned trustee for the bankruptcy of local company R.S.M. Argentina S.A., relates Infobae. Mr. Quiben will verify creditors' claims until April 4, the source adds. After that, he will prepare the individual reports, which are to be submitted in court on May 16. The submission of the general report should follow on June 29. The city's civil and commercial Court No. 3 holds jurisdiction over the Company's case. Clerk No. 6 assists the court with the proceedings. CONTACT: R.S.M. Argentina S.A. Sarmiento 767 Buenos Aires Mr. Santiago Manuel Quiben, Trustee Esmeralda 783 Buenos Aires SANCOR COOP: $300M in Bonds Remain in Default --------------------------------------------- Moody's Latin America Calificadora de Riesgo S.A. maintains the 'D' rating given to US$300 million worth of corporate bonds issued by Sancor Coop. Unidas Ltda. under 'Program.' The bonds affected were described as "Titulos de Deuda de Mediano Plazo", the CNV reports, without revealing the maturity date of the issue. The rating given is based on the Company's financial standing as of December 31, 2004. TELECOM ARGENTINA: Debts, Net Loss Surge in FY04 ------------------------------------------------ Telecom Argentina (BASE: TECO2), one of Argentina's largest telecommunications companies, announced Tuesday a consolidated net loss of P$666 million for the fiscal year ended December 31, 2004 ("FY04"). Comparatively, consolidated net income for fiscal year 2003 ("FY03") was P$351 million. Consolidated net loss for the fourth quarter of fiscal year 2004 ("4Q04") was P$175 million. Comparatively, consolidated net loss for ("4Q03") was P$428 million. Major Events and Developments -- During 4Q04 Telecom Personal and Nucleo (Paraguay) closed their debt restructurings. As of December 31, 2004, net financial debt of Telecom Personal and Nucleo reached P$1,168 (equivalent to US$392) and P$119 (equivalent to US$40) respectively. -- Regarding Telecom Argentina's debt restructuring, at a bondholders' meeting held on February 4, 2005, creditors representing 94.51% of outstanding bonds voted unanimously in favor of the APE proposal. -- During FY04 the following results were recorded: -- Net Revenues amounted to P$4,494MM (+ P$741 MM or +20% vs. FY03), mainly due to the expansion of the mobile business. -- Operating Profit amounted to P$400 MM (+P$293 MM vs. FY03). -- Net loss of P$666 MM (P$ -1,017 MM vs FY03) as a consequence of negative financial and holding results, mainly due to higher interest and currency exchange losses. -- Shareholders Equity amounted to P$502 MM (-P$666 MM or - 57% vs. FY03). -- Net Financial Debt as of December 31, 2004, reached P$7,032 MM (-P$548 MM or -7% vs. FY03). -- The Ratio Net Financial Debt / Operating Profit before Depreciation and Amortization decreased to 3.4 (from 3.8 as of December 31, 2003), mainly due to the debt restructurings of Telecom Personal and Nucleo. -- The operations of the Company are still being influenced by the "pesification" and freeze of regulated tariffs. Additionally, the results of the Company continue to be highly impacted by the fluctuation of the exchange rate of the Peso vs the Dollar and the Euro. As of December 31, $ % 2004 2003 Change Change Consolidated net revenues (in MM P$) 4,494 3,753 741 20% Fixed Telephony 2,718 2,556 162 6% Cellular 1,733 1,163 570 49% Directories edition 43 34 9 26% Operating Profit before D&A (in MM P$) 2,046 1,984 62 3% Operating Profit (in MM P$) 400 107 293 274% Net income/(Loss) (in MM P$) (666) 351 (1,017) -290% Shareholder's equity (in MM P$) 502 1,168 (666) -57% Net financial debt (in MM P$) 7,032 7,580 (548) -7% CAPEX (in MM P$) 428 120 308 257% Lines in service (Fixed lines - in thousands) 3,790 3,656 134 4% Cellular customers (in thousands) 4,337 3,130 1,207 39% Telecom Personal 3,835 2,603 1,232 47% Nucleo (Paraguay) 502 527 (25) -5% ADSL Total lines (in thousands) 125 70 55 79% Arnet subscribers (in thousands) 233 200 33 17% Dial-up 152 155 (3) -2% ADSL 81 45 36 80% Fixed traffic (in MM minutes) 16,642 16,065 577 4% Incoming/Outgoing cellular traffic (in MM minutes) 3,602 2,568 1,034 40% Average Revenue per User ARPU) Fixed Telephony (in P$) 40 39 1 3% Average Revenue per user (ARPU) Cellular Telephony (in P$) 35 32 4 11% Earnings/loss per share and ADR for FY04 amounted to P$(0.68) and P$(3.38), respectively. Earnings per share/loss and ADR for FY03 were P$0.35 and P$1.78, respectively. Earnings/loss per share and ADR for 4Q04 amounted to P$(0.18) and P$(0.89), respectively. In comparison, earnings/loss per share and ADR for 4Q03, were P$(0.43) and P$(2.17), respectively. Operating profit before depreciation and amortization, operating profit/(loss) and net income/(loss) for FY04 represented, 46%, 9% and (15%) of net sales, respectively; compared with 53%, 3% and 9%, respectively, for FY03. Operating profit before depreciation and amortization, operating profit/(loss) and net income/(loss) for 4Q04 represented, 44%, 15% and (14%) of net sales, respectively; compared with 52%, 8% and (41%), respectively, for 4Q03. The fall in the operating profit before depreciation and amortization margin in FY04 and 4Q04 is a consequence of the increased activity in the cellular telephony. In spite of this fall in margin, operating profit before depreciation and amortization for FY04 reached P$2.046 million, an increase of P$62 million or 3% compared with FY03. Company Activities Evolution of Consolidated Net Revenues (FY04 vs. FY03 comparison) Consolidated net revenues for FY04 totaled P$4,494 million, an increase of P$741 million, or 20%, compared with P$3,753 million for FY03. The increase can be largely attributed to the increase in demand, particularly in the cellular business in Argentina. Fixed Telephony In fixed telephony operations, local measured service revenues increased by P$28 million, or 6%, to P$518 million during FY04. Domestic long distance revenues increased by P$14 million, or 3%, reaching P$441 million. Revenues from both local and domestic long distance telephony increased due to higher traffic. Total traffic volume (Local and DLD), measured in minutes, increased by 4%. Monthly charges increased by P$33 million, or 5%, to P$635 million for FY04, mainly due to the increase in customer lines. Customer lines as of December 31, 2004, increased to approximately 3,484,000, due to the recovery in demand, compared to approximately 3,361,000 as of December 31, 2003. However, the current level of lines in service is still lower than before the economic crisis (December 2001). Moreover, fixed telephony tariffs remained stable after the "pesification" and freeze enforced by the Argentine Government in January 6, 2002. Revenues generated by interconnection services increased by P$46 million, or 28%, to P$210 million, mainly due to the increase of traffic transported by the fixed and cellular networks. Regarding international telephony activities, during FY04 revenues reached P$215 million, increasing by P$2 million or 1%, mainly due to higher traffic. Internet and Data Transmission Revenues generated by data transmission and Internet business totaled P$416 million, representing an increase of P$24 million, or 6%, mainly due to the increase of the in the number of ADSL clients partially offset by lower prices for data transmission services. As of December 31, 2004, total lines in service with ADSL connections amounted to 124,700, an increase of 55,000, or 79%. The number of Arnet's ADSL subscribers reached approximately 81,200, increasing by 80% while Internet dial-up customers reached approximately 152,000, decreasing 2%. Internet minutes represented 30% of total traffic measured in minutes transported over the fixed-line network. However, the internet minutes have fallen due to the steady migration of clients to ADSL services. Cellular Telephony The revenues generated by the cellular business during FY04 increased by P$ 570 million, or 49%, to P$1,733 million. Revenues of Telecom Personal in Argentina increased by P$564 million, or 56%, to P$1,567 million, mainly due to the higher number of subscribers, to the increase in total traffic, and to the increase in sales of handsets as a consequence of the increase in the demand for cellular services and the development of the GSM network. Furthermore, average revenue per user increased by 11% (to P$35 per customer, including revenues for TLRD or termination of calls coming from other cellular operators). Likewise, total cellular traffic increased by 40%. Total cellular subscribers of Telecom Personal in Argentina reached approximately 3,835,000 at December 31, 2004, representing an increase of approximately 1,232,000 customers, or 47%. This increase in the client's base was fueled by the impressive growth in the number of GSM subscribers. The level of competition in the cellular market continues to be significantly high after the launch of GSM services. In this environment, Telecom Personal continues to increase the coverage and capacity of its GSM network and has continued its marketing campaigns and promotions aimed to reposition its brand and strengthen its market position. The customer base as of December 31, 2004 amounted to approximately 2,831,000 prepaid subscribers, representing 74% of the total customer base, and approximately 1,004,000 post-paid subscribers, representing the remaining 26%. These percentages were 81% and 19%, respectively, as of December 31, 2003. Nucleo, Telecom Personal's subsidiary that provides cellular services in Paraguay, generated P$166 million in revenues during FY04, which are consolidated into the mobile telephony business together with the revenues of Telecom Personal. Nucleo's FY04 revenues represented an increase of P$6 million, or 4%. As of December 31, 2004, Nucleo had approximately 502,000 customers, a decrease of approximately 5% due to the loss of dormant prepaid customers whose elimination from Nucleo's customer base was ordered by the Paraguayan regulatory authority. However, Nucleo's postpaid subscribers increased by 44%, reaching 114,000 clients, representing 23% of the customer base. Additionally, Nucleo launched its GSM services in Paraguay, becoming the operator with the largest GSM/GPRS coverage in the country. Directories In the telephone directories' publishing business, revenue from the affiliated company Publicom increased by P$9 million to P$43 million during FY04 due to higher sales of advertising space in Paginas Amarillas' directories and the launch of several new special directories. Evolution of Operating Costs The cost of services provided, administrative expenses and selling expenses for FY04 increased by P$448 million, or 12%, to P$4,094 million, mainly due to the increase in commissions for handset sales, cost of handsets, TLRD costs and advertising expenses. The evolution of costs is mainly related to the increase in sales and increasing competition in the mobile telephony business. Salaries and social security contributions increased by P$87 million, or 17%, to P$593 million, primarily due to the increase in salaries granted during the year. Additionally, labor costs rose as a consequence of the increase in headcount. As of December 31, 2004, the headcount totaled 14,053, compared to 13,949 as of December 31, 2003. The allowance for doubtful accounts decreased by P$6 million, or 55%, to P$5 million. This positive evolution was related to the improvement in the levels of collection and the recovery of past due accounts, mainly in the fixed telephony business. Sales commissions increased by P$81 million, or 84%, to P$177 million for FY04, as a consequence of higher commissions paid for new customers and higher sales of cellular prepaid cards. Costs related to advertising increased by P$49 million, or 111%, to P$93 million for FY04. This increase was mainly due to higher media advertising expenses for the cellular and Internet businesses. In the cellular telephony business, TLRD costs (termination charges in third party cellular networks), which have been accounted for since mid-2003, reached P$137 million. Additionally, in FY04 the cost of cellular handsets increased by P$215 million, reaching P$237 million, mainly due to the increase in handsets sales as a consequence of the cellular business growth after the launch of GSM services. Depreciation of fixed and intangible assets decreased by P$231 million, or 12%, to P$1,646 million during FY04 as a consequence of the end of the amortization period of certain assets. Financial and Holding Results The loss resulting from financial and holding results reached P$1,172 million for FY04 as compared to a gain of P$48 million in FY03. The difference can be largely attributed to a decrease of P$1,084 million related to net currency exchange differences. The gap was a consequence of the effect that the evolution of the Argentine Peso against the Dollar and the Euro had on the financial debt of the Company. Debt Restructuring Results The debt restructuring processes of Telecom Personal and Nucleo generated positive results for P$209 million, as a result of the agreements that Telecom Personal and Nucleo reached with their creditors. The positive results were generated by the haircut (P$72 million), the forgiveness of compensatory interest (P$142 million), and the valuation of the debt at net present value (P$41 million), partially offset by other expenses (P$46 million). After their restructuring, Telecom Personal and Nucleo debts as of December 31, 2004, reached US$416 million and US$44 million, respectively. Additionally, once the Company obtains final homologation of its APE and the debt exchange is performed, Telecom Argentina will account for the corresponding gains as a result of the restructuring of its debt. Such gains will arise from the haircut and the forgiveness of compensatory interests. Other Expenses Other expenses (net) decreased by P$90 million, or 54%, to P$78 million for the FY04, mainly as a result of lower severance payments and lower provisions for lawsuits. Cash Flow and Net Financial Debt Net Debt (Loans minus Cash and Banks plus Investments) decreased by P$548 million, or 7%, to P$7,032 million for FY04 compared with FY03 (P$7,580 million), mainly as a consequence of the successful restructuring of Telecom Personal and Nucleo's debts and the cash flow generation of the Company partially offset by the evolution of the Argentine Peso against the Euro and the Dollar. Investments Of the total amount of P$428 million invested during FY04, P$160 million, or 37%, corresponds to fixed-line telephony, data transmission and Internet, and P$268 million, or 63%, to the cellular business as Telecom Personal continues with the deployment of its GSM network. We note that the investments made during FY04 were lower than those allowed under the debt restructuring covenants that are applicable to Telecom Argentina and its subsidiaries. The amounts not used during the present Fiscal Year can be carried forward to the next Fiscal Year. Telecom Argentina Board of Director's Proposal to Transfer Balance of Retained Earnings to the New Fiscal Year -- Article 206 of Argentine Corporate Law. As the negative Unappropriated Retained Earnings as of December 31, 2004, exceed the Legal Reserve and the 50% of the Adjustment to Capital Stock, the Company would be in the situation foreseen by the Article 206 of Argentine Corporate Law that mandates for these cases the obligatory reduction of capital. The Argentine Government had suspended, through consecutive decrees, the application of the above-mentioned Article 206 until December 10, 2004, but until today the suspension has not been prorogated. Under these circumstances the Board of Directors must propose to the Shareholders the measures to be adopted. The Board of the Company deems that this situation may be considered transitory, as it is expected that, during Fiscal Year 2005, the debt restructuring process will conclude. In such process, the Bondholders meeting was held with creditors representing 94.51% of the outstanding notes who voted unanimously in favor of the proposal included in its Acuerdo Preventivo Extrajudicial ("APE"). Moreover, it must be noted that the court that deals with the homologation of the APE has resolved the admittance of such agreement and has instructed the publication of the corresponding judicial notices. The debt restructuring would significantly improve the Shareholders' Equity structure and would allow the Company to absorb a substantial part of the accumulated losses. Therefore, the Board of Directors will propose to the Shareholders: a) to approve the transfer to the new Fiscal Year the negative Unappropriated Retained Earnings as of December 31, 2004, and to differ the adoption of a measure regarding Article 206 until the end of the restructuring process. b) In the case that no new decree of suspension had been issued about the applicability of Article 206, the Board of Directors should call for a Shareholders' Meeting to address the issue after the first Financial Statements reflecting the gains of the debt restructuring had been approved. Other Matters New Organizational Structure On January 5, 2005, the Telecom Group decided to implement a new organizational model, creating a new unit dedicated to the fixed telephony business. This unit is joined to the one that is dedicated to the cellular business (represented by Telecom Personal S.A.). Both units (fixed telephony and cellular) will report to the Chief Executive Officer, Mr. Carlos Felices. Moreover, Mr. Edmundo Poggio was designated as General Director of the Fixed Telephony Unit, while Mr. Carlos Felices will be General Director of Telecom Personal (the Cellular Unit), in an interim manner. The Telecom Group has designed this new organizational model in response to the changing needs of its business and to continue with the most effective and responsive offer for its clients. Bondholders Meeting On February 4, 2005, a Bondholders' Meeting was held ordered by the National Commercial Court No. 19, where the APE was filed for its homologacion. Creditors representing 94,51% of outstanding bonds voted unanimously in favor of the proposal contemplated in the APE. Telecom is the parent company of a leading telecommunications group in Argentina, where it offers directly or through its controlled subsidiaries local and long distance fixed-line telephony, cellular, PCS, data transmission, and Internet services, among other services. Additionally, through a controlled subsidiary the Telecom Group offers cellular services in Paraguay. The Company commenced operations on November 8, 1990, upon the Argentine Government's transfer of the telecommunications system in the northern region. Nortel Inversora S.A. ("Nortel"), which acquired the majority of the Company from the Argentine government, holds 54.74% of Telecom's common stock. Nortel is a holding company where the common stock (approximately 68% of capital stock) is owned by Sofora Telecomunicaciones S.A. Additionally, the capital stock of Nortel is comprised of preferred shares that are held by minority shareholders. On December 31, 2004, Telecom had 984,380,978 shares outstanding. CONTACT: Telecom Argentina S.A. Alicia Moreau de Justo No. 50 Buenos Aires, 1107 Argentina Phone: (54-11) 4968-3627 TGS: Techint Nets Pipeline Expansion Contract --------------------------------------------- Argentine gas transporter TGS has awarded local construction company Techint a contract to expand the San Martin and Neuba II natural gas pipelines in the south of the country, according to Business News Americas. Techint, whose partners include Swedish engineering firm Skanska, local company Contreras Hermanos and Brazil's Odebrecht, is one of two consortiums that submitted a bid for the US$285-million project in December. The other one is Iecsa, which partnered with Brazil's Camargo Correa. The project is to expand the 296km, 30-inch diameter San Mart�n pipeline and the connecting 160km, 36-inch diameter Neuba II pipeline so they can transport an additional 2.9 million cubic meters of gas a day (Mm3/d) to the province of Buenos Aires. Brazil's national development bank BNDES will provide a US$142- million loan for the project. TGS is controlled by Brazil's federal energy company Petrobras (NYSE: PBR). TGS's operates the largest gas pipeline system in Latin America capable of transporting 2.2 billion cubic feet per day ("bcf/d"). Its system connects the main gas fields in the south and west areas of Argentina with the gas distributors in the city of Buenos Aires and other areas. CONTACT: Transportadora de Gas del Sur S.A. Don Bosco 3672, 5th Floor 1206 Capital Federal Buenos Aires, Phone: (212) 688-5144 Fax: (212) 688-5213 E-mail: eduardo_pawluszek@tgs.com.ar Web Site: http://www.tgs.com.ar/ VINTAGE PETROLEUM: Board Approves 2004 Performance Bonus -------------------------------------------------------- In 1999, the Board of Directors of Vintage Petroleum, Inc. (the "Company") established the Vintage Petroleum, Inc. Discretionary Performance Bonus Program (as amended, the "Program"). The purpose of the Program is to enhance stockholder value by providing eligible employees of the Company, including executive officers, with an added incentive to achieve specific annual targets and goals. The Program also allows the Company to remain competitive with its peers in attracting and retaining qualified personnel. The targets and goals are approved by the Board of Directors. In 2004, the Company's executive officers and all other U.S. employees were eligible for cash incentive awards under the Program. Each executive officer of the Company was eligible to earn an individual award expressed as a percentage of base salary paid during the Program year. Executive officer cash incentive award opportunities varied by level of responsibility. There was no minimum incentive award. The maximum percentage of base salary payable as a cash incentive award was 75%, 105% or 150%, depending on the executive officer's position. Awards could be granted if specified Company financial and operating performance targets and individual performance levels were achieved and the Board of Directors determined to grant such bonuses. On March 2, 2005, the Board of Directors, upon the recommendation of the Compensation Committee of the Board of Directors, granted bonuses for 2004 under the Program to eligible U.S. employees, including executive officers, of the Company. The following table sets forth the bonuses approved for 2004 for the "named executive officers" of the Company who will appear in the Company's proxy statement for its 2005 Annual Meeting of Stockholders: Charles C. Stephenson, Jr. Chairman, President and Chief Executive Officer 2004: US$300,267 William C. Barnes Executive Vice President and Chief Financial Officer 2004: US$192,321 William L. Abernathy Executive Vice President and Chief Operating Officer 2004: US$186,015 Larry W. Sheppard Senior Vice President - New Ventures 2004: US$104,296 William E. Dozier Senior Vice President - Business Development 2004: US$91,516 CONTACT: Vintage Petroleum, Inc. 110 W. 7th St. Tulsa, OK 74119 USA Phone: 918-592-0101 Website: http://www.vintagepetroleum.com * UTILITY COMPANIES: Govt. Schedules Public Hearings ---------------------------------------------------- The Argentine government has scheduled public hearings for a dozen public utility companies, which have held out on state offers for new contracts, reports Dow Jones Newswires. In a surprise move, the government published the hearing schedule in Monday's Official Bulletin, burying the notice in a back section and omitting it from the table of contents. The hearings, coordinated by the state's ad hoc agency for contract talks, Uniren, are to begin on April 20 and run through May 31. The companies involved are: - Edenor S.A., a unit of Electricite de France (EDF.YY) - Edesur, a unit of Chile's Enersis (ENI) - Metrogas (MGS) - Gas Natural Ban SA (GRAN.BA) - Camuzzi's Gas del Sur and Gas Pampeana - Transportadora de Gas del Norte (TGN) - Transportadora de Gas del Sur (TGS) - Transnea - Transoa - Transcomahue - Transpa - Ente Provincial de Energia del Neuquen The government has made little ground renegotiating contracts with 62 public utility companies, with a handful of companies reaching preliminary agreements. The dozen companies listed in Monday's resolution hail from the energy sector. Further public hearing schedules for other sectors could surface in the coming days, the report suggests. =========== B R A Z I L =========== BANCO INDUSVAL: Moody's Withdraws Ratings ----------------------------------------- Moody's Investors Service withdrew, for business reasons, all of its ratings for Banco Indusval Multistock S.A. Those ratings were E+ for bank financial strength, B2/Not Prime for long and short-term foreign currency deposits, B2/Not Prime for long and short-term global local currency deposits, and Ba2.br/BR-4 for long and short-term deposits in the Brazilian national scale. The outlook on those ratings was stable. Banco Indusval Multistock S.A. is headquartered in Sao Paulo, Brazil and, as of December 2004, it had total assets of R$724 million (approximately US$ 274 million). The following ratings were withdrawn: Bank financial strength rating of E+ - Long and short-term, foreign currency deposit ratings of B2 and Not Prime - Long and short-term global local currency deposit ratings of B2 and Not Prime - Long and short-term Brazil national scale deposit ratings of Ba2.br and BR-4 COPEL: Ratifies $43M Investment Program for Curitiba Region ----------------------------------------------------------- Copel, an integrated power company controlled by the Parana state government, has ratified an BRL115-million (US$43 million) investment program, reports Business News Americas. The program, part of Copel's BRL260-million transmission investment planned for 2005, aims to strengthen power supply in the greater Curitiba region by mid-2007. A large chunk of the investment is earmarked for building six new substations and connections to the transmission network. According to Copel, the first two substations are scheduled to start commercial operations in the 2H06 and the other four will start operations in 2007. Also, Copel will invest BRL3 million to boost power transmission capacity in Curitiba's metropolitan area by 65% in the short- term. The company will install cables that can withstand higher temperatures in 108km of lines that will be hung at a greater height from the ground, allowing them to carry higher voltages. Meanwhile, Copel has obtained authorization from power regulator Aneel to continue selling power to Paraguay's state power company Ande through 2014. The company can sell up to 70MW to the Paraguayan company. The contract between the two companies has existed since 1969 and power is transported through a line linking the Foz do Iguacu substation in Brazil to Parguay's Aracary frequency conversion station. CONTACT: Companhia Paranaense de Energia (COPEL) Investor Relations team Phone: (55-41) 222-2027 E-mail: ri@copel.com Web site: http://http://www.copel.com/ LOCALIZA: S&P Affirms 'BB-' LC, FC Rating; Ups Outlook ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB-' local and foreign currency corporate credit ratings on Localiza Rent a Car S.A. (Localiza). The outlook on the local currency rating was revised to positive from stable. The outlook on the foreign currency rating remains stable. "The outlook change reflects Localiza's improving financial flexibility, with a more active presence in the domestic capital markets and the resolution of refinancing risks," said Standard & Poor's credit analyst Beatriz Degani. The company has already secured the refinancing of its senior notes due October 2005 with bank loans that will be ultimately replaced by a debentures issuance in the domestic market. After the debentures placement, we expect Localiza to improve its financial profile further, maintaining strong liquidity and an overall conservative capital structure. "The outlook also incorporates our expectation that positive market conditions will allow the company to improve further cash generation in 2005, even considering a flatter growth pattern for its fleet management business," Ms. Degani added. Localiza's ratings reflect the relatively early stages of the car rental industry in Brazil and the political and economic risks inherent in any investment in this country, which is partially offset by the company's dominant position in the Brazilian car rental market, its expertise in weathering volatility, and its conservative financial profile based on high liquidity and low leverage relative to cash flow. The positive local currency outlook reflects Standard & Poor's assessment of an improving financial flexibility for Localiza and expectations that favorable market conditions will allow the company to report strong cash generation in 2005 (with strong profitability in the used car sale business) and thus reduce short-term debt throughout the year. A positive rating action could derive from the conclusion on the refinancing of the senior notes combined with strong operating performance so that liquidity and capital structure improve further. However, the ratings could face downward pressure if the company does not reduce short-term debt as a way to finance temporary working capital requirements or if the used car operation profitability declines substantially. The stable foreign currency outlook reflects that of the foreign currency sovereign rating of the Federative Republic of Brazil. Localiza is the leading car rental company in Brazil and benefits from an efficient distribution network with about 70 key locations in the country. A well-balanced revenue portfolio from individuals and corporations has allowed the company to report strong cash generation, even under fairly stressful economic conditions. ========= C H I L E ========= INVERLINK: Only $20M in Stolen Funds Recovered ---------------------------------------------- Business News Americas reveals that the ongoing drive to retrieve stolen funds in the case of defunct financial group Inverlink has so far resulted in the recovery of US$20 million, out of an estimated US$145 million. Development agency Corfo is the lead agency in the investigation of the Inverlink affair, which is considered as the biggest financial scandal in the history of Chile. The case, which greatly contributed to Inverlink's collapse last year, stemmed from the theft of tens of millions of dollars of Corfo deposits as well as fraud at the country's central bank. The theft had been made possible through an elaborate scheme engineered by the executives of Inverlink. The scandal led to the resignation of then central bank president Carlos Massad and securities and insurance regulator Alvaro Clarke. =============== C O L O M B I A =============== BANCAFE: Government Creates Two New Banks ----------------------------------------- After a series of failed attempts to sell state-run bank Bancafe, the Colombian government decided late Monday to restructure the bank, said Bancafe president Jorge Castellanos. The restructuring, according to Dow Jones Newswires, included the creation of two new institutions, Granbanco-Bancafe and Banco Cafetero. Granbanco-Bancafe, which was formally created Tuesday, is receiving a capital injection of COP430 billion ($1=COP2,322.00) and is free to negotiate new labor conditions with 4,200 employees at more than 250 branches. Banco Cafetero, on the other hand, will manage COP212 billion in funds for severance payments to workers laid off in the restructuring. But according to Dow Jones, it will probably operate for at least two years, and disappear once payments to all laid off workers have been made. The Colombian government decided to restructure Bancafe to relieve it of its heavy pension liabilities, which have hampered privatization attempts in the past. Castellanos did not elaborate on whether the bank could be privatized in the future. Yet the privatization of Bancafe was written into Colombia's US$2.1 billion standby loan agreement with the International Monetary Fund in 2004. =============== D O M I N I C A =============== * DOMINICA: IMF Board Completes Review of PRGF Arrangement ---------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) has completed the third and fourth reviews of Dominica's performance under its three-year Poverty Reduction and Growth Facility (PRGF) arrangement. Dominica's macroeconomic performance under the program has remained very strong. All quantitative performance criteria were met during the June-December 2004 period, except for the continuous performance criterion on non-accumulation of external payment arrears. The Board also reviewed a noncomplying disbursement under the PRGF arrangement, which arose as a result of misreporting on the observance of the continuous performance criterion on non- accumulation of external payments arrears due to administrative oversights. The Board was satisfied with the authorities' swift actions to correct this problem and granted a waiver for the noncomplying disbursement. As a result of the Executive Board review, Dominica can draw an amount equivalent to SDR 1.2 million (about US$1.8 million) under the arrangement, which will bring total disbursements to SDR 4.2 million (about US$6.4 million). The Executive Board approved Dominica's three-year PRGF arrangement on December 29, 2003 (see Press Release No. 03/228) for an amount equivalent to SDR 7.7 million (about US$11.7 million). Following the Executive Board's discussion of Dominica, on March 7, 2005, Mr. Agustin Carstens, Deputy Managing Director and Acting Chair, said: "The Dominican authorities deserve much credit for the continued successful implementation of their economic program. Significant fiscal consolidation has been achieved ahead of schedule, and substantial progress has been made in debt restructuring. As a result, recent macroeconomic trends are positive. In particular, the economic recovery is gathering strength, notwithstanding the earthquake late last year, and inflation has declined. "The conduct of fiscal policy, the corner-stone of Dominica's adjustment program, has been especially commendable. Higher- than-anticipated revenues have been saved, providing a budgetary cushion which the authorities appropriately have decided to use toward meeting pressing rehabilitation and reconstruction needs following the earthquake, which caused an estimated damage to public infrastructure amounting to 7 percent of GDP. Less urgent earthquake-related projects will be incorporated into the government's medium-term investment program which, together with strengthened public expenditure management, will help ensure overall budgetary discipline going forward. "Dominica continues to make progress in resolving its debt problems. The authorities have followed international best practice in seeking to pre-emptively restructure Dominica's debt, and, for the most part, creditors have responded very favorably. The authorities continue to maintain an open dialogue with creditors who have so far chosen to remain outside the restructuring process, and continue to make good-faith efforts to reach collaborative agreements with them. In this context, these creditors are encouraged to work with the authorities towards a timely agreement. "Despite the substantial progress that has already been achieved, the task of placing Dominica's public finances on a firm footing is not yet complete. The debt restructuring is still ongoing, a medium-term economic growth strategy remains to be finalized, and the economy needs to be shielded from the impact of natural disasters. Accordingly, the authorities plan to undertake a comprehensive review of their medium-term fiscal framework, taking into account potential negative shocks. "Dominica's remaining structural reform agenda for the medium- term remains large but appropriate for consolidating the gains in macroeconomic stabilization and achieving sustained high growth. Specific measures included in the program at this time are steps to improve the fiscal framework and strengthen the financial sector. Going forward, the government that takes office after the elections will need to continue to push ahead vigorously with the implementation of the reform agenda. For its part, the international donor community will need to continue to provide timely technical and financial assistance in support of the authorities' program objectives, " Mr. Carstens said. On the issue of the noncomplying disbursement, Mr. Carstens said: "The Executive Board regretted the Dominican authorities' failure to ensure the accuracy of information relating to the continuous performance criterion on non-accumulation of external arrears, which gave rise to a noncomplying disbursement under the PRGF arrangement. The Board took note of the authorities' explanation that the missed payments on external debt were due to an oversight, and of the very prompt settlement of the payments upon the discovery of the errors. In view of the minor amount of the arrears and the additional corrective actions taken to strengthen Dominica's monitoring capabilities in this area, the Executive Board decided to grant a waiver for the nonobservance of the performance criterion on external payments arrears." CONTACT: IMF - External Relations Department 700 19th Street, NW Washington, D.C. 20431 USA Public Affairs: 202-623-7300 Fax: 202-623-6278 Media Relations: 202-623-7100 Fax: 202-623-6772 ============= E C U A D O R ============= EMELEC: Regulator Seeks to Recover $711M Debt --------------------------------------------- State energy-regulator Cenace wants to collect US$711 million in outstanding power purchase obligations from Guayaquil city distributor Emelec, says Business News Americas. Emelec, an affiliate of bankrupt bank Progreso, accumulated the debt during the three and a half-period between April 1999 and October 2002. Cenace, however, will not levy interest on the said liability. Emelec was formerly part of businessman Fernando Aspiazu's holdings before he was charged for irregularities in connection with the administration of his bank, Progreso. The Ecuadorian government created a new company, Distriguayaquil, from Emelec's assets when it assumed control of the defunct distributor on July 2003. ========= H A I T I ========= * HAITI: Gets $75M World Bank Financing --------------------------------------- World Bank Vice President for the Latin America and Caribbean Region, Pamela Cox, traveled to Haiti this week to meet with Government officials and open a new World Bank office in Port au Prince. "The Bank is committed to supporting the transition to social and economic stability and to laying the groundwork to promote inclusive growth and poverty reduction over the long term," said Pamela Cox at a joint press conference with Prime Minister Gerard Latortue. "We are working to support the government's efforts to deliver hope to the population and restore credibility in public institutions while also paving the way for working with the new government that will emerge from the elections at the end of the year." During her visit, the Vice President met with Haitian President Boniface Alexander and Prime Minister Gerard Latortue and his cabinet to discuss the Bank's programs and exchange views on the country's economic development challenges. "We very much welcome the first visit of a Vice President of the World Bank to Haiti in ten years, the resumed cooperation and the opening of their new office in Port-au-Prince," said Prime Minister Gerard Latortue. (r) It reflects the institution's shared objectives with the Transitional Government of restoring social and economic stability and working toward a smooth transition with the government that will be democratically elected." On Monday, March 7, the Vice President inaugurated the new Bank office with government officials, donors and civil society representatives, sealing the Bank's reengagement in the country. The Bank had reduced its presence in Haiti in 2001 and maintained a liaison office until now. The Bank's Board approved a two-year Transitional Support Strategy for Haiti on January 6, 2005, along with two operations for US$73 million to support economic governance reforms and emergency recovery efforts in flood-affected areas. The two operations, financed by the International Development Association (IDA), are the first approved by the Bank for the Government of Haiti since 1996. The Bank is providing a total of US$75 million in financing from IDA this fiscal year, of which US$38 million will be provided in the form of grants. The Bank has disbursed US$50 million from IDA and from the Low-Income Countries Under Stress (LICUS) Trust Fund. In addition, the Bank expects to be able to provide 100 percent of its IDA assistance on grant terms for investment projects in World Bank fiscal year 2006. The Bank's Transitional Support Strategy is built on two pillars: one is to help the government deliver hope to the population through quick wins-in the provision of basic services and job creation; and the second is to restore credibility in public institutions by helping the government launch reforms that promote sound economic governance and institutional development. CONTACT: Ms. Alejandra Viveros Phone: (202) 473-4306 E-mail: Aviveros@worldbank.org Ms. Cathy Russell Phone: (202) 458-8124 E-mail: russell@worldbank.org In Port-au-Prince: Ms. Jean Sylvio Etienne Phone:(509) 510-3797 E-mail: jetienne@worldbank.org Web site: http://www.worldbank.org/ht =========== M E X I C O =========== AOL LATIN AMERICA: Announces Executive Bonus Details ---------------------------------------------------- On March 3, 2005, the Compensation Committee of the Board of Directors of America Online Latin America, Inc. approved the granting of bonuses with respect to the 2004 fiscal year. Such amounts were previously approved by the Special Committee of the Board of Directors. Annual Bonus Earned in 2004. The Compensation Committee approved annual cash bonus awards earned during 2004 by the executive officers. The bonus awards were earned based upon the achievement of performance goals established in 2004, which were reviewed and approved by the Compensation Committee. The amounts of the bonus awards for the named executive officers are as follows: Charles Herington, CEO and President - $498,177; Osvaldo Banos, Executive Vice President and CFO - $171,785; Eduardo Escalante Castillo--President and General Manager, AOL Mexico -- $143,856; Milton Camargo, President and General Manager, AOL Brasil - $94,320; and David Bruscino, Vice President, General Counsel and Secretary - $82,265. CONTACT: America Online Latin America, Inc. 6600 N. Andrews Ave. Suite 500 Fort Lauderdale, FL 33309 USA Phone: 954-229-2100 CINTRA: To Sell Mexicana With Repackaged Aerocaribe --------------------------------------------------- Troubled carrier Mexicana de Aviacion will be sold along with a restyled Aerocaribe in a bid by state-owned airline holding company Cintra to clean up its floundering assets. Another Cintra asset, the airline Aeromexico, is also being packaged with regional carrier Aeroliteral. Reuters reports that the move to re-launch Aerocaribe as a budget carrier and its consequent amalgamation with Mexicana will help Cintra's overall divestment plan by giving prospective buyers two different airlines. Chairman Andres Conesa says that "...If you have a very different subsidiary, it helps to differentiate the products." Investors will be informed in May or June if the airlines will be sold through a shares issue, privately or through a combination of the two. Cintra is showing signs of recovery after years of losses. The company returned to black in 2004 and it hopes to further improve its performance with the sale of Aeromexico and Mexicana. DIRECTV: Underwriters to Purchase Additional Company Shares ----------------------------------------------------------- The DIRECTV Group, Inc. (NYSE:DTV) has announced that it received notice Monday that the underwriters have exercised an option to purchase 2,077,800 shares of the common stock of the Company from the General Motors Special Hourly Employees Pension Trust, the General Motors Special Salaried Employees Pension Trust and the Sub-Trust of the General Motors Welfare Benefit Trust in connection with the previously announced secondary offering of its common stock by the selling stockholders. The exercised amount is out of a total option granted of 5,500,000 additional shares held by the selling stockholders. The DIRECTV Group will not receive any of the proceeds from the sale of shares in the offering. In connection with the offering, Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated served as joint book running managers, with Citigroup Global Markets Inc., Credit Suisse First Boston LLC and J.P. Morgan Securities Inc. acting as co- managers. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. A copy of the prospectus relating to these securities may be obtained, when available, from Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, (212-902-1171), Attn: Prospectus Department or from Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, (212-761-6775). About DirecTV The DIRECTV Group, Inc. is a world-leading provider of digital multi-channel television entertainment, broadband satellite networks and services. The DIRECTV Group is 34 percent owned by Fox Entertainment Group, which is approximately 82 percent owned by News Corporation. CONTACT: The DIRECTV Group, Inc. Mr. Bob Marsocci Phone: 310-726-4656 VITRO: S&P Cuts Ratings; Outlook Improves to Stable --------------------------------------------------- Standard & Poor's Ratings Services lowered the long-term local and foreign currency corporate credit ratings assigned to glass manufacturer Vitro S.A. de C.V. (Vitro) and its glass containers subsidiary Vitro Envases Norteamerica S.A. de C.V. (Vena) to 'B' from 'B+'. Standard & Poor's also lowered the long-term national scale corporate credit rating assigned to Vitro to 'mxBBB-' from 'mxBBB'. The outlook was revised to stable from negative. Standard & Poor's also lowered the rating assigned to Vitro's notes due 2013 and to Servicios y Operaciones Financieras Vitro S.A. de C.V. notes due 2007 (which are guaranteed by Vitro) to 'CCC+' from 'B-'. Standard & Poor's also lowered the rating assigned to Vena's notes due 2011 to 'B' from 'B+'. "The rating actions reflect the continued weakness in Vitro's financial performance and profitability," said Standard & Poor's credit analyst Jose Coballasi. "In Standard & Poor's opinion, Vitro's financial performance is not commensurate with its former credit rating." The stable outlook reflects Standard & Poor's opinion that Vitro's liquidity is adequate to meet its debt maturities due in 2005. The ratings could be lowered if the company's key financial indicators fail to improve during the year, as it is expected that excess cash balances will be directed toward debt reduction as maturities come due. In particular, Standard & Poor's expects Vitro's EBITDA interest coverage and its total debt/EBITDA ratio to move toward 2.0x and 4.0x during the year. A positive rating action would demand a substantial improvement in Vitro's operating and financial performance relative to Standard & Poor's expectations. Monterrey, Mexico-based Vitro, through its subsidiary companies, is Mexico's leading glass producer. Vitro is a major participant in three principal businesses: flat glass, glass containers, and glassware. Vitro also produces raw materials and equipment and capital goods for industrial use. ================= V E N E Z U E L A ================= PDVSA: Minister Clarifies Citgo As Partial Sale ----------------------------------------------- Citgo, the U.S.-based refining arm of Venezuelan state oil company Petroleos de Venezuela (PDVSA), will not be sold completely. According to energy and oil minister Rafael Ramirez, only some of Citgo's refineries are to go under the hammer. Ramirez, who is also PDVSA's president, said the company will inform the National Assembly, the seat of Venezuela's legislative power, soon about its plans for Citgo. "We don't have a decision yet, about how many and which refineries will be sold. What we are sure of is that Citgo will not be totally sold and only those refineries that are not commercially viable will be divested," he said. Ramirez said Citgo does not make sense financially for PDVSA. "To any business analyst, a US$10bn investment with a return of US$400mn [a year] is not a good business." PDVSA: Clarifies Report on Small Oil Spill at El Palito ------------------------------------------------------- Petroleos de Venezuela stated that at dawn Tuesday, the duty shift at its El Palito Refinery had detected a crude oil spillage from a storage tank reported that a total of some 90 barrels has been spilt, and that 60 of these had reached the sea. The El Palito Refinery is located in the State of Carabobo in Venezuela 's north-central region, on the Caribbean shore. The storage tank in question is the 265X1, located near the refinery's southern boundary. According to its industrial safety experts, the accident was due to the fracture of a flange which connects a 32-inch pipeline to the tank's inlet valve. Similarly, Health Safety and Environment (HSE) personnel established that neither the pipe, flange nor valve showed any signs of corrosion, and that the fracture had probably been caused by the earth tremors (2.9 and 3.8 on the Richter Scale) which had shaken Carabobo late yesterday morning. Once the situation had been notified, the refinery activated the National Contingency Plan which deals with oil spillage's on water, coordinating the assistance provided by the Puerto Cabello Port Authority, the local garrison's Command, the Ministry of Energy and Petroleum, as well as other organizations concerned, in their efforts to combat the effects of this accident. It is also reported that the crude spill on the sea has been successfully confined to a beach belonging to the installation, and had no impact on adjacent communities nor on the El Palito's own workforce. El Palito operations -it was stated- have not otherwise been disrupted, continuing to process 140,000 barrels per day of crude and manufacturing 60,000 barrels of gasoline per day. Also, crude supplies pumped from the State of Barinas continue to arrive at regular rates, as is the pipeline transmission of products from the refinery to the Yagua and Barquisimeto terminals, in the country's central region. CONTACT: Petroleos de Venezuela S.A. Edificio Petroleos de Venezuela Avenida Libertador, La Campina, Apartado 169 Caracas, 1010-A, Venezuela Phone: +58-212-708-4111 Fax: +58-212-708-4661 http://www.pdvsa.com.ve *********** 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 2005. 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. 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