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/raid1/www/Hosts/bankrupt/TCRLA_Public/050413.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 Wednesday, April 13, 2005, Vol. 6, Issue 72 Headlines A R G E N T I N A AEROLINEAS ARGENTINAS: Marsans Firm on Keeping Majority Stake ALUNAMAR S.A.: Reports Submission Set BANCO BISEL: Schedules Shareholders Meeting IRSA: Noteholder Exercises Conversion Right JJ FELICIDADES: Proceeding With Liquidation LA BRESCIANA: Gets Court Approval for Reorganization LITTLE PALACE: Court Grants Reorganization Plea MAQUIRENTAL S.A.: Court OKs Creditor's Bankruptcy Petition METRO MEDICION: Court Approves Bankruptcy NEW CATERING: Liquidates Assets to Pay Debts PESCADOS Y MARISCOS: Trustee Readies Report for Submission PROALBA S.A.: Submits Reorganization Petition in Court SENOR KAFEGO: Court Declares Company Bankrupt TAPAMAR S.A.: Debt Payments Halted, Moves to Reorganize TRANSENER: Fitch Maintains Default Rating on $450M Bonds * ARGENTINA: Bond Exchange A "Success" Despite Holdouts B A R B A D O S COURTS: Planned Sale Attracts Interest From a Number of Firms B E R M U D A FOSTER WHEELER: Conducts Coal-to-Liquids Study GLOBAL CROSSING: SEC Concludes Reciprocal Transactions Probe INTER-OCEAN HOLDINGS: Ceases Underwriting, Enters Run Off INTER-OCEAN HOLDINGS: A.M. Best Downgrades, Withdraws Ratings LORAL SPACE: Begins Construction of TerreStar Satellite B R A Z I L AES CORPORATION: Draws Flak for City Hall Black Out CSN: Drop in Shares Unrelated to Purchase of Tin Mine C O S T A R I C A ICE: To Bring Back Special Service Lines to Boost Sales M E X I C O EAGLEPICHER: Mexican Ops Excluded in Bankruptcy Filing GRUPO DESC: Signs IT Service Contract With NEORIS GRUPO MEXICO: Asarco Resorts to Chapter 11 to Deal With Claims MEXICANA DE AVIACION: Unveils New Airline VITRO: Finacity Posts Details of Receivables Securitization P E R U ENAFER: Liquidator Releases Updates on Status of Liquidation V E N E Z U E L A PDVSA: Reports Higher Net Income in 2004 PDVSA: PowerSeraya Certain of Continued Orimulsion Fuel Supply PDVSA: To Discuss Wind Power Project With Cadafe This Week - - - - - - - - ================= A R G E N T I N A ================= AEROLINEAS ARGENTINAS: Marsans Firm on Keeping Majority Stake ------------------------------------------------------------- Grupo Marsans revealed its plans for Aerolineas Argentinas, quelling rumors of an impending bail out from the troubled Argentine carrier. Business Latin America reports that the Spanish Company is committed to upgrading Aerolineas' fleet as well as its facilities over the next six years. Marsan's CEO says that on the drawing board are plans to purchase 15 Boeing 737/500 jets and two Airbus 310s to augment the carrier's stable. The airline could also expect to offer better international flights with the proposed acquisition of two Jumbo 747/400s. New headquarters for the airline is also being considered. Hints of Grupo Marsans exit from Argentina surfaced following a protracted legal dispute with the government over the unit's 2003 results. Officials had rejected the financial statements that were required for Aerolineas' IPO. CONTACT: AEROLINEAS ARGENTINAS Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA Phone: (54-11) 4310-3000 Fax: (54-11) 4310-3585 E-mail: volar@aerolineas.com.ar Home Page: www.aerolineas.com.ar ALUNAMAR S.A.: Reports Submission Set ------------------------------------- Local accounting firm "Estudio Mendez Scolnik y Asoc," the trustee assigned to supervise the reorganization of Alunamar S.A., will submit validated individual claims for court approval on August 3. These reports explain the basis for the accepted and rejected claims. The trustee will also submit a general report of the case on September 9. Infobae reports that Court No. 24 of Buenos Aires' civil and commercial tribunal has jurisdiction over this case. The city's Clerk No. 47 assists the court with the proceedings. CONTACT: "Estudio Mendez Scolnik y Asoc." Trustee Avda Segurola 1791 Buenos Aires BANCO BISEL: Schedules Shareholders Meeting ------------------------------------------- Argentine bank Banco Bisel has called a general shareholders' meeting for May 4, 2005, Business News Americas report, citing a filing with the Buenos Aires stock exchange. Bisel is one of three banks taken over by the Argentine government in early 2002 when French banking conglomerate Credit Agricole SA left Argentina in the middle of the country's financial crisis. Bisel is yet to find a new owner. CONTACT: Banco Bisel S.A. Mitre 602 Rosario 2000 Santa Fe Argentina Phone: 0341-4200300 Web Site: http://www.bancobisel.com.a IRSA: Noteholder Exercises Conversion Right ------------------------------------------- Inversiones y Representaciones S.A. (IRSA) reports that a holder of Company's Convertible Notes exercised it conversion right. Hence, the financial indebtedness of the Company shall be reduced in US$ 28,984 and an increase of 53,181 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 338,372,526 to 338,425,707. On the other hand, the amount of registered Convertible Notes is US$ 63,354,010. IRSA is Argentina's largest, most well-diversified real estate Company, and it is the only Company in the industry whose share are listed on the Bolsa de Comercio de Buenos Aires and The New York Stock Exchange. Through its subsidiaries, IRSA manages an expanding top portfolio of shopping centers and office buildings, primarily in Buenos Aires. The Company also develops residential subdivisions and apartments (specializing in high-rises and loft- style conversions) and owns three luxury hotels. Its solid, diversified portfolio of properties has established the Company as the leader in the sector in which it participates, making it the best vehicle to access the Argentine real estate market. CONTACT: IRSA Inversiones y Representaciones S.A. 1066 Bolivar 108 Buenos Aires, Argentina Phone: 541-342-7555 JJ FELICIDADES: Proceeding With Liquidation ------------------------------------------- Banca Nacionale del Lavoro S.A. successfully sought the bankruptcy of JJ Felicidades S.A. after Court No. 18 of Buenos Aires' civil and commercial tribunal declared the Company "Quiebra," reports La Nacion. As such, the Company will now start the process with Mr. Jorge Del Hoyo as trustee. Creditors must submit proofs of their claim to the trustee by May 26 for authentication. Failure to comply with this requirement will mean disqualification from the payments that will be made after the Company's assets are liquidated. The city's Clerk No. 35 assists the court on the case that will close with the sale of all of its assets. CONTACT: JJ Felicidades S.A. Lavalle 2616 Buenos Aires Mr. Jorge Del Hoyo, Trustee Avenida Presidente Julio Argentino Roca 610 Buenos Aires LA BRESCIANA: Gets Court Approval for Reorganization ---------------------------------------------------- La Bresciana S.A.C.I.F.I. will begin reorganization following the approval of its petition by Court No. 7 of Quilmes' civil and commercial tribunal. The opening of the reorganization will allow the Company to negotiate a settlement with its creditors in order to avoid a straight liquidation. Ms. Alicia Tellechea oversees the reorganization as the court- appointed trustee. She will verify creditors' claims until June 3. The validated claims will be presented in court as individual reports on July 19. Ms. Tellechea is also required to submit a general report essentially auditing the Company's accounting and business records as well as summarizing important events pertaining to the reorganization. The report will be presented in court on August 30. An Informative Assembly, the final stage of a reorganization where the settlement proposal is presented to the Company's creditors for approval, is scheduled on March 2 next year. CONTACT: La Bresciana S.A.C.I.F.I. Calle 321 Nro. 2666 Quilmes Ms. Alicia Tellechea, Trustee Garibaldi 204 Quilmes LITTLE PALACE: Court Grants Reorganization Plea ----------------------------------------------- Little Palace S.A. successfully petitioned for reorganization after Court No. 26 of Buenos Aires' civil and commercial tribunal issued a resolution opening the Company's insolvency proceedings. Under insolvency protection, the Company will continue to manage its assets subject to certain conditions imposed by Argentine law and the oversight of a court-appointed trustee. Infobae relates that Mr. Pablo Amante will serve as trustee during the course of the reorganization. The trustee will be accepting creditors' proofs of claims for verification until May 20. After verifications, the trustee will prepare the individual reports and submit it in court on July 5. He will also present a general report for court review on August 31. The Company will endorse the settlement proposal, drafted from the submitted claims, for approval by the creditors during the informative assembly scheduled on December 20. CONTACT: Little Palace S.A. Guemes 3856 Buenos Aires Mr. Pablo Amante, Trustee Lavalle 1537 Buenos Aires MAQUIRENTAL S.A.: Court OKs Creditor's Bankruptcy Petition ---------------------------------------------------------- Mr. Carlos Carrido successfully sought the bankruptcy of Maquirental S.A. after Court No. 4 of Buenos Aires' civil and commercial tribunal declared the Company "Quiebra," reports La Nacion. As such, the heavy machinery distributor will now start the process with Mr. Roberto Hermida as trustee. Creditors must submit proof of their claims to the trustee by June 26 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 requested the Company's liquidation after the latter failed to pay debts amounting to US$34,366.90. The city's Clerk No. 7 assists the court on the case that will close with the liquidation of all of its assets. CONTACT: Maquirental S.A. Avenida Montes de Oca 1771 Buenos Aires Mr. Roberto Hermida, Trustee Tucuman 1668 Buenos Aires METRO MEDICION: Court Approves Bankruptcy ----------------------------------------- Metro Medicion S.A. was declared bankrupt after Court No. 21 of Buenos Aires' civil and commercial tribunal endorsed the petition of Mr. Marcelo Meriggi for the Company's liquidation. Argentine daily La Nacion reports that Mr. Meriggi has claims totaling US$52,189.61 against the Company. The court assigned Ms. Maria Barbieri to supervise the liquidation process as trustee. Ms. Barbieri will validate creditors' proofs of claims until May 3. The city's Clerk No. 42 assists the court in resolving this case. CONTACT: Metro Medicion S.A. Bartolome Mitre 1131 Buenos Aires Ms. Maria Barbieri, Trustee Avenida Cabildo 2040 Buenos Aires NEW CATERING: Liquidates Assets to Pay Debts -------------------------------------------- New Catering S.R.L. will begin liquidating its assets following the bankruptcy pronouncement issued by Court No. 18 of Buenos Aires' civil and commercial tribunal, Infobae reports. The ruling places the Company under the supervision of court- appointed trustee Javier Marcelo Espineira. The trustee will verify creditors' proofs of claims until May 18. The validated claims will be presented in court as individual reports on July 1. Mr. Espineira 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 August 29. The bankruptcy process will end with the sale of the Company's assets. Proceeds from the sale will be used to repay its debts. CONTACT: Mr. Javier Marcelo Espineira, Trustee Viamonte 783 Buenos Aires PESCADOS Y MARISCOS: Trustee Readies Report for Submission ---------------------------------------------------------- Pescados y Mariscos S.A., a Company operating in Buenos Aires, starts its reorganization with the appointment of Mr. Manuel Camilo Arias as trustee for the case. Infobae reports that the Mr. Arias will verify creditors' claims until June 2. Afterwards, he will present these claims as individual reports for final review by the court on August 1. The trustee will also provide the court with a general report of the case on September 12. The court has scheduled the informative assembly on March 9, 2006. Court No. 13 of the city's civil and commercial tribunal has jurisdiction over this case. The city's Clerk No. 25 assists with the proceedings. CONTACT: Pescados y Mariscos S.A. Avda Rivadavia 1427 Buenos Aires Mr. Manuel Camilo Arias, Trustee Amenabar 2529 Buenos Aires PROALBA S.A.: Submits Reorganization Petition in Court ------------------------------------------------------ Court No. 17 of Buenos Aires' civil and commercial tribunal is reviewing the merits of a petition to reorganize presented by Proalba S.A. La Nacion recalls that the chemical Company filed the petition following cessation of debt payments on February 10 this year. Reorganization will allow the Company to avoid bankruptcy by negotiating a settlement with its creditors. Proalba has stated assets of US$379,108.54 and liabilities totaling US$255,317.89. The city's Clerk No. 34 assists the court on this case. CONTACT: Proalba S.A. Maipu 267 Buenos Aires SENOR KAFEGO: Court Declares Company Bankrupt --------------------------------------------- Court No. 2 of Buenos Aires' civil and commercial tribunal declared local Company Senor Kafego S.R.L. "Quiebra", relates La Nacion. The court approved the bankruptcy petition filed by Tersuave S.A., whom the Company has debts amounting to US$11,000. The Company will undergo the bankruptcy process under the supervision of trustee Aldo Cambiasso. Creditors are required to present proof of their claims to Mr. Cambiasso for verifications by June 6. Creditors who fail to submit the required documents by the said date will not qualify for any post-liquidation distributions. Clerk No. 3 assists the court on the case. CONTACT: Senor Kafego S.R.L. Avenida Pueyrredon 749 Buenos Aires Mr. Aldo Cambiasso, Trustee Cerrito 1070 Buenos Aires TAPAMAR S.A.: Debt Payments Halted, Moves to Reorganize ------------------------------------------------------- Court No. 24 of Buenos Aires' civil and commercial tribunal is studying the request for reorganization submitted by local Company Tapamar S.A., says La Nacion. The report adds that that the Company filed a "Concurso Preventivo" petition following cessation of debt payments at the end of 2001. The city's Clerk No. 48 assists the court on this case. CONTACT: Tapamar S.A. Avenida del Libertador 774 Buenos Aires TRANSENER: Fitch Maintains Default Rating on $450M Bonds -------------------------------------------------------- Fitch Argentina Calificadora de Riesgo S.A. maintains a 'D(arg)' rating on US$450 million worth of corporate bonds issued by the Argentine high-voltage power transporter Compania de Transporte de Energia Electrica de Alta Tension Transener SA. Securities regulator CNV says the action affected bonds described as "Programa Global de Obligaciones Negociables simples no convertibles en acciones." These bonds matured on March of 2003. Another US$345 million worth of Transener bonds were given B(arg) ratings. The affected bonds are: - US$100 million worth of bonds described as "ONs Clase 6 a la Par con Oferta Publica por hasta U$S 100 MM." - US$245 million worth of bonds described as "ONs Clase 7 con Descuento con Oferta Publica por hasta U$S 245 MM." Fitch took the action based on the Company's financial health as of December 31, 2004. CONTACT: Paseo Colon 728 6th Floor (1063) Buenos Aires Republica Argentina Tel: (54-11) 4342-6925 Fax: (54-11) 4342-7147 Email: info-trans@transx.com.ar Web site: http://www.transener.com.ar * ARGENTINA: Bond Exchange A "Success" Despite Holdouts ------------------------------------------------------- Argentina will not engage in talks with holdout creditors despite calls by the International Monetary Fund to the contrary, Bloomberg reports, citing Economy Minister Roberto Lavagna. Lavagna said the government has no obligation to deal with investors holding US$20 billion in defaulted bonds after they spurned the debt swap. "Nobody should try to force negotiations or a reopening because it isn't going to happen," Lavagna said in response to IMF spokesman Thomas Dawson's comments on April 8 that the country should "develop a realistic strategy" to resolve the demands of non- participating bondholders. Although the defaulted sovereign bonds exchange operation was considered a "success" by Argentine authorities because 76% of creditors adhered, an estimated US$20 billion out of a total US$82 billion rejected the offer, which basically meant exchanging one US dollar face value for 33 US cents. During an Inter-American Development Bank meeting in Japan on the weekend, Lavagna said the country would deal with the holdouts in "due course." Lavagna denied his weekend comments imply the country will reopen the exchange. Newspaper headlines today [Monday] in Argentina suggesting it would negotiate with holdouts are wrong, he said. =============== B A R B A D O S =============== COURTS: Planned Sale Attracts Interest From a Number of Firms ------------------------------------------------------------- KPMG, the administrator to collapsed U.K-based furniture retailer Courts PLC, has received expressions of interest from several firms in connection to the planned sale of the Caribbean operations of Courts Plc. This, according to Barbados Daily Nation, was confirmed by Charles Elphick, head of corporate communications with Courts Plc. KPMG had "received expressions of interest from a number of parties who want to acquire Courts Plc's international businesses as a whole or separately," Elphick said. Courts Plc owns stores in Barbados, Jamaica, Belize, Dominica, Trinidad and Tobago, St Kitts-Nevis, Antigua, St Lucia, St Vincent and the Grenadines, Grenada, and Guyana. Their total turnover is about US$600 million. Elphick stressed that Courts' overseas businesses were "profitable and valuable assets", which the administrator and the Plc management want to continue to perform in order to enhance their value. KPMG has not yet entered into detailed discussions with prospective buyers as it is still finalizing its strategic review. CONTACT: Mailing Address: Courts Barbados Ltd P.O. Box 689C Bridgetown Barbados Registered Offices and Head Office: Courts Barbados Ltd. St. George Street Bridgetown St. Michael Head Office Telephone & Fax: Tel: +(246)-431-6850 Fax: +(246)-429-5445 ============= B E R M U D A ============= FOSTER WHEELER: Conducts Coal-to-Liquids Study ---------------------------------------------- Foster Wheeler Ltd. (OTCBB: FWHLF) announced Monday that its UK subsidiary, Foster Wheeler Energy Limited, in a joint venture with China Huanqiu Contracting & Engineering Corp., has been awarded a feasibility study Stage I contract by Sasol Synfuels International (Proprietary) Limited (Sasol) and its Chinese partners, China Shenhua Coal Liquefaction Corporation Ltd. and Ningxia Luneng Energy and High Chemistry Investment Group Co., Ltd. (jointly called "the Combined Chinese Working Team"). The Foster Wheeler contract value was not disclosed. The project will be included in the Company's first-quarter 2005 bookings. The contract is related to two 80,000 barrels per day coal-to- liquids (CTL) facilities to be located at Ningxia Autonomous Region and Shaanxi Province, respectively, both in the coal-rich western part of the People's Republic of China. "Foster Wheeler is delighted to be awarded this contract by Sasol and the CCWT," said Steve Davies, chairman and chief executive officer of Foster Wheeler Energy Limited. "This first use of Sasol's CTL technology outside South Africa builds on the relationship developed over the last eight years between Foster Wheeler and Sasol, optimizing and engineering the application of Sasol's gas-to-liquids (GTL) technology in the global marketplace, and on our long track record of delivering successful projects in China. "Coal-to-liquids is a key part of the Chinese government's energy strategy, and we are pleased to be involved at the early stages of its implementation and to be involved with other companies so well-placed to ensure its rapid and commercial development," continued Mr. Davies. Coal-to-liquids comprises an integrated process for the conversion of coal into selected fuel products such as diesel, naphtha and liquefied petroleum gas by using a combination of three principal processes, i.e., gasification of coal to synthesis gas, conversion of gas-to-liquids and hydrocracking the converted products into fuel products. The three processes will involve separate technologies, central to which is Sasol's low-temperature Fischer-Tropsch technology for the conversion of synthesis gas to liquid fuels. The Foster Wheeler/Huanqiu joint venture will evaluate the available technologies for the projects and complete feasibility study Stage I work to integrate these with the associated utilities and infrastructure systems in order to maximize the value of the project to its shareholders. Huanqiu will provide gasification experience together with the essential local technical, commercial and legislative information to ensure the study conclusions are robust. The study is scheduled for completion by the end of the year. About Foster Wheeler Foster Wheeler Ltd. is a global Company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. CONTACT: Foster Wheeler Ltd. Media Contacts: Ms. Maureen Bingert Phone: 908-730-4444 or Ms. Anne Chong Phone: +44 (0)118 913 2106 or Other Inquiries: Phone: 908-730-4000 Web site: http://www.fwc.com/ GLOBAL CROSSING: SEC Concludes Reciprocal Transactions Probe ------------------------------------------------------------ Global Crossing (NASDAQ: GLBC) announced Monday that the U.S. Securities and Exchange Commission (SEC) investigation of the Company's reciprocal purchases and sales of telecommunications capacity with other carriers and related matters has been resolved by the SEC's entry of an administrative order. "We're happy to have reached a settlement with the SEC and that we can put these issues solidly behind us without a finding of fraud or a financial penalty against the Company," said Global Crossing CEO John Legere. "We look forward to focusing on Global Crossing's bright future and building our brand as a provider of IP services to our customers around the world." The order finds that the Company did not comply with certain reporting obligations under the securities laws and requires the Company to cease and desist from committing any future violations. In addition, the order states that the SEC staff received significant cooperation from the Company during the course of its investigation. No fines or penalties were assessed against the Company, and the order does not include a finding of fraud. The Company neither admitted nor denied the SEC's findings. Global Crossing first announced that the SEC was conducting a formal investigation into allegations regarding its reciprocal transactions in February 2002. About Global Crossing Global Crossing (NASDAQ: GLBC) provides telecommunications solutions over the world's first integrated global IP-based network. Its core network connects more than 300 cities and 30 countries worldwide, and delivers services to more than 500 major cities, 50 countries and 6 continents around the globe. The Company's global sales and support model matches the network footprint and, like the network, delivers a consistent customer experience worldwide. Global Crossing IP services are global in scale, linking the world's enterprises, governments and carriers with customers, employees and partners worldwide in a secure environment that is ideally suited for IP-based business applications, allowing e- commerce to thrive. The Company offers a full range of managed data and voice products including Global Crossing IP VPN Service, Global Crossing Managed Services and Global Crossing VoIP services, to more than 40 percent of the Fortune 500, as well as 700 carriers, mobile operators and ISPs. CONTACT: Ms. Becky Yeamans Phone: + 1 973-937-0155 E-mail: PR@globalcrossing.com Analysts/Investors Contact Ms. Laurinda Pang Phone: + 1 800-836-0342 E-mail: glbc@globalcrossing.com Web site: http://www.globalcrossing.com INTER-OCEAN HOLDINGS: Ceases Underwriting, Enters Run Off --------------------------------------------------------- Inter-Ocean Holdings Ltd., a Bermuda-based finite risk reinsurer, has ceased underwriting and will run off the business of its reinsurance units, reports Royal Gazette. "After much consideration, the board of directors of Inter-Ocean has decided to put the Company into voluntary runoff," an Inter- Ocean spokeswoman said. "Current management will be retained in order to direct the Company's runoff operations." The Company didn't release details to back its decision, though analysts have cited the mounting regulatory scrutiny of finite reinsurance as a potential roadblock to Inter-Ocean's future business prospects. Business Insurance revealed in a report that Inter-Ocean is owned by 11 insurance and reinsurance companies that have helped produce much of its business and that act as 100% retrocessionaires of its two units, Inter-Ocean Reinsurance Co. Ltd. of Bermuda and Inter-Ocean Reinsurance (Ireland) Ltd. The two units thus retain no net underwriting risk and have collected only fees and, in some cases, profit commissions on the business they assume, analysts say. The 11 Inter-Ocean shareholders are: Associated Electric & Gas Insurance Services Ltd.; American Re-Insurance Co.; Converium Holding Ltd.; Federal Insurance Co., a unit of Chubb Corp.; GMAC Insurance Holdings Inc.; Hannover Ruckversicherung A.G.; Platinum Underwriters Holdings Ltd.; RenaissanceRe Holdings Ltd.; Swiss Reinsurance Co.; Westfield Insurance Co.; and XL Capital Corp. According to Business Insurance, Inter-Ocean deals have already caused trouble for one of these shareholders: RenaissanceRe stated in its 2004 10-K report filed last week with the Securities and Exchange Commission that it is restating its earnings for 2001 through 2003 after concluding that it accounted improperly for transactions with the reinsurer. The problems stemmed from a 2001 aggregate excess of loss reinsurance agreement under which RenaissanceRe ceded business to Inter-Ocean, along with a second deal under which it agreed to sell reinsurance recoverables to Inter-Ocean. While RenaissanceRe treated the excess of loss contract as traditional reinsurance, the two deals should have been considered together; in combination, they "lacked the necessary risk transfer" to be considered reinsurance, RenaissanceRe concluded after an internal review. The effect of the restatement is to increase RenaissanceRe's 2003 net income by US$1.3 million, reduce its 2002 net income by US$21.9 million and increase its 2001 net income by US$20.6 million, the Company said. RenaissanceRe's outside directors also concluded that several senior executives, including Chief Executive Officer James Stanard, "made mistakes and in some instances lacked due care" in accounting for the Inter-Ocean deals, according to the 10-K. INTER-OCEAN HOLDINGS: A.M. Best Downgrades, Withdraws Ratings ------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B++ (Very Good) from A- (Excellent) and the issuer credit rating to "bbb" from "a-" for the reinsurance subsidiaries of Inter- Ocean Holdings Limited (Inter-Ocean) (Bermuda). Additionally, A.M. Best has downgraded the issuer credit rating to "bb" from "bbb-" of Inter-Ocean. Subsequently, Inter-Ocean and its reinsurance subsidiaries ratings will be withdrawn and assigned a rating of NR-4 (Company Request). The latter action is in response to management's request that the operating subsidiaries be removed from A.M. Best's interactive rating process. The rating downgrade follows Inter-Ocean's announcement that it has voluntarily entered into runoff and has ceased writing new business. As a runoff entity, Inter-Ocean's liabilities will continue to be supported by its 11 shareholders who originally sourced all of the Company's business and continue to maintain a strong level of expertise in the global insurance and reinsurance market. One of these shareholders ultimately assumes all the underwriting or timing risk for each transaction undertaken by Inter-Ocean. LORAL SPACE: Begins Construction of TerreStar Satellite ------------------------------------------------------- Space Systems/Loral (SS/L) announced Monday that it has completed design reviews of TerreStar Networks, Inc.'s geostationary satellite, TerreStar-1, and entered into the construction phase of the Mobile Satellite Services (MSS) program. The TerreStar satellite, together with an Ancillary Terrestrial Component (ATC), is designed to provide next-generation, 2-GHz mobile voice and data communications, monitoring and messaging services throughout the United States. Scheduled for delivery in 2007, TerreStar-1 has a service life of 15 years and will carry a state-of-the-art MSS payload featuring a large unfurlable reflector. The satellite will be capable of generating hundreds of spot beams covering the Continental U.S., Canada, Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands. SS/L's contract with TerreStar also includes an option for construction of a second satellite, TerreStar-2. An FCC decision earlier this year opened the door for TerreStar Networks, and other select satellite operators, to incorporate an ATC with its satellite-delivered communications service. The previously unavailable 2-GHz frequency band will allow MSS operators to provide advanced mobile voice and data services. These services will be enhanced by ATC technology, which allows for coverage in areas where a satellite's signal could be locked, including urban canyons, dense forest or other areas out of the satellite's line-of-sight. "SS/L has taken a leadership position in the development of 2- GHz MSS satellites, which are at the heart of next generation mobile services," said C. Patrick DeWitt, president, Space Systems/Loral. "Together with our experience on other 2-GHz systems, the TerreStar award positions SS/L as the industry leader in the design and development of some of the world's most advanced mobile communication systems." TerreStar-1 is based on SS/L's space-proven 1300 platform, which has an excellent record of reliable operation. Its high efficiency solar arrays and lightweight batteries are designed to provide uninterrupted electrical power. In all, SS/L satellites have amassed more than 1,100 years of reliable on- orbit service. About TerreStar Networks Headquartered in McLean, Va., TerreStar Networks Inc. is an emerging provider of advanced mobile satellite services in North America with plans to develop, build and operate an innovative and spectrum-efficient spot beam satellite network in the 2 GHz frequency band. The TerreStar investor group includes Motient Corporation (OTC Pink Sheets: MNCP), SkyTerra Communications (OTC BB: SKYT), TMI Communications, Columbia Capital and Spectrum Equity Investors. About Space Systems Loral Space Systems/Loral, a subsidiary of Loral Space & Communications (OTCBB: LRLSQ), is a premier designer, manufacturer, and integrator of powerful satellites and satellite systems. SS/L also provides a range of related services that include mission control operations and procurement of launch services. Based in Palo Alto, Calif., the Company has an international base of commercial and governmental customers whose applications include broadband digital communications, direct-to-home broadcast, defense communications, environmental monitoring, and air traffic control. SS/L is ISO 9001:2000 certified. About Loral Space Loral Space & Communications is a satellite communications Company. In addition to Space Systems/Loral, through its Skynet subsidiary Loral owns and operates a fleet of telecommunications satellites used to broadcast video entertainment programming, and for broadband data transmission, Internet services and other value-added communications services. CONTACT: Loral Space & Communications Ltd. 600 Third Avenue New York, NY 10016 USA Phone: 212-697-1105 Web site: http://www.loral.com =========== B R A Z I L =========== AES CORPORATION: Draws Flak for City Hall Black Out --------------------------------------------------- AES Eletropaulo's move to pull the plug on 85 buildings owned by Sao Paolo's city government has ruffled the feathers of local politicians and placed the electric utility Company smack in the middle of a raging battle between former mayor Marta Suplicy and the city's current top man, Jose Serra. The New York Times reported Tuesday that Eletropaulo decided to cut-off power in city hall to coax officials to negotiate almost US$235.5 million in unpaid electrical charges accumulated since 1996. While the local government secured a court injunction forcing Eletropaulo to return power within hours of the power cut, Mr. Serra has seized the incident to drive his point that Eletropaulo's lenient treatment of the former administration had political color. Ms. Suplicy is a member of President Luiz Inacio Lula da Silva's Workers' Party. Mr. Serra had accused Suplicy of leaving Sao Paolo's coffers in near bankruptcy at the end of her term. He claims that he inherited an estimated BRL8 billion in short-term debt owed to various utility companies as well as the federal government. Brazil is an important component of AES Corporation's international operations. As the biggest power distributor in Latin America, Eletropaulo contributes about a quarter to AES's global revenues. AES plans to sink BRL428 million in Eletropaulo this year. CSN: Drop in Shares Unrelated to Purchase of Tin Mine ----------------------------------------------------- Shares of Companhia Siderurgica Nacional (CSN) continue to dip Monday, the second day of trading after the integrated flat- steel producer said it was purchasing a tin mine and foundry in the country's northern state of Rondonia. Business News Americas reports that CSN's shares closed down 3.9% on Sao Paulo's Bovespa stock exchange and were off 3.14% on the New York Stock Exchange. But according to Elaine de La Rocque, an analyst of investment research firm BES Securities, the fall was related to a general dip in investor desire for shares in the steel sector. "The fall is not very significant. It's part of a general reaction by investors to the sector unrelated to the purchase," La Rocque said. CSN said Friday it will pay BRL100 million to buy Estanho de Rondonia (ERSA) a tin mine and smelter located in the Amazon jungle in northern Brazil. The Company said it will hand over BRL76.83 million worth of its own shares for ERSA and then pay an additional BRL23.13 million in cash at the end of the year. Overall, analysts were positive about CSN's move. Brokerage Merrill Lynch and BES Securities both maintained buy ratings on shares of CSN, which has production capacity of some 6Mt/y, in separate research reports. Merrill Lynch called the purchase a step toward further integration of CSN's operations, a sentiment BES' La Rocque echoed. "This was an integration purchase, not a move toward becoming a mining Company," La Rocque said. CONTACT: Companhia Siderurgica Nacional-CSN Av. Presidente Juscelino Kubitschek 1830 Torre 1 13 andar, Itaim Bibi Sao Paulo, SP 04543-900 Brazil Web site: http://www.csn.com.br =================== C O S T A R I C A =================== ICE: To Bring Back Special Service Lines to Boost Sales ------------------------------------------------------- Electricity and telecommunications provider ICE plans to re- launch in May special commercial lines that use the 900 prefix. According to Business News Americas, the move is expected to boost annual sales by CRC3 billion (US$6.3mn). ICE was forced to discontinue the service five years ago due to complaints of high call rates. Now, the public services regulator Aresep has issued rules to control the use of these lines, insisting, for example, that users must have the right to disable their phones for such services. =========== M E X I C O =========== EAGLEPICHER: Mexican Ops Excluded in Bankruptcy Filing ------------------------------------------------------ EaglePicher Holdings, Inc., and EaglePicher Incorporated (collectively "EaglePicher") announced today that, in order to implement their strategic initiatives and position the Company for the future, they and several of their affiliates have voluntarily filed to reorganize under Chapter 11 of the Bankruptcy Code. EaglePicher said the filing would facilitate its previously planned divestiture of a number of its operating units and enable it to more effectively restructure its business. In papers filed with the U.S. Bankruptcy Court in the Southern District of Ohio in Cincinnati, the Company said it has received a commitment for up to $50 million in debtor-in-possession (DIP) financing from a group of lenders led by Harris Trust and Savings Bank, subject to court approval and certain limitations and conditions. Under the terms of the proposed DIP agreement, EaglePicher's existing receivables securitization would be replaced and the DIP would provide the Company with substantial additional liquidity. According to EaglePicher President and CEO Bert Iedema, a number of factors combined to severely limit both the Company's liquidity and borrowing ability. "While we would have preferred to restructure out of court, recent events have deprived us both of the time and resources to do so," Mr. Iedema said, adding that continuing deterioration at its Hillsdale automotive unit and high commodity costs in metal and energy have left the Company with insufficient cash to continue to operate without additional borrowing. "Over the past several weeks it has become clear to management that in order to maximize value for creditors, EaglePicher must preserve the value of its various operating divisions and, at the same time, focus the Company's resources where they will provide the greatest return," Mr. Iedema said. "The Company looked at several alternatives, including various recapitalization and refinancing options. However, mounting liquidity problems have left us with little choice but to file Chapter 11 as a means to continue to operate while we seek the best and highest offers for the businesses we decide to sell." Mr. Iedema said that the Company expects day-to-day operations to continue as usual during the Chapter 11 process. "We appreciate the past support of our suppliers and expect that, with the availability of the DIP financing and the protections afforded under the Bankruptcy Code, they will have the assurance they need to continue to work with us going forward." He added that management has sought authority from the Bankruptcy Court to pay employees and retirees and continue benefits without interruption or delay. "We deeply appreciate the loyalty of our employees, retirees and customers. We intend to fulfill our commitments to them without interruption while we reorganize under court protection. Moreover, we remain committed to providing our customers with high quality products, supported by superior customer and technical service. Meeting their needs remains our highest priority." The Company's operations outside the United States were not included in the filing, and there should be no impact whatsoever on their ability to serve customers, pay employees and fulfill their financial obligations to suppliers. EaglePicher Incorporated, founded in 1843, and headquartered in Phoenix, Arizona, is a diversified manufacturer and marketer of innovative, advanced technology and industrial products and services for space, defense, environmental, automotive, medical, filtration, pharmaceutical, nuclear power, semi-conductor and commercial applications worldwide. The Company has 4,200 employees and operates more than 30 plants in the U.S., Canada, Mexico, Korea, and Germany. EaglePicher Holdings, Inc. is the parent of EaglePicher Incorporated. EaglePicher(TM) is a trademark of EaglePicher Incorporated. CONTACT: EAGLEPICHER HOLDINGS, INC. Sandra Sternberg Tel: +1-602-794-9620 or Anita-Marie Laurie Tel: +1-310-788-2850 URL: http://www.eaglepicher.com GRUPO DESC: Signs IT Service Contract With NEORIS ------------------------------------------------- DESC, S.A. de C.V. (BMV:DESC) announced Monday that it has signed an outsourcing contract with NEORIS for IT support and project development. The outsourcing contract between the two companies includes support for ERP and non-ERP applications, project development, access to specialized talent to service the particular demand of each of DESC's businesses, and access to best practices and methodologies, while DESC continues to reduce its current cost structure in order to become more competitive and flexible. This contract also includes support to critical applications via a 24-7-365 model with both on-site personnel and remote attention. NEORIS has become Latin America's 4th largest IT consulting firm and the region's 5th largest custom application development firm. Neoris has also fortified its position in the United States and Europe by offering systems of integration, development of applications and IT consulting and software. About DESC DESC S.A. de C.V.(BMV: DESC) is one of the largest industrial groups in Mexico, with 2004 sales of approximately US$ 2 billon and nearly 14,000 employees, which through its subsidiaries is a leader in the Automobile Parts, Chemical, Food and Property sectors. CONTACTS: Ms. Marisol Vazquez-Mellado Mr. Jorge Padilla Phone: (5255) 5261-8044 E-mail: investor.relation@desc.com.mx Ms. Maria Barona Ms. Melanie Carpenter Phone: 212-406-3690 E-mail: desc@i-advize.com Web site: http://www.desc.com.mx GRUPO MEXICO: Asarco Resorts to Chapter 11 to Deal With Claims -------------------------------------------------------------- Tucson, Ariz.-based Asarco, a unit of Mexican copper mining concern Grupo Mexico SA, announced Monday that several non- operational and dormant subsidiaries have filed Chapter 11 proceedings to deal with asbestos-related claims. Dow Jones Newswires reports that the filing was made in Corpus Christi, Texas. The filing subsidiaries include Lake Asbestos of Quebec Ltd., which was sold in 1989, and CAPCO Pipe Company Inc., which was sold in 1994. Both businesses were already discontinued. Nevertheless, they face personal injury claims stemming from the widespread "asbestos crisis" of the late 1990s. "In order to dispose of thousands of claims in an expeditious and fair manner, Asarco has turned to the congressionally authored solution, and will seek a permanent injunction under section 524(g) of the Bankruptcy Code in which all asbestos- related claims will be channeled to a trust for an equitable resolution and payment," the Company said. Section 524(g) of the Bankruptcy Code gives temporary protection to parent companies from asbestos-related personal injury claims against their subsidiaries. All claims have to be heard at the same court. The filing won't affect customers, suppliers, employees or any of Asarco's operational units, the Company said. CONTACT: ASARCO 1150 N. 7th Ave. Tucson, AZ 85705 Tel: 520-798-7500 Fax: 520-798-7780 EXECUTIVE OFFICERS: Daniel Tellechea Salido - Chairman of the Board CEO/President Manuel F. Ramos Rada - Member of the Board VP, Metallurgical Operations John D. Low - VP, Mining Operations MEXICANA DE AVIACION: Unveils New Airline ----------------------------------------- Grupo Mexicana de Aviacion announced Monday a new airline concept, which will revolutionize air travel in Mexico. The new airline, named Click Mexicana, headed by Isaac Volin Bolok, is a Company part of Grupo Mexicana and will have the infrastructure support offered by Mexicana de Aviacion. The name Click, is the result of a study carried out by Landor, a renowned worldwide firm specializing in branding - brand positioning. The word Click is easy to pronounce in any language, it communicates speed and technology and refers to the sales channel in which we will offer our best rates, Click's own website. Click Mexicana will operate 10 Fokker airplanes, with a configuration of 100 seats, with 35 inches of space between rows, placing it as one of the most comfortable in the industry. These modern airplanes will integrate to the fleet gradually between July and December this year. The new airline will offer flights to some cities served by Mexicana de Aviacion, with the same frequency and service quality. At first, it will operate nine national destinations in round trips from Mexico City to Saltillo, Nuevo Laredo, San Luis Potosi, Oaxaca, Zihuatanejo, Huatulco, Tuxtla Gutierrez, Villahermosa and Merida. The announcement was issued during the XXX Tianguis Turistico trade event, being held in this port city. Emilio Romano, CEO of Grupo Mexicana de Aviacion stated, "We are very pleased to present a new low cost airline concept, unprecedented in our country, which will offer accessible and competitive rates to a greater number of clients. We are sure we will significantly increase the volume of clients who will have the opportunity to travel by air, efficiently and with quality services." Isaac Volin, CEO of Click Mexicana, said, "This is a very interesting challenge, as it revolutionizes the concept of flying in Mexico, by making it easier for a greater number of people to travel on modern, reliable and comfortable airplanes." About Click Mexicana Click Mexicana is the first low cost airline in Mexico. Initially, it will operate nine routes with 10 Fokker airplanes, completely renovated equipment and the most advanced technology. The main contact with clients is through the Click's own Website, where clients will find the most competitive prices and the best promotions. They will also have a friendly Call Center and modern virtual self-service kiosks, together with the regular sales channels, with the conviction and assurance that at every point of contact, the service will mark the difference. CONTACT: GRUPO MEXICANA DE AVIACION Fabio Serrano Vigil Tel: (55) 548-3000 Ext. 3871 E-mail: fabio.serrano@mexicana.com.mx VITRO: Finacity Posts Details of Receivables Securitization ----------------------------------------------------------- Finacity Corporation announced Monday that on March 31, 2005, in its capacity as Arranger, it facilitated the successful closing and funding of an innovative two-tranche trade receivables securitization for three subsidiaries of Finacity's client Vitro Envases Norteamerica S.A. de C.V. ("VENA"), a 100% owned subsidiary of Vitro S.A. de C.V. ("Vitro") (NYSE: VTO) (BMV: VITRO A). Acting as the Arranger, Master Servicer and Bond Administrator, Finacity successfully structured a five-year transaction that provides VENA with an almost 100% advance on receivables assigned from VENA subsidiaries Compania Vidriera, S.A. de C.V., which conducts a substantial majority of VENA's glass container operations in Mexico, Industria del Alcali, S.A. de C.V. which is engaged in the manufacturing and distribution of soda ash, sodium bicarbonate, calcium chloride and salt, and Comercializadora Alcali, S. de R.L. de C.V. which markets Alcali products. The construct developed by Finacity for Vitro demonstrates innovation from operational, structural and reporting perspectives. As Master Servicer and receivables underwriter, Finacity has taken responsibility for all functions, from credit analysis through to collections services, for VENA's receivables on an outsourced basis. These functions have been sub-contracted by Finacity to ABN AMRO Bank (Mexico) S.A. as the Servicer and Tecnologia en Cuentas por Cobrar S. A. de C.V. as the Sub- servicer in the transaction. Finacity has split VENA's funding into two tranches. The senior tranche is a MXN 550,000,000, variable rate, five-year term bond rated AAA.mx by Standard & Poor's and Aaa.mx by Moody's and due in 2010. The senior tranche was funded by domestic investors in Mexico. The subordinate tranche, a USD19,000,000, five-year term offering, was funded by a single North American investor with recourse back to Vitro. As Bond Administrator, Finacity will generate reports daily for the various constituents: Vitro, investors, both rating agencies and the regulators in order to provide all parties with visibility to assets, collateral values and receivables performance. This transaction represents the first peso-denominated, domestically funded, trade receivables-backed securitization rated AAA/Aaa in Mexico. Finacity's detailed involvement in the structural and operational aspects of this transaction has helped Vitro receive significantly more liquidity from VENA's receivables than in the arrangement with its previous lender. "This is the first transaction of its type in the Mexican market and we are very pleased with the positive reaction of the market. The result has been a very attractive financial instrument for the market, with the highest ratings and with good interest rates. I believe that this transaction strengthens the fine perception that the market has of Vitro and of our efforts to find innovative and attractive instruments for our financing operations and for the market," commented Fabrice Serfati, Vitro's Finance Manager. "We are very proud and pleased to have served Vitro's needs in their home country through such a complex transaction," said Adrian Katz, Finacity's Chief Executive Officer. "The structure we created for Vitro demonstrates Finacity's creativity and breadth of execution capabilities for our clients both in Mexico and globally." About Finacity Corporation Finacity is a Company that specializes in the provision of efficient, securitization-based trade receivables funding solutions as well as state-of-the-art servicing, collections and reporting capabilities. Finacity's offerings can include both domestic and international receivables for its clients. Finacity's strategic partners and investors include ABN AMRO Bank, Bank of America, Euler Hermes ACI, Amroc Investments, Avenue Capital, Kleiner Perkins Caufield & Byers, Bain & Co., and the partners of Texas Pacific Group. About Vitro, S.A. de C.V. Vitro, through its subsidiary companies, is one of the world's leading glass producers. Vitro is a major participant in three principal businesses: flat glass, glass containers and glassware. Vitro serves multiple product markets, including construction and automotive glass; food and beverage, wine, liquor, cosmetics and pharmaceutical glass containers; glassware for commercial, industrial and retail uses, and aluminum containers. Vitro also produces raw materials and equipment and capital goods for industrial use. Founded in 1909 in Monterrey, Mexico-based Vitro has joint ventures with major world-class partners and industry leaders that provide its subsidiaries with access to international markets, distribution channels and state-of-the-art technology. Vitro's subsidiaries have facilities and distribution centers in eight countries, located in North, Central and South America, and Europe, and export to more than 70 countries worldwide. CONTACT: Vitro, Sociedad Anonima Ave. Ricardo Margain 400 Col Valle del Campestre Garza Garcia, Nuevo Leon 66250 Mexico Phone: +52 81-8863-1200 Website: http://www.vto.com ======= P E R U ======= ENAFER: Liquidator Releases Updates on Status of Liquidation ------------------------------------------------------------ Defunct national railroad Company Enafer registered debts of more than PEN682 million (US$209mn) and negative equity of more than PEN678 million soles, Business News Americas reveals, citing a report by the Company's liquidator. Manuel Adrianzen, a representative of the liquidator, was reporting to a congressional subcommittee investigating the situation at the railroad. Adrianzen has promised the committee a prompt series of reports and updates on the total assets received, the status of auctions, non-concessionable assets, the process of liquidation and the allocation of a US$32-million World Bank loan. In his report, he also revealed that Enafer is facing 580 lawsuits related to claims by the railroad's former workers, who are demanding about PEN500,000. The liquidator is trying to complete the sell-off of Enafer's assets, a process that has proven to be much more complicated than expected. Some of the rail properties that are destined to go on the block have been taken over by squatters and built on. In order for the sale to go through, a plan must be in place to delineate the borders of these properties and secure their possession. Proceeds from any properties that are sold will go to settle claims from the railroad's former employees. ================= V E N E Z U E L A ================= PDVSA: Reports Higher Net Income in 2004 ---------------------------------------- CITGO Petroleum Corp., a U.S.-based subsidiary of Venezuelan state-owned oil Company Petroleos de Venezuela SA (PDVSA), registered net income of US$625 million in 2004, higher than the US$439 million recorded in 2003, reports Dow Jones Newswires. Net sales in 2004 amounted to US$32 billion, up from US$25 billion in 2003. The Company said it paid a US$400-million dividend to PdV America, an affiliate of PdVSA, last December. In a filing to the U.S. Securities and Exchange Commission, CITGO stated it has sufficient liquidity (defined as cash, available borrowing capacity and access to an accounts receivable sales facility) to maintain its current operations and to complete capital projects that are underway. Estimated capital expenditures for 2005 are approximately US$515 million. Of this amount, US$261 million is for regulatory projects, US$162 million for strategic projects and US$92 million is for maintenance projects. Liquidity at year-end was approximately US$553 million. Although CITGO has debt maturities during 2005 of approximately US$11 million, it routinely evaluates financing opportunities that not only mature in 2005 but also future years. The filing also revealed that as of December 31, 2004, the Company had an aggregate of US$1.1 billion of indebtedness outstanding that matures on various dates through the year 2033. As of December 31, 2004, its contractual commitments to make principal payments on this indebtedness were US$11 million, US$201 million and US$62 million for 2005, 2006 and 2007, respectively. As of December 31, 2004, the Company has a US$260 million, three year, unsecured revolving bank loan, which matures in December 2005. There was no outstanding balance under this credit agreement at December 31, 2004, the filing said. As of December 31, 2004, the Company's other principal indebtedness consisted of: (i) US$248 million in 6% senior notes issued in 2004, (ii) US$7 million in 11-3/8% senior notes issued in 2003, (iii) US$150 million in 7-7/8% senior notes issued in 1996, (iv) US$165 million in senior notes issued pursuant to a master shelf agreement with an insurance Company, (v) US$23 million in private placement senior notes issued in 1991, (vi) US$459 million in obligations related to tax exempt bonds issued by various governmental units, and (vii) US$80 million in obligations related to taxable bonds issued by various governmental units. Rumors abound that PDVSA could sell CITGO, which has come under pressure in Venezuela to contribute more money in dividends. However, Energy and Oil Minister Rafael Ramirez denied these rumors, saying CITGO will not be sold but restructured in order to make it more efficient. CONTACT: CITGO PETROLEUM CORPORATION Investor Relations Contact: Kate Robbins Public Affairs Manager (832) 486-5764 E-Mail: InvRel@citgo.com PDVSA: PowerSeraya Certain of Continued Orimulsion Fuel Supply -------------------------------------------------------------- Singaporean power generator PowerSeraya is confident that Venezuela will continue to supply it with Orimulsion fuel, suggests Dow Jones Newswires. "We have a 10-year contract. As far as we know, it is being honored," said Neil McGregor, managing director of PowerSeraya. McGregor's comments came after PDVSA president and energy and oil minister Rafael Ramirez was reported as saying that state oil firm PDVSA will stop producing its patented boiler fuel orimulsion within one year. "Orimulsion production has been reduced from about 80,000 barrels a day a few years ago to 40,000 b/d these days, and even that volume will soon disappear and be merged with crude production," Ramirez was quoted as saying. PDVSA will develop the Morichal area in eastern Venezuela, where the extra-heavy crude used to make orimulsion comes from, as a "Faja" area, Ramirez said. This means crude will no longer be used for manufacturing orimulsion but blended or upgraded for export. In September 2004, the government announced it would not sign any more orimulsion contracts and would absorb the operations of its Bitor subsidiary into PDVSA East because producing orimulsion has become unprofitable at today's high oil prices. PDVSA: To Discuss Wind Power Project With Cadafe This Week ---------------------------------------------------------- State power Company Cadafe is scheduled to meet with state oil Company PDVSA this week to engage in talks about a new joint venture project. According to Business News Americas, both companies plan to become partners in a new project to provide Venezuela's Falcon state with a wind-based solution to its electricity needs. PDVSA president and energy and oil minister Rafael Ramirez also mentioned the planned JV last week in the wake of an electricity mishap that left PDVSA's Amuay refinery - part of the CRP refining complex - without power for several days. A Cadafe official said that the Company is in the process of "gathering information" for a wind power project. There is no timeframe for the said project, which would be in addition to the PDVSA-Cadafe joint venture project to build a new 300MW thermoelectric plant in Falcon, mainly to service the CRP complex but also to provide electricity to the city of Punto Fijo and other parts of the state. *********** 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. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *