/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050610.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, June 10, 2005, Vol. 6, Issue 114 Headlines A R G E N T I N A AQUAPARK S.A.: Deadline for General Report Set BERSA: Auction Draws Three Bidders ESTUDIANTINA S.A.: Reorganization Proceeds To Bankruptcy HB COMUNICACIONES: Individual Reports Due in Court on August 2 HELY S.A.: Court Appoints Trustee for Reorganization INGEOMA S.A.: Gets Permission to Begin Reorganization INTECEL S.A.: Gears for Reorganization INTERNATIONAL CENTER: Verification Deadline Approaches JORDAN COMUNICACIONES: Court Designates Trustee for Liquidation LAMINOID S.A.: Court Orders Liquidation MAILNET: Initiates Bankruptcy Proceedings MARINA PROPIEDADES: Files Petition to Undergo Reorganization MATAFUEGOS CUENCA: Files Petition to Reorganize MATTULICH S.A.I.C.: Court Approves Concurso Motion SOCIEDAD COMERCIALIZADORA: Court OKs Creditor's Bankruptcy Call B E R M U D A LOM HOLDINGS: Withdraws From OTC Markets B R A Z I L BANCO BMG: Moody's Assigns B1 Rating to Senior Unsecured Notes CONSTRUTORA NORBERTO: S&P Affirms Ratings CSN: Calls Shareholders to a Meeting CSN: Schedules Meeting to Amend Company Bylaws PARANAPANEMA: Shares to Undergo 2,000:1 Reverse Split VARIG: ILFC to Take Back 11 Jets on Failure to Keep Up Payments C H I L E CELCO: Shuts Down Pulp Plant Amid Government Inquiry MANQUEHUE NET: To be Acquired by GTD Teleductos D O M I N I C A N R E P U B L I C AES DOMINICANA: Venezuelan Exec. Becomes Unit President M E X I C O AOL LATIN AMERICA: Time Warner Agrees to Support Liquidation CIE: Places $200M Notes Due 2015 DIRECTV GROUP: Plans to Raise $1B in Senior Notes IKON OFFICE: Moody's Changes Outlook to Negative From Stable TFM: KCS Announces Amendments to KCSR Consent Solicitation P E R U * PERU: External Debt Burden Constrains Rating, Outlook - Moodys P U E R T O R I C O R&G FINANCIAL: Murray, Frank Files Class Action Suit T R I N I D A D & T O B A G O BWIA: To Halt Flights to Scotland, Ireland U R U G U A Y * URUGUAY: IMF Executive Board OKs $1.13B Stand-By Arrangement V E N E Z U E L A PDVSA: In Discussions With Brazil's Petrobras to Import Ethanol - - - - - - - - ================= A R G E N T I N A ================= AQUAPARK S.A.: Deadline for General Report Set ---------------------------------------------- Mendoza-based accountant Enrique Romero, the court-designated trustee for the reorganization of Aquapark S.A., will submit a general report to the city's civil and commercial Court No. 1 on Aug. 26, 2005. The general report will contain the Company's audited accounting and business records as well as the summary of important events pertaining to the reorganization. Mr. Romero verified creditors' claims until May 18, 2005. The validated claims will be presented in court as individual reports on July 1, 2005. An Informative Assembly, the final stage of a reorganization where the settlement proposal is presented to the Company's creditors for approval, is scheduled for Feb. 27, 2006. Clerk No. 1 assists the court on this case. CONTACT: Aquapark S.A. Las Canas 1833 Guaymallen (Mendoza) Enrique Romero, TRUSTEE San Martin 1425 Mendoza BERSA: Auction Draws Three Bidders ---------------------------------- Out of the seven locally-owned banks that purchased the bidding rules for the auction of Banco de Entre Rios (BERSA), only three have presented their bids, a spokesperson at federal bank Banco Nacion confirmed to Business News Americas. The three banks are Banco de Santiago del Estero, Nuevo Banco de Santa Fe and Comafi. Their bids will be studied by a committee composed by Argentina's economy ministry and Banco Nacion executives, "and the final decision will be announced after studying not only the financial proposal, but the banks' solvency and other data," the spokesperson said. The announcement of the winner is scheduled for June 15. The other four banks that had purchased the bidding rules for the BERSA auction but did not present bids are Banco de Galicia, Macro Bansud, Banco Hipotecario, and Credicoop. French banking giant Credit Agricole left Argentina in the midst of the country's economic and financial crisis in 2002 and left behind three subsidiaries, BERSA, Suquia and Bisel. The three were taken over for the purpose of selling them back to the private sector at a later stage. Suquia was auctioned last year and the Bisel auction could take place this year. ESTUDIANTINA S.A.: Reorganization Proceeds To Bankruptcy -------------------------------------------------------- The reorganization of Estudiantina S.A. has progressed into bankruptcy. Argentine news source Infobae relates that Mar del Plata civil and commercial Court No. 12 ruled that the Company is "Quiebra Decretada". The report adds that the court assigned Rodolfo Damaso Crespi as trustee, who will verify creditors' proofs of claim until Aug. 1, 2005. The court also ordered the trustee to prepare individual reports after the verification process is completed. A general report on the bankruptcy process will then follow. CONTACT: Estudiantina S.A. Saavedra 3125 Mar del Plata Rodolfo Damaso Crespi, TRUSTEE Ortiz de Zarate 6450 Mar del Plata HB COMUNICACIONES: Individual Reports Due in Court on August 2 -------------------------------------------------------------- Mr. Roberto Gilli, the trustee appointed to oversee the bankruptcy proceedings of HB Comunicaciones S.R.L. is due to submit the validated individual claims for court approval on Aug. 2, 2005. These reports explain the basis for the accepted and rejected claims. The trustee will also submit a general report of the case on Sep. 14, 2005. Infobae reports that HB Comunicaciones S.R.L. entered bankruptcy protection after Court No. 8 of San Isidro's civil and commercial tribunal, with the assistance of Clerk No. 12, declared the Company "Quiebra." CONTACT: HB Comunicaciones S.R.L. Ingeniero Marconi 3365 Beccar (Partido de San Isidro) Mr. Roberto Gilli, Trustee Rivadavia 479 San Isidro HELY S.A.: Court Appoints Trustee for Reorganization ---------------------------------------------------- Buenos Aires Court No. 12 has granted local company Hely S.A. approval to start its reorganization process, appointing Mr. Juan Angel Fontecha as trustee. An Infobae report states that Mr. Fontecha will verify creditors claims until Aug. 8, 2005. Afterwards, he will present these claims as individual reports for final review by the court on Sep. 19, 2005. The trustee will also provide the court with a general report pertaining to Hely's reorganization on Oct. 31, 2005. The court, which is aided by Clerk No. 24 on this case, has scheduled the informative assembly for April 27, 2006. CONTACT: Mr. Juan Angel Fontecha, TRUSTEE Parana 785 Buenos Aires INGEOMA S.A.: Gets Permission to Begin Reorganization ----------------------------------------------------- Court No. 1 of Buenos Aires' civil and commercial tribunal approved a petition for reorganization filed by Ingeoma S.A., reveals La Nacion. Mr. Ricardo Adrogue, whom the court appointed as trustee, will verify creditors' proofs of claim until Sep. 2, 2005. After the verification period, the trustee will submit the individual and general reports to court. Dates for submission of these reports are yet to be disclosed. The informative assembly, at which creditors will vote to ratify the completed settlement plan, is scheduled for April 25, 2006. The city's Clerk No. 21 assists the court on the case. CONTACT: Ingeoma S.A. Avenida del Libertador 828 Buenos Aires Ricardo Adrogue, TRUSTEE Bouchart 468 Buenos Aires INTECEL S.A.: Gears for Reorganization -------------------------------------- Buenos Aires' civil and commercial Judge No. 10, with assistance from Clerk No. 19, issued a resolution opening the reorganization of Intecel S.A. This pronouncement authorizes the Company to begin drafting a settlement proposal with its creditors in order to avoid liquidation. The reorganization allows Intecel to retain control of its assets subject to certain conditions imposed by Argentine law and the oversight of the court appointed trustee. Mr. Jorge Daniel Alvarez will serve as trustee during the course of the reorganization. He will be validating creditors' proofs of claim until Sep. 14, 2005. The results of the verification will be presented in court as individual reports on Oct. 27, 2005. The trustee is also obligated to give the court a general report of the case on Dec. 9, 2005. The general report summarizes events relevant to the reorganization and provides an audit of the Company's accounting and business records. Mr. Alvarez will present the completed settlement proposal to its creditors during the informative assembly scheduled on Aug. 18, 2006. CONTACT: Intecel S.A. Chile 577 Buenos Aires Jorge Daniel Alvarez, TRUSTEE Bartolome Mitre 1738 Buenos Aires INTERNATIONAL CENTER: Verification Deadline Approaches ------------------------------------------------------ The verification of claims for the International Center Food S.A. bankruptcy will end on July 7, 2005 according to Infobae. Creditors with claims against the bankrupt company must present proof of the liabilities to Nestor A. Iribe, the court-appointed trustee, before the deadline. Buenos Aires Court No. 4 handles the Company's case with the assistance of Clerk No. 7. The bankruptcy will conclude with the liquidation of the Company's assets to pay its creditors. CONTACT: Nestor A. Iribe, TRUSTEE Avda Corrientes 1250 Buenos Aires JORDAN COMUNICACIONES: Court Designates Trustee for Liquidation --------------------------------------------------------------- Buenos Aires' accountant Norberto Volpe was assigned trustee in the liquidation of local company Jordan Comunicaciones S.A., relates Infobae. Mr. Volpe will verify creditors' claims until Sep. 12, 2005, the source adds. After that, he will prepare the individual reports, which are to be submitted to court on Oct. 27, 2005. The submission of the general report should follow on Dec. 19, 2005. The city's civil and commercial Court No. 9 handles the Company's case with assistance from Clerk No. 17. CONTACT: Norberto Volpe, TRUSTEE Maipu 859 Buenos Aires LAMINOID S.A.: Court Orders Liquidation --------------------------------------- Laminoid S.A. prepares to wind-up its operations following the bankruptcy pronouncement issued by Court No. 22 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. Adriana Isabel Rinaldi as trustee, who will be reviewing creditors' proofs of claim until Aug. 22, 2005. The verified claims will serve as basis for the individual reports to be presented for court approval on Oct. 3, 2005. The trustee will also submit a general report of the case on Nov. 15, 2005. Clerk No. 44 assists the court on this case that will end with the sale of the Company's assets. Proceeds from the sale will be used to repay debts. CONTACT: Ms. Adriana Isabel Rinaldi, TRUSTEE Dorrego 2789 Buenos Aires MAILNET: Initiates Bankruptcy Proceedings ----------------------------------------- Court No. 19 of Buenos Aires' civil and commercial tribunal declared Mailnet de Argentina S.A. "Quiebra," reports Infobae. Clerk No. 37 assists the court on the case, which will close with the liquidation of the Company's assets to repay creditors. Mr. Francisco R. Cano, whom the court appointed as trustee in the case, will verify creditors' claims until July 7, 2005 and then prepare the individual reports based on the results of the verification process. The individual reports will then be submitted to court on Aug. 31, 2005, followed by the general report on Oct. 11, 2005. CONTACT: Mr. Francisco R. Cano, Trustee Uruguay 618 Buenos Aires MARINA PROPIEDADES: Files Petition to Undergo Reorganization ------------------------------------------------------------ Court No. 24 of Buenos Aires' civil and commercial tribunal is now analyzing whether to grant Marina Propiedades S.A. approval for its petition to reorganize. La Nacion recalls that the Company filed its petition following cessation of debt payments since June 2003. Clerk No. 48 is assisting the court on the Company's case. CONTACT: Marina Propiedades S.A. 25 de Mayo 252 Establecimiento en Maipu 271 Cordoba MATAFUEGOS CUENCA: Files Petition to Reorganize ----------------------------------------------- Matafuegos Cuenca S.A. has filed a "Concurso Preventivo" motion, reports La Nacion. The Company is seeking to reorganize its finances following cessation of debt payments since April 12, 2005. The Company's case is pending before Buenos Aires' civil and commercial Court No. 1, who is assisted by Clerk No. 2. CONTACT: Matafuegos Cuenca S.A. Avenida Alvarez Jonte 5145 Buenos Aires MATTULICH S.A.I.C.: Court Approves Concurso Motion -------------------------------------------------- Buenos Aires' civil and commercial Court No. 5 approved a petition for reorganization filed by Mattulich S.A.I.C., according to a report by Argentine daily La Nacion. The Company, which listed assets of $40,123.45 and liabilities of $280,480.77, will undergo a reorganization process with Elida A. Vitorero as trustee. Ms. Vitorero will verify claims until Aug. 16, 2005. After verifying the claims, she will then submit the individual and general reports to court. Dates for submission of these reports are yet to be disclosed. The informative assembly, the last part of the reorganization process, will be held on May 10, 2006. Clerk No. 9 assists the court on the case. CONTACT: Mattulich S.A.I.C. Fernando de Montalvo 158 Buenos Aires Elida A. Vitorero, TRUSTEE Migueletes 1806 Buenos Aires SOCIEDAD COMERCIALIZADORA: Court OKs Creditor's Bankruptcy Call --------------------------------------------------------------- Sociedad Comercializadora de Carnes S.A. entered bankruptcy after Court No. 5 of Buenos Aires' civil and commercial tribunal approved a bankruptcy motion filed by Caprevielle, Kay y Cia. Sacfm, reports La Nacion. Sociedad Comercializadora's failure to pay $5,832.44 in debt prompted Caprevielle, Kay y Cia. Sacfm to file the petition. Working with the city's Clerk No. 10, the court assigned Ms. Monica Aquim as trustee for the bankruptcy process. The trustee's duties include the authentication of the Company's debts and the preparation of the individual and general reports. Creditors are required to present their proofs of claim to the receiver before Aug. 4, 2005. The Company's assets will be liquidated at the end of the bankruptcy process to repay creditors. Payments will be based on the results of the verification process. CONTACT: Sociedad Comercializadora de Carnes S.A. Rivadavia 1273 Buenos Aires Monica Aquim, TRUSTEE Uruguay 662 Buenos Aires ============= B E R M U D A ============= LOM HOLDINGS: Withdraws From OTC Markets ---------------------------------------- The Board of Directors and management of LOM Holdings Limited have decided that effective 30th June 2005 LOM will dramatically curtail client activity in the US bulletin board and pink sheet over-the-counter markets. LOM has, over the past several years encountered increasing scrutiny and negative publicity from this one area of our business in particular - the U.S. OTC Bulletin Board market. This is the market that trades the most junior U.S. securities and involves micro cap stocks. It's fraught with risks and has become very difficult from a risk management perspective. In addition, the market is regulated in such a way that LOM, as agent in a transaction, is at risk from any wrongdoing or alleged wrongdoing by our customers, despite having met all the relevant regulations required of us in our jurisdictions. LOM recognizes the need for change to ensure customers do not breach enormously complex regulations, which have become increasingly tough and excessively risky. As a result, the brokerage subsidiaries of the LOM Group will dramatically restrict dealing in the U.S. OTC Bulletin Board market effective Thursday, 30th June. The only exception to this will be where the client is well known to the group and where the OTC portion of their transactions form only a small percentage of the whole portfolio and even then there will be restrictions on the manner in which such transactions are executed. All other business will continue as usual uninterrupted. It is with regret to our loyal clients that LOM has decided to drastically curtail activity in this area. Customers will no longer be able to deliver OTC securities into their accounts at LOM, nor will they be able to deliver securities to any third party account internally or externally. Customers who hold OTC securities at LOM may sell those securities or alternatively deliver them out to the organization from which they were received in the same manner as such securities were delivered to us. LOM regrets withdrawing from any market and we will suffer an adverse financial impact as a result. However, we recognize that although we have been fighting regulatory battles on principle, it is a war that is being lost at significant cost to us - both from a financial and reputational perspective; and we respect this reality. We're rolling up our sleeves and working hard to get LOM firmly back on target. Removing this piece of the business will enable the other successful areas of the business to flourish untarnished by the negative publicity trading in the over the counter market has attracted. =========== B R A Z I L =========== BANCO BMG: Moody's Assigns B1 Rating to Senior Unsecured Notes -------------------------------------------------------------- Moody's Investors Service assigned a B1 long-term foreign currency rating to Banco BMG S.A.'s US$150,000,000 senior unsecured notes. The outlook on the rating is positive. Moody's stated that the B1 rating incorporates Banco BMG's fundamental credit quality, which is reflected by its Ba3 global local-currency deposit rating and which includes all relevant country risks. The B1 rating also incorporates the probability of a sovereign default implied by the Brazilian government's sub-investment-grade B1 foreign currency bond rating, as well as the likelihood that the Brazilian government could impose a debt moratorium in the event of default on its own foreign currency obligations. Moody's noted that the rating also addresses the risk that any such moratorium might include foreign currency bonds and that BMG's bonds might particularly be affected. Because the banking system is an arm of the government's monetary and foreign exchange policy, Moody's believes that, in general, banks may have a lower probability of having their bonds exempted from a moratorium than, say, a major commodity exporter would. The rating, therefore, indicates the joint probabilities of default that are contained in the B1 foreign currency ceiling and in the local currency rating of Banco BMG. Moody's has recently assigned a D- bank financial strength rating to Banco BMG, as well as a Ba3 global local-currency rating. The ratings reflect the bank's track record of adequate profitability and efficiency ratios, which compare well with peers', and which reflect BMG's niche business strategy centered in consumer lending. The bank's core earnings are solid, and they are indicative of high margins in its core product, as well as of a lean operating structure, also supported by adequate asset quality. Banco BMG is headquartered in Minas Gerais, Brazil and had R$3 billion (approximately US$1.1 billion) in total assets as of March 2005. The following rating was assigned to Banco BMG S.A.'s notes: Banco BMG S.A.: B1 long-term foreign-currency debt rating, positive outlook. CONSTRUTORA NORBERTO: S&P Affirms Ratings ----------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' local- and foreign-currency corporate credit ratings on Construtora Norberto Odebrecht S.A. (CNO). The outlook is stable. The local-currency rating on CNO reflects the company's exposure to the competitive, volatile, and cyclical heavy engineering and construction (E&C) business, some backlog concentration in public works in economically and politically volatile countries, and a somewhat leveraged financial profile," said Standard & Poor's credit analyst Reginaldo Takara. "These risks are somewhat offset by CNO's long-standing experience in the E&C business, the quality and sector and geographic diversification of its backlog, and consistent profitability and cash flow protection measures within the past several years as a result of significant efforts to focus on more profitable projects." CNO is the largest heavy construction company in Brazil, with sales and EBITDA of $2.2 billion and $152 million in the last 12 months ended March 31, 2005. The company reported a total debt balance of $500 million on the same date. The stable outlook for the local currency rating reflects our expectations that CNO's financial ratios will continue to improve through 2005 with further debt reduction, allowing for credit measures to comfortably fall into its current rating category. Reducing refinancing risks thanks to debt repayment and a committed credit line that goes over 2006 are also short- term positives. We foresee positive trends for CNO's operating performance in 2005 and 2006, with the recovery of Brazilian projects, stable margins in its traditional markets in South America and Angola, and increasing activity in the U.S., Portugal, and Mexico, but a positive revision of the ratings would depend on significant improvement on credit measures, essentially with an overall lower debt position relative to long-term cash flows. A reversal in trends would first be signaled by a deterioration in backlog; harsher changes in profitability trends and cash generation would also be reasons for the ratings to stabilize or be revised negatively. The stable outlook for the foreign currency rating reflects that of the foreign currency sovereign rating of the Federative Republic of Brazil. CSN: Calls Shareholders to a Meeting ------------------------------------ The Shareholders of COMPANHIA SIDERURGICA NACIONAL are, hereby, invited to attend the Special Meeting, to be held on June 23, 2005, at 11 a.m., at the head offices of the Company, located at Rua Sao Jose n� 20 - Grupo 1602, Centro, Rio de Janeiro - RJ, in order to decide about the following Agenda: 1. Cancellation of 14,849,099 shares currently held in treasury, without corporate capital reduction; 2. Amendment to Article 5 and 7 of the By-laws of the Company, in order to reflect the cancellation of the shares mentioned in item 1 above. The documentation related to the matter contained in the Agenda will be available for analysis of the Shareholders at the head offices of the Company. The Shareholders, whose shares are held in custody, are requested to present updated extract provided by the custodian entity, with the respective shareholding participation, and those who intend to be represented by attorney-in-fact are requested to comply with the provisions of Article 126, Paragraph 1 st, of Law 6,404/76, with the deposit at the head offices of the Company of the powers-of-attorney with specific powers for representation at the Special Meeting referred in this notice of call, within three (3) working days prior to the date determined for its holding. CONTACT: Mr. Marcos Leite Ferreira CSN - Investor Relations Phone: (55 11) 3049-7591 E-mail: marcos.ferreira@csn.com.br Web site: http://www.csn.com.br/ CSN: Schedules Meeting to Amend Company Bylaws ---------------------------------------------- The Shareholders of COMPANHIA SIDERURGICA NACIONAL are invited to attend the Special Meeting, to be held, in second call, on June 23, 2005, at 10 a.m., at the head offices of the Company, located at Rua Sao Jose n� 20 - Grupo 1602, Centro, Rio de Janeiro - RJ, in order to decide about the following Agenda: 1. Amend the Bylaws of the Company with the purpose of creating the Audit Committee. According to the provisions of Article 135 of Law 6,404/76, the meeting will be installed, in this second call, upon the presence of any number of shareholders. The documentation related to the matter contained in the Agenda will be available for analysis of the Shareholders at the head offices of the Company. The Shareholders, whose shares are under custody, are requested to present updated extract provided by the custodian entity, with the respective shareholding participation, and those who intend to be represented by attorney-in-fact are requested to comply with the provisions of Article 126, Paragraph 1 st , of Law 6,404/76, with the deposit at the head offices of the Company of the powers-of-attorney with specific powers for representation at the Special Meeting referred in this notice of call, three (3) working days prior to the date determined for its holding. PARANAPANEMA: Shares to Undergo 2,000:1 Reverse Split ----------------------------------------------------- Sao Paulo-based mining and metals holding company Paranapanema announced its shares will be subject to a reverse split effective June 14 as part of the standardization efforts by the Bovespa stock exchange, relates Business News Americas. Shares will be subject to a ratio of 2,000:1, Paranapanema said, adding that the shares will be negotiated in standard lot sizes of 100 shares on the Bovespa. Shares not subject to the reverse split will be valid until June 13, according to stock clearing firm SSE Itau. The 2,000:1 ratio was decided to be an optimal one for shareholders allowing smaller investors to maintain positions in the Company. Remaining fractional shares will be sold at auction on the Bovespa and distributed proportionally to shareholders. Paranapanema has four main divisions: tin and industrial company Mamore, fertilizer unit Cibrafertil, copper smelter Caraiba Metais and copper tube and fixture maker Eluma. VARIG: ILFC to Take Back 11 Jets on Failure to Keep Up Payments --------------------------------------------------------------- The International Lease Finance Corporation (ILFC), the aircraft leasing unit of American International Group Inc., ordered Brazilian debt-ridden airline Varig to return 11 Boeing jets. The ILFC told Varig to return five Boeing 737s, four Boeing 757s and two Boeing 777s, some of which are used on international flights, because it hasn't kept up payments. "We are still negotiating with them as they are being paid late. This type of threat is permanent and is part of the game," David Zylbersztajn, Varig's board president, said, adding that ILFC had not yet sought the legal seizure of the planes. Varig has suffered severe financial problems since the airline industry was hit by a recession in 2001. It has struggled to service net debts estimated at more than BRL6 billion. Just recently, Varig signed an agreement to allow Portugal's TAP Air Portugal to acquire about 20% of its stock, an alliance that falls short of a merger. But analysts say the debt issues still must be resolved. CONTACT: VARIG (Viacao Aerea Rio-Grandense, S.A.) Rua 18 de Novembro No. 800, Sao Joao 90240-040 Porto Alegre, Rio Grande do Sul, Brazil Phone: (51) 358-7039/7040 (51) 358-7010/7042 Fax: +55-51-358-7001 Home Page: www.varig.com.br/english/ ========= C H I L E ========= CELCO: Shuts Down Pulp Plant Amid Government Inquiry ---------------------------------------------------- Pulp producer Celco informed the SVS securities regulator of its decision to indefinitely shut down its Valdivia pulp plant, relates Business News Americas. The measure follows questioning from government and legislative figures for having allegedly filed false environmental studies on the supposed contamination of Cruces river from discharges from its plant in Region X. "Celco cannot operate with this degree of uncertainty. We trust that closing the plant down will contribute to a serene and objective analysis that will provide scientific evidence over Cruces' river contamination," Celco chair Alberto Etchegaray was quoted as saying. In line with the decision, the Company has also appointed a new general manager and director for the Company, said Matias Domeyko Cassel, who previously was the Company's financial manager. MANQUEHUE NET: To be Acquired by GTD Teleductos ----------------------------------------------- Corporate services provider GTD Teleductos has agreed to buy 100% of telephony and broadband provider Manquehue Net in an operation that is expected to be concluded as early as this week or next, reports Business News Americas. GTD has agreed to pay US$32 million for Manquehue's assets as well as pay off Manquehue's debt totaling US$85 million. Margarita Andrade, of Chilean credit ratings agency Humphreys, believes GTD's acquisition will lead to a favorable result. "Manquehue net has gone through several changes in the last few years and is just now starting a period with positive financial results. So obviously a change in controllers is positive because it should lead the company to a more stable path," Andrade said. Manquehue, which has been in the red since it was launched in 2000, expects to report profits this year, saying it will focus on providing broadband service, the only business area that has recorded positive growth with a client base of 15,000 connections. "Closing this year in the black is independent of the change in ownership, because it has more to do with management, which has certainly performed well," Andrade added. Manquehue offers fixed line telephony services and Internet access to the corporate and residential segments in Chile's metropolitan region, with 100,000 clients and a 2.7% market share. The Company is currently owned by gas distribution firm Metrogas (25.54%), US telecoms holding company Williams International Telecom (23.52%), Capital Trust (19.14%), Chile's Rabat family (19.13%) and Xycom Devel Chile (12.67%). =================================== D O M I N I C A N R E P U B L I C =================================== AES DOMINICANA: Venezuelan Exec. Becomes Unit President ------------------------------------------------------- AES Dominicana, the local subsidiary of U.S. power company AES Corp. (NYSE: AES), will have a new president in the person of Venezuelan Manuel Perez Dubuc. According to Business News Americas, Perez Dubuc's position as vice-president of finance at Caracas-based AES subsidiary EDC will be assumed by Diego Garcia, who is currently head of the treasury office. "Both promotions reflect the achievements of the finance team at EDC," EDC said in a statement. =========== M E X I C O =========== AOL LATIN AMERICA: Time Warner Agrees to Support Liquidation ------------------------------------------------------------ Time Warner Inc., a Delaware corporation that was formerly named AOL Time Warner Inc., reached an agreement with the investors of AOL Latin America to support the liquidation of the ailing Internet service provider. The agreement, however, is not finalized yet and does not require AOL Latin America to wind- down or to file a bankruptcy petition. In its Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, AOL Latin America stated that it had US$16.6 million of available cash on hand as of March 31, 2005 and that its available cash will only be sufficient to fund operations into the third quarter of 2005. The Company further stated in its Form 10-Q that to continue normal operations beyond such time, it would need an additional, substantial capital infusion and that it will not be able to obtain such additional financing from any source. In the Form 10-Q, AOL Latin America discussed the strategic alternatives it has explored and the potential actions it would take if it is not successful in completing transactions to sell all or part of its businesses. AOL Latin America stated that if it is not successful in selling its businesses in a timely manner, it expects to cease operating the businesses and that it may determine that it is advantageous to file a petition for bankruptcy under the U.S. bankruptcy laws or other jurisdictions in which it operates businesses. Time Warner holds US$160 million in AOL Latin America's senior convertible notes. After paying potential costs and priority claims related to a liquidation of AOL Latin America, 60% of any proceeds would go to Time Warner. Affiliates of the Cisneros Group of Cos., a privately-held investment firm and an AOL Latin America investor, would receive the remainder. Time Warner also agreed to assume ownership of AOL Latin America's assets in Puerto Rico as partial repayment of claims AOL Latin America owes. Beginning in 2004, AOL Latin America became a subsidiary of Time Warner for consolidation purposes. CONTACT: America Online Latin America, Inc., Fort Lauderdale Mario Lanzoni 954-689-3244 CIE: Places $200M Notes Due 2015 -------------------------------- Mexico City-based CIE, one of the largest "out of home" entertainment companies in Latin America, placed Wednesday US$200 million in 10-year notes at an annual interest rate of 8.875%. Citing a filing with the Mexican Stock Exchange, Dow Jones Newswires reports that the notes, due June 14, 2015, were placed among more than 50 international investors in the U.S., Europe and Latin America. Citigroup was the sole bookrunner, while Credit Suisse First Boston and Scotia Capital were co-managers. Moody's Investors Service earlier assigned a Ba2 rating to the notes. The proceeds of the transaction will be used to refinance short- term debt and extend CIE's maturity profile. CONTACTOS: CIE Jaime J. Zevada Director Corporativo de Finanzas Juan Carlos Sotomayor Atencion a Inversionistas Conrado M. Ramirez Comunicacion con Grupos Financieros E-mail: inversionistas@cie.com.mx Tel: +52 (55) 5201-9000 DIRECTV GROUP: Plans to Raise $1B in Senior Notes ------------------------------------------------- DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. (collectively, "DIRECTV") announced Wednesday that they intend to privately offer up to $1.0 billion principal amount of senior notes due 2015. DIRECTV plans to use the net proceeds from this offering to repay $500.0 million of borrowings under its current senior secured credit facility with the remainder of the proceeds to be retained by DIRECTV for general corporate purposes. The ten-year senior notes will be unsecured indebtedness guaranteed on a senior basis by all of DIRECTV's domestic subsidiaries. The senior notes will be sold to qualified institutional buyers in reliance on Rule 144A, and outside the United States in compliance with Regulation S under the Securities Act. The senior notes initially will not be registered under the Securities Act of 1933 or state securities laws and may not be offered or sold by holders thereof without registration unless an exemption from such registration is available. DIRECTV (NYSE:DTV) is a world-leading provider of digital multichannel television entertainment. CONTACT: DirecTV, Inc. Bob Marsocci Phone: 310-964-4656 IKON OFFICE: Moody's Changes Outlook to Negative From Stable ------------------------------------------------------------ Moody's Investors Service changed the ratings outlook for IKON Office Solutions (senior implied at Ba2) to negative from stable. The change in outlook to negative reflects (1) weak revenue patterns and strong pricing competition that continues to pressure margins, which in turn is necessitating cost reduction efforts and a streamlining of certain business activities in addition to (2) an accounting review of its US trade receivable balances that has delayed its ability to file its most recent financial statements. The rating action reflects Moody's expectation that revenue growth will remain challenging and that competitive pricing and/or product mix may continue to exert pressure on operating profitability over the intermediate term. IKON's revenue has declined between 1% and 7% over each of the last four quarters although the decline has been less if revenues are normalized for discontinued or deemphasized operations. Importantly, within overall revenue, equipment sales continue to decline (down by 5.6% and 3.2% in each of the first two quarters of fiscal 2005) with (1) declines noted in higher end and more profitable segments five and six devices, (2) growth in lower end (and less profitable) segments and, (3) growth in color devices although IKON's growth is less than some key competitors and pricing has become increasingly aggressive in order to capture the color installed base in order to obtain more profitable after market business. As a consequence of its weak revenue pattern, changing mix, and aggressive price competition, in addition to the sale of its North American leasing operations last year, IKON's gross margins remain under some pressure, having declined from nearly 38% two years ago to an estimated 35.6% for the quarter ended March 2005. Excluding finance operations, gross margins have declined by about 1% over the same period. With most of these trends likely to persist, IKON has recognized the need to embark upon more aggressive cost reduction efforts. In this regard, IKON recently announced pretax restructuring charges of approximately $30 million aimed at (1) exiting its off-site digital printing and fulfillment activities (2) downsizing its legal document services facilities (3) exiting the majority of its operations in Mexico and (4) reducing administrative staff. Moody's expects that the cash outflow related to these actions will approximate $20 million. IKON is undergoing an accounting review relating to certain of its US trade receivables that surfaced during a review of billing controls and reserve practices during its Sarbanes-Oxley testing. Based on preliminary data, IKON estimates that US trade receivables of $372 million could be overstated by about $45 million, which will likely require a restatement of revenues and trade accounts receivable of prior period financial statements. TFM: KCS Announces Amendments to KCSR Consent Solicitation ---------------------------------------------------------- Kansas City Southern ("KCS") (NYSE:KSU) announced Wednesday that its wholly owned subsidiary, The Kansas City Southern Railway Company ("KCSR"), in connection with its previously announced solicitation of consents to amend the indentures, as supplemented where applicable (the "Indentures"), under which KCSR's outstanding 9 1/2% Senior Notes due 2008 (the "9 1/2% Notes") and outstanding 7 1/2% Senior Notes due 2009 (the "7 1/2% Notes" and together with the 9 1/2% Notes, the "Notes") were issued, has amended both of the proposed supplemental indentures which were attached as annexes to the Consent Solicitation Statement dated May 11, 2005, by amending Section 1.01 (a) thereof to eliminate the defined term "TFM Credit Facility," and by eliminating Sections 1.01 (c) and 1.02 thereof, which permit TFM, S.A. de C.V., an indirect subsidiary of KCS, to incur additional indebtedness and create related liens. The amount of the consent payment has changed to $3.75 for each $1,000 principal amount of each series of Notes, payable to holders that validly give their consents prior to the Expiration Time, as described in the Consent Solicitation Statement and as amended by all previously issued press releases relating thereto. All of the other terms and conditions set forth in the Consent Solicitation Statement, as amended by all previously issued press releases relating thereto, remain unchanged. The Expiration Time is 5:00 p.m., New York time, on June 10, 2005. Questions from holders of the Notes regarding the consent solicitation or requests for additional copies of the Consent Solicitation Statement, the Letter of Consent or other related documents should be directed to D.F. King & Co., Inc., the Information Agent for the consent solicitation, at 48 Wall Street, New York, New York, 10005 (telephone 800-714-3313) or the Solicitation Agent for the consent solicitation, Morgan Stanley & Co. Incorporated, at 1585 Broadway, New York, New York, 10036 (telephone 800-624-1808). Holders of the Notes may request copies of the supplements, as amended, to the Indentures by contacting Investor Relations at KCSR at 427 West 12th Street, Kansas City, Missouri, 64105 (telephone 816-983-1551). This announcement is not a solicitation of consent with respect to any Notes. The consent solicitation is being made solely by the Consent Solicitation Statement and related documents, which set forth the complete terms of the consent solicitation. Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holdings include The Kansas City Southern Railway Company, founded in 1887, and The Texas- Mexican Railway Company, founded in 1885, serving the central and south central U.S. Its international holdings include a controlling interest in TFM, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lazaro Cardenas, Tampico and Veracruz, and a 50% interest in The Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS's North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Canada and Mexico. CONTACT: KANSAS CITY SOUTHERN William H. Galligan, 816-983-1551 (Investors) E-mail: william.h.galligan@kcsr.com or C. Doniele Kane, 816-983-1372 (U.S. Media) E-mail: doniele.c.kane@kcsr.com or Gabriel Guerra, 011-525-55-208-0860 (Mexico Media) E-mail: gguerra@gcya.net ======= P E R U ======= * PERU: External Debt Burden Constrains Rating, Outlook - Moodys ---------------------------------------------------------------- In its annual report on Peru, Moody's Investors Service says the country's Ba3 foreign-currency debt rating and stable outlook are supported by conservative fiscal management and monetary policies but constrained by a high external debt burden and the presence of a dollarized banking system. "The country's financial standing benefits from macroeconomic stability and a recent economic recovery, but a trend in favor of improvement in the external-debt burden is not enough to lessen its impact on the rating," said Moody's Vice President Mauro Leos, author of the report. Peru's ratio of external debt to current account revenues was 194% during 2004, almost twice the average for Ba-rated countries, according to Moody's report. Despite a declining trend in the country's external-debt indicators (the ratio was over 300% in the 1990's), the progress is currently not sufficient to warrant a reassessment of the credit rating, says the ratings agency. Other credit-risk factors include foreign-currency denominated debt, which comprises 80% of the government's debt, a condition that may be alleviated by an upcoming Paris Club debt buyback and counterpart local debt issuance, according to the report. The government's conservative fiscal policies have resulted in manageable and fairly stable government-debt ratios, said Mr. Leos. At the end of 2004, Peru's government-debt-to-GDP ratio stood at 44%, slightly better than the 54% mean for the Ba- rating category. Peru also derives significant credit support from a solid international reserve position, which provides ample external liquidity relative to Peru's external financial obligations. ===================== P U E R T O R I C O ===================== R&G FINANCIAL: Murray, Frank Files Class Action Suit ---------------------------------------------------- Murray, Frank & Sailer LLP announces that it has filed a class action lawsuit in United States District Court for the Southern District of New York on behalf of all securities purchasers of R&G Financial Corporation (NYSE:RGF) (Berlin:RG1B) between April 21, 2003 and April 25, 2005, inclusive (the "Class Period"). The complaint alleges that during the Class Period R&G and certain of the Company's executive officers issued materially false and misleading financial statements to the investing public regarding its financial performance and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b 5 promulgated thereunder. R&G Financial is a diversified financial holding company with operations in Puerto Rico and the United States, providing banking, mortgage banking, investments, consumer finance and insurance through its wholly-owned subsidiaries. During the Class Period, defendants made materially false and misleading statements regarding the Company's business and prospects. Unbeknownst to public investors, the true facts, which defendants knew and/or recklessly disregarded and failed to disclose to the investing public during the Class Period, included: (a) that the Company was using fraudulent accounting practices and materially overstated its net income, net gain on mortgage loan sales and net capital; and (b) that the Company was using ineffective risk management and hedging strategies against the increasing risk of rising interest rates. As a result of the defendants' false statements, R&G Financial's stock price traded at inflated levels during the Class Period. After the market closed on April 25, 2005, the Company issued a press release announcing that it would be reviewing the independent market valuations it had employed in valuing residual interests retained in securitization transactions of the Company. In connection with the review, the Company announced it would be restating its financial results for fiscal years 2003 and 2004 to reflect a reduction in the fair value of its residual interests as of December 31, 2004 by approximately $90 million to $150 million. In response to this announcement, shares of R&G Financial fell 35 percent on April 26, 2005 to close at $15.04. On April 26, 2005, R&G issued a press release announcing that it was the subject of an informal SEC investigation related to its restatement announcement. Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States. If you purchased or otherwise acquired R&G securities on any world exchange between April 21, 2003 and April 25, 2005, and sustained damages, you may, no later than June 20, 2005, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp.If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Christopher Hinton of Murray, Frank & Sailer LLP. CONTACT: Murray, Frank & Sailer LLP Eric J. Belfi Christopher Hinton (800) 497-8076 (212) 682-1818 Fax: (212) 682-1892 info@murrayfrank.com ================================= T R I N I D A D & T O B A G O ================================= BWIA: To Halt Flights to Scotland, Ireland ------------------------------------------ National airline BWIA announced Tuesday that it will terminate services to/from Prestwick, Scotland, and Belfast, Northern Ireland effective June 23 as part of its latest attempt to save itself from financial collapse. "For further information regarding reservations on these services, please contact 627-2942 (Trinidad and Tobago), 1-800- 538-2942 (for the Caribbean and North America, including Canada), 0870-499-2942 (United Kingdom and Europe)," BWIA said in a news release announcing the termination of the flights. In April, independent Senator Ramesh Deosaran recommended BWIA's closure, saying the airline is not making money. His recommendation came days after the government threw a US$35.6 million lifeline around BWIA's neck. To see important facts about BWIA: http://bankrupt.com/misc/BWIA.pdf CONTACT: BRITISH WEST INDIES AIRWAYS (BWIA) Phone: + 868 627 2942 E-mail: mail@bwee.com Home Page: http://www.bwee.com ============= U R U G U A Y ============= * URUGUAY: IMF Executive Board OKs $1.13B Stand-By Arrangement -------------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) approved Wednesday a 36-month, SDR 766.3 million (about US$1.13 billion) Stand-By Arrangement for Uruguay, aimed at supporting the country's economic stabilization through mid-2008 and helping to foster sustainable growth while reducing vulnerabilities related to high public debt. The approval enables the immediate release of SDR 30.7 million (about US$ 45.3 million) under the arrangement. Following the Executive Board discussion on Uruguay, Mr. Agust�n Carstens, Deputy Managing Director and Acting Chair, made the following statement: "Uruguay's economic performance over the past three years has been very favorable. After stabilizing the economy from the severe financial crisis in 2002, the authorities' Fund-supported program achieved an impressive recovery of growth, in an environment of rising exports and international reserves, falling inflation, and sharply improving fiscal accounts. These favorable results reflect the steadfast pursuit of prudent fiscal and monetary policies, important structural reforms especially in the banking sector, and a generally supportive external environment. The smooth political transition to a new government following the 2004 elections also helped solidify market confidence in sustained domestic consensus on a core framework of stability and growth-oriented policies. "While much has been achieved over the past three years, the task is now to sustain the recent recovery and build a lasting trend of rapid growth and improving social conditions. Although fiscal adjustment, prudent monetary policy, and banking reforms have reduced economic vulnerabilities, important weaknesses and risks remain-including a still large public debt, weaknesses in the financial sector, and obstacles to investment that hamper Uruguay's growth potential and its ability to compete in the global market place. There have also been delays with planned tax and pension system reforms, which-unless addressed-leave the fiscal accounts vulnerable to shocks and contingent costs. "The authorities' economic strategy aims to address these challenges and create a sustained dynamic of rapid growth, declining public debt, and improving social conditions. Key to their strategy is the creation of a favorable environment for private investment, through the pursuit of prudent fiscal and monetary policies and a comprehensive growth-oriented structural reform agenda. Decisive implementation of these envisaged measures will be crucial. At the same time, the strategy places increased emphasis on ensuring that the benefits of growth are more equally shared and on addressing the lingering social dislocations from the recent crisis. "A key plank of the authorities' strategy is continued fiscal consolidation, supported by structural fiscal reforms, while making room for a temporary social emergency program to address urgent social needs. Monetary policy will be geared to achieving a steady reduction in inflation to the low single digits, while strengthening international reserves in the context of a flexible exchange rate system. As in the fiscal area, the agenda includes important institutional reforms to strengthen the framework and instruments of monetary policy. A broad range of growth-enhancing structural reforms, supported by the World Bank and the Inter-American Development Bank, aim to strengthen the environment for private investment and productive enterprise, with emphasis on improving access to financing, competition, infrastructure, and the regulatory framework," Mr. Carstens said. Annex Program Summary The authorities' program for 2005-08 envisages real GDP growth to average around 4 percent a year, benefiting from the momentum of the recent recovery and two large foreign investment projects. Inflation is targeted to decline gradually, by 1 percentage point a year, to around 3� percent by 2008, while exports are projected to increase by about 9 percent a year and net international reserves to increase by US$1.5 billion over the program period. A key program goal is to gradually re- establish Uruguay's access to international capital markets, instrumental to the country's longer-term growth prospects as well as the envisaged exit from IMF financial support. The fiscal program is anchored on a medium-term primary surplus target of 4 percent of GDP, to bring down the public debt-to-GDP ratio to about 60 percent by 2008 and to about 50 percent by 2012. Key measures to achieve these goals include a comprehensive tax reform, an improved budgetary framework and firm spending control, timely adjustment of public tariffs, and reform of the specialized pension funds. The primary surplus in 2005-06 would be somewhat lower to accommodate a temporary social emergency program. Monetary policy will continue to be based on base money targeting in the context of a flexible exchange rate regime, until conditions are in place to move to an inflation targeting framework. To prepare for this move, the program envisages a strengthening of the autonomy and financial position of the central bank. Financial system reforms are to continue, building on the crisis resolution efforts of recent years with a view to creating the necessary infrastructure of financial intermediation in support of sustained private-sector led growth. Priorities include the continued reform of public banks (BROU and BHU); strengthening NBC, including by divesting the government's stake; further improving the supervisory framework; and overhauling the bank resolution framework to ensure rapid and efficient resolution of banking problems should they occur. A wide range of growth-enhancing reforms constitute another core pillar of the program and are designed to stand beside prudent macroeconomic policies and supporting institutional reforms. Many of these reforms are being supported under World Bank and the Inter-American Development Bank lending programs, and aim at creating an environment conducive to private investment and productive enterprises. The reforms include developing capital markets, opening up sectors currently reserved for the state to private sector participation and competition, bolstering property and creditor rights, improving infrastructure, and strengthening Uruguay's investment climate. CONTACT: INTERNATIONAL MONETARY FUND 700 19th Street, NW Washington, D.C. 20431 USA IMF EXTERNAL RELATIONS DEPARTMENT Public Affairs: 202-623-7300 - Fax: 202-623-6278 Media Relations: 202-623-7100 - Fax: 202-623-6772 ================= V E N E Z U E L A ================= PDVSA: In Discussions With Brazil's Petrobras to Import Ethanol --------------------------------------------------------------- State oil company Petroleos de Venezuela SA (PDVSA) is in "conversations" with its Brazilian counterpart Petroleo Brasileiro SA to import ethanol, Business News Americas reports, citing the head of refining at PDVSA. Venezuela is looking to import ethanol to replace environmentally-damaging leaded gasoline, which the government plans to phase out this year. "We are the only country in the Americas that uses lead in gasoline," said Alejandro Granado following a hearing in the National Assembly on Tuesday. Ethanol is an alternative automotive fuel derived from grain and corn that is often blended with gasoline. Granado said the nation's refineries could begin producing ethanol as well. PdVSA could also begin mixing alcohol with gasoline as a lead substitute. "We are evaluating the different options to replace lead in gasoline," he said. 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 Web site: 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 Sheryl Joy P. Olano, 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 * * *