/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050613.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 Monday, June 13, 2005, Vol. 6, Issue 115 Headlines A R G E N T I N A BERSA: Nuevo Banco de Santa Fe Makes Biggest Offer EMPRECO S.A.: Trustee to Pass Individual Reports ENGIMATIC S.A.: Verification Deadline Fixed ENTOOLS S.A.: Court Appoints Trustee for Reorganization EXPRESO RUBAL: Reports Submission Set FRANCISCO KRAPOVICKAS: Reorganization Proceeds To Bankruptcy FRIGORIFICO LA COLORADA: Debt Payments Halted, Set To Reorganize LA SOLITA: Liquidates Assets to Pay Debts SERVICIOS DE EXCELENCIA: Enters Bankruptcy on Court Orders TELECOM ARGENTINA: S&P Assigns 'B-' Rating to Senior Notes TRANSTRAM S.R.L.: Files Petition to Reorganize B E R M U D A LORAL SPACE: Delivers World's Largest Satellite to Launch Base B R A Z I L BANCO SANTOS: To Undergo Bankruptcy Proceedings Under New Law CSN: S&P Assigns Rating to CSN Islands Notes Series 2005-1 GRUPO VOTORANTIM: Talks to Sell Unit Nearing End C H I L E COCA COLA EMBONOR: S&P Withdraws Ratings at Company's Behest C O L O M B I A EMCALI: Commences Bidding Processes for $8.5M Worth of Projects E C U A D O R PETROECUADOR: Ups Total 2005 Budget for Importing Derivatives M E X I C O AOL LATIN AMERICA: Enters Into Severance Agreement With Hauser DIRECTV HOLDINGS: Fitch Rates Senior Notes 'BB' GRUPO ELEKTRA: Gives Notice to Terminate GDS Program GRUPO IUSACELL: Gives Notice to Terminate ADR Program SATMEX: Mexicans Expected to File Bankruptcy Petition TV AZTECA: Gives Notice To Terminate ADR Program TV AZTECA: Distributes $59M In Cash To Shareholders P A R A G U A Y COPACO: Delays Launching of Mobile Unit P E R U * PERU: IMF Completes Second Review Under Stand-By Arrangement T R I N I D A D & T O B A G O BWIA: Bourse May Levy Fine for Late Filing U R U G U A Y * URUGUAY: World Bank Announces New CAS and Loans - - - - - - - - ================= A R G E N T I N A ================= BERSA: Nuevo Banco de Santa Fe Makes Biggest Offer -------------------------------------------------- Local bank Nuevo Banco de Santa Fe surfaced as the highest bidder for Banco de Entre Rios (BERSA), according to Business News Americas. The minimum bidding price for BERSA was ARS30 million (US$10.4mn). Santa Fe offered ARS172 million, beating offers from Banco de Santiago del Estero (ARS120 million) and Comafi (ARS98 million). "BERSA is a provincial bank. This means it has the government as a client and all wages, taxes and deposits, as well as a large number of government employees. The three banks evaluated what it meant for their operations to acquire BERSA to expand their businesses. However, the conditions by which Bersa may keep the government as a client still need to be negotiated," said a local analyst. The announcement of the BERSA winner is scheduled for June 15. The three bids will be studied by a committee composed by Argentina's economy ministry and Banco Naci›n executives. Their decision will be based on the financial proposal and also the banks' solvency and other factors, such as its business plan. EMPRECO S.A.: Trustee to Pass Individual Reports ------------------------------------------------ Mr. Jose Valentin Benitez, the court-appointed trustee for the reorganization of Empreco S.A., will submit individual reports on June 16, 2005, states Infobae. After submitting the said reports, Mr. Benitez will then present a general report for court review on Aug. 12, 2005. The report will contain Empreco's audited accounting and business records as well as the summary of the important events pertaining to its reorganization. An informative assembly is set on March 3, 2006. This is the final stage of reorganization where the Company's settlement proposal is presented for approval by the creditors. The proposal is drafted from the submitted claims that were verified by the trustee until May 4, 2005. Empreco S.A. successfully petitioned for reorganization after Court No. 10 of Resistencia's civil and commercial tribunal issued a resolution opening the Company's insolvency proceedings. CONTACT: Empreco S.A. Marcelo T. de Alvear 998 Resistencia (Chaco) Jose Valentin Benitez Avda Las Heras 383 Resistencia (Chaco) ENGIMATIC S.A.: Verification Deadline Fixed ------------------------------------------- The verification of creditors' claims for the Engimatic S.A. insolvency case is set to end on July 8, 2005, states Infobae. Ms. Angel Vello Vazquez, the court-appointed trustee tasked with examining the claims, is required by the court to submit the validation results as individual reports. She will also present a general report. Dates for the submission of these reports are yet to be disclosed. On April 14, 2006, the Company's creditors will vote on the settlement proposal prepared by the Company. Infobae adds that the Company's reorganization is being handled by Buenos Aires' civil and commercial Court No. 17. Clerk No. 34 assists the court in the proceedings. CONTACT: Engimatic S.A. San Jose 910 Buenos Aires Ms. Angel Vello Vazquez, Trustee Sarmiento 1586 Buenos Aires ENTOOLS S.A.: Court Appoints Trustee for Reorganization ------------------------------------------------------- Entools S.A., a company operating in Buenos Aires, is ready to start its reorganization after Court No. 17 of Buenos Aires' civil and commercial tribunal appointed Angel Vello Vazquez to supervise the proceedings as trustee. Clerk No. 34 assists the court on this case. An Infobae report states that Ms. Vazquez will verify creditors claims until July 8, 2005. Afterwards, she will present these claims as individual reports for final review by the court. She will also provide the court with a general report pertaining to the Company's reorganization. The court has scheduled the informative assembly for April 14, 2006. CONTACT: Entools S.A. Uruguay 880 Buenos Aires Ms. Angel Vello Vazquez, Trustee Sarmiento 1586 Buenos Aires EXPRESO RUBAL: Reports Submission Set ------------------------------------- Ms. Analia Alba Susana Ferrando, the trustee assigned to supervise the liquidation of Expreso Rubal S.R.L., will submit the validated individual reports for court approval on June 24, 2005, following the verification of the creditors' claims which ended on May 11, 2005. The individual reports explain the basis for the accepted and rejected claims. The trustee will also submit a general report of the case on Aug. 22, 2005. Infobae reports that Court No. 10 of Chaco's civil and commercial tribunal has jurisdiction over this bankruptcy case. CONTACT: Expreso Rubal S.R.L. Avda Alberdi 1335 Chaco Ms. Analia Alba Susana Ferrando, Trustee Julio Acosta 125 Chaco FRANCISCO KRAPOVICKAS: Reorganization Proceeds To Bankruptcy ------------------------------------------------------------ The reorganization of Francisco Krapovickas S.R.L. has progressed into bankruptcy. Argentine news source Infobae relates that Lomas de Zamora's civil and commercial Court No. 7 ruled that the Company is "Quiebra Decretada". The report adds that the court assigned Anai Amancay Perez as trustee, who will verify creditors' proofs of claim until June 15, 2005. The court also ordered the trustee to prepare individual reports after the verification process is completed. The submission of the general report will then follow. CONTACT: Francisco Krapovickas S.R.L. David Prando 270 Lomas de Zamora Ms. Anai Amancay Perez, Trustee Basavilbaso 2026 Lanus FRIGORIFICO LA COLORADA: Debt Payments Halted, Set To Reorganize ---------------------------------------------------------------- Buenos Aires' civil and commercial Court No. 2 is now analyzing whether to grant Frigorifico La Colorada S.A. approval for its petition to reorganize. Infobae recalls that the Company filed a "Concurso Preventivo" petition following cessation of debt payments. Clerk No. 3 is assisting the court on the Company's case. CONTACT: Frigorifico La Colorada S.A. Avda Belgrano 535 Buenos Aires LA SOLITA: Liquidates Assets to Pay Debts ----------------------------------------- Buenos Aires based La Solita S.R.L. will begin liquidating its assets following the pronouncement of the city's civil and commercial Court No. 16 that the Company is bankrupt, reports Infobae. The bankruptcy ruling places the Company under the supervision of court-appointed trustee, Claudio Jorge Haimovici. The trustee will verify creditors' proofs of claim until July 28, 2005. The validated claims will be presented in court as individual reports on Sep. 8, 2005. Mr. Haimovici 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 Oct. 21, 2005. The bankruptcy process will end with the disposal of Company assets in favor of its creditors. CONTACT: Mr. Claudio Jorge Haimovici, Trustee Sarmiento 3843 Capital Federal SERVICIOS DE EXCELENCIA: Enters Bankruptcy on Court Orders ---------------------------------------------------------- Servicios de Excelencia S.A. Hospital Central de San Isidro enters bankruptcy protection after Court No. 5 of Buenos Aires' civil and commercial tribunal, with the assistance of Clerk No. 10, ordered the Company's liquidation. The order effectively transfers control of the Company's assets to a court-appointed trustee who will supervise the liquidation proceedings. Infobae reports that the court selected Noemi Zulema Vivares as trustee. Ms. Zulema Vivares will be verifying creditors' proofs of claim until the end of the verification phase on Aug. 18, 2005. Argentine bankruptcy law requires the trustee to provide the court with individual reports on the forwarded claims and a general report containing an audit of the company's accounting and business records. The individual reports will be submitted on Sep. 26, 2005 followed by the general report, which is due on Nov. 10, 2005. CONTACT: Ms. Noemi Zulema Vivares, Trustee Avda Cordoba 2626 Buenos Aires TELECOM ARGENTINA: S&P Assigns 'B-' Rating to Senior Notes ---------------------------------------------------------- Standard & Poor's Rating Services assigned Thursday its 'B-' rating to the US$1.9 billion of new debt to be issued by Telecom Argentina S.A. (TECO) as part of its debt restructuring process, including Series A notes with final maturity in October 2014 for up to the equivalent of $877 million and Series B notes with final maturity in October 2011 for up to US$ 995 million. These figures are calculated using exchange rates as of Aug. 4, 2004. On May 26, 2005, the company obtained a court endorsement to restructure its financial debt under an out of court agreement (Acuerdo Preventivo Extrajudicial, APE). According to Argentine bankruptcy law, after the judiciary homologation of the APE, which was approved by 94.4% of creditors, the agreement is also binding for lenders voting against it. After the publication of judiciary notices, nonconsenting lenders will have 10 days to choose one of the options presented by TECO. The company then has up to 90 days to effectively issue the new bonds. "Standard & Poor's does not foresee any material risk to the completion of the exchange," said Standard & Poor's credit analyst Ivana Recalde. "Once the APE is completed, Standard & Poor's expects to raise TECO's local and foreign currency long- term corporate credit ratings to 'B-' from 'D', where they were placed on April, 2, 2002 and, since none of the defaulted debt will remain unpaid, to withdraw its issue ratings on the debt that is currently in default." Standard & Poor's expects to assign a stable outlook to the corporate credit rating as it emerges from default, reflecting expectations that the company's good competitive position and a relatively stable economic scenario will allow TECO to further reduce debt and to consolidate financial improvements after the restructuring. The rating upside would be limited given the current business environment in Argentina, especially as regards regulatory risk, but the ratings could be pressured if tariff inflexibility persists under a higher-than-expected inflationary and exchange rate scenario, government intervention increases, or financial flexibility deteriorates significantly. As of March 31, 2005, TECO's debt amounted to US$3.1 billion on an individual basis, including US$450 million in past-due interest as well as US$65 million in penalties. The APE proposal includes three options by which the company will pay approximately US$563 million in principal and about US$184 million in interest, as well as the issuance of Series A and B notes for about $1.9 billion (including a principal adjustment factor of about US$150 million for the accrued but unpaid interest on restructured debt). The restructuring implies an average recovery value, in nominal terms, of about 85% of principal and accrued interest. As a direct result of the exchange, TECO's gross debt will drop to US$1.9 billion on an individual basis and US$2.2 billion on a consolidated basis. However, in conjunction with the exchange, TECO will cancel current maturities for about US$123 million and apply excess cash to prepay additional debt. This should take consolidated debt to US$1.7 billion at the end of the process from US$3.5 billion at the end of March 2005. TECO's financial profile should improve after the restructuring given much lower debt levels, longer debt terms, a manageable maturity schedule, and a lighter financial burden, mainly as a result of the lower debt levels. Assuming the company repays debt with cash balances, TECO will not face any significant maturity up to 2008, aside from a mandated cash sweep in case of excess cash, reducing short- and medium-term refinancing risk. Since the new notes will accrue interest at a fixed rate, the restructuring will also imply a decrease in interest rate volatility. Assuming relatively stable U.S. and Euro exchange rates and inflation levels in Argentina and depending on the final tariff renegotiation, TECO should be able to continue reducing debt and gradually consolidate its financial profile. Nortel Inversora S.A. controls TECO with a 57.74% share, while TECO's employees own about 4.68% through an employee stock ownership program, and the remainder of the stock (40.58%) trades on the Buenos Aires, New York, and Mexico City stock exchanges. Nortel is a holding company jointly controlled by the Telecom Italia Group (BBB+/Stable/A-2) and a local investor group, which together own 67.79% of its equity. TRANSTRAM S.R.L.: Files Petition to Reorganize ---------------------------------------------- Transtram S.R.L. filed a "Concurso Preventivo" motion to reorganize its finances following cessation of debt payments. According to Infobae, the Company's case is pending before Court No. 26 of Buenos Aires' civil and commercial tribunal. Clerk No. 52 assists the court on this case. CONTACT: Transtram S.R.L. Avda Rivadavia 2462 Buenos Aires ============= B E R M U D A ============= LORAL SPACE: Delivers World's Largest Satellite to Launch Base -------------------------------------------------------------- Space Systems/Loral (SS/L) announced Thursday that the iPSTAR-1 satellite has arrived at the Arianespace spaceport in Kourou, French Guiana, and is undergoing preparations for launch aboard an Ariane 5 rocket on July 7. Weighing in with a launch weight of 14,341 pounds (6505 kilograms), iPSTAR-1 will be the heaviest commercial satellite ever delivered to geosynchronous orbit. "iPSTAR-1 is one of the largest and most technologically advanced satellites ever built for a commercial customer," said C. Patrick DeWitt, president of Space Systems/Loral. "SS/L's 1300 platform is becoming an industry standard when it comes to developing highly-powered satellites for direct-to-user applications like broadband access. We're pleased to be working with Shin on this important project and look forward to the satellite's launch next month." Built for Shin Satellite, Plc of Thailand, iPSTAR-1 is designed to provide both enterprises and consumers throughout Asia, Australia and New Zealand with various levels of Internet access services, competing with cable modems and digital subscriber lines (DSL). iPSTAR-1 has a massive total data throughput capacity of over 40 Gbps. The satellite will provide users with data speeds of up to eight Mbps on the forward link and four Mbps on the return link. From its 119.5 degrees East longitude orbital position, iPSTAR-1 will use its seven on-board antennas to create 112 spot and regional beams in the Ku and Ka frequency bands. The satellite will generate 14 kW of electrical power throughout its planned 12-year service life. Shin Satellite, a turnkey satellite operator, provides C- and Ku-band transponder leasing, teleport and other value-added and engineering services to users in Asia, Africa, Europe and Australia. Shin Satellite owns and operates Thaicom 1A, located at 120 degrees East, and Thaicom 2 and 3, co-located at 78.5 degrees East. The satellites carry a total of 49 C-band and 20 Ku-band transponders offering over 70 channels. Thaicom is the Hotbird for Indochina and India, an emerging platform of choice for transcontinental satellite television broadcasts from Europe to Australia. The company has spent years researching and developing new technology to make Internet via satellite more efficient, thus reducing costs and improving the service to end- users. 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 satellites have amassed more than 1,200 years of reliable on-orbit service. SS/L is ISO 9001:2000 certified. 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 John McCarthy (212) 338-5345 Web site: http://www.loral.com =========== B R A Z I L =========== BANCO SANTOS: To Undergo Bankruptcy Proceedings Under New Law ------------------------------------------------------------- Intervened bank Banco Santos will undergo bankruptcy proceedings under the new bankruptcy law, which came into effect on June 9, reports Business News Americas. Banco Santos receiver Vanio Aguiar was expected to begin the bankruptcy proceedings earlier but the documentation gathering has delayed the process. Under the new bankruptcy law, one option for a distressed company is to present creditors with alternatives on how it plans to stay in business and pay debts in a process overseen by a judge. The process could include restructuring debt or selling assets to raise cash. Should creditors fail to agree on a restructuring plan, the judge would declare the company bankrupt, opening the way for the sale of assets. Once a company goes bankrupt, the new law also provides better protection for creditors and potential investors. The law changes the priority of creditors' claims, putting labor liabilities first, secured creditors second and the tax authorities and unsecured creditors third. Previously, unpaid salaries and benefits were paid out first with the government next in line and secured creditors such as banks in third place. The Banco Santos bankruptcy will be one of the largest in the history of the Brazilian financial system, according to Febraban chief economist Roberto Troster. Sao Paulo-based Banco Santos is a wholesale bank that was geared mainly towards corporate banking and chiefly focused on the medium-sized enterprise segment. Banco Santos was ranked as Brazil's 21st largest bank in January in terms of assets. The central bank intervened the bank and its brokerage in November last year due to financial woes and alleged irregularities. Last month, the central bank announced it would liquidate both entities. CSN: S&P Assigns Rating to CSN Islands Notes Series 2005-1 ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' rating to CSN Islands VI Corp.'s US$250 million fixed-rate notes series 2005-1 due May 06, 2015. The originator, Companhia Siderœrgica Nacional (CSN), is the largest single-site flat steel producer and the only fully integrated steel maker in Brazil. The rating addresses the ability of the issuer to pay timely interest and principal on the notes. The rating does not address the payment of a make-whole payment or additional amounts to noteholders. The series 2005-1 notes are the fourth issuance out of the CSN Islands program. A portion of proceeds will prepay the series 2003-2 notes in their entirety. Similar to the previous series, series 2005-1 is secured through a true-sale structure by all of CSN's steel exports with eligible buyers to CSN Export. CSN Export sold the rights to the receivables to the issuer. Steel export products include hot-rolled, cold-rolled, slabs, tin mill, and galvanized steel products. The receivables are predominantly U.S. dollar denominated. The 'BBB-' rating reflects Standard & Poor's corporate performance assessment of CSN over the term of the transaction. The corporate performance assessment reflects CSN's ability to generate the necessary assets to service the transaction even under a state of selective default or other financial impairment. The rating is also based on several structural and credit characteristics of the issuance that mitigate originator bankruptcy risk, sovereign interference risk, and other risks pertinent to a cross-border steel-export future flow securitization. This mitigation allows the transaction to achieve a rating two notches higher than CSN's local currency rating (BB/Stable) and three notches higher than CSN's foreign currency rating (BB-/Stable) and the long-term foreign currency sovereign rating of Brazil (BB-/Stable). Credit factors that support the 'BBB-' rating include: -- The strength of CSN's performance risk assessment of 'BBB-'; -- Strong levels of enhancement through overcollateralization; -- The offshore payment mechanism, eligible buyer eligibility criteria, and minimum receivable cash flow tests from eligible buyers; -- The mitigation of sovereign interference risk through historical noninterference by the Brazilian authorities in the steel industry and domestic demand for the exported products already being met; and -- Other key credit and structural features, including DSC triggers, a debt service reserve account, and provisions for an early amortization of outstanding debt if certain adverse events occur. The notes pay interest at a rate of 6.148% quarterly each February, May, August, and November. Principal amortization of the notes will begin after the expiration of the interest-only period in August 2008. The notes will mature in May 2015. PRIMARY CREDIT ANALYST: Pedro Gazoni, Sao Paulo (55) 11-5501-8648; pedro_gazoni@standardandpoors.com SECONDARY CREDIT ANALYSTS: Gary Kochubka, New York (1) 212-438-2514; gary_kochubka@standardandpoors.com Reginaldo Takara, Sao Paulo (55) 11-5501-8932; reginaldo_takara@standardandpoors.com GRUPO VOTORANTIM: Talks to Sell Unit Nearing End ------------------------------------------------ Mining and industrial conglomerate Grupo Votorantim is close to wrapping up negotiations to sell one of its packaging units for a price that could reach US$140 million. According to Dow Jones Newswires, Votorantim is looking to sell its Votocel unit and the main candidate for the purchase is Vitopel, a company controlled by JP Morgan and Credit Suisse First Boston. ========= C H I L E ========= COCA COLA EMBONOR: S&P Withdraws Ratings at Company's Behest ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew Thursday its 'BB+' local and foreign currency corporate credit and debt ratings on Coca Cola Embonor S.A. (Embonor) at the company's request. Embonor is the second-largest Coca-Cola bottler in Chile and the largest Coca-Cola bottler in Bolivia. =============== C O L O M B I A =============== EMCALI: Commences Bidding Processes for $8.5M Worth of Projects --------------------------------------------------------------- Cali's multi-utility Emcali has opened bidding processes for three projects worth approximately COP20 billion (US$8.5 million), reports Business News Americas. Emcali is scheduled to hold a meeting on June 10 to explain the details of the main project that is worth COP9.2 billion. The said project aims to design the city's aqueduct network and improve sewerage services. The contract for this project is likely to be awarded by the end of the month. Meanwhile, Emcali will accept proposals until June 14 for the other two projects, one of which aims to carry out construction works on the Canaveralejo wastewater treatment plant. This project is worth COP4.33 billion. The last one, worth some COP3 billion, aims to replace aqueduct and sewer pipes in the neighborhoods of El Guabal, Olimpico, Calima and Alfonso Lopez. Emcali provides public services, including waterworks, telecommunications and electric power. ============= E C U A D O R ============= PETROECUADOR: Ups Total 2005 Budget for Importing Derivatives ------------------------------------------------------------- State oil company Petroecuador will raise its total 2005 budget to import oil derivatives from US$490 million to US$1.01 billion following authorization from its board, reveals Business News Americas. The original budget, which the board approved at end-February, was based on an average price of US$28.87 a barrel. However, the average import price in Q1 was actually US$61.84/b. Petroecuador imported 4.83 million barrels of oil derivates in Q1 at a total cost of US$299 million, which used up 61% of the Company's 2005 oil derivative import budget. Moreover, Petroecuador began last week a 52-day routine maintenance on a catalytic cracker unit at the Company's Esmeraldas refinery, which means Petroecuador will have to import more oil derivatives than usual to make up for the deficit. Esmeraldas, which has a processing capacity of 110,000 barrels a day (b/d), is currently processing 102,000b/d. =========== M E X I C O =========== AOL LATIN AMERICA: Enters Into Severance Agreement With Hauser -------------------------------------------------------------- On June 3, 2005, America Online Latin America, Inc. ("AOLA") entered into a Severance Agreement and Release of Claims (the "Severance Agreement") with Eduardo Hauser. Mr. Hauser served as AOLA's Executive Vice President--AOL Services and Business Affairs until May 25, 2005. Under the Severance Agreement, AOLA will pay Mr. Hauser approximately $373,000, which reflects a severance amount and a retention payment to which he would have been entitled under the Executive Retention Agreement that Mr. Hauser and AOLA previously entered into. In addition, Mr. Hauser is eligible for a bonus of up to $51,000 based on the actual amount of AOLA's advertising and other revenue for the second quarter of 2005 as compared with budgetary objectives for the second quarter of 2005. Below is a copy of the Severance Agreement and Release of Claims between America Online Latin America, Inc. and Eduardo Hauser: May 25, 2005 Mr. Eduardo Hauser 962 Sanibel Dr. Hollywood, FL 33019 Separation Agreement and Release of Claims Dear Mr. Hauser: This letter will serve as confirmation that your employment with America Online Latin America, Inc. ("AOLA", together with any successors, subsidiaries, merged entities, parent entities and their respective affiliates, collectively the "Company") will end as set forth in this letter. This Separation Agreement and Release of Claims ("Agreement"), upon your signature, will constitute the complete agreement between you and the Company regarding the terms of your separation of employment. 1. Your employment with the Company will cease at the close of business on May 25, 2005 (the "Separation Date") on the terms and conditions set forth in this Agreement. Effective at the close of business on the Separation Date, you will cease to perform your duties for the Company. The obligations of the Company set forth in this letter are conditioned on your continuing to perform your duties through the Separation Date and your compliance with all other terms and conditions of this Agreement. 2. You will be paid a total severance amount equal to $373,009.98 as wages in lieu of notice, accrued, but unused vacation time, and payment of a retention bonus and severance payment pursuant to that certain Executive Retention Agreement (the "Retention Agreement") dated as of June 5, 2004 (collectively, the "Severance Amount"). The Severance Amount will be paid in a lump sum on or before July 1, 2005, subject to customary payroll deductions and withholdings. In addition, you will be eligible for a bonus ("Potential Bonus") for the second quarter of 2005 based on actual performance as compared with budgetary objectives for the entire quarter. The Potential Bonus would be subject to customary payroll deductions and withholdings. In addition, you will be entitled to keep possession of your personal computer (subject to your deleting Company information contained on such computer as set forth in Paragraph 4 below). 3. Your benefits will continue through the Separation Date. With respect to the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), your COBRA period will begin on the day following the Separation Date. You will receive separate information regarding your option to continue health benefits under COBRA. To the extent that you elect to continue health benefits under COBRA, the Company will reimburse you for the premiums you pay under COBRA for June, July, August, September, October, November and December 2005 and for January, February, March, April and May 2006. All other benefits will terminate on the Separation Date. 4. Prior to your departure from work on the Separation Date, you must return to the Company all the Company property in your possession, including, but not limited to, keys and the original and all copies of any written, recorded, or computer-readable information about Company practices, procedures, trade secrets, customer lists, or product marketing associated with the Company's online services business. As provided in the Confidentiality, Non-Competition and Proprietary Rights Agreement which you signed with America Online, Inc. ("AOL") dated March 3, 1999 (the "NDA"), you have agreed not to disclose to others information about AOL's and the Company's practices, procedures, trade secrets, customer lists, or product marketing, except as required by law, and that agreement remains in full force and effect, and shall remain in full force and effect following your separation from the Company. 5. The agreement of the Company to agree to pay you the Severance Amount (which includes payment of the retention amount) and your eligibility for the Potential Bonus is being offered solely in consideration for your release of claims, as set forth in Paragraph 6, your compliance with this Agreement and your continued compliance with the NDA as set forth above, and you acknowledge that this is compensation to which you are not otherwise entitled. Such agreements are not, and should not be construed as, an admission of any kind whatsoever by the Company, and the Company denies it has engaged in any wrongdoing against you. In addition, you agree that the payment of the Severance Amount constitutes full payment to you under the Retention Agreement and that you are not entitled to any additional payments under the Retention Agreement. You further agree that this agreement supercedes the Retention Agreement and the Retention Agreement shall no longer be in force or effect. 6. In consideration of the Company's agreement as stated above, you agree to discharge and release unconditionally the Company, its successors and their respective predecessors, subsidiaries, affiliates, related entities, merged entities and their parent entities, and their respective officers, directors, stockholders, employees, benefit plan administrators and trustees, agents, attorneys, insurers, representatives, affiliates, successors and assigns (the "Releasees") from any and all claims, actions, causes of action, demands, obligations or damages of whatever nature, whether known or unknown to you, which you ever had or now have upon or by reason of any matter, cause or thing, up to and including the day on which you sign this Agreement, arising from your employment with the Company and separation of your employment with the Company or otherwise, including any claim arising out of or related to any stock options held by you or granted to you by the Company which are scheduled to vest subsequent to the Separation Date (all of the foregoing, collectively "Claims"). The Claims you are waiving include, but are not limited to, any and all claims arising out of or related to or under: any stock options held by you or granted to you by the Company which are scheduled to vest subsequent to your Separation Date; Title VII of the Civil Rights Act of 1964, as amended; the Employee Retirement Income Security Act; the Americans with Disabilities Act; the Fair Labor Standards Act; the Worker Adjustment and Retraining Notification Act (WARN), or similar statutes; the Family Medical Leave Act; the National Labor Relations Act; the Employee Retirement Income Security Act; 42 U.S.C. 1981; the Older Workers Benefits Protection Act; Chapter 760, Florida Statutes; Chapter 448, Florida Statutes; analogous federal, state and local laws, regulations, statutes or ordinances; any principle of common law; all claims for any type of relief from the Releasees, and any other federal, state and local claims, whether statutory or common law, and whether tort or contract. This release of claims does not affect any pending claim for workers' compensation benefits, your vested rights, if any, in the Company's 401(k) plan, or your rights to exercise any and all Company stock options held by you that are exercisable as of your Separation Date during the applicable period of exercise and in accordance with all other terms of those options and the stock option plans, agreements and notices under which such options were granted. 7. You agree to assist the Company, upon its reasonable request, in connection with any litigation, investigation or other matter arising out of or related to your service as an employee, officer, or director of the Company. The Company will reimburse you for the reasonable out-of-pocket costs incurred by you in rendering such assistance to the Company. In addition, you agree to assist the Company in canceling the letter of credit established to secure the retention payment under the Retention Agreement. 8. You represent and agree that you have not filed any complaint or charge or lawsuit of any kind whatsoever against the Company with any other governmental agency or any court and you further represent and agree that you will not file or institute or participate in any litigation, award or judgment with any State or Federal court any time hereafter or, unless required by law or pursuant to Paragraph 7 above, testify or provide documents or information for or to any other person or entity with regard to any matter related to or arising out of your employment with the Company or the termination thereof, this Agreement or any matters released herein; provided, that this shall not limit you from filing a lawsuit for the purpose of enforcing your rights under this Agreement. 9. [intentionally omitted]. 10. You agree not to make any untruthful remarks or statements about the Releasees and their respective officers, directors, employees or agents. 11. You agree that in the event you breach any of your obligations under paragraph 1, 4, 7, 8, 9 or 10 of this Agreement, the Company will be entitled to seek recovery or setoff of the full amount of the Severance Payment, Potential Bonus and other amounts paid or to be paid to you following the Separation Date. 12. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, with regard to any otherwise applicable principles of conflicts of law. 13. If any portion of this Agreement should ever be determined to be unenforceable, it is agreed that this will not affect the enforceability of any other clause of the remainder of this Agreement. Sincerely, Charles M. Herington President and CEO DIRECTV HOLDINGS: Fitch Rates Senior Notes 'BB' ----------------------------------------------- Fitch Ratings has assigned a 'BB' rating to a proposed offering of 10-year $1.0 billion senior unsecured notes jointly issued by DIRECTV Holdings, LLC (DIRECTV) and DIRECTV Financing Co, Inc. in accordance with Rule 144A. Fitch currently rates DIRECTV's senior secured credit facility 'BB+' and the company's senior unsecured debt 'BB'. The Rating Outlook for each of the ratings remains Stable. Fitch believes that the proceeds from the offering will be used to repay up to $500 million of borrowings from the company's senior secured credit facility and for general corporate purposes. Fitch expects the remaining proceeds will stay at DIRECTV and will not be paid as a dividend to DIRECTV Group, Inc. (DTVG). From Fitch's perspective, the issuance increases DIRECTV's overall leverage and weakens the company's position within its current ratings. The proposed transaction will reduce the amount of secured debt claims above the senior unsecured debtholders, but this benefit is mitigated by a larger overall debt balance. Pro forma for the new debt issue, as well as the bank debt financing and equity contribution by DTVG, completed in April as if they were completed on March 31, 2005, Fitch believes that total debt will increase by $500.0 million to approximately $3.4 billion. Based on LTM EBITDA for the period ending March 31, 2005 of approximately $653.5 million, Fitch estimates DIRECTV's pro forma leverage would be 5.2 times (x). Overall, Fitch's ratings reflect DIRECTV's strong market position, positive subscriber metrics including robust subscriber growth and growing average revenue per unit, and the support and liquidity position of DTVG. Also incorporated into the ratings is DIRECTV's high cost to acquire and retain subscribers. Fitch expects these costs (on a per subscriber basis) to increase as subscribers migrate to more advanced set top boxes and DIRECTV controls subscriber churn. Fitch believes that reducing subscriber churn and controlling the growth of subscriber acquisition and retention costs will be key to growing EBITDA and expanding margin. Fitch's ratings also reflect DIRECTV's lack of revenue diversity and narrow product offering relative to the cable MSOs and Fitch's perception that DIRECTV's competitive position relative to the cable operators may diminish as the cable MSOs introduce telephony service to their product bundle. Fitch expects the company's total leverage metric to improve during 2005 and targets a year-end leverage metric ranging between 3.8x and 4.0x. The company's liquidity position is supported by a combination of cash on hand, which Fitch estimates to be approximately $646 million on a pro forma basis as of the end of the first quarter, and available borrowing capacity under the company's $500 million revolver contained within the company's $2.5 billion senior secured credit facility. Fitch's Stable Rating Outlook incorporates Fitch's expectation for subscriber growth to continue during 2005 albeit at a moderately slower pace relative to 2004. Fitch expects the company to balance subscriber growth with subscriber acquisition and retention costs while reducing subscriber churn to drive increasing EBITDA and operating margins. CONTACT: David Peterson +1-312-368-3177, Chicago Michael Weaver +1-312-368-3156, Chicago MEDIA RELATIONS: Brian Bertsch +1-212-908-0549, New York GRUPO ELEKTRA: Gives Notice to Terminate GDS Program ---------------------------------------------------- Grupo Elektra S.A. de C.V. (NYSE: EKT) (BMV: ELEKTRA*) (Latibex: XEKT) ("The Company"), Latin America's leading specialty retailer, consumer finance and banking and financial services company, announced Thursday that it gave notice to The New York Stock Exchange (NYSE) and The Bank of New York (BoNY) to terminate the Global Depositary Shares (GDS) program that the Company has in the United States. With the notice of termination, the company also instructed BoNY to amend the deposit agreement to reduce to 60 days the period to exchange GDSs for common shares traded on the Mexican Stock Market (BMV). As was previously announced at an Extraordinary Shareholders' Meeting held on June 1, shareholders approved termination of Grupo Elektra's GDS program, after an analysis and discussion of the costs and benefits of continued listing in the US capital markets. The trading of the GDSs in the United States shall continue for 30 days from the date on which BoNY notifies GDS holders of the termination of the deposit agreement. Grupo Elektra expects BoNY to provide notice within the next few days. After the 30-day notice period, the NYSE will suspend trading of the GDSs in the United States, and the GDS holders will have 60 days to exchange their GDSs for common shares that are traded on the BMV. Upon the expiration of the 60-day period, BoNY will be entitled to sell the common shares underlying the GDSs that were not surrendered in the BMV and distribute the proceeds of the sale to holders. Grupo Elektra is Latin America's leading specialty retailer, consumer finance and banking services company. Grupo Elektra sells retail goods and services through its Elektra, Salinas y Rocha, Bodega de Remates and Elektricity stores and over the Internet. The Group operates more than 1,000 stores in Mexico, Guatemala, Honduras and Peru. Grupo Elektra also sells and markets its consumer finance, banking and financial products and services through its more than 1,440 Banco Azteca branches located within its stores, as a stand-alone, and in other channels in Mexico and Panama. Banking and financial services include consumer credit, personal loans, money transfers, extended warranties, savings accounts, term deposits, pension- fund management and insurance. CONTACT: Grupo Elektra, S.A. de C.V. Investor and Press Inquiries: Esteban Galindez, CFA Director of Finance and I.R. Phone: 52 (55) 1720-7819 Fax: 52 (55) 1720-7822 E-mail: egalindez@elektra.com.mx URL: http://www.grupoelektra.com.mx GRUPO IUSACELL: Gives Notice to Terminate ADR Program ----------------------------------------------------- Grupo Iusacell, S.A. de C.V., (NYSE: CEL) (BMV: CEL), announced Thursday that it has gave notice to The New York Stock Exchange (NYSE) and The Bank of New York (BoNY) to terminate the American Depositary Shares (ADRs) program that the Company has in the United States, listed on the NYSE. With the notice of termination, the company also instructed BoNY to amend the deposit agreement to reduce to 60 days the period to exchange ADRs for shares traded on the Mexican Stock Market (BMV). As was previously announced, the Iusacell Extraordinary Shareholders' Meeting held on June 1 approved the termination of its ADR program, after an analysis and discussion of the costs and benefits of continued listing in the U.S. capital markets. The trading of the ADRs in the United States shall continue for the next 90 days from the date on which BoNY notifies the termination of the deposit agreement to ADR holders, which is expected to happen within the next few days. After the 90-day notice period, the NYSE will suspend trading of the ADRs in the United States, and the ADR holders will have 60 days to exchange their ADRs for shares that are traded on the BMV. Upon the expiration of the 60-day period, BoNY will be entitled to sell the remaining shares, corresponding to ADRs that were not surrendered in the BMV and distribute the proceeds of the sale to holders. Grupo Iusacell, S.A. de C.V. (NYSE: CEL) (BMV: CEL) is a wireless cellular and PCS service provider in Mexico encompassing a total of approximately 92 million POPs, representing approximately 90% of the country's total population. Independent of the negotiations towards the restructuring of its debt, Iusacell reinforces its commitment with customers, employees and suppliers and guarantees the highest quality standards in its daily operations, offering more and better voice communication and data services through state-of-the-art technology, such as its new 3G network, throughout all of the regions in which it operates. CONTACT: Grupo Iusacell Jose Luis Riera K. Chief Financial Officer Phone: 011-5255-5109-5927 J. Victor Ferrer Finance Manager Phone: 011-5255-5109-5927 E-mail: vferrer@iusacell.com.mx URL: http://www.iusacell.com SATMEX: Mexicans Expected to File Bankruptcy Petition ----------------------------------------------------- U.S. bondholders of at least US$379 million owed by Satelites Mexicanos (Satmex) may find it a great effort to start bankruptcy proceedings against the Mexican satellite operator in the U.S. Last month, the bondholders filed a suit in New York to force Satmex, which has been in default since 2003, into involuntary bankruptcy. Already, the bondholders have hammered out a prepackaged restructuring plan with Satmex's management that would provide US$55 million in new capital -- more than enough to launch the Satmex 6 satellite. The vehicle, which has been gathering dust on a launchpad in French Guyana, would provide fresh revenue and help pay off some debt. However, the proceedings have been stalled, as some Mexicans want any bankruptcy proceeding to unfold in Mexico. Satmex majority shareholder Principia has been warned by its legal advisors that opting for the US proceeding would entail certain risks. Principia and US company Loral Space & Communications have a 75% joint controlling stake, while the remaining 25% is state-owned. What is complicating the matter is that the government holds a US$188-million note for a loan it made to a holding company controlled by Principia head Sergio Autrey, called Firmamento, when Satmex was privatized in 1997. The government reportedly wants the Firmamento loan treated differently than it would normally be in a restructuring under US laws. The idea is for the loan to be treated as a debt of Satmex when it is actually a debt of Firmamento and, therefore, considered shareholder debt. According to Mexican daily Reforma, the structural change support group at the transport and communications ministry SCT wants the government loan to be recognized as a Satmex debt and not a debt of Firmamento, which has no guarantee. For this reason, the U.S. bondholders hoping to begin a court- supervised restructuring as soon as next week can expect a counter-petition from SatMex seeking bankruptcy in Mexico. TV AZTECA: Gives Notice To Terminate ADR Program ------------------------------------------------ TV Azteca, S.A. de C.V. (BMV: TVAZTCA; NYSE: TZA; Latibex: XTZA), one of the two largest producers of Spanish-language television programming in the world, announced Thursday that it gave notice to The New York Stock Exchange (NYSE) and The Bank of New York (BONY) to terminate the American Depositary Receipt (ADR) program that the Company has in the United States. With the notice of termination, the company also instructed BONY to amend the deposit agreement to reduce to 60 days the period to exchange ADRs for CPOs traded on the Mexican Stock Market (BMV). As was previously announced at an Extraordinary Shareholders' Meeting held on June 1, shareholders approved termination of TV Azteca's ADR program, after an analysis and discussion of the costs and benefits of continued listing in the US capital markets. The trading of the ADRs in the United States shall continue for 30 days from the date on which BONY notifies ADR holders of the termination of the deposit agreement. TV Azteca expects BONY to provide notice within the next few days. After the 30-day notice period, the NYSE will suspend trading of the ADRs in the United States, and the ADR holders will have 60 days to exchange their ADRs for CPOs that are traded on the BMV. Upon the expiration of the 60-day period, BONY will be entitled to sell the CPOs underlying the ADRs that were not surrendered in the BMV and distribute the proceeds of the sale to holders. TV Azteca is one of the two largest producers of Spanish language television programming in the world, operating two national television networks in Mexico, Azteca 13 and Azteca 7, through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing US Hispanic market, and Todito.com, an Internet portal for North American Spanish speakers. CONTACT: TV Azteca, S.A. de C.V. Investor Relations: Bruno Rangel Phone: 52 (55) 1720 9167 E-mail: jrangelk@tvazteca.com.mx Rolando Villarreal Phone: 52 (55) 1720 0041 E-mail: rvillarreal@gruposalinas.com.mx Press Relations: Daniel McCosh Phone: 52 (55) 1720 0059 E-mail: dmccosh@tvazteca.com.mx TV AZTECA: Distributes $59M In Cash To Shareholders --------------------------------------------------- TV Azteca, S.A. de C.V. (NYSE: TZA; BMV: TVAZTCA; Latibex: XTZA), one of the two largest producers of Spanish language television programming in the world announced that it made Thursday a US$59 million cash distribution to shareholders, equivalent to US$0.019 per CPO or US$0.309 per ADR. On April 29, TV Azteca's Annual Ordinary Shareholders' Meeting approved distributions for an aggregate amount of approximately US$80 million to be paid during 2005, which include the payment of US$59 million made on Thursday, and another payment of approximately US$21 million to be made on December 1. The company noted Thursday's cash distribution is part of its ongoing plan to allocate a substantial portion of TV Azteca's cash generation to make distributions to shareholders of over US$500 million, and to reduce the company's debt by approximately US$250 million within a six-year period that started in June 2003. The distributions under the cash usage-plan made to date, represent an aggregate amount of US$384 million, equivalent to a 25% yield on the June 8, 2005 ADR closing price. Prior distributions include: US$125 million on June 30, 2003; US$15 million on December 5, 2003; US$33 million on May 13, 2004; US$22 million on November 11, 2004; and US$130 million on December 14, 2004. "TV Azteca's ongoing distributions reflect strong financial results and robust cash generation," said Mario San Rom n, Chief Executive Officer of TV Azteca. "Growing operations domestically and in the US Hispanic market provide us with solid perspectives for cash creation going forward, allowing for strict adherence to our cash plan as scheduled." TV Azteca is one of the two largest producers of Spanish language television programming in the world, operating two national television networks in Mexico, Azteca 13 and Azteca 7, through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing US Hispanic market, and Todito.com, an Internet portal for North American Spanish speakers. CONTACT: TV Azteca, S.A. de C.V. Investor Relations: Bruno Rangel Phone: 52 (55) 1720 9167 E-mail: jrangelk@tvazteca.com.mx Rolando Villarreal Phone: 52 (55) 1720 0041 E-mail: rvillarreal@gruposalinas.com.mx Press Relations: Daniel McCosh Phone: 52 (55) 1720 0059 E-mail: dmccosh@tvazteca.com.mx =============== P A R A G U A Y =============== COPACO: Delays Launching of Mobile Unit --------------------------------------- State-run fixed line operator Copaco will delay the launching of its GSM mobile service, presently scheduled for August, until November 2005, reports Business News Americas. In preparation for the launching of the mobile service, the Company will open a tender to purchase mobile handsets. Copaco expects to attract 140,000 GSM subscribers to be served by a network of 140 base stations. "According to our studies, we should invest US$12mn in the GSM project and US$4mn in a data network project, but it could prove to be less," Copaco's CEO Omar Ramos said. With this launch, Copaco will become the fifth Paraguayan mobile operator in a market of nearly 2 million subscribers. Private operators expressed some opposition to Copaco's plans to launch a mobile unit. But Copaco commercial manager Osmar Lopez said the decision is already made and the project is developing as expected. ======= P E R U ======= * PERU: IMF Completes Second Review Under Stand-By Arrangement -------------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) completed the second review of Peru's economic performance under a 26-month Stand-By Arrangement (see Press Release No. 04/112). The completion of the review makes available a total amount equivalent to SDR 149.1 million (about US$219.8 million), but the Peruvian authorities intend to continue treating the arrangement as precautionary. In completing the review, the Executive Board also approved Peru's request for a waiver of the nonobservance of a performance criterion and the modification and resetting of another performance criterion. In addition, the Board also approved a rephasing of the country's future disbursements into five equal amounts of SDR 27.6 million (about US$40.7 million). Following the Executive Board discussion, of Peru on June 8, 2005, Mr. Agustin Carstens, Deputy Managing Director and Acting chair, said: "Peru's economic performance has continued to be strong in 2004 and the first half of 2005. Inflation remains low and official reserves are at a comfortable level. The outlook is positive, as the economy is expected to continue to benefit from the global recovery. In addition, Peru has built important buffers to mitigate vulnerabilities associated with public debt and financial dollarization. In the context of the national elections scheduled for early 2006, it will be important to maintain the consensus for policies aimed at promoting sustained growth and reducing poverty over the medium-term. "Prudent fiscal management is at the core of the authorities' economic strategy, and fiscal policies are consistent with further consolidation in 2005. Given that part of the revenue increase projected for 2005 is expected to be temporary, the authorities need to avoid boosting expenditures on a permanent basis. They are also encouraged to keep expenditure in the supplementary budget to a minimum, and to use part of any excess tax revenue to reduce the fiscal deficit below program levels. This will help reduce Peru's public debt-to-GDP ratio and further bolster investor sentiment. The authorities are committed to strengthening the institutional framework to ensure efficient and transparent use of scarce resources for public investment. In this context it is important that procedures to identify projects eligible under the Private-Public Partnerships program be strictly observed. "The central bank remains committed to keeping inflation low. Allowing the exchange rate to move more freely will be important to help insulate the economy against external shocks and speculative capital flows. It is also important that the central bank continues to gradually raise the limit on pension funds' investments abroad and further strengthen domestic capital markets in order to help diversify the risks of these funds. "The authorities are making progress in increasing the resilience and efficiency of the financial sector. They are strengthening prudential regulations on lending to unhedged economic agents and improving the supervision of offshore bank subsidiaries. The authorities also intend to discourage mortgage lending in foreign currency, and are promoting greater efficiency in financial intermediation, including through the development of the domestic capital market. It will be important that the authorities strictly observe the limit on consumer lending by the state-owned bank, Banco de la Nacion. "Progress is continuing in the implementation of growth- enhancing reforms. In recent months, the authorities' focus has been on reforming the Cedula Viva public pension regime and on bolstering private investment by awarding infrastructure transportation in concession under transparent and fiscally responsible procedures. The establishment of a commercial court in April 2005 and the centralization of collateral registries by end-September are expected to further enhance the business climate. Progress has also been made in strengthening the legal framework for prudent fiscal management, and the authorities have continued to actively pursue trade liberalization through bilateral and multilateral negotiations," Mr. Carstens said. CONTACT: International Monetary Fund IMF External Relations Department Public Affairs: Phone: 202-623-7300 Fax: 202-623-6278 Media Relations: Phone: 202-623-7100 Fax: 202-623-6772 ================================= T R I N I D A D & T O B A G O ================================= BWIA: Bourse May Levy Fine for Late Filing ------------------------------------------ The Stock Exchange may slap national airline BWIA a fine that could reach $50,000 for submitting its annual financial results late, the Trinidad Guardian reports. Originally, the airline was given until end of March to deliver the statements. But due to operational difficulties over the Christmas period, which, according to the Company, resulted in the unanticipated delay in the finalizing of the audit of the financial statements, BWIA sought to extend the deadline to May 30. It was granted the extension in provision with Clause 6 of the Listing Requirement. However, the Company, which was late in filing its accounts three years in a row, delivered the results on June 6. Meanwhile, a representative of the Stock Exchange said that while the bourse had received BWIA's financial statements, the Company was not obligated to publish the results in the daily newspapers. 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: World Bank Announces New CAS and Loans ------------------------------------------------- The World Bank's Board of Executive Directors discussed Thursday the new Country Assistance Strategy (CAS) for Uruguay, which projects financial assistance of up to US$800 million between 2005 and 2010, as well as technical and advisory services. In addition, the Board of Directors approved a Social Program Development Policy Loan and two investment projects for transport infrastructure and natural resources management. "Now that the economy is rebounding from the crisis, the Government's priorities have shifted from crisis response to the achievement of longer-term equitable and sustainable economic development," said Axel van Trotsenburg, World Bank Country Director for Argentina, Chile, Paraguay and Uruguay. "The new strategy, accompanied by these three projects, represents a strong beginning to a renewed partnership with Uruguay in supporting critical public policies and investments." The new Bank's program of lending and advisory services supports the new administration's development plan "Government of Change -Responsible Transition (El Gobierno de Cambio - La Transicion Responsable)". To achieve equitable and sustainable economic development, the Government faces three broad development challenges: reducing vulnerability, sustaining growth, and improving living standards. The new CAS is the result of close collaboration with the Government and has benefited from wide consultations with government and non-governmental representatives including youth groups, private sector, international agencies and academia. During the Board discussion, Executive Directors appreciated the wide-ranging reforms undertaken so far, but stressed the need to further pursue structural reforms to ensure longer-term equitable and sustainable development. Directors welcomed the smooth political transition following the October 2004 elections. They noted the Government's commitment to maintain macroeconomic stability and pursue sustainable economic and social development, including increased efforts to help the poor. Several Directors emphasized the importance of private sector participation and the potential for IFC and MIGA to contribute in these areas. In addition to discussing the CAS, the Board approved three new operations for a total of US$175 million to support social programs, and investments in transport and natural resources. Social Program Development Policy Loan The US$75.38 million Social Program Development Policy Loan (SPDPL) supports the Government's policy actions to increase the efficiency, coverage and sustainability of Uruguay's health, education and social protection programs. The policy measures supported by this loan are expected to contribute to a reduction in poverty and improved equity and efficiency of social sector expenditures, while setting the stage for further Bank involvement in the social sectors. The US$75.38 million, fixed-spread loan is repayable in 15 years, including five years of grace. "We are supporting the new government's policies in education, health and social protection in order to increase access and efficiency of social services within a framework of fiscal sustainability. Uruguay's social programs were successful in maintaining core social indicators like infant mortality and school attendance despite the economic shock of the crisis," said van Trotsenburg. Transport Infrastructure Maintenance and Rural Access Project The US$70 million Transport Infrastructure Maintenance and Rural Access Project seeks to upgrade the country's transport infrastructure to facilitate cost-efficient and safe transport of freight and passengers. The project focuses on rehabilitating key transport links, removing existing bottlenecks, arresting any further deterioration of infrastructure due to budgetary constraints, and improving infrastructure management and safety. The US$70 million, fixed-spread loan is repayable in 15 years, including five years of grace. Natural Resources and Biodiversity Management Project The Natural Resources and Biodiversity Management Project will be financed with a US$30 million loan from the World Bank and a US$7 million grant from the Global Environment Facility (GEF). It is an innovative project that blends both rural development and environmental conservation. "This project gives new opportunities to Uruguay's rural population," added van Trotsenburg. "It will enable them to improve their competitiveness and their market opportunities, demonstrating how to achieve economic development in harmony with the conservation of the natural environment, upon which their long-term future depends." The project will directly benefit 13,000 rural families in the adoption of economically and environmentally sustainable integrated production systems which focus on the management and conservation of soils, water and rangelands; as well as the mainstreaming of biodiversity conservation. The US$30 million, fixed-spread loan is repayable in 15 years, including five years of grace. CONTACT: World Bank In Washington: Alejandra Viveros Phone:(202) 473-4306 E-mail: Aviveros@worldbank.org In Buenos Aires: Yanina Budkin Phone:(5411) 4316-9700 E-mail: Ybudkin@worldbank.org URL: http://www.worldbank.org/gef *********** 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 * * *