/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050706.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, July 6, 2005, Vol. 6, Issue 132 Headlines A R G E N T I N A ACCEDA TELEFONICA: Court OKs Creditor's Bankruptcy Request ALBICA S.R.L.: Seeks Court Approval to Pursue Reorganization BAMUR S.A.: Debt Payments Halted, Moves to Reorganize BELLAC S.R.L.: Court Declares Company Bankrupt COMPANIA BELGA: Court Converts Bankruptcy to Reorganization FUSAL: Liquidates Assets to Pay Debts INDUSTRIAS BONART: Court Issues Bankruptcy Decree JUBAES S.A.: Files for Bankruptcy Protection MESLAND S.A.: Court Rules Liquidation Required MEZZANO ADRIATICO: Enters Bankruptcy Following Court Ruling RIBO PETROL: Debt Payments Halted, Set to Reorganize SAN EDUARDO: Court Grants Reorganization Plea SANATORIO EZEIZA: Debt Payments Cease Pending Reorganization SERVICIOS FUNERARIOS: Official Reports Schedule Set TELECOM ARGENTINA: Businessman Acquires 8.13% of Nortel TRANSENER: Ratings Raised on Debt Restructuring Completion TRANSPORTES DEL TEJAR: Court Approves Concurso Motion B R A Z I L CAMARGO CORREA: S&P Assigns Local, Foreign Currency Ratings CSN: S&P Rates $150M Perpetual Notes 'BB-', Affirms Ratings ELETROPAULO METROPOLITANA: Issues Rate Adjustment Tables C O L O M B I A EMCALI: Revising Tariff Schedule, Billing Parameters Next Year E L S A L V A D O R BANCO AMERICANO: Ernst & Young to Evaluate Offers M E X I C O CINTRA: Sale of Two Airlines Expected by Yearend GRUPO DESC: Public Note Exchange Offering Initiated GRUPO MEXICO: Comments on Subsidiary Asarco Situation P E R U SIDERPERU: Creditors Postpone Debt Payment Deadlines * PERU: Government OKs New Bonds to Fund Paris Club Debt Buyback U R U G U A Y PLUNA: Severs Ties With Brazil's VARIG V E N E Z U E L A PDVSA: To Provide 185,700b/d to 14 Caribbean Nations PDVSA: Earmarks $600M for Puerto La Cruz Refinery Upgrade - - - - - - - - - - ================= A R G E N T I N A ================= ACCEDA TELEFONICA: Court OKs Creditor's Bankruptcy Request ---------------------------------------------------------- Acceda Telefonica Celular S.A. entered bankruptcy after Court No. 8 of Buenos Aires' civil and commercial tribunal ruled on a bankruptcy motion filed by Ms. Viviana Luduena, reports La Nacion. The Company's failure to pay US$2,600 in debt prompted the creditor to file the petition. Working with the city's Clerk No. 16, the court assigned Mr. Osvaldo Luis Weiss 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 trustee before Sep. 30, 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 claims verification process. CONTACT: Acceda Telefonica Celular S.A. Avenida Alicia Moreau de Justo 1720 Buenos Aires Mr. Osvaldo Luis Weiss, Trustee Avenida Presidente Roque Saenz Pena 651 Buenos Aires ALBICA S.R.L.: Seeks Court Approval to Pursue Reorganization ------------------------------------------------------------ Court No. 8 of Buenos Aires' civil and commercial tribunal is currently reviewing the merits of the reorganization petition filed by Albica S.R.L. Argentine daily La Nacion reports that the Company filed the request after defaulting on its debt payments since Dec. 28, 2004. If granted by the court, the process will allow Albica S.R.L. to negotiate a settlement with its creditors in order to avoid a straight liquidation. Clerk No. 16 assists the court on this case. CONTACT: Albica S.R.L. Laprida 1737 Buenos Aires BAMUR S.A.: Debt Payments Halted, Moves to Reorganize ----------------------------------------------------- Court No. 15 of Buenos Aires' civil and commercial tribunal is studying the request for reorganization submitted by local company Bamur S.A., says La Nacion. The report adds that that the Company filed a "Concurso Preventivo" petition following cessation of debt payments. The city's Clerk No. 29 assists the court on this case. CONTACT: Bamur S.A. Avda Corrientes 1327 Buenos Aires BELLAC S.R.L.: Court Declares Company Bankrupt ---------------------------------------------- Bellac S.R.L. enters bankruptcy protection after Court No. 11 of Buenos Aires' civil and commercial tribunal, with the assistance of Clerk No. 22, 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 Alberto Javier Samsolo as trustee. Mr. Samsolo will be verifying creditors' proofs of claim until the end of the verification phase on Sep. 2, 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 Oct. 17, 2005 followed by the general report, which is due on Nov. 28, 2005. CONTACT: Mr. Alberto Javier Samsolo, Trustee Paraguay 1225 Buenos Aires COMPANIA BELGA: Court Converts Bankruptcy to Reorganization ----------------------------------------------------------- Compania Belga de Aceros S.A. will proceed with reorganization after a Buenos Aires' civil and commercial Court No. 13 converted the Company's ongoing bankruptcy case into a "concurso preventivo", states Infobae. Under Insolvency protection, the Company will be able to draft a proposal designed to settle its debts with creditors. The reorganization also prevents mandatory asset liquidation. Ms. Flora Marcela Pazos, the court-appointed trustee, will verify creditors' proofs of claim until Sep. 13, 2005. Creditors with unverified claims cannot participate in the Company's settlement plan. The trustee will prepare individual reports based on the verified claims and present it to court on Oct. 27, 2005. She will also submit individual reports on Dec. 9, 2005. The Company will present the completed settlement proposal to its creditors during the informative assembly scheduled on June 13, 2006. Clerk No. 25 assists the court with the proceedings. CONTACT: Ms. Flora Marcela Pazos, Trustee Montevideo 527 Buenos Aires FUSAL: Liquidates Assets to Pay Debts ------------------------------------- Buenos Aires-based Fundacion para la Promocion de la Salud (FUSAL) 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, Estudio Cres. Jorge Alberto Guaita y Jacobo Suez. The trustee will verify creditors' proofs of claim until Sep. 14, 2005. The validated claims will be presented in court as individual reports on Oct. 27, 2005. The trustee will also submit a general report, containing a summary of the Company's financial status as well as relevant events pertaining to the bankruptcy, on Dec. 9, 2005. The bankruptcy process will end with the disposal of the Company's assets in favor of its creditors. CONTACT: Estudio Cres. Jorge Alberto Guaita y Jacobo Suez (Trustee) Carlos Calvo 839 Buenos Aires INDUSTRIAS BONART: Court Issues Bankruptcy Decree ------------------------------------------------- Court No. 5 of Buenos Aires' civil and commercial tribunal declared local plastic company Industrias Bonart Sacif "Quiebra", relates La Nacion. The court approved the bankruptcy petition filed by Union de Obreros y Empleados de Plasticos, which claims debts amounting to $15,608.86. The Company will undergo the bankruptcy process with Ms. Elina Alicia Victorero as trustee. Creditors are required to present proofs of their claim to Ms. Victorero for verification before Sep. 5, 2005. Creditors who fail to submit the required documents by the said date will not qualify for any post- liquidation distributions. Clerk No. 10 assists the court on the case. CONTACT: Industrias Bonart Sacif Bonorino 1644 Buenos Aires Ms. Elina Alicia Victorero, Trustee Migueletes 1806 Buenos Aires JUBAES S.A.: Files for Bankruptcy Protection -------------------------------------------- Jubaes S.A., a company operating in Buenos Aires, has petitioned for bankruptcy after failing to pay its liabilities, Infobae reports. The bankruptcy petition, once approved by the court, will allow the Company to liquidate its assets to pay its creditors. The case is pending before Court No. 18. Clerk No. 35 assists on this case. CONTACT: Jubaes S.A. Francisco Beiro 4294 Buenos Aires MESLAND S.A.: Court Rules Liquidation Required ---------------------------------------------- Court No. 21 of Buenos Aires' civil and commercial tribunal ordered the liquidation of Mesland S.A. after the Company defaulted on its obligations, Infobae reveals. The liquidation pronouncement will effectively place the Company's affairs as well as its assets under the control of Miguel Luis Rudnitzky, the court-appointed trustee. Mr. Rudnitzky will verify creditors' proofs of claim until July 28, 2005. The verified claims will serve as basis for the individual reports to be submitted in court on Sep. 9, 2005. The submission of the general report follows on Oct. 24, 2005. Clerk No. 42 assists the court on this case, which will end with the disposal of the Company's assets in favor of its creditors. CONTACT: Mesland S.A. Asuncion 2817 Buenos Aires Mr. Miguel Luis Rudnitzky Uruguay 328 Buenos Aires MEZZANO ADRIATICO: Enters Bankruptcy Following Court Ruling ----------------------------------------------------------- Buenos Aires' civil and commercial Court No. 3 declared Mezzano Adriatico S.A. bankrupt after the Company defaulted on its debt payments. The bankruptcy order effectively places the Company's affairs as well as its assets under the control of court- appointed trustee, Mariana Nadales. As the trustee, Ms. Nadales is tasked with verifying the authenticity of claims presented by the Company's creditors. The verification phase is ongoing until Aug. 26, 2005. Following claims verification, the trustee will submit the individual reports based on the forwarded claims for final approval by the court on Oct. 7, 2005. A general report will also be submitted on Nov. 21, 2005. Infobae reports that Clerk No. 6 assists the court on this case, which will end with the disposal of the Company's assets in favor of its creditors. CONTACT: Mezzano Adriatico S.A. Parana 224 Buenos Aires Ms. Mariana Nadales, Trustee Hipolito Yrigoyen 1349 Buenos Aires RIBO PETROL: Debt Payments Halted, Set to Reorganize ---------------------------------------------------- Court No. 13 of Buenos Aires' civil and commercial tribunal is studying the request for reorganization submitted by local company Ribo Petrol S.A., says La Nacion. The report adds that that the Company filed a "Concurso Preventivo" petition following cessation of debt payments. The city's Clerk No. 26 assists the court on this case. CONTACT: Ribo Petrol S.A. Avenida Cordoba 669 Buenos Aires SAN EDUARDO: Court Grants Reorganization Plea --------------------------------------------- San Eduardo S.R.L., a company operating in Mendoza, begins reorganization proceedings after the city's civil and commercial Court No. 1 granted its petition for "concurso preventivo". During the reorganization, the Company will be able to negotiate a settlement proposal for its creditors so as to avoid a straight liquidation. According to Argentine news source Infobae, the reorganization will be conducted under the direction of Valeria Lamattina, the court-appointed trustee. Creditors with claims against San Eduardo S.R.L. must present proofs of the company's indebtedness to Ms. Lamattina before Aug. 4, 2005. These claims will constitute the individual reports to be submitted in court on Sep. 15, 2005. The court also requires the trustee to present an audit of the Company's accounting and business records through a general report due on Oct. 27, 2005. On May 3 next year, the company's creditors will vote on the settlement proposal prepared by the company. CONTACT: San Eduardo S.R.L. General Paz 135 Mendoza Ms. Valeria Lamattina, Trustee Avda Espana 509 Mendoza SANATORIO EZEIZA: Debt Payments Cease Pending Reorganization ------------------------------------------------------------ Buenos Aires' civil and commercial Court No. 2 is reviewing the merits of Sanatorio Ezeiza S.A. petition to reorganize. La Nacion recalls that the Company filed the petition following cessation of debt payments on Oct. 14, 2004. Reorganization will allow Sanatorio Ezeiza S.A. to avoid bankruptcy by negotiating a settlement with its creditors. Clerk No. 4 is assisting the court on the Company's case. CONTACT: Sanatorio Ezeiza S.A. Pavon 1402 Buenos Aires SERVICIOS FUNERARIOS: Official Reports Schedule Set --------------------------------------------------- Guido Maria Salvadori, the trustee assigned to supervise the liquidation of Servicios Funerarios S.A., will cease the authentication of creditors' claims on Aug. 5, 2005. Out of the authenticated claims, Mr. Salvadori will prepare individual reports to be submitted to court. A general report of the case will follow. Infobae reports that Court No. 6 of Buenos Aires' civil and commercial tribunal has jurisdiction over this bankruptcy case. The city's Clerk No. 12 assists the court with the proceedings. CONTACT: Servicios Funerarios S.A. Avda Belgrano 552 Buenos Aires Mr. Guido Maria Salvadori, Trustee Junin 55 Buenos Aires TELECOM ARGENTINA: Businessman Acquires 8.13% of Nortel ------------------------------------------------------- Mr. Dario Werthein, a member of a prominent Argentine family, has acquired an 8.13% stake in Nortel Inversora SA, the holding company of Telecom Argentina, says Dow Jones Newswires. In a statement filed to the local stock exchange Monday, Werthein said he received 639,648 shares of Nortel Inversora SA (NTL) from his father, Leo Werthein, who died several weeks ago. Nortel Inversora controls 54.7% of Telecom Argentina. The Wertheins run W de Argentina, an investment group that bought France Telecom's (FTE) 48% stake in Sofora Telecommunicaciones SA in late 2003. Sofora controls 68% of Nortel Inversora's total shares. Telecom Italia (TI) owns the remaining stake in Sofora. Several analysts see the Werthein investment fund as a seat- warmer that will later sell its Telecom Argentina holding. CONTACT: Telecom Argentina S.A. Alicia Moreau de Justo 50, 10th Floor Capital Federal (1107) Republica Argentina Phone: +54 11 4968 4000 Web Site: http://www.telecom.com.ar TRANSENER: Ratings Raised on Debt Restructuring Completion ---------------------------------------------------------- Standard & Poor's Ratings Services raised its foreign and local currency corporate credit ratings on Argentina's largest electricity transmitter, Compania de Transporte de Energia Electrica en Alta Tension TRANSENER S.A. (Transener), to 'CCC+' from 'D' after the completion of its debt restructuring process. The outlook is stable. At the same time, Standard & Poor's assigned its 'CCC+' rating to the new US$59.3 million amortizing par listed notes (Series 6) due December 2016 and US$178.6 million amortizing discount listed notes (Series 7) due December 2015. These notes were issued by the company on June 30, 2005, as part of its debt- restructuring process. Standard & Poor's also withdrew its 'D' ratings on Transener's US$100 million fixed-rate notes series A due 2003 and US$150 million series B fixed-rate notes due 2008. The ratings on Transener reflect the company's weak business and financial profile, which derive from the high political and regulatory risk in Argentina and the company's weak financial ratios and very limited financial flexibility. In contrast, the ratings also incorporate Transener's strong competitive position and efficient operations. The completion of the debt restructuring process on June 30, 2005, reduced Transener's total debt by about 50% to about US$285 million and smoothed its debt maturity profile, providing some relief to the company's cash flow. Weak cash flow when compared with the company's new debt levels (pro-forma total debt to EBITDA of about 7x without considering any tariff increase) and high foreign-exchange risk deriving from its mostly peso-denominated revenues and U.S. dollar-denominated debt, however, still represent significant challenges for Transener. These challenges will be especially acute if tariff adjustments are delayed or there are significant exchange rate or inflation movements. Transener also continues to face high regulatory uncertainty related to the still-pending renegotiation of its concession contract. In February 2005, the company and its subsidiary Transba S.A. signed a preliminary agreement with UNIREN, the entity created by the government to renegotiate the concessions for public service companies. These agreements incorporate tariff increases of 31% and 25%, respectively, a tariff- adjustment mechanism, mandatory investments, and service-quality targets for a transition period until February 2006, when the concession contracts should be fully renegotiated. The company's long-term credit quality, however, will depend on the final terms and conditions of the renegotiation of the concession contracts. "We expect Transener to be able to meet its financial obligations during 2005 and 2006 if exchange rates and inflation remain stable. Current ratings do not incorporate a potential tariff adjustment resulting from the preliminary agreement between Transener and UNIREN, owing to the uncertainties regarding the timeframe of the approval," said Standard & Poor's credit analyst Sergio Fuentes. "Ratings would benefit from definitions in the tariff and greater certainty about the new terms and conditions under which the concession contracts will be finally renegotiated. Ratings could be lowered, however, if Transener's financial performance is weaker than projected or there is no significant progress with regard to tariffs and the concession contracts by mid 2006." Primary Credit Analyst: Sergio Fuentes, Buenos Aires (54) 114- 891-2131; sergio_fuentes@standardandpoors.com Secondary Credit Analyst: Mariano Ingaramo, Buenos Aires (54) 114-891-2124; mariano_ingaramo@standardandpoors.com TRANSPORTES DEL TEJAR: Court Approves Concurso Motion ----------------------------------------------------- Court No. 22 of Buenos Aires' civil and commercial tribunal approved a petition for reorganization filed by Transportes del Tejar S.A., according to a report from Argentine daily Infobae. Estudio Auzmendi - Palma, the court-appointed trustee, will verify claims submitted by the Company's creditor's until Sep. 1, 2005. After verification period, the trustee will submit in court the individual reports on Oct. 18, 2005 and the general report on Nov. 30, 2005. The informative assembly will be held on May 2, 2006. Creditors will vote to ratify the completed settlement plan during the official meeting. The city's Clerk No. 43 assists the court on the case. CONTACT: Transportes del Tejar S.A. Doctor Enrique Finochietto 1305 Buenos Aires Estudio Auzmendi - Palma, Trustee Jose Evaristo Uriburu 1632 Buenos Aires =========== B R A Z I L =========== CAMARGO CORREA: S&P Assigns Local, Foreign Currency Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' local- currency and its 'BB-' foreign-currency corporate credit ratings to Camargo Correa Cimentos S.A. (CCC), a Brazilian cement producer owned by Camargo Correa S.A. (CCSA). The outlook is stable. The forthcoming $150 million issuance of senior unsecured notes due July 2015 by Caue Finance Ltd., fully, unconditionally, and irrevocably guaranteed by CCC, was also assigned a 'BB-' rating. "The local currency rating on CCC reflects the company's exposure to the swings in cement demand in Brazil, its relative small size in a competitive industry where larger national and international players also participate, and potential risks deriving from its expansion strategy," said Standard & Poor's credit analyst Juliana Gallo. "Partially offsetting these risks are the favorable location of CCC's plants in Southeast Brazil, a competitive cost position in cement production and distribution, traditionally stable margins, and a moderate financial policy." The acquisition of the holding company that controls Loma Negra C.I.A.S.A. (Loma Negra) in Argentina increases geographic diversity but also adds some stronger volatility to CCC's business portfolio. CCC is a wholly owned subsidiary of CCSA, the holding company under which Camargo Correa Group manages all of its business segments, including cement, engineering and construction, textile and footwear, energy and concessions, and other smaller operations. The stable outlook on CCC's local currency rating reflects our expectation that the company's financial profile will remain conservative despite programmed capital expenditures and potential acquisitions in the near future. At present, the company counts on substantial liquidity and low levels of indebtedness to fund these expenditures. Parental support is also an integral part of the analysis, and we believe that CCC will not only remain one of the core and most important operations for the Camargo Correa Group, but that it will also count on financial support to finance acquisitions. Therefore, a negative action on the ratings and outlook may come from an increase in leverage and deterioration of credit measures, under a scenario of relaxed financial policy targets for the company or the whole group. A positive action on the ratings would depend on structural and permanent improvements in Camargo Correa Group's financial and business profiles, surpassing scale, market, and synergy gains deriving from its current growth strategy already under implementation (which includes the improvement in the business fundamentals not only for its cement operation but also for its textile and footwear divisions). The stable outlook on the foreign currency rating reflects that of the sovereign foreign currency rating on the Federative Republic of Brazil. Primary Credit Analyst: Juliana Gallo, Sao Paulo (55) 11-5501- 8948; juliana_gallo@standardandpoors.com Secondary Credit Analyst: Reginaldo Takara, Sao Paulo (55) 11- 5501-8932; reginaldo_takara@standardandpoors.com CSN: S&P Rates $150M Perpetual Notes 'BB-', Affirms Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its long-term 'BB' local-currency and 'BB-' foreign-currency corporate credit ratings on Brazil-based integrated carbon flat-steel maker Companhia Sider�rgica Nacional (CSN), following the announcement of a forthcoming $150 million notes issue by a group subsidiary. The outlook remains stable. At the same time, Standard & Poor's assigned its 'BB-' senior unsecured long-term rating to the forthcoming $150 million guaranteed perpetual notes to be issued by related entity CSN Islands X Corp. The notes are unconditionally and irrevocably guaranteed by CSN. The new perpetual bond issuance by CSN Islands X is guaranteed by CSN and this guarantee ranks as a general, unsecured, and unsubordinated obligation of CSN. The bond indenture will allow for early redemption, but only at the company's option on any interest payment date in or after July 2010. The net proceeds will be used for CSN's general corporate purposes, including repayment of short-term debt. "The 'BB' local-currency rating on CSN reflects the company's exposure to volatile demand and price cycles, increasing competition in its home and predominant market of Brazil, aggressive dividend policy and capital investment plan, and sizable gross-debt position," said Standard & Poor's credit analyst Reginaldo Takara. "These risks are partly offset by CSN's privileged cost position and sound operating profile, favorable market position in Brazil, strong export capabilities to offset occasional domestic demand sluggishness, and increasing business diversification." The stable outlook on CSN's local-currency corporate credit rating reflects our expectations that CSN will manage to preserve strong liquidity in the future thanks to its robust cash generation and despite the already announced capital commitments. The outlook also assumes that CSN will be able to maintain sound operating results through the steel cycle thanks to its favorable cost position and access to steel export markets. The rating could come under downward pressure if a continuing increase of gross debt leads to financial metrics that are not consistent with the rating category. Acquisitions or further capital commitments that could potentially hurt the company's current liquidity condition or add financial leverage are not assumed and could equally lead to a negative revision of the ratings or a negative outlook. On the other hand, strengthening results to levels not factored in or a more conservative financial stance (essentially deriving from lower total gross debt balances and lower exposure to short-term debt) could lead to a positive revision of the ratings or outlook in the medium term. However, this scenario is seen as unlikely considering the company's significant capital and dividend commitments already scheduled for the near future. Primary Credit Analyst: Reginaldo Takara, Sao Paulo (55) 11- 5501-8932; reginaldo_takara@standardandpoors.com Secondary Credit Analyst: Milena Zaniboni, Sao Paulo (55) 11- 5501-8945; milena_zaniboni@standardandpoors.com ELETROPAULO METROPOLITANA: Issues Rate Adjustment Tables -------------------------------------------------------- Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A., pursuant to CVM Instruction No. 358, of January 3, 2002, notifies the following: On July 1st, 2005, Aneel authorized an average tariff readjustment of 2.12% for Eletropaulo, which will be applied to its tariff as from July 4, 2005. Due to the reduction in subsidies, high voltage consumers (large commercial and industrial consumers) will have adjustments higher than those applied to low voltage customers, according to the table below: Consumption Class Index Low Voltage -7.80% High Voltage A2(88 to 138 kV) 10.87% A3a(34,5kV) -0.93% A4(2,3 to 25kV) 2.74% The Eletropaulo adjustment authorized by Aneel on July 1st, 2005 comprises items as follows: Parcel A The 3.83%negative variation refers to: i) Positive variation of the exchange rate in June 2004 (R$3.1075/US$) and June 2005 (R$2.4562/US$), which has an effect on the purchase of energy from Itaipu; ii) In the first half of 2005 the company purchased energy at tariffs lower than the average energy purchase tariffs ratified by Aneel in its latest tariff adjustment. That difference will be reimbursed as from this tariff readjustment by way of the Energy CVA; iii) The connection charges were reviewed and were reduced pursuant to a resolution ratified by Aneel and published on July 1st, 2005 and sets forth the revenue allowance for transmission companies. CVA The CVA comprises three items as follows: iv) Remaining 50% of the CVA for the period 2002 - 2003 that was deferred by way of Inter-ministry Administrative Ruling # 116, of 04/04/2003 for a 24-month period as from July 2004. This item corresponds to a 4.33% increase in our tariff adjustment. v) Negative CVA of 0.27%, which can be explained by (a) the variation of the exchange rate for payments for Itaipu energy and (b) negative energy CVA basically arising from the difference between the energy price obtained at the first energy auction (R$ 57.51/MWh) and the average energy purchase tariff granted by the 2004 readjustment. vi) It refers to the CVA difference of the 2003-2004 period not recovered on the billing of Eletropaulo in the past 12 months. This item corresponds to a 0.69% increase in our tariff adjustment. Parcel B The IGP-M for the period was 7.12% and the recalculated X-Factor was 2.43%, resulting in a 4.69% adjustment index to Parcela B. This adjustment to Parcela B resulted in a 1.34% increase in the tariff index. The X-Factor of 2.43% was reduced approximately by 2 base points, when compared to the X-Factor in force until the date. Conclusion of the 2003 tariff review process Apart from the annual tariff adjustment process, was concluded the 2003 tariff review process, which resulted in a positive increase in the 10.95% index authorized in 2003 to 11.65%; that difference accounting for 1.49% of the amount of increase set forth for July 2005. That positive development can be explained by the fact that Eletropaulo is entitled to an additional R$ 42- million remuneration to that permitted in the 2003 tariff review, as shown on the table below. Item - R$ 000.000 Previous Current Variation Basis of the net remuneration R$5,242 R$4,771 Remuneration rate 17.07% 17.07%, Rmineration R$895 R$814 (R$81) Gross basis R$8,275 R$9,885 Depreciation rate 3.95% 4.31% Depreciation R$327 R$426 R$99 Additional O & M costs - R$24 R$24 TOTAL R$42 Pis/Cofins The 4.28% negative remuneration refers to the exclusion of Pis/Cofins from the tariff adjustment formula. However, this tax will be separately levied on the energy account, in compliance with rules to be set forth by Aneel. Recovery of Pis/Cofins from 2002 through 2005 The company will pass through to the tariff the liabilities incurred on the basis of the ratio increases for those taxes in 2002 (Pis) and 2004 (Cofins), which were levied both on the items of Parcela A and Parcela B. This pass-through represented a 0.56% and a 1.87% increase in Parcela A and Parcela B, respectively. Pass-through of the Variation of Other Costs The tariff pass-through contemplated refers mainly to: The recovery of discounts to TUSD - Res. 77/2004 Financial adjustments to the costs of CUSD Expenses with the company who carried out the assessment of the remuneration basis. Finally, the main components used in the calculation of the tariff readjustment were as follows: PTAX 2,4562 IGPM Variation 7,12% X Factor 2,43% ((IGP-M)-X) 4,6885% CONTACT: Eletropaulo Metropolitana Eletricidade de Sao Paulo S/A Investor Relations Manager Ms. Clarice Silva Assis E-mail: clarice.assis@aes.com Phone:(55 11) 2195-2229 Fax:(55 11) 2195-2503 =============== C O L O M B I A =============== EMCALI: Revising Tariff Schedule, Billing Parameters Next Year -------------------------------------------------------------- Cali's multi-utility Emcali will have a new tariff scheme beginning 2006 following an order by Telecoms regulator Comision de Regulacion de Telecomunicaciones (CRT), reports Business News Americas. According to the new plan, Emcali will charge telephony calls on a per-minute basis instead of using three- minute pulses. The Company is also expected to implement new telephony plans for low-income segments, which should not include a monthly fixed charge. Other plans must include fixed charges with a certain amount of minutes or a mix between fixed and variable charges. CRT still needs to determine the maximum tariffs according to the operator's costs. Emcali provides public services, including waterworks, telecommunications and electric power. ===================== E L S A L V A D O R ===================== BANCO AMERICANO: Ernst & Young to Evaluate Offers ------------------------------------------------- Niche bank Banco Americano hired Ernst & Young to evaluate the acquisition and strategic investment offers presented by seven Central American and international financial institutions. Business News Americas suggests Ernst & Young will make a recommendation based on its evaluation. "I hope that during July we reach a decision as we have various offers on the table and we still have to negotiate the exact numbers," the bank's chairman Ronald Lacayo was quoted as saying. The bank ended the first quarter with US$84.0 million in assets and US$14.0 million in equity. Earnings grew 63% to US$187,110. Nevertheless, Fitch Ratings cut Banco Americano's national scale long-term ratings to B- from B in June, citing pressure on the bank's balance sheet due to its shallow funding base and the significant loss of deposits during the first quarter. =========== M E X I C O =========== CINTRA: Sale of Two Airlines Expected by Yearend ---------------------------------------------------------- The country's two biggest airlines, AeroMexico and Mexicana, could be under new ownership by the end of this year, in sales that could yield more than $1 billion, according to an FT.com report. State-owned Cintra earlier said that it would offer a stake of 51% to 100% in each airline group and, if necessary, make a public share offering for any remaining capital, under a plan approved by the board but still to be presented to shareholders. "This guarantees that the two groups will be controlled by Mexican investors. Any foreign investor must join a consortium with majority national capital" under Mexican law, Cintra said. Under the sale plan, Aeromexico will be sold with regional airline Aerolitoral and Mexicana is being packaged with Click, a new low-cost carrier. CONTACT: Cintra S.A. de C.V. Av Xola 535 piso 16 col. del Valle Mexico Phone: (5)448 - 8000 E-mail: infocintra@cintra.com.mx Web site: http://www.cintra.com.mx GRUPO DESC: Public Note Exchange Offering Initiated --------------------------------------------------- DESC, S.A. de C.V. (BMV:DESC) announced Friday that it has begun a public exchange offering of its Udi-denominated Medium Term Notes, maturing in 2006 and originally issued in 1999, for local bonds (Certificados Bursatiles). The local bonds have the following characteristics: 5-year term, nominal interest rate equivalent to TIIE of 28 days plus a margin to be defined, "AA-" rating by Standard & Poor's and Fitch Mexico, a guarantee by Banco Nacional de Comercio Exterior (Bancomext) of up to 50% of the nominal value, among others. For further details, please see the prospectus and the corresponding supplement available via the Mexican Stock Exchange. This offering is an additional measure that DESC has taken to reflect the Company's commitment and focus of continually strengthening its financial structure, translating into an important improvement in its debt amortization profile, and substantially lowering maturities for 2006. DESC, S.A. de C.V. (BMV: DESC) is one of the largest industrial groups in Mexico, with 2004 sales of approximately US$2 billon and nearly 14,000 employees, which through its subsidiaries is a leader in the Automobile Parts, Chemical, Food and Property sectors. CONTACT: Grupo DESC In Mexico Marisol Vazquez-Mellado Jorge Padilla Phone: (5255) 5261-8044 E-mail: ir@desc.com.mx In the U.S. Maria Barona Melanie Carpenter Phone: 212-406-3690 E-mail: desc@i-advize.com URL: www.desc.com.mx GRUPO MEXICO: Comments on Subsidiary Asarco Situation ----------------------------------------------------- Grupo Mexico S.A. de C.V. (GMEXICO) announced that unionized workers in the majority of the facilities of its independent subsidiary ASARCO, LLC have been on strike since Saturday, July 2. Notwithstanding this fact, Asarco still maintains production below ordinary levels with non-unionized employees. The strike could impact production at Asarco in around 50% of its capacity and therefore around 100,000 to 125,000 tons of contained copper might be lost on annualized bases. Asarco regrets the decision taken by the corresponding unions to abandon ongoing conversations destined to confirm collective bargaining agreements in such facilities and hence, assure the generation and permanence of productive employment. Asarco is one of the highest cost operating mining companies in the U.S. and the world, due in a fundamental part to the cost of labor, thus affecting the competitiveness of the company in the long run. Decisive workers' support is essential to this end. Asarco had not fully recuperated from the last copper price slump, reporting net profits of only $2 million for the first quarter of 2005, seven times lower than those reached during the same period of last year, due to higher stripping costs, overall maintenance, environmental and related costs and pension benefits. Asarco's management is currently evaluating various options to ensure the long-term viability of the company, including asset sales, corporate reorganization and other pertinent alternatives. Grupo Mexico expects no impact in its future results, due to the small or null contribution of Asarco. Grupo Mexico, the world's third-largest copper producer, bought Asarco in 1999. CONTACT: GRUPO MEXICO S.A. DE C.V. Avenida Baja California 200, Colonia Roma Sur 06760 Mexico, D.F., Mexico Phone: +52-55-5264-7775 Fax: +52-55-5264-7769 Web site: http://www.gmexico.com ======= P E R U ======= SIDERPERU: Creditors Postpone Debt Payment Deadlines ---------------------------------------------------- Siderperu, the country's largest steel producer, gained more time to make payments to creditors under its already rescheduled corporate bond program, reports Business News Americas. In a statement to Lima's stock exchange, Siderperu revealed that creditors have agreed to extend until August 31, 2005, the payment of expired fixed quotas of the principal amount contained in an addendum signed December 12, 2003, to the company's global refinancing agreement (AGR) of April 2002. Other payments agreed under the addendum, including interest, have been put back to September 30, 2005, the statement added. The Company did not provide details of the amounts to be paid. but according to Business News Americas, the addendum dealt with debts totaling approximately US$8 million originally programmed to be paid by September 30, 2004, subsequently postponed to February 28, 2005. Siderperu revealed in the statement that it paid US$1.75 million in debt and US$1.16 million in interest in the April-June 2005 period. Chimbote-based Siderperu is controlled by local holding company Sider Corp. * PERU: Government OKs New Bonds to Fund Paris Club Debt Buyback ---------------------------------------------------------------- President Alejandro Toledo and two ministers signed a document Friday allowing the placements of up to US$2.03 billion in sovereign bonds to fund a buyback of debt held with the Paris Club of nations. According to Dow Jones Newswires, the debt placements will be led by JP Morgan Securities Ltd. (JPM) and UBS Securities LLC (UBS). The debt could be placed in U.S. dollars, in euros or in the national currency, the sol. Last month, the Paris Club group of creditor states accepted Peru's offer for an early repayment of as much as US$2 billion in debt falling due between August 2005 and December 2009. It said the prepayment would be made at par and would be offered to all creditors. Payments will be made on August 15, Paris Club said. As of the end of March 2005, Peru's debt with the Paris Club totaled US$8.13 billion, or about 34% of Peru's total external public debt. Paris Club members who are creditors of Peru include Belgium, France, Canada, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden, Austria, the U.S. and the U.K. The Paris Club, founded in 1956, comprises 19 nations including the U.S., the U.K., Switzerland, Sweden, Spain, Russia, Norway, the Netherlands, Japan, Italy, Ireland, Germany, France, Finland, Denmark, Canada, Belgium, Australia and Austria. ============= U R U G U A Y ============= PLUNA: Severs Ties With Brazil's VARIG -------------------------------------- Uruguay's flagship airline Pluna (Primera Linea Uruguaya de Navegacion Aerea) is not going to renew its management pact with Brazilian airline Viacao Aerea Riograndense SA (VARIG), reports Dow Jones Newswires. VARIG acquired a 49% stake in Pluna during the June 2004 privatization process and began a management contract a year after that. However, the venture proved to be financially disappointing, prompting VARIG to seek the sale of all or part of interest in Pluna. Pluna's vice president, Carlos Galceran, revealed that the Uruguayan government, which also owns 49% of Pluna, is now in talks with five potential partners that may buy in. "The possible or future partner of the Uruguayan state would be someone that is prepared to buy all or part of the shares currently owned by VARIG," Mr. Galceran said. There is no deadline for trying to secure a new partner, he added. The remaining 2% of Pluna is held by Uruguayan businessmen and brothers Victor and Santiago Mesa. Weighed down by BRL9.5 billion of debts, VARIG filed for protection from creditors in a Rio de Janeiro court on June 17. But Mr. Galceran insists the restructuring process in Brazil hasn't affected Pluna or its talks with potential new partners, which include U.K.-based investment group Ashmore and Venezuela's state-owned airline Conviasa. "The situation of VARIG in Brazil has not affected us, so far," Mr. Galceran said. But local newspapers have reported that Pluna has posted losses for eight of the last 10 years, and that it currently has debts estimated at US$5 million. Mr. Galceran declined to provide specific figures but admitted that the current administration, which took office earlier this year, discovered some "financial difficulties" which they are now trying to resolve. "We are in a process of financial rationalization to try to balance the Company's finances," Mr. Galceran said. Under new general manager Elina Rodriguez, Pluna is putting together a cost-cutting program, which includes examining maintenance contracts with VARIG subsidiary VARIG Engineering and Maintenance, or VEM. ================= V E N E Z U E L A ================= PDVSA: To Provide 185,700b/d to 14 Caribbean Nations ---------------------------------------------------- State oil firm Petroleos de Venezuela (PDVSA) will supply the 14 Caribbean nations with a total of 185,700 barrels a day (b/d) of oil, Business News Americas reports, citing PDVSA president and energy and oil minister Rafael Ramirez. The move is in line with the Petrocaribe accord signed with the Caribbean heads of state, except Barbados and Trinidad & Tobago, on June 29 in the Venezuelan resort city of Puerto La Cruz in Anzoategui state. PDVSA provides Cuba with 98,000b/d, the Dominican Republic 50.000b/d, Jamaica 14,000b/d and the remaining countries 23,700b/d. Ramirez said that with Venezuelan oil currently priced at US$40 a barrel, Caribbean countries will be able to fund about 30% of their purchases for 15 years at a 2% annual interest rate. If the price exceeds US$50/b, the interest rate drops to 1% a year and the amount that can be financed goes up to 40% for as long as 25 years. If the price hits US$100/b, the Petrocaribe countries will be able to finance 50% of their oil bills. In all cases a grace period of two years applies. 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 PDVSA: Earmarks $600M for Puerto La Cruz Refinery Upgrade --------------------------------------------------------- PDVSA revealed a US$600-million planned investment, under which it will upgrade its Puerto La Cruz refinery in Anzoategui state, reports Business News Americas. The upgrade will see the construction of a new thermoelectric generation as well as the expansion of the plant's services, including providing power to the nearby resort city of Puerto La Cruz, according to PDVSA president and energy and oil minister Rafael Ramirez. The US$600-million investment is also designed to upgrade the refinery to deep conversion, a process that will increase the refinery's gasoline output. The investment brings to a total of US$2.8 billion the amount PDVSA will spend to upgrade its three refineries in the short term. The other two are CRP and El Palito. *********** 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 * * *