/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050708.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, July 8, 2005, Vol. 6, Issue 134 Headlines A R G E N T I N A AMERICAN FALCON: Court Appoints Trustee for Reorganization CABLEVISION: Secures Local Court's Endorsement on APE CRISAN S.A.: Liquidates Assets to Pay Debts CTI MOVIL: Service Problems Prompt Temporary Selling Injunction ECOMAD CONSTRUCCIONES: Reorganization Dissolves To Bankruptcy ESTABLECIMIENTO FIDEERO: Court Deems Bankruptcy Necessary ESTABLECIMIENTO METALURGICO: Set to Reorganize MARIAHUE S.A.: Files for Bankruptcy Protection MATTULICH S.A.I.C.: Court Grants Reorganization Request MULTIPLAST S.A.: Liquidation Process Initiated NOVECIENTOS ONCE: Enters Bankruptcy on Court Orders PETROFULL S.R.L.: Gets Court Approval to Reorganize PLANET SERVICE: Court Rules Liquidation Required POLITER S.R.L.: Liquidating Assets to Repay Debts STORAGE SYSTEMS: Court to Oversee Bankruptcy Process TELEFONICA DE ARGENTINA: S&P Details Ratings Analysis TELEFONICA HOLDING: Ratings Reflect on Indirect Stake in TASA * ARGENTINA: World Bank Approves $25M Loan B E R M U D A INTELSAT: Signs New Contract With RR Satellite B O L I V I A AGUAS DEL ILLIMANI: Audit Proceeds Despite Departure B R A Z I L CSN: Soaring Demand Prompts Possible Bond Issue Expansion VARIG: Management Reshuffled Amid Debt Restructuring C H I L E COEUR D'ALENE: Appoints New Vice President of Investor Relations C O L O M B I A ECOPETROL: Reports 20% Boost in Export Revenues in 5 Months J A M A I C A AIR JAMAICA: Gallimore Withdraws Charges Against Airline AIR JAMAICA: Cuts Costs Through In-Flight Meal Service Changes M E X I C O CINTRA: Initiates Airlines' Sale Process Process GRUPO MEXICO: All Asarco Employees Now on Strike TV AZTECA: Granted More Time to Prepare Arguments Vs. SEC P E R U SIDERPERU: Appoints New Heads of Legal Division - - - - - - - - - - ================= A R G E N T I N A ================= AMERICAN FALCON: Court Appoints Trustee for Reorganization ---------------------------------------------------------- American Falcon S.A., a company operating in Buenos Aires, is ready to start its reorganization after Court No. 18 of the city's civil and commercial tribunal appointed Estudio Fizzani y Asociados to supervise the proceedings as trustee. Clerk No. 35 assists the court on this case. An Infobae report states that Estudio Fizzani y Asociados will verify creditors' claims until Sep. 16, 2005. Afterwards, the trustee will present these claims as individual reports for final review by the court on Oct. 31, 2005. The trustee will also provide the court with a general report pertaining to American Falcon S.A. reorganization on Dec. 12, 2005. The court has scheduled the informative assembly on June 13, 2006. CONTACT: Estudio Fizzani y Asociados, Trustee Tte Gral Juan D. Peron 1509 Buenos Aires CABLEVISION: Secures Local Court's Endorsement on APE ----------------------------------------------------- A commercial court has resolved to endorse Cablevision S.A.'s US$725-million out-of-court debt settlement or APE. Dr. Miguel F. Bargallo, of the Juzgado Nacional de Primera Instancia en lo Comercial Nų 11, issued the decision after rejecting all formal objections to the deal, saying there was no "case of fraud or abuse" in the proceedings. Cablevision presented its debt restructuring proposal to the court in December. The company had already held its first creditor assembly in March 2003 and then, on a judge's order, held a second vote in November. The Company secured 99.9% approval from creditors attending the meeting and 98.6% from all creditors. It is not yet known when the Company would be able to settle its debt exchange. The debt restructuring that Cablevision pursued allows for appeals after the initial court ruling. Subsidiaries of Texas-based fund Hicks Muse Tate & Furst control 50% of CableVision. The other half is split between Fintech Media LLC and a group called Vistone Ltd. CONTACTS: (Buenos Aires) Santiago Pena Tel: (5411) 4778-6520 E-mail: spena@cablevision.com.ar Martin Pigretti Tel: (5411) 4778-6546 E-mail: mpigretti@cablevision.com.ar URL: www.cablevision.com.ar CRISAN S.A.: Liquidates Assets to Pay Debts ------------------------------------------- Crisan S.A. will begin liquidating its assets following the pronouncement of Buenos' Aires' civil and commercial Court No. 9 that the Company is bankrupt, Infobae reports. The bankruptcy ruling places the Company under the supervision of court-appointed trustee, Griselda Isabel Eidelstein. The trustee will verify creditors' proofs of claim until Sep. 20, 2005. The validated claims will be presented in court as individual reports on Nov. 1, 2005. Ms. Eidelstein will also submit a general report, containing a summary of the Company's financial status as well as relevant events pertaining to the bankruptcy, Dec. 14, 2005. The bankruptcy process will end with the disposal of the Company's assets in favor of its creditors. CONTACT: Crisan S.A. Avda. Corrientes 1132 Buenos Aires Ms. Griselda Isabel Eidelstein, Trustee Lambare 1140 Buenos Aires CTI MOVIL: Service Problems Prompt Temporary Selling Injunction --------------------------------------------------------------- An Argentine court has ordered mobile operator CTI Movil to stop selling its products in Buenos Aires at least until it solves service problems, says Business News Americas. The ruling follows numerous complaints from users saying the Company does not provide the service as specified in their contracts. Complaints are related to lack of coverage, deficient terminals and allegedly poor quality customer support. Following the court's decision, CTI has 10 days to report on measures taken to solve these problems. ECOMAD CONSTRUCCIONES: Reorganization Dissolves To Bankruptcy ------------------------------------------------------------- The reorganization of Ecomad Construcciones Portuarias S.A.C.I.F.I. has progressed into bankruptcy. Argentine news source Infobae relates that Buenos Aires' civil and commercial Court No. 19 ruled that the Company is "Quiebra Decretada". The report adds that the court assigned Carlos Daniel Brzezinski as trustee, who will verify creditors' proofs of claim until Sep. 6, 2005. The court also ordered the trustee to prepare individual reports after the verification process is completed, and have them ready by Oct. 19, 2005. A general report on the bankruptcy process is expected on Nov. 30, 2005. CONTACT: Ecomad Construcciones Portuarias S.A.C.I.F.I. Tacuari 32 Buenos Aires Mr. Carlos Daniel Brzezinski, Trustee Lambare 1140 Buenos Aires ESTABLECIMIENTO FIDEERO: Court Deems Bankruptcy Necessary --------------------------------------------------------- Establecimiento Fideero Verbano S.R.L., which was undergoing reorganization, entered bankruptcy on orders from Buenos Aires' civil and commercial Court No. 18. Infobae relates that the court, which is assisted by Clerk No. 35, appointed Mr. Ernesto Aldo Monti, to be the receiver on the case. Mr. Monti will conduct the credit verification process "por via incidental." CONTACT: Mr. Ernesto Aldo Monti, Trustee Larrea 785 Buenos Aires ESTABLECIMIENTO METALURGICO: Set to Reorganize ---------------------------------------------- Buenos Aires' civil and commercial Court No. 9, with assistance from Clerk No. 17, issued a resolution opening the reorganization of Establecimiento Metalurgico Bursztyn S.A. This pronouncement authorizes the Company to begin drafting a settlement proposal with its creditors in order to avoid liquidation. The reorganization allows the Company to retain control of its assets subject to certain conditions imposed by Argentine law and the oversight of the court appointed trustee. Miguel Angel Troisi will serve as trustee during the course of the reorganization. He will be validating creditors' proofs of claim until July 26, 2005. The results of the verification will be presented in court as individual reports on Sep. 7, 2005. The trustee is also obligated to give the court a general report of the case on Oct. 20, 2005. The general report summarizes events relevant to the reorganization and provides an audit of the Company's accounting and business records. Mr. Troisi will present the completed settlement proposal to its creditors during the informative assembly scheduled on Feb. 22, 2006. CONTACT: Mr. Miguel Angel Troisi, Trustee Cerrito 146 Buenos Aires MARIAHUE S.A.: Files for Bankruptcy Protection ---------------------------------------------- Court No. 13 of Buenos Aires' civil and commercial tribunal is reviewing the bankruptcy petition filed by local company Mariahue S.A., says Infobae. The report adds that that the Company filed the petition after defaulting on its debt payments. The city's Clerk No. 26 assists the court on this case. CONTACT: Mariahue S.A. Florida 835 Buenos Aires MATTULICH S.A.I.C.: Court Grants Reorganization Request ------------------------------------------------------- Mattulich S.A.I.C. successfully petitioned for reorganization after Court No. 5 of Buenos Aires' civil and commercial tribunal issued a resolution opening the Company's insolvency proceedings. Under insolvency protection, the Company will continue to manage its assets subject to certain conditions imposed by Argentine law and the oversight of a court-appointed trustee. Infobae relates that Elida Alicia Victorero will serve as trustee during the course of the reorganization. The trustee will be accepting creditors' proofs of claim for verification until Aug. 16, 2005. After verifications, the trustee will prepare the individual reports and submit it in court on Sep. 28, 2005. She will also present a general report for court review on Nov. 10, 2005. The Company will endorse the settlement proposal, drafted from the submitted claims, for approval by the creditors during the informative assembly, which will follow after the submission of the general report. CONTACT: Ms. Elida Alicia Victorero, Trustee Migueletes 1806 Buenos Aires MULTIPLAST S.A.: Liquidation Process Initiated ---------------------------------------------- Multiplast S.A. of Buenos Aires will begin liquidating its assets after Court No. 5 of the city's civil and commercial tribunal declared the Company bankrupt. Infobae reveals that the bankruptcy process will commence under the supervision of court- appointed trustee, Monica Graciela Aquim. The trustee will review claims forwarded by the Company's creditors until Sep. 15, 2005. After claims verification, Ms. Aquim will submit the individual reports for court approval on Oct. 31, 2005. The general report will follow on Dec. 27, 2005. Clerk No. 9 assists the court on this case. CONTACT: Ms. Monica Graciela Aquim, Trustee Uruguay 662 Buenos Aires NOVECIENTOS ONCE: Enters Bankruptcy on Court Orders --------------------------------------------------- Buenos Aires' civil and commercial Court No. 24 declared Novecientos Once 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, Sebastian Barletta. As the trustee, Mr. Barletta is tasked with verifying the authenticity of claims presented by the Company's creditors. The verification phase is ongoing until Aug. 31, 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. 14, 2005. Infobae reports that Clerk No. 47 assists the court on this case, which will end with the disposal of the Company's assets in favor of its creditors. CONTACT: Mr. Sebastian Barletta, Trustee Avda Norberto de la Riestra 1209 Buenos Aires PETROFULL S.R.L.: Gets Court Approval to Reorganize --------------------------------------------------- Petrofull S.R.L. will begin reorganization following the approval of its petition by Court No. 7 of Buenos Aires' civil and commercial tribunal. The opening of the reorganization will allow the Company to negotiate a settlement with its creditors in order to avoid a straight liquidation. Juan Carlos Caro will oversee the reorganization proceedings as the court-appointed trustee. He will verify creditors' claims until Aug. 18, 2005. The validated claims will be presented in court as individual reports on Sep. 29, 2005. Mr. Caro is also required by the court to submit a general report essentially auditing the Company's accounting and business records as well as summarizing important events pertaining to the reorganization. The report will be presented in court on Nov. 11, 2005. An Informative Assembly, the final stage of a reorganization where the settlement proposal is presented to the Company's creditors for approval, is scheduled on May 15, 2006. Clerk No. 14 assists the court on this case. CONTACT: Petrofull S.R.L. Avda Nazca 1330 Buenos Aires Mr. Juan Carlos Caro, Trustee Junin 933 Buenos Aires PLANET SERVICE: Court Rules Liquidation Required ------------------------------------------------ Court No. 9 of Buenos Aires' civil and commercial tribunal ordered the liquidation of Planet Service 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 Gustavo Alejandro Pagliere, the court-appointed trustee. Mr. Pagliere will verify creditors' proofs of claim until Sep. 13, 2005. The verified claims will serve as basis for the individual reports to be submitted in court on Oct. 25, 2005. The submission of the general report follows on Dec. 6, 2005. Clerk No. 18 assists the court on this case, which will end with the disposal of the Company's assets in favor of its creditors. CONTACT: Planet Service S.A. San Martin 60 Buenos Aires Mr. Gustavo Alejandro Pagliere, Trustee Tucuman 1424 Buenos Aires POLITER S.R.L.: Liquidating Assets to Repay Debts ------------------------------------------------- Buenos Aires-based Politer S.R.L. will begin liquidating its assets following the pronouncement of the city's civil and commercial Court No. 9 that the Company is bankrupt, reports Infobae. The bankruptcy ruling places the Company under the supervision of court-appointed trustee, Hugo Ruben Faure. The trustee will verify creditors' proofs of claim until Sep. 12, 2005. The validated claims will be presented in court as individual reports on Oct. 2, 2005. Mr. Faure 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. 5, 2005. The bankruptcy process will end with the disposal of the Company's assets in favor of its creditors. CONTACT: Politer S.R.L. Superi 3155 Buenos Aires Mr. Hugo Ruben Faure, Trustee Avda Rivadavia 1227 Buenos Aires STORAGE SYSTEMS: Court to Oversee Bankruptcy Process ---------------------------------------------------- Storage Systems S.A. enters bankruptcy protection after Court No. 19 of Buenos Aires' civil and commercial tribunal, with the assistance of Clerk No. 38, 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 Carlos Alberto Menendez as trustee. Mr. Menendez will be verifying creditors' proofs of claim until the end of the verification phase on July 25, 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. 6, 2005 followed by the general report, which is due on Oct. 19, 2005. CONTACT: Storage Systems S.A. Luis Saenz Pena 352 Buenos Aires Mr. Carlos Alberto Menendez, Trustee Ventura Bosch 7098 Buenos Aires TELEFONICA DE ARGENTINA: S&P Details Ratings Analysis ----------------------------------------------------- Rationale The rating on Telef¢nica de Argentina S.A. (TASA) reflects the financial and regulatory challenges of operating in the Argentine environment after the crisis in 2002, which have weakened TASA's debt-servicing ability (due to the fact that most of its debt is foreign currency-denominated). Regulatory uncertainty is still high regarding the contract and tariff renegotiation, which was mandated by the government in early 2002 but is still pending. In November 2004, the government extended the ruling of the Emergency Law and the period for tariff and contracts renegotiation until December 2005, which could result in additional delays. Nevertheless, potential tariff adjustments resulting from the renegotiation are not expected to compensate for the effects of the devaluation of the peso and pesification and freeze of tariffs. The company's good market position, efficient operations, and improved financial performance partially mitigate the negative factors mentioned above. Despite the negative regulatory environment, TASA's financial performance has gradually recovered after the crisis as a result of the economic stabilization in the country and debt reductions and cost containment and efficiency measures taken by the company. Interest coverage and funds from operations-to-total debt measures for the 12 months ended March 2005 improved to 4.5x and 39.7%, respectively, from 2.9x and 23.6% in 2003. These improvements should allow the company to weather a certain level of unfavorable changes in Argentina's macroeconomic environment- particularly as regards inflation and exchange rates-and still maintain credit quality commensurate with the current rating category. Looking forward, TASA's future cash-flow generation and financial profile will depend primarily on the result of tariff renegotiations with the government, the sustained economic recovery and stability in Argentina, and the company's ability to contain costs. Margins are expected to decline gradually with the upward adjustments in wages and other costs (as evidenced in first-quarter 2005, when EBITDA margin declined to 53.7% from 57.1% in the equal period of 2004). In addition, the important amortization of mainly intercompany debt improved TASA's debt- to-capitalization ratio to 55.1% and the debt-to-12-month EBITDA to 2x as of March 31, 2005 (compared to 62% and 3x, respectively, in December 2003). Telefonica S.A. (TESA; A/Negative/A-1) directly and indirectly owns 98% of TASA's shares. Although TESA provided several loans in the past, the mentioned factors have somewhat weakened our expectations of continuing financial support from TESA to the Argentine operations. TASA is one of two incumbent telephone companies in Argentina, formed in 1990 after the privatization of state telecommunications. Holding approximately 53% of the 8 million lines in service in Argentina, TASA currently provides basic telecommunications services (local, national, and international long distance) throughout the country. Liquidity In spite of some access to the local capital markets, TASA's liquidity remains relatively tight due to the limited long-term funding flexibility for Argentine companies and weaker expectations of support from TESA. In addition, cash-flow generation is still affected by the mismatch of peso flows and dollar debt burden. As of March 31, 2005, TASA had approximately $365 million in short-term debt over a consolidated debt of $1,213 million. Short-term maturities include intercompany loans for about $100 million, and Argentine pesos (ArP) 498 million of CP due in May and October 2005 and February 2006 (equivalent to about $170 million). TASA's internal cash generation and cash holdings (the latter of about $130 million as of March 31, 2005), are expected to be devoted to fund capital expenditures, cancel third-party maturities, and further reduce intercompany debt. A high level of debt with other group holdings had provided credit support to TASA since the crisis in 2001. Nevertheless, intercompany debt is expected to be complete canceled by the end of 2005, from $864 million as of June 2003, increasing refinancing risk. In late October 2004 and February 2005, the company issued the second and third tranches of short-term bonds for an aggregate amount of ArP450 million (equivalent to about $151 million) due between October 2005 and February 2007, gradually reducing foreign currency debt exposure, but also increasing short-term debt with third parties. Outlook The stable outlook reflects expectations that the company's good competitive position and a relatively stable economic scenario would allow TASA to consolidate its financial improvements. Nevertheless, ratings could be revised if tariff inflexibility persists under a higher than expected inflationary and exchange rate scenario, government intervention increases, or financial flexibility deteriorates significantly. Primary Credit Analyst: Ivana Recalde, Buenos Aires (54) 114- 891-2127; ivana_recalde@standardandpoors.com Secondary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114- 891-2125; pablo_lutereau@standardandpoors.com TELEFONICA HOLDING: Ratings Reflect on Indirect Stake in TASA ------------------------------------------------------------- Rationale The ratings on Argentine holding company Telefonica Holding de Argentina S.A. (THA) are based on its indirect stake in Telefonica de Argentina S.A. (TASA; of 32.4%), an Argentine- based integrated telecom incumbent provider that has about a 58% fixed-line share throughout the country. The rating on TASA reflects the financial and regulatory challenges of operating in the Argentine environment after the crisis in 2002, which have weakened TASA's debt-servicing ability (due to the fact that most of its debt is foreign currency-denominated). Regulatory uncertainty is still high regarding the contract and tariff renegotiation, which was mandated by the government in early 2002 but is still pending. In November 2004, the government extended the ruling of the Emergency Law and the period for tariff and contracts renegotiation until December 2005, which could result in additional delays. Nevertheless, potential tariff adjustments resulting from the renegotiation are not expected to compensate for the effects of the devaluation of the peso and pesification and freeze of tariffs. The company's good market position, efficient operations, and improved financial performance partially mitigate the negative factors. In February 2005, Telefonica Internacional S.A. (TISA; a subsidiary of the Spain's Telefonica S.A.) decided to capitalize almost all its intercompany loans with THA for up to $687 million. As of March 2005, loans with TISA represented about 99% of THA's financial debt. Although this transaction will not represent a cash inflow for THA, it will significantly improve the company's financial statements and ratios, as net worth would become positive and financial debt would decline to about $7 million (corresponding to outstanding notes with third parties that mature in 2007), from $640 million. THA's overall financial profile is highly dependent on the performance of its subsidiaries, as THA is a holding company whose only significant asset is its stake in COINTEL, through which it participates in TASA, its main source of funds through dividends and management fees. Historically, dividends and management fees were enough to cover selling, general, and administrative expenses (SG&A) and interest. Nevertheless, since 2002, THA's financial measures were significantly affected by the devaluation of the Argentine peso (as almost all the financial debt is dollar denominated, while dividends and fees are in pesos), the suspension of dividends from COINTEL, and the reduction of management fee levels since May 2003 (to 4% of TASA's gross income from 9%). This resulted in weak fixed-charge coverage, calculated as the ratio of management fees plus dividends-to-interest (effectively paid) plus SG&A, of 2x in first-quarter 2005 and 1.1x for fiscal 2004. Paid interest in first-quarter 2005 amounted to $4 million (out of a total accrued in that period of $22 million). Financial measures are expected to improve as a result the interest burden reduction after the mentioned capitalization of intercompany loans. In addition, the debt-to-capitalization ratio (which as of December 2004 was 237.8%) will be positively affected by this capitalization. Liquidity THA's liquidity and financial flexibility depend on its parent, while cash flow ultimately depends on flows from TASA. In spite of some access to the local capital markets, TASA's liquidity remains relatively tight due to the limited long-term funding flexibility for Argentine companies, and weaker expectations of support from TESA. In addition, cash-flow generation is still affected by the mismatch of peso flows and dollar debt burden. Outlook The stable outlook on THA reflects the close link with TASA's credit quality. The stable outlook on TASA reflects expectations that the company's good competitive position and a relatively stable economic scenario would allow TASA to consolidate its financial improvements. Nevertheless, ratings could be revised if tariff inflexibility persists under a higher than expected inflationary and exchange rate scenario, government intervention increases, or financial flexibility deteriorates significantly. Primary Credit Analyst: Ivana Recalde, Buenos Aires (54) 114- 891-2127; ivana_recalde@standardandpoors.com Secondary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114- 891-2125; pablo_lutereau@standardandpoors.com * ARGENTINA: World Bank Approves $25M Loan ------------------------------------------ The World Bank's Board of Directors approved Tuesday a $25 million loan for Argentina to support the institutional strengthening of the National Social Security Administration. "This project supports the Government of Argentina's objective of strengthening governance by improving the service delivery of the social security administration through greater efficiency, transparency and accountability," said Axel van Trotsenburg, World Bank Country Director for Argentina, Chile, Paraguay and Uruguay. The Institutional Strengthening of the National Social Security Administration Technical Assistance Loan seeks to enhance service delivery by the National Social Security Administration (Administracion Nacional de Seguridad Social - ANSES). This will be done through institutional reengineering, enhance fraud and error detection, change management, greater internal and external oversight, institutional strengthening of the Social Security Secretariat and civil society participation on the basis of innovative corporate management practices that add concrete value to ANSES' beneficiaries. In particular, the project will support the following objectives: i) Consolidate and expand selected organizational reforms of ANSES through business process reengineering, integration and automation of core processes, functions, and products, and ICT investments for continuous dynamic change with a view to improve the efficiency and effectiveness of service-delivery; ii) Support the institutional strengthening of the Social Security Secretariat to enhance its policymaking and oversight functions, strengthen the accountability of ANSES and other social security institutions, and promote outreach to other stakeholders; iii) Enhance access to information and exchange of information, help fraud and error detection in benefit determination and liquidation, and promote effective channels for citizen engagement and oversight, with a view to improve internal and external transparency and citizen participation; and iv) Promote change management, innovation, and dissemination of good management practices to enhance project performance and sustainability. "This loan will consolidate the reforms started under the first phase supported by a previous Bank loan, such as access to services and fraud and error detection, and will go beyond these issues to help create a more dynamic, efficient and transparent institution on the basis of innovative public sector management instruments," said Kathrin A. Plangemann, World Bank Task Manager for the project. The first ANSES loan helped the institution to undertake significant institutional reforms that increased its management capacity. Under this loan, ANSES has made progress in institution building through the development of an integrating vision and mission, and the establishment of basic processes and systems supporting vertical and horizontal integrations. In addition, it set up an infrastructure to expand access to services, and started addressing some of its most pressing problems, such as fraud and error detection. The $25 million single-currency, fixed spread loan has a repayment period of 15 years, including six years of grace. CONTACT: World Bank Media Contacts Yanina Budkin Phone: 4316-9700 E-mail: ybudkin@worldbank.org Alejandra Viveros Phone: (202) 473-4306 E-mail: aviveros@worldbank.org URL: http://web.worldbank.org ============= B E R M U D A ============= INTELSAT: Signs New Contract With RR Satellite ---------------------------------------------- Intelsat announced Thursday that RR Satellite Communications Limited (RR Sat), an Israeli broadcast service provider, has selected Intelsat to provide two new content distribution platforms in the United States and Asia, respectively. In one of the new contracts, RR Sat has chosen the Intelsat Americas-5 (IA-5) satellite to distribute Asian, European and Middle Eastern content via a new direct-to-home (DTH) platform in the U.S. IA-5 hosts a large international broadcasting community in the U.S. from its orbital location at 97ųW, presenting RR Sat with the opportunity to penetrate the U.S. DTH market and expand the number of viewers accessing its content. In a separate contract, RR Sat has launched a new Pan-Asian distribution platform via Intelsat on the APR-1 satellite located at 83ųE. The platform on APR-1 will enable broadcasters and programmers to target cable head-ends across most of Asia, including India and Australia, using just one satellite. "Leveraging Intelsat's global satellite fleet allows us to significantly extend our distribution network around the world and enter new markets," said Lior Rival, VP of Sales and Marketing at RR Sat. "We know that we have found the right partner in Intelsat; they are proactive, efficient and cost- effective, which will allow us to keep growing our audiences around the world." Ramu Potarazu, COO, Intelsat, stated, "Intelsat offers value to broadcasters by extending the reach of their programming and providing them cost-effective access to new audiences and markets - our relationship with RR Sat is a great example of this. In general, the Intelsat value proposition for businesses is simple: if you're looking for an effective way to reach new markets and grow, Intelsat can help." Intelsat is a global communications provider offering flexible and secure services to customers in over 220 countries and territories. Intelsat has maintained a leadership position for over 40 years by distributing video, voice, and data for television and content providers, government and military entities, major corporations, telecommunications carriers, and Internet service providers. Intelsat's reach, power and expanding solutions portfolio deliver information reliably and quickly to every corner of the globe. RR Sat is the fastest growing provider of end-to-end transmission and playout services to the global satellite broadcasting industry. This includes channel distribution and backhaul services, SNG services, sports feeds and other occasional feed services. It also includes production support, playout centers and other value-added services to provide customers with complete solution. RR Sat's new focus for 2005 is VOD, HD, MPEG 4 and Media 9 broadcasting. RR Sat provides global distribution services via satellite on a 24-hour per day basis to more than 150 TV channels on 10 digital platforms all over the world. CONTACT: Intelsat Medial Relations Phone: 1 202-944-7500 E-mail: media.relations@intelsat.com ============= B O L I V I A ============= AGUAS DEL ILLIMANI: Audit Proceeds Despite Departure ---------------------------------------------------- Basic services regulator Sisab said the audit of outgoing water services concessionaire Aguas del Illimani (AISA) will proceed with or without the cooperation of the Company, reports Business News Americas. Sisab director Alvaro Camacho said an audit of AISA's books from 1997, when it won the concession to operate basic services in the Bolivian capital La Paz and satellite city El Alto, will be carried out "unilaterally if AISA refuses to reach a mutual agreement" on the issue. Reports have it that AISA is resisting probe claiming that the period 1997-2002 has already been covered by a previous audit. The extent of the audit must be sufficient to reveal the level of real investment carried out by AISA to date. The government just wants to ensure that the investment recorded in the Company's books is real before it will compensate for the rescission of the contract. AISA, which is controlled by French water giant Suez, was informed by the government last year that its contract will be rescinded. The notification came after residents complained about lack of services in parts of the city and water bills tied to the US dollar. =========== B R A Z I L =========== CSN: Soaring Demand Prompts Possible Bond Issue Expansion --------------------------------------------------------- Steel company Companhia Siderurgica Nacional SA (CSN) may up its planned US$150 million perpetual bond issue to US$500 million after demand exceeded US$1.5 billion, reports Dow Jones Newswires. CSN plans to issue US$150 million in guaranteed perpetual notes via related entity CSN Islands X Corp. to raise funds to help pay down short-term debts of around US$500 million. The deal may close any day this week. Standard & Poor's Ratings Services has awarded CSN's issue its BB- senior unsecured long-term rating. The Company is exposed to volatile demand and price cycles, increasing competition in Brazil, heavy investments and an aggressive dividend policy, Standard & Poor's credit analyst Reginaldo Takara said in a statement. These risks are partly offset by CSN's cost position, sound operating profile, favorable market position in Brazil, strong export capabilities and increasing diversification, he said. Rio de Janeiro-based CSN is a steel complex comprised of investments in infrastructure and logistics whose operations include captive mines, an integrated steel mill, service centers, ports and railways. With a total annual production capacity of 5.7 million tons of crude steel and consolidated gross revenues of BRL12.3 billion in 2004, CSN is also the only tin-plate producer in Brazil and one of the five largest tin- plate producers worldwide. CONTACT: Mr. Marcos Leite Ferreira CSN - Investor Relations Phone: (55 11) 3049-7591 E-mail: marcos.ferreira@csn.com.br Web site: http://www.csn.com.br/ VARIG: Management Reshuffled Amid Debt Restructuring ---------------------------------------------------- Viacao Aerea Riograndense SA (Varig) has reorganized its senior management structure to ensure that the Company's day-to-day operations as well as its financial restructuring will be handled by seasoned leaders. According to Dow Jones Newswires, Omar Carneiro da Cunha has been tasked to lead the airline's operations, replacing Henrique Neves, who has been tasked with leading the Company's financial restructuring. Besides overseeing the airline's day-to-day operations, Carneiro da Cunha will keep his seat on Varig's board of directors. However, his position as deputy chairman has been handed to another director, Eleazar de Carvalho Filho. In a statement, Varig chairman David Zylberstajn said the same team that took over Varig in mid-May remains in place and is united it its efforts to resolve the airline's problems. Varig last month filed for protection from creditors under Brazil's new bankruptcy law, as it seeks to restructure gross debts of approximately BRL9.5 billion. The firm is in the process of hiring a firm to help it develop a restructuring plan, which must be presented by mid-August to the Rio de Janeiro court managing the case. CONTACT: VARIG S.A. (Viacao Aerea Rio-Grandense) Avenida Almirante Silvio de Noronha, 365 Rio de Janeiro, RJ 20021-010 Brazil VICENTE CERVO - FOREIGN REPRESENTATIVE OF VARIG Attorneys for the Foreign Representative: PILLSBURY WINTHROP SHAW PITMAN LLP 1540 Broadway New York, New York 10036-4039 (212) 858-1000 (Phone) (212) 858-1500 (Fax) Rick B. Antonoff (RBA-4158) ========= C H I L E ========= COEUR D'ALENE: Appoints New Vice President of Investor Relations ---------------------------------------------------------------- Coeur d'Alene Mines Corporation (NYSE: CDE, TSX: CDM), the world's largest primary silver producer and a growing gold producer, announced Wednesday the appointment of W. Scott Lamb as Vice President of Investor Relations, effective August 1, 2005. Lamb was most recently Vice President of Investor Relations and Corporate Communications at Kaiser Aluminum & Chemical Corporation. Prior to joining that organization in 1992, he held positions in financial, corporate, and marketing communications with Boise Cascade Corporation and Datapoint Corporation. Dennis E. Wheeler, Chairman, President and CEO stated, "Scott is a great addition to our professional team. His extensive investor relations experience will be particularly valuable as the Company continues to build on its dominant silver position and create value for its shareholders." Lamb is a member of the National Investor Relations Institute (NIRI) and completed the NIRI Investor Relations program at the University of Michigan. He holds an MA from the University of Houston and a BA from Weber State University. He is also a member of the National Advisory Council at Weber State University. Coeur d'Alene Mines Corporation is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile, Bolivia and Australia CONTACT: Coeur D'Alene Mines Corp. Tony Ebersole Director of Investor Relations Phone: 800-523-1535 =============== C O L O M B I A =============== ECOPETROL: Reports 20% Boost in Export Revenues in 5 Months ----------------------------------------------------------- State oil company Ecopetrol saw a 20% boost in its revenues from exports of crude and oil derivatives in the Jan-May 2005 period against the comparable period last year, Business News Americas reports. Ecopetrol's earnings from January to May this year reached US$938 million due to higher crude prices despite lower volume export of crude-based products. The average WTI price was US$50.52 a barrel from Jan-May this year, up 22% from the average price of US$41.40/b for the same period in 2004. Ecopetrol exported a total of 23.7 million barrels (Mb) of crude and oil derivatives over the period, down 7% compared to 25.5Mb barrels exported in the five-month lapse in 2004. Ecopetrol exports premium gasoline, jet fuel, naphtha and light crude, of which 57% of the January-May total went to the US, 16% to the Dominican Republic, 5% to Mexico and the remaining 22% to other countries, the statement said. ============= J A M A I C A ============= AIR JAMAICA: Gallimore Withdraws Charges Against Airline -------------------------------------------------------- Air Jamaica has reached a settlement agreement with Miguel Gallimore, who lodged a US$3-million lawsuit against the former for alleged wrongful dismissal and the unauthorized use of his image in an advertisement, The Jamaica Observer reports. Airline officials declined to disclose the settlement terms, saying they were confidential. But in a press release announcing the settlement, Gallimore withdrew allegations of money laundering, US immigration violations, racketeering, tax evasion and other crimes against the airline. "Mr. Gallimore acknowledges that these allegations were not specifically or otherwise related to the three commercial claims in the lawsuit which arose out his employment by Air Jamaica," his press statement says. Air Jamaica could not say what compensation was received by Gallimore, but legal sources in Florida, where his case went on for nearly two years, suggested that in the apparent circumstances it was quite unlikely that he could have had a significant payout. "Air Jamaica could not have had a significant bill to have this settled." Air Jamaica is yet to recover from massive financial losses stemming from higher security costs and a slump in passengers in the aftermath of the Sept. 11, 2001 terror attacks in the United States. CONTACT: AIR JAMAICA Corporate Communications Tel: 876-922-3460 ext 4060-5 URL: www.airjamaica.com AIR JAMAICA: Cuts Costs Through In-Flight Meal Service Changes -------------------------------------------------------------- Air Jamaica (www.airjamaica.com) announced on June 17, 2005 that the carrier will achieve a US$2 million reduction in its annual operating costs by making two adjustments to its in-flight meal service. The changes, which went into effect July 1, 2005, are as follows: I. Snack and beverage service are offered instead of full meal service on select flights under 2.5 hours. The change affects passengers traveling in Lovebird Economy Class on routes connecting Jamaica with select gateways in the Caribbean (Nassau, Grand Cayman, and Curacao) and Florida (Miami, Fort Lauderdale, and Orlando). Meal service continues to be offered in First Class, and full breakfast continues to be offered to all passengers on flights scheduled to depart prior to 8:30 a.m. No changes are made to Air Jamaica's full meal and beverage service on flights over 2.5 hours. II. Beer and wine are now available for sale on all flights, except for service on the London route. The change affects passengers traveling in Lovebird Economy Class only. Beer is priced at US$2.00, while wine is available for US$3.00. The US$5.00 charge for hard liquor remains unchanged. Complimentary hard liquor, beer, and wine continue to be provided to First Class passengers. Complimentary champagne continues to be provided to all passengers on all flights. These adjustments are a continuation of Air Jamaica's corporate restructuring program. Launched in December 2004, the corporate restructuring program is designed to improve operational efficiencies and reduce costs by approximately US$50 million in the face of record-high fuel prices and increased competition. =========== M E X I C O =========== CINTRA: Initiates Airlines' Sale Process Process ------------------------------------------------ State airline holding company Cintra SA launched Wednesday the process to privatize its Mexicana and Aeromexico airlines. Through paid advertisements in local daily newspapers, Cintra chairman Andres Conesa told potential buyers that they have until July 26 to show their interest. Only bidders approved to participate will receive the sale terms. Cintra said it will let investors know by Aug. 9 whether they have qualified to take part in the privatization. Foreigners, who are limited to minority stakes, must ally themselves with Mexican investors in order to participate. The flagship carriers will be sold separately, although investors are allowed to submit bids for both. Cintra said it would take bids for minimum stakes of 51%. "If the proposal is for more than 75% of the shares, it will have to be for 100%," it said. The government took control of the airlines in the mid-1990s after an economic crisis led to their financial collapse. It wants to return them to the private sector, but previous plans to sell the carriers have been delayed, most recently by the crisis that hit the industry after September 11, 2001. 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 MEXICO: All Asarco Employees Now on Strike ------------------------------------------------ The situation at Grupo Mexico's independent US subsidiary, Asarco LLC, has worsened after the last group of employees working without a contract voted to walk out of an Amarillo, Texas, refinery on Wednesday. With the addition of the more than 300 refinery workers, more than 1,500 employees of Tucson-based Asarco are now on strike, said Union spokesman Manny Armenta. Terry Bonds, District 12 supervisor for the United Steelworkers of America, revealed workers on two separate labor pacts that expired July 1 of this year and last year are striking because Asarco has violated fair-labor practices by refusing to negotiate in good faith. Asarco, which was purchased by Grupo Mexico in 1999, has demanded wage freezes and cuts in medical and pension benefits. Those steps are necessary to bring down the costs of Asarco's operations in order to be globally competitive, said Asarco CEO Daniel Tellechea. A company spokesman said Asarco was now considering various options for its operations, including possible asset sales. However, Bonds said the threat of asset sales would not push the union into backing down. "They've never said it before. It has only been since the strike started that they are saying it," he said. "We can't base our decisions when they break the law on what they might do." 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 TV AZTECA: Granted More Time to Prepare Arguments Vs. SEC --------------------------------------------------------- Mexico's second largest television channel TV Azteca (NYSE: TZA) now has until July 25 to present before a US Judge its arguments on whether fraud charges filed by the Securities and Exchange Commission (SEC) against the broadcaster should be dismissed. In January, the SEC filed fraud charges against TV Azteca and Company chairman Ricardo Salinas Pliego for withholding information on a debt sale at its mobile telephone unit, Unefon. The suit alleges the deal netted Salinas and former TV Azteca director Pedro Padilla US$109 million. In May, the broadcaster sought to dismiss SEC's charges, arguing that TV Azteca had had no knowledge of the deal. The judge, at the time, granted SEC an extension of until June 15 to present its arguments, and TV Azteca until July 11. TV Azteca's new deadline [July 25] was granted at the Company's behest. If the SEC wins this case, TV Azteca would have to return the profits earned, face fines and be prohibited from heading companies that trade on the New York Stock Exchange, says Business News Americas. CONTACT: TV Azteca, S.A. de C.V. Investors, Bruno Rangel Tel: +5255-3099-9167 E-mail: jrangelk@tvazteca.com.mx Media, Tristan Canales Tel: +5255-1720-5786 E-mail: tcanales@tvazteca.com.mx Daniel McCosh Tel: +5255-1720-0059 E-mail: dmccosh@tvazteca.com.mx URL: http://www.irtvazteca.com/ ======= P E R U ======= SIDERPERU: Appoints New Heads of Legal Division ----------------------------------------------- Siderperu, the country's largest steel producer, appointed Andres Balta as director of legal and institutional matters and Rafael Montoya as legal manager, reports Business News Americas. The Company, which is based in Chimbote in central Peru's Ancash department, didn't provide details of the said appointments. Siderperu has until August 31, 2005 to make 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, are due September 30, 2005. The addendum dealt with debts totaling approximately US$8 million originally programmed to be paid by September 30, 2004 Siderperu is controlled by local holding company Sider Corp. *********** 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 * * *