/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050715.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 15, 2005, Vol. 6, Issue 139 Headlines A R G E N T I N A AGUAS PROVINCIALES: Galicia Partnership Expected to Continue ARBOLEA PATAGONICA: Court Mandates Liquidation Process COCOLOR S.R.L.: Liquidates Assets to Pay Debts COVALPET S.A.: Court to Oversee Bankruptcy Proceedings EMBERSON HOTELS: Enters Bankruptcy on Court Orders EMPRESA DE TRANSPORTES: Begins Liquidation IRSA: Buys 6,309,060 Ordinary via Open Market MAGIK S.A.: Initiates Bankruptcy Proceedings PAN AMERICAN ENERGY: Secures $250M Loan From IFC SOCIEDAD TECNICA: Court Converts Reorganization to Bankruptcy TAMECO S.R.L.: Court Orders Liquidation B R A Z I L CSN: Mulls Reopening of Perpetual Bond Issue GRUPO VOTORANTIM: Hopes to Conclude Votocel Sale Next Month PARMALAT: Judge Throws Out Fraud Allegations vs. Bank of America RBS PARTICIPACOES: S&P Affirms 'B-' Corporate Credit Rating USIMINAS: CVRD Affirms Commitment, Backs Investment Plan VARIG: Venezuela's Conviasa Eyeing Stake in Uruguayan Airline M E X I C O BALLY TOTAL: Discloses Financial Updates, Seeks Waiver Extension P E R U * PERU: Fitch Assigns 'BB' to Upcoming Dollar Issue U R U G U A Y GALICIA URUGUAY: Argentine Central Bank OKs Boden Transfer V E N E Z U E L A PDVSA: Likely to Postpone Gas License Grants to Yearend - - - - - - - - - - ================= A R G E N T I N A ================= AGUAS PROVINCIALES: Galicia Partnership Expected to Continue ------------------------------------------------------------ Banco de Galicia has until today, July 15, to reaffirm its commitment to water utility Aguas Provinciales de Santa Fe, reports Business News Americas. As proof of its intention to stay on as minority partner, Galicia, together with Emgasud - its partner in Aguas Provinciales - must hand the Santa Fe government today the purchase contracts and bank guarantees needed to continue operating the utility. In addition, Galicia and Emgasud will have to present the Santa Fe government with a work proposal, which must include the acceptation that rates will not be raised this year and that the contract will be renegotiated in 2006. They will also need to show authorities the contract for the technical operation of Aguas Provinciales, signed with the former operator, French firm Suez, and valid until the end of next year. "There is no problem in signing these commitments. We are certain that we can make the company profitable and efficient with only a few adjustments that will not involve the number of staff," the new owners of Aguas de Santa Fe were quoted as saying. Suez announced its exit in May after talks with local authorities over a tariff hike failed. ARBOLEA PATAGONICA: Court Mandates Liquidation Process ------------------------------------------------------ Arbolea Patagonica S.R.L. enters bankruptcy protection after Court No. 2 of Comodoro Rivadavia's civil and commercial tribunal 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 Walmyr Herberto Grosso Sheridan as trustee. Mr. Sheridan will be verifying creditors' proofs of claim until the end of the verification phase on Aug. 19, 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. 7, 2005 followed by the general report, which is due on Dec. 5, 2005. CONTACT: Arbolea Patagonica S.R.L. Benito Grillo 185 Comodoro Rivadavia (Chubut) Mr. Walmyr Herberto Grosso Sheridan, Trustee Rivadavia 985 Comodoro Rivadavia (Chubut) COCOLOR S.R.L.: Liquidates Assets to Pay Debts ---------------------------------------------- Buenos Aires-based Cocolor S.R.L. will begin liquidating its assets following the pronouncement of the city's civil and commercial Court No. 18 that the Company is bankrupt, reports Infobae. The bankruptcy ruling places the company under the supervision of court-appointed trustee, Maria Luisa Ledesma. The trustee will verify creditors' proofs of claim until Oct. 13, 2005. The validated claims will be presented in court as individual reports. Ms. Ledesma will also submit a general report, containing a summary of the company's financial status as well as relevant events pertaining to the bankruptcy. The bankruptcy process will end with the disposal company assets in favor of its creditors. CONTACT: Cocolor S.R.L. Cucha Cucha 2651 Buenos Aires Ms. Maria Luisa Ledesma, Trustee Avda Cordoba 1351 Buenos Aires COVALPET S.A.: Court to Oversee Bankruptcy Proceedings ------------------------------------------------------ Court No. 2 of Comodoro Rivadavia's civil and commercial tribunal ordered the liquidation of Covalpet 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 Walmyr Herberto Grosso Sheridan, the court-appointed trustee. Mr. Sheridan will verify creditors' proofs of claim until Aug. 19, 2005. The verified claims will serve as basis for the individual reports to be submitted in court on Oct. 7, 2005. The submission of the general report follows on Dec. 5, 2005. The case will end with the disposal of the company's assets in favor of its creditors. CONTACT: Mr. Walmyr Herberto Grosso Sheridan, Trustee Rivadavia 985 Comodoro Rivadavia (Chubut) EMBERSON HOTELS: Enters Bankruptcy on Court Orders -------------------------------------------------- Buenos Aires' civil and commercial Court No. 22 declared Emberson Hotels 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, Sara Clara Gusner (Sindico Suplente). The trustee tasked with verifying the authenticity of claims presented by the Company's creditors. The verification phase is ongoing until July 31, 2005. Following claims verification, the trustee will submit the individual reports based on the forwarded claims for final approval by the court on Nov. 14, 2005. A general report will also be submitted on Dec. 27, 2005. Infobae reports that Clerk No. 44 assists the court on this case, which will end with the disposal of the company's assets in favor of its creditors. CONTACT: Sara Clara Gusner (Sindico Suplente) Avda Raul Scalabrini Ortiz 2089 Buenos Aires EMPRESA DE TRANSPORTES: Begins Liquidation ------------------------------------------ Empresa de Transportes Los Andes S.A.C. of Buenos Aires will begin liquidating its assets after Court No. 12 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, Jorge Fernando Podhorzer. The trustee will review claims forwarded by the Company's creditors until Oct. 3, 2005. After claims verification, Mr. Podhorzer will submit the individual reports for court approval on Nov. 14, 2005. The general report will follow on Dec. 27, 2005. Clerk No. 23 assists the court on this case. CONTACT: Mr. Jorge Fernando Podhorzer, Trustee Pasaje del Carmen 716 Buenos Aires IRSA: Buys 6,309,060 Ordinary via Open Market --------------------------------------------- Inversiones y Representaciones S.A. revealed in a letter to the Comision Nacional de Valores on July 11, 2005 that it acquired from the market the amount of 6,309,060 ordinary shares with face value pesos 0.10 each and with one vote each of Alto Palermo S.A. (APSA) for a total amount of pesos $3,517,568.80, which represents the 0.80% of the outstanding authorized capital. The Company has not intention to substantially modify its participation in Alto Palermo S.A. (APSA). CONTACT: IRSA Inversiones y Representaciones S. A. Alejandro Elsztain, Director Gabriel Blasi, CFO Tel: +011-5411 4323-7449 E-mail: finanzas@irsa.com.ar MAGIK S.A.: Initiates Bankruptcy Proceedings -------------------------------------------- Buenos Aires' civil and commercial Court No. 1 declared Magik S.A. "Quiebra," reports Infobae. Clerk No. 1 assists the court on the case, which will close with the liquidation of the Company's assets to repay creditors. Jose Eduardo Obes, who has been appointed as trustee, will verify creditors' claims until Sep. 21, 2005 and then prepare the individual reports based on the results of the verification process. After presenting these reports to court, the trustee will submit the general report. CONTACT: Mr. Jose Eduardo Obes, Trustee Lavalle 1619 Buenos Aires PAN AMERICAN ENERGY: Secures $250M Loan From IFC ------------------------------------------------ The International Finance Corporation, the private sector arm of the World Bank Group, has signed a $250 million loan for Argentina-based Pan American Energy LLC. A joint venture company between BP plc and Bridas Corporation, Pan American is the second-largest oil and gas producer in Argentina, accounting for about 13 percent of the country's output. The loan will finance part of the Argentine Branch's 2005 capital expenditure program, which is primarily focused on its operations in the Golfo San Jorge basin in southern Argentina. IFC's US$250 million loan package comprises a US$115 million loan for IFC's own account and a US$135 million loan for the account of commercial banks. Commercial bank participation was closed with an oversubscription. The seven-year tenor of the IFC syndicated loan is the longest tenor raised for an Argentine borrower since the country's economic crisis in 2001. Rashad Kaldany, IFC's Director for Oil, Gas, Mining, and Chemicals, said, "IFC's financing will support a company that is recognized as a good corporate citizen. Pan American Energy has a strong development impact in the regions in which it operates, through high levels of employment, contributions to fiscal revenues, and development of local industries and small and medium enterprises. In addition, its substantial gas production and strategically located gas reserves provide a clean source of fuel and help alleviate the current supply shortage in Argentina" Atul Mehta, IFC's Director for Latin America and the Caribbean, noted, "IFC is pleased to continue supporting Argentina's successful export-oriented companies, which have played an important role in the recovery of the country's economy." He added, "This operation complements IFC's regional strategy to act as a catalyst for investment in Argentina by helping to mobilize long-term financing from the international commercial markets." Richard Spies, CEO of Pan American Energy, said, "We are delighted to have built on our long-standing relationship with IFC, in a transaction that is aligned with our company's long- term development programs. We believe that IFC's interest in environmental and social sustainability will only help us improve on a strong, industry-leading performance." Rodolfo Berisso, Pan American Energy's Vice President of Finance and Planning, added, "With IFC's presence, we have been able to set a new benchmark for Argentine companies in long-term financing from international commercial banks. IFC conducted the entire process in a very efficient manner that allowed completion within the agreed timeline." SOCIEDAD TECNICA: Court Converts Reorganization to Bankruptcy ------------------------------------------------------------- Sociedad Tecnica Mediterranea S.R.L., which was undergoing reorganization, entered bankruptcy on orders from Cordoba's civil and commercial Court No. 8, according to Infobae. The court assigned Susana Nieves del Milagro Martin, Liliana Beatriz D Ortencio y Jose Angel Diani as the Company's receivers. The credit verification process will be done in the ordinary course according to local bankruptcy law, says the report. CONTACT: Sociedad Tecnica Mediterranea S.R.L. Huergo 4381 Barrio San Lorenzo (Cordoba) Ms. Susana Nieves del Milagro Martin Ms. Liliana Beatriz D Ortencio y Jose Angel Diani La Rioja 619 Ciudad de Cordoba (Cordoba) TAMECO S.R.L.: Court Orders Liquidation --------------------------------------- Tameco S.R.L. prepares to wind-up its operations following the bankruptcy pronouncement issued by Court No. 2 of Comodoro Rivadavia's civil and commercial tribunal. The declaration effectively prohibits the company from administering its assets, control of which will be transferred to a court-appointed trustee. Infobae reports that the court appointed Mr. Walmyr Herberto Grosso Sheridan as trustee. Mr. Sheridan will be reviewing creditors' proofs of claim until Aug. 19, 2005. The verified claims will serve as basis for the individual reports to be presented for court approval on Oct. 7, 2005. The trustee will also submit a general report of the case on Dec. 5, 2005. The case will end with the sale of the Company's assets. Proceeds from the sale will be used to repay the Company's debts. CONTACT: Tameco S.R.L. Pedro Ortega 2945 Barrio Humberto Beghin Comodoro Rivadavia (Chubut) Mr. Walmyr Herberto Grosso Sheridan, Trustee Rivadavia 985 Comodoro Rivadavia (Chubut) ========== B R A Z I L =========== CSN: Mulls Reopening of Perpetual Bond Issue -------------------------------------------- After raising US$500 million from a recent bond issue, steel company Companhia Siderurgica Nacional SA (SID) is planning to reopen an issue of perpetual bonds in hopes to raise another US$100 million to US$200 million, Dow Jones Newswires reports, citing a person familiar with the situation. "If we decide to reopen, the value should reach $100 to $200 million this time," the source, who requested anonymity, said, adding, "We are expecting to place the bonds soon, maybe this week." The planned issue would be coordinated by Credit Suisse First Boston and Deutsche Bank, the source said. 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/ GRUPO VOTORANTIM: Hopes to Conclude Votocel Sale Next Month ----------------------------------------------------------- Mining and industrial conglomerate Grupo Votorantim is selling its Votocel plastic film packaging unit to Argentina's Vitopel, reports Dow Jones Newswires. The operation is valued at US$120 million and is expected to be concluded by August 1. Votorantim said proceeds of the transaction will be reinvested into its operations in Brazil. Votocel, a market leader in Brazil for producing bi-oriented polypropylene (BOPP), ended 2004 with revenues of BRL360 million. Vitopel, which is controlled by private equity funds of JP Morgan and Credit Suisse First Boston, operates in Brazil and Argentina. PARMALAT: Judge Throws Out Fraud Allegations vs. Bank of America ---------------------------------------------------------------- Judge Lewis A. Kaplan of the U.S. District Court in Manhattan dismissed some allegations of wrongdoing by Bank of America Corp. arising from an equity investment in a Parmalat subsidiary in Brazil and loans to other Parmalat subsidiaries. The plaintiffs had sought to hold the bank liable for its actions related to the transactions. They also claimed the bank knew of Parmalat's true value, but was "motivated to participate" in a fraud to keep its lucrative banking relationship with the Company. Judge Kaplan also dismissed claims against Citigroup Inc. over its role in various transactions, as well as its alleged role in approving a 2003 Parmalat press release related to a Citigroup financing vehicle, Buconero LLC. Buconero means "black hole" in Italian. Kaplan, however, left intact claims against Citigroup and Italy's Banca Nazionale del Lavoro SpA involving allegedly worthless invoices. He also refused to throw out claims that Credit Suisse Group Inc.'s Credit Suisse First Boston unit designed some transactions it knew Parmalat would use to conceal debt. The lawsuit was filed on behalf of investors who bought Parmalat securities from 1999 through 2003. The 368-page complaint details various alleged fraudulent acts by Parmalat and the banks. Parmalat filed for bankruptcy in 2003, and several of its former top executives, including Parmalat founder Calisto Tanzi, are facing criminal charges stemming from a probe into the Company's collapse. RBS PARTICIPACOES: S&P Affirms 'B-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed Wednesday its 'B-' local and foreign currency corporate credit ratings on RBS Participacoes S.A. (RBS), as well as its 'B-' rating on RBS' $58 million MTNs maturing in 2007. At the same time, the outlook was revised to positive from stable. Brazil-based RBS Participacoes S.A. is part of the RBS Group (RBS), which operates in television and radio broadcasting, newspaper publishing, and other media businesses in the southern states of the country. Total gross debt for the combined RBS entities as of May 2005 was $215 million. "The outlook revision reflects the consistent improvements in RBS' cash flow protection measures, which are fueled mainly by the positive performance of the advertising market in Brazil but also reflect a more intrinsic change in the company's cost structure," said Standard & Poor's credit analyst Milena Zaniboni. The ratings on RBS Group reflect the Group's susceptibility to the volatile results of the media industry in Brazil, its leveraged financial profile, and its challenges to service debt due to its still-thin free operating cash generation. While the profile of the Group's bank debt and senior notes has improved considerably since 2003, it is expected that RBS will have to resort to its cash reserves to meet all amortizations until 2006 and will still run some refinancing risk in 2007. These vulnerabilities are partially offset by the group's dominant share of audience and advertising in its service area, its quality programming and the distribution of TV Globo's high- quality content, the sustained recovery of the Brazilian media industry at least during 2005, and its track record of financial support from shareholders. The analysis is based on a combined view of RBS Group companies to reflect the group's commitments and financial flexibility in a more comprehensive way. Financial information includes the combined figures of all media entities (Media Companies, which also includes the cash collection company RBS Administracao e Cobrancas), RBS Participacoes, and offshore RBS Par Ltd. RBS Administracao e Cobrancas is not part of the group of companies that guarantee the notes. The positive outlook indicates that Standard & Poor's expects RBS to be able to sustain the improved operating profitability it has been posting in the past few quarters, including a higher positive free cash flow to cover a wider part of its debt maturities in the next several years. Nevertheless, earnings volatility and some refinancing risk continue to constrain the rating. If RBS is able to sustain its current stronger results, represented by FFO to debt of higher than 15% and total debt to EBITDA lower than 4x in the short term, and solve the refinancing requirements for 2007, the ratings could be raised. On the other hand, as leverage is still high and financial results are linked to the local economy, a deceleration or downturn in advertising or economic prospects for Brazil would lead to an outlook revision to stable or even negative. Primary Credit Analyst: Milena Zaniboni, Sao Paulo (55) 11-5501- 8945; milena_zaniboni@standardandpoors.com USIMINAS: CVRD Affirms Commitment, Backs Investment Plan -------------------------------------------------------- Apparently mining giant Companhia Vale do Rio Doce (CVRD) has changed its mind about selling its stake in steel firm Usiminas after the latter revealed a plan to build a new blast furnace. According to Dow Jones Newswires, steel firm Usiminas plans to build a new blast furnace at its Ipatinga unit in Minas Gerais state. The plan seemed to appeal to CVRD, which said that it is willing to keep its stake in the Company and is prepared to put up cash for new investments. "If Usiminas invests, we are ready to remain in the company and also to put in more money so the firm can build a new blast furnace, grow and gain scale," CVRD's chairman, Roger Agnelli, was quoted as saying. Usiminas is conducting feasibility studies for building the blast furnace, which would add some 2 million metric tons of steel production per year and require some US$800 million investments. The Company is due to present the report to its board of directors on August 24. CVRD owns 23% of Usiminas, the largest single stake in the company, but is not part of the controlling group of shareholders. Usiminas is the leader supplier of flat steel products to the Brazilian domestic market, besides selling its coated and uncoated flat steels to a number of industries and distributors in foreign markets. CONTACT: Usinas Siderurgicas Minas Gerais SA Mr. Bruno Seno Phone: +55 (31) 3499-8710 E-mail: brunofusaro@usiminas.com.br VARIG: Venezuela's Conviasa Eyeing Stake in Uruguayan Airline ------------------------------------------------------------- Venezuela's tourism minister announced Wednesday that the country's new state airline Conviasa is preparing to buy Brazilian carrier Varig's 49% stake in the Uruguayan airline Pluna, reports Reuters. "A feasible scenario would be to buy Varig's stake, make a strategic alliance between Conviasa and Pluna and consolidate a joint venture to take advantage of equipment and routes," Tourism Minister Wilmar Castro was quoted as saying. Conviasa currently operates two planes but plans to expand the fleet to 12 aircraft this year. Venezuelan President Hugo Chavez reportedly plans to invest US$95 million in the expansion as part his plan to restore a national airline after Viasa went bankrupt in 1997. VARIG wants to unload its 49% stake in Pluna as it tries to maneuver itself out of its financial predicament. Weighed down by BRL9.5 billion of debts, VARIG filed for protection from creditors in a Rio de Janeiro court on June 17. 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) =========== M E X I C O =========== BALLY TOTAL: Discloses Financial Updates, Seeks Waiver Extension ---------------------------------------------------------------- Bally Total Fitness Holding Corporation (NYSE: BFT) announced Wednesday selected operating data for the quarter ended March 31, 2005 and five months ended May 31, 2005. In addition, it also announced its intention to seek a 90-day extension of the existing waivers from its public noteholders until October 31, 2005. The original waivers, which relate to the Company's delay in providing financial statements as required by indentures governing its outstanding notes, expire on July 31, 2005. Commenting on the status of the restatement process, Paul Toback, Chairman and Chief Executive Officer stated, "During the past nine months, we have made substantial progress towards completing this audit despite having to replace several key finance executives, hiring a new CFO, Treasurer and Controller and dealing with many complex accounting issues, several of which were unearthed during the process. Now I believe that barring any unforeseen circumstances, we are close to completing this long process despite needing a little more time to do so." Mr. Toback added, "On the issue of the performance of the business, our business redesign through our Build Your Own Membership program, is in the early stages of implementation and we are introducing it into our major markets during the second half of this year. The preliminary indications are positive, including early demonstrations of an improvement in the retention of members during their first 30 days. Similarly, it appears as though, we are experiencing an increase in our average down payment in markets that have rolled out the Build Your Own Membership program, which is an indication of our customers' ability and willingness to stay and pay." Consent for Extension of Waiver Bally will not be able to provide its audited financial statements for 2002-2004 by July 31, 2005 and will seek an extension for up to 90 days of the waivers of reporting covenant defaults from holders of its 10-1/2% Senior Notes due 2011 and 9-7/8% Senior Subordinated Notes due 2007 under the indentures governing the notes. These defaults result from the Company's previously announced failure to timely provide its financial statements for the second and third quarters and full year 2004 and the first quarter of 2005 with the Securities and Exchange Commission and deliver such financial statements to the trustee and holders of notes pursuant to the indentures. The original waivers, which were obtained in December 2004, expire on July 31, 2005. If the waivers are not extended, the Company will be in default under its indentures after July 31, 2005. At any time thereafter, the obligations of the Company under its public notes could be accelerated after notice and the passage of cure periods under the indentures. Moreover, the Company's credit facility provides for a cross-default 10 days after delivery of such notice under either indenture, which would give the Company's lenders under the credit facility the right to accelerate the Company's obligations thereunder. As a result of the previously disclosed investigation conducted by the Company's Audit Committee, which found multiple errors in the Company's past accounting, the Company decided to no longer rely on Ernst & Young LLP's reports with respect to prior year audits and engaged KPMG LLP to audit the Company's financial statements for 2002-2004. Bally's management has devoted a significant amount of their efforts and Company resources towards completing the multi-year audit. A key part of this effort has been bringing in new financial and accounting leadership. In recent months, the Company has appointed a new Chief Financial Officer, Treasurer, Controller and Assistant Controller. Given these parties' limited tenure with Bally, the involvement of a new auditing firm and the complexity surrounding the accounting issues involved, including, among others, revenue recognition and the valuation of goodwill and other intangible assets relating to prior acquisitions, Bally does not expect to complete such audits by July 31, 2005. Resolution of all remaining audit issues is expected to be completed in order to make the necessary filings with the Securities and Exchange Commission, the trustee and the noteholders no later than October 31, 2005. The Company also expects a delay in filing its 10-Q report for the quarter ended June 30, 2005, which would also be covered by the waiver extension. Operational Overview In the first five months of 2005, Bally continued the transformation of its business according to the plan laid out several months ago. Month-to- month memberships, an add-on program for friends and family and a results guarantee have helped drive results in 2005. In the first quarter of 2005, new joining members increased 11% compared to the prior year period. For the five months ending May 31, 2005, new joining members rose 8% over the same period in the prior year. For the corresponding periods, new memberships (contracts which represent one or more members) increased 4% and 2%, respectively, over 2004. The total number of members at May 31, 2005 was up 1% over the same period in 2004. The Company is beginning to roll out its new Build Your Own Membership program, which it expects will improve member retention and customer satisfaction when fully implemented. Operating Data The following operating data reflect membership sales and cash flow data. The following operating data has not been audited or reviewed by KPMG LLP and therefore is subject to change, which changes may be material individually or in the aggregate. Interim cash flow data and/or trends should not be considered indicative of data or trends to be expected for annual or other interim periods. Three Months Ended March 31, 2005 The following table shows new joining members, new memberships sold and related data for the three months ended March 31, 2005 and 2004 (in thousands except monthly data): Operating Data Three months ended March 31, 2005 2004 % Change New joining members 361 325 11% Average committed monthly fee per member (dollars) $36.43 $38.52 -5% Average committed duration per member (in months) 27.7 30.0 -8% New memberships 251 241 4% Average committed monthly fee per membership (dollars) $53.16 $52.83 1% Average committed duration per membership (in months) 27.3 29.5 -7% Gross committed membership fees: Total Company $364,257 $375,614 -3% Same club $336,529 $359,618 -6% Members (end of period) 4,081 4,029 1% Gross committed membership fees is an operating measure, which includes potential future value of all initial membership fee revenue, dues revenue, earned finance charges and membership- related products and services revenue from new membership sales in a period. It is measured on a gross basis before consideration of any uncollectible amounts. A growing percentage of Bally memberships are pay-as-you-go memberships that only include one-month credit to gross committed membership fees. The Company tracks gross committed membership revenue as an indicator of its current sales activities. The following table shows cash flow and selected balance sheet data for the three months ended March 31, 2005 and 2004 and as of March 31, 2005 and December 31, 2004 (in thousands): Cash Flow Data Three months ended March 31, 2005 2004 Cash provided by operating activities $22,914 $13,313 Cash used in investing activities (7,867) (14,021) Free cash flow (deficit) $15,047 $(708) Selected Balance Sheet Data As of As of March 31, 2005 December 31, 2004 Cash and equivalents $33,412 $19,516 Total debt 756,978 760,676 Net debt $723,566 $741,160 Five Months Ended May 31, 2005 The following table shows new joining members, new membership sales and related data for the five months ended May 31, 2005 and 2004 (in thousands except monthly data): Operating Data Five months ended May 31, 2005 2004 % Change New joining members 557 517 8% Average committed monthly fee per member (dollars) $36.15 $38.35 -6% Average committed duration per member (in months) 27.4 29.8 -8% New memberships 390 383 2% Average committed monthly fee per membership (dollars) $52.78 $52.84 0% Average committed duration per membership (in months) 26.8 29.2 -8% Gross committed membership fees: Total Company $551,680 $590,889 -7% Same club $510,968 $566,965 -10% Members (end of period) 4,070 4,033 1% The following table shows selected cash flow data for the five months ended May 31, 2005 and 2004 and balance sheet data as of May 31, 2005 (in thousands): Cash Flow Data Five months ended May 31, 2005 2004 Cash provided by operating activities $17,873 $12,117 Cash used in investing activities (11,563) (23,051) Free cash flow (deficit) $6,310 $(10,934) Selected Balance Sheet Data As of As of May 31, 2005 December 31, 2004 Cash and equivalents $24,704 $19,516 Total debt 757,152 760,676 Net debt $732,448 $741,160 As of July 12, 2005, the Company had no borrowings outstanding but has issued approximately $9.8 million of letters of credit under the $100 million revolving credit portion of its $275 million credit facility. Bally will be hosting a conference call on Wednesday, July 13, 2005, at 11:00 a.m. Central Time. In order to participate, please dial (800) 599-9829, international (617) 847-8703, at least 15 minutes before the start of the call and use ID Code "Bally Total Fitness". The conference call can also be accessed through the Company's web site, where it will be available for replay through July 27, 2005. Bally Total Fitness is the largest and only nationwide commercial operator of fitness centers, with approximately four million members and 440 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness- conscious adult consumers. CONTACT: Bally Total Fitness Matt Messinger Phone: (773) 864-6850 E-mail: mmessinger@ballyfitness.com URL: http://www.ballyfitness.com Brunswick Group Frank De Maria Phone: (212) 333-3810 E-mail: fdemaria@brunswickgroup.com ======= P E R U ======= * PERU: Fitch Assigns 'BB' to Upcoming Dollar Issue --------------------------------------------------- Fitch Ratings, the international rating agency, expects to assign a long-term foreign currency rating of 'BB' to the Republic of Peru's upcoming US$750 million 20-year bond issue. The Rating Outlook is Stable. This issuance is part of the government's plan to finance a prepayment of US$1.55 billion in Paris Club debt, as well as provide prefinancing for a portion of 2006 public financing needs. Fitch upgraded Peru's long-term foreign currency rating to 'BB' from 'BB-' in November 2004, reflecting the passage of pension reform and robust macroeconomic and fiscal performance. Since 2002, fiscal deficit reduction has proceeded in the face of a challenging domestic political environment, which combined with stronger growth has contributed to a decline in Peru's public debt burden. The general government deficit, which has declined from 2.1% of GDP in 2002 to 1.2% in 2004, is likely to fall to 1.0% of GDP this year. Given the strong performance of tax revenues through May, even with increased expenditures in the run-up to the 2006 elections, Fitch believes this target will be attainable. Solid GDP and export growth continues to underpin Peru's sovereign creditworthiness and should provide a sufficient buffer to deal with possible adverse shocks, whether election- related or externally-driven. A revival in private investment has broadened from mining and energy to include the consumer goods sector. A solid balance of payments performance continues to diminish Peru's vulnerability to external shocks, reflected in international reserve accumulation of US$1.3 billion since year-end 2004 and Peru's low external financing needs of about 15% of reserves. Peru's high net external debt declined to 110% of external receipts in 2004 from 175% in 2000 and will continue declining this year given benign external conditions and some reduction of external debt with the prepayment of Paris Club debt. However, this ratio will remain high relative to the median of 49% for similarly rated credits. Peruvian politics may continue to pose risks to the economic policy framework. However, with the 2006 general election in view, the political parties have been supporting prudent policy settings and modest reforms to enhance their credibility with the electorate. A smooth transition to the next government and maintenance of prudent macroeconomic settings would be positive for creditworthiness. On the other hand, a populist departure from the current policy framework would be negative. CONTACT: Theresa Paiz Fredel, +1-212-908-0534, New York Roger M. Scher, +1-212-908-0240, New York MEDIA RELATIONS: Kenneth Reed +1-212-908-0540, New York ============= U R U G U A Y ============= GALICIA URUGUAY: Argentine Central Bank OKs Boden Transfer ---------------------------------------------------------- Banco de Galicia y Buenos Aires S.A. (Buenos Aires Stock Exchange: GALI) (the "Bank") announced Wednesday that, as part of the exchange of liabilities for Boden 2012 bonds and cash carried out by Banco Galicia Uruguay S.A. ("Galicia Uruguay"), that closed on May 27, 2005, the Argentine Central Bank has authorized the Bank to transfer to Galicia Uruguay, a wholly owned subsidiary of the Bank, US$196 million of face value of Boden 2012. These bonds were used by Galicia Uruguay to settle the exchange offer, pursuant to the expressions of interest received from its creditors. Galicia Uruguay has accepted expressions of interest from its creditors for US$243 million. In addition, Grupo Financiero Galicia S.A. (Buenos Aires Stock Exchange/Nasdaq: GGAL) ("Grupo Galicia"), the Bank's controlling company, announced Wednesday that it has forgiven US$43 million of subordinated negotiable obligations issued by Galicia Uruguay. Galicia Uruguay's exchange offer together with the debt forgiveness by Grupo Galicia, are of direct benefit to the Bank, not only because of the significant reduction in its consolidated liabilities, but also because of the US$43 million increase in its shareholders' equity resulting from Grupo Galicia's debt forgiveness. In addition, the Bank's regulatory capital will increase by US$64.5 million, given that the increase in shareholders' equity allows for a greater amount of subordinated debt (issued as part of the restructuring of the Bank's foreign debt) to be computed as supplementary capital. CONTACT: Banco de Galicia Y Buenos Aires Tte Gral Juan D Peron 407 Buenos Aires Argentina C1038AAI Phone: +54 11 6329 0000 Fax: +54 11 6329 6100 Home Page: http://www.bancogalicia.com.ar Contact: Juan Martin Etchegoyhen, Chairman Antonio R. Garces, Vice Chairman Grupo Financiero Galicia SA 2nd Floor No 456 Tte Gral Juan D Peron Buenos Aires Argentina 1038 Phone: +54 11 4343 7528/9475 Home Page: http://www.gfgsa.com Contact: Atty. Abel Ayerza, Chairman ================= V E N E Z U E L A ================= PDVSA: Likely to Postpone Gas License Grants to Yearend ------------------------------------------------------- State oil firm PDVSA may not be able to award six offshore natural gas blocks in the first stage of the Rafael Urdaneta project between September and October as planned, reports Business News Americas. Under the original timetable, PDVSA will receive bids until July 27 and award the blocks in September- October. However, Tino Bonadonna, the president of Venezuelan gas processors association (AVPG), indicated that the awarding could be pushed back to November-December as a result of the delay in processing the requests. The delay is due to the "process of revising and updating all of the clarifications that have arrived at PDVSA," Mr. Bonadonna said. "PDVSA is processing the body of information in order to have a reference base before it can proceed with the phase of receiving offers, both technical and economic," he added. The Rafael Urdaneta Project is made up by a total of 29 blocks, 18 located in the Gulf of Venezuela and 11 in Northeast Falcon. Together, they cover an area of approximately 30,000 square kilometers, where probable gas reserves are estimated at 26 trillion cubic feet (TCF). Twenty-nine national and foreign energy companies bought a data pack for the tender in April. The licenses will have a 25-year duration and PDVSA retains the right to obtain a 35% stake in the projects if and when commerciality is declared. *********** 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. 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