/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/050728.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 Thursday, July 28, 2005, Vol. 6, Issue 148 Headlines A R G E N T I N A AGRO CRENNA: Closes Reorganization AGUAS ARGENTINAS: Rejects Government's Final Proposal ARGENTINE BANKS: Moody's Changes Outlook on BFSRs to Positive CALIDAD Y SERVICIO: Debt Payments Halted, Set To Reorganize EMI RECORDVINIL: Court Declares Company Bankrupt EMPRESA LIBERTAD: General Report to be Submitted Aug. 10 FRIGORIFICO LA COLORADA: Court Approves Concurso Motion OESTE EMBOTELLADORA: Date for the Informative Assembly Set PRIMA S.R.L.: Declared Bankrupt by Court PROALBA S.R.L.: Claims Verification Ends PTO S.A.: Asks Court for Reorganization SANTA MARIA: Proceeds With Liquidation SANTIAGO CRENNA: Court Authorizes Plan, Concludes Reorganization ULTRA MEDICINA: Individual Reports Due Aug. 2 B E R M U D A GLOBAL CROSSING: Suit Settlement Hearing Set October 27, 2005 B O L I V I A AGUAS DEL ILLIMANI: Makes $3M Guarantee Bond Payment B R A Z I L EMBRATEL: Reports R$94 Mln Net Income in 2Q05 LIGHT SERVICOS: Close to Wrapping Up Debt Restructuring C H I L E AES GENER: To Build $317M, 250MW Coal-Fueled Power Plant C O L O M B I A TERMOEMCALI FUNDING: S&P Assigns `D' to $165M Sr. Sec. Notes D O M I N I C A N R E P U B L I C * DOMINICAN REPUBLIC: Fitch Removes Default Rating on Bonds E C U A D O R COFIEC: Likely to be Taken Over by the Government E L S A L V A D O R BANCO AMERICANO: Seen Taking On Strategic Investor M E X I C O ALFA: Net Profit Soars in 2Q05 on Solid Revenue Growth HYLSAMEX: Public Tender Offer for Series B, L Shares UNEFON: Seeks More Time to Comply With New BMV Requirements P E R U SPCC: Completes $800M 144A International Debt Offering V E N E Z U E L A PARMALAT FINANZIARIA: Posts 34% Hike in First-half EBITDA - - - - - - - - ================= A R G E N T I N A ================= AGRO CRENNA: Closes Reorganization ---------------------------------- The reorganization of Agro Crenna S.A. has been concluded. Data revealed by Infobae on its Web site indicated that the process was concluded after the Rio Cuarto's civil and commercial Court No. 3 homologated the debt agreement signed between the Company and its creditors. CONTACT: Agro Crenna S.A. Rio Cuarto (Cordoba) AGUAS ARGENTINAS: Rejects Government's Final Proposal ----------------------------------------------------- Aguas Argentinas, the main local arm of French utility Suez, rejected Tuesday the government's latest proposal on tariffs after three years of negotiations following a 2002 freeze. The government's final proposal, "doesn't consider proposals made by the company, nor does it offer alternatives," the utility said in a statement. "Despite the enormous quantity of information submitted to UNIREN (the government's utility contract negotiating body) for the last three years, the document received yesterday [Monday] doesn't contain any economic-financial references, contrary to the government's previous proposal of June 15." Aguas' minimum request to the government was for a 20% increase in regulated water rates in January and a further 15% hike in the second half of 2006. The Company would also like to receive a helping hand from Argentine state-owned bank Banco de la Nacion to convert part of its US$600 million debt into pesos to limit future currency risks. But the government has made it clear that it will not increase rates unless Suez drops the claim it has filed against Argentina in the World Bank's arbitration tribunal, the International Center for the Settlement of Investment Disputes. Therefore, Aguas is likely to rely on a clause under which it can rescind its contract if authorities haven't met its request for an increase in water rates within 30 business days. "Barring a last-minute proposal from the Argentine government, the formal decision to leave (Argentina) could be made in early September," a person close to Suez said. Aguas has said it would convene a board meeting Tuesday to adopt a course of action. ARGENTINE BANKS: Moody's Changes Outlook on BFSRs to Positive ------------------------------------------------------------- Moody's Investors Service changed the outlook to positive from stable on the "E" financial strength ratings (BFSRs) of the following Argentine banks: Banco de la Ciudad de Buenos Aires, Banco Credicoop Cooperativo Limitado, BBVA Banco Frances S.A., Banco Macro Bansud S.A., Banco Rio de la Plata S.A., and Banco de Valores S.A. Moody's noted that the outlook changes were based on the respective banks' franchise strength and improving performance since the height of Argentina's financial crisis in 2002. The positive outlooks also reflect the expectation of further improvements in the banks' fundamentals as they continue to restructure their balance sheets and focus on new business in a still challenging environment. Moody's outlooks are opinions that a rating change may occur in the medium term. Moody's also pointed out that systemic risks remain a substantial challenge for the Argentine banks, including a backdrop of high country risk and a still uncertain operating and legal environment. The agency also warned that system financials continue to be heavily influenced by accounting and regulatory forbearances and earnings restatements that make it difficult to assess the banks' true economic solvency at this juncture. These concerns are reflected in the E BFSR, the lowest Moody's assigns on this global rating scale, which is a measure of a bank's intrinsic creditworthiness, excluding external support elements. The E BFSRs are an indication of the banks' relatively weak financial fundamentals derived from large exposures to the highly indebted public sector, uncertain private sector asset quality, weak core earnings, and limited funding access. Published credit opinions on the individual issuers will be made available on moodys.com. The following ratings have been affected: Banco de la Ciudad de Buenos Aires: Bank Financial Strength Rating: E, outlook changed to positive from stable Banco Credicoop Cooperativo Limitado.: Bank Financial Strength Rating: E, outlook changed to positive from stable BBVA Banco Frances S.A.: Bank Financial Strength Rating: E, outlook changed to positive from stable Banco Macro Bansud S.A.: Bank Financial Strength Rating: E, outlook changed to positive from stable Banco Rio de la Plata S.A.: Bank Financial Strength Rating: E, outlook changed to positive from stable Banco de Valores S.A.: Bank Financial Strength Rating: E, outlook changed to positive from stable CALIDAD Y SERVICIO: Debt Payments Halted, Set To Reorganize ----------------------------------------------------------- Buenos Aires' civil and commercial Court No. 14 is reviewing the merits of Calidad y Servicio Automotriz S.A. petition to reorganize. La Nacion recalls that the Company filed the petition following cessation of debt payments on July 2004. Reorganization will allow Calidad y Servicio Automotriz S.A. to avoid bankruptcy by negotiating a settlement with its creditors. Clerk No. 28 is assisting the court on the Company's case. CONTACT: Calidad y Servicio Automotriz S.A. Piedras 459 Buenos Aires EMI RECORDVINIL: Court Declares Company Bankrupt ------------------------------------------------ Court No. 6 of Buenos Aires' civil and commercial tribunal declared local company EMI Recordvinil S.A. "Quiebra", relates La Nacion. The court approved the bankruptcy petition filed by Obra Social de la Industria del Plastico, whom the Company has debts amounting to $4,890.85. The Company will undergo the bankruptcy process with Lilian Rey as trustee. Creditors are required to present proofs of their claim to Ms. Rey for verification before Sep. 10, 2005. Creditors who fail to submit the required documents by the said date will not qualify for any post-liquidation distributions. Clerk No. 11 assists the court on the case. CONTACT: EMI Recordvinil S.A. Parana 439 Buenos Aires Ms. Lilian Rey, Trustee Avenida Presidente Roque Saenz Pena 651 Buenos Aires EMPRESA LIBERTAD: General Report to be Submitted Aug. 10 -------------------------------------------------------- Manuel Hector Alvarez, the trustee appointed by the court for the Empresa Libertad S.A. reorganization, will submit a general report on Aug. 10, 2005. The report will contain the audited accounting and business records as well as the summary of important events pertaining to the reorganization. Infobae relates that the trustee submitted on June 29, 2005 the individual reports on the validated claims of the Company's creditors. The trustee had accepted claims until May 16, 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 Nov. 3, 2005. Empresa Libertad S.A. began reorganization following the approval of its petition by Court No. 2 of Santiago del Estero's civil and commercial tribunal. Reorganization allows the Company to negotiate a settlement with its creditors in order to avoid a straight liquidation. CONTACT: Empresa Libertad S.A. Andres Rojas 139 BA Autonomia Ciudad de Santiago del Estero (Santiago del Estero) Mr. Manuel Hector Alvarez, Trustee Avda Belgrano 855 (S) Ciudad de Santiago del Estero (Santiago del Estero) FRIGORIFICO LA COLORADA: Court Approves Concurso Motion ------------------------------------------------------- Court No. 2 of Buenos Aires' civil and commercial tribunal approved a petition for reorganization filed by Frigorifico La Colorada S.A., according to a report from Argentine daily La Nacion. Estudio Escandell-Hurovich-Lopez Cepero, the court-appointed trustee, will verify claims from the Company's creditors until Sep. 29, 2005. After verification period, the trustee will submit the individual and general reports in court. Dates for submission of these reports are yet to be disclosed. The informative assembly will be held on June 27, 2006. Creditors will vote to ratify the completed settlement plan during the said assembly. The city's Clerk No. 3 assists the court on the case. CONTACT: Frigorifico La Colorada S.A. Avenida Belgrano 535 Buenos Aires Estudio Escandell-Hurovich-Lopez Cepero, Trustee Teniente General Juan Domingo Peron 1509 Buenos Aires OESTE EMBOTELLADORA: Date for the Informative Assembly Set ---------------------------------------------------------- The informative assembly for the Oeste Embotelladora S.A. insolvency case is set on Oct. 11, 2005. During the said assembly, the Company will present its completed settlement proposal to the creditors. The court-appointed trustee had presented a general report on June 2, 2005. Court No. 2 of Mendoza's civil and commercial tribunal granted the Company's petition for reorganization after it defaulted on its debt payments. PRIMA S.R.L.: Declared Bankrupt by Court ---------------------------------------- Prima S.R.L. is now "Quiebra" - meaning bankrupt, says Infobae. Bahia Blanca's civil and commercial Court No. 7 decreed the Company's bankruptcy and appointed Nestor Julio Radice, as receiver for the Company. Mr. Radice will be reviewing creditors' claims until Aug. 12, 2005. Analyzing these claims is important because the outcome of the process will determine the amount each creditor will get after all the assets of the Company are liquidated. The court, which is aided by Clerk No. 6, will conclude the bankruptcy process by liquidating its assets to repay creditors. CONTACT: Prima S.R.L. Avda Colon 447 Bahia Blanca Mr. Nestor Julio Radice, Trustee Beruti 623 Bahia Blanca PROALBA S.R.L.: Claims Verification Ends ---------------------------------------- The verification phase of Proalba S.R.L. insolvency case will end tomorrow, July 29, 2005. The authenticated claims of the Company's creditors will be presented in court by Carlos Erasmo Moreno, the appointed trustee, as individual reports on Sep. 12, 2005. A general report is also due on Oct. 26, 2005. This is a report on the Company's accounting and business records, which are audited by the court-appointed trustee. It also includes the summary of important events pertaining to the reorganization. An Informative Assembly, the final stage of reorganization where the settlement proposal is presented to the Company's creditors for approval, is scheduled on May 9, 2006. Buenos Aires' civil and commercial Court No. 17 approved the reorganization motion filed by the Company after it failed to pay its creditors. CONTACT: Mr. Carlos Erasmo Moreno, Trustee Tucuman 1658 Buenos Aires PTO S.A.: Asks Court for Reorganization --------------------------------------- PTO S.A., a company operating in Buenos Aires, has requested for reorganization after failing to pay its liabilities since June 2005. The reorganization petition, once approved by the court, will allow the Company to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending before Buenos Aires' civil and commercial Court No. 7. Clerk No. 13 assists on this case. CONTACT: PTO S.A. Pichincha 364 Buenos Aires SANTA MARIA: Proceeds With Liquidation -------------------------------------- Mr. Eduardo Peralta successfully sought for the bankruptcy of Santa Maria S.C.A. after Court No. 7 of Buenos Aires' civil and commercial tribunal declared the Company "Quiebra," reports La Nacion. As such, Santa Maria S.C.A. will now start the process with Mr. Adrian Ponce as trustee. Creditors must submit proofs of their claim to the trustee by Sep. 30, 2005 for authentication. Failure to comply with this requirement will mean a disqualification from the payments that will be made after the Company's assets are liquidated. The creditor sought for the Company's liquidation after the latter failed to pay debts amounting to $40,532.96. The city's Clerk No. 14 assists the court on the case that will close with the sale of all of its assets. CONTACT: Santa Maria S.C.A. Avenida Directorio 5221 Buenos Aires Mr. Adrian Ponce, Trustee Bernardo de Irigoyen 330 Buenos Aires SANTIAGO CRENNA: Court Authorizes Plan, Concludes Reorganization ---------------------------------------------------------------- Rio Cuarto-based Santiago Crenna S.A. concluded its reorganization process, according to data released by Infobae on its Web site. The conclusion came after the city's civil and commercial Court No. 3 homologated the debt plan signed between the Company and its creditors. ULTRA MEDICINA: Individual Reports Due Aug. 2 --------------------------------------------- The individual reports on the verified claims of creditors of Ultra Medicina S.A. will be submitted to court on Aug. 2, 2005, Infobae reports. The verification phase ended on June 6, 2005. Trustees Antonia Hortensia Arquier, Raul Alberto Barontini and Lorena Paola Canut are also required by the court to prepare a general report on the Company's reorganization and submit it on Sep. 14, 2005. The submission of this report will be followed by the presentation of the Company's settlement proposal to the creditors. This proposal will be drafted from the submitted claims and will be voted on by the creditors during the informative assembly scheduled on Feb. 14, 2006. Ultra Medicina S.A. successfully petitioned for reorganization after Rosario's civil and commercial Court No. 10 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. CONTACT: Ultra Medicina S.A. Cordoba 1437 Rosario (Santa Fe) Ms. Antonia Hortensia Arquier Mr. Raul Alberto Barontini Ms. Lorena Paola Canut, Trustees Zeballos 2161 Rosario (Santa Fe) ============= B E R M U D A ============= GLOBAL CROSSING: Suit Settlement Hearing Set October 27, 2005 ------------------------------------------------------------- The United States District Court for the Southern District of New York will hold a fairness hearing for the proposed settlement in the matter: In re Global Crossing, Ltd., Securities Litigation, Case No. 02 Civ. 910 (GEL), on behalf of all persons who bought Global Crossing Ltd. or Asia Global Crossing Ltd. Securities Between February 1, 1999 and December 8, 2003. The Court will hold a hearing on October 27, 2005 at 2 p.m. to consider whether to approve the Settlement and whether to grant the request by the lead lawyers representing the Class Members for attorneys' fees and costs. For more details, contact Jay W. Eisenhofer, Esq., Sidney S. Liebesman, Esq. or Grant & Eisenhofer P.A. of Chase Manhattan Centre, 1201 N. Market St., Wilmington, DE, 19801, Phone: (302) 622-7149, Fax: (302) 622-7100 OR Global Crossing, Ltd. Securities Litigation, Andersen Entities Partial Settlement, c/o The Garden City Group, Inc., Claims Administrator, P.O. Box 9000 #6152, Merrick, NY, 11566-9000, Phone: 1-866-808-3497, Web site: http://www.globalcrossinglitigation.com.(Class Action Reporter, Wednesday, July 27, 2005, Issue No. 147) ============= B O L I V I A ============= AGUAS DEL ILLIMANI: Makes $3M Guarantee Bond Payment ---------------------------------------------------- Talks between Bolivian capital La Paz water services concessionaire Aguas del Illimani (AISA) and the government regarding the rescission of AISA's concession are now back on track. Business News Americas reports that the resumption of talks follows AISA's decision to pay a US$3 million guarantee bond and its declaration to pay another US$5 million on July 29. According to AISA spokesperson Tania Jaldin, discussions at the moment are leaning towards a share purchase arrangement. Earlier reports suggested that the Bolivian government has offered to buy a majority stake in AISA for US$11 million to avoid a service interruption. But the problem is that the government's US$11-million offer could not be justified while the market price was unknown. The material value of the Company could be determined through an audit of the Company's books from 1997, when it won the concession to operate basic services in the Bolivian capital La Paz and satellite city El Alto, to date. However, AISA is resisting the probe claiming that the period 1997-2001 has already been covered by a previous audit. AISA, a subsidiary of French energy group Suez, is in handover talks with Sisab and basic services ministry (VSB) officials after the government rescinded its 30-year concession after residents protested over Aisa's supposed poor service. The World Bank (WB) will provide assistance in the process to turn the concessionaire back over to the state, according to WB regional director Marcelo Giugale. =========== B R A Z I L =========== EMBRATEL: Reports R$94 Mln Net Income in 2Q05 --------------------------------------------- Embratel Participacoes S.A. (Embratel Participacoes or "Embrapar") holds 99.0 percent of Empresa Brasileira de Telecomunicacoes S.A. ("Embratel"). (All financial figures are in Reais and based on consolidated financial statements of Embrapar) Highlights - Net revenues were R$1,859 million in the second quarter of 2005. Year-to-date net revenues were R$3,756 million. - EBITDA was R$422 million in the second quarter and R$887 million in the first half of 2005. - Operating income was R$155 million in the second quarter and R$349 million in the first half of 2005. - Net income was R$94 million in the second quarter of 2005 and R$137 million year-to-date. - Net debt totaled R$682 million at June 30, 2005. - Embrapar increased R$1,823 million to its capital base during the quarter, using the funds to reduce outstanding debt. Total Net Revenues In the second quarter of 2005, total net revenues were R$1,859 million, an increase of 2.9 percent compared with the second quarter of 2004. Higher revenues resulted from a 32.6 percent increase in other services revenues, a 1.3 percent increase in long distance voice revenues and a 1.5 percent increase in data revenues. Compared with the first quarter of 2005, total net revenues declined 2.0 percent. A 12.3 percent growth in local revenues and a 6.1 percent increase in other services revenues helped to offset a 4.1 percent decline in long distance voice revenues and a 2.0 percent decrease in data communications revenues. Year-to-date, total net revenues were R$3,756 million, an increase of 1.5 percent compared with the first half of 2004 due to a 4.6 percent increase in data revenues, a 29.4 percent increase in other services revenues and an 8.8 percent increase in local services revenues, which offset a 1.6 percent decline in long distance voice revenues. Data Communications In the second quarter of 2005, 102.8 thousand 64kbits line equivalents were added. At the end of June 2005, Embratel had 1,221.2 thousand 64kbit line equivalents providing data services to business customers. Year-over-year, 64kbit line equivalents in service increased 60.2 percent. Embratel's second quarter data communications revenues were R$438 million, a year-over-year increase of 1.5 percent. Compared with the first quarter of 2005, data revenues declined 2.0 percent due to a one-time R$9 million revenue recorded for Internet services provided which occurred in the first quarter of 2005. Excluding that amount, data revenues would have been flat quarter to quarter. In the first half of 2005, data revenues rose 4.6 percent to R$886 million. Domestic Long Distance In the second quarter of 2005, domestic long distance traffic totaled 3,095 million minutes, a gain of 3.6 percent compared with the first quarter 2005. Domestic long distance revenues were R$1,013 million, a 3.5 percent increase compared with the second quarter of 2004, benefiting from tariff increases which occurred in the second half of 2004. Compared with the first quarter of 2005, domestic long distance revenues decreased 2.7 percent as a result of lower average revenue per minute due to the competitive environment. Year-to- date, domestic long distance revenues were R$2,053 million, flat compared with the prior year period. International Long Distance International long distance traffic totaled 600 million minutes, flat compared with the previous 2005 quarter but up 59.9 percent from the year-earlier quarter because of higher inbound traffic. Year-over-year, second quarter international long distance revenues fell 10.1 percent to R$169 million due to tariff declines and the effect of the Real's appreciation. Compared with the first three months of the year, second quarter international long distance revenues decreased 11.9 percent due to the effect on inbound revenues of the appreciation of the Real to the US dollar. In the first half of 2005, international long distance revenues declined 7.8 percent to R$360 million reflecting lower tariffs and local currency appreciation. Local Services Revenues from local services gained 8.3 percent to R$168 million compared with last year's second quarter due to the growth in the customer base and local traffic. Compared with the first quarter of 2005, local revenues rose 12.3 percent reflecting a growing corporate customer base, higher traffic and increased handset sales. Growth of the customer base and local traffic also produced an 8.8 percent increase to R$317 million in the first half of 2005. Cost and Expenses Interconnection Interconnection costs rose to R$894 million in the second quarter, an increase of 5.4 percent compared with the second quarter of 2004. On a sequential-quarter basis, interconnection increased 3.0 percent due to traffic growth. The telco ratio rose to 48.1 percent of net revenues in the second quarter compared with 45.7 percent in the first quarter of 2005. The higher telco ratio reflected a lower average revenue per minute. Year-to-date, interconnection costs were R$1,761 million, up 4.2 percent. Costs of Services (excluding interconnection) Year-over-year cost of services (excluding interconnection) rose 2.4 percent mainly due to higher energy, transport of equipment and equipment inventory costs. Compared with the first three months of 2005, cost of services (excluding interconnection) rose 28.4 percent to R$183 million. The main factor in the increase were higher third party expenses related to data and local service installations since the company has been increasing the number of customers. During the quarter, cost of services increased due to more handset sales because of the growth in the wireless local loop customer base. Year-to-date, cost of services excluding interconnection were R$325 million declining 4.2 percent compared with the first half of 2004 due to lower handset sales. Selling Expenses Selling expenses were R$200 million in the second quarter of 2005, a decline of 7.0 percent due to a lower provision for doubtful accounts compared with the year-ago quarter. Compared with the first quarter of 2005, selling expenses declined 11.6 percent. The decrease was entirely due to a reduction in the provision for doubtful accounts. Continued efforts to solve various billing issues related to mobile originated long distance calls have led to agreements between Embratel and certain mobile operators and improvement in collection of co- billed mobile revenues which enabled Embratel to record a non- recurring lower allowance for doubtful accounts. A complete solution of these issues will require continued effort by the company. In the first half of 2005, selling expenses declined 1.1 percent to R$426 million. General and Administrative Expenses General & administrative expenses were R$193 million, decreasing 38.8 percent from the second quarter of 2004. Excluding a retention plan payment of R$92 million in the second quarter of 2004, general and administrative expenses declined 13.5 percent mainly due to actions taken by management to reduce third party and personnel expenses. Compared with the first quarter of 2005, general and administrative expenses increased 3.2 percent. For the first half of 2005, general and administrative expenses declined 31.4 percent to R$380 million. Excluding retention payments, general and administrative expenses dropped 17.7 percent. Other Operating Income and Expense, net Embratel recorded other operating income of R$32 million in the second quarter related to past period revenues recorded as a result of agreements with two cellular operators with respect to the co-billing of mobile-originated long distance calls. In the second quarter of 2004, Embratel recorded operating income of R$97 million due to non-recurring reversals made in that quarter. EBITDA, EBIT and Net Income Compared with the second quarter of 2004, EBITDA increased 21.5 percent to R$422 million. The EBITDA margin rose to 22.7 percent from 19.2 percent a year-ago. Compared with the first quarter of 2005, EBITDA declined 9.2 percent. For the first half of 2005, EBITDA increased 11.4 percent to R$887 million compared with the year-ago period. Operating income (EBIT) was R$155 million in the second quarter, improving 167.8 percent compared with the second quarter of 2004 but down 20.1 percent compared with the first quarter of 2005. Year-to-date, operating income was R$349 million, an increase of 63.5 percent compared with the first half of 2004. "Net Financial Expense", including monetary and exchange variation, was positive by R$7.2 million due to a 11.8 percent appreciation of the Real to the US dollar and resulting exchange gains on the company's unhedged foreign currency debt. Year- over-year and year-to-date, the company benefited from the effect of the appreciation of the Real on its foreign currency debt as well as overall debt reduction. Net income rose to R$94 million in the second quarter of 2005 compared with R$43 million in the first quarter of 2005. In the first half of 2005, net income was R$137 million. Financial Position At June 30, cash position was R$671 million. Embrapar ended the quarter with a total outstanding debt of R$1.4 billion and net debt of R$682 million. Short-term debt (accrued interest, short- term debt and current maturity long-term debt in the next 12 months) was R$438 million. During the quarter, Embrapar received R$1.8 billion from the capital increase that took effect on May 23, 2005 and used the funds to redeem 35 percent of the outstanding guaranteed notes (approximately R$275 million), paid down R$1.0 billion of local commercial paper and pre-paid US$165 million of short -term debt. Capex Total capital expenditures in the second quarter of 2005 were R$378 million. The breakdown is as follows: local infrastructure, access and services- 21.0 percent; data and Internet services - 17.5 percent; network infrastructure - 2.4 percent, others - 10.7 percent, and Star One - 48.4 percent. In the first half of 2005 capital expenditures were R$596 million. Possible Acquisitions On May 23, 2005 Embrapar's Board of Directors authorized the company to conduct studies in order to determine whether it would be advantageous to the company to acquire from Telmex a controlling stake in Telmex do Brasil and 37.1% participation in Net Servicos. Additionally, the Board stated that should these acquisitions occur, they should be made through another capital increase at Embrapar with the issuance of new ordinary shares. Embrapar is in the process of conducting these studies. Capital Increase On May 23, Embrapar concluded a R$1.8 billion capital increase raising the company's capital base from R$2.3 billion to R$4.1 billion and the total number of outstanding shares to 758.3 billion (282 billion ordinary and 476.3 billion preferred). Under the company's current ownership structure, Telmex is the controlling shareholder with 63.9 percent (95.1 percent ordinary and 45.4 percent preferred) and, excluding treasury stock, the remaining 35.9 percent is market float. Embratel is the premier communications provider in Brazil offering a wide array of advanced communications services over its own state of the art network. It is the leading provider of data and Internet services in the country and is well positioned to be the country's only true national, local service provider for corporate customers. Service offerings: include telephony, advanced voice, high-speed data communication services, Internet, satellite data communications, corporate networks and local voice services for corporate clients. Embratel is uniquely positioned to be the all-distance telecommunications network of South America. The Company's network has countrywide coverage with 28,868 km of fiber cables comprising 1,068,657 km of optic fibers. To see financial statements: http://bankrupt.com/misc/Embratel.pdf CONTACT: EMT - Embratel Participacoes S.A. Rua Regenta Feijo 166 Sala 1687-B Centro Rio de Janeiro, 20060-060 Brazil Phone: 5521-519-6474 URL: http://www.embratel.net.br LIGHT SERVICOS: Close to Wrapping Up Debt Restructuring ------------------------------------------------------- Power distribution company Light Servicos de Electricidade SA moved closer to concluding its ownership and debt restructuring Monday after its French parent concluded a BRL991-million capital injection. Business News Americas reports that Electricite de France (EdF) carried out the capital injection through the conversion of a US$400-million debt that Light owed it into voting shares. The operation, according to a Light spokesperson, paves the way for the signing of the ratification of a US$760-million debt restructuring agreement with 12 creditor banks. Light will now pay over the next five years US$600 million that originally matured over the next 12 months and has postponed to 2012 from 2007 the payment of US$160 million. EDF's capital injection also fulfills the condition for national development bank BNDES to buy from Light BRL727 million in local convertible debt. The transactions should bring Light out of default, aligning its debt obligations with the Company's revenue and pave the way for it to invest BRL1 billion in the 2005-2007 period. Light will start listing its shares on the Novo Mercado on July 28. The Novo Mercado is the Brazilian Stock Exchange's most rigorous forum for listing. To qualify for listing on the Novo Mercado, a company must sell a minimum stake of 25% while 100% of the company's shares must be common, rather than preferred. CONTACT: LIGHT SERVICOS DE ELETRICIDADE S.A. Avenida Marechal Floriano, 168 20080-002 Rio de Janeiro, Brazil Phone: +55-21-2211-2794 Fax: +55-21-2211-2993 Home Page: http://www.lightrio.com.br Contact: Bo Gosta Kallstrand, Chairman Michel Gaillard, President and CEO Joel Nicolas, Executive Director, Operation Paulo Roberto Ribeiro Pinto, Executive Director, Investor Relations and CFO ========= C H I L E ========= AES GENER: To Build $317M, 250MW Coal-Fueled Power Plant -------------------------------------------------------- Power company AES Gener SA plans to build a US$317-million, 250- megawatt coal-fueled power plant some 100 kilometers northwest of Santiago. The Nueva Ventanas project forms part of the Company's plan to diversify Chile's energy matrix in light of natural gas restrictions coming from neighboring Argentina. Nueva Ventanas will help to "increase [supply] stability in the case of eventual supply problems considering the new energy situation characterized by natural gas shortages in Chile," AES Gener said. AES submitted its EIS for the project to environmental authority Conama on July 15. The study indicates that advanced technology, which the project will use, will allow gas emissions to stay within the range permitted by the country's regulations. US power company AES (NYSE: AES) owns AES Gener through its Inversiones Cachagua holding company. CONTACT: AES Gener Mariano Sanchez Fontecilla 310 Piso 3 Santiago de Chile Phone: 562-6868900 Fax: 562-6868991 =============== C O L O M B I A =============== TERMOEMCALI FUNDING: S&P Assigns `D' to $165M Sr. Sec. Notes ------------------------------------------------------------ Rationale The 'D' rating on TermoEmcali Funding Corp.'s US$165 million senior secured notes due 2014 reflects the Colombian company's failure to make its September 2004 debt-service payment. Since then, the project-financed entity also failed to make its debt- service payments through June 2005. TermoEmcali operates a 234 MW combined-cycle, natural-gas-fired power generation facility, and sells capacity and energy to Empresas Municipales de Cali (Emcali), a Colombian municipal utility that provides diversified services to two million residents in and around Santiago de Cali. TermoEmcali entered a 20-year purchased-power agreement (PPA) with Emcali to provide capacity and energy, and eventually transfer the facility to Emcali at no cost. However, after Emcali defaulted on March 6, 2003, the PPA has not been honored. As of June 2005, Emcali continues to fail to meet its financial obligations due under the PPA for more than $85 million. In November 2003, TermoEmcali and Emcali, the project's offtaker, signed a memorandum of understanding (MOU) while pursuing an orderly restructuring of the obligations under the PPA. The MOU expired on June 2004, and although the parties discussed extending it, Emcali indicated it would not continue payments under the MOU until an energy-purchase agreement (EPA), replacing the former PPA, is signed. Despite the expiration of the MOU and Emcali's failure to perform its obligations under the PPA, Emcali and TermoEmcali continued to negotiate a restructuring of the PPA. On June 2005, TermoEmcali reached agreement to restructure Emcali's obligations to the project and settle certain disputes with Emcali. The deadline to achieve the restructuring is May 17, 2006. In parallel with those negotiations, TermoEmcali and a committee of restricted bondholders and other lenders have held discussions about restructuring the financing documents on a basis consistent with cash flows anticipated under a restructured PPA. After the restructuring of the financing documents is finalized Standard & Poor's Ratings Services will reassess the transaction's credit rating. Primary Credit Analyst: Luis Manuel Martinez, Mexico City (52) 55-5081-4462; luis_martinez@standardandpoors.com Secondary Credit Analyst: Federico Mora, Mexico City (52) 55-5081-4436; federico_mora@standardandpoors.com =================================== D O M I N I C A N R E P U B L I C =================================== * DOMINICAN REPUBLIC: Fitch Removes Default Rating on Bonds ----------------------------------------------------------- Fitch Ratings upgraded Tuesday Dominican Republic's sovereign external bonds that were eligible for April's debt exchange but were not fully extinguished to 'CCC+' from 'DDD'. This rating action reflects the government's commitment to service this debt as demonstrated by the recent coupon payment on 2013 bond. This rating applies to the 9.50% bonds due 2006 (US$) and the 9.04% bonds due 2013. The exchange eligible bonds were downgraded to 'DDD' on May 5 on the announcement of the completion of a debt exchange, which Fitch determined to be an event of default under its distressed debt exchange criteria (see 'Sovereign Distressed Debt Exchanges' at 'www.fitchratings.com'). It is Fitch's practice to keep the exchange eligible bonds in the default category for at least 30 days and to take them out of default when payments have resumed according to the original terms. The reopening of the exchange brought investor participation up to 97% of the face value of eligible bonds from the previous 94%. The bonds removed from default Tuesday are rated below the new bonds ('B-') issued as part of the exchange. The distinction is based on Fitch's opinion that the government's willingness to service bonds not tendered on time and in full may be lower than for the new bonds. Near-term amortization payments on the old bonds (estimated at $40 million in 2006) appear to be covered by net multilateral disbursements and some issuance in the domestic market. In the event that financial pressures mount, the government may elect to incur arrears on exchange eligible bonds before doing so on new bonds issued in the exchange. As part of the exchange, bondholders consented to exit amendments eliminating cross default clauses for holdouts of exchange eligible bonds. As a result, payment delays on these bonds would not trigger defaults on the US$1.1 billion in new bonds issued in the exchange. CONTACT: Shelly Shetty +1-212-908-0324, New York Roger M. Scher +1-212-908-0240, New York MEDIA RELATIONS: Kenneth Reed +1-212-908-0540, New York ============= E C U A D O R ============= COFIEC: Likely to be Taken Over by the Government ------------------------------------------------- Ecuador's government is mulling the acquisition of a bank controlled by the country's deposit insurance agency AGD to provide services to affiliates of social security institute IESS, reports Business News Americas. The government is yet to disclose the name of the bank. However, local newspaper El Universo suggested that the most likely candidate for the acquisition is Cofiec. Cofiec is one of the failed banks taken over by the government, through the AGD, after Ecuador's severe banking crisis in 1998- 1999. Cofiec could issue mortgage loans, among other financial services, which would diversify the services offered by the IESS to its affiliates. If such an acquisition were to take place, the IESS would not run the bank but would rather hire professionals to do it, said IESS official Manuel Vivanco. ===================== E L S A L V A D O R ===================== BANCO AMERICANO: Seen Taking On Strategic Investor -------------------------------------------------- Banco Americano expects to decide by late August whether to take on a strategic investor, Business News Americas reports. "It's more of a strategic move. We feel that in order to remain in a competitive environment we need a strategic partner where we can take advantage of a larger financial network and have access to cheaper funding," Business News Americas quoted the bank's chairman Ronald Lacayo as saying. Analysts and market observers also see a strategic investor as helping Banco Americano compete in an increasingly concentrated banking industry. Banco Americano received several offers from seven Central American and international banking groups. These offers range from the acquisition of 100% of the bank's shares to the purchase of a minority stake. The bank ended the first quarter with US$84.0 million in assets and US$14.0 million in equity. 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 =========== ALFA: Net Profit Soars in 2Q05 on Solid Revenue Growth ------------------------------------------------------ Conglomerate Alfa SA reported Monday a 65% increase in second- quarter net profit to MXN1.838 billion (US$170 million) from MXN1.117 billion a year earlier on solid revenue growth. In a press release, the Monterrey-based company said: "Higher sales volumes of petrochemicals, refrigerated food products and aluminum auto components are accountable for most of the revenue growth in the quarter." Revenue rose 22% to MXN17.382 billion. Alfa's operating profit in the second quarter of 2005 was also up at MXN1.67 billion, from MXN1.35 billion in the second quarter of 2004, while earnings before interest, taxes, depreciation and amortization, or EBITDA, rose to MXN2.29 billion from MXN2.24 billion. Net income included contributions from Alfa's 42.5% stake in steel unit Hylsamex SA. Hylsamex reported net profit of MXN977 million in the second quarter on sales of MXN6.74 billion. Hylsamex said it shipped 824,500 tons of steel in the quarter, up 5% from the year-ago period. Revenue per ton fell 1% to $742 because international steel prices were lower. A 3.61% appreciation of the peso against the dollar in the quarter also helped net profit. Alfa reported a foreign exchange gain of MXN212 million, against a loss in the same period last year of MXN262 million. ALFA is a Mexican company involved in the petrochemicals, refrigerated food, aluminum auto components, steel and telecom businesses. CONTACT: ALFA Mr. Enrique Flores Director of Corporate Communications Phone:(011-52-81) 8748 1207 E-mail: eflores@alfa.com.mx HYLSAMEX: Public Tender Offer for Series B, L Shares ---------------------------------------------------- On July 26, 2005, I.I.I. - Industrial Investments Inc. (I.I.I.) and Siderar S.A.I.C. launched a tender offer in Mexico for the acquisition of all outstanding shares of Hylsamex S.A. de C.V. (Hylsamex), held by the public generally and not owned directly or indirectly by Alfa S.A. de C.V. (Alfa). I.I.I. is also acquiring Alfa's 42.5% interest in Hylsamex. The transaction with Alfa is to close simultaneously with the closing of the tender offer and provides for a payment of a price per share of Hylsamex equal to the price per share offered in the tender offer. The tender offer, which is scheduled to close at 3 p.m., Mexico City time, on August 16, 2005, is being made on the terms and subject to the conditions set forth in the Folleto Informativo authorized by the Comision Nacional Bancaria y de Valores (the Mexican Banking and Securities Commission), which has been prepared by the offeror without Hylsamex's participation. Among other conditions, the offerors will not be required to consummate the tender offer unless a sufficient number of Hylsamex's outstanding Series B shares and Series L shares are tendered and not withdrawn so that, after consummation of the tender offer and the acquisition of Alfa's 42.5% interest, the offerors collectively hold more than 50% of Hyslamex's outstanding shares and more than 50% of Hylsamex's Series B shares. The Folleto Informativo contains material information on the terms and conditions of the tender offer and the procedures for tendering shares and should be read in their entirety before any decision is made with respect to the tender offer. The statements contained herein do not constitute an offer or sale of any securities in any jurisdiction. The tender offer is being made pursuant to the Folleto Informativo and the statements herein should be deemed qualifed in its entirety by the information included in the Folleto Informativo. CONTACT: Othon Diaz Del Guante Tel: +(52) 81-8865-1240 E-mail: odiaz@hylsamex.com.mx Ismael De La Garza Tel: +(52) 81-8865-1224 E-mail: idelagarza@hylsamex.com.mx Kevin Kirkeby Tel: +(646) 284-9416 E-mail: kkirkeby@hfgcg.com UNEFON: Seeks More Time to Comply With New BMV Requirements ----------------------------------------------------------- Mexican mobile operator Unefon is negotiating with the stock market BMV to grant it a year to comply with the new listing requirements, Business News Americas reports, citing Unefon president Moises Saba. The BMV introduced early this year the new 12% minimum free float requirement. On July 15, it suspended trading of Unefon's shares, saying there had been little indication of the Company meeting the new requirements. Unefon had 7% of its shares held by public investors. "We are negotiating with the authorities so they grant us this period to correct the situation," Saba said. "It would be an error to delist us, above all now that the company is working hard and we are growing slowly but surely," he added. Unefon announced in April it was planning to delist, citing poor liquidity of its stock. However, shareholders eventually decided to keep the shares trading. Unefon, which is 46.5%-owned by the country's No. 2 broadcaster TV Azteca (NYSE: TZA), has faced stiff competition from market leader Telcel, owned by America Movil (NYSE: AMX), and the market has become even more competitive since Spain's Telefonica (NYSE: TEM) arrived, now branded Movistar. CONTACT: Unefon Press Relations Mr. Tristan Canales E-mail: tcanales@tvazteca.com.mx Phone: (011-5255) 3099 5786 Unefon Investor Relations Mr. Alan Infante E-mail: ainfante@unefon.com.mx Phone: (011-5255) 8582 5134 VeriSign Media Relations Mr. Leslie Rubin E-mail: lrubin@verisign.com Phone: 650-426-5363 VeriSign Investor Relations Mr. Tom McCallum E-mail: tmccallum@verisign.com Phone: 650-426-3744 ======= P E R U ======= SPCC: Completes $800M 144A International Debt Offering ------------------------------------------------------ Marking one of the largest inaugural debt issues in recent years out of Latin America, Southern Peru Copper Corporation (SPCC) has completed an $800 million 144A international debt offering underwritten by Citigroup. The international law firm Milbank, Tweed, Hadley & McCloy LLP, led by partners Michael Fitzgerald and Robert Williams, represented SPCC in negotiating and closing the deal. Milbank's Fitzgerald noted, "SPCC continues to take advantage of favorable conditions in the financial markets with the issuance of these notes. Record high copper prices and low interest rates contributed to the offering being more than five times oversubscribed. Following on the successful landmark $955 million equity offering by SPCC in June of this year, the note offering is indicative of investors' continuing positive reaction to Grupo Mexico's recent merger of its Mexican and Peruvian operations into SPCC." Milbank also represented Grupo Mexico and its subsidiary Minera Mexico in the recent merger of its Mexican and Peruvian operations to turn SPCC (NYSE, LSE: PCU) into the world's number 2 copper company by reserves and market capitalization. As a result of the merger, Grupo Mexico increased its ownership interest in SPCC to approximately 75%. About the Offering: The notes were offered on a Rule 144A/Reg. S basis with SEC registration rights. The offering was divided into two tranches with SPCC selling $600 million of 30 year notes with a coupon of 7.5% and $200 million of 10 year notes with a coupon of 6.375%. The proceeds of the offering were used primarily to refinance approximately $700 million of bank loans recently arranged by Citigroup. The lead managers for the sale were Citigroup Global Markets Inc. and UBS Investment Bank. The Milbank team representing SPCC was led by partners Michael Fitzgerald and Robert B. Williams with associates John Cobb, Michael Fordham, Ellie Kwack and Hieu Pham. Milbank, Tweed, Hadley & McCloy LLP is a premier global law firm headquartered in New York, with offices in Washington, D.C., Los Angeles, Palo Alto, London, Frankfurt, Munich, Tokyo, Hong Kong and Singapore. Recently named Legal Week's "International Firm of the Year" for 2004, Milbank is a recognized leader in capital markets, corporate finance, project finance, acquisition finance, and other major fields of legal practice. The Firm's practice includes cross-border mergers and acquisitions and global securities transactions as well as assisting multinational clients with their cross border investments. Milbank provides a full range of services to many of the world's leading financial, industrial and commercial enterprises, as well as governments, institutions and individuals. ================= V E N E Z U E L A ================= PARMALAT FINANZIARIA: Posts 34% Hike in First-half EBITDA --------------------------------------------------------- Parmalat Finanziaria S.p.A. in Extraordinary Administration announces the operating and financial results of the Parmalat Group at June 30, 2005. Scope of Consolidation The scope of consolidation has been defined using principles that are consistent with those adopted in preparing the statement of income and balance sheet at December 31, 2004. Companies that are subject to certain restrictions on their management as a result of local bankruptcy proceedings that have effectively placed them outside the control of Parmalat Finanziaria S.p.A. in Extraordinary Administration, and companies in voluntary liquidation are no longer consolidated on a line-by-line basis. The current scope of consolidation no longer includes companies in which the Group held equity investments that were sold after January 1, 2005. The corresponding 2004 data have been restated accordingly on a pro-forma basis. The operations divested in 2005 include the companies that comprised the U.S.A. Bakery Division (Mother's Cake & Cookies, Archway Cookies and three production units in Canada), which were sold in January 2005, and Parmalat Uruguay, which was sold in February 2005. Margherita Yogurt, which was placed in liquidation in February 2005, has also been removed from the scope of consolidation. Following a settlement with the three U.S. companies in Chapter 11 (Parmalat U.S.A. Corporation, Farmland Dairies LLC and Farmland Stremicks Sub LLC) and their respective bankruptcy trustees and creditors (U.S.A. Dairy), the abovementioned three companies have been permanently removed from the Parmalat Group. Core Businesses In the six months ended June 30, 2005, the Group's Core Businesses reported slightly higher revenues than in the same period last year. Revenues were up 1.1%, rising from EUR1,820.4 million at June 30, 2004 to EUR1,839.7 million at June 30, 2005. EBITDA also improved, growing from EUR131.8 million (7.2% of revenues) to EUR142.0 million (7.7% of revenues). These data do not reflect the impact of the nonrecurring charges related to the extraordinary administration proceedings, which amounted to about EUR48.6 million (EUR38.8 million in 2004). Revenues for the second quarter of 2005 (difference between the cumulative figures at June 30 and March 31) rose sharply compared with the previous quarter (revenues up to 8.9% to EUR959.2 million compared with EUR880.5 million in the first quarter; EBITDA to EUR80.2 million, or 29.8% more than the EUR61.8 million earned in the first three months of the year), but were little changed from the second quarter of 2004, when revenues totaled EUR974.5 million, (-1.6%) and EBITDA amounted to EUR81.2 million (-1.2%). Monthly revenues (difference between the cumulative figures at June 30 and May 31) decreased compared with the same period a year ago (EUR308.9 million vs. EUR336.0 million). At June 2005 EUR26.4 million, EBITDA were also lower than the amount booked in June 2004 (EUR30.5 million). An analysis of the Group's results in the main geographic regions in which it operates is provided below. Italy The results for the first half of 2005 were somewhat lower than those reported in the same period last year, with revenues falling from EUR692.0 million to EUR678.2 million (-2.0%) and EBITDA decreasing from EUR47.3 million to EUR46.1 million (- 2.5%). The ratio of EBITDA to revenues was unchanged. While June revenues were down in 2005 compared with June 2004 (EUR113.5 million compared with EUR117.8 million), EBITDA showed a modest increase from EUR7.3 million to EUR7.4 million. If the affiliate Boschi S.p.A. in Extraordinary Administration is excluded, the performance of the Italian operations improved in the fist six months of 2005, with revenues up slightly and EBITDA almost unchanged. Market data show a modest contraction in the demand for fresh milk, but the Group increased its share of the UHT segment, due mainly to gains by the Zymil brand. The Parmalat and Kyr product lines performed well in the yogurt segment, despite the intense competition that characterizes this market. The fruit juice operations also showed good growth. Spain Revenues for the first half of 2005 were down 4.2% to EUR109.5 million (EUR114.3 million in 2004), but EBITDA increased both in absolute terms (up from EUR7.9 million to EUR8.1 million) and as a percentage of revenues (up from 7.0% to 7.4%). In June 2005, net revenues and EBITDA decreased, totaling EUR21.6 million and EUR1.6 million, respectively (EUR23.3 million and EUR2.0 million, respectively, in 2004), but the trend showed signs of improvement compared with the earlier months of the year. The start of promotional and advertising campaigns for products that are traditionally affected by seasonal factors (e.g., flavored milk beverages) and products that are being launched or repositioned (e.g., Santal Top fruit juices and Active Soja) had a positive effect on unit sales, which rose enough to offset the impact of higher promotional and advertising costs on profitability. Nevertheless, the Group's companies in Spain are still faced with the challenges discussed in previous press releases, which include an overall decrease in consumer demand and an extremely competitive market environment (especially in the yogurt and dessert businesses). South Africa In the first six months of 2005, the South African operations reported significantly better results than in the same period last year. Net revenues increased from EUR113.1 million to EUR134.4 million (+18.8%) and EBITDA jumped 46.2%, rising from EUR9.3 million (8.2% of revenues) to EUR13.6 million (10.1% of revenues). June revenues totaled EUR21.2 million and EBITDA amounted to EUR2.2 million (10.4% of revenues). Both revenues and EBITDA were significantly higher than in June 2004. Rising demand from consumers concerned with quality and wellness, who were responding to a timely increase in advertising and promotional investments; gains in production efficiency; and the steadily expanding coverage of the distribution network caused unit sales to grow in the first half of 2005 (pasteurized cream was the sole exception) compared with the same period last year. A reduction in overhead and the rise in the value of the South African rand versus the euro (+2.9% at the average exchange rate for the January-June 2005 period) were also positive factors. Market share was also up in the fruit juice, yogurt and cheese segments. Venezuela Even though revenues decreased to EUR71.6 million (EUR74.8 million in the first six months of 2004), the profitability of the Venezuelan operations improved dramatically during the first half of 2005. EBITDA rose both in absolute terms (from EUR2.1 million to EUR6.1 million) and as a percentage of revenues (from 2.7% to 8.5%). In June 2005, revenues totaled EUR12.6 million and EBITDA amounted to EUR0.6 million (4.8% revenues), up from EUR12.1 million and EUR0.4 million, respectively, in June 2004. While unit sales were down overall compared with the previous year, a shift in the sales mix contained the decline in revenues. A reduction in raw material costs and overhead, and the successful streamlining of the product line account for the improvement in profitability. However, promotional expenses were higher than in the same period last year. Lastly, it is important to keep in mind that the data in euros presented in this press release reflect the negative impact of a slide in the value of the bolivar (-17.7% compared with the average exchange rate for the period). Canada In the first six months of 2005, revenues increased to EUR599.5 million, or 7.5% more than the EUR557.6 million booked in the same period last year. EBITDA were also up, rising from EUR35.6 million to EUR45.4 million (+27.5%). As a result, the ratio of EBITDA to revenues improved from 6.4% to 7.6%. In June 2005, the Canadian operations reported higher revenues and EBITDA (EUR99.2 million and EUR10.0 million, respectively) than in June 2004, when the corresponding figures were EUR93.0 million and EUR8.4 million, respectively. Steady overall unit sales and a reduction in variable production costs and overhead are the main reasons for this improved performance. The Canadian dollar appreciated versus the euro during the first six months of 2005, with the average exchange rate rising by 3.3% compared with the same period in 2004. Australia Revenues for the first six months of 2005 grew to EUR193.3 million, up from EUR182.6 million in 2004. EBITDA were also up, rising both in absolute terms (from EUR13.8 million to EUR15.0 million) and as a percentage of revenues (from 7.6% to 7.7%). In June 2005, net revenues totaled EUR32.6 million and EBITDA increased to EUR2.5 million (EUR2.1 million in June 2004). Higher unit sales (especially pasteurized milk and yogurt) and a shift in the sales mix contributed to these improved results. At the same time, the launch of new streamlining projects (closure of two production facilities, exit from unprofitable product areas and markets and divestiture of non-strategic assets, such as a Coca-Cola bottling franchise) offset the negative impact of the higher prices paid for milk and packaging materials during the first half of 2005. There was no significant difference between the average exchange rates for the first six months of 2005 and 2004. Non-core Businesses In the first six months of 2005, the Group's Non-core Businesses reported revenues of EUR125.3 million, a decrease of 22.3% from pro forma revenues of EUR161.2 million in the same period last year. However, even though net revenues were down, chiefly as a result of the divestiture of the Mexican operations in 2004, EBITDA improved from a negative EUR15.1 million to a positive EUR11.1 million, due mainly to the successful implementation of cost cutting programs by the Group's other operations. Revenues for the month of June were EUR17.8 million and EBITDA amounted to EUR1.5 million. Full copy of Parmalat's first half results can be viewed free- of-charge at http://bankrupt.com/misc/Parmalat(1h2005).pdf. CONTACT: PARMALAT FINANZIARIA S.p.A. Legal Seat 43044 Collecchio (Pr) Via Oreste Grassi, 26 Administrative Seat 20122 Milan Piazza Erculea, 9 Phone: +39 02 806 8801 Fax: +39 02 869 3863 Web site: http://www.parmalat.net *********** 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 * * *