/raid1/www/Hosts/bankrupt/TCRLA_Public/050823.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
Tuesday, August 23, 2005, Vol. 6, Issue 166
Headlines
A R G E N T I N A
AEBA COOPERATIVA: General Report to be Filed August 24
CUSTOMWARE S.R.L.: Official Reorganization Update Due August 24
ENRON: To Retire TGS Stake
INFORMATICA Y COMUNICACIONES: Judge Approves Bankruptcy
MATAFUEGOS SEGURIDAD: Court Mandates Liqudation Process
SALTA HYDROCARBON: S&P CreditWatch Improves with Lower Risk
SCP: Shares Decline on CNV Fine
SPRINT TV: Court Favors Creditor's Involuntary Bankruptcy Motion
SUDAMERICAN S.A.: Trustee to Submit General Report
TORPEDOS S.R.L.: Trustee to File Individual Reports in Court
T.R.A.C.T.U.R.: Individual Reports Due August 24
B E R M U D A
INTELSAT: Negotiating to Acquire New Skies for $1.3B
SUMMIT INSURANCE: Creditors' First Meeting to be Held Sept. 22
B R A Z I L
XEROX CORP.: Fitch Upgrades Rating to 'BB+', Positive Outlook
C H I L E
MANQUEHUE NET: GTD to Take Over By Month End
SR TELECOM: 8.15% Debentures Exchange Offer Expires
C O L O M B I A
TELECOM: Govt. to Release Criteria for Partner Selection Soon
E C U A D O R
* ECUADOR: To Loan Oil from Venezuela to Honor Export Contracts
J A M A I C A
AIR JAMAICA: Bracing for $160M Year-End Loss
M E X I C O
AVIA DE MEXICO: Seeks OK for Marvin Mohney as Counsel
AVIA DE MEXICO: Wants Scheef & Stone as Special Counsel
BALLY TOTAL: Extends Noteholder Consent Period Until Aug. 25
SICARTSA: Director Warns Strike Could Lead to Permanent Closure
P A R A G U A Y
ACEPAR: Govt. Takes Action to Recover $24M Debt Payment
P U E R T O R I C O
DORAL FINANCIAL: Board Appoints Key Senior Management
U R U G U A Y
NBC: New Campaign Attracts $8.5M in Time Deposits
V E N E Z U E L A
EDC: US Parent Maintains Equity Stake Despite Woes
ROYAL SHELL: Withdraws From Mariscal Sucre Project
- - - - - - - - - -
=================
A R G E N T I N A
=================
AEBA COOPERATIVA: General Report to be Filed August 24
------------------------------------------------------
The general report containing an audit of the accounting and
business records of Aeba Cooperativa de Credito Consumo y
Vivienda Ltda. is due tomorrow, Aug. 24, 2005.
Mr. Hugo Pantaleo, who was appointed by Buenos Aires' civil and
commercial Court No. 26, submitted on June 26 the individual
reports. These claims underwent the verification phase which
ended on May 13, 2005.
The Company entered bankruptcy protection after the court, with
the assistance of Clerk No. 52, ordered the Company's
liquidation.
CONTACT: Aeba Cooperativa de Credito Consumo y Vivienda Ltda.
Florida 169
Buenos Aires
Mr. Hugo Pantaleo, Trustee
Avda Corrientes 1450
Buenos Aires
CUSTOMWARE S.R.L.: Official Reorganization Update Due August 24
---------------------------------------------------------------
The general report on the Customware S.R.L. bankruptcy case is
expected tomorrow, Aug. 24, 2005. Ms. Isabel A. Ramirez, the
court-appointed trustee shall include in the said report the
summary of the Company's financial status as well as relevant
events pertaining to the bankruptcy.
Customware S.R.L. began liquidating its assets following the
bankruptcy pronouncement issued by Court No. 2 of the city's
civil and commercial tribunal.
Ms. Ramirez authenticated creditors' proofs of claims until May
13, 2005. The validated claims were presented in court as
individual reports on June 28, 2005.
The bankruptcy process will end with the sale of the Company's
assets. Proceeds from the sale will be used to repay the
Company's debts.
CONTACT: Ms. Isabel A Ramirez, Trustee
Tte Gral Juan Domingo Peron 2082
Buenos Aires
ENRON: To Retire TGS Stake
--------------------------
Enron has begun the process of exiting from TGS, its last
remaining asset in Argentina, by transferring its 50% in Ciesa,
the controller of TGS, to local creditors, reports El Cronista.
In return, Enron will receive 19% of Class B shares, which the
bankrupt giant will use to pay off local debt.
Vulture funds led by Ashmore will replace Enron as shareholders
in Ciesa and thus partners with Petrobras, the Brazilian owner
of the remaining 50%.
Ciesa will have cleared 90% of the debt, says El Cronista.
Headquartered in Houston, Texas, Enron Corporation --
http://www.enron.com/-- is in the midst of restructuring
various businesses for distribution as ongoing companies to its
creditors and liquidating its remaining operations.
Enron filed for chapter 11 protection on December 2, 2001
(Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed
the Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed. The Confirmed Plan took effect on
Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,
Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in
their restructuring efforts.
INFORMATICA Y COMUNICACIONES: Judge Approves Bankruptcy
-------------------------------------------------------
Informatica y Comunicaciones S.A. was declared bankrupt after
Court No. 18 of Buenos Aires' civil and commercial tribunal
endorsed the petition of Ms. Aurora Barrera for the Company's
liquidation, Argentine daily La Nacion reports.
The court assigned Diana Panitch to supervise the liquidation
process as trustee. Ms. Panitch is tasked to validate creditors'
proofs of claim.
The city's Clerk No. 35 assists the court in resolving this
case.
CONTACT: Informatica y Comunicaciones S.A.
Jujuy 570
Buenos Aires
Ms. Diana Panitch, Trustee
Avenida Corrientes 1250
Buenos Aires
MATAFUEGOS SEGURIDAD: Court Mandates Liqudation Process
-------------------------------------------------------
Court No. 12 of Buenos Aires' civil and commercial tribunal
declared local company Matafuegos Seguridad S.R.L. "Quiebra",
relates La Nacion. The court approved the bankruptcy petition
filed by Mr. Manuel Primo Lozano, a creditor of the Company.
The Company will undergo the bankruptcy process with Mr. Leandro
Villari as trustee. Creditors are required to present proofs of
claim to Mr. Villari for verification before Oct. 8, 2005.
Creditors who fail to submit the required documents by the said
date will not qualify for any post-liquidation distributions.
Clerk No. 24 assists the court on the case.
CONTACT: Matafuegos Seguridad S.R.L.
Olaya 1642/44
Buenos Aires
Leandro Villari
Talcahuano 316
Buenos Aires
SALTA HYDROCARBON: S&P CreditWatch Improves with Lower Risk
-----------------------------------------------------------
Standard & Poor's Ratings Services placed Friday its 'CCC-'
rating on Salta Hydrocarbon Royalty Trust's (Salta Trust) $234
million 11.5% targeted amortization notes due 2015 on
CreditWatch with positive implications.
The CreditWatch placement reflects both improving performance of
the underlying assets and Standard & Poor's reassessment of the
province of Salta's oil and gas industry risk, on which the
transaction's cash flow is dependent. Salta Trust involves the
securitization of 80% of all royalty payments due to the
Argentine province of Salta from a group of 18 private companies
operating oil and gas concessions in the province. The
transaction has an insurance policy protecting the issuer from
the risk that it cannot transfer or convert currency needed for
debt service. The policy protects the issuer against these risks
for 31 months and a liquidity reserve fund protects it for an
additional six months.
Salta's Hydrocarbon industry performance analysis focuses on the
ability of the industry to produce royalties in an amount
sufficient to meet the obligations arising from the current
transaction. In turn, royalty generation is dependant on the
production and the price of the hydrocarbons produced in the
province, especially natural gas. Although the basin's
production is much lower than the original expectations due to
lower investments, crude oil prices are significantly higher
(despite export duties), and natural gas prices, which plummeted
in dollar terms in 2002, are slowly and slightly recovering,
somewhat offsetting the impact of lower production. However,
Standard & Poor's considers that the longer term performance of
the industry and its ability to generate royalties will be
heavily influenced by the institutional environment in the
country, which could foster investments in new drilling,
exploration, and development of new fields, therefore reverting
the current decreasing trend in production and the impact of
taxes (such as export duties) that could affect realization
prices. Standard & Poor's will continue to focus its analysis on
natural gas production because, given the geological complexity
of the basin, hydrocarbon production is heavily leveraged toward
natural gas (approximately 6 to 1 for crude oil). Nevertheless,
given its relative price compared with natural gas, crude oil
will continue to play a significant part in the transaction, at
least in the medium term, as evidenced by crude oil generating
almost half of the royalties produced by natural gas.
Despite the Argentine sovereign economic crisis and the
pesification of the oil and gas tariffs, Salta Trust has been
performing adequately for the past 12 months. After being
negatively affected in early 2002, the transaction's cash flows
began recovering at a solid pace. After not being able to pay
the scheduled principal payment in December 2002, the
transaction has been current with all interest payments, and it
even resumed partial principal payments in 2003. The rating
assigned to the transaction addresses the timely payment of
interest and the ultimate repayment of principal. Consequently,
because all interest payments were made since the issuance date,
no events of default have been triggered. Standard & Poor's
expects the performance of the transaction's cash flow to
continue improving in the next few months. As of the end of June
2005, Salta Trust has paid interest and principal totaling
$133.3 million and has an outstanding principal balance of
$217.4 million. Although principal payments have not followed
the original theoretical schedule, Salta Trust has been
increasing principal amortization payments for the past year as
a result of improving collateral performance. Collections have
totaled $142.2 million since the issuance date. Additionally,
the target payment coverage ratio, calculated as the ratio of
the last two collection periods and the last two debt service
payments, has been stable during the past year.
Over the next month, Standard & Poor's will conduct a detailed
review of the credit and financial performance and remaining
credit support for the transaction and determine whether an
upgrade is warranted. The rating could be raised approximately
three to four notches.
Primary Credit Analyst:
Maria Sol Ventura, Buenos Aires
Tel: (54) 11-4891-2114
E-mail: maria_sol_ventura@standardandpoors.com
Secondary Credit Analyst:
Juan Pablo De Mollein, New York
Tel: (1) 212-438-2536
E-mail: juan_demollein@standardandpoors.com
Pablo Lutereau, Buenos Aires
Tel: (54) 114-891-2125
E-mail: pablo_lutereau@standardandpoors.com
SCP: Shares Decline on CNV Fine
-------------------------------
Sociedad Comercial del Plata (COME.BA) saw its shares falling in
early trading Friday in the wake of a decision by the country's
securities regulator, the CNV, to slap a fine on the directors
of SCP's holding company, Solfina SA. Dow Jones Newswires
recounts that the CNV issued a resolution on July 28, imposing a
total ARS500,000 penalty on the five board members of Solfina
SA, a company wholly owned by the Soldati family.
The CNV revealed that a Switzerland-based investment vehicle
headed by a Soldati family friend sold SCP shares on behalf of
Solfina in the days before SCP missed a capital payment on a
bond series. The securities regulator said Solfina's board of
directors knew about the impending default and acted
accordingly.
Among the directors who were fined are SCP President Santiago
Soldati and Hector Giorgetti, a longtime associate of the
Soldatis' who served as president of the family-owned insurance
business and was Solfina's financial advisor.
SCP is in the midst of completing a debt restructuring.
CONTACT: Sociedad Comercial del Plata
Av. Davila 350
Buenos Aires, Argentina
Phone: 54 1 310-0490
Fax: 54 1 310-0493
SPRINT TV: Court Favors Creditor's Involuntary Bankruptcy Motion
----------------------------------------------------------------
Court No. 12 of Buenos Aires' civil and commercial tribunal
declared Sprint TV S.A. bankrupt, says La Nacion.
Trustee Luis Chelala will examine and authenticate creditors'
claims until Oct. 18, 2005. This is done to determine the nature
and amount of the Company's debts. Creditors must have their
claims authenticated by the trustee by the said date in order to
qualify for the payments that will be made after the Company's
assets are liquidated.
Clerk No. 23 assists the court on the case, which will conclude
with the liquidation of the Company's assets.
CONTACT: Sprint TV S.A.
Hipolito Yrigoyen 850
Buenos Aires
Luis Chelala
Avenida Corrientes 2335
Buenos Aires
SUDAMERICAN S.A.: Trustee to Submit General Report
--------------------------------------------------
Trustee Ernesto Horacio Garcia will submit the general report on
the Sudamerican S.A. reorganization tomorrow, Aug. 24, 2005.
Buenos Aires' civil and commercial Court No. 5 appointed Mr.
Garcia to supervise the ongoing bankruptcy case of Sudamerican
S.A., which was then converted into a "concurso preventivo".
Mr. Garcia submitted the individual reports on the creditors'
claims to court on June 28, 2005, after the verification
of claims of creditors of Sudamerican S.A. ended on May 30,
2005.
An informative assembly between the Company and its creditors
will take place on February 24, 2006.
CONTACT: Sudamerican S.A.
La Pampa 2037
Buenos Aires
Mr. Ernesto Horacio Garcia, Trustee
Montevideo 536
Buenos Aires
TORPEDOS S.R.L.: Trustee to File Individual Reports in Court
------------------------------------------------------------
Ms. Beatriz Susana Stachesky, the court-appointed trustee for
the Torpedos S.R.L. bankruptcy, will present in court the
individual reports on the claims of the Company's creditors
tomorrow, Aug. 24, 2005. Ms. Stachesky stopped authenticating
the proofs of claim until on June 28, 2005.
Torpedos S.R.L. bankruptcy protection was initiated following a
ruling from Court No. 3 of Buenos Aires' civil and commercial
tribunal, with the assistance of Clerk No. 6, ordering the
Company's liquidation.
The trustee will also prepare a general report containing an
audit of the Company's accounting and business records. This
will be submitted on Oct. 5, 2005.
CONTACT: Torpedos S.R.L.
25 de Mayo 597
Buenos Aires
Ms. Beatriz Susana Stachesky, Trustee
Avda Cordoba 817
Buenos Aires
T.R.A.C.T.U.R.: Individual Reports Due August 24
------------------------------------------------
The individual reports on the claims of creditors of
T.r.a.c.t.u.r. Viajes y Turismo S.R.L. are to be submitted
tomorrow, Aug. 24, 2005. The court-appointed trustee Alejandra
E. Giacomini stopped reviewing the claims on June 27, 2005.
The Company began liquidating its assets after Court No. 22 of
Buenos Aires' civil and commercial tribunal declared the company
bankrupt.
Ms. Giacomini is also tasked to prepare the general report and
submit it on Oct. 6, 2005 for court approval.
Clerk No. 43 assists the court on this case.
CONTACT: Ms. Alejandra E Giacomini
Avda Carabobo 250
Buenos Aires
=============
B E R M U D A
=============
INTELSAT: Negotiating to Acquire New Skies for $1.3B
----------------------------------------------------
Intelsat Ltd., a Bermuda-based communications satellite
operator, is in talks to acquire smaller rival New Skies
Satellites Holdings Ltd. for US$1.3 billion, The Wall Street
Journal reports, citing people familiar with the matter.
New Skies was bought by private equity firm Blackstone Group in
November and it brought more than 37% of the company public in a
New York Stock Exchange listing in May. It was formed by a 1998
spinoff from Intelsat, when Intelsat was going private.
Wachovia analyst Jeff Wlodarczak suggested that the reported
price implies a deal worth US$25 to US$26 per share, a premium
of 22% to 27% over the stock's closing price on Thursday.
"The final price could end up higher," said Mr. Wlodarczak, who
said the reported price was attractive for both players and that
a deal could yield cost cuts.
"We would be surprised if a transaction is not consummated,"
Wlodarczak said in a note to clients.
Combined, Intelsat and New Skies would have 33 satellites in
orbit, including five relatively young New Skies satellites
designed to carry video, Internet and telephone calls.
CONTACT: Intelsat
E-mail: media.relations@intelsat.com
Phone: 1 202-944-7500
SUMMIT INSURANCE: Creditors' First Meeting to be Held Sept. 22
--------------------------------------------------------------
IN THE SUPREME COURT OF BERMUDA COMPANIES (WINDING-UP)
And
IN THE MATTER OF THE COMPANIES ACT 1981
And
IN THE MATTER OF Summit Insurance Company Ltd.
NOTICE TO CREDITORS OF FIRST MEETING
(Under the order for Winding-up the above-named Company dated
the October 22, 2004)
NOTICE IS HEREBY GIVEN that the First Meeting of creditors in
the above matter will be held at Government Administration
Building, 30 Parliament Street, Hamilton HM 12, Bermuda on
September 22, 2005 at 10:30 a.m. for the purpose of determining
whether or not an application is to be made to the Supreme Court
of Bermuda for the appointment of a Permanent Liquidator, in
place of the Provisional Liquidator, and a Committee of
Inspection. Forms of General and Special Proxies and Proof of
Debt are enclosed herewith.
Proofs of Debt and Proxies to be used at the meeting must be
lodged with the Provisional Liquidator at the offices of the
Official Receiver, Government Administration Building, 30
Parliament Street, Hamilton HM 12, Bermuda, marked for the
immediate attention of Carolyn Dutton no later than 5:00 p.m.,
September 20, 2005.
At the First Meeting of Creditors, the Creditors may amongst
other things:
1. By resolution determine whether or not an application is to
be made to the Supreme Court of Bermuda to appoint a Permanent
Liquidator in place of the Provisional Liquidator; and
2. By resolution determine whether or not an application shall
be made to the Supreme Court of Bermuda for the appointment of a
Committee of Inspection to act with the Liquidator, and who are
to be the members of the Committee of Inspection if appointed.
If a Liquidator is not appointed by the Supreme Court of Bermuda
then the Official Receiver will be the Liquidator.
Dated August 10, 2005.
Stephen E. Lowe
Official Receiver and Provisional Liquidator
Summit Insurance Company Ltd.
===========
B R A Z I L
===========
XEROX CORP.: Fitch Upgrades Rating to 'BB+', Positive Outlook
-------------------------------------------------------------
Fitch Ratings has upgraded Xerox Corp. and its subsidiaries'
senior unsecured debt to 'BB+' from 'BB', trust preferred
securities to 'BB-' from 'B+' and affirmed the senior secured
bank credit facility at 'BBB-'. The Rating Outlook remains
Positive. Approximately $5.8 billion of securities are affected
by Fitch's action.
Fitch's rating actions and positive outlook reflect Xerox's
improved credit protection measures, adequate liquidity profile,
consistent operating and financial performance, significant
reduction in core debt, and progress in reducing both the
proportion and total dollar value of secured debt in the capital
structure. Xerox continues to execute its operating strategy,
and despite challenging prospects for revenue growth in the near
term, Fitch expects operating performance will remain stable.
Consistent financial and operational performance and strong free
cash flow, along with continued core and secured debt reduction,
could result in further positive rating actions.
Fitch's rating concerns center on strong competition, Xerox's
inability to achieve consistent revenue growth, and lagging but
improving performance in Xerox's Developing Markets Operations
(DMO) segment, specifically Brazil. In addition, Fitch remains
concerned about the recent gross margin deterioration in the
second quarter ended June 30, 2005 as a result of product mix
shifts in the office and production segments. Fitch anticipates
tepid revenue growth for the remainder of 2005 with margin
pressures associated with the company's various end markets,
particularly the office and low-end printer segments.
Credit protection measures for the latest 12 months ending June
30, 2005, continue to improve, especially Xerox's core debt
metrics. Xerox's leverage, measured by total debt to total
operating EBITDA, is estimated to be approximately 4.3 times (x)
compared to 5.1x and 5.4x for year-end 2004 and 2003,
respectively. Similarly, Fitch estimates Xerox's core leverage
(defined as non-financing debt divided by non-financing
operating EBITDA) at June 30, 2005 declined to approximately
1.6x compared to 2.3x for fiscal 2004 and 2.7x for fiscal 2003.
In addition, the company's overall interest coverage (including
the financing segment) was 3.2x, while Fitch estimates core
interest coverage (defined as core operating EBITDA divided by
core interest expense) was approximately 4.8x for the latest 12
months ended June 30, 2005, compared to 4.1x and 3.0x for fiscal
2004 and 2003. Fitch expects overall and core credit protection
measures to gradually improve as a result of core debt reduction
from free cash flow along with relatively flat operational
EBITDA.
The company's liquidity at June 30, 2005 consisted of more than
$2.1 billion of cash and short-term investments, consistent
annual free cash flow above $1.5 billion the last three years,
and an undrawn $700 million bank facility revolver expiring
September 2008. The bank facility is available, without sub-
limit, to Xerox and certain foreign borrowers of Xerox,
including Xerox Canada Capital Limited, Xerox Capital (Europe)
plc, and other qualified foreign subsidiaries. Fitch believes
that Xerox has more than sufficient liquidity and financial
flexibility to meet upcoming debt maturities and absorb a
reasonable adverse monetary outcome from any currently
outstanding litigation.
To support business growth, Xerox also has access to a secured
eight-year $5 billion credit facility provided by General
Electric Vendor Financial Services expiring in October 2010.
This facility is used for secured loans backed by U.S. finance
receivables arising from the sale of Xerox's products. At June
30, 2005, nearly $3 billion was available under this facility.
In addition, in June 2004 Xerox arranged a three-year $400
million revolving credit facility secured by U.S. trade
receivables with General Electric Capital Corp.; as of June 30,
2005, approximately $172 million was drawn from this facility.
Additionally, Xerox has various multi-year committed secured
funding facilities totaling approximately $1.8 billion, of which
approximately $400 million was available at June 30, 2005. Xerox
will continue to access the aforementioned financing facilities
in the near term, but Fitch expects the company to gradually
reduce its reliance on these vendor financing programs by
internally funding a higher proportion of customer financing
receivables.
As of June 30, 2005, total debt was $8.9 billion, excluding the
$889 million of mandatorily convertible preferred stock
converting July 2006. Total debt consists of $3.9 billion of
senior unsecured debt, $736 million of liabilities to subsidiary
trusts issuing preferred securities (mandatorily redeemable in
2027), and $4.2 billion of secured debt, consisting primarily of
a $300 million bank term loan due 2008, $3.7 billion secured by
financing receivables, and $172 million secured by trade
receivables. Debt secured by finance receivables accounted for
41.1% of total debt and Fitch believes this percentage will
gradually decline as the company reduces the proportion of
secured debt in the capital structure. Xerox's finance
receivables totaled $7.9 billion at June 30, 2005. Debt
maturities for the second half of 2005 are estimated to be $884
million, of which only $178 million is unsecured debt and the
remaining amount is debt secured by finance receivables. Fitch
believes free cash flow along with a strong cash balance will
enable the company to manage debt maturities and other
obligations. Additional cash outlays are expected to continue in
2005 for the company's pension plans as well as cash charges for
previously announced restructuring actions, primarily for
severance payments.
In addition to Xerox Corp., the ratings affected are: Xerox
Credit Corp. and Xerox Capital (Europe) plc's rated senior debt,
and Xerox Corp.'s $1 billion senior secured bank credit facility
($700 million revolver and $300 million term loan), which is
also available to Xerox Canada Capital Limited and Xerox Capital
(Europe) plc.
Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from
this site, at all times. Fitch's code of conduct,
confidentiality, conflicts of interest, affiliate firewall,
compliance and other relevant policies and procedures are also
available from the 'Code of Conduct' section of this site.
CONTACT: Fitch Ratings, New York
Nick P. Nilarp, CFA
212-908-0649
John M. Witt, CFA
212-908-0673
Brendan Buckley
212-908-0640
For information on Xerox Corp.
Philip S. Walker, Jr., CFA
212-908-0624
For information on Xerox Credit Corp.
Brian Bertsch, 212-908-0549 (Media Relations)
=========
C H I L E
=========
MANQUEHUE NET: GTD to Take Over By Month End
--------------------------------------------
Telecoms holding company Grupo GTD expects to assume control of
Manquehue Net on August 31 in an operation worth a total of
US$27 million, reports Business News Americas. GTD Teleductos
will acquire 49% of Manquehue's shares and in a separate
contract plans to acquire 100% of the telco's debt.
Even after the operation is completed, GTD and Manquehue Net
will continue to operate as independent companies, mostly
because of Manquehue's strength in the residential segment,
according to previous reports.
GTD will continue to be a corporate orientated brand, while
Manquehue plans to fortify its presence with greater penetration
in the broadband market, specifically in the higher income
segments.
SR TELECOM: 8.15% Debentures Exchange Offer Expires
---------------------------------------------------
SR Telecom Inc. (TSX: SRX - News; Nasdaq: SRXA - News) announced
the expiration of its offer to exchange its outstanding CDN$71
million 8.15% debentures due August 31, 2005 (the "8.15%
Debentures") and accrued interest thereon of approximately
CDN$4.8 million into new 10% Secured Convertible Debentures due
October 15, 2011 (the "10% Secured Convertible Debentures"). The
offer expired at 5:00 p.m., Eastern Time, on August 18, 2005.
The exchange offer occurred as part of the Corporation's
recapitalization plan, announced in May 2005. At that time, SR
Telecom closed an operating credit facility of USD$39.6 million
with certain holders of its 8.15% Debentures, including certain
funds and accounts managed by DDJ Capital Management, LLC. In
addition, Inter-American Development Bank and Export Development
Canada agreed to restructure the terms of the loans to SR
Telecom's Chilean subsidiary, Comunicacion rurales y telefonia,
and postpone maturity for three years from the date of the
implementation of the restructuring.
SR Telecom was pleased to announce that, pursuant to the
exchange offer, CDN$70.5 million in principal amount of the
8.15% Debentures were tendered, representing approximately 99.3%
of the outstanding 8.15% Debentures. In exchange, the
Corporation will issue CDN$75.3 million of 10% Secured
Convertible Debentures to those holders of 8.15% Debentures who
tendered at the closing on account of principal and interest.
Funds and accounts managed by DDJ Capital Management, LLC will
hold approximately 33% of the outstanding 10% Secured
Convertible Debentures upon consummation of the exchange offer.
In addition, under the exchange offer, SR Telecom received the
required consents to amend the terms of the 8.15% Debentures to,
among other things, extend the maturity thereof to coincide with
the maturity date of the 10% Secured Convertible Debentures and
remove certain covenants. Holders of 8.15% Debentures who did
not tender under the exchange offer will continue to hold such
debentures.
Interest on the 10% Secured Convertible Debentures is payable in
cash or in kind by the issuance of additional 10% Secured
Convertible Debentures, at the option of SR Telecom. The 10%
Secured Convertible Debentures will be convertible into common
shares at a rate of approximately 4,606 common shares per
CDN$1,000 in principal amount of 10% Secured Convertible
Debentures representing a conversion price at closing of
approximately $0.217 per common share such that the outstanding
principal amount of all 10% Secured Convertible Debentures are
convertible into 95.2% of the fully diluted common shares of the
Corporation upon closing of the exchange offer.
On the earlier of the business day following the record date for
a rights offering being contemplated by the Corporation and
November 30, 2005, CDN$10 million in principal amount of the 10%
Secured Convertible Debentures will be converted into
approximately 46,060,892 common shares of the Corporation, and
immediately after the issuance, those holders of 10% Secured
Convertible Debentures that were converted will hold
approximately 72% of the common shares of the Corporation on an
undiluted basis.
The exchange offer was launched on July 21, 2005 and was subject
to terms and conditions set forth in a private offering
memorandum and consent solicitation statement sent to holders of
8.15% debentures. As all conditions of the exchange offer have
been met, the closing of the exchange offer is expected to take
place on or after August 22, 2005, upon completion of all
regulatory filings.
This press release is not an offer of securities for sale in the
United States. Securities may not be offered or sold in the
United States in the absence of registration or an exemption
from registration. Any public offering in the United States will
be made by means of a prospectus that may be obtained from SR
Telecom, and that will contain detailed information about the
Corporation and management, as well as financial statements.
About SR Telecom
SR TELECOM (TSX: SRX, Nasdaq: SRXA) designs, manufactures and
deploys versatile, Broadband Fixed Wireless Access solutions.
For over two decades, carriers have used SR Telecom's products
to provide field-proven data and carrier-class voice services to
end-users in both urban and remote areas around the globe. SR
Telecom's products have helped to connect millions of people
throughout the world.
A pioneer in the industry, SR Telecom works closely with
carriers to ensure that its broadband wireless access solutions
directly respond to evolving customer needs. Its turnkey
solutions include equipment, network planning, project
management, installation and maintenance.
SR Telecom is a principal member of WiMAX Forum, a cooperative
industry initiative which promotes the deployment of broadband
wireless access networks by using a global standard and
certifying interoperability of products and technologies.
About DDJ Capital Management, LLC
DDJ Capital Management, LLC is a boutique investment manager
specializing in private equity and debt financings, as well as
high yield and special situations investing. Founded in 1996,
the Wellesley, Massachusetts based investment firm currently
manages approximately $3 billion on behalf of 78 institutional
clients.
CONTACT: Mr. William E. Aziz, Interim President and CEO
(514) 335-2429 Ext.4613
===============
C O L O M B I A
===============
TELECOM: Govt. to Release Criteria for Partner Selection Soon
-------------------------------------------------------------
The Colombian government will outline the criteria to choose a
partner for state-run telco Colombia Telecomunicaciones
(Telecom) in a document, which will be presented to the national
political, economic and social council Conpes anytime soon.
The document, according to a Business News Americas report, will
establish the following:
- conditions for the new partner such as how it must deal with
Telecom's COP6 billion (US$2.6mn) in pension liabilities;
- guidelines for maintaining coverage in areas where the
Company now operates;
- a guarantee that Telecom will be able to enter the mobile
business; and
- a guarantee that the state will not sell its entire stake in
Telecom.
Once a partner has been chosen, the companies will have to
publish the conditions of any eventual agreement to make the
process fully transparent for the population, and Telecom is
expected to remain open to better proposals if they arise.
=============
E C U A D O R
=============
* ECUADOR: To Loan Oil from Venezuela to Honor Export Contracts
---------------------------------------------------------------
After declaring a force majeure on oil exports, Ecuador will
propose loaning oil from Venezuela to help it meet export
commitments, Dow Jones Newswires reports. Economy Minister
Magdalena Barreiro said the country's foreign minister is now
traveling to Cuba where he hopes to meet with Venezuelan
President Hugo Chavez, who would be visiting President Fidel
Castro. Mr. Barreiro gave no details on the amount of oil that
Ecuador would borrow or the conditions of such a loan.
The economy minister says he is confident that if Venezuela
loans Ecuador the oil, markets will be calm enough to allow the
planned issuance of US$500 million in bonds, which Ecuador would
use to help cover its fiscal gap, within six to seven weeks and
at a maximum coupon of 8.5%. Venezuela has committed to buying
US$300 million of the dollar-denominated issue.
Petroecuador was forced to declare a force majeure on oil
exports after five days of violent protests in two oil-rich
Amazonian provinces where the heart of Ecuador's oil industry is
based.
Barreiro said financial losses resulting from the protests would
run as $634 million, of which $433 million corresponds to lost
fiscal oil income, $30 million to scheduled but unfulfilled fuel
oil and naphtha exports and $30 million to help Petroecuador
with repairs to its oil facilities. The remaining $141 million
will cover the necessary fuel.
Ecuador will import $141 million in oil derivatives to help
manage the impact of the protests wracking the oil sector.
Six-country group Fondo Latinoamericano de Reservas (FLAR),
which supports the balance of payments of its members including
Ecuador through loans or loan guarantees from other lenders to
central banks, has also agreed to extend Ecuador a US$400-
million loan, said Barreiro, assuring that Ecuador will honor
all its foreign debt obligations.
=============
J A M A I C A
=============
AIR JAMAICA: Bracing for $160M Year-End Loss
--------------------------------------------
National carrier Air Jamaica expects to record a loss of US$160
million, the biggest to date, by year-end, according to The
Jamaica Observer. The carrier is expecting this figure as it
anticipates a further 35% reduction in passenger loads with the
onset of competition from low-budget airline Spirit Airlines
(this November), Richard Branson's Virgin (flying Boeing 747s
next July) and American Airlines adding capacity on Jamaican
routes.
What is worse, a number of "super managers," who were supposed
to resuscitate Air Jamaica, have left disenchanted with the
government-controlled operation for higher-paying executive
positions with larger entities.
Mike Going, who was in charge of Air Jamaica's Sales and
Marketing, left to become President of Certified Vacations,
which is the in-house tour operator for Delta and Continental
airlines.
Brian Shilling, the former President of Air Jamaica Vacations
(its tour arm), left in March of this year to join US Air as
President. US Air has fifteen times the number of aircraft that
Air Jamaica has.
John Lewis, regarded as a very effective financial operations
manager, left the airline disgruntled and signed up with Air
Jamaica Express, which is still run by the Air Jamaica
Acquisition Group (AJAG).
Richard Lue, who was the director of sales and marketing, North
America (ethnic), has also left the beleaguered national
carrier.
According to a former senior Air Jamaica executive, the present
management team possesses very little commercial airline
expertise.
Last month, the Minister of Finance said that by the end of this
year he expects a new chief executive officer to be appointed.
Aubyn Hill, a banker with tremendous ability, was appointed as
chief restructuring officer but his tenure is now over.
Senior Air Jamaica managers say that it is remiss of the new
team not to utilize experience garnered by the former President
and CEO of Air Jamaica Christopher Zacca.
CONTACT: AIR JAMAICA
Corporate Communications
Tel: 876-922-3460 ext 4060-5
URL: www.airjamaica.com
===========
M E X I C O
===========
AVIA DE MEXICO: Seeks OK for Marvin Mohney as Counsel
-----------------------------------------------------
Avia Energy Development, LLC, and Avia de Mexico S. de R.l. de
CV ask the U.S. Bankruptcy Court for the Northern District of
Texas for permission to employ Marvin R. Mohney, Esq., of
Dallas, Texas, as their general bankruptcy counsel.
Mr. Mohney is expected to:
(a) furnish legal advice to the Debtor with regard to its
powers, duties and responsibilities as a debtor-in-
possession and the continued management of its affairs and
assets under chapter 11;
(b) prepare, for and on behalf of the Debtor, all necessary
applications, motions, answers, orders, reports and other
legal papers;
(c) prepare a disclosure statement and plan of reorganization
and other related services;
(d) investigate and prosecute preference and fraudulent
transfers actions arising under the avoidance powers of
the Bankruptcy Code, including rendering assistance and
advice to such other counsel as the Court may authorize
the Debtor to engage for special purposes; and
(e) perform all other legal services for the Debtor, which may
be necessary.
Mr. Mohney will bill the Debtors $225 per hour for his
professional services.
The Debtors believe that Mr. Mohney is a "disinterested person"
as that term is defined in Section 101(14) of the U.S.
Bankruptcy Code.
Headquartered in Dallas, Texas, Avia Energy Development, LLC,
and Avia de Mexico S. de R.l. de CV filed for chapter 11
protection on August 18, 2005 (Bankr. N.D. Tex. Case No. 05-
39339). Kimberly A. Elkjer, Esq., Scheef & Stone, LLP, and
Marvin R. Mohney, Esq., in Dallas, Texas, represent the Debtors.
When the Debtors filed for protection from their creditors, they
listed $2,298,509 in consolidated assets and $11,768,065 in
consolidated debts. (Troubled Company Reporter, Monday, August
22, 2005, Vol. 9, No. 197)
AVIA DE MEXICO: Wants Scheef & Stone as Special Counsel
-------------------------------------------------------
Avia Energy Development, LLC, and Avia de Mexico S. de R.l. de
CV ask the U.S. Bankruptcy Court for the Northern District of
Texas for permission to employ Scheef & Stone, LLP, as their
special
bankruptcy counsel.
Scheef & Stone will, inter alia:
(a) represent the Debtors in connection with two consolidated
litigation matters pending in the 192nd Judicial District
Court of Dallas County, Texas;
(b) represent the Debtors in connection with the Clay Tanks
case pending in the 381st District Court of Starr County,
Texas;
(c) represent the Debtors in connection with a Travelers
Casualty and Surety Company of America case pending in the
381st Judicial District Court of Starr County, Texas.
Kimberly A. Elkjer, Esq., a partner at Scheef & Stone, LLP,
discloses that the Firm received a $65,544 prepetition retainer.
As of Aug. 17, 2005, the Debtor still owes $19,576 to the Firm.
James C. Musselman, the Debtors' president, assures the Firm
that it will be paid before the end of August 2005. The current
hourly rates of the Firm's professionals are:
Designation Hourly Rate
----------- -----------
Partners $250 - $300
Associates $170 - $250
Paralegals $90 - $120
The Debtors assure the Court that Scheef & Stone, LLP, is a
"disinterested person" as that term is defined in Section
101(14) of the U.S. Bankruptcy Code. (Troubled Company Reporter,
Monday, August 22, 2005, Vol. 9, No. 197)
BALLY TOTAL: Extends Noteholder Consent Period Until Aug. 25
------------------------------------------------------------
Bally Total Fitness Holding Corporation (NYSE: BFT) announced
Friday that it has extended the consent period relating to
waivers of financial reporting covenant defaults under its
public bond indentures to 5:00 p.m., New York City time, on
August 25, 2005. The Company continues to negotiate with
noteholders to secure a waiver extension and has received
consent from holders of 42.83% of the Senior Notes and 96.33% of
the Senior Subordinated Notes.
The Company also announced that it has paid the previously
announced judgment confirming an arbitration award against the
Company of approximately $14.3 million, relating to a
contractual dispute arising from a program of transferring
membership receivables balances into a credit card program.
As previously announced, the Company recently received consent
from the lenders under its $275 million secured credit agreement
to extend the cross default deadline relating to Bally's
financial reporting covenant defaults under its public bond
indentures to August 31, 2005. After August 31, 2005, unless the
indenture financial reporting covenant defaults are cured or
waived, over $700 million of Bally's debt obligations under its
credit agreement and indentures could become immediately due and
payable.
Except as set forth herein, the terms of the Consent
Solicitations remain the same as set forth in the Consent
Solicitation Statements previously distributed to noteholders.
As previously announced, Bally has retained Deutsche Bank
Securities Inc. to serve as its solicitation agent and MacKenzie
Partners, Inc. to serve as the information agent and tabulation
agent for the consent solicitation. Questions concerning the
terms of the consent solicitation should be directed to Deutsche
Bank Securities Inc., 60 Wall Street, 2nd Floor, New York, New
York 10005, Attention: Christopher White. The solicitation agent
may be reached by telephone at (212) 250-6008. Requests for
documents may be directed to MacKenzie Partners, Inc., 105
Madison Avenue, New York, New York 10016, Attention: Jeanne Carr
or Simon Coope. The information agent and tabulation agent may
be reached by telephone at (212) 929-5500 (call collect) or
(800) 322-2885 (toll-free).
As of Monday, August 15, 2005 23:59, the latest Comtex
SmarTrend(SM) Alert, an automated pattern recognition system,
indicated a downtrend on August 8, 2005 for BFT at $3.14.
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 Holding
Matt Messinger
Phone: 773-864-6850
URL: www.ballyfitness.com
or
Public Relations
MWW Group
Carreen Winters
Phone: 201-507-9500
SICARTSA: Director Warns Strike Could Lead to Permanent Closure
---------------------------------------------------------------
The Sicartsa strike, which labor judge Silvia Ortega validated
last week, could eventually lead to the permanent closure of the
Grupo Villacero steel unit, Business News Americas reports,
citing general operations director Sergio Villarreal.
Some 2,000 steel workers have been on strike since Aug. 1 at
Sicartsa over a series of labor disputes.
Protesters are blocking deliveries of primary materials to
Sicartsa's coking plant, which helps heat the furnace. If the
Company cannot heat the furnace, the plant would shut down and
take at last two years and US$400 million to put back into
operation.
"I don't know how much more we can take... with a cost of US$400
million, maybe it won't be profitable to open back up again,"
Mr. Villareal said.
According to Grupo Villacero financial director Ignacio Trevino,
the Company was losing US$3 million a day in production from the
Sicartsa steel plant, which produces 5,000 metric tons a day of
liquid steel 365 days a year.
Although the Company had sufficient resources to stay afloat
"for quite some time," Mr. Trevino said that the strike is
illegal and that the Company should be allowed to continue
operations as talks continue.
"Evidently the situation is deteriorating because there hasn't
been any advance in talks with the union, and our installations
at Sicartsa continue to be seized, which is affecting the entire
population in Lazaro Cardenas," Mr. Trevino said.
===============
P A R A G U A Y
===============
ACEPAR: Govt. Takes Action to Recover $24M Debt Payment
-------------------------------------------------------
Paraguay President Nicanor Duarte has formed a legal team to
enforce a US$24-million debt payment from steelmaker Acepar,
reports Business News Americas. Mr. Duarte hinted at returning
Acepar to state ownership if the Company fails to pay the debt
owed to the government.
Acepar was privatized in 1997 and is now controlled by an
Argentine and Paraguayan business consortium, while workers hold
a 33.33% stake.
Under the privatization process, which required payments of
US$40 million, the Company has not missed any deadlines, and has
already paid US$14 million, an unnamed Acepar executive
insisted.
Acepar had until 2009 to pay off the total outstanding debt of
US$26 million, the executive said.
"In November 2004, we paid US$2.3 million for the first
installment of the outstanding amount," he explained.
=====================
P U E R T O R I C O
=====================
DORAL FINANCIAL: Board Appoints Key Senior Management
-----------------------------------------------------
Doral Financial Corporation (NYSE: DRL) announced Friday that
the Board of Directors has determined that it is in the best
interest of Doral to begin the process of implementing changes
in Doral's senior management in order to complete the Company's
previously announced financial restatement process and move the
Company forward following the restatement.
Accordingly, Zoila Levis has been appointed Vice Chairman of the
Board and will continue to serve Doral as its President, Chief
Operating Officer and a Director. John Ward has been appointed
Chief Executive Officer on an interim basis, effective September
15, 2005. Salomon Levis is resigning from his position as Chief
Executive and as a member of the Doral Board of Directors
effective September 15, 2005. Similarly, David Levis has
resigned as Director Emeritus effective August 19, 2005. Mario
S. Levis, who has been Doral's Treasurer, also has agreed to
resign effective August 19, 2005. Lidio Soriano has been
appointed by the Board to Chief Financial Officer on an interim
basis, succeeding Ricardo Melendez, who has been terminated
effective August 19, 2005. The Board appointed Julio Micheo to
the position of Treasurer.
The Doral Board plans to undertake a thorough search for a
permanent Chief Executive Officer and a Chief Financial Officer.
After receiving a report from Latham & Watkins LLP, independent
counsel for the outside directors of the Board, the Board
determined that these management changes are in the best
interest of the Company as it proceeds to resolve the issues
raised by the need to restate its financial statements as
announced on April 19, 2005.
The Company continues to work expeditiously to complete the
previously announced restatement of its financial statements for
one or more of the periods ending on or prior to December 31,
2004, and to become current in its filings with the Securities
and Exchange Commission. The investigation being conducted by
Latham Watkins LLP into the facts and circumstances relating to
the restatement is continuing.
John Ward stated, "The Company's Board of Directors determined
that these changes give Doral the basis for a fresh start and a
highly professional management team to implement a clear
business model to grow the company following the restatement
process. Doral's Board and management are committed to providing
audited financial statements as soon as possible, and to
ensuring the integrity of our processes and controls. While the
Board appreciates both the Company's prior leadership in
positioning Doral as a leader in financial services in Puerto
Rico and selected growth markets in New York City, and
recognizes the Levis' substantial ongoing ownership in the
Company, it determined that a revitalization of Doral's
leadership is necessary to position the franchise optimally for
success going forward."
Zoila Levis said, "Doral Financial is a company with an
outstanding franchise, and the ongoing performance of our
operations is strong. Our experienced business segment
leadership will continue to build the Doral franchise and I am
confident that as we put a new senior management team in place
for the long term, Doral's position will be further enhanced as
the Company moves forward."
Ms. Levis, 57, has served as President of the Company since
1991. She is a leading executive in the financial services
industry in Puerto Rico and is current President of the Puerto
Rico Bankers Association.
Mr. Ward, 59, has served as non-executive Chairman of the Board
since July 14, 2005. As a result of his appointment as interim
Chief Executive Officer, he will no longer serve as a member of
the Audit and Risk Policy committees of the Board. Mr. Ward's
previous experience includes serving as Chairman and CEO of
American Express Bank from 1996 until 2000. Before joining
American Express, Mr. Ward was an executive for 27 years at The
Chase Manhattan Bank, during which he served as CEO of Chase
Bankcard Services and President and CEO of Chase Personal
Financial Services, a nationwide retail mortgage and home equity
lender.
Mr. Soriano, 36, has served as Risk Management Director of the
Company since January 2005 and a member of the Asset Liability
Management Committee of the Board. Previously, he was President
of Doral Money, a New York based subsidiary of Doral Bank.
Before joining the Company, Mr. Soriano was Vice President in
charge of the Mortgage Division of Citibank Puerto Rico.
Mr. Micheo, 45, has served as Executive Vice President and Head
of Funds Management Group for the Company since January 2005.
Prior to that position, Mr. Micheo was President of Doral
Securities, the broker dealer subsidiary of the Company. He also
serves as a member of the Asset Liability Management Committee
of the Board.
The Company, a financial holding company, is the largest
residential mortgage lender in Puerto Rico, and the parent
company of Doral Bank, a Puerto Rico based commercial bank,
Doral Securities, a Puerto Rico based investment banking and
institutional brokerage firm, Doral Insurance Agency, Inc. and
Doral Bank FSB, a federal savings bank based in New York City.
CONTACT: Doral Financial Corporation
Investor Relations:
Richard F. Bonini
Phone: 212-329-3728
or
Lucienne Gigante
Phone: 212-329-3733
=============
U R U G U A Y
=============
NBC: New Campaign Attracts $8.5M in Time Deposits
-------------------------------------------------
State-owned bank Nuevo Banco Comercial's (NBC) aggressive
campaign to bring in time deposits managed to attract some
US$8.5 million, reports Business News Americas. According to NBC
president Julio Porteiro, the bank has a certain margin to
improve these deposits' yields. In addition, NBC is considering
developing business lines with local pension fund managers
(AFAPs) to tap mid and long term funding in local currency.
The Uruguayan government is seeking to privatize NBC by the end
of the year. US investment fund Advent International and Chilean
financial holding Corp Group, the two firms vying for NBC, have
offered some US$250 million each for the bank, a source close to
the negotiations said.
But Mr. Porteiro said such figures "have no basis," although he
did not disclose any figures for the transaction.
Chilean businessman Alvaro Saieh controls Corp Group, which runs
Corpbanca (NYSE: BCA) in Chile and Venezuela. Advent is a US
private investment fund that manages some US$6 billion in
assets.
NBC was created in March 2003 from the assets of local banks
Banco Comercial, Banco Montevideo and Banco Caja Obrera. The
three banks were intervened and suspended as a result of a run
on deposits during the country's financial crisis in 2002.
=================
V E N E Z U E L A
=================
EDC: US Parent Maintains Equity Stake Despite Woes
---------------------------------------------------
US company AES Corp. (NYSE: AES) will not be selling its 80%
stake in Venezuelan power unit Electricidad de Caracas (EDC)
even though the unit is operating in a difficult business
environment, says EDC president Julian Nebreda. Service rates
for Venezuelan electricity companies have been frozen for almost
two years and electricity theft accounts for 10% of all the
power EDC transmits.
In addition, Venezuela has a complicated business environment in
macroeconomic terms, with inflation of around 20% and almost
constant devaluations of the local currency. But, according to
Mr. Nebrada, AES is convinced that those problems will be
solved.
Recently, EDC said demand for electricity in the greater Caracas
area grew 5% in the first seven months compared with the same
period of 2004.
"There has been an important reactivation in economic activity
in the country and that has brought an increase in electricity
consumption," Mr. Nebreda said.
The increase is below the 8%-plus growth reported for the same
period nationwide, but that is because "we serve a city that is
already established" in terms of population and businesses
presence, explained Mr. Nebrada.
EDC is generating about 13,000GWh a year and has capacity to
generate about 46% more, Nebreda said. The Company serves one
million clients in the Greater Caracas area and has 2,650
employees.
CONTACT: C.A. La Electricidad de Caracas
Avenida Vollmer
Caracas, Venezuela
Scarlett Alvarez
Directora: Relaciones con Inversionistas
Tel: 0212 502-2950
E-mail: edcinversionistas@aes.com
ROYAL SHELL: Withdraws From Mariscal Sucre Project
--------------------------------------------------
Venezuelan oil minister Rafael Ramirez announced Friday that
Royal Dutch Shell will no longer participate in the US$2.7
billion Mariscal Sucre natural gas project. Business News
Americas recalls that Shell and Japan's Mitsubishi signed a
preliminary agreement with state-owned Petroleos de Venezuela SA
(PDVSA) in June 2002 to develop Mariscal Sucre to produce gas
for the domestic market and export liquefied natural gas (LNG)
to the US. The agreement would have given Shell a 30% stake in
the project, PDVSA 60% and Mitsubishi 8%, and local investors
the remaining 2%.
However, negotiations broke down in recent months, as it emerged
that PDVSA wanted to change the terms such that most of the gas
would remain in the domestic market.
Venezuela has long argued that producing gas for the local
market is an important part of the Mariscal Sucre project.
Producing for the local market, however, would mean selling the
gas at a lower price than could be obtained in the export market
for LNG.
Shell's decision to cancel its participation in the project
comes two weeks after the Company said it would contest a US$130
million retroactive tax bill for its operations in Venezuela
from 2001 to 2004. Shell spokesman Luis Prado said Shell doesn't
think the issues are linked.
***********
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 * * *