/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/051026.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, October 26, 2005, Vol. 6, Issue 212 Headlines A R G E N T I N A ALPARGATAS: $600M Debt Offer Garners 92.21% Creditor Approval BANCO HIPOTECARIO: S&P Rates $100M Notes 'B-' CORCEL IMPORT: Reorganization Proceeds to Bankruptcy COWS & BULLS: Seeks Court Approval to Reorganize DROGUERIA PATAGONICA: Court Mandates Bankruptcy EDENOR: Operations Contract Limits Dolphin's Power FREECOR S.A.: General Report to be Submitted Nov. 8 HACESA S.A.: Concludes Reorganization PITA S S.R.L.: Court Grants Reorganization Request TRANSPORTADORA MESOPOTAMICA: Proceeds to Bankruptcy B R A Z I L ELETROPAULO METROPOLITANA: Submits Expense Report Clarification EMBRATEL: Concludes June 30 Financial Statement Audit LIGHT SERVICOS: Cemig to Present Purchase Offer Nov. 11 UNIBANCO: Completes Creative Liquidity Facility Transaction C A Y M A N I S L A N D S CASSET FUND: Shareholders File Petition for Liquidation MFS MERIDIAN RESEARCH: Creditors' Debt Claims Due Nov. 17 MFS MERIDIAN STRATEGIC GROWTH: Nov. 17 Claims Deadline Set MFS MERIDIAN STRATEGIC INCOME: Shareholder Winds Up Firm MFS MERIDIAN TECHNOLOGY: Liquidators to Review Claims MFS MERIDIAN US EMERGING: Winding Up Process Begins MFS MERIDIAN US EQUITY: To Wind Up Operations MFS MERIDIAN US GOVERNMENT: Liquidators Selected MFS MERIDIAN US HIGH: Liquidators Selected MFS MERIDIAN US RESEARCH: Appoints Joint Liquidators MFS MERIDIAN VALUE: To Wind Up Voluntarily OKB LIMITED: Creditors' Proof of Claims Due Nov. 17 OVERSEAS EXPORT: To Hold Final General Meeting Nov. 17 PERSEUS FUNDING: Creditors to Prove Debt Claims Nov. 17 C O L O M B I A * COLOMBIA: IMF Completes First Review Under Stand-By Deal H O N D U R A S MILLICOM INTERNATIONAL: Revenues Up 11% in 3Q05 J A M A I C A AIR JAMAICA: New Head Forecasts Bright Future for Airline M E X I C O BALLY TOTAL: Pardus Voices Board Selection Concerns P A R A G U A Y ACEPAR: Denies Unfair Domestic Market Practices Claims P U E R T O R I C O FIRST BANCORP: SEC Orders Investigation into Puerto Rican Unit FIRST BANCORP: Fitch Downgrades, Removes from Watch Negative V E N E Z U E L A PDVSA: Denies Short-Term Lyondell Refinery Sale REFCO INC: Inverbanco Denies Dealings with Bankrupt Firm REFCO INC: Totalbank Brokerage Forecasts $867K Loss SIDOR: Anticipates 4M Tons Total Production in 2005 - - - - - - - - - - ================= A R G E N T I N A ================= ALPARGATAS: $600M Debt Offer Garners 92.21% Creditor Approval ------------------------------------------------------------- Textile producer Alpargatas SA has obtained 92.21% creditor approval for its US$600-million debt-restructuring offer, reports Dow Jones Newswires. Alpargatas seeks to convert US$500 million in foreign-denominated debt into pesos at a rate of one-to-one. The local currency is trading at ARS2.9775 to the dollar. Creditors had four alternatives: - A 25-year peso par bond with a step-up interest rate. - A 15-year peso bond with a 50% nominal haircut and step-up interest rate. - A cash payment worth 7% of the original face value plus a 15-year, zero-coupon peso bond with an 82% nominal haircut. - Swap 80% of their original holdings for the Company's ordinary shares at ARS12 each. The remaining US$100 million of debt is already denominated in pesos. Analysts' estimates put bondholders' recovery rate at 10 cents to 15 cents for every dollar of face-value debt. Alpargatas filed for the local equivalent of Chapter 11 bankruptcy in December 2001 and presented its debt- restructuring offer in court in March 2004. The judge overseeing the Company's debt workout had set a Nov. 18 deadline for it to secure creditor approval. BANCO HIPOTECARIO: S&P Rates $100M Notes 'B-' --------------------------------------------- Standard & Poor's Ratings Services has assigned its 'B-' foreign currency senior unsecured debt rating to Banco Hipotecario S.A.'s (BH) $100 million notes due in 2010 to be issued under the $1.2 billion senior unsecured global MTN program. At the same time, Standard & Poor's affirmed its ratings on the Argentine bank's outstanding debt, and its 'B-/Stable/--' counterparty credit ratings. The outlook is stable. The proceeds from the upcoming issuance will be used for liability management and to increase lending activities to the private sector. "The ratings on BH reflect the improvement in the Argentine financial system's operating environment since the completion of the sovereign debt restructuring process, as well as BH's own strengthened credit profile," said Standard & Poor's credit analyst Federico Rey-Marino. This improvement in the bank's creditworthiness includes a strong liquidity position, higher financial flexibility, reduced rate and currency mismatches, and the reduction in the bank's indebtedness arising from the finalization of the entity's debt exchange in January 2004. In addition, it comprises increasing lending activities to the private sector, healthier asset quality, and the restoration of the bank's profitability. These strengths are counterbalanced by the bank's still-high concentration in mortgage lending and the recently evidenced disagreements on BH's future strategy between the controlling group and the Argentine government, the bank's other major shareholder. In addition, BH's credit quality is still conditioned by its relatively high exposure to the sovereign's creditworthiness-mostly originated by the government bonds received as compensation for pesification-as is the case with the rest of the financial system. The outlook follows the outlook on the Argentine sovereign ratings. BH is a public company controlled by several shareholders including IRSA, a prominent Argentine real estate company, and several international investment funds. As a result of the bank's privatization in 1999, the Argentine government remains a shareholder of the institution. Primary Credit Analysts: Carina Lopez, Buenos Aires Tel: (54) 11-4891-2118 Or Federico Rey-Marino, Buenos Aires Tel: (54) 114-891-2130; E-mail: federico_rey-marino@standardandpoors.com CORCEL IMPORT: Reorganization Proceeds to Bankruptcy ---------------------------------------------------- The reorganization of Corcel Import S.A. has progressed into bankruptcy. Argentine news source Infobae relates that a Buenos Aires court ruled that the Company is "Quiebra Decretada". The report adds that the court assigned Mr. Augusto Luis Fiorillo as trustee, who will verify creditors' proofs of claim until Nov. 25, 2005. The court also ordered the trustee to prepare individual reports after the verification process is completed, and have them ready by Feb. 8, 2006. The trustee is also required to submit a general report on the bankruptcy process. The date for the submission of this report is yet to be disclosed. CONTACT: Mr. Augusto Luis Fiorillo, Trustee Rodriguez Pena 434 Buenos Aires COWS & BULLS: Seeks Court Approval to Reorganize ------------------------------------------------ Cows & Bulls S.A., a company operating in Buenos Aires, has requested for reorganization after failing to pay its liabilities, reports Infobae. 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. CONTACT: Cows & Bulls S.A. Alvarado 2357 Buenos Aires DROGUERIA PATAGONICA: Court Mandates Bankruptcy ----------------------------------------------- Drogueria Patagonica S.R.L. enters bankruptcy protection after a Buenos Aires court ordered the Company's liquidation. The order effectively transfers control of the Company's assets to a court-appointed trustee who will supervise the liquidation proceedings. Infobae reports that the court will select a trustee to verify creditors' proofs of claim. Argentine bankruptcy law requires the trustee to provide the court with individual reports on the forwarded claims and a general report containing an audit of the Company's accounting and business records. The dates for the submission of the reports as well as the end of the verification phase are yet to be determined. EDENOR: Operations Contract Limits Dolphin's Power -------------------------------------------------- Despite taking control of power distributor Edenor, the Dolphin Fund Management faces serious limitations of power within the electricity concession. El Cronista reports that under its contract of operations, Dolphin cannot unilaterally change Edenor's statute, cannot raise capital without the approval of its partners and cannot renounce any rights obtained through the concession contract. With regard to the restructuring of Edenor's $512-million defaulted debt, Dolphin must receive the backing of investors before making any formal proposal to creditors. Moreover, Dolphin cannot sign contracts with third parties for more than US$25 million per annum nor for more than US$50 million in total without consulting partners. It cannot sell off or rent out any assets worth more than US$25 million and cannot acquire any assets for that sum and above without the approval of all those involved. Dolphin recently assumed control of Edenor after it bought a 65% stake from French state power company EdF for US$100 million. The French utility is retaining a 25% stake and lending technical assistance for five years. Edenor serves 2.4 million clients in the northern part of Buenos Aires. The Company's new investments will allow the addition of 250,000 new residential and small-business clients, as well as 6,800 more industrial users. These new customers represent a 10.6% expansion in the residential client base and a 19% increase in large-scale users. CONTACT: EDENOR S.A. Azopardo Building Azopardo 1025 (1107) Capital Federal Phone: (54-11) 4346-5000 Fax: (54-11) 4346-5300 E-mail: to ofitel@edenor.com.ar Web Site: http://www.edenor.com.ar FREECOR S.A.: General Report to be Submitted Nov. 8 --------------------------------------------------- The general report on the Freecor S.A. reorganization will be submitted on Nov. 8, 2005, following the end of the verification of creditors' claims. Infobae relates that the general report will contain the Company's audited accounting and business records as well as the summary of important events pertaining to the reorganization. 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 March 20, 2006. HACESA S.A.: Concludes Reorganization ------------------------------------- The reorganization process of Buenos Aires-based Hacesa S.A. has ended. Data revealed by Infobae` on its Web site indicated that the proceeding was concluded after Buenos Aires' civil and commercial court homologated the debt agreement signed between the Company and its creditors. PITA S S.R.L.: Court Grants Reorganization Request -------------------------------------------------- Pita s S.R.L. successfully petitioned for reorganization after a Buenos Aires court issued a resolution opening the Company's insolvency proceedings. Under insolvency protection, the Company will continue to manage its assets subject to certain conditions imposed by Argentine law and the oversight of a court-appointed trustee. Infobae relates that Mr. Roberto A. Mazzarella will serve as trustee during the course of the reorganization. The trustee will be accepting creditors' proofs of claim for verification until Nov. 15, 2005. After verifications, the trustee will prepare the individual reports and submit it in court on Dec. 28, 2005. He will also present a general report for court review on March 10, 2006. The Company will endorse the settlement proposal, drafted from the submitted claims, for approval by the creditors during the informative assembly scheduled on Aug. 21, 2006. CONTACT: Mr. Roberto A. Mazzarella, Trustee Laprida 1411 Buenos Aires TRANSPORTADORA MESOPOTAMICA: Proceeds to Bankruptcy --------------------------------------------------- Santa Fe's civil and commercial court has converted the reorganization of Transportadora Mesopotamica S.R.L. into bankruptcy, Infobae reports. The report adds that the court assigned a trustee to verify creditors' proofs of claim until Dec. 13, 2005. The court also ordered the trustee to prepare individual reports after the verification process is completed. A general report on the bankruptcy will also be submitted. The dates for the submission of the reports are yet to be disclosed. CONTACT: Transportadora Mesopotamica S.R.L. General Lopez 2520 Ciudad de Santa Fe (Santa Fe) =========== B R A Z I L =========== ELETROPAULO METROPOLITANA: Submits Expense Report Clarification --------------------------------------------------------------- Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. ("Company"), under CVM Instruction No 358 of January 3, 2002, hereby announces to the market that: On the third quarter of 2005, the Company will account for extraordinary expenses amounting to R$257,134 thousand in its income statement, as follows: 1. Non-recurring provision relating to the Payment Agreement ("Agreement") entered into between the Company and the City Government of Sao Paulo ("City Government") On September 2, 2005, the Company published an Announcement to the Market informing that: a. The City Government had failed to pay the amount falling due on August 31, 2005, such amount relating to the first of the twelve monthly installments as provided for in the Agreement signed with the Company on September 9, 2004. The original amount due by the City Government is R$542,572 thousand, of which R$10,000 thousand were paid in two installments on June 22 and July 5, 2004. b. Given that the default occurred on August 31, 2005, the Company filed a lawsuit for judicial collection on September 2, 2005. Considering that there is no possibility to resume bilateral negotiations to resolve on the debt, and taking into account the expectation relating to the period to conclude the ju dicial measures already taken, the Company decided to make full provision for the remaining amounts relating to its credits with the City Government. 2. Increase of the Pis/Cofins tax on the Electric Power Supply Contract ("Contract") with AES Tiete On September 30, 2005, the Company paid the total amount of R$43,692 thousand to AES Tiete, relating to the increase from 3,65% to 9,25% of the PIS/Cofins tax levied on the Contract, such amount relating to the period from July 4, 2004 to June 30, 2005, duly adjusted as provided for in the Contract. In the tariff readjustment of July 4, 2005, ANEEL did not approve that the increase in the above mentioned tax burden be passed on to tariffs charged by the Company. Obeying to what the Contract determines, since July 2005 the Company has included the increase of the Pis/Cofins tax on its monthly payments. On August 25, 2005, the Company filed a lawsuit with the purpose of being allowed to pass on such increase. ANEEL was served with process on September 14, 2005 and will have 60 days as from such date to express its opinion on the case. After such period the judge will render his decision. According to the development of the lawsuit, Eletropaulo will ponder applicable additional measures. The Company attests that, as liquidity is concerned, it has the capacity to meet its financial obligations and will divulge any further and relevant information. The Company reiterates its commitment to be transparent to its investors and to the market at large. CONTACT: Eletropaulo Metropolitana Eletricidade de Sao Paulo S/A Investor Relations Manager Ms. Clarice Silva Assis E-mail: clarice.assis@aes.com Phone:(55 11) 2195-2229 Fax:(55 11) 2195-2503 EMBRATEL: Concludes June 30 Financial Statement Audit ----------------------------------------------------- Embratel Participacoes S.A. ("Embrapar"), concluded the auditing of the June 30, 2005 Financial Statements of Embrapar and its subsidiaries which served as the basis for the transaction announced in the Relevant Facts published on May 24, 2005 and October 3, 2005. The auditing process of the June 30, 2005 Financial Statements, conducted until October 21, resulted in the need to adjust some accounts to include events which occurred subsequent to the filing of the quarterly financial information - Informacoes Trimestrais (ITR) of June 30, 2005. The Company reports that the adjustments made do not affect revenues, net income and shareholders' equity. To see accounts: http://bankrupt.com/misc/EMBRATEL.htm CONTACT: Embratel Participacoes S.A. Silvia M.R. Pereira Investor Relations Phone: (55 21) 2121-9662 Fax: (55 21) 2121-6388 E-mail: silvia.pereira@embratel.com.br invest@embratel.com.br LIGHT SERVICOS: Cemig to Present Purchase Offer Nov. 11 ------------------------------------------------------- Electric power utility Companhia Energetica de Minas Gerais SA (Cemig) aims to come up with a bid for Rio de Janeiro-based electricity distributor Light Servicos de Eletricidade SA before Nov. 11. Cemig President Djalma Bastos de Morais said Monday his company is looking for partners to bid jointly for Light. "We are looking for partners. We do not want to be majority stake holders. In our partnerships, we're always minority holders," Mr. Bastos de Morais said. In June, Electricite de France (EDF), which owns 94.8% of Light, said it was interested in bringing new investors into Light as part of the restructuring of Light's debt of BRL1.77 billion (US$782 million). Bastos de Morais said Cemig will present its proposal to the U.S. investment bank Goldman Sachs, which is managing the sale of stakes in Light. Light, which serves 3.4 million clients in Brazil's second- biggest city of Rio, has big debts and has lost revenue due to power theft in Rio's slums and low-income neighborhoods. The Company loses 17% of its energy from power theft and its revenue losses total about BRL500 million annually. 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 UNIBANCO: Completes Creative Liquidity Facility Transaction ----------------------------------------------------------- Unibanco completed a US$200 million Liquidity Facility transaction. It is an innovative hybrid instrument for the global financial markets. For the next two years, Unibanco will be able to access resources in the amount of up to US$200 million, with a seven-year term repayment period. The resources drawn will be backed by notes issued under the Receivables Securitization Program of Unibanco and UBB Diversified Payment Rights Finance Company ("Securitization Program"). The Securitization Program is formed by the future flow of receivables denominated in US dollars. It comprises, mainly, foreign trade and payment order transactions. Since its beginning, in 2002, the Securitization Program posted a solid growth of more than 70% in financial volume. Daniel Gleizer, Executive Director of Unibanco, responsible for the Treasury commented: "This was a strategic transaction for Unibanco. It combines the benefits of a stand-by bank facility with the advantages of long-term funding. This facility will allow efficient management of the future amortization flow of our Securitization Program." Financial Guaranty Insurance Company guaranteed the transaction and SMBC Securities, Inc., a wholly owned subsidiary of Sumitomo Mitsui Banking Corporation, acted as arranger. CONTACT: Unibanco - Uniao de Bancos Brasileiros S.A. Investor Relations Area Av. Eusebio Matoso, 891 - 15th floor - Sao Paulo SP 05423-901 - Brazil Phone: (55 11) 3097-1980 Fax: (55 11) 3813-6182 E-mail: investor.relations@unibanco.com URL: www.ir.unibanco.com =========================== C A Y M A N I S L A N D S =========================== CASSET FUND: Shareholders File Petition for Liquidation ------------------------------------------------------- IN THE GRAND COURT OF THE CAYMAN ISLANDS CAUSE NO: 440 OF 2005 And IN THE MATTER OF THE COMPANIES LAW (2004 REVISION) And IN THE MATTER OF Casset Fund, Ltd. A Petition to wind up Casset Fund, Ltd., whose registered office is situated at Ugland House, P.O. Box 309 GT, South Church Street, George Town, Grand Cayman, Cayman Islands ("the Company"), was presented to the Court on September 22, 2005 by certain registered shareholders. The said Petition will be heard before the Grand Court at the Law Courts, George Town, Grand Cayman at 10:00 a.m. on November 1, 2005, or as soon thereafter as the Petition can be heard. Any person who intends to appear on the hearing of the said Petition (whether to support or oppose it) must serve notice of intention to do so on the Attorneys-at-Law for the Petitioners whose address is set out below no later than 4:00 p.m. on October 31, 2004. CONTACT: Walkers, Attorneys at Law for the Petitioner Robert Gardner P O Box 265GT, George Town Grand Cayman, Cayman Islands Telephone: 345 914 6332 Facsimile: 345 814 8333 MFS MERIDIAN RESEARCH: Creditors' Debt Claims Due Nov. 17 --------------------------------------------------------- MFS Meridian Research International Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of MFS Meridian Research International Fund at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of MFS Meridian Research International Fund are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 MFS MERIDIAN STRATEGIC GROWTH: Nov. 17 Claims Deadline Set ---------------------------------------------------------- MFS Meridian Strategic Growth Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of MFS Meridian Strategic Growth Fund at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of MFS Meridian Strategic Growth Fund are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 MFS MERIDIAN STRATEGIC INCOME: Shareholder Winds Up Firm -------------------------------------------------------- MFS Meridian Strategic Income Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of MFS Meridian Strategic Income Fund at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of MFS Meridian Strategic Income Fund are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 MFS MERIDIAN TECHNOLOGY: Liquidators to Review Claims ----------------------------------------------------- MFS Meridian Technology Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of MFS Meridian Technology Fund at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of the Company are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 MFS MERIDIAN US EMERGING: Winding Up Process Begins --------------------------------------------------- MFS Meridian U.S. Emerging Growth Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of the above-named company at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of this company are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 MFS MERIDIAN US EQUITY: To Wind Up Operations --------------------------------------------- MFS Meridian U.S. Equity Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of MFS Meridian U.S. Equity Fund at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of the Company are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 MFS MERIDIAN US GOVERNMENT: Liquidators Selected ------------------------------------------------ MFS Meridian U.S. Government Bond Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of MFS Meridian U.S. Government Bond Fund at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of this company are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 MFS MERIDIAN US HIGH: Liquidators Selected ------------------------------------------ MFS Meridian U.S. High Yield Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of MFS Meridian U.S. High Yield Fund at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of the Company are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 MFS MERIDIAN US RESEARCH: Appoints Joint Liquidators ---------------------------------------------------- MFS Meridian U.S. Research Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of MFS Meridian U.S. Research Fund at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of this company are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 MFS MERIDIAN VALUE: To Wind Up Voluntarily ------------------------------------------ MFS Meridian Value Fund (In Voluntary Liquidation) The Companies Law (2004 Revision) The following special resolution was passed by the sole shareholder of MFS Meridian Value Fund at an extraordinary general meeting of the shareholders held on September 28, 2005: "That the company be voluntarily wound up and that Linburgh Martin and John Sutlic, of P.O. Box 1034GT, Grand Cayman, be and are hereby appointed Joint Liquidators, to act jointly and severally, for the purposes of such winding up." Creditors of this company are to prove their debts or claims on or before November 17, 2005 and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Linburgh Martin, Joint Voluntary Liquidator Thiry Gordon Close Brothers (Cayman) Limited Fourth Floor, Harbour Place P.O. Box 1034GT, Grand Cayman Telephone: (345) 949 8455 Facsimile: (345) 949 8499 OKB LIMITED: Creditors' Proof of Claims Due Nov. 17 --------------------------------------------------- OKB Limited (In Voluntary Liquidation) The Companies Law (2004 Revision) Section 135 TAKE NOTICE that the following special resolution was passed by the shareholder(s) of OKB Limited at an extraordinary general meeting of the shareholder(s) held on September 27, 2005: THAT the Company be placed into voluntary liquidation forthwith. THAT Martin Couch and Johann Le Roux be appointed, jointly and severally, as liquidators of the Company. Creditors of OKB Limited are to prove their debts or claims on or before November 17, 2005, and to send full particulars of their debts or claims to the joint liquidators of the said company. In default thereof, they will be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Messrs. Martin Couch and Johann Leroux Joint Voluntary Liquidators Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands OVERSEAS EXPORT: To Hold Final General Meeting Nov. 17 ------------------------------------------------------ Overseas Export Ltd. (In Voluntary Liquidation) The Companies Law (2004 Revision) Section 145 NOTICE is hereby given pursuant to Section 145 of the Companies Law that the final general meeting of Overseas Export Ltd. will be held at the offices of Maples Finance Limited, Queensgate House, George Town, Grand Cayman, Cayman Islands, on November 17, 2005 for the purpose of presenting to the members an account of the winding up of the Company and giving any explanation thereof. CONTACT: Ms. Suzan Merren and Mr. Johann Le Roux Joint Voluntary Liquidators Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands PERSEUS FUNDING: Creditors to Prove Debt Claims Nov. 17 ------------------------------------------------------- Perseus Funding Ltd. (In Voluntary Liquidation) The Companies Law (2004 Revision) Section 135 TAKE NOTICE that the following special resolution was passed by the shareholder(s) of Perseus Funding Ltd. at an extraordinary general meeting of the shareholder(s) held on October 5, 2005: THAT the Company be placed into voluntary liquidation forthwith. THAT Mora Goddard and Mike Hughes be appointed, jointly and severally, as liquidators of the Company. Creditors of Perseus Funding Ltd. are to prove their debts or claims on or before November 17, 2005, and to send full particulars of their debts or claims to the joint liquidators of the said company. In default thereof, they will be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Mike Hughes, Joint Voluntary Liquidator Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands =============== C O L O M B I A =============== * COLOMBIA: IMF Completes First Review Under Stand-By Deal ---------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) completed Monday the first review of Colombia's performance under an 18-month SDR 405 million (about US$583.8 million) Stand-By Arrangement approved on April 29, 2005. The Board has also approved a modification of performance criteria in order to lower the combined public sector deficit target, and granted a waiver for the nonobservance of the end June 2005 structural performance criterion on congressional approval of changes to the budget code on the basis of several corrective measures, including steps already adopted. The Board also granted waivers of applicability for the end-September 2005 quantitative performance criteria on the combined public sector deficit and on the net disbursement of short-term external debt of the public sector. Completion of this review makes an amount equivalent to SDR 42.3 million (about US$61.0 million) immediately available to Colombia, in addition to SDR 193.5 million (about US$278.9 million) made available initially upon the program's approval. However, the authorities continue to treat the arrangement as precautionary, and do not intend to draw on the credit available. Following the Executive Board's discussion of Colombia, Ms. Anne O. Krueger, First Deputy Managing Director and Acting Chair, made the following statement: "The authorities' strong economic policies are allowing the economy to benefit from the favorable global economic environment. In 2005, real GDP is expected to rise by 4 percent, reducing unemployment further, while inflation will remain at its lowest level in decades. The external sector has strengthened, benefiting from high world commodity prices, robust growth in nontraditional exports, and strong inflows of foreign direct investment. The government has lowered the 2005 target for the combined public sector deficit to below the original target, from 2.5 to 1.6 percent of GDP. This improvement in the fiscal position results from gains in tax administration, as well as continued control over spending and the effect of higher oil prices. Monetary policy continues to aim at achieving the inflation target, in the context of a managed float exchange rate policy. "The economic outlook for 2006 is favorable, with good prospects for sustained growth and declining inflation. Fiscal policy is set to remain prudent, with a combined public sector deficit of no more than 2 percent of GDP. Moreover, the authorities also intend to save most of any oil price windfall accruing to the public sector, which will help keep the public debt on a declining path. "Structural reforms are continuing to advance. The pension reform and the Securities Market Law were approved. The authorities have already adopted several key elements of the revised budget code that had been before Congress, and intend to implement as many of the remaining elements as possible through executive action. Financial supervision will continue to strengthen. The government intends to build political support for additional key medium-term reforms, such as strengthening tax policy, improving the system of revenue sharing, and reducing the extent of revenue earmarking. "These policies will help lay the foundation for continued growth over the medium term and for a smooth exit by Colombia from financial support from the Fund," Ms. Krueger said. CONTACT: International Monetary Fund - IMF External Relations Department Public Affairs Phone: 202-623-7300 Fax: 202-623-6278 Or Media Relations Phone: 202-623-7100 Fax: 202-623-6772 =============== H O N D U R A S =============== MILLICOM INTERNATIONAL: Revenues Up 11% in 3Q05 ----------------------------------------------- Millicom International Cellular S.A. (Nasdaq:MICC) (Stockholmsborsen and Luxembourg Stock Exchange:MIC), the global telecommunications company, released Monday results for the quarter and nine months ended September 30, 2005. Marc Beuls, Millicom's President and Chief Executive Officer stated: "Millicom's underlying business grew more strongly in the third quarter than in the second quarter with an 8% increase in pro forma revenues. The pro forma numbers exclude Vietnam, where our BCC ended in May and include Millicom's joint venture in Honduras with a percentage ownership of 66.67% to reflect the increase in ownership from 50% in May 2005. Pro forma EBITDA was up by 6% from the second quarter of 2005. The main driver in revenue growth was a 13% increase in revenues in Central America, 10% in South America and the 5% growth in revenues in Africa, which continue to be our star performers." "The Latin American market has seen a strong acceleration in subscriber growth since the launch of GSM and the Tigo brand in 2004, and this has continued to gather momentum as Millicom continues to take market share in Central America. In Africa, Ghana and Senegal were particularly strong markets and Tanzania is beginning to improve its performance. Millicom has started operating in two new markets, launching operations in Chad in October and purchasing the Oasis business in Congo. Together these two countries add some 70 million new people under license, replacing the potential new subscribers lost with the end of our BCC in Vietnam." "Millicom is currently negotiating the sale of its share in Pakcom, its second operation in Pakistan. It is interesting to note that Millicom's growth would have been even higher without Pakcom. Millicom has decided to concentrate its investment in Pakistan into its Paktel business and in total, since 2002, Millicom has committed $250 million of investment, excluding the license fee. Paktel is growing strongly and by the end of the quarter the business had 945,000 subscribers." To see financial summary: http://bankrupt.com/misc/MILLICOM_INTERNATIONAL.htm CONTACT: Millicom International Cellular S.A., Luxembourg Marc Beuls President and Chief Executive Officer Telephone: 352 27 759 327 or Shared Value, Ltd. London Investor Relations Andrew Best Telephone: 44 20 7321 5022 URL: www.millicom.com ============= J A M A I C A ============= AIR JAMAICA: New Head Forecasts Bright Future for Airline --------------------------------------------------------- Michael Conway, the new President and Chief Executive Officer (CEO) of Air Jamaica Limited, expects the national carrier to regain its original image, the Caribbean Net News reports. "The airline can get back to where I know it was with reliable, on-time service. I'm confident that this and the support from Jamaicans can make the airline compete with anybody," Conway said. "I'll be placing a lot of emphasis on why the airline is late and rest assured the airline must be reliable and on-time and we will figure out how to do that hopefully in short fashion," Conway added. He was speaking last week at a press briefing held at the Ministry of Finance and Planning, where the Minister, Dr. Omar Davies announced the new Board and Chief Executive Officer of Air Jamaica Limited. The announcement comes 10 months after Government reassumed control of the national airline in December 2004. Mr. Conway's appointment becomes effective on November 1. CONTACT: AIR JAMAICA Corporate Communications Tel: 876-922-3460 ext 4060-5 URL: www.airjamaica.com =========== M E X I C O =========== BALLY TOTAL: Pardus Voices Board Selection Concerns --------------------------------------------------- Pardus Capital Management L.P., a Delaware limited partnership ("PCM") delivered October 24, 2005 a letter to the Board of Directors (the "Board") of Bally Total Fitness Holding Corporation, a Delaware corporation (the "Company"), responding to a letter received from the Company on October 18, 2005. PCM wrote: We received your letter of October 18, 2005 concerning the process for nominating directors to the Bally's board and the adoption of an interim poison pill. Unlike many of your stakeholders, we do not have a lengthy history with the company, management or the current board. While we have heard the overwhelming negative investor sentiment towards the company, we have tried to reserve judgment and, accordingly, have approached management openly with respect to our concerns over the present state of the company and where Bally's needs to go if it is to turn-around and thrive. To date, we are disappointed with the company's response. You have stated that you desire to work cooperatively with us. We would welcome a direct dialog with the board and have repeatedly asked management to arrange a meeting or provide us with appropriate contact information. As a matter of the most fundamental philosophy, we believe management serves at the pleasure of the board of directors and, in turn, the board serves at the pleasure of the shareholders and for their benefit, all with the ultimate goal of enhancing shareholder value. If the current board shares this basic philosophy, we will have a common ground from which to work to rebuild Bally's. If the current board has a different view, it is unlikely we will be able to collaborate going forward. Management is well aware that of our initial three candidates, one withdrew due to a strategic event involving his own company that required more of his time than anticipated and two have made themselves available to be interviewed by the company's CEO. There has been no follow-up with respect to these two candidates, whether from management, the nominating committee or Russell Reynolds. I found out today that one of our candidates gave the company's CEO THREE separate dates for an in-person meeting but the CEO could not find one to his liking. Statements from the company implying anything else are simply misleading. We have additional candidates who represent a full complement of independent, highly qualified nominees for the board and who have broad, relevant turnaround and restructuring experience. We will gladly share our candidates with the board if we can be assured they will receive fair, honest and timely consideration. We also would consider any other candidates who are genuinely independent and have the relevant skill sets and qualifications. It is with reluctance that we have begun to spend our money and time pursuing a proxy contest; it would be an utter waste of shareholder money and management time for Bally's to object to qualified candidates, especially when broad, existing shareholder sentiment against this management team makes the outcome of an election contest a foregone conclusion. We see the adoption of the poison pill as a further effort to entrench the management team and only serve to spread the appearance of a "bunker" mentality, which can only detract from the company's recovery. Worse, news items and rumors in the marketplace concerning the company's talks to sell itself, including today's report about Wellspring Capital Management, in advance of the release of audited and restated financial statements suggest management is interested primarily in preserving its position and reserving upside in Bally's to a select few rather than ALL of the shareholders at large. I am completely uninterested in a petty, tit-for-tat exchange of letters or an argument over who left the last phone message unanswered. We have, from the beginning and repeatedly, expressed a desire to speak principal-to-principal with the board concerning these matters and are prepared to do so now. We have again last week reached out to management to further that process and been in contact with Russell Reynolds. We firmly believe, however, that little progress will be made absent direct shareholder-to-board interaction. If this present board is serious about revitalizing Bally's and truly representing the shareholders' interests, we invite you to contact us to further a consensual process. But make no mistake: we are your largest shareholder, we are not going away and we will see Bally's turned around and restored to its potential with or without management's or the current board's cooperation. Pardus European Special Opportunities Master Fund L.P., a limited partnership formed under the laws of the Cayman Islands (the "Fund"), is the holder of 5,000,000 shares of the common stock, par value $0.01 per share (the "Shares"), of the Company, including the 1000 shares of common stock owned of record. PCM serves as the investment manager of the Fund and possesses sole power to vote and direct the disposition of all Shares held by the Fund. Pardus Capital Management LLC, a Delaware limited liability company ("PCM LLC"), is the general partner of PCM and Mr. Karim Samii is the sole member of PCM LLC. The persons filing this Schedule 14A are PCM, the Fund, PCM LLC and Mr. Samii (collectively, the "Reporting Persons"). Based on information provided by the Company, as of September 30, 2005 there were 36,083,427 shares of the Company's common stock issued and outstanding. Thus, as of October 24, 2005, PCM may be deemed to beneficially own 5,000,000 Shares, or 13.9% of the shares of Company common stock deemed issued and outstanding as of that date. On the same date, PCM, filed Amendment Number 8 to its Schedule 13D with the Securities and Exchange Commission (the "Amendment"). The Amendment amends PCM's previously filed Item 4 disclosure by adding the following: "PCM has attached as Exhibit 2 to this Schedule 13D a letter, dated October 24, 2005, from PCM to the Board of Directors of the Company responding to a letter received from the Company on October 18, 2005. Except as otherwise described in this Item 4 of this Schedule 13D, as amended, the acquisition of the Shares by the Fund is for investment purposes on behalf of the Fund." CONTACT: Bally Total Fitness Holding Corporation Investors: Janine Warell Phone: 773-864-6897 Media Matt Messinger Phone: 773-864-6850 URL: www.ballyfitness.com or MWW Group Public Relations Carreen Winters Phone: 201-507-9500 =============== P A R A G U A Y =============== ACEPAR: Denies Unfair Domestic Market Practices Claims ------------------------------------------------------ Steelmaker Acepar refuted construction chamber Capaco's allegations that it has acted "arbitrarily and unjustly" in the domestic market by increasing steel prices whenever it considers it convenient, reports Business News Americas. Acepar director Juan Ramon Martinez said his company does not understand where Capaco director Jorge Moreno got his information given that "Acepar has not changed its prices since December." "There is no valid reason to be criticizing us this way. Domestic market prices are fixed in guarantees [the local currency] and have remained the same since that date," he said, referring to December. Mr. Moreno also said "when international conditions are favorable, [Acepar] argues that the domestic market is a free market, allowing it to act independently, which leaves us without a certain type of rebar." The chamber's director also warned against Acepar's policy of raising the minimum purchase value by tonne for company distributors, saying the move could push prices above market standards. ===================== P U E R T O R I C O ===================== FIRST BANCORP: SEC Orders Investigation into Puerto Rican Unit -------------------------------------------------------------- First BanCorp (NYSE: FBP) announced that the Securities and Exchange Commission has issued a formal order of investigation in its investigation into First BanCorp. The investigation, which stems out of an informal inquiry announced by the Company in late August 2005, appears to relate to, among other things, transactions in which First Bank acquired a substantial number of mortgage loans from other Puerto Rican financial institutions. The Company is cooperating with the SEC's investigation. The Audit Committee of First BanCorp's Board of Directors has been looking into the mortgage transactions and the proper accounting treatment of them since shortly before the Company learned of the SEC's initial inquiry into First BanCorp. The Audit Committee is also reviewing other possible accounting and financial controls issues, and it is possible that the Committee may also determine to review other issues as well. The Committee has retained independent counsel and forensic accounting advisers to assist in this review. The Committee and its counsel are cooperating with, and providing information to, the SEC staff. One issue under review by the Audit Committee is whether the mortgage transactions at issue were properly classified for accounting purposes as purchases of the mortgage loans by First Bank or whether they should have been treated as loans by First Bank to the other financial institutions, secured by the mortgages. Although the Company's accounting analysis is not complete, First Bank has concluded that most of its transactions with one financial institution, R&G Mortgage Corp, did not qualify as true sales as a legal matter. Accordingly, these transactions may need to be accounted for as a secured loan to that financial institution. As a result, First BanCorp may be required to restate its previously issued financial statements for the period from 2000 through the first quarter of 2005. Any reclassification of the transactions as secured loans rather than as purchases of mortgages would affect the notes to the Company's financial statements as well as the Company's presentation of its cash flow from investing activities. The Company is reviewing the adequacy of its allowance for loan losses relating to the potential reclassified secured loans as well as the regulatory capital implications of the reclassifications. Any need to change the allowance for loan losses would impact previously reported net income and loans net of allowance for loan losses. The analysis of the mortgage transactions with other financial institutions, including Doral Financial Corporation, is not complete. To the extent that the Company concludes that any transactions are considered to be true sales, it also will need to determine whether such transactions include various terms that should have been accounted for as derivatives. Any need to restate historical financial statements to reflect such derivatives could substantially decrease or increase First BanCorp's net income for particular periods between 2000 and the first quarter of 2005. The Audit Committee's continuing review of this matter as well as other matters may result in the need for the Company to restate its financial statements. FIRST BANCORP: Fitch Downgrades, Removes from Watch Negative ------------------------------------------------------------ Fitch has lowered the ratings of First BanCorp (FBP) and its subsidiary, FirstBank Puerto Rico, to 'BB' from 'BBB-' (long- term) and to 'B' from 'F3' (short-term). In addition, the Individual Rating has been downgraded to 'C/D' from 'C'. The ratings have all been removed from Rating Watch Negative. The Rating Outlook is Negative. (See complete list of affected ratings provided at the end of this release.) This rating action follows the announcement that the Securities and Exchange Commission (SEC) has issued a formal order of investigation into FBP. This follows the informal inquiry by the SEC announced in August 2005. FBP has disclosed that its Audit Committee concluded that mortgages reported as being purchased from R&G Mortgage were improperly classified as mortgage loans rather than treated as commercial loans. The reclassification stems from the underlying transactions failing to meet all the tests of a true sale for financial reporting purposes. The review, which remains ongoing, will also be covering similar contracts made with other financial institutions including Doral Financial Corporation. Fitch believes the mortgage purchase activity conducted by FBP is the focal point of the SEC investigation, and that Fitch believes it is likely that the review of such transactions will necessitate that FBP restate its previously released financial statements. Management has indicated such restatements, if required, could reach back to 2000. The timing and magnitude of such restatements are uncertain at this time. Fitch's rating action also recognizes that the financial restatement process likely could result in pressure on capital ratios as well as the need for increased loan loss reserves and changes in previously reported levels of net income. The potential disruption in funding is an equally important factor in Fitch's rating action. Mortgage loans serve as a key piece of collateral in FBP's funding arrangements. If the mortgage loans in question are deemed to have not been purchased by FBP, its available collateral pool for funding could be reduced. FBP's funding profile also shows a heavy reliance on brokered deposits, a source of funds that the regulators may restrict FBP's use of until greater certainty on the financial restatement process is achieved. Further pressuring capitalization and increasing the risk related to uncertain funding plans, FBP has undergone significant growth in its commercial loan portfolio during the first half of 2005, exclusive of the above-mentioned reclassification. Growth in the first half of 2005 reduced the total risk-based capital ratio by nearly 200 basis points based on FBP's regulatory report filing. Management will need to revisit growth plans and likely seek ways to restrain asset growth until greater certainty can be achieved regarding available sources of funds. Fitch's expectation considers the likelihood that capital ratios would not fall below the technical regulatory parameters of a well-capitalized institution. Looking forward, FBP's return to normal growth will likely necessitate increased levels of overall capital, with attention paid to ensure there is appropriate balance between common equity and more expensive forms of preferred and hybrid instruments. Resolution of the Negative Outlook will focus on the near-term challenges related to management's ability to effectively balance growth with potential near-term funding issues. A return to a Stable Rating Outlook will not likely precede the conclusion of the accounting, financial, and SEC investigation, release of audited financial statements, and a period of steady-state performance at FBP. The Negative Outlook also considers the possibility that the ongoing investigation may produce additional findings, and operational and regulatory challenges. The following ratings are downgraded: First BanCorp -- Long-term issuer to 'BB' from 'BBB-'; -- Short-term to 'B' from 'F3'; -- Individual to 'C/D' from 'C'. FirstBank Puerto Rico -- Long-term issuer to 'BB' from 'BBB-'; -- Subordinated debt to 'BB-' from 'BB+'; -- Long-term deposit obligations to 'BB+' from 'BBB'; -- Short-term issuer to 'B' from F3'; -- Individual to 'C/D' from 'C'. Fitch also rates First BanCorp and FirstBank Puerto Rico as follows: -- Support '5'. CONTACT: Fitch Ratings Ileana Cervantes, 312-368-5472 (Chicago) Peter Shimkus, 312-368-2063 (Chicago) Kenneth Reed, 212-908-0540 (Media Relations, New York) ================= V E N E Z U E L A ================= PDVSA: Denies Short-Term Lyondell Refinery Sale ----------------------------------------------- State-owned oil company Petroleos de Venezuela SA (PDVSA) is not putting its Lyondell refinery in Houston up for sale in the short-term, reports Dow Jones Newswires. The announcement, which was made by Venezuelan Oil Minister Rafael Ramirez on Thursday, contradicts earlier reports that PDVSA is aiming for an immediate sale of the refinery to recoup its US$5 billion investment in the plant. The Houston refinery is jointly owned by Citgo, a subsidiary of PDVSA, and Lyondell Chemical Co. Ramirez said that PDVSA will begin reviewing the possible sale of Citgo assets when oil prices soften. "As soon as we see the market changing, we will do a study on which of these businesses we will keep," Ramirez said. Ramirez, who is also president of PDVSA, claims the Citgo refineries have been a bad deal for Venezuela because they buy Venezuelan oil at a discount under lousy contracts and pay taxes in the U.S. REFCO INC: Inverbanco Denies Dealings with Bankrupt Firm -------------------------------------------------------- Caracas-based bank Banco Hipotecario Inversiones Turisticas SA (Inverbanco) severed ties with bankrupt U.S. futures trader Refco Inc. about three or four weeks ago, reports Bloomberg. Inverbanco vice president Aracely Magaly Marquez said the move follows a warning from Venezuela's Banking Superintendent Trino Diaz that Refco wasn't meeting all legal requirements to operate in the country. "We were warned and we acted rigorously on the recommendations," Mr. Marquez said, adding, "We have no current deals with Refco." Refco, which recently filed for bankruptcy protection, was the custodian of US$85.8 million of Venezuelan government bonds for Inverbanco, Marquez said. The bank responded by finding a new custodian for the bonds, Mr. Marquez said. Refco's bankruptcy documents list Inverbanco as a creditor for US$85.81 million. REFCO INC: Totalbank Brokerage Forecasts $867K Loss --------------------------------------------------- Totalbank Banco Universal, a Venezuelan financial institution, said its brokerage may lose US$867,000 in Venezuelan government bonds because of Refco's bankruptcy filing. Totalbank President Victor Gil revealed Refco was the custodian of US$1.43 million in Venezuelan government bonds due 2027 for a group of Totalbank clients. The losses stem from business Totalbank's brokerage did with Refco, he said. "We couldn't recover that money but the group has enough funds to provision such a loss," Mr. Gil said. The Caracas-based bank, which is listed as Refco's 48th largest creditor with unsecured claims totaling US$10.66 million, sent a request to the U.S. court handling Refco's bankruptcy to be taken off a list of the trading company's creditors, said Mr. Gil. Last week, the country's stock exchange regulator requested the brokerage to detail its current dealings with Refco, Mr. Gil said. SIDOR: Anticipates 4M Tons Total Production in 2005 --------------------------------------------------- Steel company Siderurgica del Orinoco (Sidor) expects to close this year with production of around 4 million metric tons, reports Business News Americas. "We're going to close this year with a production level close to 4 million tons of steel," Sidor President Julian Eguren said. The Company plans to raise production to 4.4 million tons, or 10% more, in 2006, Eguren said, stressing that higher production will be achieved by increasing investments. This year, the Company is expected to invest anywhere between US$65 million and US$67 million and a similar amount in 2006. Sidor is majority owned by a consortium of overseas steel companies from Mexico, Brazil and Argentina with a 20% stake held by the Venezuelan government. *********** 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. 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