Venezuela's CANTV to discuss January debt rollover

Fri May 9, 2003 03:13 PM ET CARACAS, Venezuela, May 9 (<a href=reuters.com>Reuters) - Venezuela's leading telephone company CANTV TDVd.CR VNT.N said Friday it would hold talks with its main debt holders about the possibility of extending the maturity of some of its debt due in early 2004.

"We are looking into all the options we have regarding the amortization of ... $100 million of Yankee bonds that are coming due in January of 2004," CANTV's Vice President of Finances Armando Yanes told shareholders during a conference call.

But CANTV was not considering the rollover of all of the $100 million due in January, Yanes added.

The company reported a 74 percent fall in net profits for the first quarter of 2003 compared with a year ago, due to the ongoing recession in Venezuela, the world's No. 5 oil exporter.

CANTV, whose main shareholder is U.S. telephone company Verizon Communications Inc. VZ.N , last week issued guidance predicting a net loss of $73 million to $195 million for 2003, in contrast to profits of $44 million last year.

The firm blamed the projected losses on an anticipated fall in telephone use due to an expected 15 percent contraction in Venezuela's economy this year. The oil-reliant economy contracted 8.9 percent in 2002.

President Hugo Chavez's government introduced strict currency controls in late January to stem massive capital flight following a crippling oil strike by foes of Chavez in December and January. It fixed the local bolivar currency's exchange rate at 1,600 bolivars per U.S. dollar.

Companies have complained bitterly about the resulting dollar drought, and CANTV in April announced it was not immediately able to pay ordinary dividends in dollars for holders of its American Depository Receipts (ADR).

CANTV said it would continue working closely with the state exchange control board CADIVI to draw up mechanisms that would allow the company to pay the dividends in dollars and pay the Yankee bonds when they fall due.

Shares in CANTV climbed 3.23 percent in the local market Friday to 2,400 bolivars per share, while its ADRs, which each represent seven shares, climbed 1.57 percent to $10.37.