THE SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the nine months ended September 30, 2001
HQI Transelec Chile S.A.
(Translation of registrant's name into English)
Apoquindo 3721, Piso 6
Las Condes
Santiago, Chile
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
--- ---
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
--- ---
HQI TRANSELEC CHILE S.A.
Interim unaudited financial statements
September 30, 2001
- --------------------------------------------------------------------------------
These financial statements are a free translation of the quarterly report (
"Ficha Estatistica Codificada Uniforme" or "FECU" ) sent to the
Superintendency of Securities and Insurance Companies ( "Superintendencia de
Valores y Seguridades" or "SVS" ). They have not been audited.
- --------------------------------------------------------------------------------
CONTENTS
Balance sheet
Statement of income
Statement of cash flows
Notes to the individual financial statements
Relevant facts
Financial statements analysis
Ch$ - Chilean pesos
ThCh$ - Thousands of Chilean pesos
US$ - United States dollars
UF - A daily inflation indexed, Chilean peso - denominated monetary unit
HQI TRANSELEC CHILE S.A.
BALANCE SHEET
As of September 30, 2001
ASSETS Notes ThCh$
----- -----
CURRENT ASSETS
Cash and banks 30,796
Time deposits 2 f 80,679,853
Marketable securities 2 h, 4 3,042,341
Trade accounts receivable 5 9,360,771
Sundry debtors 5 467,107
Notes and accounts receivable from related companies 6 1,014,476
Inventories 81,348
Recoverable taxes 1,029,685
Prepaid expenses 1,651,133
Deferred Taxes 7 104,513
Other current assets 8 10,829,648
------------
Total current asset 108,291,671
------------
FIXED ASSETS
Land 5,261,461
Buildings and infrastructure 271,647,884
Machinery and equipment 221,524,313
Other fixed assets 1,837,850
Increase value arising from technical reappraisal
of fixed asset 19,675,108
Accumulated depreciation (54,124,938)
------------
Total fixed assets, net 2 j, 10 465,821,678
------------
OTHER ASSETS
Investments in other companies 11 36,998
Goodwill 2 k, 12 101,869,711
Long-term debtors 5 423,436
Notes and accounts receivable from related companies-long 6 77,293,403
term
Deferred taxes 7 17,453,042
Intangibles 2 q, 13 22,951,742
Amortization of intangibles 2 q, 13 (1,404,552)
Other 2 o, 14 11,914,307
------------
Total other assets 230,538,087
------------
Total assets 804,651,436
============
LIABILITIES AND SHAREHOLDERS' EQUITY Notes ThCh$
- ------------------------------------ -----
CURRENT LIABILITIES
Bonds payable-short term portion 2 i, 15 12,347,784
Accounts payable 2,364,589
Sundry creditors 2,209,936
Accounts payable to related companies 6 177,347
Provisions 2 m, 16 1,430,445
Withholdings 1,693,332
Other current liabilities 102,107
-----------
Total current liabilities 20,325,540
-----------
LONG-TERM LIABILITIES
Long-term bonds payable 2 l, 15 468,549,304
Sundry creditors 79,962
Provisions 2 m, 16 1,272,660
Other long-term liabilities 34,789
-----------
Total long-term liabilities 469,936,715
-----------
SHAREHOLDERS' EQUITY
Paid-in capital 310,140,471
Other reserves 6,823,090
Retained earnings (2,574,380)
-----------
18 314,389,181
-----------
Total liabilities and equity 804,651,436
===========
The accompanying Notes 1 to 29 form an integral part of these financial
statements
HQI TRANSELEC CHILE S.A.
STATEMENT OF INCOME
For the six month period ended September 30, 2001
Notes ThCh$
----- -----
OPERATING RESULTS
Sales 66,037,184
Cost of sales (17,879,806)
------------
Gross margin 48,157,378
Administrative an selling expenses (1,862,473)
------------
Operating income 46,294,905
------------
NON-OPERATING RESULTS
Financial income 5,615,224
Other non-operating income 19 114,194
Goodwill amortization 12 (4,020,036)
Financial expenses (26,632,235)
Other non-operating expenses 19 (718,587)
Price-level restatement 2 c, 20 1,498,421
Exchange differences 21 (27,564,214)
------------
Non-operating results (51,707,233)
------------
Income before income taxes (5,412,328)
Income tax 2 n, 7 (410,704)
------------
LOSS FOR THE PERIOD (5,823,032)
============
- ----------
The accompanying Notes 1 to 29 form an integral part of these financial
statements.
HQI TRANSELEC CHILE S.A.
STATEMENT OF CASH FLOWS
For the six month period ended September 30, 2001
Notes ThCh$
----- -----
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period (5,823,032)
CHARGES (CREDITS) TO INCOME NOT REPRESENTING CASH FLOWS
Depreciation 11,049,045
Amortization of intangibles 496,785
Amortization of negative goodwill 4,020,036
Price-level restatement 20 (1,498,421)
Exchange differences 21 27,564,214
Other credits to income not representing cash flows (133,643)
Other charges to income not representing cash flows 2,415,884
CHANGES IN ASSETS WHICH EFFECT CASH FLOWS
Trade accounts receivable (1,441,279)
Inventories (46,411)
Other assets 14,704,727
CHANGES IN LIABILITIES WHICH EFFECT CASH FLOWS
Accounts payable related to operating results 339,896
Interest payable 12,347,784
Income tax payable (20,014,354)
Value added tax and other taxes (5,058)
------------
Net cash flows from operating activities 43,976,173
------------
CASH FLOWS FROM FINANCING ACTIVITIES
Bonds 427,534,812
Payments of documented loans from related companies (328,654,109)
Bond issuance and placement expenses (9,401,347)
------------
Net cash flow from financing activities 89,479,356
------------
CASH FLOWS FROM INVESTMENT ACTIVITIES
Purchase of fixed assets (3,789,472)
38,861,286
Other loans to related companies (102,477,692)
------------
Net cash flows from investing activities (67,405,878)
------------
Total net cash flow for the year 66,049,651
EFFECT OF INFLATION ON CASH AND CASH EQUIVALENTS 5,034,028
------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 71,083,679
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 23,323,461
------------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 94,407,140
============
The accompanying Notes 1 to 29 form an integral part of theses financial
statements
HQI TRANSELEC CHILE S.A.
NOTES TO THE FINANCIAL STATEMENTS
AT SEPTEMBER 30, 2001
NOTE 1 - COMPANY CONSTITUTION
Inversiones HQI Chile Limitada was formed as a limited liability company, as
stated in public deed dated September 15, 2000. The Company was formed to invest
in shares and partnership interests. On October 16, 2000 the Company changed its
name to Inversiones HQI Transelec Chile Limitada without making any changes in
its business activities. On November 23, 2000, the Company changed its name to
HQI Transelec Chile S.A. and was registered as a closely held corporation with
the Chilean Superintendency of Securities and Insurance Companies Register under
number 729 as from March 22, 2001.
The revised objective of the new Company is the exploitation and development of
electrical systems, either owned by the Company or third parties, used for the
transmission of electrical energy, for which they can purchase and/or make use
of concessions, taking into account all the benefits that are available by law
to electrical company.
Per public deed dated January 18, 2001, the Company purchased from Inversiones
HQI Chile Holding Limitada 98,606 shares, corresponding to 0.01% of the share
capital in Compania Nacional de Transmision Electrica S.A., concentrating 100%
of ownership. As a result of the latter, assets, liabilities, obligations and
rights of Compania Nacional de Transmision Electrica S.A. were merged by
absorption by HQI Transelec Chile S.A. Therefore, the Company directly assumed
business operations associated with the transmission of electricity which were
carried out by the absorbed subsidiary.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Period of analysis
The accompanying interim financial statements and corresponding notes relate to
the period from January 1, 2001 to September 30, 2001.
b) General
The accompanying financial statements of HQI Transelec Chile S.A. at September
30, 2001 have been prepared in conformity with accounting principles generally
accepted in Chile issued by the Chilean Institute of Accountants, and specific
instructions and regulations issued by the Superintendency of Securities and
Insurance Companies. The latter predominate over the former in the event of
discrepancy with established accounting principles.
c) Price-level restatement
The financial statements have been restated in order to reflect the effect of
changes in the purchasing power of the Chilean peso during the period.
Accordingly, non-monetary assets and liabilities and shareholders' equity have
been restated against income. The restatements have been determined on the basis
of the official Chilean Consumer Price Index (CPI) issued by the National
Institute of Statistics, applied one month in arrears, which was 2.2% for the
six month period ended September 30, 2001. In addition, income statement
accounts have been restated to their period-end values.
2
d) Operating estimates
The Company has to make accounting estimates to record its accounts receivable
from transmission tolls. Final settlements of these accounts may extend beyond
one fiscal year and can result in losses or gains for amounts not expected to be
significant.
e) Currency translation
Balances in foreign currency are considered monetary items and are adjusted at
the exchange rate prevailing on the closing date of the financial statements.
Inflationary-indexed units have been adjusted according to the restatement
index.
Assets and liabilities in foreign currency and UF have been translated into
Chilean pesos at the following closing exchange or conversion rates:
Ch$ per unit
------------
Unidad de fomento (UF) 16,094.96
United States dollar 695.02
f) Time deposits
Investments in time deposits are recorded at cost plus accrued interest at
period-end.
g) Resale agreements
Other current assets include purchases under resale agreements which are
recorded at their present value calculated at the discount rate used to
determine the price of each security on the purchase date.
h) Marketable securities
This item includes investments in mutual funds, which are valued at their quoted
market value at period end.
i) Allowance for doubtful accounts
The Company believes that it is unnecessary to record an allowance for doubtful
accounts at period end considering the aging of its accounts receivable.
j) Fixed assets
Fixed assets include lines, buildings and infrastructure, machinery and
equipment owned by the Company, which are valued at restated purchase cost or
contribution value at period end.
Depreciation is calculated using the straight-line method. Assets purchased
before 2000 are depreciated considering 95% of their value and since 2000
considering 100% of their value. In addition, in 2001 the remaining useful life
of some assets was extended, some of which include electrical lines and
equipment.
3
k) Goodwill
The amount represents the difference between the purchase value of shares in
Compania Nacional de Transmision Electrica S.A. and the book value of the
investment on the purchase date. This difference is amortized over a 20-year
period.
l) Bonds payable
This balance includes the obligation incurred in the issuance of bonds by the
Company at nominal value plus accrued interest and restatements at period end.
The difference between the book value and placement value is amortized until
maturity.
m) Severance indemnities
The provision for severance payments to Company staff upon reaching 15 years of
service is presented at present value on an accrual basis, using an annual
interest rate of 6.5% and considering an average tenure of 35 years. An average
of 75% of the benefit, for staff with less than 15 years of service, has been
accrued at present value.
n) Income tax
At Septembrer 30, 2001 in conformity with current regulatory requirements, the
Company has not set up a provision for Corporate Income Tax as it presents tax
losses. However, as a result of the absorption of Compania de Transmision
Electrica S.A. (Transelec) by HQI Transelec Chile S.A. on March 31, 2001,
Corporate Income tax payments amounted to ThCh$ 1,248,449, for the period
January 1 to January 30, 2001 of Transelec S.A.
o) Deferred taxes
Effective January 1, 2000 and in conformity with Technical Bulletin No. 60
issued by the Chilean Institute of Accountants, deferred taxes have been
recorded for all temporary differences between accounting balances and tax
balances for assets and liabilities at period end.
The effect of unrecorded deferred taxes at December 31, 1999 have been recorded
in complementary asset and liability accounts, as applicable, and are being
amortized over the weighted average term of reversal for temporary differences.
p) Debt security issuance and placement expenses
The Company has capitalized as deferred charges, expenses in the issuance and
placement of debt securities during the period. These deferred charges are
recorded under Other long-term and short-term assets, and are amortized using
the straight-line method until maturity of the obligations. Amortization is
presented under Financial expenses.
q) Staff vacation
In conformity with Technical Bulletin No. 47 issued by the Chilean Institute of
Accountants, the annual cost of employee vacations is recorded as an expense in
the financial statements on an accrual basis.
4
r) Intangibles
They consist of rights-of-way which are amortized on the straight-line basis
over 40 years in conformity with Technical Bulletin No. 55 issued by the Chilean
Institute of Accountants.
s) Statement of cash flows
Cash and cash equivalents correspond to cash and banks, time deposits and resale
agreements which are presented in Other current assets.
Cash flows from operating activities include all business-related cash flows as
well as interest paid, interest income and, in general, all cash flows not
defined as from financial or investment activities. The concept of operations
used in this statement is broader than that used in the Income Statement.
t) Derivative contracts
At September 30, the Company has subscribed foreign exchange future contracts
with financial institutions to hedge existing items and are recorded in
conformity with Technical Bulletin No. 57 issued by the Chilean Institute of
Accountants.
NOTE 3 - ACCOUNTING CHANGES
There have been no changes in acounting policies for the period January 1 to
September 30, 2001.
As discussed in Note 1 j), the Company changed the useful life of some fixed
assets, resulting in a decrease in the charge to income during the period of
approximately ThCh$ 3,930,000.
NOTE 4 - MARKETABLE SECURITIES
The balance of ThCh$ 3,042,341 corresponds to investments in mutual funds.
NOTE 5 - SHORT-AND LONG-TERM DEBTORS
a) At September 30, 2001 trade accounts receivable correspond to the following:
ThCh$
-----
Toll and transmission charges 8,746,897
Services provided to other parties 613,874
---------
9,360,771
=========
5
b) Short and long term debtors are comprised as follows as of September
30, 2001:
Current
Up to 90 days 91 days to 1 year Short-term Long-term
------------- ----------------- ---------- ---------
ThCh$ ThCh$ ThCh$ ThCh$
Trade accounts receivable 9,360,771 -.- 9,360,771 -.-
Sundry debtors 467,107 -.- 467,107 423,436
--------- --------- -------
Total debtors 9,827,878 -.- 9,827,878 423,436
========= === ========= =======
NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES
Significant balances and transactions with related companies are shown below:
a) Notes and accounts receivable
Company Short-term Long-term
------- ---------- ---------
ThCh$ ThCh$
Accounts receivable:
Inversiones HQI Chile Holding Ltda. 1,014,476 77,293,403
--------- ----------
Total 1,014,476 77,293,403
========= ==========
Accounts payable:
Inversiones HQI Chile Holding Ltda. 37,347
Hydro Quebec 140,000 -.-
-------
Total 177,347
=======
The receivable balance corresponds to a current account loan issued on April 17,
2001 to Inversiones HQI Chile Holding Ltda. for US$ 169,354,025.44. The amount
due is payable in United States dollars and accrues a 7.875% interest on an
annual basis of 360 days. The balance due will be paid from the dividends
received by Inversiones HQI Chile Holding Ltda. from HQI Transelec Chile S.A.,
first for payment of accrued interest and then for capital amortization.
b) Transactions with related companies
Effect on
income
Company Relation Transaction Amount (charge/credit)
- ------- -------- ----------- ------ ---------------
ThCh$ ThCh$
Inversiones HQI Chile Holding Ltda. Parent Loan repaid 323,478,454 (8,700,862)
Loan drawn 78,307,879 3,481,799
6
NOTE 7 - INCOME TAXES AND DEFERRED TAXES
a) At September 30, 2001 the Company has not provided for income tax due to
tax losses amounting to ThCh$ 22,759,739. There are no undistributed tax
profits from prior years.
ThCh$
-----
i) Net taxable income for the period (22,759,739)
ii) Income tax payment January 2001 (1,248,499)
iii) Provision for Article 21 tax (4,213)
iv) Deferred income tax (406,491)
v) Accumulated taxable income (loss carry forward) (22,759,739)
b) Deferred taxes:
Deferred assets Deferred liabilities
Temporary differences Short-term Long-term Short-term Long-term
--------------------- ---------- --------- ---------- ---------
ThCh$ ThCh$ ThCh$ ThCh$
Accrued staff vacation 79,398
Leased assets 2,770,251
Fixed asset depreciation 770,332
Accrued severance benefits 114,975
Deferred charges 1,322,172
Forward contracts 25,115
Swap contract 415,671
Tax loss benefit 3,413,961
Increase in value of fixed 17,823,114
assets (absorption)
Complementary accounts (1,609,368)
-----------
- - net of amortization
Total 104,513 21,237,075 3,784,033
c) Income taxes
Item ThCh$
---- -----
Current tax expense (tax provision) (4,213)
Deferred tax asset and liability for the year 893,411
Amortization of complementary deferred tax asset and liability (51,403)
Other charges or credits (1,248,499)
-----------
Total (410,704)
NOTE 8 - OTHER CURRENT ASSETS
The composition of this balance is as follows:
ThCh$
-----
Resale agreements
Bond issuance expenses 10,654,150
Other 175,498
----------
Total 10,829,648
==========
7
NOTE 9 - PURCHASES UNDER RESALE AGREEMENTS OF SECURITIES.
The composition of this balance at period end is as follows:
Purchase Expiration Counterparty Currency Subscription Final Market
------------ --------
date date value Rate value Security Value
- ---- ---- ----- ---- ----- ------- -----
ThCh$ % ThCh$ ThCh$
21/09/2001 02/10/2001 Banco de Credito e Inversiones Pesos 500,000 0.44 500,807 PRBC 500,660
21/09/2001 03/10/2001 BBVA Banco BHIF Pesos 890,000 0.43 891,531 PDBC 891,148
21/09/2001 02/10/2001 Banco Sudamericano Pesos 2,000,000 0.44 2,003,227 PDBC 2,002,640
24/09/2001 09/10/2001 BBVA Banco BHIF Pesos 790,000 0.53 792,094 PDBC 790,837
25/09/2001 09/10/2001 Banco A. Edwards Pesos 1,037,000 0.56 1,039,710 PDBC 1,037,968
27/09/2001 11/10/2001 Banco de Credito e Inversiones Pesos 1,000,000 0.54 1,002,520 PRBC 1,000,540
27/09/2001 16/10/2001 Banco de Credito e Inversiones Pesos 1,000,000 0.54 1,003,420 PRBC 1,000,540
27/09/2001 11/10/2001 Banco Santiago Pesos 1,000,000 0.53 1,002,473 PRBC 1,000,530
27/09/2001 16/10/2001 Banco Santiago Pesos 1,428,000 0.53 1,432,793 PRBC 1,428,757
27/09/2001 16/10/2001 BBVA Banco BHIF Pesos 1,000,000 0.53 1,003,357 PDBC 1,000,530
8
NOTE 10 - FIXED ASSETS
Fixed assets are summarized as follows:
Accumulated Net value
Gross value depreciation
----------- ------------
ThCh$ ThCh$ ThCh$
Land, rights and other 5,261,461 5,261,461
Buildings and infrastructure
Buildings 6,254,495 (829,889) 5,424,606
Access roads 343,862 (33,702) 310,160
Lines 241,301,201 (21,219,976) 220,081,225
Houses and apartments 621,232 (192,157) 429,075
Non-hydraulic civil projects 17,530,638 (2,004,815) 15,525,823
Construction and infrastructure 5,596,456 5,596,456
Total 271,647,884 (24,280,539) 247,367,345
Machinery and equipment
Telecommunication equipment 5,252,182 (3,234,248) 2,017,934
Machinery and office equipment, furniture 587,055 (492,258) 94,797
Service equipment 20,159 (11,986) 8,173
Tools and instruments 1,314,790 (1,019,422) 295,368
Power generation unit 465,076 (64,094) 400,982
Electrical equipment 182,507,251 (20,570,507) 161,936,744
Protection and mechanical equipment 29,628,717 (3,399,622) 26,229,095
Transportation and loading equipment 1,169,264 (637,068) 532,196
Personal Computer 205,746 (92,441) 113,305
Software 374,073 (322,753) 51,320
------- --------- ------
221,524,313 (29,844,399) 191,679,914
Subtotal fixed assets 498,433,658 (54,124,938) 444,308,720
Other fixed assets
Advances to contractors 116,172 116,172
Construction materials 1,721,678 1,721,678
--------- ---------
1,837,850 1,837,850
Increased value from technical appraisal 22,637,532 (2,962,424) 19,675,108
---------- ---------- ----------
Total fixed assets 522,909,040 (57,087,362) 465,821,678
---------- ------------ -----------
Depreciation for the period amounts to ThCh$11,049,045. The amount of ThCh$
11,033,355 was charged to Operating costs and ThCh$ 15,690 was recorded in
Administrative and selling expenses.
Assets subject to technical reappraisal correspond to those contributed by
Empresa Nacional de Electricidad S.A. (ENDESA) to Transelec S.A. and include:
land, buildings, electrical equipment, telecommunication equipment, lines,
houses, and apartments.
9
NOTE 11 - INVESTMENT IN OTHER COMPANIES
This balance corresponds to an 8.33% of Sociedad Centro de Despacho Economico de
Carga del Sistema Electrico Interconectado Central CDEC-SIC Limitada, whose
objective is to administrate and operate the SIC and coordinate its electrical
system.
NOTE 12 - GOODWILL AND NEGATIVE GOODWILL
The balance at June 30, 2001 is summarized as follows:
ThCh$
Opening balance 123,352,962
Transfer to deferred taxes (1) (18,246,601)
Opening equity balance difference (2) 1,982,651
---------
107,089,012
Amortization of accrued goodwill (5,219,301)
-----------
Total 101,869,711
===========
(1) Corresponds to the deferred tax credit generated by the allocation of
goodwill, resulting from the absorption of Transelec S.A. by HQI Transelec
Chile S.A., to fixed assets (tax accounting). Consequently, goodwill was
deducted in the equivalent amount of the deferred tax credit.
(2) As a result of the arbitration process instituted by the audit firm Ernst &
Young relative to the Share Purchase Agreement dated October 23, 2000
between Inversiones HQI Transelec Limitada (currently HQI Transelec Chile
S.A.), Inversiones HQI Chile Holding Limitada and Hydro Quebec
International Inc., the buyers, and Empresa Nacional de Electricidad
(ENDESA) and Endesa Inversiones Generales S.A. (Enigesa), the sellers,
whereby the share buyers undertook to reimburse the sellers the difference
between the reference net equity set at ThCh$ 188,019,844, and the
period-end net equity value on the agreement date, if such difference were
positive. On June 29, 2001, an arbitration resolution was rendered, whereby
the Arbitration Auditor determined net equity at year-end of
ThCh$190,688,338, which was greater than the net equity reference by ThCh$
2,668,494. Since a portion of this amount was recognized as goodwill at
December 31, 2000, goodwill only increased by ThCh$ 1,968,870 during this
period.
Tax Amortization Goodwill
Registraion No. Company for the period Balance
- --------------- ------- -------------- -------
ThCh$ ThCh$
96.659.380-6 Compania Nacional de Transmision 4,020,036 101,869,711
Electrica S.A
10
NOTE 13 - INTANGIBLES
The composition of intangibles at period end is as follows:
ThCh$
Rights-of-way 22,951,742
Accumulated amortization (1,404,552)
-----------
Net value 21,547,190
==========
The amortization charge to income amounted to ThCh$ 496,785.
NOTE 14 - OTHER ASSETS
The balance at period end is summarized as follows:
ThCh$
Rental deposits for employee housing 21,708
Prepaid expenses - bonds in UF 2,092,272
Prepaid expenses - bonds in US$ 5,716,151
Discount on bond placements - UF 2,737,361
Discount on bond placements - US$ 1,346,815
---------
Total 11,914,307
==========
NOTE 15 - LONG AND SHORT TERM OBLIGATIONS (PROMISSORY NOTES AND BONDS)
- ----------------------------------------------------------------------
a) The Company has made the following public offering of bonds in the local
market:
On April 2, 2001 the Company registered the first bond issuance for a maximum of
UF 10,000,000 with the Superintendency of Securities and Insurance Companies
under number 249. Of this amount, UF 9,200,000 were finally placed on April 11,
2001.
As of September 30, 2001 the ratings obtained by the bonds are: Category
--------
- - Fitch Chile Clasificadora de Riesgo Ltda. AA
- - Feller-Rate Clasificadora de Riesgo Limitada AA+
The characteristics of these bonds are as follows:
TERMS OF ISSUANCE
Issuer HQI Transelec Chile S.A.
Securities issued : Bearer bonds in local currency, denominated
in Unidades de Fomento.
Maximum issued : 10,000,000 Unidades de Fomento divided into
Series A
--------
Series A-1 : Up to UF 3,000,000 divided into
3,000 bonds at UF 1,000 each. Series A-2 :Up
to UF 4,00,000 (400 bonds at UF 10,000
each).
Series B
--------
Series B-1: Up to UF 1,000,000 (1,000 bonds
at UF 1,000 each).
Series B-2: Up to UF 3,000,000 (200 bonds at
UF 10,000 each).
11
NOTE 15 - LONG AND SHORT TERM OBLIGATIONS (PROMISSORY NOTES AND BONDS)
- ----------------------------------------------------------------------
(Continued)
Readjustment ; Variation in Unidades de Fomento
Amortization period : Series A: 6 years and Series B: 21 years (6
grace years and 1 to 15 years for capital
amortization, respectively).
Capital amortization Series A, in one installment, upon maturity,
and Series B, payable half-yearly, in
increasing amounts, and effective September
1, 2007.
Early redemption : Series A: without early redemption and
Series B,: effective September 1, 2009, on
any of its denominated dates of payment of
interest or interest and capital
amortization.
Interest rate : Series A and B bonds accrue an 6.20% annual
interest rate on the outstanding capital,
expressed in Unidades de Fomento. Interest
is calculated over a period of 360 days,
upon maturity and payable half-yearly in two
semesters of 180 days each.
Interest payments : Half-yearly payments, upon maturity on March
1 and September 1 yearly, starting September
1, 2001. Interest accrued at period end
amounts to ThCh$ 753,547 and is presented in
Current liabilities.
Guarantees: : This issue has no special guarantees, except
for the general guarantee on all of the
issuer's assets.
Period of placement : 36 months, as from the date of register with
the Superintendency of Securities and
Insurance Companies.
b) The Company issued and placed notes in the international market on April
17, 2001 as follows:
At period end, this bond issuance has the following risk classification:
Category
--------
Standard and Poor's Rating Group A-
Fitch Ibca, Duff & Phelps A-
Moody's Investors Service Inc. Baa1
Issuer HQI Transelec Chile S.A.
Securities issued : US$ (Yankee Bonds) traded in the US market.
Issue value : ThUS$ 465,000 of a single series
Readjustment Variation in United States dollar
Capital amortization Total expiration on April 15, 2011.
Nominal interest rate : 7.875% annually.
Interest payments : On April 15 and October 15 each year,
effective October 15, 2001. Interest accrued
at period end amounts to ThCh$ 11,594,237
and is presented in Current liabilities.
12
NOTE 15 - LONG AND SHORT TERM OBLIGATIONS (PROMISSORY NOTES AND BONDS)
- ----------------------------------------------------------------------
(Continued)
c) Short-and long-term obligations (bonds)
Registration No./ Nominal Restatement Final Interest
identification Series placement value unit Interest rate maturity payment Amortization
-------------- ------ --------------- ---- ------------- -------- ------- ------------
ThCh$ %
Long-term bonds
249 A1 2,000,000 UF 6.2 01/03/2007 Semester At the end
249 A2 4,000,000 UF 6.2 01/03/2007 Semester At the end
249 B1 200,000 UF 6.2 01/03/2022 Semester Semester
249 B2 3,000,000 UF 6.2 01/03/2022 Semester Semester
irst issuance 465,000,000 US$ 7.875 15/04/2011 Semester At the end
Total long-term
Placed
locally or
Par value abroad
--------- ------
ThCh$
32,189,920 Chile
64,379,840 Chile
3,218,992 Chile
48,284,880 Chile
320,475,672 Abroad
-------------
468,549,304
=========
13
NOTE 16 - PROVISIONS AND WRITE-OFFS
Provisions at period end are summarized as follows:
a) Short-term provisions ThCh$
Severance indemnities 39,016
Accrued payroll 1,305,257
Cost of accidents (lines and substations) 86,172
------
Total 1,430,445
=========
b) Long-term provisions
Severance indemnities 1,272,660
=========
c) Write-offs
Inventories 100
===
NOTE 17 - SEVERANCE INDEMNITIES
Changes in provisions are as follows: ThCh$
-----
Opening balance 1,232,173
Price-level restatement 2,515
Provision for the year 76,988
------
Total 1,311,676
=========
Short-term 39,016
Long-term 1,272,660
---------
Total 1,311,676
=========
NOTE 18 - CHANGES IN SHAREHOLDERS' EQUITY
a) During 2001, the changes in shareholders' equity are summarized as follows:
Net income
Paid-in capital Other reserves Retained earnings for the period
--------------- -------------- ----------------- --------------
ThCh$ ThCh$ ThCh$ ThCh$
Opening balance 310,140,471 3,178,720
Prior-year income distribution 3,178,720 -3,178,720
Price-level restatements 6,823,090 69,932
Loss for the period (5,823,032)
------------------------------------------------------------------------------------
Final balance 310,140,471 6,823,090 3,248,652 (5,823,032)
====================================================================================
b) Number of shares
----------------
Series Number of shares Paid-in shares Voting shares
- ------ ---------------- -------------- -------------
Single serie 1,000,000 1,000,000 1,000,000
c) Capital
Series Subscribed capital (ThCh$) Paid-in capital (ThCh$)
- ------ -------------------------- -----------------------
Single serie 310,140,471 310,140,471
14
NOTE 19 - OTHER NON-OPERATING INCOME AND EXPENSES
These are summarized as follows:
ThCh$
-----
Other non-operating income
Prior-year income 107,377
Miscellaneous income 26
Income on disposal of materials 6,791
-----
Total 114,194
Other non-operating expenses:
Prior-year expenses 126,881
Miscellaneous losses 516,671
Retired employee benefits 128
Directors' remuneration 13,969
Fiscal and judicial fines 4,949
Research disbursement 55,989
------
Total 718,587
NOTE 20 - PRICE-LEVEL RESTATEMENT
The net effects of price-level restatements, as described in Note 2 c), resulted
in a net credit to income amounting to ThCh$ 1,498,421 and is summarized as
follows:
Assets - credits Restatement index ThCh$
---------------- ----------------- -----
Inventories Replacement cost 19,079
Fixed assets CPI 10,653,261
Other non-monetary assets CPI 7,639,403
Expense accounts CPI 249,049
-------
Total (charges) credits 18,560,792
----------
Liabilities - charges
Shareholders' equity CPI (6,893,022)
Non-monetary liabilities UF (9,380,455)
Income accounts CPI (788,894)
---------
Net credit (17,062,371)
------------
Price-level restatement net income 1,498,421
---------
15
NOTE 21 - EXCHANGE DIFFERENCES
The net effects of exchange differences amounted to a net charge to income of
ThCh$27,564,214.
Currency Amount
-------- ------
ThCh$
Assets - credits
Time deposits US dollars 4,878,685
Investments in HQI Chile Holding Ltda. US dollars 13,825,731
Forwards US dollars 4,770,810
---------
Total credits 23,475,226
----------
Liabilities - charges
- ---------------------
Loan HQI Holding US dollars (12,356,066)
Bonds US dollars (39,432,599)
SWAP US dollars (5,357,112)
Accounts payable to related companies US dollars (66,862)
--------
Total charges (57,212,639)
------------
Loss from exchange differences (27,564,214)
NOTE 22 - DEBT SECURITY ISSUANCE EXPENSES
Expenses incurred in debt securities issued in the local and foreign markets
include: Stamp tax, placement fees, legal services, financial services, risk
classification reports, and printing costs.
Local Foreign Total
----- ------- -----
ThCh$ ThCh$ ThCh$
Issuance and offering expenses 2,609,881 6,791,467 9,401,348
Amortization for the year (results) (190,698) (396,169) (586,867)
--------- -------- ---------
2,419,183 6,395,298 8,814,481
Balance sheet presentation:
Other current assets 326,911 679,147 1,006,058
Other assets 2,092,272 5,716,151 7,808,423
--------- --------- ---------
2,419,183 6,395,298 8,814,481
16
NOTE 23 - DERIVATIVES
The Company maintains forward and swap contracts to hedge the risk of exchange
rate fluctuations on short-term trade accounts receivable and long term debt as
follows:
a) Contract description
Item Value of Date of Specific Purchase Hedged Item Hedge value
contract expiration item /Sale item amount of item
-------- ---------- ---- ----- ---- ------ -------
ThCh$ ThCh$ ThCh$
1 7,000,000 4to.trimestre Exchange rate (US) P Trade receivables 4,872,000 4,865,140
2 100,000,000 2do.trimestre Exchange rate (US) P US$ Bonds 67,900,000 69,502,000
3 10,000,000 4to.trimestre Exchange rate (US) P US$ Bonds 6,842,000 6,950,200
4 15,000,000 4to.trimestre Exchange rate (US) P US$ Bonds 10,243,500 10,425,300
5 5,000,000 4to.trimestre Exchange rate (US) P US$ Bonds 3,466,500 3,475,100
6 30,000,000 4to.trimestre Exchange rate (US) S US$ Bonds 20,477,700 20,850,600
b) Accounting effect
Unrealized
Item Liability Amount effect on income
---- --------- ------ ----------------
ThCh$ ThCh$
1 Short-term sundry creditors 6,860 6,860
2 Long term bonds payable 2,708,628 2,708,628
3 Long term bonds payable 108,200 108,200
4 Long term bonds payable 181,800 181,800
5 Long term bonds payable 8,600 8,600
6 Long term bonds payable 372,900 372,900
NOTE 24 - CONTINGENCIES AND RESTRICTIONS
a) Restrictions
As a result of the obligations incurred in the bond offerings, the Company is
required to meet specific ratios and obligations, including:
- - Maintain at all times assets free from any encumbrance, assets with a book
value equal to or greater than 1.2 times the book value of the issuer's
total obligations and debts which are not pledged as actual guarantees on
goods and assets owned. These obligations include debts arising from the
aforementioned bond offering.
- - Prohibition to sell, assign, transfer, contribute or dispose of the
issuer's primary assets ("Activos Esenciales") in any way, either by
monetary sale or free of charge.
- - Maintain an individual and consolidated leverage ratio whereby the
proportion of Total liabilities/Total capitalization is not greater than
0.7 times.
- - Maintain at all times an individual and consolidated minimum equity equal
to 15.000.000 Unidades de Fomento.
17
NOTE 24 - CONTINGENCIES AND RESTRICTIONS
(Continued)
b) Direct obligations
There are no direct obligations
c) Indirect obligations
There are no guarantors or guarantees issued arising from indirect obligations.
d) Pending lawsuits
There are pending lawsuits filed against the Company, in response to which it
has instituted the corresponding defense, representing a total of ThCh$ 117,907.
Management believes that no significant contingencies will result from the
pending lawsuits.
e) Direct guarantees
Book value of
Creditor of guarantee Debtor Type Compromised Assets
- --------------------- ------ ---- ------
ThCh$
Banco Santiago Conama Deposit 910,106
Banco Santiago Codelco Deposit 20,851
NOTE 25 - GUARANTEES
Guarantees obtained from third parties:
The Company has received guarantees from contractors and third parties for the
completion of constructions, maintenance work and repayment of housing loans,
amounting to ThCh$ 1,612,564.
18
NOTE 26 - LOCAL AND FOREIGN CURRENCY
Assets and liabilities held in foreign currency have been translated to Chilean
pesos at their respective exchange rates at period end and are summarized as
follows:
a) Assets:
-------
Currency ThCh$
-------- -----
Cash and banks Chilean pesos 24,291
Cash and banks US dollars 6,505
Time deposits US dollars 80,679,853
Marketable securities Chilean pesos 3,042,341
Trade accounts receivable Chilean pesos 9,360,771
Sundry debtors Chilean pesos 467,107
Inventories Chilean pesos 81,348
Recoverable taxes Chilean pesos 1,029,685
Prepaid expenses Chilean pesos 1,651,133
Other Chilean pesos 175,498
Resale agreements UF 10,654,150
Notes and accounts receivable from related companies US dollars 1,014,476
Deferred taxes Chilean pesos 104,513
-------
Total current assets 108,291,671
Fixed assets Chilean pesos 465,821,678
Investments in other companies Chilean pesos 36,998
Goodwill Chilean pesos 101,869,711
Long-term debtors UF 423,436
Accounts receivable from Inversiones
HQI Chile Holding Ltda. US dollars 77,293,403
Intangibles Chilean pesos 22,951,742
Amortization of intangibles Chilean pesos (1,404,552)
Long-term deferred taxes Chilean pesos 17,453,042
Other assets Chilean pesos 11,914,307
----------
Total other assets 230,538,087
19
NOTE 26 - LOCAL AND FOREIGN CURRENCY
(Continued)
b) Current liabilities:
-------------------
Up to 90 days
-------------
Annual average
Currency Amount interest rate
-------- ------ -------------
ThCh$ %
Interest payable - bonds UF 753,547 6.2
Interest payable - bonds US dollars 11,594,237 7.875
Accounts payable Chilean pesos 2,364,589
Sundry creditors US dollars 32,033
Sundry creditors Chilean pesos 2,177,903
Provisions Chilean pesos 1,430,445
Withholdings Chilean pesos 1,693,332
Other current liabilities Chilean pesos 20,947
Notes and accounts payable to related companies Chilean pesos 140,000
Notes and accounts payable to related companies US dollars 37,347
Forward contracts US dollars 81,160
c) Long-term liabilities:
---------------------
1 to 3 years 3 to 5 years 5 to 10 years More than 10 years
------------ ------------ ------------- ------------------
Currency Amount Interest Amount Interest Amount Interest Amount Interest
-------- ------ -------- ------ -------- ------ --------- ------ -------
rate rate rate rate
---- ---- ---- ----
ThCh$ % ThCh$ % ThCh$ % ThCh$ %
Bonds US dollars 323,184,300 7.875
Bonds UF 100,690,069 6.2 47,383,563 6.2
Sundry creditors US dollars 79,962
Customs duties
Provisions Chilean pesos 1,272,660
Other liabilities Chilean pesos 34,789
Swap contracts 2,708,628 7.875
NOTE 27 - SANCTIONS
During the period between January 1, 2001 and September 30, 2001, the Company,
its Directors and Management have not been sanctioned by the Superintendency of
Securities and Insurance Companies.
NOTE 28 - SUBSEQUENT EVENTS
There have been no subsequent financial or accounting events between September
30, 2001 and the date these financial statements were presented to the
Superintendency of Securities and Insurance Companies, which could significantly
affect there interpretation.
NOTE 29 - ENVIRONMENTAL EXPENSES
The Company has made no disbursements during the nine month period ended
September 30, 2001 in connection with this concept.
20
HQI TRANSELEC CHILE S.A.
RELEVANT EVENTS
During the period January 2001 to September 2001 and in conformity with General
Standard No. 30, the Company informed the Superintendency of Securities and
Insurance Companies of the following relevant events:
a) On January 31, 2001 HQI Transelec Chile S.A. purchased 98,606 shares in
Compania Nacional de Transmision Electrica S.A. from Inversiones HQI Chile
Holding Limitada. As a result, HQI Transelec Chile S.A. owns 100% of the
shares in Compania de Transmision Electrica S.A., resulting in its
dissolution in conformity with provisions set forth under Article 103 of
Law 18,046. The purchase agreement was subscribed by public deed dated
January 18, 2001 before the Public Notary Mr. Juan Ricardo San Martin
Urrejola, in Santiago.
b) On April 9, 2001 the Company placed bonds of HQI Transelec Chile S.A. in
the foreign market with the following characteristics:
Currency : United States dollar
Amount : US$ 465,000,000
Securities issued : Singles-series bonds to the order
Amount of series : US$ 465,000,000
Nominal value of bond : US$ 1,000
Interest rate : 7.875%
Issue date : April 17, 2001
c) On April 16, 2001 the Company reported that on April 11, 2001, HQI
Transelec Chile S.A. placed readjustable bearer bonds, registered with the
Superintendency of Securities and Insurance Companies under No. 249. As of
said date, total bonds for UF 9,200,000 were placed, of which 6,000,000
correspond to Series A and 3,200,000 to Series B.
d) On April 18, 2001 the First Ordinary Shareholders' Meeting approved the
balance sheets for the period ended December 31, 2000. In addition, it
approved the proposition from the Company's Board of Directors to pay a
final dividend for 2000 of Ch$ 8.21425 per share, which had already been
paid to the shareholders by means of an interim dividend payment.
e) On April 23, 2001 the Company reported that the First General Ordinary
Shareholders' Meeting held on April 18, 2001 appointed Messrs. Yves Filion,
Jacques Regis, Daniel Leclair, Gilles Marchand, and Pedro Lizana Greve as
members of the Board of directors. In addition, Messrs Gonzalo Delaveau
Swett, Roberto Guerrero del Rio, Roberto Guerrero Valenzuela, Jorge
Delpiano Kraemer, and Arturo Marin Vicuna were elected alternate directors.
f) On August 31, 2001 the Company reported that, as stipulated in the
Registration Rights Agreement, HQI Transelec Chile S.A. registered with the
Securities and Exchange Commission the US dollar issue and modified the
existing bonds in order to make them fully registered according to the
Securities Act. The terms and conditions remained unchanged except for the
elimination of the transfer restrictions of the Rule 144A.
Page 1 of 4
HQI TRANSELEC CHILE S.A.
FINANCIAL STATEMENT ANALYSIS
AT SEPTEMBER 30, 2001
A) SUMMARY
In the first nine months of 2001, HQI TRANSELEC CHILE S.A. obtained a net loss
of ThCh$ 5,823,032 in spite of its positive operating results of ThCh$
46,294,905. The loss was generated from the negative non-operating results
amounting to ThCh$ 51,707,233 and a net credit to income arising from income
taxes of ThCh$ 410,704.
Operating income during the year amounted to ThCh$ 66,037,184. This income is
provided by current contracts subscribed in order to commercialize the
installation's capacity for transmission and the sales of services.
Operating expenses amounted to ThCh$ 17,879,806, which is broken down into Fixed
asset depreciation (61.7%), payroll (15.1%), and work, supplies, and services
hired (17.8%).
Administrative and selling expenses amount to ThCh$ 1,862,473, which is broken
down into payroll (51.6%), and expenses incurred in work, supplies and services
hired (29.6%).
Non-operating results for the period present a loss of ThCh$ 51,707,233 arising
from financial expenses totaling ThCh$ 26,632,235 (51.5%), monetary correction
gain for ThCh$ 1,498,421 (2.3%) as a result of an increase in the Consumer Price
Index (2.2% in the first nine months) and exchange rate loss for ThCh$
27,564,214 (53.3%) as a result of an increase in the US dollar exchange rate of
21.2% during the period (Ch$ 121.37). Other significant items with an effect on
non-operating results were interest income amounting to ThCh$ 5,615,224 (10.9%)
and goodwill amortization amounting to ThCh$ 4,020,036 (7.8%).
B) RESULTS
Concepts From January 1 to September 30,2001
- --------
ThCh$
Operating income 66,037,184
Toll sales 62,466,525
Work and services 3,570,659
Operating expenses (17,879,806)
Fixed costs (6,349,666)
Depreciation (11,033,355)
Amortization of intangibles (496,785)
Administrative and selling expenses (1,862,473)
Operating results 46,294,905
Non-operating results (51,707,233)
Income tax (deferred tax credit) (410,704)
Loss for the period (5,823,032)
EBITDA 43,935,095
Profitability Indices
Return on equity (1.85)
Return on of assets (0.72)
Return on income earning assets 9.47
Loss per share (Ch$) 5,823
Page 2 of 4
C) BALANCE SHEET ANALYSIS
At September 30, 2001
---------------------
Concepts ThCh$
- --------
Current assets 108,291,671
Fixed assets 465,821,678
Other assets 230,538,087
-----------
Total assets 804,651,436
Current liabilities 20,325,540
Long-term liabilities 469,936,715
Shareholders' equity 314,389,181
-----------
Total Liabilities and Shareholders' equity 804,651,436
Value of main operating fixed assets At September 30, 2001
- ------------------------------------ ---------------------
ThCh$
Land 5,261,461
Buildings and infrastructure 271,647,884
Machinery and equipment 221,524,313
Other fixed assets 1,837,850
Increased value from technical reappraisal (net) 19,675,108
Depreciation (54,124,938)
------------
Total 465,821,678
Liquidity and leverage Ratios At September 30, 2001
- ----------------------------- ---------------------
Current ratio 5.33
Acid test 4.64
Liabilities/Shareholders' equity 1,56
% Short-short debt 4.15
% Long-term debt 95.85
At September 30, 2001 fixed assets are mainly represented by land, buildings,
infrastructure, and machinery and equipment.
The Company's assets are valued in conformity with accounting principles
generally accepted in Chile.
Significant fluctuations in the market in which the Company operates
- --------------------------------------------------------------------
In the Interconnected Central System (SIC), 100% of the 500KV transmission lines
and 74.4% and 99.8% of the 220 and 154 kV, respectively, are exploited by HQI
Transelec Chile S.A.
It is worth noticing that in the nine months of 2001 there were no significant
fluctuations in the market in which the Company operates.
Page 3 of 4
Exchange rate risk
- ------------------
At September 30, 2001 a portion of the Company's debt was denominated in United
States dollars from the placement of bonds abroad amounting to US$ 481,681,875
(including accrued interest). The loan issued to the Parent Company, Inversiones
HQI Chile Holding Limitada, for US$ 112,669,965 (including accrued interest),
and short-term investments in the financial market for US$ 116,082,778 and a
Swap contract for US$ 100,000,000 (since August 17, 2001), reduce the net
exposure to US$ 152,929,131. At December 31, 2000 the net exposure of US$
288,645,975, was originated from a loan for US$538,645,975 issued by the Parent
Company and a forward position of US$ 250,000,000. During the period, the effect
of the devaluation of the Chilean peso compared to the US dollar amounted to
ThCh$ 27,564,214.
In the balance sheet, exposure to the exchange rate fluctuation is reduced by
the fact that transmission toll income is associated with the US dollar. Toll
contracts are denominated in US dollars, however monthly billing is expressed at
their equivalent in Chilean pesos, at the average monthly Observed US dollar
exchange rate for 85% of contracts, and at the current US dollar exchange rate
on the last day of the month for the rest of the contracts. The evolution of the
exchange rate for the first nine months was as follows:
Exchange rate Average of the month Last day of the month
------------- -------------------- ---------------------
Average for the Average for the
Monthly value Quarter Monthly value Quarter
January 571.12 561.61
574.01 576.48
February 563.13 572.86
March 587.79 594.97
- --------------------------------------------------------------------------------------------
April 598.63 598.61
606.39 612.82
May 604.48 610.85
June 616.07 629.00
- --------------------------------------------------------------------------------------------
July 656.46 668.79
670.47 675.26
August 673.70 661.97
September 681.24 695.02
- --------------------------------------------------------------------------------------------
Toll contracts include semester indexation formulas to reflect fluctuations in
the net replacement value of assets and in the operating and maintenance costs.
These reflect variations in the international prices of equipment and the local
costs of materials and labour. During the period between January 1, 2001 and
June 30, 2001 the average toll index was 0.97288, which was effective as of July
1, 2001. The next indexation will be applied on January 1, 2002.
Revenues from transmission tolls during the third quarter amounted to Ch$ 22,205
million, including an adjustment of Ch$ 499 millions for the first nine months
of 2001. Without this adjustment, the revenues of Ch$ 21,706 compared to Ch$
20,292 of the second quarter. This difference is basically due to an increase of
the average exchange rate of 10.5% and a reduction of 2.7% in the volume of
revenues expressed in dollars resulting from the indexation applied on July 1,
2001.
Financial results for the year include the loss from the devaluation in the
Chilean peso applied on the debt (liabilities in foreign currency), however it
is not possible to record the future increase in toll income from the same
devaluation.
Page 4 of 4
Cash flows during the period
In the first nine months of 2001, due mainly to operating activities, net
positive cash flows amounting to ThCh$ 66,049,651 were generated.
Financing activities generated positive cash flows of ThCh$ 89,479,356 arising
from bond placements in the local market (UF 9,200,000) and foreign market (US$
465,000,000).
Cash flows from investment activities generated a negative cash flow of ThCh$
67,405,878 as a result of a current account loan granted to Inversiones HQI
Chile Holding Ltda. and the purchase of fixed assets. On July 31, the loan from
HQI Transelec Chile S.A. to Inversiones Chile Holding Ltda was reduced by ThCh$
38,861,286.
The effect of inflation on cash and cash equivalents amounted to ThCh$
5,034,028.
The closing cash flow balance amounted to ThCh$ 94,407,140 considering an
opening balance of ThCh$ 23,323,462
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
HQI Transelec Chile S.A.
Date: December 13, 2001 By: /s/ Real Paul-Hus
----------------------------
Real Paul-Hus
Finance Manager