6-K 1 multicanal-6k_0830.txt FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Pursuant to Rule 13a-16 or 15d-16 of the Securities Act of 1934 For the month of August 2004 MULTICANAL S.A. (Exact name of Registrant as specified in its charter) MULTICHANNEL S.A. (Translation of Registrant's name into English) Avalos 2057 (1431) Buenos Aires, Argentina (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 12g-3-2(b) under the Securities Exchange Act of 1934. Yes No X ------ ----- If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82 - . ------------------------ Buenos Aires, August 30, 2004 Messrs. Argentine Securities Commission ------------------------------- Reference: MULTICANAL S.A. Relevant Information -------------------------------------------------------------------------------- Dear Sirs, Martin G. Rios, in my capacity as Person in Charge of Market Relations on behalf of Multicanal S.A. (the "Company"), proof of such representation previously filed, with a registered domicile established at Av. Juana Manso 205, 1st Floor, Federal Capital City, addresses this letter to you in order to accompany the Press Release issued by the Company in relation to the legal proceeding initiated by the Company's board of directors pursuant to Section 304 of the U.S. Bankruptcy Code to obtain recognition of its Acuerdo Preventivo Extrajudicial (the "APE"), as confirmed on April 14, 2004. Yours sincerely, Martin G. Rios BUENOS AIRES, August 30, 2004. On August 27, 2004, the United States Bankruptcy Court for the Southern District of New York rendered a preliminary decision in the proceeding initiated by the Company's board of directors to obtain recognition, pursuant to Section 304 of the U.S. Bankruptcy Code, of Multicanal's APE in the United States, as confirmed on April 14, 2004 - currently on appeal before the National Commercial Court of Appeals of the City of Buenos Aires. The decision calls for additional proceedings with respect to two matters prior to the Company obtaining a final favorable decision in the United States. Multicanal is analyzing the U.S. Bankruptcy Court's preliminary decision. MULTICANAL S.A. SIGNATURE 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. MULTICANAL S.A. Buenos Aires, Argentina, August 30, 2004 By: /s/ Adrian Meszaros ----------------------- Adrian Meszaros Chief Financial Officer

June 30, December 31, -------------------------------------------- 2004 2003 (Unaudited) -------------------------------------------- $ -------------------------------------------- ASSETS CURRENT ASSETS Cash and banks........................................................... 217,889,636 187,475,744 Short-term investments (Note 3 (a)) ..................................... 665,892 450,952 Trade receivables (Note 3 (b))........................................... 16,435,152 15,527,882 Receivables from related parties......................................... 11,719,948 12,016,311 Other (Note 3 (c))....................................................... 57,996,775 46,926,992 -------------------------------------------- Total current assets............................................ 304,707,403 262,397,881 -------------------------------------------- NON-CURRENT ASSETS Long-term investments (Note 3 (e))....................................... 6,133,377 11,996,007 Property and equipment, net (Note 4)..................................... 461,649,907 495,848,975 Intangible assets (Note 5)............................................... 34,283,296 35,083,550 Goodwill (Note 3(f))..................................................... 1,174,817,804 1,172,682,439 Other (Note 3 (d))....................................................... 414,705,753 379,349,295 -------------------------------------------- Total non-current assets........................................ 2,091,590,137 2,094,960,266 -------------------------------------------- Total assets ................................................... 2,396,297,540 2,357,358,147 ============================================ LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities................................. 107,348,443 96,041,540 Short-term bank and financial debt (Notes 3 (g) and 7)................... 2,084,554,211 1,963,820,070 Acquisition related debt ................................................ 5,500,543 8,158,497 Taxes payable............................................................ 15,121,612 16,878,902 Debt with related parties................................................ 82,551 20,458 Payroll and social security.............................................. 10,283,417 11,643,677 Other (Note 3 (h))....................................................... 6,255,449 7,342,309 -------------------------------------------- Total current liabilities....................................... 2,229,146,226 2,103,905,453 -------------------------------------------- NON-CURRENT LIABILITIES Taxes payable............................................................ 559,570 684,715 Acquisition related debt ................................................ 100,633 100,633 Long-term bank and financial debt........................................ 239,753 239,753 Other (Note 3 (i))....................................................... 11,561,224 15,133,341 Provision for lawsuits and contingencies (Note 6 (c)).................... 21,201,100 19,831,019 -------------------------------------------- Total non-current liabilities................................... 33,662,280 35,989,461 -------------------------------------------- Total liabilities............................................... 2,262,808,506 2,139,894,914 -------------------------------------------- TEMPORARY TRANSLATION DIFFERENCES 2,961,769 3,330,360 MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES .......................... 27,850,099 31,476,831 SHAREHOLDERS' EQUITY (as per related statement).......................... 102,677,166 182,656,042 -------------------------------------------- Total liabilities, Temporary translation differences, Minority interest in consolidated subsidiaries and shareholders' equity.. 2,396,297,540 2,357,358,147 ============================================

June 30, -------------------------------------------- 2004 2003 (Unaudited) (Unaudited) -------------------------------------------- $ -------------------------------------------- Net revenues (Note 3 (j) )............................................. 266,208,265 245,009,666 Operating costs Direct operating expenses (Exhibit).................................. (125,723,709) (119,580,283) General and administrative expenses (Exhibit)........................ (31,981,885) (31,423,646) Selling and marketing expenses (Exhibit)............................. (19,674,569) (14,617,770) Depreciation and amortization........................................ (59,792,932) (80,652,943) -------------------------------------------- Operating gain (loss) ................................................. 29,035,170 (1,264,976) Non-operating expenses Financial income / (expenses) and holding results, net On assets Result of exposure to inflation........................................ - (2,279,073) Exchange differences and results from conversion....................... 6,817,467 (32,416,620) Bank expenses.......................................................... (429,709) (435,490) Holding gains/short-term investments................................... 120,544 363,548 Interest............................................................... 1,193,016 685,583 On liabilities Result of exposure to inflation........................................ - 1,987,621 Interest............................................................... (100,937,195) (96,667,145) Loan restatement ...................................................... (2,832,181) (1,828,996) Exchange differences................................................... (16,313,465) 361,061,976 Tax on indebtedness.................................................... - (78,704) Tax on debits and credits to bank current accounts..................... (3,307,267) (2,388,935) Commissions............................................................ (19,546,941) (16,821,124) Other non-operating (expenses) / income, net (Note 3 (k) )........... (3,557,457) 6,621,038 -------------------------------------------- (Loss) / gain before income taxes, minority interest and equity in the (109,758,018) 216,538,703 gains / (losses) of affiliated companies............................. Income taxes and / or tax on minimum notional income................... 29,897,947 (1,968,566) -------------------------------------------- (Loss) / gain before minority interest and equity in the gains / (losses) (79,860,071) 214,570,137 of affiliated companies.............................................. Equity in the gains / (losses) of affiliated companies................. 471,153 139,551 Minority interest in results of consolidated subsidiaries............. (589,958) (284,208) -------------------------------------------- Net (loss) / gain ..................................................... (79,978,876) 214,425,480 ============================================ Weighted average number of shares...................................... (0.22) 0.58 ============================================ Net (loss) / gain per share............................................ 371,635,103 366,821,037 ============================================

==================================================================================================================================== SHAREHOLDERS' CONTRIBUTIONS ------------------------------------------------------------------ Number of issued and authorized common Additional shares par Share Adjustments paid-in Merger Irrevocable Legal value Ps. 1 capital to capital capital premium contributions Reserve reserve ---------------------------------------------------------------------------------------------------------- At January 1, 2003 366,821,037 366,821,037 469,187,808 1,052,448,962 33,930,620 4,814,066 64,519,465 6,356,401 Net gain for the period - - - - - - - - ---------------------------------------------------------------------------------------------------------- At June 30, 2003 366,821,037 366,821,037 469,187,808 1,052,448,962 33,930,620 4,814,066 64,519,465 6,356,401 ========================================================================================================== At January 1, 2004 371,635,103 371,635,103 469,187,808 1,052,448,962 33,930,620 - 64,519,465 6,356,401 Net loss for the period - - - - - - - - ---------------------------------------------------------------------------------------------------------- At June 30, 2004 371,635,103 371,635,103 469,187,808 1,052,448,962 33,930,620 - 64,519,465 6,356,401 ==================================================================================================================================== ======================================================= Retained earnings Total (accumulated shareholders' deficit) equity ------------------------------ At January 1, 2003 (1,876,973,764) 121,104,595 Net gain for the period 214,425,480 214,425,480 ------------------------------ At June 30, 2003 (1,662,548,284) 335,530,075 ============================== At January 1, 2004 (1,815,422,317) 182,656,042 Net loss for the period (79,978,876) (79,978,876) ------------------------------ At June 30, 2004 (1,895,401,193) 102,677,166 ========================================================

June 30, ---------------------------------------- 2004 2003 (Unaudited) (Unaudited) ---------------------------------------- $ ---------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) / gain for the period .......................................... (79,978,876) 214,425,480 Adjustments to reconcile net (loss) gain to net cash provided by operating activities: Accrued income tax...................................................... (29,897,947) 1,968,566 Depreciation and disposal of fixed assets............................... 56,769,262 78,043,727 Intangible assets amortization.......................................... 3,023,670 2,609,216 Equity in the (gains) losses of affiliated companies.................... (471,153) (139,551) Loan restatement ....................................................... 2,832,181 1,828,996 Interest accrued on financial liabilities and acquisition of cable...... 100,154,617 94,764,959 Result from restatement of negotiable obligations...................... 17,747,343 (350,635,146) Minority interest in results of consolidated subsidiaries............... 589,958 284,208 Provision for lawsuits and contingencies................................ 2,350,000 453,271 Exchange difference in advances on purchase of investments.............. - 19,146 Result of exposure to inflation from bank and financial debt and acquisition related debt in Argentine pesos ............................ - 33,423 Result from holding of long-term investments............................ (1,071) 1,360 Income tax paid......................................................... (6,058,637) (2,706,430) Decrease (increase) in assets Trade receivables....................................................... (907,270) 4,392,340 Other current assets.................................................... (3,289,773) 4,909,274 Other non-current assets................................................ (2,599,173) 2,657,894 Receivables from related parties........................................ 296,363 (1,375,753) Increase (decrease) in liabilities Debt with related parties............................................... 62,093 (664,299) Other current and non-current liabilities............................... (1,087,238) (5,094,249) Accounts payable and accrued liabilities................................ 11,306,903 (23,515,532) Payroll and social security............................................. (1,360,260) (1,200,052) Current and non-current taxes payable................................... (4,699,146) (4,278,671) Provision for lawsuits and contingencies................................ (979,919) (767,076) Temporary translation differences ...................................... (3,008,921) 11,006,608 ---------------------------------------- Cash provided by operations................................................ 60,793,006 27,021,709 ---------------------------------------- CASH FLOWS FROM INVESTMENT ACTIVITIES Purchases of property and equipment net of proceeds from sales and disposals (21,951,197) (7,783,927) Dividends received......................................................... 784,000 - (Acquisitions)/Sales of cable systems and subscribers and (increase) decrease in goodwill and intangible assets............................... (1,965,429) (756,469) ---------------------------------------- Cash used in investment activities......................................... (23,132,626) (8,540,396) ---------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Repayments of acquisition related debt..................................... (2,802,066) (1,951,347) Increase of minority interest in consolidated subsidiaries................. (4,229,482) (1,065,431) ---------------------------------------- Cash used in financing activities.......................................... (7,031,548) (3,016,778) ---------------------------------------- INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS......................... 30,628,832 15,464,535 Cash and cash equivalents at the beginning of period....................... 187,926,696 107,023,972 ---------------------------------------- CASH AND CASH EQUIVALENTS AT THE END OF PERIOD ............................ 218,555,528 122,488,507 ----------------------------------------

% of capital and votes held by Multicanal June 30, December 31, ------------------------------------------ 2004 2003 ------------------------------------------ % ------------------------------------------ Subsidiaries Telesur Teledifusora Rio Cuarto S.A. 100.00 100.00 Delta Cable S.A. 84.00 84.00 TV Cable San Francisco S.A. 100.00 100.00 A.V.C. Continente Audiovisual S.A. 90.00 90.00 Televisora Privada del Oeste S.A. 51.00 51.00 Pem S.A. 100.00 100.00 CV Berazategui S.A. 70.00 70.00 San Lorenzo T.V. Cable S.A. 100.00 100.00 La Capital Cable S.A. 50.00 50.00 Chaco Cable Color S.R.L. (1) 100.00 100.00 Teledifusora San Miguel Arcangel S.A. 50.10 50.10 Tevemundo S.A. 100.00 100.00 Cable Imagen S.R.L. (1) 100.00 100.00 Television Dirigida S.A.E.C.A. 89.39 89.39 Cablevision Comunicaciones S.A.E.C.A. 89.81 89.81 Tres Arroyos Televisora Color S.A. 72.99 71.06 Wolves Television S.A. 100.00 100.00 Adesol S.A. 100.00 100.00 Cable Video Sociedad Anonima 100.00 100.00 Dorrego Television S.A. 100.00 100.00 Cable Video Sur S.R.L. 100.00 100.00

June 30, December 31, ------------------------------------ 2004 2003 (Unaudited) ------------------------------------ $ ------------------------------------ CONSOLIDATED BALANCE SHEET CURRENT ASSETS (a) Short-term investments Money market instruments........................................... 36,089 36,385 Time deposits...................................................... 173,970 173,845 Other.............................................................. 455,833 240,722 ------------------------------------ 665,892 450,952 ==================================== (b) Trade receivables From subscriptions.............................................. 24,084,129 25,229,019 From advertising................................................ 10,858,451 9,212,702 Notes receivable................................................ 12,536 15,628 From new businesses............................................. 1,006,217 794,041 Credit cards.................................................... 2,914,933 3,354,466 From assurance.................................................. 3,119,585 2,939,314 Other........................................................... 60,306 379,051 Allowance for doubtful accounts (Note 6 (a)) From subscriptions.............................................. (19,607,892) (20,285,188) From advertising................................................ (5,612,954) (5,710,992) From new businesses............................................. (400,159) (400,159) ------------------------------------ 16,435,152 15,527,882 ==================================== (c) Other Advances to suppliers................................................... 5,987,399 791,057 Receivables from minority shareholders.................................. 134,206 520,326 Tax advances............................................................ 3,168,810 3,406,427 Deposits in guarantee................................................... 537,338 555,334 Other receivables....................................................... 9,860,807 9,004,290 Debtors in litigation................................................... 405,299 327 Prepaid expenses........................................................ 8,524,787 5,446,394 Advances to employees................................................... 302,178 309,154 Judicial deposits ...................................................... 12,833,710 14,361,063 Dividends receivable ................................................... 1,764,000 - Other................................................................... 14,478,241 12,532,620 ------------------------------------- 57,996,775 46,926,992 =====================================

June 30, December 31, ------------------------------------- 2004 2003 (Unaudited) ------------------------------------- $ ------------------------------------- NON-CURRENT ASSETS (d) Other Prepaid expenses....................................................... 20,851,385 22,561,980 Net deferred tax assets................................................. 385,862,088 352,245,799 Tax advances............................................................ 7,847,155 4,396,391 Deposits in guarantee................................................... 145,125 145,125 ------------------------------------- 414,705,753 379,349,295 ===================================== (e) Long-term investments Investments in companies carried under the equity method (Note 10)........................................................ 5,322,479 7,286,400 Advances for the purchase of companies............................... 6,866,000 6,785,500 Provision for recovery of investments (Note 6 (d)) .................... (6,716,000) (6,635,500) Investments in companies carried at cost ............................ 660,898 4,559,607 ------------------------------------- 6,133,377 11,996,007 ===================================== (f) Goodwill Original Value...................................................... 2,600,612,560 2,597,016,094 Accumulated amortization ........................................... (851,635,954) (850,174,853) ------------------------------------- 1,748,976,606 1,746,841,241 Allowance for impairment of Goodwill (Note 6 (e)) .................. (574,158,802) (574,158,802) ------------------------------------- 1,174,817,804 1,172,682,439 ===================================== CURRENT LIABILITIES (g) Short-term bank and financial debt Overdraft facilities.................................................... 57,144 57,144 Corporate Bonds Capital.............................................................. 1,503,241,920 1,490,545,620 Interests payable.................................................... 504,055,840 400,378,043 Loans Capital.............................................................. 44,601,647 44,601,647 Interests payable and restatements................................... 32,597,660 28,237,616 ------------------------------------- 2,084,554,211 1,963,820,070 ===================================== (h) Other Other provisions....................................................... 691,341 736,009 Debt with minority shareholders........................................ 259,704 244,646 Dividends payable...................................................... 2,467,906 2,347,300 Sundry creditors....................................................... 237,174 545,052 Other.................................................................. 2,599,324 3,469,302 ------------------------------------- 6,255,449 7,342,309 =====================================

June 30, December 31, ------------------------------------- 2004 2003 (Unaudited) ------------------------------------- $ ------------------------------------- NON-CURRENT LIABILITIES (i) Other Investments in companies carried under the equity method - Fintelco S.A. (Note 10)........................................................ 11,304,107 14,875,850 Other.................................................................. 257,117 257,491 ------------------------------------- 11,561,224 15,133,341 ===================================== June 30, ------------------------------------- 2004 2003 (Unaudited) (Unaudited) ------------------------------------- $ ------------------------------------- CONSOLIDATED STATEMENT OF OPERATIONS (j) Net revenues Gross sales From subscriptions.................................................... 258,939,214 225,393,771 From advertising...................................................... 5,517,534 4,202,530 Other................................................................ 3,655,715 17,417,570 Allowance for doubtful accounts From subscriptions.................................................... (1,906,795) (1,994,385) From advertising - recovery........................................... 2,597 (9,820) ------------------------------------- 266,208,265 245,009,666 ===================================== (k) Other non-operating income / (expenses), net Provision for lawsuits and contingencies................................ (2,350,000) (453,271) Indemnification paid.................................................... (518,000) - Indemnification collected............................................... - 1,571,916 Uncollectibility of other receivables................................... - (73,582) Other................................................................... (689,457) 5,575,975 ------------------------------------- (3,557,457) 6,621,038 =====================================

June 30, 2004 --------------------------------------------------------------------------- Original value Accumulated Net book value Assets depreciation lives years --------------------------------------------------------------------------- (Unaudited) (Unaudited) (Unaudited) ------------------------------------------------------------- $ ------------------------------------------------------------- Installations, external wiring and transmission equipment......... 1,453,103,041 (1,119,005,133) 334,097,908 10 Properties....................... 121,635,410 (46,719,707) 74,915,703 50 Computer equipment............... 67,643,932 (61,103,630) 6,540,302 5 Furniture, fixtures and tools.... 53,674,520 (50,146,346) 3,528,174 10 Vehicles......................... 30,219,185 (27,229,196) 2,989,989 5 Materials, net of provision for obsolescence of materials...... 33,278,879 - 33,278,879 - Work in progress................. 5,321,043 - 5,321,043 - Advances to suppliers............ 977,909 - 977,909 - ------------------------------------------------------------- Total................... 1,765,853,919 (1,304,204,012) 461,649,907 =============================================================

December 31, 2003 --------------------------------------------------------------------------- Original value Accumulated Net book value Assets depreciation lives years --------------------------------------------------------------------------- $ ------------------------------------------------------------- Installations, external wiring and transmission equipment........... 1,414,541,121 (1,073,969,643) 340,571,478 10 Properties....................... 119,919,321 (43,448,764) 76,470,557 50 Computer equipment............... 63,889,233 (59,143,983) 4,745,250 5 Furniture, fixtures and tools.... 53,295,943 (49,523,044) 3,772,899 10 Vehicles......................... 29,896,109 (27,757,101) 2,139,008 5 Materials, net of provision for obsolescence of materials...... 57,212,629 - 57,212,629 - Work in progress................. 9,088,949 - 9,088,949 - Advances to suppliers............ 1,848,205 - 1,848,205 - ------------------------------------------------------------- Total................... 1,749,691,510 (1,253,842,535) 495,848,975 =============================================================

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