Intesa negotiations reach impasse

Venezuela's state oil company PDVSA has reached a deadlock in the dispute with its partner, US tech firm Science Applications International Corp (SAIC), over the future of their Venezuelan IT services joint venture Intesa, according to local press. Intesa became embroiled in PDVSA's political strife towards the end of 2002, and PDVSA canceled all contracts with the IT services company, reportedly owing Intesa about US$50mn in unpaid fees. SAIC and PDVSA have been in talks for five months: SAIC wants to declare Intesa bankrupt, while Pdvsa does not, said Jorge Baralt, president of PDV-IFT, a unit of PDVSA that owns the company's 40% stake in Intesa. SAIC owns the remaining 60%. The Venezuelan government fears bankruptcy would mean abandoning Intesa creditors and employees; however, the reports did not mention any other possibilities, and Baralt said one way or another the company would be wound up. "My objective as president of PDV-IFT is to dissolve the company and, therefore, end up without a job. But that objective has not yet been reached," he said. Intesa was formed in January 1997 to provide IT services in Latin America. According to SAIC, Intesa posted revenues of US$323mn and US$215mn for the fiscal years of 2002 and 2003, respectively. Intesa's fiscal year ends on January 31. San Diego, California-based SAIC has already classified Intesa as a "discontinued operation" in its financial statements.