TCRLA_Public/020415.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

            Monday, April 15, 2002, Vol. 3, Issue 73

                           Headlines



A R G E N T I N A

AGUAS ARGENTINAS: Suspends Debt Payments; S&P Cuts Ratings
BGN: Shareholders Seek Central Bank Approval For Liquidation
CAPEX SA: Defaults; Fitch Downgrades Ratings To 'DD' From 'C'
IMPSA: Signs Deal With Cemig For the Supply of Turbines


B E R M U D A

FLAG TELECOM: Cauley Geller Files Securities Class Action Suit
FLAG TELECOM: Schiffrin & Barroway, LLP Files Class Action Suit
FLAG TELECOM: Moody's Cuts Rating On Proposed Debt Restructuring
GLOBAL CROSSING: Seeks Approval To Pay US$15M Retention Bonuses
TYCO INTERNATIONAL: Plastics Unit To Go On The Block By July


B R A Z I L

AES CORP.: Eletropaulo Seeks Actuarial Liability Extension
BCP: Default Goes Uncured; Owners Continue Negotiating
EMBRATEL: Pursues Legal Fight Over Inflated Interconnection Fees
VARIG: Resumes Miami-Belem Flights as Demand Picks Up


C H I L E

DISPUTADA: Exxon Still Considering Anglo American Bid
ENAMI: Smaller Mines Contest Ventanas Transfer To Codelco
MANQUEHUE NET: Fitch Cuts Bond Ratings; Outlook Negative


C O L O M B I A

BANCAFE: Colombia's Woes May Hinder Privatization


M E X I C O

DESC: Reports 7% Drop In 1Q02 Operating Income
GRUPO ALFA: Considers Selling Major Assets To Reduce Debt
GRUPO MEXICO: EPA To Cover Cleanup Of the Ruston Smelter Site


U R U G U A Y

PLUNA SA: Uruguay, Varig Announce Rescue Plan


V E N E Z U E L A

PDVSA: Restores Operations, Workforce; Begins Transition


     - - - - - - - - - -


=================
A R G E N T I N A
=================

AGUAS ARGENTINAS: Suspends Debt Payments; S&P Cuts Ratings
----------------------------------------------------------
Aguas Argentinas' recent announcement that it will suspend debt
payments prompted international credit rating agency Standard and
Poor's (S&P) to downgrade the Company's ratings, said S&P credit
analyst Sergio Fuentes.

S&P cut the Argentine water utility's local and foreign currency
corporate credit ratings to 'D' from 'SD' (selective default).

According to the ratings agency, Aguas' debt repayment capacity
has been substantially diminished because of the strong and
continuing devaluation of the Argentine peso, which followed the
end of convertibility, while tariffs were frozen without allowing
for any compensating adjustments.

Combined with the lack of liquidity in the financial system, the
Company's financial condition has worsened, S&P noted.

Aguas' French parent company Suez, which announced the payment
suspension Wednesday, explained that the utility will dedicate
its financial resources to ensuring service continuity.

Suez added that Aguas intends to develop and propose a plan to
reestablish the economic and financial balance of the concession
contract, in association with the public authorities.

Aguas Argentinas provides potable water and sewerage services to
some nine million residents in Buenos Aires and 13 surrounding
municipalities. Its 30-year concession began May 1993.

CONTACT:  SUEZ
          Media:
          Antoine Lenoir
          Phone: +331-4006-6715
                 or
          Investors:
          Arnaud Erbin
          Phone: +331-4006-6489
                 or
          Belgium
          Guy Dellicour
          Phone: +322-507-02-77


BGN: Shareholders Seek Central Bank Approval For Liquidation
------------------------------------------------------------
Banco General de Negocios's (BGN) primary shareholders have
requested that the Central Bank liquidate the Argentine bank
while allowing sister banks Nuevo Banco de Santa Fe (NBSF) and
Banco Comercial del Uruguay to continue normal operations,
relates Business News Americas.

Credit Suisse First Boston (CSFB), Dresdner Bank and JP Morgan
Chase are attempting to reach an agreement with the central bank
that will allow NBSF and BCU to carry out a formal separation
from BGN.

Simultaneously, the assets and liabilities of BGN would be
transferred to NBSF, along with the resources necessary to cover
BGN's depositors.

BGN is at the center of an investigation, which included the
arrest of the Argentine bank's vice president, Carlos Roh, on
charges that he illegally siphoned up to US$250 million out of
the country after Argentina's government imposed capital and
deposit controls on December 3 last year.

CONTACTS:  BANCO GENERAL DE NEGOCIOS SA
           Esmeralda 120
           Capital Federal 1035
           Buenos Aires, Argentina
           Phone: 011-4394-3003
           Fax: 011-4320-6138
           Email: interbank@bancobgn.com
           URL: http://www.bancobgn.com

           DRESDNER BANK LATEINAMERIKA AG
           Neuer Jungfernstieg 16
           20354 Hamburg, Germany
           Tel.:   (+49 40) 3595-0
           Fax:   (+49 40) 3595 3314
           Telex:   214 236-0 dl d
           S.W.I.F.T. DRES DE HL
           E-Mail:   public-relations@dbla.com

           CREDIT SUISSE GROUP
           P.O. Box 1
           CH-8070 Zurich
           Tel. +41 (1) 212 16 16
           Fax. +41 (1) 333 25 87
           Contact: Lukas Muehlemann, chairman & CEO

           J.P. MORGAN CHASE & CO.
           Investor Relations
           J.P. Morgan Chase & Co.
           270 Park Avenue
           New York, NY 10017-2070
           (1-212) 270-6000
           URL: www.jpmorganchase.com


CAPEX SA: Defaults; Fitch Downgrades Ratings To 'DD' From 'C'
------------------------------------------------------------
Fitch Ratings has downgraded the foreign and local currency
ratings of Capex S.A. to 'DD' from 'C'.

The rating actions follow Capex's default on interest payments
due under the company's floating rate note (FRN) and trade
facilities. The default was prompted by the absence of the
required approval from the central bank (Banco Central de la
Republica de Argentina, BCRA) to transfer the corresponding
interest payments.

Capex's financial flexibility has been adversely affected by the
devaluation, implementation of transfer and convertibility
controls, pesofication and effects stemming from the government's
default.

At present, Capex, as well as other market participants, is
negotiating with the Argentine government in the hopes of
recovering the value effectively expropriated from the company
through Public Emergency Law No. 25.561. The outcome of the
negotiations remains uncertain.

Capex is 55% owned and controlled by Capsa S.A. (CAPSA) with the
remainder of the common stock being listed of the Buenos Aires
and Luxembourg Stock Exchanges. Capsa is 55% owned by the Gotz
family and 45% owned by El Paso Energy (EPG), a U.S.-based energy
company that has operations in interstate natural gas
transmission, gas gathering and processing, energy marketing, and
international energy infrastructure development. EPG and Capex
are strategic partners that expect to invest in oil and gas and
power projects in Latin America.

CONTACT:  Fitch Ratings
          Cecilia Minguillon
              or
          Ana Paula Ares
          Phone:  +54 11 4327-2444

          Jason T. Todd
          Phone: 1-312-368-3217

          Alejandro Bertuol
          Phone: 1-212-908-0393

          James Jockle
          Phone: 1-212-908-0547 (Media Relations)

          CAPEX SA
          Melo 630 (1638) Vicente L˘pez
          Buenos Aires  Argentina
          Tel./Fax: (54-11) 4796-6000
          E-mail: info@capex.com.ar
          Contact:
          Enrique Gotz, Chairman
          Alejandro Gotz, Vice-Chairman
          Pablo Gotz, Director


IMPSA: Signs Deal With Cemig For the Supply of Turbines
-------------------------------------------------------
Brazil's Minas Gerais state integrated power company Cemig has
agreed to supply turbines for Impsa's US$16-million, 23MW Pai
Joaquim small-scale hydro project in Minas Gerais state, reports
Business News Americas. Impsa will sign an additional two
contracts in Brazil worth US$52 million for two turbines by
month-end.

"Although this isn't one of the biggest projects we've worked on
in Brazil, at this moment it has the symbolic value of showing
that Argentine companies that have been working in this country
for years, retain the confidence of clients despite the crisis,"
Impsa's Brazil president Alfredo Collado said.

Impsa is on the verge of closing an agreement with investors, one
of the first successful refinancing cases of an Argentine company
in default.

The Company's offer includes 2 new bonds, one of which would
cover 50 percent over the nominal value of the previous bond.
About 66 percent of the shareholders have accepted the offer so
far.

Impsa's default started last December when it failed to pay
nearly US$7 million in interests for a US$137.6 million bond.

CONTACTS:

IMPSA
Latin America
Roberto Arancibia
Rodrˇguez Pe¤a 2451 (5503) Godoy Cruz, Mendoza, Argentina.
Tel: +54-261 4131300
Fax. +54-261 4131416 - 4131423
arancibi@impsa.com.ar
Julio Bermant
Av. Eduardo Madero 940, piso 19 (1106) Buenos Aires, Argentina.
Tel.: +54 11 50770888
Fax: +54 11 50770835
bermant@impsa.com.ar

Brazil
Luis Garcˇa
Av. Alvarez Cabral, 344 18§ andar - Conjuntos 1801-1802, Cep
30170-000 - Centro - Belo Horizonte - MG - BRAZIL
ph: +55 31 273-2254
fx: +55 31 273-9734
luis_garcia@osite.com.br

Europe
Hanspeter Hauser
Tribschenstrasse 7, Ch-6005 Lucerne - SWITZERLAND
Tel: (+41-41) 3600864
Fax: (+41-41) 3603103
hugal@acces.ch



=============
B E R M U D A
=============

FLAG TELECOM: Cauley Geller Files Securities Class Action Suit
--------------------------------------------------------------
The Law Firm of Cauley Geller Bowman & Coates, LLP announced
Thursday that a class action has been filed in the United States
District Court for the Southern District of New York on behalf of
purchasers of FLAG Telecom Holdings, Ltd. (Nasdaq: FTHL) ("FLAG"
or the "Company") common stock during the period between March
23, 2001 and February 13, 2002, inclusive (the "Class Period"). A
copy of the complaint filed in this action is available from the
Court, or can be viewed on the firm's website at
http://www.classlawyer.com/pr/flag.pdf.

The complaint charges FLAG, Andres Bande (CEO and Chairman),
Edward McCormack (Chief Operating Officer), Andrew Evans (Chief
Technology Officer) and Larry Bautista (Chief Financial Officer
until August 2001) with issuing false and misleading statements
concerning its business and financial condition. Specifically,
the complaint alleges that throughout the Class Period, FLAG
reported strong year-over-year revenue growth. Unbeknownst to
investors, however, as alleged in the complaint, FLAG was
experiencing diminishing revenue growth. The complaint alleges
that in order to create the impression that FLAG was continuing
to experience growth, the Company engaged in a series of
reciprocal transactions with certain competitors for the purchase
and sale of dark fiber optic cable -- the so-called dark fiber
swap. The complaint alleges that as a result of these
transactions, FLAG artificially inflated its operating results
and materially misrepresented its financial results at all
relevant times.

CONTACT:  CAULEY GELLER BOWMAN & COATES, LLP
          Investor Relations Department:
          Jackie Addison, Sue Null or Shelly Nicholson
          P.O. Box 25438
          Little Rock, AR 72221-5438
          Toll Free: 1-888-551-9944
          E-mail: info@classlawyer.com


FLAG TELECOM: Schiffrin & Barroway, LLP Files Class Action Suit
---------------------------------------------------------------
The following statement was issued Thursday by the law firm of
Schiffrin & Barroway, LLP:

Notice is hereby given that a class action lawsuit was filed in
the United States District Court for the Southern District of New
York on behalf of all purchasers of the common stock of FLAG
Telecom Holdings, Ltd. ("FLAG" or the "Company") (Nasdaq: FTHL)
from March 23, 2001 through February 13, 2002, inclusive (the
"Class Period").

The complaint charges FLAG Telecom Holdings, Ltd., Andres Bande
(CEO and Chairman), Edward McCormack (Chief Operating Officer),
Andrew Evans (Chief Technology Officer) and Larry Bautista (Chief
Financial Officer until August 2001) with issuing false and
misleading statements concerning its business and financial
condition. Specifically, the complaint alleges that throughout
the Class Period, FLAG reported strong year-over-year revenue
growth. Unbeknownst to investors, however, as alleged in the
complaint, FLAG was experiencing diminishing revenue growth. The
complaint alleges that in order to create the impression that
FLAG was continuing to experience growth, the Company engaged in
a series of reciprocal transactions with certain competitors for
the purchase and sale of dark fiber optic cable -- the so-called
dark fiber swap. The complaint alleges that as a result of these
transactions, FLAG artificially inflated its operating results
and materially misrepresented its financial results at all
relevant times.

Plaintiff seeks to recover damages on behalf of class members and
is represented by the law firm of Schiffrin & Barroway, LLP,
which has significant experience and expertise prosecuting class
actions on behalf of investors and shareholders. For more
information on Schiffrin & Barroway, or to sign up to participate
in this action online, please visit
http://www.sbclasslaw.com/cgi/signup.cgi.

For questions concerning this notice, please contact Schiffrin &
Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.)
toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at
info@sbclasslaw.com.


CONTACT:  Schiffrin & Barroway, LLP
          Marc A. Topaz, Esq.
          Stuart L. Berman, Esq.
          Three Bala Plaza East
          Suite 400, Bala Cynwyd, PA  19004
          Tel. 1-888-299-7706 (toll free) or 1-610-667-7706
          E-mail: info@sbclasslaw.com


FLAG TELECOM: Moody's Cuts Rating On Proposed Debt Restructuring
----------------------------------------------------------------
Moody's Investors Service affirmed Flag Telecom Holdings Ltd's
senior unsecured and issuer ratings at Ca while cutting its
senior implied rating to Ca from Caa2, relates AFX.

The agency also lowered Flag Ltd's senior unsecured rating to Ca
from Caa3 and withdrew the Company's senior secured loan facility
rating.

The action follows Flag Telecom's recently proposed debt
restructuring which, if approved, "would result in a recovery
value to existing debt holders within the parameters of the new
ratings."

Moody's added that the new ratings "are predicated on the
proposed restructuring being accepted by all parties and the
ratings could be lowered further in the event the proposal is
rejected or the terms and conditions of the proposal are changed
in any way."

Under Flag's proposal, the Company would exchange:

(a) The FLAG Atlantic Bank debt of approximately US$257 million
for approximately US$70 million in cash and new common equity of
FLAG; (b) US$430 million of FLAG Limited 81/4% Senior Notes due
in 2008 for approximately US$170 million of New Senior Notes of
FLAG; and (c) $US300 million and Euro 300 million of FLAG 11 5/8%
Senior Notes due in 2010 for approximately US$150 million in
cash, approximately US$40 million of New Senior Notes of FLAG and
new common equity of FLAG.

Under the Proposal, all trade creditors and equipment suppliers
would be paid in full in the ordinary course of business or
through vendor financing.

The Proposal anticipates that, as is common in restructurings of
this type, existing common equity holders will be substantially
diluted.

To see financial statements:
http://bankrupt.com/misc/Flag_Telecom.txt

CONTACT:  FLAG Telecom
          David Morales, +44 20 7317 0837
          Dmorales@flagtelecom.com
                  or
          Investors:
          Sloane & Company
          Charles Southworth, 212/446-1892

          Cedar House, 41 Cedar Avenue
          Hamilton HM12, Bermuda
          Phone: (441) 296-0909
          Fax: (441) 296-0938
          Email: irelations@flagtelecom.com
          Contacts:
          Andres Bande, Chairman/CEO
          Michel Cayouette, CFO


GLOBAL CROSSING: Seeks Approval To Pay US$15M Retention Bonuses
---------------------------------------------------------------
Embattled Bermuda-based fiber-optic network operator Global
Crossing Ltd. is seeking approval from the bankruptcy court to
pay up to US$15 million in retention bonuses, reports Dow Jones.

In a filing made Wednesday with the U.S. Bankruptcy Court in
Manhattan, Global Crossing explained that the proposed retention
plan would provide US$10 million in payments to 304 employees
considered to be vital to the Company's business or restructuring
efforts.

The remaining $5 million would go into a discretionary pool for
other employees who, in the judgement of Global Crossing's chief
executive, are or will become essential to the reorganization
efforts, the filing said.

Half of the money would be available immediately, with the other
half being accessible on the approval of the committee
representing the Company's unsecured creditors.

A hearing on the telecommunications provider's request on the
retention bonuses is scheduled for May 13 before Bankruptcy Judge
Robert E. Gerber. Objections to the motion are due May 3.

CONTACT:  GLOBAL CROSSING
          Press Contacts:
          Becky Yeamans
          +1 973-410-5857
          rebecca.yeamans@globalcrossing.com

          Cynthia Artin
          +1 973-410-8820
          cynthia.artin@globalcrossing.com

          Analysts / Investors Contact:
          Ken Simril
          +1 310-385-5200
          investors@globalcrossing.com


TYCO INTERNATIONAL: Plastics Unit To Go On The Block By July
------------------------------------------------------------
Executives of Tyco International Ltd. are still optimistic that
the Company will be able to sell of its plastics division by the
end of June, relates the Associated Press.

"From our point of view we're still on track with where we
thought we were," said Brad McGee, a Tyco executive vice
president.

The announcement came in response to reports that the sale,
expected to bring about US$3 billion, has been delayed by the
lack of audited financial reports for the division.

Tyco stock has been troubled by worries about the Company's
accounting practices and debt load following Enron Corp.'s
collapse. News of delays in completing the audit could make some
investors assume that auditors were finding irregularities, said
Rob Plaza, an analyst with Morningstar Inc. in Chicago.

"(The news) could be something the market will look at and expect
the worst," Plaza said.

McGee was quick to quash such expectations.

"To suggest that there's been a delay in the audit due to
accounting issues is absurd," he said.

Tyco, based in Bermuda but run from Exeter, wants to sell the
plastics unit and use the proceeds to reduce debt.

Several potential bidders for the division have been identified,
including Madison Dearborn Partners Inc., Clayton, Dubilier &
Rice Inc., Kohlberg Kravis & Roberts Co. and the Blackstone
Group.

CONTACT:  TYCO INTERNATIONAL (U.S.) INC.
          One Tyco Park
          Exeter, NH 03833
          Phone: 603-778-9700
          Home Page: http://www.tyco.com
          Contact:
          L. Dennis Kozlowski, Chairman, President, and CEO
          Mark H. Swartz, EVP and CFO

          Corporate Office
          Tyco International Ltd.
          The Zurich Centre, Second Floor
          90 Pitts Bay Road
          Pembroke HM 08, Bermuda
          Phone: 441-292-8674



===========
B R A Z I L
===========

AES CORP.: Eletropaulo Seeks Actuarial Liability Extension
----------------------------------------------------------
Brazilian distributor Eletropaulo, which is controlled by US-
based AES Corp., is negotiating with the CVM (Comissao de Valores
Mobiliarios) to delay posting actuarial liabilities of BRL2.4
billion. The Company hopes to extend the period of time until it
from five years to fifteen.

The dollar amount at issue relates to post employment benefits
connected with its pension fund.

Eletropaulo is seeking the deferral in order to avoid having to
register an annual liability of BRL480 million. The additional
burden could have a negative effect on its profitability and may
compromise its ability to pass on dividends to AES. Its US-based
parent is in need of the resources to reassure investors about
its capacity to pay back US$22 billion in debt, as well as
strengthen its balance sheet.

However, Eletropaulo's chances for success are slim as CVM is
unlikely to permit such request over concerns of creating a
precedent for other companies.

CONTACTS:  ELETROPAULO METROPOLITANA
           Luiz D. Travesso, Chairman and President
           Orestes GonOalves Jr., VP Finance/Investor Relations

           THEIR ADDRESS:
           Avenida Alfredo Egidio de Souza Aranha 100-B,
           13 andar 04726-270 San Paulo
           Brazil
           Phone: +55-11-548-9461, +55 11 5696 3595
           Fax: +55-11-546-1933
           URL: http://www.eletropaulo.com.br

           AES CORPORATION
           Kenneth R. Woodcock
           Roger W. Sant, Chairman
           Dennis W. Bakke, President, CEO, and Director
           Barry J. Sharp, EVP Large Utilities, CFO, and COO

           THEIR ADDRESS:
           AES Corp.
           1001 N. 19th St.
           Arlington, VA 22209
           Phone: 703-522-1315
           Fax: 703-528-4510
           URL: http://www.aesc.com


BCP: Default Goes Uncured; Owners Continue Negotiating
------------------------------------------------------
US-based telco Bellsouth and Brazil's Banco Safra are still in
negotiations to decide how to resolve the present default
condition on US$375 million debt by their mobile subsidiary BCP
on March 28, a Bellsouth spokesperson confirmed to Business News
Americas.

Bellsouth's current position refutes last week's reports that
both the parties have reached a funding agreement for their
struggling Brazilian wireless unit.

An impasse between the two sides about the money-losing carrier's
needs forced BCP to default on a US$375-million debt payment, an
event, which according to Standard & Poor's, would potentially
trigger payment accelerations on as much as US$1.6 billion of the
Company's debt.

Bellsouth and Safra are BCP's largest shareholders, each owning
44.5 percent of the Company.

The default came amidst continuing speculation about the possible
buyout of BCP by a larger wireless group.

CONTACT:  BELLSOUTH CORPORATION
          1155 Peachtree St. NE
          Atlanta, GA 30309-3610
          Phone: 404-249-2000
          Fax: 404-249-5599
          Home Page: http://www.bellsouth.com
          Contacts:
          Investor Relations
          Phone (US): 800.241.3419
          Fax: 404.249.2060
          E-mail: investor@bellsouth.com

          BCP TELECOMUNICACOES
          Rua Florida, 1970 4o andar
          Sao Paulo - SP
          Tel: 55 11 5509-6428
          Fax: 55 11 5509-6257
          Home Page: http://www.bcp.com.br


EMBRATEL: Pursues Legal Fight Over Inflated Interconnection Fees
----------------------------------------------------------------
Embratel, a leading Brazilian long-distance phone company, is
taking matters to court against fixed line operators for charging
inflated interconnection fees. The legal proceeding, which was
scheduled for Friday, is filed against operators Telefonica,
Brasil Telecom, and Telemar.

Embratel regulatory VP Purificacion Carpinteyro has asked the
government to settle the dispute and has requested an emergency
status for the issue.

Embratel recently concluded its primary financing program for
2002.

The major part of the program consisted of a syndicated loan of
US$270 million. A total of US$240 million has already been
internalized by the Company, and another US$30 million is being
finalized. An additional US$35 million of trade-related financing
is being structured and will complete Embratel's core financing
needs for 2002.

Embratel ended the first quarter of 2002 with a cash position of
R$662 million, having paid approximately US$409 million of
interest and principal during the quarter.

Embratel provides customers in Brazil with a wide array of
advanced communications services over its own network. Service
offerings include: advanced voice, high-speed data communication
services, Internet, satellite data communications and corporate
networks. The Company's network has countrywide coverage, with
28,868 km of fiber-optic cables comprising 1,068,657 km of optic
fibers.

CONTACT: EMBRATEL
         Investor Relations
         Silvia M.R. Pereira
         Phone: 55-21-2519-9662
         Fax: 55-21-2519-6388
         E-mail: silvia.pereira@embratel.com.br
                 invest@embratel.com.br

         Press Relations
         Helena Duncan
         Phone: 55-21-2519-3653
         Fax: 55-21-2519-8010
         E-mail: hduncan@embratel.com.br
               OR
         Mariana Palmeira
         Phone: 55-21-2519-3654
         Fax: 55-21-2519-8010
         E-mail: mpalm@embratel.com.br


VARIG: Resumes Miami-Belem Flights as Demand Picks Up
-----------------------------------------------------
VARIG Brazilian Airlines will resume its flights between Miami
and Belem effective May 18, offering yet another option for
international travelers departing Miami.

The resumption of flights which were suspended in the aftermath
of the terrorist attacks in the United States in the fall of
2001, will coincide with the airline's 75th anniversary
celebration which will take place throughout the month of May,
according to Vicente Cervo, VARIG'S Director-North America.

"We are responding to customer demand," Cervo said. "Belem is an
important commercial capital and offers tourists a variety of
interesting excursions on the mouth of the Amazon River. Slightly
over 5 hours from Miami, Belem is the northern gateway to Brazil
and is a convenient stop for eco-tourists planning to explore the
Amazon Rain Forest," he added.

The Varig airline group, which includes regional carriers Rio-
Sul, Nordeste and Pluna, is seeking new sources of revenue after
posting a BRL480.9 million (US$211.6 million) loss last year. The
airline offers flights to more than 100 destinations throughout
South America and also has routes to Europe and Asia.

CONTACT:  VARIG Brazilian Airlines, Miami
          Jeff Kriendler, 305/866-2115
          jkriendler@aol.com



=========
C H I L E
=========

DISPUTADA: Exxon Still Considering Anglo American Bid
-----------------------------------------------------
Exxon Mobil is still analyzing the offer made by Anglo American
to acquire a 49-percent stake in Disputada de Las Condes. Anglo
American is now the only one left in the race for the major
mining company's assets, with a US$1.3-billion offer, after
Chilean state owned copper major Codelco dropped out.

Exxon Mobil has put the mine up for sale since last year as part
of a plan to shed its non-oil businesses. In recent years,
Disputada has endured poor financial results due to low mineral
production levels and depressed copper prices.

Disputada runs the Los Bronces and El Soldado copper mines and a
smelter called Chagres in central Chile.


ENAMI: Smaller Mines Contest Ventanas Transfer To Codelco
---------------------------------------------------------
Ovalle mining association, an organization of small-scale miners,
is concerned over Enami's decision to transfer Ventanas copper
smelter-refinery to Codelco, the state copper corporation.
State-owned Enami is considering the option in order to reduced
its US$480 million debt load.

The workers association in Chile's central-north Region IV
contends that this step could lead to handing over other assets,
such as Enami's Matta processing plant and Paipote smelter.

In the associations view, such a move would end Enami's support
to small-scale miners, implying the death of small and medium
scale mining in Chile.

State-owned Enami and the Chilean government are still in talks
over a possible solution for Enami's debt. Other options include
the acquisition of a partner for Ventanas, getting US$160 million
tax credits due to Enami back from the government, and having the
state guarantee its debt.

Ventanas is Enami's principal asset and is currently producing
450,000t/y of electrolytic copper. Enami also operates the
Paipote smelter in northern Chile's Region III. A large part of
the debts derive from environmental clean-up programs at the two
smelters.

CONTACT:

CORPORACION NACIONAL DEL COBRE (CODELCO)
Huerfanos 1270, Santiago, Chile
Phone: 56(2) 690 3000 (Information)
Fax:   56(2) 690 3059
E-mail: comunica@stgo.codelco.cl
Home Page: http://www.codelcochile.com
Contacts:
Juan Villarzu Rohde, President and CEO
Juan Eduardo Herrera Correa, Chief Financial Officer

ENAMI (Empresa Nacional de Mineria)
MacIver 459,
Santiago, Chile
Phone: 637 52 78
       637 50 00
Fax:   637 54 52
Email: webmaster@enami.cl
Home Page: www.enami.cl/
Contact:
Jorge Rodriguez Grossi, President


MANQUEHUE NET: Fitch Cuts Bond Ratings; Outlook Negative
--------------------------------------------------------
Credit rating agency Fitch lowered the rating for bonds issued by
Chilean Manquehue Net from BBB to BB+, with a negative outlook.
The action was prompted by Fitch's assessment of the local
exchange carrier's delicate financial situation, and the
Company's difficulty in continuing its growth plan.

Manquehue had a net loss of CLP11.3 billion (US$17.3 million) in
2001, which is equivalent to a 10-percent cut in the Company's
average equity. Concurrently, revenues were affected by the
deceleration of Chile's economy.

Fitch also lowered the ratings due to the uncertainty of the
future of the Company's ownership structure.

UK-based National Grid, which owns a 30-percent stake in the
Company, is searching for buyers for its 50 percent stake in
Argentina-based carrier of carriers Silica Networks as well as
some or all of its 50 percent in Brazilian long distance operator
Intelig.

US-based network operator Williams Communications, owner of a
16.5 percent stake in Manquehue, is itself undergoing financial
difficulties.

The shareholder structure also stands to change if Manquehue is
successful in its search for a new strategic partner -- a move,
which may dilute the above shareholders' ownership or replace
them altogether.

Manquehue's other shareholders are Chilean gas distributor
Metrogas (25.6 percent); the local Rabat family (21.2 percent);
and investment fund Xycom.

To see financial statements:
http://bankrupt.com/misc/Manquehue.doc



===============
C O L O M B I A
===============

BANCAFE: Colombia's Woes May Hinder Privatization
-------------------------------------------------
Analysts believe that Colombia's troubled economy, as well as the
country's unstable political situation, could derail the
government's plan to privatize the country's largest bank Bancafe
this year, says a report released by Business News Americas.

The government, according to Bancafe chairman Pedro Nel Ospina,
is now considering three alternatives for Bancafe: continue to
run it as a state bank; privatize the bank in its entirety; or
bring in a strategic partner to introduce capital and know-how.

"I believe the first alternative is the most likely," said
Santander Investment banking analyst Felipe Hernandez in Bogota.

"I don't think we (Colombia) will be able to sell it," agreed the
senior economic research analyst at local brokerage Corredores
Assoicados, Ricardo Duran.

Colombia is currently in a very dire financial situation, with
unemployment rate at 16.4 percent and urban unemployment even
worse at 18.8 percent.

The existing condition seems likely to continue, with
international rating agency Moody's last week lowering its
country outlook from stable to negative. Fellow rating agency
Standard & Poor's already had a negative outlook, while Fitch
maintains its stable outlook.

Political strife and war have scared off foreign investors in the
past. Subsequently, Colombia has fallen from international
investor grace since the peace process between the government and
guerillas officially ended on February 20.

According to Duran, Colombia's current war situation could
escalate in the next couple of months because the leading
presidential candidate for May 26 elections, Alvaro Uribe Veliz,
has said he will crack down on the guerillas.

"The moment is not very opportunistic to sell Bancafe - or any
company in Colombia," Duran said. "If we could not sell the bank
when there was not a war going on, what are the chances of
selling it today?"

Bancafe chairman Nel Ospina said he expects the bank post net
income of COP20 billion (US$8.8 million) this year due to
improvements in efficiency and customer service, which are part
of the government's efforts to make Bancafe more attractive to
potential foreign investors.

Colombia's government said initial contacts had been made with an
international financial group at the Inter-American Development
Bank's annual meeting in Brazil last month, which had expressed
interest in buying Bancafe or purchasing part of the bank.

Duran said the government announcements have never included
anything concrete like a name or an offer.

Bancafe is Colombia's fourth largest bank in terms of assets,
trailing its private sector rivals Bancolombia, Banco de Bogota
and BBVA Banco Ganadero.

Colombian authorities have been seeking to sell Bancafe for two
year now because of the bank's drain on public finances.

CONTACT:  BANCAFE
          Street 28 Not 13 To 15
          Bogota District of Colombia
          Phone:  5600999 EXT. 4338
          E-mail:  ma.pulido@bancafe.com.co
          Fax:  336 76 77
          Home Page: www.bancafe.com
          Contact:
          Pedro Nel Ospina Santamaria, Legal Representative

          INTER-AMERICAN DEVELOPMENT BANK
          1300 New York Avenue, NW
          Washington, DC 20577
          United States of America
          Phone: 202-623-1000
          E-mail: pic@iadb.org
          Contacts:
          Enrique V. Iglesias, President
          K. Burke Dillon, Executive Vice President

          For Investors:
          Hakan Lon`us, Chief, Funding Section
          Phone: +1-202-623-2441


===========
M E X I C O
===========

DESC: Reports 7% Drop In 1Q02 Operating Income
----------------------------------------------
Mexican industrial conglomerate Desc SA said Thursday that
sluggishness in the auto parts and chemical sectors, seasonal
factors and a strong currency pressured operating income and
sales in the first quarter, relates Dow Jones.

The Mexico City-based company said preliminary results show
operating income at US$39 million compared with US$42 million for
the same quarter in 2001.

Sales are expected to fall by 7.5 percent, to US$505 million from
$546 million in the year-earlier period. Earnings before
interest, taxes, depreciation and amortization dropped 5.5
percent, to US$69 million, from US$73 million last year due to a
gain in the currency that crimped Desc's export competitiveness.

Desc's chemical unit was hit hardest, with a 25-percent drop in
operating income to US$9 million. Operating income at the auto
parts, the company's largest unit, fell 6.9 percent to US$27
million.

Desc is in the midst of a corporate restructuring aimed at
improving productivity and administrative efficiency. The Company
ended 2001 with US$942 million in debt.

CONTACTS:  DESC, S. A. DE C. V.
           Paseo de los Tamarindos # 400-B
           Mexico, D.F. 05120
           Phone: (5255) 261-80-00
           Fax: (5255) 261-80-96
           desc@mail.desc.com.mx

           Arturo D'Acosta Ruz, Chief Financial Officer
           Tel: (5255) 261 8000

           Alejandro de la Barreda, Investor Relations
           Tel: (5255) 261 8000 ext 2806
           abarredag@mail.desc.com.mx

           Adriana Estrada Vergara, Investor Relations
           Tel: (5255) 261 8000 ext 2846
           aestradav@mail.desc.com.mx


GRUPO ALFA: Considers Selling Major Assets To Reduce Debt
---------------------------------------------------------
Mexican industrial conglomerate Grupo Alfa is likely to
relinquish control of Hylsamex to a partner and sell its
interests in Siderurgica del Orinoco SA (Sidor), Venezuela's
largest steelmaker, according to Grupo Alfa president, Dionisio
Garza.

In a report released by Notimex, Mr. Garza explained that the
group is considering such steps because of acute financial
problems at its iron and steel divisions. Grupo Alfa's debt now
totals US$2.6 billion, he explained.

Mr. Garza also noted that Hylsamex still needs to finish
restructuring its debt of US$1.1 billion, obtain a majority
partner or sell assets to reduce its leverage.

To see Hylsamex's financial statement:
http://bankrupt.com/misc/Hylsamex.doc

CONTACT:  HYLSAMEX
          Investor Relations
          Margarita Gutierrez
          E-Mail: mgutierrez@hylsamex.com.mx

          Ricardo Sada
          E-Mail: rsada@hylsamex.com.mx
          Phone: (52) 81 8865 1224
                 (52) 81 8865 1201
          Munich 101,
          San Nicolas de los Garza N.L., 66452
          Mexico


GRUPO MEXICO: EPA To Cover Cleanup Of the Ruston Smelter Site
-------------------------------------------------------------
U.S. Rep. Norm Dicks revealed that a top Environmental Protection
Agency official assured that the federal government will pay to
complete the cleanup of the Ruston smelter site in the event that
Asarco fails to do so, reports Knight-Ridder Business News.

However, Mr. Dicks noted that Marianne Lamont Horinko, an
assistant EPA administrator who oversees the Superfund program,
also said that EPA and the Justice Department have become
increasingly worried that Grupo Mexico, S.A. de C.V. might
transfer the few remaining assets of its American subsidiary
overseas. Grupo Mexico assumed control of Asarco in 1999 in a
hostile takeover worth US$2.25 billion

Such a move would force the company into bankruptcy, and could
leave EPA on the hook for the estimated US$90 million to complete
the Ruston smelter cleanup as well as some US$1 billion to clean
up about 20 other Asarco sites around the nation.

However, Doug McAllister, Asarco's Phoenix-based vice president
and general counsel, strongly denied that Asarco's parent company
intends to shift assets out of the United States.

Asarco faces an April 20 deadline to report to the EPA on how it
will comply with a March order to clean up submerged lands near
the smelter. Asarco must produce a compliance plan and prove it
can pay for the cleanup by posting a performance bond, securing a
line of credit or showing how it can pay out of its own pocket.
McAllister said he isn't sure how the company will respond.

Meanwhile, Asarco and Grupo Mexico are facing financial liquidity
problems. Asarco's 54.2 percent share of Southern Peru Copper Co.
is pledged against Asarco's current debt. The company owes US$450
million to a consortium of international banks and is trying to
renegotiate. The money is due in November.

Grupo Mexico, on the other hand, is also carrying a debt load of
US$2.5 billion, which is partly the result of its acquisition of
Asarco. It has sought to control costs by suspending operations
at Asarco smelters in Helena, Montana, and El Paso, Texas.

CONTACTS:  GRUPO MEXICO S.A. DE C.V
           Avenida Baja California 200,
           Colonia Roma Sur
           06760 Mexico, D.F.
           Mexico
           Phone: +52-55-5264-7775
           Fax: +52-55-5264-7769
           http://www.gmexico.com
           Contacts:
           German Larrea Mota-Velasco, Chairman & CEO
           Xavier Garcia de Quevedo Topete, President & COO

           SOUTHERN PERU COPPER CORPORATION
           Ave. Caminos del Inca 171
           Urb. Chacarilla del Estanque
           Santiago de Surco
           Lima 33, Peru
           Tel: +51 1 372 1414
           Fax: +51 1 372 0238
           Home Page: http://www.southernperu.com
           Contacts:
           German Larrea Mota-Velasco, Chairman & CEO
           Oscar Gonzalez Rocha, President & Director General
           Daniel Tellechea Salido, VP - Finance

           ASARCO, INC.
           2575 E. Camelback Rd., Ste. 500
           Phoenix, AZ 85016
           Phone: 602-977-6500
           Fax: 602-977-6701
           Home Page: http://www.asarco.com
           Contacts:
           German Larea Mota-Velasco, Chairman & CEO
           Genaro Larrea Mota-Velasco, President
           Daniel Tellechea Salido, VP & CFO



=============
U R U G U A Y
=============

PLUNA SA: Uruguay, Varig Announce Rescue Plan
---------------------------------------------
Varig and Pluna Ente Autonomo announced a US$20-million
capitalization plan that is expected to cancel Uruguayan airline
Pluna SA's debts and avert the Company's technical bankruptcy.
The Uruguayan state holds a 48.75 percent stake in PLUNA SA,
while Varig holds 49 percent. According to the agreement, Varig
will inject US14.5 million and Pluna Ente Autonomo will add
US$5.6 million.

The airline Pluna is faced with US$52 million debts, of which
US$20 million is owed to Varig, as well as accumulated losses of
US$10 million between July 2000 and June 2001.

The Company's crisis stemmed from high management costs, says
Fernando Alberti, President of the employees union. Varig
expected an US$8-million surplus on its first year of management
but a US$16-million deficit was turned in instead.

The airline Pluna transports 75 percent of the tourists who fly
to Uruguay from Argentina.



=================
V E N E Z U E L A
=================

PDVSA: Restores Operations, Workforce; Begins Transition
---------------------------------------------------------
Pedro Carmona Estanga, President of the Transition Government,
announced the reengagement of all PDVSA workers who were recently
forcefully suspended, retired, dismissed, and transferred. These
workers are once again performing their usual duties within the
Corporation.

In a special meeting held last week, PDVSA appointed Ignacio
Layrisse as Executive Director of Exploration, Production, and
Upgrading; Marco Rossi as Executive Director of Bitor; Alfredo
Martˇnez as Managing Director of Bariven; Erick Flores as
Corporate Manager of Loss Prevention and Control; Francisco
Bustillos as Finance Executive Director; and H‚ctor Asapche as
Deputy General Auditor. The remaining administrative positions
have been ratified as the respective analyses are being
conducted.

Petr˘leos de Venezuela has appointed a work team for the current
transition period comprising certain representatives of the
Workers' Assembly. This team will manage the Corporation until
the Administration appoints the new Board of Directors.

The team appointed to lead the transition process is comprised of
Vice-presidents Karl Mazeika, Eduardo Praselj, and Vincenzo
Paglione; Business Leaders Edgar Paredes (Refining, Supply, and
Trading); Ignacio Layrisse (Exploration, Production, and
Upgrading); Nelson Nava (PDVSA Gas); Jos‚ Rafael Paz (Pequiven);
and, Francisco Bustillos (Finance Executive Director).
Representing the Workers' Assembly are Lino Carrillo, Jos‚
Batista, Juan Santana, Guillermo Villamizar, Ciro Izarra, Horacio
Medina, and Tom s Carrillo.

Workers are reportedly working around the clock to restore
operations and minimize the economic losses caused by the labor
strike whose objective was to rescue Meritocracy and reject the
politicization of PDVSA.

CONTACT:  Omar Guaregua
          Phone: (58212) 7084822
          guareguao@pdvsa.com

          Yoly Bravo
          Phone: (58212) 7084484
          bravoyz@pdvsa.com





               ***********


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 American is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ,
and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
Psamathe P. Alfeche and Ma. Cristina Canson, Editors.

Copyright 2002.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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