TCRLA_Public/020617.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, June 17, 2002, Vol. 3, Issue 118

                           Headlines


A R G E N T I N A

ARGENTINE BANKS: Central Bank Rules Out More Funding
BANCO GALICIA: Misses Bond Interest Payment
BANCO RIO: Refinancing Most Of $200M Notes Due Next Week
CAPEX SA: Approves $265,146 Interest Payment
DMG: Pulls Plug In Argentina Due To Financial Crisis

HSBC ARGENTINA: Parent To Inject Funds To Aid Debt Payments
REPSOL YPF: Pemex Reduces Stake By 1%
REPSOL YPF: Selling Oilfield Stake To Counter Argentine Woes


B E R M U D A

FLAG TELECOM: Stock to Trade OTC
GLOBAL CROSSING: Schatz & Nobel Announces Class Action Lawsuit
TYCO INTERNATIONAL: Plans To Streamline Corporate Operations
TYCO INTERNATIONAL: Rating Still Negative as PO Wins Approval
TYCO INTERNATIONAL: Asensio & Co. Announces Investment Opinion


B R A Z I L

AES CORP: Moody's Cuts Ratings on Slumping Revenues, Liquidity
BELL CANADA: S&P Affirms Ratings; On Watch Positive
ELETROPAULO METROPOLITANA: Moody's Lowers, Reviews Rating


C H I L E

AES GENER: Wants To Team Up With Enap Over Geothermal Project
         

M E X I C O

ALESTRA: S&P Cuts Ratings to 'CCC+', Still on CreditWatch Neg
BANCO INDUSTRIAL/ANAHUAC: Liquidation Pending
CORPORACION DURANGO: S&P Assigns 'B+' To Sr. Unsecured Notes
GRUPO BITAL: Finalizes Deal With ING
DESC SA: Obtains Syndicated Loan To Refinance Debt

HYLSAMEX: Seeks Shareholders' Approval of Planned Offering
SUNTERRA CORPORATION: Obtains Court Approval of New Financing

     -  -  -  -  -  -  -  -

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

ARGENTINE BANKS: Central Bank Rules Out More Funding
----------------------------------------------------
Economy Ministry Roberty Lavagna, at a meeting with deputies of
the Justicialist (Peronist) party, announced the Ministry will no
longer bail out commercial banks. Lavagna, according to reports,
said that banks are to use their own funds even if some of them
could go bankrupt.

According to Lavagna, the system must be that for each peso the
central banks grants to a commercial bank under a rediscount
facility, the recipient has to put in another peso in equity.

So far, the central bank has put in ARS19 billion in rediscount
facilities to commercial banks.  The move fueled inflation as it
created a large increase in circulating money.  The fund was
mainly used to refund account holders who were granted account
access by the court.

The Economy Ministry reportedly also said that the government is
no longer launching a grant like the US$4.5-billion package it
gave to Banco de Galicia y Buenos Aires.

The only bank exempted from the scheme is Banco de la Nacion
Argentina.  

Banco Nacion and Banco Provincia have received ARS10 billion from
the central bank, while Banco Bilbao Vizcaya Argentaria SA unit
BBVA Banco Frances requested ARS1 billion.


BANCO GALICIA: Misses Bond Interest Payment
-------------------------------------------
Blaming the country's ongoing financial crisis, which has weighed
on its operations, Argentine Banco Galicia failed to make an
interest payment on a 2003 bond yielding 9% that was due May 1
and whose grace period ran out last week, Reuters reports, citing
a bank spokeswoman.

Meanwhile, the spokeswoman revealed that the bank will try to
restructure its external debt and has hired investment bank
Salomon Smith Barney to help it with the process.

The spokeswoman said she did not know the amount of Banco
Galicia's foreign debt and other officials were not immediately
available for comment.

CONTACT:  BANCO DE GALICIA Y BUENOS AIRES S.A., HEAD OFFICE
          Tte. Gral Juan D. Peron 407
          1038 Buenos Aires, Argentina
          Phone: +54-11-6329-0000
          Fax: +54-11-6329-6100
          Home Page: http://www.bancogalicia.com.ar

          Corporate Communications
          Phone: (54 11) 6329 6439
          Fax:(54 11) 6329 6000 ext.: 2041

          Representative Office: Buenos Aires
          Reconquista 144, piso 17
          (1003) Buenos Aires, Argentina
          Phone: (54-11) 4343-5200/5303/5162
          Fax: (54-11) 4343-6576

          New York Branch
          300 Park Avenue, 20th Floor
          New York, NY 10022
          Phone: (1-212) 906-3700
          Fax: (1-212) 906-3777

          SALOMON SMITH BARNEY
          388 Greenwich Street
          35th Floor
          New York, NY 10013
          Home Page: http://www.salomonsmithbarney.com
          Phone: (212) 816-6000
          Fax: (212) 816-7020
          Contact:
          Richard G. Spiro, Global Head of Insurance Group
          Phone: (212) 816-2170
          Fax:(212) 816-5990
          E-mail: richard.spiro@ssmb.com

          Williams Johns, Managing Director
          Phone: (212) 816-8782
          Fax: (212) 816-7020
          E-mail: william.johns@ssmb.com


BANCO RIO: Refinancing Most Of $200M Notes Due Next Week
---------------------------------------------------------
Banco Rio de la Plata SA, the Argentine unit of Spanish bank
Banco Santander Central Hispano SA, plans to refinance most of
US$200 million worth of notes maturing next week, reports
financial daily El Cronista, citing sources.

Under the plan, some 90% of the notes will be swapped for new
bonds maturing in a year's time, while the rest will be paid in
cash. Part of the cash payments will be made by year-end.

The new notes will be backed by SCH's New York branch.

Banco Rio, one of Argentina's largest banking companies, has
US$1.4 billion in total debt; about US$605 million of which
matures by May 2003 and another US$250 million matures by May
2004.

In May, officials from its Spanish parent said that Banco Rio had
just three months' worth of capital left, and that Santander
would not send new money to Argentina until the Duhalde
administration stabilized the country's finances and strengthened
the weakened banking system.

All banking deposits in Argentina are currently trapped by the
so-called "corralito," a freeze on banking deposits instituted by
the Argentine government in December to protect the solvency of
the country's banking system.

Although the Argentine government announced a plan earlier this
month to phase out the freeze slowly, offering holders of savings
accounts a choice of bonds maturing in three to 10 years time,
few depositors are satisfied.

CONTACT:  SANTANDER CENTRAL HISPANO S.A.
          Plaza de Canalejas,1
          28014 Madrid, Spain
          Phone: +34-91-558-10-31
          Fax: +34-91-552-66-70
          Email: investor@grupo.bsch.es
          Home Page: http://www.bsch.es
          Contacts:
          Ana P. Botn, Chairman, Banesto
          Emilio Botn-Sanz, Chairman
          Francisco G. Rold n, Financial Division General Manager

          Investor Relations:
          Phone: + 34.91.558.13.69
                 + 34.91.558.10.05
          Fax: + 34.91. 558.14.53
               + 34.91.522.66.70

          BANCO RIO DE LA PLATA S.A.
          Bartolome Mitre 480
          1036 Buenos Aires, Argentina
          Phone: +54-14-341-1081-1580
          Fax: +54-14-341-1074-1084
          Home Page: http://www.bancorio.com.ar
          Contacts:
          Ana Patricia B. S. de Sautuola y O'Shea, Chairman
          Jose L. E. Cristofani, Executive Vice Chairman and CEO
          Pablo Caride, Corporate Finance


CAPEX SA: Approves $265,146 Interest Payment
--------------------------------------------
Capex SA, an Argentine gas producer and power generator, informed
the Buenos Aires stock exchange that it has authorized the
payment of US$265,146 in due interest to holders of US$40 million
in company debentures.

According to a Business News Americas report, The Bank of New
York will make the payment, which corresponds to the period May
11-June 11.

The Company's May 11 interest payment still awaits authorization
from Argentina's Central Bank, Capex said in its statement to the
bourse.

In March, credit rating agency Standard and Poor's (S&P) lowered
Capex's foreign currency rating to 'D' from 'SD' (Selective
Default), and its local currency rating to 'D' from 'CC', because
Capex failed to make a US$2.5-million principal debt payment.

In April, Fitch Ratings also downgraded Capex's foreign and local
currency ratings to 'DD' from 'C' following the Company's default
on interest payments due under its floating rate note (FRN) and
trade facilities. The default had been 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.

The Company still faces uncertainties around the electricity
sector's proposed new pricing system that would allow companies
to recover higher operating costs from the devaluation.

Capex, which generates electricity in the Comahue region in
southwest Argentina, with six gas-fired units and one steam unit,
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:  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

          THE BANK OF NEW YORK
          P.O. Box 11002
          New York, N.Y. 10286-1002
          Phone: (212) 815-8325


DMG: Pulls Plug In Argentina Due To Financial Crisis
----------------------------------------------------
English group DMG is packing to join the caravan of investors
leaving Argentina.

DMG arrived in Argentina in 1999, acquiring 51% of the firm
Salones Especializados and 100% of Organizacion Uniline.  Three
years later, it included as losses the nearly US$8 million it has
invested in Argentina.

The company transferred 100% of Organizacion Uniline back to its
owners and founders who will shoulder the business' debts.  It
gave the total share package of Salones Especializados, on the
other hand, to the company's Argentine partners who will take on
Salones' debts.

DMG's other company, World Media DMG, faces a bleak future as
well.


HSBC ARGENTINA: Parent To Inject Funds To Aid Debt Payments
-----------------------------------------------------------
HSBC Holdings Plc, Europe's biggest bank by market value, will
provide its Argentine unit with funds to repay US$150 million in
maturing debt, financial daily El Cronista reports, citing
sources close to HSBC.

In addition, HSBC Argentina will also receive fresh funds to
strengthen its capital, says the report.

Late in May, HSBC chief executive Keith Whitson announced that
the parent company had no plans to make further contributions to
its Argentina operations. Subsequently, HSBC chairman Sir John
Bond warned shareholders that the Company was in a "critical"
position in Argentina.

HSBC's earnings dipped due to potential losses from Argentina's
devaluation and US$95 billion in debt default.

The Company's 2001 profit fell 18 percent to US$5.41 billion, as
it set aside US$2.04 billion for bad loans, up from US$932
million in 2000.

CONTACT:  HSBC HOLDINGS PLC
          10 Lower Thames St.
          London EC3R 6AE, United Kingdom
          Phone: +44-020-7260-0500
          Fax: +44-020-7260-0501
          Home Page: http://www.hsbc.com
          Contacts:
          Sir John R. H. Bond, Group Chairman / Exec. Dir.
          Sir Brian Moffat, Deputy Chairman / Sr. Non-Exec. Dir.
          Keith R. Whitson, Group Chief Executive

          HSBC ARGENTINA
          Av. de Mayo 701, Piso 27, (1084)
          Buenos Aires, Argentina
          Tel: 54 11 4 344 3333
          Fax: 54 11 4 334 6679
          Contact: Michael Smith, Chairman and Chief Executive


REPSOL YPF: Pemex Reduces Stake By 1%
-------------------------------------
Petroleos Mexicanos, Mexico's government oil monopoly, reduced
its stake in Repsol YPF SA to 4.08% after it sold a 1% stake in
the Spanish oil group this year, reports Bloomberg, citing
newspaper La Gaceta de los Negocios.

The reduction in Pemex's participation comes in the wake of a 30%
dip in the Spanish oil company's share, as its US$15-billion
purchase of Argentine driller YPF in 1999 turns sour.

Argentina's four-year economic slump and currency devaluation
wiped EUR2.7 billion (US$2.5 billion) from Repsol's earnings.

Banco Bilbao Vizcaya Argentaria SA, Spain's No. 2 bank and
Repsol's second-largest shareholder, has also lowered its stake
to 8.03% from 8.34% in recent months.

Respol's other shareholders are Caja de Ahorros y Pensiones de
Barcelona SA, with 10.16%; Repinves, 5.63%; Iberdrola SA, 3.27%;
and Endesa SA, at 3.02%.

CONTACT:  REPSOL YPF
          Paseo de la Castellana 278
          28046 Madrid, Spain
          Phone   +34 91 348 81 00
          Home Page: http://www.repsol.com
          or
          Av. Roque S enz Pe a, 777.
          C.P 1364. Buenos Aires
          Argentina
          Contacts:
          Alfonso Cortina De Alcocer, Chairman
          Ramon Blanco Balin, Vice Chairman
          Carmelo De Las Morenas Lopez, CFO


REPSOL YPF: Selling Oilfield Stake To Counter Argentine Woes
------------------------------------------------------------
Repsol YPF decided to sell its 50% stake in the Ayoluengo
oilfield, the value of which is unknown, reports Expansion.

The move is part of a measure to counteract the negative impact
of Argentina's financial crisis on the Spanish oil company's
balance sheet.

Buyers of the stake include British group Northern Petroleum 45
percent, which will operate the oilfield, and Teredo, which
increases its stake in it from 25 to 30 percent.

Ayoluengo oilfield is located in the province of Burgos and is
the first oilfield to operate in Spain, back in 1964.



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

FLAG TELECOM: Stock to Trade OTC
--------------------------------
FLAG Telecom Holdings Limited, announced Thursday the company's
common stock is expected to begin trading Over the Counter
("OTC") in the United States, effective as of the opening of
business on June 13, 2002, under its current ticker symbol FTHLQ.
The company has been notified by the Nasdaq Qualifications
Hearing Panel of its decision to delist the company's common
stock from the Nasdaq National Market effective from the open of
business on June 13, 2002. The move will not have any impact on
business operations or customer service.

The company expects that its shares will commence trading on the
Over the Counter Bulletin Board ("OTCBB") in due course. The
OTCBB is a regulated quotation service that displays real-time
quotes, last-sale prices and volume information in OTC equity
securities. OTCBB securities are traded by a community of market
makers that enter quotes and trade reports. The company advises
that investors should call their brokers for daily pricing and
volume information.

In accordance with the Listing Rules of The Financial Services
Authority of the United Kingdom, FLAG Telecom Holdings Limited  
gives notice of the delisting of its common stock from the
Official List and from the London Stock Exchange. Such delisting
will take effect on the later of either July 11, 2002 or the date
upon which the Bermuda Court grants its approval of further
transfers of the company's shares. However, The Financial
Services Authority may delist the company's shares at any time at
its discretion.

FLAG Telecom Holdings Limited intends to seek promptly the
Bermuda Court's approval of any transfer of the company's shares
following the delisting of FLAG Telecom's shares from both Nasdaq
and the London Stock Exchange. In the event that such approval is
not obtained following the delisting from both Nasdaq and the
London Stock Exchange then any share transfers after such
delisting shall be void.

The company is currently in chapter 11 and is planning to apply
with both the United States and Bermuda bankruptcy courts for a
plan to restructure its obligations.

About the FLAG Telecom Group

The FLAG Telecom Group is a leading global network services
provider and independent carriers' carrier providing an
innovative range of products and services to the international
carrier community, ASPs and ISPs across an international network
platform designed to support the next generation of IP over
optical data networks. On April 12 and April 23, 2002, FLAG
Telecom Holdings Limited and certain of its subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York. Also, FLAG Telecom
Holdings Limited and the other companies continue to operate
their businesses as Debtors In Possession under Chapter 11
protection. FLAG Telecom Holdings Limited and certain of its
Bermuda-registered subsidiaries - FLAG Limited, FLAG Atlantic
Limited and FLAG Asia Limited - filed parallel proceedings in
Bermuda to seek the appointment of provisional liquidators to
obtain a moratorium to preserve the companies from creditor
actions. Provisional liquidators were appointed and part of their
role is to oversee and liaise with the directors of the companies
in effecting a reorganization under Chapter 11. Recent news
releases and further information are on FLAG Telecom's website
at: www.flagtelecom.com.

CONTACT:  FLAG TELECOM
          John Draheim
          Tel. +44 20 7317 0826
          Email: jdraheim@flagtelecom.com
                    or
          David Morales
          Tel. +44 20 7317 0837
          Email: dmorales@flagtelecom.com


GLOBAL CROSSING: Schatz & Nobel Announces Class Action Lawsuit
--------------------------------------------------------------
A lawsuit seeking class action status has been filed in the
United States District Court for the Southern District of New
York on behalf of all persons who purchased the publicly traded
securities of Global Crossing, Ltd. (formerly NYSE: GX; currently
OTC: GBLXQ) ("Global Crossing" or "Company") from May 24, 1999
through October 4, 2001, inclusive (the "Class Period").

The law firm of Schatz & Nobel, P.C., which has significant
experience prosecuting class actions on behalf of investors,
represents the plaintiff.

The Complaint alleges that Salomon Smith Barney and its well-
known telecommunications stock analyst, Jack Grubman, violated
the federal securities laws by knowingly issuing false and
misleading analyst reports regarding Global Crossing during the
Class Period.  The Complaint alleges that Salomon failed to
disclose a significant conflict of interest between its
investment banking and research departments.  Specifically, Jack
Grubman and other Salomon Smith Barney analysts issued very
favorable analyst reports regarding Global Crossing to the public
when they allegedly knew that the positive recommendations were
unwarranted.  Unbeknownst to the investing public, Salomon Smith
Barney's buy recommendations and price targets for Global
Crossing were influenced by its efforts to be retained as a
financial advisor for Global Crossing and other
telecommunications companies.  Such lucrative investment banking
engagements were worth millions of dollars in fees to Salomon.

Plaintiff seeks to recover damages from Salomon Smith Barney and
Jack Grubman on behalf of all Class Members.  If you purchased
the common stock of Global Crossing from May 24, 1999 through
October 4, 2001, inclusive, and wish to act as a lead plaintiff,
you may move the Court to act in that capacity not later than
July 23, 2002.  

If you wish to discuss your rights as lead plaintiff or as a
class member, please contact:

           SCHATZ & NOBEL, P.C.
           Andrew M. Schatz
           Nancy A. Kulesa
           Tel. (800) 797-5499
           E-mail: sn06106@aol.com
           Web site: www.snlaw.net


TYCO INTERNATIONAL: Plans To Streamline Corporate Operations
------------------------------------------------------------
Tyco International Ltd. announced Thursday that it is
streamlining its corporate operations.  Tyco will consolidate its
headquarters facilities in Exeter, New Hampshire, New York City
and Europe, and reduce corporate staffing by eliminating
nonessential corporate functions. Nearly all of Tyco's more than
250,000 employees worldwide work in the diversified company's
operating units and will not be affected by the moves.

John F. Fort, Tyco's Lead Director, said, "We are moving quickly
to streamline our corporate operations to ensure that we manage
Tyco with financial discipline and a relentless focus on support
of our operating businesses, which are the heart of the
company.  While Tyco is run very efficiently at the operating
level, we have identified areas where we can streamline functions
and eliminate nonessential costs.  These actions underscore our
commitment to financial prudence and discipline.  We will
continue to take every opportunity to improve Tyco's advantage of
fundamentally strong businesses with solid finances."

According to Chief Financial Officer Mark H. Swartz, these
actions are expected to result in a reduction of approximately
115 corporate staff positions and savings of approximately $125
million annually.

Specifically, Tyco plans to make these changes:

* In Exeter, N.H., the company's corporate employees as well as
employees of Engineering Products and Services will move to the
Tyco Telecommunications building.  The company's three buildings
at Tyco Park in Exeter will be sold.  This move will be completed
by September 1.

* The company will move its New York City offices at 9 West 57th
Street to a much smaller and more cost-effective location at 712
Fifth Avenue. This move also will be completed by September 1.

* Tyco's London corporate office will be consolidated with other
existing Tyco operations in the U.K., and its Luxembourg
corporate office will be consolidated into a more cost-effective
location.

* A number of corporate departments will be eliminated and their
assets sold, including all company aircraft.

* Corporate staffing will be reduced, beginning immediately, in
each of the company's corporate offices among all relevant
departments.

About Tyco International Ltd.

Tyco International Ltd. is a diversified manufacturing and
service company.  Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services; and the world's largest
manufacturer of specialty valves.  Tyco also holds strong
leadership positions in disposable medical products, financing
and leasing capital, plastics and adhesives.  Tyco operates in
more than 100 countries and had fiscal 2001 revenues in excess of
$36 billion.

CONTACT:  TYCO INTERNATIONAL LTD.
          Gary Holmes
          Tel. +1-212-424-1314
               +1-212-424-1307


TYCO INTERNATIONAL: Rating Still Negative as PO Wins Approval
-------------------------------------------------------------
Standard & Poor's said Thursday that its ratings on Tyco
International Ltd. and its industrial subsidiaries, including its
triple-'B'-minus/'A-3' corporate credit ratings, remain on
CreditWatch with negative implications following word that Tyco
has received SEC approval to launch the IPO of commercial finance
subsidiary The CIT Group Inc. Standard & Poor's said that it
plans to issue an update regarding its ratings on CIT shortly.

"Standard & Poor's ratings on Tyco include the expectation that
this transaction will close within about a month and that
substantially all proceeds will be used for debt reduction", said
Standard & Poor's credit analyst Cynthia Werneth. "If so,
concerns regarding the company's liquidity--the primary reason
the ratings remain on CreditWatch--would diminish. If it does
not, ratings would likely be lowered".

Hamilton, Bermuda-based Tyco is a diversified company with total
debt of about $27 billion.

Analyst: Cynthia Werneth, New York (1) 212-438-7819


TYCO INTERNATIONAL: Asensio & Co. Announces Investment Opinion
--------------------------------------------------------------
Tyco International Ltd.'s stock remains severely depressed on
credit concerns:

"At yesterday's prices, Tyco's bonds and bank debt implied that
the market was valuing Tyco at approximately 2.6 times Latest
Twelve Month EBITDA. We are aware of the market's concern that
Tyco's reported EBITDA may be overstated. We are aware of the
accounting policies at issue. Our Tyco valuation discounts
reported EBITDA by 20% and increases historical capital
expenditures by 30%. Our estimated free cash flow based on these
adjustments, which we believe to be adequate and conservative, is
sufficient to allow us to believe Tyco's debt is manageable."

CONTACT:  ASENSIO & COMPANY, INC.
          Manuel P. Asnesio, 212/702-8805



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

AES CORP: Moody's Cuts Ratings on Slumping Revenues, Liquidity
--------------------------------------------------------------
Moody's Investors Service said it downgraded AES Sul
Distribuidora Gaucha de Energia S.A.'s (AES Sul) local currency
rating to B1 from Ba2, and the national scale rating to Baa3.br
from A1.br.

The rating agency said it continues to review both ratings for
possible further downgrade.

Moody's took the action on concern about AES Sul's deteriorating
electricity revenue, which is negatively affecting its operating
cash flow.

Although AES Sul was not directly affected by power rationing in
Brazil, rationing resulted in countrywide efforts to reduce power
consumption, leading to an 8% decline in AES Sul's electricity
revenue.

AES Sul's tight liquidity position also contributed to the
downgrade. The Company was able to make its June debt payment,
however, any revenue shortfall or deviation from cash flow
projections could jeopardize its November debt payment.

Currently, AES Sul has a conflict with regulator ANEEL. In its
regulatory ruling, ANEEL alleged that the spot market price
charged by Sul to its free customers during the electric
rationing far exceeded the fair market price, thus disallowing
the amount of the overcharge accrued by Sul in its income
statement in 2001. Total disallowed revenues amount to BRL350
million. AES Sul is challenging ANEEL's decision in court. Should
ANEEL prevail, this could result in a write-off of up to BRL350
million and an inability to collect these amounts in cash.

AES Sul is an electric distribution company located in the
Brazilian state of Rio Grande do Sul.

CONTACT:  AES CORPORATION
          Home Page: www.aes.com
            or
          Kenneth R. Woodcock
          Phone: 703/522-1315
            or
          Investor relations
          E-mail: investing@aes.com


BELL CANADA: S&P Affirms Ratings; On Watch Positive
---------------------------------------------------
Standard & Poor's said Thursday it affirmed its double-'B'-minus
long-term corporate credit and senior unsecured debt ratings on
telecommunications company Bell Canada International Inc. (BCI).
At the same time, the ratings were placed on CreditWatch with
positive implications. The ratings actions follow the Montreal,
Que.-based company's announced sale of its 41.7% equity interest
in Telecom Americas Ltd. to America Movil S.A. de C.V. for US$366
million.

The transaction, which includes BCI's release from US$250 million
of guarantees related to Tess S.A. and Algar Telecom Leste S.A.,
is expected to close on or before Aug. 9, 2002. The ratings
actions affect C$160.0 million of rated debt.

"The CreditWatch placement reflects BCI's intention to apply the
cash proceeds to repay and cancel its bank credit facility upon
closing of the transaction on or before Aug. 9, 2002, and the low
payment risk associated with a US$220 million note to be issued
by America Movil (local currency BBB+/Stable/--; foreign currency
BBB-/Stable/--) due March 2003 as remaining payment for the
Telecom Americas assets; Standard & Poor's expectation that
proceeds will be sufficient to repay all of the remaining
corporate debt and contingent liabilities at BCI; the expectation
that BCI will be wound up in the next 12 to 18 months following a
supervised disposition of its remaining holdings; the nonrecourse
nature of subsidiary liabilities; and Standard & Poor's
expectation that no significant additional cash contributions
will be made by BCI to Axtel S.A. de C.V. and Canbras
Communications Corp. to fund ongoing activities in the interim,"
said Standard & Poor's credit analyst Linli Chee.

The ratings on BCI take into account the higher business risk
profile of the company's remaining interests in Mexican
competitive local exchange carrier Axtel (28%), and broadband
cable and wireless operators in Brazil and Venezuela, Canbras
(76%) and Genesis Telecom C.A. (30%), and the uncertain outcome
of litigious actions against BCI related to the company's
recapitalization plan in February 2002.

BCI is a holding company with investments in the competitive
local exchanged carrier and broadband segments of the
telecommunications industry in Latin America. As a holding
company, BCI has been dependent on asset sales and external
financing to meet its debt-servicing requirements. Cash proceeds
of US$146 million, and a US$220 million interest-free note due
March 1, 2003, from America Movil will be used to repay BCI's
bank credit facility, of which C$175 million is drawn, and to
service BCI's remaining obligations. This includes a US$32
million contingent guarantee related to the Vesper Companies as
part of the final restructuring of the company in November 2001.
The completion of the transaction is sufficient to resolve near-
term liquidity pressures at BCI, leaving a cash cushion of more
than C$220 million absent further asset sales prior to contingent
claims.

The successful completion of the first stage of the transaction,
whereby the cash received will be used immediately for repayment
of bank debt, could lead to a ratings upgrade, reflecting the
limited transaction risks associated with the note due from
America Movil for the remainder of the purchase price.

CONTACT:  BELL CANADA INTERNATIONAL INC.
          Marie-Lise Gauthier, 514/392-2318
          marie-lise.gauthier@bci.ca


ELETROPAULO METROPOLITANA: Moody's Lowers, Reviews Rating
----------------------------------------------------------
Moody's Investors Service downgraded Eletropaulo Metropolitana
Eletricidade de Sao Paulo SA's local currency issuer rating to
Ba2 from Baa2, reports Bloomberg.

The rating action reflects Moody's concern on the Brazilian
utility's capacity to refinance US$414 million in debt and the
rising yields in Brazil, as the currency and bond prices fall.

"The rating action reflects Moody's concern about Eletropaulo's
financial flexibility and its significant need to execute near
term financing, during a period of diminished market access in
Brazil," according to a Moody's report.

Moody's said it is keeping Eletropaulo under review for a
possible further downgrade.

Analysts at Banco Pactual in Rio de Janeiro said Eletropaulo
faces a "50 percent to 60 percent" chance of defaulting on its
debt due in August and September.

Eletropaulo, Brazil's largest electrical power distributor, has a
total of US$1.6 billion of debt, of which $740 million comes due
before the end of the year.

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



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

AES GENER: Wants To Team Up With Enap Over Geothermal Project
-------------------------------------------------------------
Chilean generator AES Gener SA is looking to join forces with
state oil company Enap to develop a 50MW geothermal power
generation project, reports Business News Americas, citing a
source connected to the project.

According to the source, AES Gener has been mulling over the
plans for some time now, but only took greater interest once the
present geothermal law established a firmer legal framework.

AES Gener has undertaken geothermal basic studies, and the US
Trade & Development Agency (TDA) has approved funding for a
feasibility study.

The generator is waiting for a TDA official to visit and
determine an amount for the feasibility studies, which the source
considers could start in three months.

The value of the project has not been disclosed.

AES Gener is Chile's third-biggest energy generator and is a unit
of AES Corp., an American energy firm based in Arlington,
Virginia.

CONTACT:  AES GENER S.A.
          Mariano Sanchez Fontecilla 310 Piso 3
          Santiago de Chile
          Phone: (56-2) 6868900
          Fax: (56-2) 6868991
          Home Page: www.gener.com
          Contact:
          Robert Morgan, Chief Executive
          Laurence Golborne Riveros, Chief Financial Officer

         

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

ALESTRA: S&P Cuts Ratings to 'CCC+', Still on CreditWatch Neg
-------------------------------------------------------------
Standard & Poor's said Thursday it lowered its foreign and local
currency corporate credit ratings on Alestra S. de R.L. de C.V.,
to triple-'C'-plus from single-'B'-minus. The downgrade reflects
uncertainties about the company's ability to pay its near-term
debt maturities, a reflection of Alestra's deteriorated financial
flexibility.

The ratings remain on CreditWatch with negative implications
where they were placed March 18, 2002, due to ongoing concerns
about the company's ability to pay its near-term financial
obligations in a timely manner. Alestra reported US$619 million
in debt as of March 2002.

"Even a favorable resolution to its July 1 note payment would not
improve Alestra's risk profile, at least until November's coupon
payment is met, and the company shows a well-designed business
plan according to its highly leveraged balance sheet," stated
Standard & Poor's credit analyst Manuel Guerena.

The risk of Alestra not making the coupon's full payment in time
is high. Alestra's sponsors do not provide a clear position on
potential monetary support to Alestra.

Alestra is 49%-owned by AT&T Corp. (BBB+/Watch Neg/--) and 51%-
owned by Onexa S.A. de C.V. (owned by Grupo Alfa S.A. de C.V. and
Grupo Financiero BBVA Bancomer S.A. de C.V.). The company's
network covers 170 cities throughout Mexico, approximately 83% of
the Mexican long-distance market in terms of lines. Long-distance
related revenues represented 86% of total revenues during 2001,
and 79% as of March 31, 2002.

Analyst: Manuel Guerena, Mexico City (52) 55-5279-2011

CONTACT:  ALESTRA S.A.
          Av. Paseo de las Palmas No. 405
          Col. Lomas de Chapultepec
          11000 Mexico, D.F.
          Phone: 5201-5020
                 5201-5019
          Fax:   5201-5031
                 5201-5027
          Contact:
          Rolando Zubiran, Chief Executive Officer
          Eduardo Lazos, V.P. Engineering & Operations


BANCO INDUSTRIAL/ANAHUAC: Liquidation Pending
---------------------------------------------
Mexican banks Banco Industrial and Banco Anahuac, two of the
three banks that have been taken over and controlled by the
financial authorities, are to be liquidated.

The decision comes after a technical study, which was conducted
by the consulting firm Deloitte & Touche (D&T) under the order of
the Bank Savings Protection, indicated that the banks don't have
any future as viable businesses.

What remains to be revealed is the loss that will have to be
covered by the state.

Patricio Bustamante, vice president of supervision at the
National Banking and Securities Commission (CNBV), said that the
process to transfer the banks Industrial and Anahuac to IPAB for
liquidation would begin in the coming weeks.

Meanwhile, the third bank, Banco del Sureste, could survive, as
the authorities see it as being reasonably viable. However, its
future will be revealed by studies to be carried out later.

At the close of 2000, Banco Industrial lost MXN4.55 billion
(US$479 million), Banco Anahuac MXN878 million (US$93 million)
and Banco del Sureste MXN1.63 billion (US$172 million).

CONTACT:  DELOITTE TOUCHE TOHMATSU
          1633 Broadway
          New York, NY 10019-6754
          Phone: 212-492-4000
          Fax: 212-492-4111
          Home Page: http://www.deloitte.com
          Contact:
          Piet Hoogendoorn, Chairman
          James E. Copeland Jr., Chief Executive Officer
          J. Thomas Presby, Chief Operation Officer
          William A. Fowler, Chief Financial Officer

          DELOITTE TOUCHE TOHMATSU (MEXICO)
          Jaime Balmes No. 11
          Edificio B, 9o Piso, Los Morales
          Mexico City 11510
          Mexico
          Phone: +52 (55) 52 83 77 77
          Fax: +52 (55) 52 83 76 00


CORPORACION DURANGO: S&P Assigns 'B+' To Sr. Unsecured Notes
------------------------------------------------------------
Standard & Poor's said Thursday it assigned its single-'B'-plus
rating to paper and forest products company, Corporacion Durango
S.A. de C.V.'s (CD) US$175 million senior unsecured notes due
2009. Proceeds will use to refinance the existing US$121.7
million senior notes due 2003, as well as other bank debt
facilities.

At the same time, Standard & Poor's affirmed its single-'B'-plus
corporate credit rating on CD. The Mexican firm has US$813
million in debt. The outlook is stable.

"The outlook incorporates Standard & Poor's expectation that the
company will be able to benefit from its lower cost structure
once demand starts showing signs of recovery in the second half
of 2002," stated Standard & Poor's credit analyst Beatriz Coll.

Standard & Poor's also expects that CD will maintain adequate
liquidity.

CD's inability to improve its cash flow generation and to reduce
debt, due to current market conditions, has resulted in a
continued deterioration of its financial profile.

The company is highly leveraged, with sixfold debt to EBITDA.
EBITDA interest coverage and funds from operations to debt are
weak at 1.4x and 1.4% for the three months ended March 2002.
Operating margins remain at about 15% and are expected to remain
around those levels at least during 2002.

Standard & Poor's said that the company's liquidity should be
sufficient to maintain cash needs in 2002, helped by a low
capital expenditure program of around US$35 million mainly aimed
for maintenance investments, and a light debt maturity during the
balance of 2002 of about US$47.7 million.

Management has expressed its commitment to reduce debt through
the divestiture of certain non-core assets. However, the timing
on these sales is still uncertain, so once these divestitures
take place, Standard & Poor's will evaluate their impact on the
company's financial profile.

CD is one of the largest privately held paper and forest product
companies in Latin America. Through its 100% interest in Grupo
Industrial Durango S.A. de C.V., the company has about a 40%
market share in containerboard and corrugated containers in
Mexico; owns 100% of Grupo Pipsamex, the largest producer of
newsprint in Mexico with a 70% market share; and 100% of Durango
Paper Co., a bleached kraft paper and paperboard producer with
operations in St. Mary's, Ga.

Analyst: Beatriz Coll, Mexico City (52) 55-5279-2016;
         Manuel Guerena, Mexico City (52) 55-5279-2011

To see latest financial statements:
http://bankrupt.com/misc/Durango.pdf

CONTACTS:  CORPORACION DURANGO, S.A. DE C.V.
           Mayela R. Velasco
           +52 (1) 829 1008
           mrinconv@corpdgo.com.mx

           Arturo Diaz Medina
           +52 (1) 829 1015
           adiaz@corpdgo.com.mx


GRUPO BITAL: Finalizes Deal With ING
------------------------------------
Grupo Financiero Bital has practically wrapped up a deal with
Dutch group ING under which the latter will acquire a 17.5% stake
of the Mexican group's capital, reports Mexico City daily el
Economista, citing Bital chairman Luis Berrondo.

However, the payment of the US$200 million involved will be made
towards the end of July.

Bital and ING came to an agreement in March, knowing that Banco
Santander Central Hispano (BSCH) wanted to buy the Bital stake
held by Banco Comercial Portugues (BCP).

BSCH says it currently holds 26.6% of Bital, but that depends on
the purchase of the BCP stocks and the approval of the
authorities.

National Banking and Securities Commission (CNBV) was scheduled
to issue its authorization over the weekend to allow foreign
specialists to carry out a revision of BSCH's proposal, as
requested by Bital.

CONTACT:  GRUPO FINANCIERO BITAL
          Paseo De La Reforma
          No. 243, Cuauhtemoc,
          06500, Mexico ,D.F.
          Phone: 57.21.52.86
          Fax:  57.21.57.83
          Home Page: www.bital.com.mx
          Contact:
          Investor Relations
          Act. Ricardo Garza Galindo Salazar
          Phone: 57.21.26.40
          Fax:57.21.26.26
          E-mail: ricaggs@bital.com.mx

         
DESC SA: Obtains Syndicated Loan To Refinance Debt
--------------------------------------------------
DESC, S.A. de C.V., announced Thursday the closing of two
syndicated loan contracts (one in pesos and one in dollars) for a
total of approximately US$ 410 million, which will allow Desc to
improve its debt profile.

Desc will use these proceeds to replace certain bank loans, and
therefore optimize the company's financing costs. This will also
improve its debt structure, while taking advantage of the
competitive interest rates in the market and will continue to
strengthen its balance sheet, which has been characteristic of
Desc for the last five years.

These achievements were possible due to the following two
transactions: The first transaction for US$ 275 million was
divided into two tranches:

- Tranche A - for US$97 million, with a 3-year maturity at a rate
of LIBOR plus 137.5 basis points, and

- Tranche B - for US$178 million, with a 5-year maturity at a
rate of LIBOR plus 162.5 basis points.

Citibank acted as lead arranger, with JP Morgan Chase and
Deutsche Bank as Senior Arrangers. Comerica Bank and Banco
Nacional de Comercio Exterior acted as Arrangers. Other
participants included Export Development Canada, the Toronto-
Dominion Bank, BBVA Bancomer, Credit Lyonnais, Credit Suisse
First Boston, HSBC Bank and Bayerische Hypo-Und Vereinsbank.

The second transaction for Ps. 1,300 million with a 5-year
maturity was for a rate of TIIE plus 0.90 basis points. The
leading arrangers were BBVA-Bancomer and Banco Santander
Mexicano, other participants included Banorte, Invex, Comerica
Bank and Ixe Banco.

Through these transactions, Desc will improve its debt profile
from 35% to 17% in short-term debt and from 65% to 83% in long-
term debt. After the closing of these transactions, the new debt
composition will be 68% in dollars and 32% in pesos, providing a
natural hedge between the dollar denominated debt and the
company's exports.

Desc, S.A. de C.V. is one of Mexico's largest industrial groups
with sales of approximately US$ 2.2 billion during 2001, out of
which exports to over 50 countries amounted to US$ 980 million.
Through its subsidiaries, the Company is a leading operator in
the Autoparts, Chemical, Food and Real Estate Sectors.

CONTACTS:  DESC, S.A. DE C.V.
           In Mexico:
           Arturo D'Acosta
           Alejandro de la Barreda
           Tel: (525)5-5261-8037
           Email: abarredag@mail.desc.com.mx

           In New York:
           Blanca Hirani
           Melanie Carpenter
           Tel: 212-406-3693
           Email: bhirani@i-advize.com


HYLSAMEX: Seeks Shareholders' Approval of Planned Offering
----------------------------------------------------------
Mexican steelmaker Hylsamex SA will seek shareholders' approval
in a meeting scheduled for June 28 to sell up to MXN3.5 billion
($365 million) in shares.

The offering is aimed at boosting the Company's equity to MXN5.89
billion, Hylsamex said.

The Company plans to sell the shares at 90% of their average
value over the last 30 trading days, which is about MXN9.83.

The capital increase is part of an agreement to restructure
US$1.2 billion debt that Hylsamex defaulted on in December after
sinking steel prices and higher energy costs slashed its cash
flow to US$155 million last year from US$253 million in 2000.

In mid-April, Hylsamex got the majority consent needed to
restructure its 2007 Eurobonds, avoiding a formal default on the
US$300 million debt. The Company had missed a US$13.8 million
coupon payment on the bonds March 15.

The steelmaker extended the maturity on the bonds by three years,
and also worked out a deal to restructure US$627 million in bank
debt.

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


SUNTERRA CORPORATION: Obtains Court Approval of New Financing
-------------------------------------------------------------
Sunterra Corporation announced that the United States Bankruptcy
Court in Baltimore had approved a proposed $300 million financing
commitment from Merrill Lynch Mortgage Capital Inc. Finalizing
the new financing is a crucial milestone in achieving Sunterra's
goal of reorganizing and emerging from Chapter 11.

"There is no doubt that our ability to secure this level of
capital commitment from a leading global financial institution
such as Merrill Lynch reflects their confidence in our business
plan. It is also a direct reflection of the tireless efforts of
the Company's employees and advisors during the last two years to
restructure and prepare the Company for emergence from Chapter
11", said Nick Benson, CEO of Sunterra.

The new financing will be utilized to retire Sunterra's existing
debtor-in-possession facility, fund other bankruptcy related
items and provide a revolving line of credit to fund post-
emergence operations. The commitment provided by Merrill Lynch is
subject to execution of mutually acceptable loan documentation
and certain other closing conditions.

In addition, Sunterra has entered into an amendment to its
debtor-in-possession financing agreement with Greenwich Capital
Markets, Inc. that provides for an extension of the maturity date
of that financing until July 31, 2002.

Chanin Capital Partners, Sunterra's investment banker, advised
Sunterra on structuring the new financing commitment.

Sunterra Corporation is a vacation destination company with over
80 resorts in locales including North America, Europe, Mexico,
the Caribbean and Hawaii. Sunterra also manages various
condominium resorts and hotels in Hawaii and operates Club
Sunterra, a points-based vacation system.

PAYMENTS TO SECURED CREDITORS during Reporting Period:


               Frequency of    Amount   
               Payments per    of Each  
Creditor        Contract       Payment  
----------------------------------------------------------------
Finova                           None
----------------------------------------------------------------
Ableco Financing/
Foothill                         None
----------------------------------------------------------------
98-A Securitization            $1,632,914 principal and interest
----------------------------------------------------------------
99-A Securitization            $1,672,251 principal and interest
----------------------------------------------------------------
99-B Securitization            $1,030,554 principal and interest
----------------------------------------------------------------
Greenwich Capital              $595,791
----------------------------------------------------------------
Bank of America                  None
----------------------------------------------------------------
Key Global Finance             $28,146
----------------------------------------------------------------
GE Capital (Matrix leases)       None
----------------------------------------------------------------
Matrix Funding                 $18,899
----------------------------------------------------------------
Cypress Land Loans             $11,250
----------------------------------------------------------------
Societe General
(Barton Capital)               $912,205 principal and interest
----------------------------------------------------------------

To see latest Financial Statement:
http://bankrupt.com/misc/SUNTERRA.htm

DEBTORS ATTORNEYS:  WHITEFORD, TAYLOR & PRESTON, L.L.P.
                    Seven Saint Paul Street
                    Baltimore, Maryland 21202-1626
                    Telephone: (410) 347-8700
                    Attention: Martin T. Fletcher, Esq.
                    Paul M. Nussbaum, Esq.

                    WILLKIE FARR & GALLAGHER
                    787 Seventh Avenue
                    New York, New York 10019
                    Telephone: (212) 729 -8000
                    Attention: Marc Abrams, Esq.
                    Michael Kelly, Esq

CONTACT:  Mark Rubin
          Chanin Capital Partners Corporation
          Phone: (212) 758-2629

          Nick Benson, CEO and President
          Sunterra Corporation
          Phone: (407) 532 1244




               ***********


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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.


* * * End of Transmission * * *