TCRLA_Public/020704.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

           Thursday, July 4, 2002, Vol. 3, Issue 131

                           Headlines



A R G E N T I N A

BAESA: Troubles Could Lead To Loss Of PepsiCo Contract
BANCO GALICIA: Initiates Debt Talks Handful of Creditors
CLAXSON INTERACTIVE: Fitch Says Imagen Offer Distressed Exchange
DISCO: Weak Earnings Prompt Moody's To Change Parent's Outlook
GRUPO VELOX: Liquidity Crunch Drags Down Dutch Partner's Stock
TELEFONICA DE ARGENTINA: Lays Off 10% of Total Workforce


B E R M U D A

TYCO INTERNATIONAL: CIT IPO Falls Below Expectations
TYCO INTERNATIONAL: Still CreditWatch Negative After CIT IPO
TYCO INTERNATIONAL: Moody's Continues To Review For Possible Cut
TYCO INTERNATIONAL: Internal Accounting Review Inconclusive


B R A Z I L

EMBRATEL: Fails To Block Telefonica's Market Penetration


C H I L E

TELEFONICA CTC: Company Braces For Lengthy Strike


E C U A D O R

BANCO DEL PROGRESO: AGD Schedules Another El Telegrafo Auction


M E X I C O

FAR-BEN: Creditors Shun Funding Plan; Pardo Still Seeks Control
FARGO: Mexico's Grupo Bimbo Denies Reports of Sale Talks
POLAROID: Bank One to Assume Mexican Subsidiary


N I C A R A G U A

INTERNATIONAL THUNDERBIRD: New Board Appointed; Merger Halted


     - - - - - - - - - -

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

BAESA: Troubles Could Lead To Loss Of PepsiCo Contract
------------------------------------------------------
Luxembourg-based holding company Quinsa says that troubles in its
subsidiary Baesa may jeopardize its contract with Pepsico. In a
report to the US Securities and Exchange Commission, Quinsa main
explained that Pepsi's primary Argentina bottler was in danger of
losing its agreement.

Cerveceria y Malteria Quilmes, with which Baesa was merged in
2000, pointed out that the company's default or that of Baesa
could affect clauses in the contract with PepsiCo. Quilmes warned
that the process could eventually result to the dissolution of
the company's bottling and marketing agreements in Argentina and
Uruguay. The report feared that a default in a subsidiary of the
group might push Pepsico to end the franchise contracts.

Quinsa, owned by the Bemberg family acquired Baesa in 1999 for
US$73mil. It merged Baesa with beer-company Quilmes in 2000,
unifying the manufacturing and distribution processes of the
company's beer and alcoholic drinks units. The merger generated
savings of up to US$40mil.

Baesa's turnover was US$253mil last year. Baesa together with
Edisa, the secondary Pepsi bottler in Argentina, support market
Pepsi brands' market share nearly 22%.

CONTACT: QUILMES INDUSTRIAL (QUINSA) S.A.
         84, Grand-Rue
         L-1660 Luxembourg
         Grand Duchy of Luxembourg
         Phone:(352) 473-884
         Fax:(352) 226-056

         QUILMES INDUSTRIAL (QUINSA) S.A.
         Tte. Gral. Juan D. Perón 667
         C1038AAM - Buenos Aires
         Argentina
         Phone: (54-11) 4321-2700 (extension 8291)
         Direct Line:(54-11) 4321-2744
         Fax: (54-11) 4321-2746


BANCO GALICIA: Initiates Debt Talks Handful of Creditors
--------------------------------------------------------
Hector Arzeno, international vice president of Banco de Galicia y
Buenos Aires SA, led a meeting with about six of the bank's 155
creditors in an effort to start debt-restructuring negotiations,
reports Bloomberg

"You've got to start the conversations at some point,'' said
Arzeno, without revealing the names of the institutions that
attended the meeting in New York. "Now it's up to the creditors
to create a steering committee," he added.

Galicia ran out of cash after depositors accelerated withdrawals
on concern that the bank lacked an international parent willing
to back it after Argentina defaulted on US$95 billion in debt and
devalued the peso. The bank asked creditors, including Barclay's
Plc, Banco Santander Central Hispano SA, Dresdner Bank AG, the
International Finance Corp. and J.P. Morgan Chase & Co. to
convert part of about $1.2 billion in debt into shares and
refinance the rest to help strengthen its capital.

Converting debt owed by Galicia into equity may be the best way
for international banks to recoup some of the billions of dollars
in losses they have written off on assets in Argentina as a
result of the default and devaluation, analysts said.

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.a

CREDITOR BANKS:

BARCLAYS PLC
54 Lombard St.
London EC3P 3AH, United Kingdom
Phone: +44-20-7699-5000
Fax: +44-20-7699-2721
Home Page: http://www.barclays.co.uk/
Contact:
     Cathy Turner, Head of Investor Relations
     Phone: (+44) (0)207 699 5000
     Fax: ((+44) (0)207 699 2721

SANTANDER CENTRAL HISPANO S.A.
Plaza de Canalejas,1
28014 Madrid, Spain
Phone: +34-91-558-10-31
Fax: +34-91-552-66-70
Home Page: http://www.bsch.es
Contacts:
     Ana P. Botín, Chairman, Banesto
     Emilio Botín-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

J.P. MORGAN CHASE & CO.
270 Park Avenue
New York, NY 10017
Phone: (212) 270-6000
Fax: (212) 270-1648
Home Page: http://www.jpmorganchase.com/
Contact:
     William Harrison, Jr., Chairman and Chief Executive  Officer
     Dina Dublon, Chief Financial Officer
     Geoffrey Boisi, Co-CEO of the Investment Bank

     Investor Relations
     Phone: (1-212) 270-6000

DRESDNER BANK AG
Jürgen-Ponto-Platz 1
D-60301 Frankfurt/Main,
Germany
Phone: +49-(0) 69/2 63-0
Fax: General enquiries
+49-(0) 69/2 63-48 31
+49-(0) 69/2 63-40 04
Home Page: http://www.dresdner-bank.de/
Contact:
Dr. Jur. Henning Schulte-Noelle
Chairman of the Supervisory Board of Dresdner Bank AG

Uwe Plucinski
Deputy Chairman of the Supervisory Boa

INTERNATIONAL FINANCE CORPORATION
2121 Pennsylvania Avenue, NW
Washington, DC 20433
USA
For directory service,
call the IFC switchboard at
Tel.: (202) 473-1000
Home Page: http://www.ifc.org/
Contact:
Corporate Relations Unit
Phone.: (202) 473-3800
Fax: (202) 974-4384
E-mail: Webmaster@ifc.org


CLAXSON INTERACTIVE: Fitch Says Imagen Offer Distressed Exchange
----------------------------------------------------------------
Imagen Satelital S.A.'s (Imagen) parent company, Claxson
Interactive Group, recently announced an exchange offer for
Imagen's 11% US$80 million notes (old notes) due 2005. Claxson is
offering a US$410 principal payment for each US$1,000 principal
amount of old notes held. The balance will consist of 7.25%
senior notes due 2010. The exchange offer expires on July 31,
2002. Additionally, Claxson is offering a consent payment for
proposed changes to the indenture governing the old notes. The
consent payment offer is equal to US$10 per US$1,000 principal of
old notes with an expiration date of July 18, 2002. Based on the
proposed terms, Fitch would consider the transaction to be a
distressed exchange. The exchange offer's lower interest rate and
lengthened maturity would result in a loss of present value.

On May 1, 2002, Imagen missed a semiannual interest payment of
US$4.4 million on its US$80 million senior unsecured notes; the
foreign currency rating was subsequently downgraded to 'DD'. The
next interest payment is due on Nov. 1, 2002. At Dec. 31, 2001,
total debt was US$85.5 million and primarily consisted of US$80
million senior unsecured notes due in 2005.

Imagen is one of the leading programmers and distributors of pay-
TV channels in Argentina and the rest of the Southern Cone. The
company owns seven channels and has distribution rights for
another five. The 12 channels are provided to more than 1,000
cable system operators and delivered to more than 15 million TV
households in Latin America. Imagen is a wholly owned subsidiary
of the newly formed Claxson. Claxson was formed as a result of
the merger of certain media assets held by Grupo Cisneros, Hicks
Muse Tate and First, and El Sitio in exchange for a 45%, 35% and
20% stake, respectively, in Claxson. In recent years, Imagen's
non-Argentine sales have risen but are not anticipated, in the
near-term, to reach a point sufficient to offset the currency
mismatch and heightened sovereign risks.

CONTACT:  Fitch Ratings
          Randy Alvarado
          Phone: 312/368-3117 (Chicago)
          Carolina Iturralde
          Phone: +011 541 14 327 2444 (Buenos Aires)
          Media Relations:
          Matt Burkhard
          Phone: 212/908-0540 (New York)


DISCO: Weak Earnings Prompt Moody's To Change Parent's Outlook
--------------------------------------------------------------
Moody's Investors Service changed the outlook on the senior
unsecured Baa1 rating of Koninklijke Ahold NV ('Ahold') to
negative from stable.

The outlook change is based on concerns that Ahold's 2002
earnings from Latin America are expected to be significantly
impacted by the economic difficulties facing the region, while
recent investments in the region are unlikely to deliver the
appropriate risk returns over the medium term.

The significant devaluation of the Argentine peso and the weak
economic environment in Argentina are expected to lead to a
significant dilution in revenues and earnings generated by
Ahold's subsidiary Disco SA ('Disco'), which has a leading
position in Argentine food retail.

While Moody's views positively Disco's local management's swift
response to the changed economic climate through adjusting its
product assortment, very weak macroeconomic fundamentals are
expected to continue to weigh on revenue growth and earnings for
the foreseeable future.

Although Ahold's decision to capitalize US$234 million of
shareholder loans to Disco has stabilized the latter's capital
structure, it has also increased the risk profile of the group's
investments in its Argentine business. In Moody's opinion, Ahold
is unlikely to generate the appropriate risk return required from
its equity investment, while, in the current economic
environment, capital controls can be expected to limit any
upstreaming of dividends.

Ahold's potential settlement of the US$480 million of contingent
obligations in connection with the bank indebtedness of its local
partner Velox (against which it has been pledged all but 1% of
Velox's stake in Disco Ahold International Holdings) is expected
to be met from a combination of internal cashflow and bank
funding. Moody's views the acquisition of the shares as likely to
lead to a large impairment charge given the expectation of
sharply lower earnings derived from its stake in Disco. Whilst
Ahold should be able to comfortably absorb the cash-flow impact
of the payment, the significant cash outflow would modestly delay
the expected rate of de-leveraging of the company, the rating
agency noted.

Based in Zaandam, the Netherlands, Koninklijke Ahold NV is a
leading international food provider, with operations in the
Netherlands, the United States, and a growing presence in the
developing markets of Southern and Central Europe, Latin America
and Asia. The company had 2001 revenues in excess of EUR66.5
billion.


GRUPO VELOX: Liquidity Crunch Drags Down Dutch Partner's Stock
--------------------------------------------------------------
The tight financial situation of Argentine group Grupo Velox
pulled down the value of the shares of its Dutch partner, Royal
Ahold NV.

According to a report released by Bloomberg, shares of Ahold on
Tuesday fell as much as EUR2.16 euros, or 10.2%, to EUR19.08, on
track for the biggest one-day slide since at least 1991.

The plunge in the value of the stock came after the Argentine
Central Bank forced Grupo Velox to suspend for 30 days the
operations of its unit, Banco Velox, amid press reports of
suspected fraud at the bank.

Ahold, the world's largest food distributor, controls the Disco
SA and Santa Isabel SA grocery chains in Argentina, Chile and
Peru together with Velox Retail Holdings (VRH), a unit of Grupo
Velox.

"Now that things have started rumbling within the group the
chances are that Velox Retail will go bankrupt too," said Sander
van Oort, an analyst at Effectenbank Stroeve with a `buy' rating
on the stock.

Ahold owns 85% of its retail joint venture with Grupo Velox and
may have to pay as much as US$496.2 million if VRH defaults on
its debt, board member Bill Grize said in an interview.

"We're talking about an asset that is worth much less," Grize
said, adding, "If and when we make that payment we might have to
make a write-off."

Financing costs would also rise because Ahold would have to
borrow the money to cover the cost, he said. Grize said he's seen
no indication that the Argentine partner is going to default.

"If Velox retail goes down, it will cost Ahold 2.5% in market
value," not 10%, said Fernand de Boer, an analyst at ING
Financial markets in Amsterdam, who maintains a "buy"
recommendation on the shares.

CONTACT:  GRUPO VELOX
          Burgos 80, piso 5, Of. 501
          Las Condes
          Santiago, chile
          Phone: 208-8380
          Fax: 208-8332
          Home Page: http://www.finambras.com.br/grupo_velox.html

          DISCO S.A.
          Larrea 847, Piso 1
          1117 Buenos Aires, Argentina
          Phone: +54-11-4964-8000
          Fax: +54-11-4964-8039
          Home Page: http://www.disco.com.ar
          Contacts:
          Eduardo R. Orteu, Chief Executive Officer
          Jose Sanchez, Chief Financial Officer


TELEFONICA DE ARGENTINA: Lays Off 10% of Total Workforce
--------------------------------------------------------
Argentina's deepening economic crisis is driving Telefonica de
Argentina, the Argentine subsidiary of Spanish telecommunications
group, to send up to 10% of its 10,000 employees, reports El Pais
newspaper. The affected employees will receive 70% of their
monthly pay. The length of the lay offs hasn't been decided yet.

Telefonica de Argentina, which has decided to freeze investments,
has been hard hit by the devaluation of the Argentine peso,
plummeting sales and high debts. The Company reported first-
quarter losses of ARS2.48 billion compared with a profit of US$44
million a year ago.

The Argentine company's total debt hovers at US$1.8 billion, of
which US$800 million are in bonds. About US$400 million of debts
will come due later this year and another US$400 million on May
7, 2008.

CONTACTS:  TELEFONICA DE ARGENTINA
           Tucuman 1, 18th Floor, 1049
           Buenos Aires, Argentina
           Phone: (212) 688-6840
           Home Page: http://www.telefonica.com.ar
           Contacts:
           Carlos Fernandez-Prida Mendez Nunez, Chairman
           Paul Burton Savoldelli, Vice Chairman
           Fernando Raul Borio, Secretary



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

TYCO INTERNATIONAL: CIT IPO Falls Below Expectations
----------------------------------------------------
Tyco International Ltd. raised US$4.6 billion through the initial
public offering of its CIT Group finance unit on Monday, reveals
Knight-Ridder Business News. However, the result was quite
disappointing as the amount raised fell short of the expected
range of $5 billion to $5.8 billion. Two hundred million shares
were sold for US$23 each, below the planned range of US$25 to
US$29 per share.

"People simply are pulling away from anything that isn't triple-
A," said Peter Van Winkle, investment chief for PNC Advisors in
Boston. "Anything touched by Tyco, at least right now, is going
to be a problem."

But despite the lower-than-expected price, Tyco shareholders
breathed a sigh of relief that the finance-unit sale had been
completed after months of speculation that the deal could be in
trouble.

"Finally is the operative word," said Darcy MacLaren, director of
equity research at Safeco Asset Management in Seattle. "At this
stage, getting it done is the first thing, and the price is
secondary."

Raising cash from a sale of CIT has been considered pivotal to
Tyco's financial health. The conglomerate, which has been beset
by concerns about its liquidity, has said it plans to use the
proceeds from the IPO to pay off some of its US$27 billion in
debt.

Tyco will take a US$1.9-billion charge to reflect part of the
loss it took on the CIT deal, a company spokesman said. Tyco,
which bought CIT for US$9.5 billion last year and had once
carried it on its books at more than US$11 billion, took a US$4.5
billion charge in the second quarter to reduce CIT's carrying
value to US$6.5 billion.

Tyco, which is based in Bermuda but says it has operating
headquarters in Exeter, N.H., had little choice but to get rid of
CIT, after Tyco's own woes cost CIT its access to short-term
credit markets earlier this year.

CIT shares began trading Monday on the New York Stock Exchange
under the symbol CIT.

CONTACT:  TYCO INTERNATIONAL
          Gary Holmes
          Tel. +1-212-424-1314
               +1-212-424-1307
          Web site:  http://www.tyco.com

          CTI Group (Holdings), Incorporated
          333 North Alabama Street
          Suite 240
          Indianapolis, IN. 46204-1767
          Tel:317-262-4666
          Fax:317-262-4605
          Home Page: http://www.ctigroup.com/index.asp
          Contact: Brad Houlberg, Chief Executive Officer
          Email: dsauceda@ctigroup.com


TYCO INTERNATIONAL: Still CreditWatch Negative After CIT IPO
------------------------------------------------------------
Standard & Poor's said Tuesday that the triple-'B'-minus
corporate credit ratings on Tyco International Ltd. and its
industrial subsidiaries remain on CreditWatch with negative
implications. The reiteration follows the completion of the IPO
of Tyco's commercial finance subsidiary, the CIT Group Inc.
Hamilton, Bermuda-based Tyco is a diversified company with total
debt of about $26 billion.

The IPO is an important step in strengthening Tyco's liquidity.
Management intends to use IPO proceeds totaling $4.6 billion,
together with a significant portion of cash balances (between
$2.5 billion and $3.0 billion currently) to reduce debt. During
the next 18 months, the company will have public and bank debt
maturities totaling about $6.8 billion, plus the potential "put"
of two zero-coupon debt issues totaling about $5.9 billion. (Tyco
has the option to satisfy $2.3 billion of the latter amount in
common stock at the February 2003 put date. However, the company
may choose not to do so because at the current low common share
price, this would cause significant dilution.)

Moodey's says removal of the ratings from CreditWatch will depend
on management's addressing the gap between IPO proceeds, cash
balances, and operating cash flow (expected to total about $3
billion in the current fiscal year) and obligations coming due in
the next 18 months. This could be done through a combination of
restoring bank line availability, selling additional assets, and
accessing the public capital markets.

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



TYCO INTERNATIONAL: Moody's Continues To Review For Possible Cut
----------------------------------------------------------------
Moody's Investors Service said it is continuing its review for
possible downgrade the debt ratings of Tyco International Ltd.
and its subsidiaries.

The ratings agency sees the completion of the CIT initial public
offering (IPO), which provides Tyco with net proceeds of
approximately $4.6 billion to begin needed debt reduction, as a
positive development.

However, Moody's believes that Tyco will continue to face a
significant debt burden with sizable maturities over the next
eighteen months.

The rating agency noted that in addition to the CIT IPO proceeds,
Tyco anticipates cash liquidity of US$2.5 to US$3.0 billion as of
June 30 (after fully drawing its available bank lines earlier
this year), as well as free cash flow which should enable it to
meet funding needs during the current calendar year.

The Company expects free cash flow in the range of US$4.2 to
US$4.5 billion in its 2003 fiscal year, and a refinancing need of
US$1.5 billion in November, 2003, Moody's said.


TYCO INTERNATIONAL: Internal Accounting Review Inconclusive
-----------------------------------------------------------
Tyco International Ltd.'s ongoing review of financial
transactions involving senior executives hasn't, so far, unveiled
any evidence of accounting irregularities, the Company said.

"Accounting issues have created a recent firestorm in the
corporate world," John Fort, who is running the conglomerate on
an interim basis, said in a conference call with investors.
"We're not in this category," he added.

Fort revealed outside accountants have been looking at the
Company's books, but that Tyco has been unfairly lumped into the
same category as WorldCom and Adelphia, which have disclosed
accounting scandals that have shaken the stock market.

"We've been under the harsh light for nearly three years, and we
don't have any information that would call into question the
Company's accounting practices," Fort said. "Something like
WorldCom just couldn't happen here."



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

EMBRATEL: Fails To Block Telefonica's Market Penetration
--------------------------------------------------------
Embratel Participacoes SA failed to prevent the entrance of the
Brazilian unit of Telefonica SA in the nationwide long-distance
service when regulator Anatel granted Telefonica the rights, late
Monday.

Anatel allowed Brazilian fixed-line unit Telesp to provide
nationwide services through a regulatory `authorization'-- an
agreement with a set of legal obligations not entirely found in a
`concession.'

Telefonica's concession to expand business beyond Sao Paolo was
cut short when Embratel won a court order April 29 preventing
Telesp from offering domestic and international long-distance
service nationwide in Brazil's 27 states. The legal action was
based on the argument that the Spanish firm breached competition
and tariff rules.

Telefonica continued to appeal to overturn the injunction and
finally got the rights to launch nationwide services as early as
this week.

Embratel is controlled by the embattled U.S.-based WorldCom Inc.

To see Embratel's latest financial statements:
http://bankrupt.com/misc/Embratel.txt

CONTACT:  EMBRATEL PARTICIPACOES S.A.
          Investor Relations
          Silvia Pereira
          Tel. (55 21) 2519-9662
          Fax: (55 21) 2519-6388
          Email: Silvia.Pereira@embratel.com.br
                 invest@embratel.com.br
                  or
          Press Relations:
          Helena Duncan/Mariana Palmeira
          Tel: (55 21) 2519-3653/3654
          Fax: (55 21) 2519-8010
          Email: hduncan@embratel.com.br
                 mpalm@embratel.com.br

          TELEFONICA SA
          Gran Via 28, Planta 3
          28013 Madrid,
          Spain
          Phone: +34 91 584 4713
          Fax: +34 91 531 934
          E-mail: investor.relations@telefonica.es
          Home Page: http://www.telefonica.es/
          Contact:
          Ezequiel Nieto, Investor Relations Manager

          TELECOMUNICA?OES DE SAO PAULO S.A. - TELESP
          Rua Martiniano de Carvalho, 851, 17th Fl.
          01321-001 Sao Paulo, Brazil
          Phone: +55-5511-3549-7200
          Fax: +55-5511-3549-7202
          Home Page: http://www.telefonica.net.br/sp
          Contact:
          Fernando Xavier Ferreira, Chairman and President
          Antonio Viana Baptista, Vice Chairman
          Manoel L. Ferrao de Amorim, Chief Operations Officer
          Leonardo de Piava Rocha, VP Finance, Administration,
                                   and Investor Relations



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

TELEFONICA CTC: Company Braces For Lengthy Strike
-------------------------------------------------
Telefonica CTC Chile, a unit of Spain's Telefonica SA, is likely
to deal with a prolonged work stoppage as unions enter their
second day of strike.

"I think we'll be here for weeks," said Daniel Droguett,
spokesman for the United Workers Federation, which represents the
striking workers. "Management doesn't want to address our
demands."

Unions at Telefonica CTC Chile began striking Monday following
last week's announcement by Telefonica CTC Chief Executive
Claudio Munoz that the Company wants to freeze some wages and cut
severance pay.

Union leaders are demanding a 3% increase in wages that are
indexed to inflation rate and oppose a company plan to cut
salaries by 25%.

A prolonged work stoppage may slow maintenance, installations and
sales and hamper efforts by the Company to lower costs and
increase profit. However, Telefonica CTC said in a statement that
the protest hasn't reduced its service.

In a separate statement to the Chilean securities, the Company
said that 3,281 people of a workforce of 7,500 are on strike,
fewer than the figure of 4,000 given by unions. Telefonica CTC
added that 1,386 workers who aren't participating in the strike
have agreed to a wage contract, without providing details.

CONTACT:  Telefonica CTC (Corporacion Telefonica Chilena S.A.)
          V. Providencia 111
          Providencia - Santiago
          (56)-Chile
          Phone: (2) 2320511
                 (2) 6912020
          Home Page: http://www.telefonicadechile.cl/
          Contacts:
          Mr. Bruno Philippi, President
          Mr. Jacinto Daz, Vice President
          Gisela Escobar,  Head of Investor Relations



=============
E C U A D O R
=============

BANCO DEL PROGRESO: AGD Schedules Another El Telegrafo Auction
--------------------------------------------------------------
After a failed auction held last week due to the absence of
offers, the Ecuadorian banks deposits agency AGD will launch
another auction for the newspaper El Telegrafo. However, this
time around, the base price of US$2.58 million will be reduced.

Proceeds of the 118-year old newspaper's sale will be used to pay
the customers of intervened bank Banco del Progresso, one of a
host of financial institutions that closed during the crisis
between 1998 and 2000.

Progreso and El Telegrafo were seized by the government after
their owner was accused of corruption. Fernando Aspiazu, who was
sent to jail for tax violations, reportedly diverted funds from
the bank and falsified accounts.



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

FAR-BEN: Creditors Shun Funding Plan; Pardo Still Seeks Control
---------------------------------------------------------------
Fernando Chico Pardo and his investment group failed to take
control of the Mexican pharmacy chain Far-Ben (Farmacias
Benavides) after some of the creditors rejected the
capitalization process.

As reported, Far-Ben's board had authorized a MXN533.3-million
capital increase by investors headed by Chico Pardo and majority
shareholders of the Benavides family. One of the requirements of
the capitalization is to have at least 95% of the holders of
debentures issued in 1997 accept one of the three alternatives to
restructure presented by the Shareholders Assembly on June 10.
However, only 84% accepted one or other of the alternatives,
which brought the agreement between both parties to an end.

Had the capitalization been completed, Chico Pardo would have
taken control of at least 51% of the Monterrey-based chain.

Meanwhile, Far-Ben announced the board's agreement to continue
the debt restructuring process of US$700 million in negotiable
debentures to fulfill the renegotiation agreements with
creditors.

CONTACT:  BENAVIDES (FAR-BEN S.A. DE C.V.)
          Benavides (Far-Ben S.A. De C.V.)
          602 Pino Suarez South Central
          Monterrey Nuevo Leon
          Mexico
          Phone: +52 50 77 00
          Fax: +52 89 99 31
          Home Page: http://www.benavides.com.mx/
                    Contact:
          Investor Relations
          E-mail: inversionistas@benavides.com.mx
             or
          Enrique Javier Villarreal Bacco, CFO
          Guillermo Benavides Arredondo, COO
          Miguel Carlos Peinado Gonz lez, Purchasing and
                                          Merchandising VP
          Fernando Benavides Sauceda, Chief Information Officer


FARGO: Mexico's Grupo Bimbo Denies Reports of Sale Talks
--------------------------------------------------------
Mexican-based Grupo Bimbo is not in sale negotiations with
Argentina's largest bread-baker Fargo, which filed for bankruptcy
protection Friday, said a Bimbo official.

"Today we are not in negotiations, and I would like to clarify
that the company [Bimbo] has always had a vision of growing in
the different markets in which it competes," said Bimbo Corporate
Finance Director Luis Sampson.

Early this week, diplomatic sources from both Mexico and
Argentina, as well as the media, had claimed the sale was a done
deal.

Fargo filed for bankruptcy protection Friday seeking an agreement
with creditors to restructure its reported US$150 million of
debt. The company, which employs 1,280 workers at five plants,
began to report losses earlier this year, following the
devaluation of the peso, which sent prices of raw materials
soaring.

Fargo is Argentina's leading packaged bread manufacturer with 54%
of the market, down from 62% last year.

CONTACT:  COMPANIA DE ALIMENTOS FARGO S.A.
          Panamericana Y Marcos Sastre
          1617 General Pacheco
          Buenos Aires, Argentina
          Phone: 541-14-736-6500
          Fax: 541-14-736-6540
          Contacts:
          Carlos Barbero
          E-mail: vbullrich@fargo.com.ar


POLAROID: Bank One to Assume Mexican Subsidiary
-----------------------------------------------
Polaroid Corporation's subsidiary in Mexico, which is headed
Andres Ramirez Salazar, will maintain its current strategy while
it awaits orders from its new owner.

Already, U.S. parent Polaroid Corporation, presided by John W.
Loose, has obtained approval from the U.S. Bankruptcy Court to
sell the company and its subsidiaries for nearly US$265 million
to Bank One Corporation. The bank will have to pay US$255 million
cash, plus interest of 35% to close the deal. In addition, it
will also contract a debt for US$1 billion left by Polaroid. The
bank said it could make modifications to the Company's structure
and will make staff changes within a month.

Bank One Corporation wants to recover Polaroid's leadership of
the sector. In Mexico, Bank One wants Polaroid's plant there to
strengthen business in Latin America and will boost its share of
the photographic market, as well as its participation in
medicines, graphic arts, magnetic products, and digital
technology.

CONTACT:  POLAROID DE MEXICO S.A. DE C.V.
          Paseo de la Reforma
          195-17 P.H. Col Cuauhtemoc
          06500 Mexico, D.F.
          Phone: 525-703-1111

          BANK ONE CORPORATION
          Corporate Headquarters
          1 Bank One Plaza
          Chicago, Illinois 60670
          Phone: 312-732-4000



=================
N I C A R A G U A
=================

INTERNATIONAL THUNDERBIRD: New Board Appointed; Merger Halted
-------------------------------------------------------------
International Thunderbird Gaming Corporation announced that
Salomon Guggenheim of Zurich, Switzerland and Jean Duval of
Carignan, Quebec have been appointed to the board of directors of
the Corporation, effective June 28, 2002. These appointments fill
vacancies on the board left by Dave Michelson, the Chief
Financial Officer and Secretary of the Company, who advised the
Company that he would not stand for re-election as a director at
the Annual Meeting of the Company held on June 20, 2002, and by
Clay Hardin, who resigned as a director to create a vacancy to
permit these appointments. Both Mr. Michelson and Mr. Hardin
continue as officers of the Company.

As a result of these changes, the board now consists of five
directors who are Jack R. Mitchell and Albert W. Atallah, both
officers of the Company, Jorge Montano of Mexico City and Messrs.
Guggenheim and Duval, the latter three being outside directors
with diverse business backgrounds.

The new board has confirmed the reappointments of Mr. Mitchell as
President and Chief Executive Office, Mr. Atallah as Chief
Operating Officer and General Counsel, Mr. Hardin as Vice
President Operations and Dave Michelson as Chief Financial
Officer and Secretary.

Company management believes the appointments resolve a proxy
fight threatened by certain dissident shareholders. In this
threatened action, Alex Winch, the former Chairman of the Board
of the Corporation, notified Mr. Mitchell and Mr. Atallah that he
was leading a group of dissident shareholders who were requesting
the resignation of all of the directors of the Corporation in
favour of their appointees to the board failing which they
intended to solicit proxies from all shareholders to appoint
their slate of nominees to the board to replace the existing
directors. They further advised that if the existing board would
not agree to their request and they were subsequently successful
in electing their nominees to the board, they would terminate the
employment of all of the officers without severance and relocate
the head office of the Company to Toronto. Mr. Winch represented
to Mr. Mitchell and Mr. Atallah that he had the support of
shareholders holding a sufficient number of shares of the Company
to carry out his objectives. After making these demands and
contacting a number of the Company's business partners and
lenders, the dissidents concluded that they would not be in a
position to carry on successfully the various Company's business
relationships without the existing management, and Mr. Winch
withdrew his demands. This led to subsequent discussions between
the existing management and Mr. Guggenheim, who Mr. Winch had
requested be part of his dissident group, and he agreed to join
the board. Mr. Duval, a long time shareholder of the Company, was
recommended to the Company by other sources. The management
expects a good working relationship with both of the new
directors.

The disruption in management caused by the dissident group has
led the Company's primary lender and development partner, MRG
Entertainment LLC, to serve notices of default in respect of
loans totaling $2,880,000 made by MRG and its affiliates to the
Company. The Notices claim a default on the basis of a "change of
control" in management and in the composition of the board of
directors. The loan documents provide the Company with a 30 day
period to cure defaults, and the reconstitution of the board and
reappointments of the officers of the Company referred to above
rectify the circumstances on which default was claimed within the
30 day cure period.

The Company will not proceed with the proposed merger of its
Nicaraguan operations with the Nicaraguan operations of Hopewell
Limited. The disruption of management by the dissident group
occurred during the Company's due diligence investigations of the
Hopewell transaction and adversely affected the Company's
relationship with MRG, to whom the Company had applied for its
financing in respect of the transaction. Although these factors
impacted the transaction negatively, the management of the
Company had become concerned during the due diligence process as
to the compatibility of the managements of the two companies,
leading to a mutual decision by the Company and Hopewell that it
was in neither company's best interest to proceed with the
merger.

In a matter unrelated to the recent management issues, the
Company has entered into a settlement with the Hopland Band of
Pomo Indians relating to claims made by the Company in respect of
the termination of the Company's revenue sharing arrangement with
the Band's gaming facility operated by the Band in California
which occurred in 1998. Under the terms of the settlement, the
Band will pay the Company a total of $750,000, either in one lump
sum if and when the Band successfully completes a certain
financing but in any event, over a 15 month period at the rate of
$50,000 per month without interest or over a period of 36 months
with interest at 12%. In either case, the payments will commence
on August 1, 2002 and the Band will advise the Company whether it
is electing the 15-month period or the 36-month period prior to
that time.

As a result of the disruptions to management which occurred due
to the threat of the dissident proxy fight, the Toronto Stock
Exchange halted trading in the common shares of the Company on
June 10, 2002 pending clarification of the Company's affairs. The
TSX has advised the Company that it is reviewing the eligibility
for continued listing of the common shares of the Company on the
TSX.

International Thunderbird Gaming Corporation is an owner and
manager of international gaming facilities. The Company's shares
trade on the Toronto Stock Exchange under the symbol INB.

On behalf of the Board of Directors,

Jack R. Mitchell, President and CEO

Cautionary Notice: This release contains certain forward-looking
statements within the meaning of section 21E of the United States
Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical fact, included herein,
including without limitation, statements regarding potential
revenue and plans and objectives of the Company are forward-
looking statements that involve risk and uncertainties. There can
be no assurances that such statements will prove to be accurate
and actual results could differ materially from those anticipated
in such statements. Important factors that could cause actual
results to differ materially from the Company's forward-looking
statements include competitive pressures, unfavorable changes in
regulatory structures, and general risks associated with
business, all of which are disclosed under the heading "Risk
Factors" and elsewhere in the Company's documents filed from
time-to-time with the TSE and other regulatory authorities.

CONTACT:  INTERNATIONAL THUNDERBIRD GAMING CORPORATION
          Albert Atallah, 858/451-3637
          Email: info@thunderbirdgaming.com
          Website: www.thunderbirdgaming.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.

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