/raid1/www/Hosts/bankrupt/TCRLA_Public/020705.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

           Friday, July 5, 2002, Vol. 3, Issue 132

                           Headlines


A R G E N T I N A

GRUPO VELOX: Dutch Partner More Likely To Buy JV
HAVANNA: Files For Bankruptcy Protection From Creditors
REPSOL YPF: Petrobras Seen As Most Likely Buyer For YPF
TELECOM ARGENTINA: Shares Climb On Creditor Funding Deal Rumors
TGN: S&P Leaves Ratings Unchanged Despite Recent Payments


B E R M U D A


FLAG TELECOM: Files Plan of Reorganization
TYCO INTERNATIONAL: DBRS Confirms Rating at BB (High)


B R A Z I L

BANCO CITIBANK: S&P Cuts Ratings After Lowering Brazil's Ratings
BANCO DO BRASIL: S&P Lowers Local, Foreign Currency Ratings
BANCO DO ESTADO: S&P Takes Rating Actions Following Brazil Cut
BANCO ITAU: S&P Changes Ratings On Debt
BANCO SANTANDER BRASIL: Ratings Downgraded by S&P

BANCO SANTANDER MERIDIONAL: S&P Reduces Ratings
CIBRASEC: S&P Downgrades Local, Foreign Currency Credit Ratings
HSBC BANK: S&P Changes Ratings
UNIBANCO: S&P Cuts Debt Ratings
ELETROPAULO METROPOLITANA: Gets Consent To Hike Rates By 14.2%
VARIG: July Wages Delayed As Counter Measure to Huge Debt
XEROX CORP.: Fitch Downgrades Ratings To 'BB-'; Outlook Negative


M E X I C O

FAR-BEN: Market Specialists Apply Pressure for Speedy Financing
GLOBAL LIGHT: Files For Creditor Protection to Restructure
VITRO: Whirlpool Concludes Acquisition of Vitromatic


     - - - - - - - - - -


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

GRUPO VELOX: Dutch Partner More Likely To Buy JV
------------------------------------------------
Cees van der Hoeven, the chief executive officer of Royal Ahold
NV, revealed mounting expectations that the Dutch company will
buy out its Argentine partner and write down the value of the
venture.

Ahold, the world's largest food distributor, may have to spend
about $480 million to take full control of the company it owns
with Grupo Velox and the "larger part" of that would become a
writedown, Van der Hoeven said.

"We've always said it's a possibility," Van der Hoeven said. "The
likelihood has increased in the last few weeks."

The Dutch company controls the Disco SA and Santa Isabel SA
grocery chains in Argentina, Chile and Peru with Velox Retail
Holdings (VRH), a subsidiary of the embattled group Grupo Velox.
It owns 85% of the joint venture.

Grupo Velox' Banco Velox has been suspended from operations for
30 days amid press reports of suspected fraud at the bank. It's
the third Velox banking unit to be closed in the past 10 days.

Ahold is guarantor on US$100 million in principal debt to VRH. If
the partner defaults, Ahold is obliged to buy the shares in the
joint venture that Velox Retail pledged to secure borrowings.

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


HAVANNA: Files For Bankruptcy Protection From Creditors
-------------------------------------------------------
Speculation of an imminent liquidation by creditors led Havanna
SA, Argentina's leading maker of milk caramel-based sweet cakes
and owner of a popular cafe chain to seek creditor protection. .
News of the filing was reported by daily newspaper Ambito
Financiero.

Company manager Carlos Bendisky revealed that Deutsche Bank,
Citibank, Santander Central Hispano, and Sudameris threatened to
liquidate the Company and sell its popular brand and other
assets. The executive added that the banks refused to extend
maturities on the US$32-million debt. The Havanna manager
admitted that the debt is "unpayable" since the Company earns
revenues in declining pesos (ARS3.69=$1).

Havanna is 70%-owned by private equity firm Exxel Group.
Havanna's recent decision came after another Exxel Group company,
Fargo, the country's largest bakery, filed for bankruptcy in an
effort to restructure debt.

CONTACT:  HAVANNA S.A.
          Brandsen 3298
          Mar del Plata, Buenos Aires 7600
          Argentina
          Phone: (54223) 4748323
          Fax: (54223) 4748327

          THE EXXEL GROUP
          Caledonian House, Jennet Street,
          George Town, Grand Cayman, Cayman Islands.
          Phone: (10 345 949 0050
          Fax: (1) 345 949 8062

          Av del Libertador 602 Piso 27 (1001)
          Buenos Aires
          Argentina
          Phone: (54 11) 4815-2001
          E-mail: info@exxel-group.com
          Home Page: http://www.exxel-group.com/


REPSOL YPF: Petrobras Seen As Most Likely Buyer For YPF
-------------------------------------------------------
Spanish-Argentine oil giant Repsol-YPF SA, may find a buyer for
its Argentine arm in Petroleo Brasileiro SA. Alfonso Cortina,
chairman of Repsol YPF admitted Wednesday the possibility of
selling YPF, but believed that with the situation in Argentina,
it is unlikely to find a buyer for the unit.

Petrobras, on the other hand, said late Tuesday it has interest
in Repsol's YPF in Argentina, only that Repsol "has not expressed
an intention to sell."

Petrobras and Repsol also, recently exchanged some downstream
assets in the Argentine and Brazilian markets.

Francisco Gros, Petrobras president, disclosed the Brazilian
company intends to buy "other oil assets."  According to him, the
company has plans of applying in Argentina the integrated up- and
downstream structure of its operations in Brazilian. It also has
intentions of increasing planned investments in Argentina to
US$140 million in the period to 2005, with the US$43 million to
be spent in the remainder of this year.

Repsol's acquisition of YPF had linked the oil company to the
troubles in Argentina. Market watchers warn this could weigh on
the oil company's share price and ratings in the near future.

Cortina reaffirmed Repsol had almost completed a strategic plan
to counter the ongoing crisis in Argentina.

The oil giant purchased YPF for US$15 billion in 1999. The
acquisition transformed the company's primary operations from
refining and marketing to exploration and production, increasing
the share of exploration and production activities in Repsol's
assets from 23% to 50%.

CONTACTS:  REPSOL YPF
           Alfonso Cortina De Alcocer, Chairman & CEO
           Ramon Blanco Balin, Vice Chairman
           Carmelo De Las Morenas Lopez, CFO

           Their Address:
           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

           PETROLEO BRASILEIRO S/A - PETROBRAS S.A.
           Investor Relations Department
           Av. Republica do Chile, 65 - office 401 E
           20035-900 - Rio de Janeiro - RJ - Centro
           Phone: (55 21) 2534-1510 or 2534-9947
           Fax: (55 21) 2534-6055
           E-mail: petroinvest@petrobras.com.br
           Home Page:
http://www2.petrobras.com.br/ingles/index.asp

           THOMSON FINANCIAL / CARSON
           Brazil
           Valter Faria
           Phone: (5511) 3848-0887 ext. 202
           E-mail: valter.faria@thomsonir.com.br

           NEW YORK - USA
           Isabel Vieira
           Phone: (1 212) 701-1823
           E-mail: isabel.vieira@thomsonir.com


TELECOM ARGENTINA: Shares Climb On Creditor Funding Deal Rumors
---------------------------------------------------------------
Speculation of new funds coming from its creditors boosted the
value of the shares of Telecom Argentina Stet-France Telecom SA.
According to a Bloomberg report, Telecom shares closed at 67
centavos on Wednesday, up 21% - its biggest gain since Jan. 17 -
from the previous day's 55 centavos. Volume was 1.85 million
pesos of shares traded, double the average volume of the past
three months.

"The market has been buoyed by speculation European banks will
inject up to US$1.2 billion into Telecom," said Rafael Ber, an
analyst at Argentine Research. "Also, the government calling for
early elections may signal negotiations on new telephone rates
could happen sooner than expected."

President Eduardo Duhalde announced this week that he was moving
forward elections to March from September as social protest grew
over unemployment of about 25%.

Telecom Argentina is one of the Argentine firms devestated by the
country's devaluation. In April, it missed a US$3.2-billion debt
payment, marking the biggest default by an Argentine company on
record.

CONTACT:  TELECOM ARGENTINA STET - FRANCE TELECOM SA (TELECOM)
          Alicia Moreau de Justo 50, 10th Floor
          Capital Federal (1107) Repoblica Argentina
          Phone: +54 11 4968 4000
          Home Page: http://www.telecom.com.ar
          Contacts:
          Alberto J. Ricciardi, Chief Financial Officer
          Elvira Lazzati, Finance Director
          Pedro Insussarry, Investor Relations Manager
          Phone: (5411) 4968-3626/3627
          Fax: (5411) 4313-5842/3109
          Email: inversores@intersrv.telecom.com


TGN: S&P Leaves Ratings Unchanged Despite Recent Payments
---------------------------------------------------------
According to Standard & Poor's expectations, Transportadora de
Gas del Norte S.A. (TGN, SD/--/--) met interest payments on the
series IV and V bonds due on June 26, 2002. The company requested
the Argentine Central Bank's authorization to make the interest
payments and it was granted still within the grace period, thus
allowing TGN to meet its obligations.

Because the corporate credit rating of the company is already in
'SD' (selective default), reflecting failure to pay certain
principal maturities, this event does not affect the rating.

TGN, which holds a 35-year license to operate northern
Argentina's gas transport system, has been severely hit by the
measures taken by the government, particularly the pesofication
of tariffs, the free-floating of the peso and debt that is
financed in dollars. TGN's short-term debt increased 200% between
1998 and 2001.

CONTACT:  TRANSPORTADORA DE GAS DEL NORTE (TGN)
          Don Bosco 3672, (C120ABF) Buenos Aires, Argentina.
          Phone: (+54 11) 4959-2000
          Fax: (+54 11) 4959-2242
          Home Page: www.tgn.com.ar/



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


FLAG TELECOM: Files Plan of Reorganization
------------------------------------------
FLAG Telecom Holdings Limited, together with its subsidiaries
that have filed in U.S. Bankruptcy Court under Chapter 11 ("FLAG
Telecom"), announced Wednesday that it has filed a Plan of
Reorganization (the "Plan") and related Disclosure Statement in
the U.S. Bankruptcy Court for the Southern District of New York
(the "Court"). FLAG Telecom believes that it has achieved an
agreement in principle among its principal creditors to support
the main economic provisions of the Plan.

The Company believes that it can emerge from Chapter 11 and
related proceedings by September 2002 with its global network
intact, with a major reduction of its financial indebtedness and
a reduced operating expense level that will still enable FLAG
Telecom to service its customers. This timing assumes that the
requisite procedural steps can be accomplished on the schedule
anticipated by FLAG Telecom, and that the Plan receives the
requisite support from creditor groups and is confirmed by the
Court, and that the Schemes of Arrangement in the parallel
proceedings in Bermuda can be concluded on a similar time
schedule.

The reorganized holding company ("Reorganized FLAG Holdings")
would have new shareholders as summarized below, whereas current
equity holders of FLAG Telecom Holdings Limited would receive no
consideration under the Plan.

Highlights of the filed Plan of Reorganization are as follows: 1.
Holders of FLAG Telecom Holdings' 11 5/8% Senior Notes would
receive $245 million in cash, a $45 million promissory note
(callable at $30 million for 18 months) and 5% of the common
stock of Reorganized FLAG Holdings.

2. Holders of FLAG Limited's 8 1/4% Notes would receive
approximately 63% of the common stock of Reorganized FLAG
Holdings.

3. Bank lenders under a credit facility previously extended to
FLAG Atlantic Limited would receive approximately 26% of the
common stock of Reorganized FLAG Holdings.

4. Certain significant trade creditors, such as Alcatel, Reach
and Ciena, would have their agreements with FLAG amended and
assumed and would receive other consideration which would include
notes and common stock of Reorganized FLAG Holdings and cash, as
detailed in the Plan.

5. Trade creditors of FLAG Telecom's entities other than FLAG
Atlantic Holdings and its debtor subsidiaries would receive such
treatment agreed to with FLAG, or reinstatement of their claims
or payment in full.

6. Trade creditors (other than Alcatel) of FLAG Atlantic Holdings
and those of its subsidiaries which are debtors in the
proceedings would receive only their pro rata rights to
preference actions.
Stefan Feuerabendt, Managing Director of the The Blackstone
Group, financial advisor to FLAG Telecom, observed "FLAG Telecom
has worked diligently in intensive and complicated negotiations
with representatives of all of its major creditor groups to
present this Plan to the Court today. Upon confirmation of this
Plan, FLAG Telecom will have very significantly reduced its
financial obligations. When combined with the Company's
constructive operating plan, the deleveraging of FLAG Telecom's
balance sheet will leave the Company with a materially improved
financial position."

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.

CONTACT:  FLAG Telecom
          John Draheim, VP Corporate Services
          Phone:(+44 20 7317 0826)
          E-mail: Jdraheim@flagtelecom.com
              or
          FLAG Telecom
          David Morales, VP Corporate Finance & Investor
                                        Relations
          Phone: (+44 20 7317 0837)
          E-mail: Dmorales@flagtelecom.com


TYCO INTERNATIONAL: DBRS Confirms Rating at BB (High)
-----------------------------------------------------
Rating     Trend    Rating Action    Debt Rated
BB (high)   Neg     Confirmed        Corporate Rating

DBRS (Dominion Bond Rating Service Ltd.) is confirming the
corporate rating of Tyco International Ltd. at BB (high) with a
Negative trend, but is removing the Company from Under Review
with Negative Implications where it was placed on June 13, 2002.

The divestiture of the CIT Group for approximately $4.6 billion
is a positive development even though the proceeds are less than
anticipated. Proceeds from the sale have significantly
strengthened the Company's liquidity position. However, the
Company has to repay about $13.1 billion in debt through November
2003. With about $7 billion cash on hand currently, the Company
faces a short fall of $6.1 billion which needed to be refinanced
or covered by free cash flow and asset sales.

Although the Company has continued to generate favorable free
cash flow, there are still uncertainties surrounding the
operations of the Company:

1) risk of customers losing confidence in the Company's viability
and stability as a result of negative developments regarding
management and accounting issues;

2) reduced access to the capital market due to negative
development regarding the Company's credit rating; and

3) potential goodwill impairment charges of other businesses,
which could impinge on the debt/equity covenant of its bank
facilities.

DBRS is a Toronto-based, full-service credit rating agency
established in 1976. Privately owned and operated without
affiliation to any organization, DBRS is respected for its
independent, third-party evaluations of corporate and government
issues, spanning North America, Europe and Asia. DBRS's extensive
coverage of securitizations and structured finance transactions
solidifies our standing as a leading provider of comprehensive,
in-depth credit analysis.


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

BANCO CITIBANK: S&P Cuts Ratings After Lowering Brazil's Ratings
----------------------------------------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included Banco Citibank S.A. with the following changes in
its ratings on company debt:
                                 To              From

- Foreign currency
   counterparty credit rtgs    B+/Negative/--   BB-/Negative/--
- Certificates of deposit      B+               BB-
- Senior unsecured debt        B+               BB-

CONTACTS:  BANCO CITIBANK
           Av Paulista 1111 - 11 Andar - B Vista
           Sao Paulo - SP
           01311-920
           Fax: (+11) 5576-1291
           Phone: (+11) 5546-1201
           Home Page: http://www.citibank.com.br/


BANCO DO BRASIL: S&P Lowers Local, Foreign Currency Ratings
-----------------------------------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included Banco do Brasil S.A with the following changes in
its ratings on company debt:
                                 To              From

- Local currency
   counterparty credit rtgs    BB/Negative/B    BB+/Negative/B
- Foreign currency
   counterparty credit rtgs    B+/Negative/B    BB-/Negative/B

CONTACT:   BANCO DO BRASIL
           SBS Edificio Sede III, 24th Fl.
           70089-900 Bras¡lia, D.F., Brazil
           Phone: +55-61-310-3406
           Fax: +55-61-310-2563
           Home Page: http://www.bb.com.br
           Contact: Marco Geovanne Tobias da Silva, IR Manager
           Phone: 61-310-5920


BANCO DO ESTADO: S&P Takes Rating Actions Following Brazil Cut
--------------------------------------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included Banco do Estado de Sao Paulo S.A. with the
following changes in its ratings on company debt:
                                 To              From

- Local currency
   counterparty credit rtgs    BB/Negative/B    BB/Stable/B
- Foreign currency
   counterparty credit rtgs    B+/Negative/B    BB-/Negative/B
- Certificates of deposit      B+/B             BB-/B

CONTACT:   BANCO DO ESTADO DE SAO PAULO S.A.
           Praca Antonio Prado 6, 6 andar
           Sao Paulo, Brazil
           Phone: +55-11-3249-9090
           Fax: +55-11-3239-2414
           Home Page: http://www.banespa.com.br
           Contact:
           Gabriel Jaramillo-Sanint, Director-Presidente
           Gustavo A. Funcia Murgel, VP and CFO


BANCO ITAU: S&P Changes Ratings On Debt
---------------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included Banco Itau S.A. with the following changes in its
ratings on company debt:
                                 To              From

- Local currency
   counterparty credit rtgs    BB/Negative/B    BB+/Negative/B
- Foreign currency
   counterparty credit rtgs    B+/Negative/B    BB-/Negative/B
- Senior unsecured debt        B+               BB-

CONTACT:   BANCO ITAU S.A.
           Rua Boa Vista, 176
           01014-919 Sao Paulo, Brazil
           Phone: +55-11-237-3000
           Fax: +55-11-5582-1133
           Home Page: http://www.itau.com.br
           Contacts:
           Olavo Egydio Setubal, Chairman of the Board
           Roberto Egydio Setubal, President and CEO
           Geraldo Soares, Investor Relations Superintendent
           Praca Alfredo Egydio de Souza Aranha, 100
           Torre Conceicao - 11§ andar
           04344-902 - Sao Paulo - SP
           Phone: +5511 5019-1549
           Fax: +5511 5019-1133


BANCO SANTANDER BRASIL: Ratings Downgraded by S&P
-------------------------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included Banco Santander Brasil S.A. with the following
changes in its ratings on company debt:
                                 To              From

- Local currency
   counterparty credit rtgs    BB/Negative/B    BB/Stable/B
- Foreign currency
   counterparty credit rtgs    B+/Negative/B    BB-/Negative/B
- Certificates of deposit      B+/B             BB-/B

CONTACT:   BANCO SANTANDER BRASIL
           Home Page: www.santander.com.br/
           International Desk (S.A.C.I.)
           Marcelo Voss
           Tel. (55-11) 5538 6425
           Fax (55-11) 5538 6954
           E-mail: mvoss@santander.com.br

           (Brasilia)
           SCS 01 - Bloco F - Loja 30
           Edificio Camargo Correia
           CEP: 70397-900
           Tel.: (55-61) 321-4844
           Fax: (55-61) 224-3730

           (Curitiba)
           Rua XV de Novembro
           CEP: 80020-310
           Tel. (55-41) 322-4543
           Fax (55-41) 224-4136

           (Rio de Janeiro)
           Rua do Rosario, 109/111
           CEP: 20041-004
           Tel. (55-21) 276-7676
           Fax (55-21) 221-6349

           Sao Paulo
           Rua Amador Bueno, 474,
           Piso 3, Sao Paulo
           Tel. (55-11) 538 6000
           Fax (55-11) 538 6680


BANCO SANTANDER MERIDIONAL: S&P Reduces Ratings
-----------------------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included Banco Santander Meridional S.A. with the
following changes in its ratings on company debt:
                                 To              From

- Local currency
   counterparty credit rtgs    BB/Negative/B    BB/Stable/B
- Foreign currency
   counterparty credit rtgs    B+/Negative/B    BB-/Negative/B
- Certificates of deposit      B+/B             BB-/B

CONTACT:   BANCO SANTANDER MERIDIONAL S.A.
           Av. Borges de Medeiros, 2581
           Phone: (54) 286 1308


BANCO VOTORANTIM: Local, Foreign Currency Debts Slashed by S&P
--------------------------------------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included Banco Votorantim S.A. with the following changes
in its ratings on company debt:
                                 To              From

- Local currency
   counterparty credit rtgs    BB/Negative/B    BB/Stable/B
- Foreign currency
   counterparty credit rtgs    B+/Negative/B    BB-/Negative/B

CONTACT:   BANCO VOTORANTIM S/A (37)
           Av Roque Petroni Junior 999-16
           Andar Vila Gertrudes
           Sao Paulo SP
           04707-910
           Fax: (+11) 5185-1900
           Phone: (+11) 5185-1700
           Home Page: http://www.bancovotorantim.com.br/


CIBRASEC: S&P Downgrades Local, Foreign Currency Credit Ratings
---------------------------------------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included Companhia Brasileira De Securitizacao (CIBRASEC)
with the following changes in its ratings on company debt:
                                 To              From

- Local currency
   counterparty credit rtgs    B+/Negative/B    B+/Stable/B
- Foreign currency
   counterparty credit rtgs    B+/Negative/B    B+/Stable/B

CONTACT:   CIBRASEC - COMPANHIA BRASILEIRA DE SECURITIZACAO
           Av. Paulista, 1.439, 2¦ Sobreloja
           Sao Paulo
           SP - Brasil
           CEP 01311-200
           Phone: (5511) 3266 3223
           Fax: (5511) 3266 3229
           Home Page: http://www.cibrasec.com.br


HSBC BANK: S&P Changes Ratings
------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included HSBC Bank Brasil S.A. with the following changes
in its ratings on company debt:
                                 To              From

- Local currency
   counterparty credit rtgs    BB/Negative/B    BB/Stable/B
- Foreign currency
   counterparty credit rtgs    B+/Negative/B    BB-/Negative/B
- Senior unsecured debt        B+               BB-
- Certificates of deposits     B+/B             BB-/B
- Subordinated debt            B+               BB-

CONTACT:    HSBC BANK BRASIL S.A.
           Av Brig Faria Lima 3064 - 4 Andar - Jd Paulistano
           Sao Paulo - Sp
           01451-000
           Phone: (+11) 3847-5574
           Home Page: http://www.hsbc.com.br/english


ING INVESTMENT: S&P Lowers Credit Ratings After Brazil Downgrade
----------------------------------------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included ING Investment Management Ltda. with the
following changes in its ratings on company debt:
                                 To              From

- Local currency
   counterparty credit rtgs    BB/Negative/B    BB/Developing/B
- Foreign currency
   counterparty credit rtgs    B+/Negative/B    BB-/Negative/B

CONTACT:   ING AMERICAS
           5780 Powers Ferry Road N.W.
           Atlanta, GA 30327
           Phone: 770.980.3300
           Fax: 770.980.3301
           Home Page: http://www.ingamericas.com


UNIBANCO: S&P Cuts Debt Ratings
-------------------------------
In a series of related announcements made Wednesday, Standard &
Poor's included Uniao de Bancos Brasileiros, S.A. with the
following changes in its ratings on company debt:
                                 To              From

- Foreign currency
    counterparty credit rtgs   B+/Negative/B    BB-/Negative/B
- Certificates of deposit      B+/B             BB-/B
- Senior unsecured debt        B+               BB-

CONTACT:   UNIBANCO-UNIAO DE BANCOS BRASILIEROS S.A.
           Av. Eusebio Matoso 891, 15th Floor
           Sao Paulo 05423, Brazil
           Phone: +55-11-3097-1313
                  +55-11-3097-4050
           Fax: +55-11-3813-6182
           Home Page: http://www.unibanco.com/
           Contacts:
           Geraldo Travaglia, CFO and Executive Director
           Julia Reid, Investor Relations Associate Director
           E-mail: investor.relations@unibanco.com.br


S&P NOTES: Standard & Poor's on Wednesday took ratings actions on
the Brazilian financial institutions mentioned above, following
the lowering of the Federative Republic of Brazil's foreign and
local currency ratings to single-'B'-plus and double-'B',
respectively. The downgrade of the sovereign ratings reflects
rising public debt, which further reduces the country's fiscal
flexibility. Ever-tighter fiscal management is necessary to
maintain debt to GDP at current levels, given the worsening
domestic debt profile and heightened market concerns over
political uncertainties. The negative outlook on the sovereign
was maintained, given that fiscal and external vulnerabilities
require ongoing commitment to appropriate policies in a demanding
internal and external environment, and allow little room for
policy slippage.

According to Standard & Poor's financial institutions rating
criteria, financial institutions operating in Brazil may not be
rated higher than the sovereign. This is due to the level of
government risk in the form of marketable securities in the
institutions' balance sheets, as well as exposure to the
government's monetary policies and regulations. The financial
services sector is affected by the increased risks arising from a
worsening economic environment and a potential deterioration in
asset-quality indicators. Asset quality is affected by the high
proportion of government securities in financial conglomerates'
balance sheets. Although there may be variations among the
institutions, this will affect all players in the market. In
addition, the pressures faced by the corporate sector and its
higher demand for bank loans due to refinancing needs could
negatively affect loan portfolio indicators in the near future.

Analyst: Daniel Araujo, Sao Paulo (55) 11-5501-8939; Ursula M
Wilhelm, Mexico City (52) 55-5279-2007


ELETROPAULO METROPOLITANA: Gets Consent To Hike Rates By 14.2%
--------------------------------------------------------------
Struggling to get out of its tight financial situation,
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA, gained a
little breathing space after Brazil allowed it to raise
electricity rates by as much as 14.2%

Brazilian utilities have asked the government to increase
consumer rates as nine months of power rationing that ended in
March and falling consumption make it harder for them to cover
costs and pay debt.

"The rate increase was within forecasts," said Andre Segadilha,
an analyst with Banco Brascan SA in Sao Paulo. He expected a rate
increase of as much as 15%.

Eletropaulo, a unit of AES Corp., last month was downgraded by
Moody's Investors Service on concern it may not be able to
refinance US$600 million in debt due within the end of the year.
The increase in rates should boost revenue at Eletropaulo that's
needed to serve its about US$1.5 billion in debt, with about half
of it coming due in less than a year.

Eletropaulo, which serves 4.7 million customers in the state of
Sao Paulo, saw its preferred shares dip 0.9% to close at
BRL42.70.

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 Gonzalves Jr., VP Finance/Investor Relations


VARIG: July Wages Delayed As Counter Measure to Huge Debt
---------------------------------------------------------
Brazil's flagship airline Varig, which is struggling to cut costs
as it grapples with a crippling US$850-million debt, said it
would delay half of July monthly salaries above US$700 until
August, reports Reuters.

According to Manuel Guedes, director of market relations, the
measure would help to save US$20 million in extra debt costs. The
Company also plans to issue BRL50 million (US$17.4 million) in
debentures to roll over debt expiring in July.

"If we hadn't done that we would have resorted to financing and
rates are very high. It would complicate our situation even
further," Guedes said, adding that this year, Varig had to pay
back US$200 million in debt and US$100 million in interest.

For that purpose, Varig plans to raise US$200 million via a
global stock offer and US$100 million in debentures, probably in
October, Guedes said.

Earlier, company sources had indicated at a bigger offer, of
about US$400-US$500 million.

CONTACT:  VARIG (Viacao Aerea Rio-Grandense, S.A.)
          Rua 18 de Novembro No. 800, Sao Joao
          90240-040 Porto Alegre,
          Rio Grande do Sul, Brazil
          Phone: (51) 358-7039/7040
                 (51) 358-7010/7042
          Fax: +55-51-358-7001
          Home Page: www.varig.com.br/english/
          Contacts:
          Dorival Ramos Schultz, EVP Finance and CFO
          E-mail: dorival.schultz@varig.com.br

          Investor Relations:
          Av. Almirante Silvio de Noronha,
          n  365-Bloco "B" - s/458 / Centro
          Rio de Janeiro, Brazil


XEROX CORP.: Fitch Downgrades Ratings To 'BB-'; Outlook Negative
----------------------------------------------------------------
Fitch Ratings has downgraded Xerox Corp. (Xerox) and its
subsidiaries' senior unsecured debt to 'BB-' from 'BB', and the
convertible trust preferred to 'B' from 'B+'. The Rating Outlook
remains Negative. The rating actions reflect the structural
subordination due to the security granted under Xerox's new $4.2
billion Amended and Restated Credit Agreement dated as of June
21, 2002, as well as the level of increased senior secured debt
in the company's capital structure which incorporates off-balance
sheet loans secured by finance and trade receivables. With a $2.8
billion paydown of the $7 billion that would have expired in
October 2002, Xerox has arranged a new 3-year credit facility
expiring on April 30, 2005, and consisting of: 1) $1.5 billion
term loan A, 2) $500 million secured term loan B, 3) $700 million
term loan C expiring Sept. 30, 2002, and 4) $1.5 billion revolver
fully drawn at the inception. The amortization schedule for term
loan A is $400 million in 2003 and $600 million in 2004, while
term loan B has minimal amortization of $5 million annually. The
covenants for the facility are more strict and diverse than
previously but have not yet been reset due to the company's
restatement of its historical financial statements for the 1997-
2001 period.

The Rating Outlook remains Negative reflecting Xerox's weakened
credit protection measures, significant debt maturities for the
next three years, and Xerox's impaired financial flexibility and
reduced access to the capital markets. The ratings also
incorporate the competitive nature of the printing industry, the
necessity for constant new product introductions, and overall
weak economic conditions. As revenues are forecasted flat to
down, it is crucial that Xerox continues executing its cost
cutting programs beyond the already achieved $1.2 billion in
order to return the core operations to consistent profitability
levels. Cash flow remains strained and will have to increase
significantly in order to support its debt obligations and Fitch
anticipates core credit protection measures will continue to be
challenged.

After Xerox's $2.8 billion partial paydown of its previous
revolver and $1.3 billion of debt that matured in the second
quarter of 2002, Xerox's cash position is estimated to be in
excess of $1.7 billion with total debt greater than $13 billion,
of which more than half is from customer financing, supported by
significant financing receivables. The company recently announced
an extension to its finance receivable monetization program with
GECC which will provide an additional $1 billion in funding. Of
this program $500 million was received in May 2002 and the
balance is expected to be received the second half of 2002. Xerox
continues outsourcing its customer financing programs that could
provide additional sources of funds. Debt maturities for second
half of 2002 are estimated to be $2 billion, including term loan
C for $700 million.

Fitch continues to recognize Xerox's improving operational
performance, strong, technologically competitive product line and
business position, and execution of the cost restructuring
program. In addition Fitch recognizes the progress Xerox has made
in exiting the financing business with GECC eventually being the
primary source of customer financing in the U.S., Canada,
Germany, and France, and De Lage Landen International BV managing
equipment financing for Xerox customers in the Netherlands. Xerox
has also made arrangements for third-party financings in Nordic
Region, Italy, Mexico, and Brazil. In addition, Xerox has made
significant progress with its turnaround strategy as the
previously announced $1 billion cost cutting program was achieved
ahead of schedule and larger than anticipated, including a more
than 10% headcount reduction from year-end 2000. Asset sales have
totaled more than $2 billion, including an agreement to outsource
approximately half of its manufacturing, the common stock
dividend has been eliminated, and Xerox exited the ink-jet
market, which was a significant cash drain.

In addition to Xerox Corp., the ratings affected are: Xerox
Credit Corp. and Xerox Capital (Europe) plc's rated senior debt.

CONTACT:  FITCH RATINGS
          Nick P. Nilarp, 1-212-908-0649
          Brendan Buckley, 1-212-908-0640 (Xerox Corp.)
          Philip S. Walker, Jr., 1-212-908-0624 (Xerox Credit
Corp.)
          James Jockle, 1-212-908-0547 (Media Relations)



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

FAR-BEN: Market Specialists Apply Pressure for Speedy Financing
---------------------------------------------------------------
Market specialists are now urging Farmacias Benavides (Far-Ben)
to hasten its search for new financing alternatives after a
failed capitalization, which was to be executed by a group of
investors led by businessman Fernando Chico Pardo. Otherwise,
stockholders would lose money, the specialists said.

Enrique Villarreal, Far-Ben's finance director, said the Company
would continue looking for a potential investor to capitalize the
Company's operations.

"Now we are looking for new alternatives and we are open to any
investor. The important issue is to save the Company," said
Villareal.

Fitch Mexico has already rated the firm at Non-Fulfillment
D(mex).

Meanwhile, Far-Ben informed the Mexico City Stock Exchange (BMV)
that it has appointed Enrique Mouret Benavides as the company's
new Chairman.

Far-Ben has seen its profits slump in the last five years as
grocery chains such as Wal-Mart de Mexico SA added in-store
pharmacies and offered medicines at discount prices. Sales fell
12% last year to MXN5.07 billion. Operating income at the chain
fell to MXN37 million last year from MXN214 million in 2000.

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


GLOBAL LIGHT: Files For Creditor Protection to Restructure
----------------------------------------------------------
Global Light Telecommunications Inc. filed a petition with the
Supreme Court of British Columbia and obtained an order granting
it certain relief, including a stay of proceedings and protection
from creditors, under the Companies' Creditors Arrangement Act
("CCAA").

Pursuant to the order all payments in respect of any debt
obligations existing on or before today are suspended pending
development of a restructuring plan. The order provides for an
initial period of protection for 30 days subject to further
extension by the Court and permits the Company to operate in the
normal course during this period.

PricewaterhouseCoopers Inc. has been appointed by the Court to
act as the Company's Monitor pursuant to the provisions of the
CCAA. The Company will be seeking to obtain debtor-in-possession
financing during the period of the order.

The Company also announces that it will be requesting the
American Stock Exchange to delist its shares.

Gordon Blankstein, Chairman of the Company, stated: "The
deterioration and the continuing uncertainty in the
telecommunications sector has made it impossible to obtain
adequate financing under our current structure for our ongoing
requirements and commitments. As a consequence we have had to
take these steps to ensure that all of our stakeholders are
adequately protected so that we can put together and implement a
reorganization plan which will give us the best opportunity to
maximize the returns for all concerned."

About Global Light

Global Light holds a 49% interest (undiluted) in each of New
World Network Holdings, Ltd. and Bestel, S.A. de C.V. New World
Network is a carrier's carrier that provides advanced, high-speed
bandwidth capacity to telecommunications companies and Internet
Service Providers. New World's network (ARCOS) is an undersea
broadband fiber-optic cable network connecting the U.S., Mexico,
Central America, South America and the Caribbean. New World owns
an approximate 86% interest in ARCOS. Bestel is a facilities-
based telecommunications company in Mexico that provides domestic
and international broadband services to carriers, wholesalers and
corporate customers. Bestel designed, constructed and operates a
next-generation fiber optic network utilizing Mexican railroad
rights of way. The network also extends into the southern part of
the United States and includes over 500 km of metropolitan rings
for local access in the major cities of Mexico. Bestel also has
certain point-to-point and point-to-multipoint wireless licenses
in Mexico.

CONTACT:  Global Light Telecommunications Inc., 530 - 999
          West Hastings Street, Vancouver, B.C., V6H 2E6,
          (604) 688-0553

          PricewaterhouseCoopers LLP
          1301 Avenue of the Americas
          New York, NY 10019
          Phone: 646-471-4000
          Fax: 646-394-1301
          Home Page: http://www.pwcglobal.com


VITRO: Whirlpool Concludes Acquisition of Vitromatic
----------------------------------------------------
Whirlpool Corporation announced Wednesday that it has completed
its acquisition of Vitromatic S.A. de C.V., Mexico's second
largest appliance manufacturer and distributor. Vitromatic was a
joint venture of Vitro S.A. and Whirlpool.

Whirlpool purchased Vitro's 51-percent stake in Vitromatic for
$150 million in cash and the assumption of 100 percent of the
former joint venture's $170 million debt.

Headquartered in Monterrey, Vitromatic manufactures ranges,
refrigerators and laundry products for domestic and export
markets under the Whirlpool, KitchenAid, Acros and Supermatic
brand names.

Vitromatic produces annual sales of more than $600 million,
including approximately $150 million from inter-company sales.
The acquisition is expected to be slightly accretive to
Whirlpool's earnings beginning in the second half of 2002.

Whirlpool Corporation is the world's leading manufacturer and
marketer of major home appliances. Headquartered in Benton
Harbor, Mich., the company manufactures in 13 countries and
markets products under 11 major brand names in more than 170
countries. Additional information about the company can be found
on the Internet at www.whirlpoolcorp.com.

CONTACT:  Whirlpool Corporation
          Media: Tom Kline, 616/923-3738
          thomas_e_kline@email.whirlpool.com

          Financial: Thomas Filstrup, 616/923-3189
          thomas_c_filstrup@email.whirlpool.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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