TCRLA_Public/020708.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, July 8 2002, Vol. 3, Issue 133

                           Headlines


A R G E N T I N A

ARGENTINE BANKS: Crisis Expected to Wipe Out 50% of Banks
HIDROELECTRICA PIEDRA: Fitch Lowers Ratings On Four Instruments
SIDECO AMERICANA: S&P Withdraws Rating On Company's Request


B R A Z I L

CODESP: Operators Skeptical About Transfer of Port's Control
EMBRATEL: Doubles Executives Salaries As Profits Shrink
NEXTEL BRAZIL: Data Speed Upgrade Plans Still In Early Stages
WORLDCOM: Analysts Predict Little Buy Interest For LatAm Assets


C H I L E

ENAMI: Seeks To Exercise Refusal Rights On Mining Company
MADECO: Accelerates Debt Talks To Make July 10 Meeting Deadline
MANQUEHUE NET: ABN Reschedules Bidding Deadline To July 19


M E X I C O

AEROMEXICO/MEXICANA: On the Auction Block Again
GLOBAL LIGHT: Disposing Of Mexican, Carribean Assets
SATMEX: To Supply Transponders to e-Mexico Project
WORLDCOM MEXICO: Citigroup To Sell Stake in Venture


P A N A M A

TRICOM: Court Lifts Sanction, Prevents Fines for Alleged Breach


P A R A G U A Y

BANCO ALEMAN: Paraguay Moves To Liquidate Bank Quickly


     - - - - - - - - - -

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

ARGENTINE BANKS: Crisis Expected to Wipe Out 50% of Banks
-------------------------------------------------------------
Of Argentina's 86 banks, only half are predicted to survive the
economic crisis of the country, reports say. Victims of the
current turmoil may either be closed or merged in the coming
months, Central Bank President, Also told newspapers.

The newly appointed Central Bank chief told newspapers Clarin and
Ambito Financiero that only about 40 banks may be left operating
branches in Argentina, mentioning in particular Canada's Bank of
Nova Scotia, which was closed April. He said he believes this
bank will liquidate its local unit's assets and sell only a few
branches.

Mr. Pignanelli also foresees a process of mergers that would
eventually create "a group of solid foreign banks, a strong
private domestic banking sector..and an efficient state-owned
banking system."

As for the government's plan to convert existing depositors'
savings into bonds, he feared this might fail, stressing the need
to make it compulsory.  The banks deposits that must be changed
into bonds should not be less than 30% in order to maintain
future withdrawals, he said.

Pignanelli attributed the trimming down of the number of banks in
Argentina from 215 to 110, to the "Tequila" effect, or the
fallout from the financial crisis in Mexico in 1995.

International Monetary Fund officials are arriving Monday in
Argentina to help design recovery plans for the country's
financial system.

The Argentine government is set to use its foreign reserves to
pay $52 million of interest to the IMF this week.  Last year,
Argentina defaulted on $95 billion of bonds that belong largely
to the country's bank.

CONTACTS:  BANK OF NOVA SCOTIA
           Scotia Plaza,
           44 King Street West
           Toronto, Ontario
           M5H 1H1
           Home Page: http://www.scotiabank.com/
           Contact:
           Scotia INFOLINE
           (416) 750-FUND (3863) (Greater Toronto Area)
           1-800-268-9269 (Other Areas In Canada)

           Bill Bailey, Ombudsman
           Tel: 1-800-785-8772/(416) 933-3299
           Fax: (416) 933-3276


HIDROELECTRICA PIEDRA: Fitch Lowers Ratings On Four Instruments
---------------------------------------------------------------
Fitch Argentina downgraded a series of financial instruments
issued by generator Hidroelectrica Piedra del Aguila (HPDA) to
'D(arg)' after the company said it will delay payments on capital
and interest on qualified bonds and a loan with Banco Nacion,
reveals Business News Americas.

The instruments include a US$300-million debenture program, class
I and II debentures for US$94.4 million each, class III and IV
debentures for US$62.5 million each, and US$35 million in
subordinate class V debentures.

HPDA, on June 30, had to make an US$8-million capital and
interest payments for the series I debentures, US$4.1 million
interest on series II debentures, US$4.3 million capital and
interest on series III debentures and US$1.6 million interest on
series IV debentures, as well as US$6 million capital and
interest on a Banco Nacion loan.

Fitch Argentina also decided to downgrade to the same category
class I and V trustee papers issued under the HPDA I and V
trusteeship, given that the terms and conditions of the papers
were identical to those of the class I and V debentures
respectively.

HPDA defaulted on its payments on lack of funds to pay the US$9.8
million total interest, ARS1.1 million on the Banco Nacion loan
and US$4.9 million capital on series I debentures and while still
continuing operations, Fitch said.

On February 3, 2002, HPDA's total debt was ARS1.04 billion, of
which ARS74.1 million was due within 12 months. The Company plans
to start a debt restructuring process to achieve greater
flexibility of conditions of its financial obligations amidst
current uncertainty in Argentina, Fitch said.


SIDECO AMERICANA: S&P Withdraws Rating On Company's Request
-----------------------------------------------------------
Standard & Poor's (S&P) has withdrawn its 'D' corporate rating on
Argentine-based public and infrastructure services company Sideco
Americana, at the company's request, Business News Americas
reports citing an S&P statement.

In February, the international credit rating agency lowered
Sideco's foreign and local currency corporate credit ratings to
'D' from 'SD' (selective default) and 'CC-,' respectively,
reflecting the Company's low cash-generation capacity and
restricted financial flexibility.

Simultaneously, S&P also withdrew the 'D' rating on Sideco's
US$125 million senior unsecured notes due August 1, 2002,
following the acceleration of the Company's US$125 million in
senior unsecured notes, as requested by a group of bondholders.

Sideco is focused mainly on postal services and toll roads, as
well as waste management and also has operations throughout the
Mercosur countries, including Chile and Colombia.



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

CODESP: Operators Skeptical About Transfer of Port's Control
------------------------------------------------------------
The impending transfer of control of Brazil's largest port,
Santos, from federal to state government is causing worries among
terminal operators. Expectations are that rates and fees will
subsequently increase, reports Business News Americas.

Codesp (Companhia Docas do Estado de Sao Paulo), which currently
operates the Santos port will subsequently be liquidated as soon
as control of the port is handed over to a new public company,
reportedly has outstanding liabilities of around BRL500 million
(US$179 million). The transfer will involve paying this debt over
eight years to the federal government.

"Those interested in the port's development cannot agree to
having their revenues jeopardized, making investments in land and
sea infrastructure unfeasible," said Ronaldo de Souza Forte,
director of container terminal operator Santos Brasil.

Codesp's liabilities have been calculated at BRL370 million
(US$132 million) plus a number of court actions that await
rulings.

Manoel Reis, from Sao Paulo state transport department, affirmed
that the new port authority will be completely self-sustainable
and that at least BRL20 million (US$7.1 million) will be invested
in the port every year.

Santos mayor Beto Mansur remained skeptical, saying: "I think it
is absurd that they want to use resources from the new company to
pay Codesp's debts. It is compromising investments."

CONTACT: Companhia Docas do Estado de Sao Paulo
         (CODESP)(Port Authority)
         Ave Cons Rodrigues Alves s/n,
         Macuco, Santos SP 01015-900,
         Brazil
         Phone: 55-132-351-611
         Fax: 55=132=333=080
         Contact: Fernando Lima Barbosa, President


EMBRATEL: Doubles Executives Salaries As Profits Shrink
-------------------------------------------------------
Embratel Participacoes SA, a unit of the beleaguered U.S. company
WorldCom Inc., paid their executives twice as much as what they
should have been getting last year. What amounts to big bonuses
went out while the Company's profits begin to dwindle, reveals
Bloomberg.

In a recent filing with the U.S Securities and Exchange
Commission, Brazil's biggest long-distance phone disclosed that
it paid directors and executives about BRL7.2 million (US$3.1
million) in 2001, compared BRL3.5 million in the previous year.
This as the Company ran up a net loss of BRL533.7 million last
year, compared with net profit of BRL577.1 million in 2000, as
the currency weakened and it set aside cash to cover bad debts.

"It looks like the party may be over so maybe they were making
the most of it while it lasted," said Lucio Graccho, who helps
manage BRL1.1 billion in stocks at HSBC Holdings Plc's Brazilian
asset management unit in Sao Paulo, referring to the increased
salary payment to Embratel managers. "The fundamentals of
Embratel's business deteriorated a long time ago."

In an attempt to explain the move, Helena Duncan, a spokeswoman
for the Rio de Janeiro-based company said that Embratel increased
salaries to make up for an executive pay freeze in 1999. The
Company also increased the amount of directors it has, she said.

Embratel preferred shares have lost 81% of their value this year
on the Sao Paulo exchange.

WorldCom took control of Embratel in July 1998, paying us$2.27
billion for its 19% stake when Brazil broke up Telecomunicacoes
Brasileiras SA, the state telephone monopoly. The company's
market capitalization now is about BRL770 million (US$271
million).

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


NEXTEL BRAZIL: Data Speed Upgrade Plans Still In Early Stages
-------------------------------------------------------------
Nextel Brazil, a division of US-based digital trunking provider
NII Holdings (formerly Nextel International), is now in the early
stages of a plan to upgrade its data transmission capacity from
22Kbps to 60-70Kbps, Brazilian daily o Globo reports, citing the
division's data services manager, Tiago Galli.

The Company is yet to announce what technology they will use, how
much it will invest, and when to implement the upgrade.

NII, a subsidiary of Nextel Communications, filed for bankruptcy
under Chapter 11 in May and reached an initial agreement with
creditors to cut its US$2.70billion debt by 80%, to less than
US$500 million.

NII provides digital trunking services in Mexico, Brazil, Peru,
Argentina, Chile and the Philippines.

CONTACT:  NII Holdings Inc.
          Claudia Restrepo
          Phone: +1-305-779-3086
          E-mail: claudia.restrepo@nextel.com

LEGAL REPRESENTATIVE:

          RICHARDS, LAYTON & FINGER, P.A.
          One Rodney Square
          P. O. Box 551
          Wilmington, Delaware 19899
          Phone: (302) 651-7700
          Fax: (302) 651-7701
          Home Page: http://www.rlf.com/welcome2.htm
          Contact:
          Daniel J DeFranceschi
          Phone:  (302) 651-7816
          Fax:  (302) 784-7090
          E-mail:  defranceschi@rlf.com


WORLDCOM: Analysts Predict Little Buy Interest For LatAm Assets
---------------------------------------------------------------
Analysts forecast that WorldCom Inc. would not be able to attract
enough buyers as it attempts to sell its holdings in Mexico and
Brazil. WorldCom badly needs to raise cash and help it stave off
a threatening bankruptcy, the Wall Street Journal relates.

"We do not believe that WorldCom will be able to successfully
sell its Latin American operations in the near term," Pyramid
Research, a Cambridge, Mass., telecommunications market analyst,
said in a recent report.

WorldCom is currently mired in an accounting scandal stemming
from a $3.8-billion earnings restatement. The Company is working
frantically to raise up to US$1 billion by selling its assets
world-wide. That includes the Company's 19.3% controlling stake
in Brazilian phone company Embratel Participacoes SA and its 45%
stake in privately held Avantel SA, Mexico's No. 2 long-distance
phone company.

However, with the telecommunications industry in a global slump
because of overcapacity and heavy debt, prospective buyers are
wary -- especially in developing economies like Brazil and
Mexico. Embratel and Avantel together have debt estimated at
roughly US$2 billion, a level beyond what many investors say the
companies can easily repay.

Even if WorldCom manages to sell both companies, the price may be
only a fraction of what it originally paid for the stakes.
Merrill Lynch estimates that WorldCom's stake in Embratel, for
which it paid about US$2 billion in 1998, is valued anywhere from
US$18 million to US$238 million, depending on a variety of
political and economic factors.

Mexico's Avantel is probably worse off, the Journal suggests. The
company generates an estimated US$65 million in earnings before
interest, taxes, depreciation and amortization, but has debt
estimated at US$600 million. That means a potential buyer
probably would pay no cash and also would want to renegotiate the
debt.



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

ENAMI: Seeks To Exercise Refusal Rights On Mining Company
---------------------------------------------------------
The Chilean tribunal will study an appeal by the country's state-
owned copper mining company Enami to preserve refusal rights it
claims to have on the sale of shares of the mining major
Disputada de Las Condes.

Disputada owner Exxon Mobil had declared null the refusal rights
and entered into binding negotiations to sell the mining company
to Anglo American for US$1.3 billion. However, Enami claims that
back in 1978 when it sold 86.6% of Disputada to Exxon, the
contract included an option to acquire 49% of the shares until
2028. Exxon, on the other hand, insists that Disputada became a
limited liability company in 1998, a change that nullified the
right claimed by Enami.

Enami reportedly has bank debts of US$480 million; US$230 million
of which are short-term liabilities.

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

          EXXON MOBIL CORPORATION
          5959 Las Colinas Boulevard
          Irving, Texas 75039-2298
          http://www2.exxonmobil.com/
          Contacts:
          For all inquiries, call:
          ExxonMobil Shareholder Services
          Phone: 1 800 252 1800 (within the Continental U.S.)
                781 575 2058 (outside the Continental U.S.)

          In Chile:
          Mobil Cono Sur Ltda.,
          Av. Nva Tajamar N. 555 Dpto. 301
          Las Condes, Santiago, Chile
          Phone: 56 2 364 6000
          Home Page: http://www.esso.com/eaff/essocca/

          CIA. MINERA DISPUTADA DE LAS CONDES S.A.
          Av. Pedro de Valdivia 291
          Providencia
          Santiago
          Chile
          Phone: (56 2) 230 6000
          Fax: (56 2) 230 6280


MADECO: Accelerates Debt Talks To Make July 10 Meeting Deadline
---------------------------------------------------------------
Chilean copper and aluminum products manufacturer Madeco SA is
expediting debt talks with creditor banks in order to reach a
deal with them ahead of the extraordinary shareholders' meeting
scheduled for July 10.

Shareholders are due to vote July 10 on a plan to carry out a
capital increase for the equivalent of no less than US$70 million
by Sept. 30, which would help slash Madeco's US$325-million debt.

The Company, which is majority-owned by Quinenco, the non-mining
holding of Chile's Luksic group, hired investment bank Salomon
Smith Barney (SSB) late last year to sort out its financial
difficulties. Madeco blames itscondition largely on the economic
crisis in Argentina, where it has invested heavily. The Company
has also been hurt by the slump in the Brazilian telecom sector.

CONTACT:  MADECO SA
          Marisol Fernandez
          Investor Relations
          Voice: (56 2) 520-1380
          Fax: (56 2) 520-1545
          E-mail : mfl@madeco.cl
          Web Site: www.madeco.cl

ADVISER:  SALOMON SMITH BARNEY
          In New York:
          767 Fifth Avenue
          New York City
          New York
          Phone:  212-230-3500
          Home Page: http://www.salomonsmithbarney.com/


MANQUEHUE NET: ABN Reschedules Bidding Deadline To July 19
----------------------------------------------------------
Prospective bidders Entel, CTR, Telex, and GTD Teleductos will
have more time to submit bids for Manquhue Net. ABN Amro,
coordinator for the sale of the assets of Chilean fixed line
operator, has rescheduled the deadline to July 19th to give more
time for these bidders to evaluate the assets.

Manquehue has US$84.9-million debt load, US$63.6 million of which
is long-term. It has debts of US$120 million that are expected to
be restructured.

The cash-strapped company ended 2001 with a net loss of CLP11.3
billion US$17.3 million), against a profit of CLP224,017 in the
previous year. Results showed little improvement in 1Q02, when
the Company reported a net loss of CLP2.15 billion, compared to
the CLP922-million loss in the same period last year.

Manquehue's current shareholders are the UK's National Grid
(NYSE: NGG) (30%); Chilean gas distributor Metrogas (25.6%); the
local Rabat family (21.2%); US-based network operator Williams
Communications (NYSE: WCG) (16.5%) and investment fund Xycom.

CONTACT:  MANQUEHUE NET S.A.
          Av. Condor 796, Enterprise City,
          Huechuraba Santiago Chile
          Phone: 00 562 243 8800
          Fax: 00 562 248 7292
          EMAIL: info@manquehue.netl
          Home Page: http://www.manquehue.net/
                     http://www.manquehue.cl
          Contact:
          Mr. Miller Williams, President
          Sr.Jos, Luis Rabat Vilaplana, Vice President

          ABN AMRO HOLDING N.V
          Foppingadreef 22
          1102 BS Amsterdam, The Netherlands
          Phone: +31-20-628-9393
          Fax: +31-20-629-9111
          Home Page: http://www.abnamro.com
          Contact:
          Investor Relations(HQ1191)
          Gustav Mahlerlaan 10
          PO Box 283
          1000 EA Amsterdam
          The Netherlands
          Phone: +31 (0) 20 628 78 35
                 +31 (0) 20 628 78 37
          E-mail: investorrelations@nl.abnamro.com



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

AEROMEXICO/MEXICANA: On the Auction Block Again
-----------------------------------------------
The Mexican government has put its two largest airlines
Aeromexico and Mexicana on the auction block, Associated Press
reports. The decision comes despite the slump in the airline
industry after the Sept. 11 terrorist attack.

Cintra spokesman Manuel de Cueto admitted the sale was prompted
by recent interest from possible buyers. Analysts agree, the
Sept. 11 aftermath will make it difficult to fetch a good price
for the airlines, confirming the Union's fears. Yet, they too
assess this may be the best time for the sale.

Among the potential buyers are U.S. airlines American,
Continental and Delta, as well as some Mexican investors.

The government's plan to sell the airlines in 2000 was delayed
not only by the Sept. 11 event but also by contentions from
lawmakers that the companies should be kept together.

The Federal Competition Commission recently, however, ruled that
the two must be sold separately to preserve competition.

The airlines, which together handle about 80% of the country's
flights have been run since 1995 by Cintra, a government-
controlled holding company. Both usually offer the same rates for
the same routes.

The Commission also said, Cintra's domination of the market hurts
smaller airlines. The airlines have more than 165 planes and
serve nearly 100 cities.

And yet, Victor Ochoa Campo, a member of Congress' Transportation
and Communications Commission, believes the airlines can compete
better under one holding company than they could as different
entities.

The Union, on the other hand, fears the sales will bring in price
competitions that could either endanger service or destroy the
business all together.

Mexicana was bought by the government in 1982, when the airline
ran into financial problems. It was sold to investors in 1989 to
help support the country's economy.

Aeromexico, on the other hand, filed for bankruptcy in 1988
following a strike. It was later sold to investors for US$335
million.

Both companies were intervened during Mexico's 1995 peso crisis,
with Cintra being a part of a US$100-billion bank bailout.

The government bank savings protection agency has more than a 65%
position in Cintra. The stake accounts for the airlines' debt,
held by troubled banks that were taken over by the government.
Sales from the intervened banks' assets were used to reduce the
costs of the bailout that was shouldered by taxpayers. Although
both improved in terms of service under Cintra, the holding
company still incurred losses of MXN394 million (US$40 million)
in the first quarter of this year.

The auction is scheduled at the end of the year.  Merrill Lynch
has been hired to oversee the sale.

CONTACT:  AEROMEXICO
          Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or
          mweitzman@aeromexico.com

          MEXICANA DE AVIACION
          Jenny Jenks, Marketing Director, International
          Division of Mexicana Airlines, +1-210-491-9764, or
          ennyjenks@mexicana.com

          CINTRA
          Xola 535, Piso 16, Col. del Valle
          03100 M,xico, D.F., Mexico
          Phone: +52-5-448-8050
          Fax: +52-5-448-8055
          Contacts:
          Jaime Corredor Esnaola, Chairman
          Juan Dez-Canedo Ruiz, CEO
          Rodrigo Ocejo Rojo, CFO
                       OR
          C.P. Francisco Cuevas Feliu, Investor Relations
          Xola 535, Piso 16
          Col. del Valle
          03100 M,xico, D.F.
          Tel. (52) 5 448 80 50
          Fax (52) 5 448 80 55
          infocintra@cintra.com.mx

          MERRILL LYNCH & CO., INC.
          World Financial Center,
          North Tower, 250 Vesey St.
          New York, NY 10281
          Phone: 212-449-1000
          Toll Free: 800-637-7455
          Home Page: http://www.merrilllynch.com
          Contact:
          David H. Komansky, Chairman and CEO
          E. Stanley O'Neal, President, COO, and Director
          Thomas H. Patrick, EVP and CFO

          MERRILL LYNCH MEXICO
          Paseo de las Palmas No. 405
          Piso 8
          Col. Lomas de Chapultepec
          11000 Mexico City, Mexico
          Phone: 5255-5201-3200
          Fax: 5255-5201-3222

          CONTINENTAL AIRLINES
          Corporate Headquarters
          1600 Smith Street
          Houston, TX 77002
          Home Page: http://www.continental.com/corporate/
          Mailing Address:
          P.O. Box 4607
          Houston, TX 77210
          Telephone:
          (713) 324-5000 (Main Switchboard)
          (713) 324-5152 (Investor Relations)
          Email:
          InvestorRelationsdept@coair.com (Investor Relations*)
          custo@coair.com (All other matters)

          AMERICAN AIRLINES
          MD-2400, Box 619612,
          DFW Airport, TX 75261-9612
          Phone: 817-967-2000
          Fax: 817-967-4162
          Home Page: www.americanairlines.com

          DELTA AIRLINES INC.,
          P.O. Box, 20980, Atlanta,
          GA 30320-2908
          Phone: 1-800-335-8241
          Fax:888-286-3163
          Home Page: www.delta.com


GLOBAL LIGHT: Disposing Of Mexican, Carribean Assets
----------------------------------------------------
Global Light Telecommunications of Vancouver recently received
creditor protection status under the Companies' Creditors
Arrangement Act in the Supreme Court of British Columbia. The
Company plans to pay its president and chief executive officer,
Gordon Blankstein, more than US$240,000 a year while it attempts
to sell stakes in Mexican and Caribbean fiber networks in which
it has invested more than US$138 million since 1997.

According to a report by the Canada Stockwatch, Mr. Blankstein's
court-approved annual pay is the equivalent of more than 10% of
the Company's total market capitalization.

Despite a depressing situation in the fiber industry at present,
Global Light figures that through an "orderly sales effort" by an
as-yet unidentified investment banker, it will find some solvent
party to buy its 49% stakes in Bestel SA de CV and New World
Network Holdings Ltd., a process expected to take six to 12
months.

"Alternatively, it is possible that the petitioner may be able to
attract new equity funding, which would enable it to pay or
restructure its existing indebtedness, while at the same time
maintaining some or all of its interests in New World and Bestel.
However, the petitioner believes that the only way this can
possibly be accomplished is in the context of an orderly
restructuring process,"  states the Company's lead Vancouver
lawyer, Scott Turner of Blake Cassels & Graydon, in the petition.

In an April 16 research report, Canaccord Capital analyst Mark
Horn of London, who rated Global Light a "speculative buy" at 72
cents, valued Global Light's interest in Bestel at US$147 million
to US$261 million, with a "base value" of US$188 million, and its
interest in New World at US$65 million to US$168 million, with a
base value of US$100 million. The analyst's base-value targets
suggest Global Light could at least double its US$50 million
investment made in New World just two years ago, and more than
double its US$88 million investment made in Bestel since 1997.

Bestel, which spent more than US$265 million building a network
linking 19 Mexican metropolitan areas and reaching 60% of the
country's population, has failed to make a penny since starting
commercial operations in 1998. The company's US$182-million debt
load as of Dec. 31 includes US$144.7 million in outstanding 12-
3/4% senior notes and US$30 million in vendor financing. On May
15, Bestel failed to make a US$9-million semi-annual interest
payment on the notes, and it is in continuing talks with unhappy
bondholders.

The outlook for New World is much bleaker. New World has spent
US$380 million as its share of construction and a further US$55
million in development, operational and financing costs for the
ARCOS-1 network, of which it owns 86 per cent. Before completing
the network, which spans the offshore havens of the Bahamas, the
Turks and Caicos Islands, the Dominican Republic, Panama and
Costa Rica and such Latin countries as Puerto Rico, Nicaragua,
the Honduras, Belize, Guatemala and Mexico, at the end of 2001,
New World presold 13.5% of its capacity to 28 regional carriers.

While New World has signed more than US$40 million in additional
contracts this year, court documents do not detail terms of the
contracts or the financial conditional of its customers. As of
Dec. 31, New World had US$325 million in outstanding bank debt,
including an unsecured bridge loan, a senior secured loan and a
revolving working capital facility.

Court documents note these loans are secured by liens on
substantially all of New World's assets, and it has been in non-
compliance with certain loan covenants since March 31. New World
is currently in talks with its primary creditor, which is not
identified, and plans a possible restructuring of its capital
structure.



SATMEX: To Supply Transponders to e-Mexico Project
--------------------------------------------------
Satelites Mexicanos SA (Satmex), a unit of U.S. satellite
communications company Loral Space & Communications Ltd., said it
will supply transponders with satellite capability to the e-
Mexico project.  The transponders are part of the satellite
reserve the Company has agreed to provide to the government under
its concession contract.

The Company is delivering the reserve corresponding to its Satmex
6 satellite in advance. Satmex 6 replaces the Solidaridad 1
satellite, which ceased to operate on Aug. 29, 2000 after a back-
up processor failed.

Reportedly, U.S. company PanAmsat de Mexico declared last month
it would offer satellite capacity to the government through the
PAS-1R satellite. PanAmsat operates with Pegaso under the legal
name Controladora Satelital de M‚xico.

Satmex is heightening its efforts to avoid defaulting on its
US$556-million debt. The unit is sacking employees, slashing
spending and stepping up collection on past-due accounts.

CONTACT:  SATMEX
          Blvd. Manuel Avila Camacho 40
          piso 24 Col. Lomas de Chapultepec
          Mexico, D.F. 11000 M,xico
          Phone (Mexico): 5201-0898
          Toll free:  01-800-800-7286
          From other states in Mexico: (55) 52-01-08-98
          Toll free (USA): 1-877-728-63-91 (1-877-SATMEX1)
          From the USA to Mexico City: (52) (55) 52-01-08-98


WORLDCOM MEXICO: Citigroup To Sell Stake in Venture
---------------------------------------------------
Citigroup Inc. decided to seek a buyer for its 55% stake in
Mexican telephone company Avantel SA after its partner WorldCom
Inc. announced in May that it was selling its 45% stake in the
venture, says Bloomberg. Citigroup acquired its share in Avantel
when it purchased Mexican bank Grupo Financiero Banamex-Accival
SA for US$12.6 billion.

However, analysts expect that Citigroup and WorldCom aren't
likely to recoup the US$1.5 billion that Banamex and MCI
Communications Corp, bought by WorldCom in 1998, spent to acquire
Avantel. Credit Suisse First Boston analyst Dan Reingold in May
valued Avantel at US$200 million, reflecting a plunge in
telecommunications stocks in the last two years.

"This is not the time to be selling Latin American
telecommunications assets," said Peter Comack, an analyst at
Miami-based Guzman & Co. "Assets have been going for 20 cents on
the dollar and falling. They will certainly not get top price."

Citigroup doesn't expect to take a charge against earnings
related to Avantel, said spokeswoman Leah Johnson. She declined
comment on a possible sale of Citigroup's stake.

Credit Suisse's Reingold estimated Citigroup's share of Avantel
at about US$110 million, compared with an initial value of about
US$750 million. He based the forecast on comparisons with another
Mexican long-distance telephone company, Alestra SA.

CONTACT:  CITIGROUP INC.
          399 Park Ave.
          New York, NY 10043
          Phone: 212-559-1000
          Fax: 212-793-3946
          Email: investorrelations@citi.com
          Home Page: http://www.citigroup.com
          Contact:
          Sanford I. (Sandy) Weill, Chairman and CEO
          Todd S. Thomson, EVP-Finance and Investments/CFO

          CITIGROUP IN MEXICO:
          Banamex
          Avenida Paseo De La Reforma
          No. 390, Col. Juarez
          Mexico City 6695
          Mexico
          Contact:
          Jose Ortiz-Izquierdo
          Phone: 52-5225-5136
          E-mail: jortiz@banamex.com

          WORLDCOM
          500 Clinton Center Drive
          Clinton, MS 39056
          1-877-624-9266
          Phone: (601) 460-5600
          Fax: (601) 460-8350
          E-mail: http://www.worldcom.com/
          Contact:
          John Sidgmore, President and CEO

          (In Mexico)
          Carretera Libre M,xico-Toluca 5714
          Col. Lomas de Memetla
          Cuajimalpa, M,xico, D.F.  05330
          Phone: 1-866-591-4076
          E-mail: webmaster@avantel.com.mx
          Home Page: http://www.avantel.com.mx/

          (In Brazil)
          Av. Presidente Vargas, 1012 / 437
          Centro
          Rio de Janeiro - RJ
          CEP: 20179-900
          Brasil
          Tel: 0800 90 1021
          Home Page: http://www.embratel.com.br/

          THE GOLDMAN SACHS GROUP, INC.
          New York Headquarters
          Goldman Sachs & Co.
          85 Broad Street
          New York, NY 10004
          United States of America
          Phone: 1-212-902-1000
          Fax: 212-902-3000
          Contacts:
          Henry M. Paulson Jr., Chairman and CEO
          John A. Thain, President, Co-COO, and Director
          John L. Thornton, President, Co-COO, and Director
          David A. Viniar, Executive Vice President and CFO

          AVANTEL SERVICIOS LOCALES, S.A. (AVANTEL LOCAL)
          Reforma No. 265, 6o piso, Col.
          Cuauhtemoc, 06500, M,xico, D.F.
          Tel: 5242-1004
          Fax: 5242-1060
          Home Page: www.avantel.com.mx/


===========
P A N A M A
===========

TRICOM: Court Lifts Sanction, Prevents Fines for Alleged Breach
---------------------------------------------------------------
Panama's supreme court on Wednesday lifted the sanction the
public services regulator imposed on telco Cable & Wireless
Panama for not keeping its interconnection agreement with Tricom.
The Supreme Court prevented the regulator from fining C&W Panama
US$5,000/day for the breach.

The interconnection agreement was not implemented after a lower
court suspended Tricom's activities related to mobile telephony
services, following legal action from mobile operator BSC de
Panama. BSC, the local Bellsouth subsidiary that is owned in
partnership with regional investment group Multi Holding
Corporation, contends that according to its concession BSC and
C&W Panama have exclusive rights in providing cellular services
until 2007. According to BSC, Tricom violates this by offering a
similar service. Tricom however, claims it uses a different
technology, adding that it has also obtained approval from the
public services regulator.

C&W Panama lawyer Alejandro Ferrer said that, although the
agreement is in place, C&W cannot proceed with interconnection
because of the court ruling which supersedes the decision of the
regulator.

The three companies are waiting for the Supreme Court to decide
whether the public services regulator has power over the lower
courts. They expected the Supreme Court to act within the next
60-90 days. Tricom CEO Arturo Pellerano hopes the Supreme Court
will uphold the public services regulator as the entity that has
a say on the dispute.

Tricom entered the telephony services using Motorola's Iden
digital trunking technology after it lose Panama's mobile
telephony license in 1996 to BellSouth. Bellsouth won the license
for US$72 million.

Tricom officially launched digital trunking services in April,
operating with a legal concession. The injunction against
interconnection prompted Tricom to offer its digital trunking
service only for the intra network communications.

Tricom has investments of about US$40 million in Panama,
including purchases of spectrum, a mobile switching office,
enhanced base transceiver stations and site acquisitions and
construction to deploy a digital network in Panama City and
Colon.

CONTACT:  TRICOM, S.A.
          Ave. Lope de Vega No. 95
          Santo Domingo, Dominican Republic
          Phone: 809-476-4000
          Fax: 809-476-6700
          E-mail: investor.relations@tricom.net
          Home Page: www.tricom.net
          Contact:
          Miguel Guerrero, Director Investor Relations
          Phone: (809) 476-4012
          Fax: (809) 476-6700
          E-Mail: investor.relations@tricom.net

          CABLE & WIRELESS PANAMA S.A.
          Gerencia de Corresponsalia
          Apartado 659 Panama 9A Panama
          Phone: 507 2235131
          Fax: 507 2642436
          Home Page: http://www.cwpanama.com.pa
          Contact: veronica.bolivar@cwpanama.com



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

BANCO ALEMAN: Paraguay Moves To Liquidate Bank Quickly
------------------------------------------------------
Paraguayan authorities will aim for an out of court liquidation
of intervened bank Banco Aleman in order to expedite the process,
reports Business News Americas.

Aleman, a subsidiary of Uruguay's Velox group, was intervened on
June 24 at its own request because it lost more than US$100
million during a 20-day run on deposits following local media
rumors that the bank was experiencing financial difficulties.

Early last week, the central bank began returning deposits of up
to PYG20 million (US$3,400), and on July 11 will return deposits
of up to PYG50 million. These represent 90% of Aleman's deposits
and the return of remaining funds will be announced July 11.

The speedy liquidation of Banco Aleman is part of an attempt by
the government to bolster public confidence in the financial
system.

CONTACT:  BANCO ALEMAN PARAGUAYO S.A.
          Estrella Esquina 14 de Mayo
          Asuncion, PARAGUAY
          Tel: (59521) 418 3000
          Fax: (59521) 447 645
          Home Page: http://www.bancoaleman.com.py/
          Contact:
          Juan Peirano, Presidente
          Ricardo Castillo Fracchia, Vice President



               ***********


S U B S C R I P T I O N   I N F O R M A T I O N

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

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

This material is copyrighted and any commercial use, resale or
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