/raid1/www/Hosts/bankrupt/TCRLA_Public/020724.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

           Wednesday, July 24, 2002, Vol. 3, Issue 145

                           Headlines


A R G E N T I N A

ARGENTINE BANKS: IMF Urges President To Put End To Restrictions
METRORED: Argentine Court Declares Firm Bankrupt
PEREZ COMPANC: Petrobras To Acquire Controlling Interest
PEREZ COMPANC: Pecom Ratings Remain Unchanged Despite Buy Offer
SCOTIABANK QUILMES: S&P Assigns "D" Rating To Corporate Bonds
TGN: Tells IFC It Can't Pay Bonds In Dollars Citing Restrictions


B E R M U D A

MUTUAL RISK: Wolf Haldenstein Commences Shareholder Class Action


B R A Z I L

BOMBRIL CIRIO: Scrutinized For Alleged Illegal Money Transfers
BOMBRIL CIRIO: Company Profile
CEMAR: PPL Announces Sale Proposal For Its 90% Interest
EMBRATEL: Pressure On Anatel Mounts Over WorldCom's Demise
EMBRATEL: CVM Audit Uncovers No Irregularities


C H I L E

TELEFONICA CTC: Strike Enters Week Four; No Solution In Sight


C O L O M B I A

CMS ENERGY: Agrees To Sell CMS Oil and Gas Co. For US$232M


D O M I N I C A N   R E P U B L I C

SMITH-ENRON: Back At The Negotiating Table With Government


M E X I C O

HAYES LEMMERZ: Strengthens Leadership Team
HYLSAMEX: Reaches Agreement to Restructure Its Debt Obligation
HYLSAMEX: Hylsa Successfully Completes Exchange Offer


P E R U

BACKUS: Cisneros Group Makes Significant Investment In Brewer


T R I N I D A D   &   T O B A G O

BWIA: Peak Season Cancellations Prompted By Pilots' Protest


     - - - - - - - - - -


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

ARGENTINE BANKS: IMF Urges President To Put End To Restrictions
---------------------------------------------------------------
International Monetary Fund (IMF) officials, who are visiting
Argentina to help the country design plans for the recovery of
its financial system, have suggested to President Duhalde to
scrap its banking restrictions, AFX reports citing a senior
government source.

The president, however, has left the matter for consideration to
the Economy Minister Roberto Lavagna. Lavagna, on the other hand,
has warned that ending the restrictions pertaining to some US$15
billion, could trigger hyperinflation.

The banking freeze was imposed last December to stave off panic
withdrawals from depositors in an effort to prevent collapse of
the country's banking system.

The government has offered depositors bond plans that would allow
them to withdraw their deposits in dollars in either five or ten
years.  The bond plans was part of the condition satisfied by the
Argentine government to obtain an emergency loan from the IMF.

The IMF mission is to help Argentina reschedule all of its debt
to multilateral institutions.


METRORED: Argentine Court Declares Firm Bankrupt
------------------------------------------------
A bankruptcy court in Argentina declared Metrored
Telecomunicaciones SRL bankrupt, reports El Clarin. Metrored,
which dismissed 190 employees in May, was forced to file for
bankruptcy protection after it failed to restructure close to
US$30 million in debt.

The bankruptcy filing was also attributed to the refusal of the
Company's largest creditor, U.S.-based Fleet Financial, to take
control of the struggling company.

Metrored launched operations in Argentina in 1997, offering data,
video and voice transmission services to corporate clients. The
company reportedly invested US$218 million to build a fiber-optic
network in the country, but only managed to generate revenues of
US$24 million in 2001.

Fidelity Investments and Boston Ventures owns 89.5% of the
telecom firm, while another U.S.-based company, Metro
Communications Corp., owns 10.5%.

MetroRed also offers service in Sao Paulo, Rio de Janeiro, Belo
Horizonte and Mexico City

CONTACT:  METRORED TELECOMUNICACIONES
          Paseo Col>n 746
          Piso 4 (C1063ACU)
          Buenos Aires
          Argentina
          Phone: (5411) 4876-7700
          Fax: (5411) 4876-7767
          Home Page:  metrored@metrored.com.ar


PEREZ COMPANC: Petrobras To Acquire Controlling Interest
--------------------------------------------------------
Perez Companc S.A.(Buenos Aires: PC NYSE: PC), announces that
Petr˘leo Brasileiro S.A. - PETROBRAS ("Petrobras") (NYSE:
PBR/PBRA; BOVESPA: PETR3/PETR4 & LATIBEX: XPBR/XPBRA), the Perez
Companc family (the "Family") and the Perez Companc Foundation
(the "Foundation") have reached an agreement in principle for
Petrobras to acquire a controlling interest in Perez Companc from
the Family and the Foundation.  Pursuant to an agreement in
principle, Petrobras intends to acquire 58.6% of the capital
stock of Perez Companc.  The consideration to be paid to the
Family and the Foundation will consist of US$754,621,000 in cash
for the Perez Companc class A shares to be transferred and
US$370,548,000 in Petrobras medium term notes for the Perez
Companc class B shares to be transferred.  The notes will carry a
6% annual coupon and a 7-year final maturity and, in certain
circumstances, may be settled by delivery of Petrobras preferred
stock in the form of American Depositary Shares. Petrobras has
publicly stated that it has no immediate plans to launch a tender
offer for Perez Companc's class B shares.

Consummation of the transaction is subject to the execution of a
definitive Share and Purchase Agreement and, among other
conditions, to (i) the closing of the exchange offer of Perez
Companc's subsidiary, Pecom EnergĦa S.A., in respect of its
outstanding notes, (ii) refinancing of Pecom EnergĦa S.A. bank
loans resulting in the completion of an acceptable bank loan
profile, (iii) due diligence, (iv) Petrobras final board
approval, and (v) certain required regulatory approvals.

About PEREZ COMPANC
Perez Companc is the largest independently owned energy company
in the Latin American region. Its business activities include oil
and gas production and transportation, refining and
petrochemicals, power generation, transmission and distribution
as well as forestry activities. Headquartered in Buenos Aires,
the Company has operations throughout Argentina, Brazil,
Venezuela, Bolivia, Peru and Ecuador.

About PETROBRAS
Petrobras is one of the world's largest integrated energy
companies, engaged in a broad range of activities including oil
and gas exploration, production and transportation, refining,
distribution and marketing of oil products, petrochemicals, and
power generation. Headquartered in Rio de Janeiro, the Company
has principal operations in Brazil and throughout Latin America,
as well as Gulf of Mexico and West Africa. Based upon 2001
consolidated revenues, Petrobras is the largest corporation in
Brazil and the third largest corporation in Latin America.

To see Pecom's financial statements:
http://bankrupt.com/misc/Perez_Companc.pdf

CONTACT:  PECOM ENERGIA S.A. DE PEREZ COMPANC S.A.
          Maipo 1 - Piso 22 - C1084ABA
          Buenos Aires, Argentina
          Phone: (54-11) 4344-6000
          Fax: (54-11) 4344-6315
          URL: http://www.pecom.com.ar

           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


PEREZ COMPANC: Pecom Ratings Remain Unchanged Despite Buy Offer
---------------------------------------------------------------
Fitch Ratings has placed the 'B+' international foreign currency
rating of Petroleo Brasileiro S.A. (Petrobras) on Rating Watch
Evolving. The ratings for Pecom Energia S.A.'s (Pecom) senior
unsecured foreign and local currency ratings remain unchanged at
'C'. Pecom remains on Rating Watch Negative.

The rating actions follow the announcement that Petrobras has
agreed to acquire a 58.6% equity interest in Pecom for
approximately US$755 million in cash and a US$371 million note to
be issued to the sellers. The transaction is conditioned on Pecom
successfully completing its recently announced debt exchange
offer due to expire at the end of this month. Following the
acquisition, Pecom will be held as a consolidated subsidiary of
Petrobras and Pecom's debt obligations will be non-recourse to
Petrobras.

Fitch views the transaction as having long-term positives to the
foreign currency creditors of both entities. The transaction is
expected to increase Petrobras' daily production volumes from 1.6
barrels of oil equivalent (BOE) million per day to approximately
1.8 million BOE per day, representing an approximate 10%
increase. In addition, the acquisition will boost Petrobras'
proven reserves from 9.3 billion BOE to 10.3 billion BOE, an
approximate 10% increase, as well as increase the level of
international diversification to its asset portfolio.

In the short term, Petrobras' financial position will be
moderately pressured by adding roughly US$3.1 billion in net debt
from the consolidation of the more highly leveraged Pecom. Credit
protection measures are expected to remain consistent with the
'B+' rating level, which is currently constrained by the
sovereign rating of Brazil. Proforma debt to capitalization is
expected to be approximately 43% well above existing levels.
Longer term, the development of the newly acquired international
reserves should provide Petrobras with a more diverse revenue
stream, and somewhat lower convertibility and transfer risks, as
well as help achieve its goal of producing and selling 300,000
BOE per day outside of Brazil.

Pecom has been acquiring and proving out international reserves
over the last several years and currently has approximately 60%
of its proved reserves outside of Argentina, primarily in
Venezuela, Bolivia and Ecuador. Unfortunately for Pecom, a
majority of its cash flow remain in Argentina, which economy has
been under severe stress and placed extreme financial and
liquidity pressures on private sector corporates including Pecom.
The financial distress and limited liquidity has currently
constrained Pecom's ability to monetize its international reserve
base.

As a result, Pecom's announced US$997.5 million distressed debt
exchange offer last month. The proposal seeks to refinance
US$97.5 million of 7 7/8% notes due August 2002; US$300 million
of 9% notes due January 2004; US$200 million of 9% notes due May
2006; and US$400 million of 8 1/8% notes due July 2007. The
company is offering four series of new notes carrying the same
interest rate of each series of existing notes but extending
their corresponding maturity by three years. Pecom's actions are
part of a comprehensive effort to refinance an estimated US$1.95
billion in financial obligations. Regardless of the acquisition,
Fitch will likely view the Pecom debt exchange as a distressed
debt exchange and therefore as a default. Following the exchange
and the acquisition of Pecom by Petrobras, creditors should be in
a somewhat improved position to the extent that 'B+'-rated
Petrobras can provide additional liquidity and support to Pecom
going forward.

CONTACT:  FITCH RATINGS
          Alejandro Bertuol, 212/908-0393 (New York)
          Daniel R. Kastholm, 312/368-2070 (Chicago)
          James Jockle, 212/908-0547 (New York; Media Relations)


SCOTIABANK QUILMES: S&P Assigns "D" Rating To Corporate Bonds
-------------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
has assigned a "D" rating to Scotiabank Quilmes S.A. corporate
bonds worth US$500 million. The rating is based on the financial
position of the Company as of December 31 2001.

Scotiabank Quilmes was the first foreign-owned bank to be halted
amid Argentina's four-year recession. The ensuing financial
turmoil has pushed the entire banking system to the brink of
bankruptcy after last year's bank run drained 20% of all
deposits.

Scotiabank owes depositors, the Central bank, and private
creditors ARS3.7 billion. The obligation to the Central Bank
consists of ARS200 million in repurchase agreements and ARS170
million in rediscount loans.

The parent, Bank of Nova Scotia, which is the fourth-largest bank
in Canada, has stopped financing its Argentine subsidiary after
taking a CAD707-million write-down that erased most of its
profits in the first quarter of this fiscal year.

To see Scotiabank Quilmes' financial statements:
http://bankrupt.com/misc/SCOTIABANKQUILMES.htm

LATIN AMERICAN CONTACTS:

           SCOTIABANK QUILMES
           Alan Macdonald
           Chief Executive Officer
           Phone: (54-11) 4338-8000
           Fax: (54-11) 4338-8033
           Mail: 6th Floor
           Gral. J.D. Peron 564
           (C1038AAL) Buenos Aires

           Roy D. Scott
           Vice-President and Managing Director, Latin America
           Phone: (54-11) 4394-8726
           Fax: (54-11) 4328-1901
           Mail: P.O. Box 3955
           C1000WBN Correo Central
           Buenos Aires, Argentina
           E-mail: scotiarep@sinectis.com.ar


TGN: Tells IFC It Can't Pay Bonds In Dollars Citing Restrictions
----------------------------------------------------------------
Transportadora Gas del Norte (TGN) informed the International
Finance Corporation (IFC) that it won't be making full dollar
interest payments on nearly US$160 million of bonds, relates Dow
Jones Newswires.

TGN claimed that its efforts to make the payment is being
hampered by the Argentine law requiring it to pay instead in
pesos, which have declined more than 70% against the dollar this
year as the country's economic crisis deepens.

The law, which was implemented several months ago following the
Argentine government's default on most of its public sector debt,
stipulates that locally sold dollar debt must be converted into
pesos. Dollar debt sold abroad is exempt, but not local dollar
debt sold to multilaterals.

The bonds in question are unique from most held by foreign
creditors because they were sold under both international and
local laws. The IFC made a loan to TGN that was sold to a trust
in Argentina. Foreign investors bought notes from this trust
under international law. TGN promised to make its payments on the
loan to the IFC, which then passes them on to the trust and the
foreign investors.

IFC, the World Bank's business-finance arm, which is the largest
multilateral source of financing for privately-owned companies in
developing countries, is now trying to get clarification from
Argentine officials about TGN's decision to pay in pesos.

"We believe this issue is a problem specific to this company and
is completely unrelated to preferred creditor status, and it
should be resolved soon," said Suellen Lazarus, director of the
syndications and international securities department at the IFC.
"Preferred creditor status is powerful in terms of working in
Argentina, but it does not take care of credit risk."

As a multilateral, the IFC has signed agreements with the
government that imply the institution's status as a preferred
creditor. This means debtors will, in theory, repay it before
repaying other lenders. The Argentine government has made other
rulings in the past that exempted multilaterals like the IFC from
local restrictions on debt payments. As a result, companies such
as TGN have been able to legally transfer dollar payments abroad
to the IFC in previous months, even when others could not.

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/



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B E R M U D A
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MUTUAL RISK: Wolf Haldenstein Commences Shareholder Class Action
----------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP has filed a class
action lawsuit in the United States District Court for the
Southern District of California, on behalf of all persons who
acquired the securities of Mutual Risk Management, Ltd. ("Mutual
Risk" or the "Company") [NYSE: MM; Non Nasdaq OTC: MLRMF] between
February 16, 2000 and April 2, 2002, inclusive, (the "Class
Period") against defendants Mutual Risk and certain of its
officers and directors.

The case name is Zhang v. Mutual Risk, et al. A copy of the
complaint filed in this action is available from the Court, or
can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP
website at www.whafh.com.

The complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements throughout the Class Period that had the effect of
artificially inflating the market price of the Company's
securities.

The Complaint alleges that Mutual Risk and its highest-ranking
officers and directors circulated materially false financial
statements for the interim quarters during the Class Period as
well as for the years ended December 31, 2000 and 2001,
materially overstating the Company's collective revenues and its
net income. Defendants made additional materially false and
misleading statements concerning Mutual Risk and its financial
condition and performance.

The Complaint further alleges that the Company's quarterly and
annual filings with the SEC violated generally accepted
accounting principles as revenues for potential claims were
understated. It is also alleged that Mutual Risk's $17.5 million
receivable (reinsurance recoverable) linked with Reliance Group
Holdings ("Reliance") was largely exaggerated as it was not
collectible. These receivables had become materially damaged at
the start of the Class Period and completely impaired even before
November 15, 2000, when Reliance defaulted on its bond.

On April 2, 2002, Mutual Risk disclosed that even its problematic
Q4 2001 results (released February 19, 2002) were not precise,
causing the Company's shares to dramatically decline, trading at
just pennies per share following the announcement.

Those who purchased Mutual Risk securities during the Class
Period may request that the Court appoint them as lead plaintiff
by August 6, 2002. A lead plaintiff is a representative party
that acts on behalf of other class members in directing the
litigation. In order to be appointed lead plaintiff, the Court
must determine that the class member's claim is typical of the
claims of other class members, and that the class member will
adequately represent the class. Under certain circumstances, one
or more class members may together serve as "lead plaintiff."
Your ability to share in any recovery is not, however, affected
by the decision whether or not to serve as a lead plaintiff.

CONTACT:  WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP
          270 Madison Avenue
          New York, New York 10016
          Tel: (800) 575-0735
          Contacts:
          Fred Isquith, Esq.
          Michael Miske
          George Peters
          Derek Behnke
          E-mail: classmember@whafh.com
          Web site: www.whafh.com



===========
B R A Z I L
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BOMBRIL CIRIO: Scrutinized For Alleged Illegal Money Transfers
--------------------------------------------------------------
An investigation into allegations that Bombril Cirio SA, a
Brazilian cleaning products maker, sent US$1.3 billion abroad
irregularly between April 1996 and February 2002 is now ongoing,
Bloomberg reports, citing Valor Economico newspaper.

The Brazilian central bank said it found indications that Bombril
faked trading of U.S. Treasury bills to justify sending money
abroad.

However, in a statement published in the newspaper, Bombril's
investor relations director Claudia Musto explained that trading
of securities was done according to the law to meet the Company's
short-term financial needs. Musto said trading of securities has
been properly booked and audited in the Company's financial
statements.

Bombril is controlled by Sergio Cragnotti, owner of Italy's Lazio
soccer club, who was fined US$27 million in April by the
country's securities regulators for defrauding shareholders.


BOMBRIL CIRIO: Company Profile
------------------------------
NAME: Bombril Cirio S.A.
      JD Paulistano
      Sao Paulo, Brazil

PHONE: 3816-7877

FAX: 3815-0488

E-MAIL: seracoes@bombril.com.br

WEBSITE: http://www.bombril.com.br

TYPE OF BUSINESS: The main activities of the Company are the
production and distribution of cleaning products for domestic and
industrial use (detergents, disinfectants, ammonia and fabric
conditioners). Other activities include production of dairy
products, preserves and other foodstuffs.

SIC: Chemicals (Household chemicals)

EXECUTIVES: Massimo Cragnotti, Chairman
            Jose R. D'Aprile, Chief Executive
            Claudia G.A. Musto, Finance Director

INVESTOR RELATIONS: Joamir Alves,
                    E-mail: acionista@bombril.com.br

NUMBER OF EMPLOYEES: 1,913

AUDITOR: Grant Thornton Auditores Independentes
         Av. Brigadeiro Paria Lima 2601-12 ANDA
         International Contact:
         Carlos Eduardo Assmann
         Rua Bela Cintra, 9th Floor, 934
         Cerqueira Cesar
         CEP: 01415-000
         Sao Paulo - SP
         Phone: 55 (0)11 3138 5000
         Fax: 55 (0)11 3138 5229
         E-mail: assmann@grantthornton.com.br
         Home Page: http://www.grantthornton.com.br

To see Financial Statement: http://bankrupt.com/misc/Bombril.pdf


CEMAR: PPL Announces Sale Proposal For Its 90% Interest
-------------------------------------------------------
PPL Corporation (NYSE: PPL) announced Monday a proposal for the
sale of its 90 percent interest in Companhia Energetica do
Maranhao (CEMAR) to Franklin Park Energy, LLC of McLean, Va.
CEMAR is PPL's Brazilian electric distribution company.

In a filing submitted Monday, CEMAR asked Brazil's National
Electrical Energy Agency (ANEEL) to approve the sale. To expedite
the transaction, CEMAR has requested that ANEEL act by August 15
on the sale proposal. If the transaction is approved by ANEEL and
completed, Franklin Park would purchase CEMAR for a nominal price
and would assume the responsibility to operate CEMAR.

The eventual transfer of CEMAR to Franklin Park also is subject
to the negotiation and execution of a definitive purchase and
sale agreement between Franklin Park and PPL Global, a subsidiary
of PPL Corporation. The transfer of PPL's ownership to Franklin
Park is not expected to change CEMAR's day-to-day operations, and
CEMAR will be held to the same standards of high-quality customer
service that has characterized PPL's ownership of CEMAR.

"We are pleased to enter into this proposal with Franklin Park,
and we are hopeful that ANEEL will approve the sale and change of
ownership as soon as possible to remove any uncertainty for the
customers, creditors and employees of CEMAR," said William F.
Hecht, chairman, president and chief executive officer of PPL.

"Franklin Park brings the potential of a future additional equity
investment in CEMAR, and Franklin Park is in a good position to
do the financial restructuring of CEMAR that is necessary for the
restoration of CEMAR to financial health," Hecht said.

Hecht noted that the proposed transaction would not have any
impact on PPL's financial results.

Hecht said that the possible sale of CEMAR has been under
discussion with interested parties since before ANEEL refused the
company's request for an extraordinary tariff review in early
June of 2002.

"Our CEMAR team worked closely with government officials,
creditors and bondholders for nearly a year to return CEMAR to
financial health following the impact of the prolonged drought,
government-mandated electricity rationing and a non-functioning
wholesale energy market in Brazil. Unfortunately, the denial of
the tariff review by ANEEL left us with no choice, short of
filing for bankruptcy, but to seek a buyer for the company.
CEMAR's advisor has contacted more than 40 potential purchasers,
and Franklin Park has emerged from that process," said Hecht.

Franklin Park is a private investment group focused on owning and
operating utilities in the United States and Latin America.
Franklin Park is led by Thomas A. Tribone.

CEMAR provides electricity delivery service to more than 1
million customers in the northeastern Brazilian state of
Maranhao. PPL's other Latin American electricity distribution
companies, located in Chile, Bolivia and El Salvador, are
unaffected by the situation in Brazil.

PPL Corporation, headquartered in Allentown, Pa., controls or
owns more than 10,000 megawatts of generating capacity in the
United States, sells energy in key U.S. markets, and delivers
electricity to customers in Pennsylvania, the United Kingdom and
Latin America.

CONTACT:  PPL Corporation
          For U.S. media:
          Dan McCarthy
          Tel: +1-610-774-5758

          For Brazilian media:
          Daniele Faissal,
          Tel: 55-21-3082-0125

          For financial analysts:
          Tim Paukovits
          Tel: +1-610-774-4124


EMBRATEL: Pressure On Anatel Mounts Over WorldCom's Demise
----------------------------------------------------------
The recent bankruptcy filing of WorldCom is likely to push the
Brazilian regulator Anatel even further toward changing rules
that are blocking the sale of the U.S. giant's local unit
Embratel Participacoes SA before July next year, relates Dow
Jones Newswires.

WorldCom, which filed the world's largest bankruptcy filing on
Sunday in the wake of its US$3.85-billion accounting scandal, is
trying to sell Embratel, Brazil's dominant long-distance carrier,
and plans to use the sale proceeds to cut its huge debt load.

Goldman Sachs, which has been hired to find a buyer for the unit,
has been making efforts to structure a deal that skirts
regulatory obstacles by gradually transferring stakes in Embratel
over the next year. However, Embratel has denied this, saying
WorldCom has hired Goldman only to "evaluate" its assets.

Embratel has good reason to ask for the regulatory change. Though
it has already borrowed some US$305 million to help fund its
BRL1.1-billion ($1=BRL2.87) capital expenditures budget for 2002,
WorldCom's demise would make it tough for Embratel to access
capital markets or find lenders next year, even though the two
companies are financially independent.

"In 2003 there won't be any money in the market for Embratel
because of the bankruptcy," the source said. "We could make it
until then without financing, but the crisis of confidence may be
too overwhelming."

Anatel has come under attack from operators and certain
government officials to possibly rework regulations regarding
mergers and improve the financial results of companies.

CONTACT:  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


EMBRATEL: CVM Audit Uncovers No Irregularities
----------------------------------------------
The preliminary results of the audit conducted by Brazil's CVM
securities regulator into the 2001 results of Embratel showed
there haven't been any irregularities committed within the
Company, says Reuters. Therefore, according to the National
Telecommunications Agency (Anatel), there is no reason for state
intervention in Embratel.

"Embratel is regulated by the CVM, which in a recent audit found
no signs of any practice which discredits Embratel," Anatel said
in a statement.

"Embratel is in a comfortable position because its debts have
already been renegotiated," Anatel President Luiz Schymura said.
"It has sufficient cash to stay alive until next year with ease."

Anatel's statement came as Embratel, which has posted five
quarterly losses in a row, tried to distance itself from its
embattled U.S. parent WorldCom.

On Monday, Embratel released a statement similar to the one it
has sent to investors after WorldCom revealed its accounting
irregularities, saying it was separate from its U.S. parent.

"Embratel is a company that is operationally and financially
independent from WorldCom," Embratel President Jorge Rodriguez
said in the statement. "WorldCom's bankruptcy will not affect
Embratel, nor have an impact on our operations."

Rodriguez also took that message personally to President Fernando
Henrique Cardoso, the firm said later.

Embratel said the only operating ties between the two companies
were "normal" commercial operations between two
telecommunications carriers and an administrative fee.

It said financing had been set up independently and that its debt
was not guaranteed by WorldCom. Analysts have noted, however,
that banks may be less willing to lend Embratel cash in the wake
of the WorldCom debacle.

Embratel also reiterated plans to invest BRL1.1 billion this
year, with investment focused on increasing its data
communications business and on value-added products such as
broad-band and Internet services.

According to an average of five analysts' forecasts collected by
Reuters,

Embratel is expected to widen its net loss in the second-quarter
to BRL246 million, six times more than the BRL39 million loss it
reported in the same period a year ago.

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



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

TELEFONICA CTC: Strike Enters Week Four; No Solution In Sight
-------------------------------------------------------------
The situation at Telefonica CTC Chile, a unit of Spain's
Telefonica SA, stays unchanged as unions entered their fourth
week of strike. In a Bloomberg report, union spokesman Miguel
Vera said that union representatives and management aren't
negotiating to end the strike by 4,000 of 7,500 workers. Unions
said the Company wants to cut worker's pay by 25% and Telefonica
CTC has denied that.

The strike hampers Telefonica CTC's efforts to reduce salary
expenses to bolster earnings, which dropped to CLP4.1 billion
(US$6.2 million) last year from CLP130.1 billion in 1998. The
former state-run monopoly said the drop, and losses in 1999 and
2000 reflect a slide in revenue for local calls after government-
imposed reductions in 1999.

Workers will likely vote next week on whether to continue with
the strike or return to work, Vera said.

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




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

CMS ENERGY: Agrees To Sell CMS Oil and Gas Co. For US$232M
----------------------------------------------------------
CMS Energy Corporation (NYSE: CMS) announced Monday it has signed
a definitive agreement and a letter of intent, which together
provide for the sale of CMS' oil and gas exploration and
production unit, CMS Oil and Gas Co., for approximately $232
million.

The buyers under the definitive agreement are Perenco S.A., a
privately held exploration and production company, and its
affiliated companies. The transaction accounts for a substantial
part of the $232 million. Negotiation of a definitive agreement
is actively underway with another party for CMS Oil and Gas
Company's oil and gas assets in Colombia, which are covered by
the letter of intent. CMS Energy expects the sales to close in
the third quarter.

According to a previous TCR-LA report, CMS Energy was compelled
to sell CMS Oil and Gas Co. due to its ailing finances. CMS is
under attack by an inquiry into its trading practices.
Regulators, including the Federal Energy Regulatory Commission,
the Securities and Exchange Commission and the Commodity Futures
Trading Commission, are looking into a round-trip trading in the
wholesale energy markets. In early May, CMS said that the trades,
in which two companies swap the same amount of energy for the
same price, accounted for more than 70% of its electricity-
trading volume last year and almost 80% of its volume in 2000.

CMS Oil and Gas Co. is a developer of oil and natural gas
supplies in the Permian Basin of west Texas and internationally
in Cameroon, the Republic of Congo, Colombia, Eritrea, Tunisia
and Venezuela.

CMS Energy Corporation is an integrated energy company, which has
as its primary business operations an electric and natural gas
utility, natural gas pipeline systems, independent power
generation, oil and gas exploration and production, and energy
marketing, services and trading.

CONTACT:  CMS Energy Corporation
          Media Contacts:
          Kelly M. Farr, +1-313-436-9253
          John P. Barnett, +1-713-989-7556
          Daniel C. Bishop, +1-517-788-2395

          Investment Analyst Contact:
          CMS Energy Investor Relations, +1-517-788-2590

          Web site: www.cmsenergy.com/

          RANDALL & DEWEY, INC.,
          16800 Greenspoint Park Drive Suite 380S,
          Houston, TX, USA, 77060
          Phone: (281) 774-2000
          Fax: (281) 774-2100
          Home Page: http://www.randew.com/bodyx.htm
          Contact:
          Jack Randall and Ken Dewey, Owner
          Warren Keyes, Marketing
          Phone: 281-774-2022
          Fax: 281-774-205



===================================
D O M I N I C A N   R E P U B L I C
===================================

SMITH-ENRON: Back At The Negotiating Table With Government
----------------------------------------------------------
Smith/Enron Cogeneration Limited Partnership, Inc. decided to
return to the bargaining table with the Dominican government to
settle a conflict regarding its 185-megawatt combined-cycle power
facility mounted on a barge at Puerto Plata. The move came after
the Dominican government asked an international arbitrage court
in Geneva to resolve the said conflict.

The conflict stems from a contract signed by the Dominican state
in 1994 during the government of the late President Balaguer. The
contract expires in 2015. Reports have it that the Dominican
government offered to pay US$20 million on overdue receivables to
rescind the contract, which it deems the most onerous of all
signed with private power producers. It requires the government
to pay the Company US$3.5 million, regardless of whether the
plant is in operation or not.

However, Smith-Enron negotiators wanted US$35 million. George
Reynoso, director of the National Power Commission that is
negotiating with the company, said that Enron executives would
travel from Houston to continue the negotiations.

The U.S. government and Enron Corp. each own a stake in the cash-
strapped Dominican Republic power plant, as revealed by the U.S.
Maritime Administration in early June.



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

HAYES LEMMERZ: Strengthens Leadership Team
------------------------------------------
Hayes Lemmerz International, Inc. (OTC Bulletin Board: HLMMQ)
announced Monday several key appointments to its Global
Leadership Team. The following individuals will report directly
to Curtis J. Clawson, Chairman of the Board and Chief Executive
Officer:

James A. Yost has been appointed as Chief Financial Officer
(CFO). Mr. Yost retired from Ford Motor Company in 2001 after
serving as Vice President of Corporate Strategy. He also held
positions as Vice President and Chief Information Officer,
Executive Director of Corporate Finance, General Auditor and
Executive Director of Finance Process and Systems Development,
Finance Director of Ford Europe and Controller of Autolatina
(South America) during his 27-year career. Mr. Yost graduated
with a bachelor of engineering science degree in computer science
from the Johns Hopkins University in Baltimore, Maryland. He also
received a master in business administration degree in finance
from the University of Chicago.

Kenneth A. Hiltz will continue in his role as Chief Restructuring
Officer (CRO). Mr. Hiltz, a Principal with AlixPartners, LLC,
joined Hayes Lemmerz in October 2001 as Interim CFO and CRO. He
will continue to play a key role in the development and
implementation of the Company's restructuring plan.

Brian O'Loughlin has been appointed as Chief Information Officer
(CIO). Mr. O'Loughlin joins the Company from Revlon, Inc., where
he served as CIO. In earlier positions at Revlon, he served as
Vice President of Applications Development, Director of Systems &
Programming, and as Project Manager. Prior to Revlon, Mr.
O'Loughlin spent four years in the industry as a consultant. He
has also held information systems management positions with
Congoleum Corporation and A.M. International. Mr. O'Loughlin
holds a bachelor of science in Business Administration from
Ramapo College in New Jersey.

Edward W. Kopkowski has been appointed to the newly created
position of Vice President of Operational Excellence. Mr.
Kopkowski previously served as Founder and President of Kopko
Associates, Ltd., a consulting firm. Prior to that time, Mr.
Kopkowski was Vice President of Modular Products and Operating
Excellence at Pilkington PLC (formerly Libbey-Owens-Ford) in
Toledo, Ohio. Additionally, he was Plant Manager at Bosch Braking
Systems machining and assembly plant in Ashland, Ohio. Before
that, Mr. Kopkowski served in a variety of management roles in
operations and engineering, at AlliedSignal Braking Systems and,
earlier in his career, Bendix Automotive Brake Systems, in both
South Bend, Indiana and St. Joseph, Michigan. Mr. Kopkowski
received his bachelor of science degree in mechanical engineering
from Purdue University in West Lafayette, Indiana, and his master
of arts degree in management from Nazareth College in Kalamazoo,
Michigan. He is also a licensed Professional Engineer in the
State of Michigan and an ASQ Certified Quality Engineer.

"These talented professionals will bring tremendous strength to
our organization and have a major, positive impact on our global
business," said Mr. Clawson.

Hayes Lemmerz International, Inc. is one of the world's leading
global suppliers of automotive and commercial highway wheels,
brakes, powertrain, suspension, structural and other lightweight
components. The Company has 42 plants, 3 joint venture facilities
and approximately 12,000 employees worldwide.

On December 5, 2001, Hayes Lemmerz International, Inc., all of
its U.S. subsidiaries and one Mexican subsidiary filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code, to
reduce their debt and strengthen their competitive position.
These filings include 22 facilities in the United States and one
plant in Mexico.

To see latest financial statements:
http://bankrupt.com/misc/Hayes_Lemmerz.htm

CONTACT:  HAYES LEMMERZ INTERNATIONAL, INC.
          Marika P. Diamond
          Tel: +1-734-737-5162


HYLSAMEX: Reaches Agreement to Restructure Its Debt Obligation
--------------------------------------------------------------
Hylsamex, S.A. de C.V. ("Hylsamex") (BMV: "HYLSAMXB") (ADR:
"HLETY") the steel production unit of ALFA, announced today that
its subsidiary Hylsa, S.A. de C.V. ("Hylsa") signed agreements to
restructure substantially all of its debt. The refinancing of
Hylsa's debt was based on the proposal presented to creditors on
December 11, 2001.

In addition, as part of the agreement with its banks, Hylsamex's
subsidiary Galvak received new long-term financing in the amount
of US$150 million, which will allow it to refinance debt at
longer terms and have available the necessary funds for future
investments.

As a result of the negotiated agreement, Hylsa's financial
condition will be significantly enhanced, reducing its total
level of debt while extending debt maturities.

Alejandro M. Elizondo, CEO of Hylsamex, commented, "The
negotiated restructuring provides our Company the necessary
flexibility to not only continue operating but to reassert our
role as one of the lowest cost producers in the industry. Now
that Hylsa's financial obligations have been adjusted to more
accurately reflect existing and expected conditions in the steel
industry, we can focus more closely on the execution of our
business plan."

"We appreciate the confidence that our creditors showed in us,"
commented Alejandro Elizondo, "the finalized agreement, in
conjunction with our expectations for improvement in the steel
market, makes us optimistic about the future of the Company,"
Elizondo concluded.

Hylsamex is one of the most important steel companies in Mexico.
It is involved in the production of flat and long steel products,
coated and painted steel sheets, insulated panels, construction
systems, as well as in the operation of a steel service center
and the development and commercialization of proprietary steel-
making technology. In 2001, Hylsamex generated revenue of
US$1,211 million and employed nearly 6,000 workers.

Hylsamex was represented by Credit Suisse First Boston as
financial advisor and Weil, Gotshal & Manges `LLP as legal
advisor.

CONTACT:  Hylsamex S.A. de C.V.
          Margarita Gutierrez
          Phone: 011-5281-8865-1224
          E-mail: mgutierrez@hylsamex.com.mx


HYLSAMEX: Hylsa Successfully Completes Exchange Offer
-----------------------------------------------------
Hylsamex, S.A. de C.V. (BMV:HYLSAMXB) (ADR:HLETY) and its
subsidiary Hylsa, S.A. de C.V. ("Hylsa") announced today that
Hylsa's exchange offer for its 9 1/4% Notes due 2007 (the "2007
Notes") was successfully completed upon its expiration on Friday
the 19th at 5:00 p.m. Hylsa received tenders in the exchange
offer of approximately US$161 million in principal amount of its
2007 Notes. Hylsa has accepted tenders the old notes in exchange
for its 10 1/2% Notes due 2010.

As previously announced, Hylsa satisfied the condition that it
receive tenders of at least 50% in principal amount of its
outstanding 2007 Notes and the consent of a majority in principal
amount of its outstanding 2007 Notes to the proposed amendments
to the indenture governing the 2007 Notes and the waiver of past
defaults under the indenture. As announced today, Hylsa has also
successfully reached agreement to restructure its remaining
outstanding debt, which was a condition to the closing of the
exchange offer. The closing and settlement of the exchange offer
is scheduled for July 26, 2002.

Hylsa will pay accrued and unpaid interest at the closing of the
exchange offer on all 2007 Notes tendered and accepted for
exchange at the rate of 9 1/4% per annum through June 14, 2002
and at the rate of 10 1/2% per annum from June 15, 2002 through
the closing date of the exchange offer. Hylsa will pay accrued
and unpaid interest at the closing of the exchange offer at the
rate of 9 1/4% per annum through March 15, 2002 on all 2007 Notes
not tendered for exchange.

CONTACT:  MacKenzie Partners, Inc.
          Stephen Ballet
          Phone: 800/322-2885
                 212/929-5500 (collect)
          E-mail: proxy@mackenziepartners.com



=======
P E R U
=======

BACKUS: Cisneros Group Makes Significant Investment In Brewer
-------------------------------------------------------------
Cisneros Group of Companies announced Monday that it has made a
significant investment in Backus & Johnston, the leading beer
company in Peru. Cisneros Group of Companies purchased
irrevocable options for 16% of class A common voting shares for
an approximate amount of US$200 million dollars.

The Cisneros Group of Companies rounds out Backus' core investor
group and will work with the Bentin family, who has managed
Backus for 48 years, to position the business for continued
growth, as beer consumption continues to rise in the Peruvian
market. Peru's macro economic stability, the beer market's growth
and regional expansion potential and the outstanding management
of Backus & Johnston were the key investment drivers.

Ricardo Cisneros, Vice Chairman of the Cisneros Group of
Companies, commented: "For some time now, the Cisneros Group of
Companies has believed that Backus & Johnston represents an
attractive strategic investment opportunity for our beer
operations, Cerveceria Regional. As part of our pan-regional
development strategy, we have identified Peru as a key market,
with great promise for economic prosperity. Backus has a strong
and vibrant business with tremendous potential for continued
growth. We at the Cisneros Group have a great deal of respect and
admiration for the Bentin family and believe that they have done
an extraordinary job of building value at Backus. We see this
move as a first step into a key market in the brewing industry in
Latin America, and as a significant step forward in our own
growth strategy for Regional. We share the continuing interest of
the Bentin family to preserve and enhance the value of Backus &
Johnston for all shareholders and, in particular, for minority
shareholders. In line with this interest, we are considering ways
and means for minority shareholders to participate in the
transaction within the legal and regulatory framework of Peru and
up to the limit of 24.8%."

Mr. Cisneros continued, "The Cisneros Group of Companies'
interest to participate as an investor in Backus was immediately
welcomed by local shareholders. The Cisneros Group of Companies'
role is to give support to the management of Backus & Johnston.
With its long history of successful partnerships with companies
including Coca Cola, Hughes and America Online, Inc., and its
extensive pan-regional reach, the Cisneros Group of Companies is
ready to extend help to the Backus management team to maximize
opportunities going forward."

Regional is a wholly owned subsidiary of the Cisneros Group of
Companies and a leading Venezuelan brewer. The Company has a
market share of 25.8% in Venezuela - the market with the largest
beer consumption per capita in Latin America. This represents
impressive growth from 1993 when its market share was 4.9%. Sales
of Regional surged over 410% from 77 million liters in 1993 to
393 million liters in 2001. The sales target for 2002 is 495
million liters. Regional brands include: Regional and Regional
Light.

Elias Bentin, President of Backus, said: "We are extremely happy
about the Cisneros Group of Companies' interest to become a key
investor, and that Backus will have their full support. The
Cisneros Group of Companies will be a tremendous asset for us as
we work to maximize the opportunities available, as beer
consumption continues to rise in Peru. Their investment in Backus
is a strong endorsement of our business, as well as the country
of Peru. Within the region, Backus has the unique advantage of
marquee investors with vast experience and expertise in the
brewing business in Latin America. This differentiator will help
position our Company for continued success within the rapidly
consolidating beer industry."

Backus is the largest brewer in Peru and the sixth largest brewer
in Latin America, with 2001 sales of US$ 507 million.

The Cisneros Group of Companies' investment in Backus & Johnston
represents a first step for Regional into an attractive business,
and a market that the Company has great confidence in and has
identified as being key to international growth. The Cisneros
Group of Companies has been implementing a successful pan-
regional strategy for years developing and cultivating key
partnerships including DIRECTV Latin America, AOL Latin America,
and Panamco. The Company believes that the beer industry can no
longer be viewed as a national enterprise but as a pan-regional
corporation.

About The Cisneros Group of Companies

The Cisneros Group of Companies is one of the largest privately
held media, entertainment, telecommunications and consumer
products organizations in the world. The Company's assets
include: AOL Latin America (NASDAQ: AOLA); DIRECTV Latin America;
Univision Communications, Inc. (NYSE: UVN); Venevision, the
leading television network in Venezuela; Eccelera, the Group's
technology investing arm; and Venevision International, one of
the largest television distribution companies in Ibero-America.
The Cisneros Group also owns, operates and has interests in other
consumer product-based businesses in Latin America such as
supermarket chains, fast food chains, video franchises and
beverage companies. These companies include: Pueblo Xtra
International, Regional Brewing Company, Panamco and Blockbuster.

CONTACT: THE CISNEROS GROUP OF COMPANIES
         Susan Ainsworth
         Phone: 305/206-3100
         E-mail: sna411@aol.com



=================================
T R I N I D A D   &   T O B A G O
=================================

BWIA: Peak Season Cancellations Prompted By Pilots' Protest
-----------------------------------------------------------
Trinidad national airline BWIA was forced to cancel several
flights in the middle of its busiest season after a group of BWIA
pilots began to strike by "calling in sick or refusing to assist
when mechanical failures require extended flying hours," The
Trinidad Express reports, quoting a senior industry source.

The BWIA management is making efforts to keep the airline flying
normally, however, the state of the industry, which has
deteriorated in the wake of the September 11 attacks, may not
allow managers to keep up that stiff upper lip for long, the
source said.

"The thing is in the midst of juggling the balls in the air,
pilots are fighting for salary increases," the insider said.

The cancelled flights brought on by pilots calling in sick have
severely cut into the airline's revenue. One cancelled BWIA
flight to any of its North American destinations costs the
airline as much as US$60,000 in lost revenue, the source pointed
out.

"The airline industry is in trouble everywhere and these guys are
not helping," the source said.

BWIA management has been trying to shield its staff from
financial problems because "it needed all staff motivated for the
heavy July and August months (when BWIA averages more than 50
flights per day), to provide good service and to bring in the
A340," the source said.

However, according to the source, the pilots have interpreted
this to mean that things are good and that now is the time to get
increases. Pilots are negotiating an average minimum salary of up
to US$77,500 a year, the source said.

BWIA posted an after-tax loss of US$66.5 million for the year
ended December 31, 2001.

CONTACTS:  BWIA West Indies Airways
           Phone: + 868 627 2942
           E-mail: mailto:mail@bwee.com
           Home Page: http://www.bwee.com/
           Contacts:
           Conrad Aleong, President and CEO (Trinidad)
           Beatrix Carrington, VP Marketing and Sales (Barbados)
           Paul Schutz, Chief Financial Officer (Trinidad)





               ***********


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

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

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

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

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

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


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