TCRLA_Public/021004.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, October 4, 2002, Vol. 3, Issue 197



HAVANNA: CNV Ruling Suspends Auction
PEREZ COMPANC: Petrobras Expects To Conclude Buyout Shortly
SIDERAR: Creditors Agree To Postpone Payment


GLOBAL CROSSING: Chairman Says Questionable Swaps Were Legal


BRAZILIAN BANKS: Cling to Bonds to Avoid Losses
CAIUA: Moody's Takes Rating Actions, Concludes Review
ENRON: Still In Talks With Petrobras Over Asset Sale
INTESCABCI: Enters Arbitration To Resolve Stake Price Conflict
TELEMAR: Appoints New Board Of Executive Officers
TELESP CELULAR: Judge Rules Against Appeal To Block TIM's Ops
TRANSBRASIL: Three Groups Wrestle For Control


ENAMI: Government Talks Guarantees With Bank Creditors

D O M I N I C A N   R E P U B L I C

EDENORTE: Analysis Reveals Pricey Loans Source of Losses
EDENORTE/EDESUR/EDEESTE: Regulator Urges To Delay Rate Hikes


DESC SA: Economic Slump Blamed for Lower 3Q02 Sales
SANLUIS CORPORACION: Launches Tender Offer, Exchange Offer


ANCAP: Union Agrees to Proposal, Calls Off Strike

     - - - - - - - - - -


HAVANNA: CNV Ruling Suspends Auction
Exxel Group, a buyout fund run by businessman Juan Navarro, was
supposed to auction its troubled cookie maker, Havanna SA, on
September 30. However, a decision by the securities & exchange
commission, CNV, that deemed the auction irregular postponed the

The planned auction, which had drawn the interest of Arcor Saic,
Argentina's largest toffee producer, and Molinos Rio de la Plata
SA, the nation's biggest pasta maker, was expected to raise
US$34.3 million to pay creditor banks led by Deutsche Bank,
Citibank, and Banco Rio.

Havanna, which Exxel bought for US$85 million in 1998, sought
protection from creditors in August with debts of US$32 million.

          Brandsen 3298
          Mar del Plata, Buenos Aires 7600
          Phone: (54223) 4748323
          Fax: (54223) 4748327

          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
          Phone: (54 11) 4815-2001
          Home Page:

PEREZ COMPANC: Petrobras Expects To Conclude Buyout Shortly
An executive from the Brazilian state-controlled oil giant
Petroleo Brasileiro SA (Petrobras) expressed confidence that its
acquisition of Argentina's Perez Companc will take place over the
next few days.

"I hope we'll be able to sign a definitive agreement over the
next few days," Francisco Gros, Petrobras' president, said during
a speech at the Council of Americas in New York.

Gros said that Petrobras has been "negotiating around the clock"
to finalize the deal for Perez Companc, Argentina's largest oil

Earlier this week, Perez Companc also informed Argentina's stock
exchange that it expects to conclude its deal with Petrobras
within the next two weeks.

In July, Perez Companc announced it had reached a preliminary
agreement to sell 58.6% of its capital to Petrobras for US$1.125
billon. However, the transaction hasn't been concluded, as Perez
Companc's unit, Pecom Energia, is yet to refinance some US$2.2
billion in debts. Petrobras has conditioned that all debt must be
restructured before it would proceed with the transaction.

Subsequently, most of the refinancing has been completed, and the
two companies are finalizing the exchange of documents, before
the deal can be closed, Pecom Energia president Mario Lagrosa had
said in a separate statement to the stock exchange.

          Maipo 1 - Piso 22 - C1084ABA
          Buenos Aires, Argentina
          Phone: (54-11) 4344-6000
          Fax: (54-11) 4344-6315

SIDERAR: Creditors Agree To Postpone Payment
Creditors of Siderar SAIC consented to a wait a little longer for
the Company's payment on US$110 million in bonds while it
negotiates a more extensive restructuring of its debt, reports

The Company said that bondholders have agreed to extend the due
date on late principal worth US$41.3 million by 30 days. The new
deadline will be on Oct. 31. The Company also said the privately
sold bonds are due in 2003 and are held by banks, which they did
not name.

Siderar's Chief Financial Officer Leonardo Estazi said that the
dealy was requested so that the Company can complete negotiations
on a total of US$500 million of debt.

Argentina's second largest steelmaker needs the extension to
avoid being forced into bankruptcy as it tries to recuperate from
four years of recession. The devaluation of the local currency
makes it harder for the Company to pay debts that are in dollars.

The extension request is the Company's third this year. However,
Estazi said that interest payments on the bonds and other debts
are otherwise current.

The last seven quarters have not been good for Siderar, as it
lost a substancial amount of money during the period due to low
product demand.

Despite all its problems, the Company managed to be Argentina's
sixth best performer in this year's stock exchange. Investors
speculate that the devaluation boosts the Company's exports and
reverse losses.

The Company's shares fell 1.3 percent to ARS3.83 (US$1.04)
Wednesday, but it has been up by more than twice its value this

CONTACT:  Leonardo Stazi
          Siderar S.A.I.C.
          Phone: 54 (11) 4018-2308/2249
          Home Page:


GLOBAL CROSSING: Chairman Says Questionable Swaps Were Legal
Congress was told that the agreement between Global Crossing Ltd.
and Qwest Communications International for each to swap space on
the other's networks was within accounting rules, relates

Global Crossing chairman Gary Winnick told the House Energy and
Commerce Committee that his company went down not because of
fraud but because of a telecommunications meltdown. He also
offered to give US$25 million of his own money to compensate the
loss of 401(k) plans of Global Crossing employees.

Qwest's former chief executive officer Joseph Nacchio claims he
would have vetoed any transaction with the sole purpose of
inflating sales.

Global Crossing, along with western telephone service provider
Qwest Communications, is under investigation by the Securities
and Exchange Commission, the Department of Justice, and Congress
on whether the companies engaged in "sham transactions designed
to boost revenues", giving investors and financial analysts
misleading information on the company's financial health.

Andersen was Global Crossing's auditor until his conviction for
obstructing justice earlier this year. Global Crossing is
currently looking for a new auditor.

          45 Reid Street, Wessex House
          Hamilton HM 12, Bermuda
          Phone: (441) 296-8600
          Fax: (441) 296-8606

          Becky Yeamans, +1-974-410-5857,

          Tisha Kresler, +1-973-410-8666

          Ken Simril, +1-310-385-5200


BRAZILIAN BANKS: Cling to Bonds to Avoid Losses
Brazilian Banks, including Banco do Brasil and Caixa Economica
Federal are following new accounting rules that allow them to
ignore the decline in the value of some of their bonds when
calculating profit. A report by Bloomberg shows that Brazil's
most-traded bonds have dropped by 38 percent since the first day
of April. As a consequence, these banks can no longer sell the
debt without violating regulations.

Brazil's top six banks are now holding US$20.8 billion worth of
bonds no matter how far their value falls or how bad the
country's financial condition becomes.

Four of these banks are planning to hold more than a quarter of
their bonds until they are due, according to their second-quarter
accounts. These banks are Banco do Brasil, Unibanco, Brazil's
fifth-biggest bank, Caixa Economica Federal, the second-biggest
bank, and Banco do Estado de Sao Paulo SA, a unit of Spain's
Banco Santander Central Hispano SA.

Banks may reclassify their bonds only in specific cases where the
central bank agrees to the necessity of the move. Brazil's
Central Bank imposed new regulations on bond valuations in June,
in an effort to bring rules in line with U.S. standards.

According to several Brazilian banks, they chose to classify
government bond holdings as held to maturity because they have no
intensions to sell these bonds, regardless of what their market
value becomes.

``We didn't buy them to trade,'' said Geraldo Travaglia, chief
financial officer of Unibanco. According to the bank's second-
quarter earnings statement, 29 percent of its bonds are
classified as held to maturity, avoiding a charge to account for
a BRL579 million decline in their value.

Banco do Brasil, according to its second-quarter statement has
assets of BRL169.9 billion in bonds, listed 36 percent as held to

State-owned Caixa Economic Federal said it would hold 72 percent
of its securities to maturity and Banco Santander's Banespa,
Brazil's sixth-biggest bank, said it would hold 41 percent.

Elena Iparraguirre, a credit analyst at Standard & Poor's in
Madrid says that holding bonds to maturity is "definitely a way
of not immediately recognizing the loss in their value."

Jason Mollin, an analyst at Bear Stearns & Co. in New York, says
that Brazilian banks, which write down more of their bond
holdings, seem healthier than their rivals. Thus, they play
better in the stock market.

For instance, Banco Itau SA's shares kept less than 1 percent of
its securities to maturity in the second quarter, and took a
charge of BRL145 million to account for bond losses, lost 21
percent of its value since the end of June. But Uniao de Bancos
Brasilieiros held 29 percent to maturity, avoiding a charge to
account for a BRL579 million decline in its bond holdings, and
suffered a 34 percent decline in the same period.

Brazil's bonds and currency have plummeted since March on concern
that Worker's Party condidate Luiz Inacio Lula da Silva will win
the elections, triggering the country's default. Lula is ahead in
opinion polls, followed by his closest rival Jose Serra.

The currency has fallen by 34 percent since May. This raised the
cost of servicing Brazil's BRL1.05 trillion of debt. About 45
percent of this is tied to the U.S. dollar.

But more recently, Lula has issued statements that he would honor
Brazil's obligations should he win this Sunday's presidential

CAIUA: Moody's Takes Rating Actions, Concludes Review
Moody's took actions on the ratings of Brazil's Caiua Servicos de
Eletricidade (CAIUA), concluding a review that was initiated on
August 20, 2002.

The following actions were taken:

- CAIUA's issuer rating (Global Local Currency) downgraded to B2
from Ba3,
- CAIUA's issuer rating (Brazilian National Scale) downgraded to from
- CAIUA's senior unsecured R$167 million debentures (Brazilian
National Scale) downgraded to from
- CAIUA's senior unsecured US$55 million medium term notes
confirmed at B2 (Foreign Currency)

Caiua's rating outlook is negative.

According to Moody's, the ratings downgrade and negative outlook
reflect its concerns about CAIUA's debt level, which has
contributed to continued operating losses and pressure on cash
flows, and liquidity pressures resulting from debt maturities in
the near term. The economic uncertainties prevailing in Brazil
and the on-going market and regulatory pressures affecting the
electric sector have also been factored into the ratings. Moody's
also considered the company's maturity schedule over the medium
term, in the context of the current adverse conditions in the
Brazilian financial markets. Moody's recognizes the additional
obstacles for the Brazilian electric utilities in general and the
continued support by the Federal Government through the BNDES.
However, in Moody's opinion, the outstanding pressures have
increased CAIUA's risk profile to a more sizeable extent than
some other issuers.

The B2 foreign currency rating for CAIUA's senior unsecured
US$300 million Euro medium-term note program is confirmed. The
notes are guaranteed by Empresa de Eletricidade Vale Paranapanema
S.A. (EEVP), which directly holds 79% of CAIUA's voting capital
and 61% of its total capital. The total outstanding amount of
US$55 million issued under this program is due on November 27,
2002 and has been fully currency-hedged. At present, the company
is developing alternatives under which it intends to refinance
this maturity.

CAIUA's B2 issuer rating, under Moody's Global Local Currency
Scale, indicates an issuer whose capacity to meet obligations
over any long period of time may be small. This scale compares
the issuer to all other issuers around the world and incorporates
all Brazil-related risks, excluding the currency convertibility

The, under the Brazilian National Scale rating, for
CAIUA's R$ 167 million senior unsecured debentures due April
2005, indicates an issuer or issue with creditworthiness below-
average relative to other Brazilian issuers or issues.

CAIUA is an electric distribution utility, which controls other
six electric utilities in six states of Brazil. CAIUA is
headquartered in Sao Paulo, Brazil.

ENRON: Still In Talks With Petrobras Over Asset Sale
Petroleo Brasileiro SA continues to talk with Enron Corp. about
assuming the bankrupt Texas-energy company's gas-distribution
holdings in the Brazilian state of Rio de Janeiro, according to
Francisco Gros, president of the Brazilian state-controlled oil
giant. In a Dow Jones Newswire report, Gros said the possible
acquisition would be discussed at a Petrobras board meeting

Petrobras announced in February it planned to buy Enron's 25.38%
stake in Companhia Distribuidora de Gas do Rio de Janeiro (CEG),
which distributes gas in metropolitan Rio de Janeiro, for US$240
million. The stake sale would also include Enron's 33.75% holding
in CEG-Rio, which supplies the state of Rio de Janeiro. But the
deal has yet to be clinched.

"We've been going back and forth, discussing valuation," said

While he wouldn't provide any ballpark figures, he indicated that
Petrobras wants to negotiate the price downward.

"I'd say whatever assets were valued six months ago in Brazil,
they're not worth the same today," he told Dow Jones Newswires.

Enron filed for bankruptcy protection early December 2001 in the
largest Chapter 11 case ever after Dynegy Inc. abandoned its
US$23 billion takeover of the Houston-based energy trader. Enron
listed about US$40 billion of debt, including off-balance-sheet
project financing. Since the bankruptcy filing, Enron has been
restructuring its accounts and selling assets.

CONTACTS: Mark Palmer of Enron Corp., +1-713-853-4738
          Enron Corp.
          Investor Relations Dept.
          P.O. Box 1188, Suite 4926B
          Houston, TX 77251-1188
          (713) 853-3956

          Enron Corp.
          Public Relations Dept.
          P.O. Box 1188, Suite 4712
          Houston, TX 77251-1188
          (713) 853-5670

INTESCABCI: Enters Arbitration To Resolve Stake Price Conflict
Italian bank IntesaBCI SpA and Brazil's Banco Itau SA failed to
agree on a sale price for IntesaBCI's 94.57% stake in Brazilian
bank Banco Sudameris Brasil SA, reports Dow Jones Newswires.

As a result, the two institutions entered into an arbitration
process to find a resolution. According to an unnamed financial
source, the arbitration will be conducted by Deloitte & Touche
and an appraisal is expected by end-November.

Deloitte's price assessment won't necessarily bind the two
parties, the source said. "They will see what Deloitte says, and
then they will decide whether to accept the arbitration price or

In March, IntesaBci had accepted an offer from Itau SA for the
stake. The offer was equal to the adjusted book value of
Sudameris Brasil at Dec 31, 2001 plus goodwill of US$925 million.
But the sale was postponed to September.

In July, IntesaBci said it expected the sale to be concluded in
the first 10 days of September.

The source said recourse to an arbitrator was provided for in the
contract to sell Sudameris Brasil to Itau in case the parties
failed to reach an agreement.

CONTACT:  IntesaBci
          Investor Relations:
          Piazza della Scala, 6
          20121 - Milano
          Fax: (39) 02 8850 2587
                Andrea Tamagnini, Tel: (39) 02 8850 3180
                Marco Delfrate, Tel: (39) 02 8850 2622
                Cristina Paltrinieri, Tel: (39) 02 8850 3571
                Carla De Alberti, Tel: (39) 02 8850 3159
                Giorgio Grossi, Tel: (39) 02 8850 3189
                Anna Gervasoni, Tel: (39) 02 8850 3466
                Maria Vittoria Buscicchio, Tel: (39) 02 8850 7114
                Manuela Banfi, Tel: (39) 02 8850 3273

          Dionisio Derteano, 102 Esquina con Miguel Seminario
          Lima 27, Peru
          Phone: +51-1-211-6000
          Fax: +51-1-440-7945
          Luis F. Wiese de Osma, Chairman
          Eugenio Bertini, CEO
          Carlos Palacios Rey, President, Executive Committee

TELEMAR: Appoints New Board Of Executive Officers
company of providers of telecommunications services in the north,
northeastern and eastern regions of Brazil, announced Wednesday
that as part of the new structure for Telemar's executive
management, defined during the Company's General Shareholders
Meeting held on September 30, 2002, TNE's Board of Directors
named new executive officers:

Sr. Jose Fernandes Pauletti - President
Sr. Ronaldo Iabrudi dos Santos - Superintendent Director
Sr. Luiz Eduardo Falco - Superintendent Director
Sr. Francisco Tosta Valim Filho - Director
Sr. Marcos Grodetzky - Director
Sr. Julio Cesar Pinto - Director

Additionally, Mr. Valim Filho will be responsible for the
Company's Financial area, while Mr. Grodetzky and Mr. Pinto will
be in charge of the Company's Treasury and Controlling areas,

Mr. Marcos Grodetzky will also hold the position of Investor
Relations Officer, being responsible for the Company's
relationship with the regulatory bodies of the capital markets.

          Roberto Terziani
          Tel: 55 21 3131 1210
          Carlos Lacerda
          Tel: 55 21 3131 1314
          Fax: 55 21 3131 1155

          Rick Huber
          Tel: 212 807 5026
          Mariana Crespo
          Fax: 1 212 807 5025

TELESP CELULAR: Judge Rules Against Appeal To Block TIM's Ops
Telesp Celular lost its legal battle against rival operator
Telecom Italia Mobile (TIM). Business News Americas reports that
Brazilian Judge ruled against Telesp's appeal to stop TIM from
launching operations. Telesp Celular filed a request for Judge
Neri Junior to overturn the ruling of the lower court.

An earlier report from the Trouble Company Reporter reveals TIM,
which controls Brazilian cellular operators Tele Celular Sul
(NYSE: TSU), Tele Nordeste Celular (NYSE: TND) and Maxitel, has
been unable to use the three licenses it bought in March 2001 due
to regulations requiring fixed line incumbents of shareholders
holding at least 20 percent stake in those companies to meet
government mandated build-out goals in order to expand services
before July 2003.

In August, TIM controller Telecom Italia (NYSE: TI) reduced its
stake in Solpart Participacoes, a local telecoms holding, to 19
percent from 37.3 percent to allow TIM to offer PCS services.
Solpart is the indirect controller of Brazilian fixed line
incumbent operator Brasil Telecom (NYSE: BRP), which did not meet
build-out requirements ahead of schedule last year.

BCP, a subsidiary of BellSouth (NYSE: BLS), has also filed a
similar lawsuit versus TIM.

CONTACT:  Telesp Celular Participacoes S.A.
          Edson Alves Menini, (55 11) 3059-7531

TRANSBRASIL: Three Groups Wrestle For Control
Transbrasil continues battling a number of problems, including
onerous debts with the Brazilian government, employees, and
suppliers. The company faces difficulties on three different
fronts, says South American Business Information.

The factions most involved in the dispute are an heir of the
Company founder (Omar Fontana), Fundacao Transbrasil (the
Company's employees) and businessman Dilson Teixeira.

Market sources believe that such 'dispute' would be aimed at
confusing the Brazilian government about liquidating the Company.
The regulatory institution DAC (Departamento de Aviacao Civil)
has set an Oct 16 deadline for the Company to outline a plan and
resume operations. Otherwise, it will lose its license to

CONTACT:  Antonio Celso Cipriani, CFO
          Rua Geral Pantaleao Telles, No. 4,
          Jardim Aeroporto
          04355-040 Sao Paulo, Brazil
          Phone: +55-11-533-7111
          Fax: +55-11-543-9083


ENAMI: Government Talks Guarantees With Bank Creditors
The government of Chile is actively negotiating with the creditor
banks of Enami to offer them guarantees on the US$490-million
debt of the state owned mining company, most of which is coming
due and payable within the next months, reports South American
Business Information. The board of Enami has renewed its pledge
for private investors to join some of the projects it has in the
portfolio to be developed in 2003.
CONTACT:  ENAMI (Empresa Nacional de Mineria)
          MacIver 459,
          Santiago, Chile
          Phone: 637 52 78
                 637 50 00
          Fax:   637 54 52
          Home Page:
          Jorge Rodriguez Grossi, President

D O M I N I C A N   R E P U B L I C

EDENORTE: Analysis Reveals Pricey Loans Source of Losses
A significant portion of the losses reported by Dominican
Republic power distributor Edenorte are due to loans contracted
above market rates by the Company. The conclusion, according to a
DR1 Daily News report, was disclosed in an analysis conducted by
The Grant Thornton into Edenorte's financial statements.

Edenorte reported loans borrowed at 24% in 2000 and 18% in 2001.
Market rates of 12% were the norm at the time. The analysis
showed that the Company would have had savings of RD$102 million
if it had secured financing at then average market rates.

Superintendent of Power Julio Cross also criticized the
investment of US$20 million in a management system. Furthermore,
Cross charged that 36% of the assets reported by Edenorte were
intangibles that only exist in their imagination. He said the
assets served the purpose of transferring earnings to affiliate

Edenorte executives have denied the irregularities in the
generally accepted accounting practices publicized by Power
Superintendent Julio Cross on the Aeromundo TV talk show last

EDENORTE/EDESUR/EDEESTE: Regulator Urges To Delay Rate Hikes
The Dominican Republic's energy regulator is calling on power
distributors Edenorte, Edesur and EdeEste not to increase rates
after October 1 because the government has not specified when it
will stop subsidies, reports Business News Americas.

According to Julio Cross, head of the country's energy regulatory
body, the timing of the new rates formula implementation cannot
be determined until the government specifies if it will pay the
September subsidy or not.

On September 17, President Hipolito Mejia announced that the
government could not continue subsidizing electricity users,
except for householders in the country's poorest neighborhoods.
The next day, the energy regulator issued a resolution setting
out a new rates mechanism and implementation timetable.

The resolution stated that a new rate mechanism would be
implemented on October 1.


DESC SA: Economic Slump Blamed for Lower 3Q02 Sales
Mexican industrial conglomerate Desc SA said Wednesday that
economic weakness cut its sales in the third quarter of the year.
Between July and September, sales fell 8.3% to US$507 million,
from US$553 million for the same period one year ago. Exports
represent more than 40% of Desc's sales.

Desc, which makes auto parts, petrochemicals and processed foods,
estimated that third quarter earnings before interest, taxes,
depreciation and amortization, or EBITDA, fell to US$60 million
from US$79 million in the same quarter of 2001, while operating
profit fell to US$29 million from US$46 million.

Desc also may face lower sales in the fourth quarter as well
because DaimlerChrylser's truck plant near Mexico City shut down
in late August, hurting sales for one month in the third quarter,
said Luis Miranda, an analyst with Santander Central Hispano
Investment in Mexico City.

"The loss of the contract with DaimlerChrysler falls within
the worst-case scenario range," Miranda said. "Desc's sales of
pickup beds to DaimlerChrylser accounted for about 8% of the
Company's sales," he added.


Arturo D'Acosta
Alejandro de la Barreda
Tel: 5255-5261-8037

Blanca Hirani
Melanie Carpenter
Tel: 212-406-3693

SANLUIS CORPORACION: Launches Tender Offer, Exchange Offer
SANLUIS Corporacion, S.A. de C.V. (BMV: SANLUIS) ("SANLUIS"), a
Mexican industrial group engaged in the manufacture of auto
parts, yesterday commenced simultaneous offers to purchase for
cash and to exchange for debt of a newly formed subsidiary
substantially all of SANLUIS' outstanding indebtedness.  The cash
tender offer and the exchange offer are open to all eligible
holders of SANLUIS' 8.875% Notes due 2008, certain Euro
Commercial Paper notes of SANLUIS and certain other financial
indebtedness, all in an aggregate principal amount of
approximately US$291.3 million.  Eligible holders may tender debt
into either the cash tender offer or the exchange offer, which
SANLUIS is making on the following terms:

*  For each US$1,000 principal amount of SANLUIS debt tendered in
the cash tender offer and accepted, the holders thereof will
receive a cash payment of US$350; or

*  For each US$1,000 principal amount of SANLUIS debt tendered in
the exchange offer and accepted, the holders thereof will

*  US$384.15 in principal amount of newly issued 8% Senior Notes
due June 30, 2010, of Sanluis Co-Inter, S.A., or SISA, a wholly
owned subsidiary of SANLUIS to be formed that will indirectly own
all of SANLUIS' operating companies through its wholly owned
subsidiary SANLUIS Rassini Autopartes, S.A. de C.V., and

*  US$615.85 in principal amount of newly issued 7% Mandatorily
Convertible Debentures due June 30, 2011, of SISA.

SANLUIS will accept from holders of its existing indebtedness a
maximum of US$128.6 million in aggregate principal amount of debt
in the cash tender offer, and approximately US$162.7 million in
aggregate principal amount of debt in the exchange offer.  The
offers are scheduled to expire at 11:59 p.m., New York City time,
on November 8, 2002.

SISA will pay up to US$5 million in cash interest per year on the
8% Senior Notes to the extent that it has cash available to make
the payment. Otherwise, this interest, and any interest over $5
million due in any year, will be capitalized.  Interest will
accrue from July 1, 2002.  Principal on these new Notes, which
will also carry a subordinated guarantee from SANLUIS Rassini
Autopartes and its subsidiaries, will be due in full upon

The 7% Mandatorily Convertible Debentures will, if not repaid in
full upon maturity, be convertible into a new class of shares of
SISA that will carry voting rights and a liquidation preference
in the amount of the accrued and unpaid amount of principal of
and interest on the convertible debentures, plus 7% per annum
from the date of conversion.  The convertible debentures may also
be converted by holders upon the occurrence of certain other
events.  Interest on the convertible debentures will be paid-in-
kind and capitalized.

Concurrently with the cash tender offer and exchange offer,
SANLUIS is soliciting consents from holders of 8.875% Notes due
2008 of SANLUIS to effect certain amendments to and waive certain
existing defaults under the indenture governing these
notes.  Holders of the 8.875% Notes wishing to tender into either
the cash tender offer or the exchange offer must as a condition
to acceptance of their tender grant these consents.

The completion of the cash tender and exchange offer will be
subject to various customary conditions that must be met or
waived by SANLUIS, including but not limited to participation by
holders of minimum amounts of SANLUIS debt both in the cash
tender offer and exchange offer together and in the cash tender
offer separately.

If the minimum participation condition for the cash tender offer
is not initially met, a portion of the SANLUIS debt tendered in
the exchange offer may be reallocated into the cash tender offer,
up to the amount by which initial tenders in the cash tender
offer fall short of $128.6 million.  In this case, SANLUIS debt
will be reallocated pro rata from each holder tendering into the
exchange offer that has not refused such reallocation.

If SANLUIS debt in excess of US$128.6 million is tendered in the
cash tender offer, SANLUIS may decline SANLUIS debt tendered in
excess of this amount pro rata from each tendering holder.  In
this case, any such SANLUIS debt that has been tendered in the
cash tender offer and declined may be reallocated into the
exchange offer from each holder that has not refused such

The completion of the cash tender and exchange offer is subject
to the registration of SISA's new 8% Senior Notes due 2010 and
new 7% Mandatorily Convertible Debentures due 2011 with the
National Securities Registry (Registro Nacional de Valores),
Special Section, of the Mexican National Banking and Securities
Commission (Comision Nacional Bancaria y de Valores, or
CNBV).  Participation in the debt exchange offer is restricted in
the United States to qualified institutional buyers and
institutional accredited investors, and outside the United States
to non-U.S. persons.

Neither the 8% Senior Notes nor the 7% Mandatorily Convertible
Debentures of SISA will be registered under the United States
Securities Act of 1933, as amended, and they may not be offered
or sold in the United States absent an applicable exemption from
the registration requirements of the Securities Act.

This press release is neither an offer to sell nor the
solicitation of an offer to buy any security, nor an offer,
solicitation or sale in any jurisdiction in which such offering,
solicitation or sale would be unlawful.

The tender offer, exchange offer and consent solicitation will be
made solely by means of the offering memorandum and consent

This release may contain forward-looking statements.  Any such
forward- looking statements, which reflect SANLUIS' current views
of future events and financial performance, involve known and
unknown risks and uncertainties that may cause SANLUIS' actual
results to be materially different from planned or expected
results.  These risks and uncertainties include, but are not
limited to, competition, consumer demand, seasonality, economic
conditions, and government activity.  Investors should take such
risks into account when making investment decisions.

CONTACT:  SANLUIS Corporacion, S.A. de C.V.
          Hector Amador
          Tel. +11-5255-5229-5838
          Fax. +11-5255-5202-6604
          Web site:


ANCAP: Union Agrees to Proposal, Calls Off Strike
Uruguay's state oil company Ancap avoided a strike scheduled to
start October 1 after reaching an agreement with diesel retailer
union Unveno, reports Business News Americas. Unveno, which had
been seeking a 15% increase in the commissions that Ancap pays
service stations for diesel sales, threatened to lodge a strike.
However, after accepting Ancap's proposal of a 6.7% hike in the
commissions, Unveno called off the planned strike.

In a previous Business News Americas report, Unveno president
Hector Barrella said that the union was "moderately optimistic"
of reaching an agreement, and said that despite the lower
commissions, Ancap made other proposals that Unveno considered
"very important."

Ancap pays private gas companies a commission for every liter of
fuel sold. For 20 years, Ancap has paid private service stations
on a per-liter sold basis and the amount is supposedly adjusted
every six months. However, the amount has not been adjusted for
five years. Ancap currently pays 1.10 pesos per liter of gas and
0.8 pesos per liter of diesel.

CONTACT:  Administracion Nacional de Combustibles, Alcohol y
                Portland (ANCAP)
          Central Administration Paysando
          s/n esq. Avenida del Libertador
          Montevideo, 11100 Uruguay
          P.O. Box 1090
          Phones: +598(2) 902 0608
                          902 3892
                          902 4192
          Fax +598(2) 902 1136 902 1642
          Telex ANCAP UY 23168
          Home Page:
          Benito E. Pi eiro, Chief Executive Officer
          Phone +598(2) 900 2945
                +598(2) 902 0608 Ext. 2253
          Fax +598(2) 908 9188

A large merger could be the solution for the suspended banks in
Uruguay, a central bank executive suggested. In a Business News
Americas report, Uruguay's central bank chairman Julio de Brun
revealed that the government is considering merging Banco
Comercial with Banco Montevideo and Banco Caja Obrera to form one
bank. These three banks were intervened and suspended in late
July and August due to a run on deposits.

A complete solution to these banks' woes just seems to be very
elusive. They all need significant capital injections. The
government has been negotiating with multilateral institutions
and international investors in the case of Comercial, while Greek
business group Tsakos is interested in Montevideo and Caja
Obrera. But, so far, nothing concrete has come out of those

Time is also running out to find a permanent solution for the
three banks as the central bank said last week it would extend
the suspensions until October 25, but not beyond that date. If no
viable solution to reopen the banks can be found, officials say
they will be liquidated.

However, one viable alternative being considered would be to
merge the strongest of the three banks with the best parts of the
other two banks. Under the most likely merger scenario Comercial
would reopen with the best and most viable parts of Montevideo
and Caja Obrera.

The consulting arm of Netherlands-based ING Bank is expected to
submit a report to the government in two weeks on how best to
dispose of the suspended banks.

          Cerrito No. 400,
          11100 Montevideo
          Phone: 960-394/97
          Fax: 963-569
          Home Page:

          1399 - Montevideo
          Fax: 9162880
          Home Page:
          Contact: Sr. Marcelo Pestarino, 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.

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