/raid1/www/Hosts/bankrupt/TCRLA_Public/021010.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

                   L A T I N   A M E R I C A

           Thursday, October 10, 2002, Vol. 3, Issue 201

                           Headlines



A R G E N T I N A

EDENOR SA: Argentine Unit Costs Parent EUR500M Charge This Year
HYDROCARBONS SECTOR: Further Cuts Case by Case Basis, Says S&P
INTESABCI: Sells LatAm Units, Prepares To Exit Region
METRORED ARGENTINA: New Owner Expected Soon
*Argentine Banks Ordered to Return US$107 Million to Clients


B E R M U D A

GLOBAL CROSSING: Creditor Challenges Exclusive Period


B O L I V I A

COTEL: Bolivia Takes On World Bank To Seek Auditor


B R A Z I L

ACESITA: Gains Controllers Support On Planned Debenture Issue
EMBRATEL: Expects Expansion To Meet Growing Demands
TELEMAIS TELECOM: Announces Reverse Stock Split
TUPY: WTO Urges EU To Correct Methodology In Imposing Tariffs
* Soros Says Forecasts Massive Debt Restructuring


C H I L E

ENAMI: Bill Making State Guarantor To Reach Congress This Week
ENERSIS/ENDESA-CHILE: Fitch Puts Ratings on Watch Negative


M E X I C O

AHMSA: Schedules Shareholders Meeting For November 7
CORPORACION DURANGO: Georgia Mill Goes to Operadora Omega
FERRONALES: Liquidation Process Remains Stalled



V E N E Z U E L A

EDC: Fitch Affirms Foreign Currency, Lowers Local Currency


     - - - - - - - - - -

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

EDENOR SA: Argentine Unit Costs Parent EUR500M Charge This Year
---------------------------------------------------------------
French state-owned company Electricite de France is going to take
a EUR500-million (US$491 million) one-time charge for its
Argentine unit this year, reports Bloomberg. EdF, the largest
power company in Europe, directly and indirectly owns about 90%
of Edenor SA, which distributes power to 2.3 million people in
northern Buenos Aires.

The embattled Argentine unit had its local currency rating
downgraded to `DD' from `C' by Fitch Ratings last month
reflecting the non-payment of principal in an amount of US$37.5
million on Sept. 15, 2002 under the US$250 million FRN Notes. The
FRNs were originally issued under the company's euro medium-term
notes program.

At present, the unit is negotiating with all its creditors for
the extension of all of its principal maturities until March
2003. The negotiations are part of a general restructuring of the
company's debt (approximately US$510 million).

CONTACT:  EDENOR S.A.
          Azopardo Building
          Azopardo 1025 (1107) Capital Federal
          Phone: (54-11) 4346-5000
          Fax: (54-11) 4346-5300
          E-mai: to ofitel@edenor.com.ar
          Home Page: http://www.edenor.com.ar


HYDROCARBONS SECTOR: Further Cuts Case by Case Basis, Says S&P
--------------------------------------------------------------
Credit Ratings Agency Standard & Poor's said that the extend of
any further corporate downgrades in Argentina's hydrocarbons
sector will be considered on a case by case basis after
considering potential levels of parent support and cash balances
available to honor financial commitments, relates Business News
Americas.

The credit ratings agency said that if the legal rules of the
game are changed for oil & gas companies' export proceeds, S&P
"would most likely downgrade all rated companies in the sector
because of the impact of this measure on financing availability
and flexibility."

"Laws and regulations for the Argentine oil & gas sector are
undergoing profound and continuous changes," S&P said, adding
that it already factors into its ratings some degree of
increasing government intervention, and the negative effects on
profitability and cash flow protection measures derived from
lower realization prices (due to implicit or explicit taxes).


INTESABCI: Sells LatAm Units, Prepares To Exit Region
-----------------------------------------------------
IntesaBci Chief Executive Officer Corrado Passera said Tuesday
that Italy's largest banking group is expecting to sell its
troubled unit in Argentina. In fact, the group may announce its
complete exit from the country by the end of October. According
to a Business News Americas report, Passera did not mention who
would buy the Argentine unit.

Banco Sudameris Argentina has assets of about ARS2.5 billion
(US$666.7 million), according to a Reuters report, and ranks
among the ten largest banks in the economically depressed
country.

On the sale of its Brazilian unit, Passera said that the price
would be consistent with the values of the banks in the country.
He added that the bank "makes money". IntescaBci's negotiations
with Banco Itau had been dragging for months. Banco Itau had
offered to buy Banco Sudameris Brazil, but the price hasn't been
settled yet. Auditor Deloitte & Touch has been reportedly named
as arbitrator for the final sale price, but Itau has not
confirmed the reports.

Intesca would also be selling its Peruvian unit Banco Weise
Sudameris by the first half of nest year, according to Passera.

The Company had earlier said that it would divest its Sudameris
franchise to improve the company's risk profile and general
performance. The company would also employ cost cutting measures,
and may cut off between 6,000 to 8,000 jobs.

CONTACT: IntesaBci SpA
         Piazza Paolo Ferrari 10
         20121 Milano
         Italy
         Tel  +39 02 88 441
         Fax  +39 02 8844 3638
         Homepage:http://www.intesabci.it/
         Contact: Corrado Passera - Chief Executive Officer
                  Giampio Bracchi - Vice Chairman
                  Gianfranco Gutty - Vice Chairman


METRORED ARGENTINA: New Owner Expected Soon
-------------------------------------------
MetroRed Argentina, the local unit of regional corporate
communications provider MetroRed Telecom, is likely to see a new
owner this week. According to a report released by Business News
Americas, the Company's creditors and the judge handling
MetroRed's bankruptcy case will decide this week which of the
bidders will acquire the unit.

Argentine daily La Nacion indicates that the likely buyer would
be Techtel, a local corporate communications provider and an
America Movil subsidiary. Techtel, according to the paper,
offered to pay the unit ARS2 million (US$530,000), a figure,
which comes in far below than the ARS10 million Techtel
originally offered.

Analysts agreed that MetroRed Argentina would not likely sell for
a large sum, but that the final sale price would likely be higher
than the figure quoted by La Nacion.

"However, this has to do with a firm offer, without doing any
audit," La Nacion quoted a source as saying.

Argentine Research senior analyst Rafael Ber told Business News
Americas that Techtel's offer was probably too low to be
realistic. Ber estimated a more realistic offer would be around
US$7 million - US$8 million (ARS26 million - ARS30 million).

While Ber said the Company would be acquired at "liquidation
prices," Pyramid Research analyst Alejandro Rodriguez told
Business News Americas that the current market price of
MetroRed's investments would bear no relationship to their
original value.

MetroRed invested more than US$170 million in Argentina since
launching operations there in 1997. The Company's assets include
a 300km metropolitan fiber network and two Internet Data Centers
(IDCs) in Buenos Aires. MetroRed Argentina reported more than 400
corporate clients when it opened its second IDC in November 2001.

Techtel certainly has the money to make the acquisition thanks to
its relationship to America Movil, Rodriguez said. Techtel might
use its parent's deep pockets to acquire the assets now, even if
they are not expected to perform in the immediate future,
Rodriguez added.

Other groups with a reported interest in MetroRed are the local
units of Spain's Telefonica and AT&T Latin America, Argentine
corporate communications providers Iplan and Datco, and the
Argentina-based Dolphin investment fund.

Metrored 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 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


*Argentine Banks Ordered to Return US$107 Million to Clients
------------------------------------------------------------
Argentina's Central Bank has published new regulations requiring
Argentine banks to reimburse about ARS400 million (US$107
million) to clients that prepaid loans this year. The new
regulations published Tuesday change the way lenders adjust loans
for inflation, according to Argentine daily La Nacion.

Banks are now prohibited from indexing certain loans to
inflation. The said loans include home mortgages for a primary
residence and personal loans, with an upper limit of US$30,000.
The reimbursements add to the banks' losses in Argentina. Up to
this point, at least US$11 billion had been lost due to the
country's currency devaluation and debt default.



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

GLOBAL CROSSING: Creditor Challenges Exclusive Period
------------------------------------------------------
Michael S. Pascazi, an equity security holder in Global Crossing
(OTCBB:GBLXQ), has filed an objection to that company's motion to
the Bankruptcy Court seeking to extend the period during which
management has exclusive rights to file a reorganization plan.
Mr. Pascazi, also President of Fiber Optek Interconnect Corp.,
has previously indicated his interest in filing such a plan.

The Bankruptcy statute prescribes management's exclusivity as 120
days from filing of the Chapter 11 petition. The Court already
has granted an extension to October 21, 2002, Mr. Pascazi says,
"but now the company's motion to the Court requests an additional
extension of the exclusivity period to protect the debtors if
they are compelled to withdraw the Plan, or the Court does not
approve the Plan." The motion points out that the Plan they have
filed contains "closing conditions" which may not be satisfied.

"Clearly," Mr. Pascazi asserts, "Global Crossing is aware of the
possibility that the Plan it has filed will not be confirmed. Yet
its proposed motion would effectively preclude any other party
from filing an alternate Plan until the Court acts on
management's Plan, whenever that may be."

"Management has had plenty of time to formulate and submit their
best Plan," he added, "and I see no reason why others should be
barred for an indefinite period from proposing competing Plans
for the Court's consideration."

A hearing on the company's motion for extension of exclusivity
will be held October 21, 2002, at 9:45 a.m. at the Bankruptcy
Courthouse, 1 Bowling Green in New York City, the Honorable
Robert E. Gerber presiding.

Mr. Pascazi concludes, "I hope all stockholders, creditors and
others who want to see competing Plans given a chance will attend
the hearing and voice their sentiments."

Mr. Pascazi's full filed objection can be found at:
www.gblxplan.com.

CONTACT:  FIBER OPTEK INTERCONNECT CORP.
          Michael S. Pascazi, 845/462-6357
          info@gblxplan.com



=============
B O L I V I A
=============

COTEL: Bolivia Takes On World Bank To Seek Auditor
--------------------------------------------------
Bolivia hired the World Bank to take on the responsibility of
hiring and supervising a firm to audit La Paz-based local
telephony cooperative Cotel, reports Business News Americas.
Retaining the World Bank, according to Bolivia's labor minister
Jaime Navarro, is the only way to ensure transparent and
impartial audit.

Cotel has been mired with controversy ever since German telecoms
consultancy Detecon signed a five-year contract in May 2001 to
administer Cotel in return for US$138,000 in monthly management
fees. Detecon has aroused the ire of the cooperative's directors
and workers alike in their efforts to modernize the telco, lay
off excess employees, and transform Cotel from a cooperative to a
publicly registered company.

One of the objectives of the audit would be to evaluate Detecon's
administrative contract, which both Cotel's directors and workers
have vociferously claimed illegal. The labor ministry has also
questioned Detecon's contract, on the grounds the German company
was brought in to bring order to the cooperative, something which
clearly has not happened.

Navarro also said the audit should determine the respective roles
and division of powers between the administrator, directors, and
the unions.

The audit is expected to be completed and its results verified by
the World Bank by early next year.

CONTACT:  COOPERATIVA DE TELEFONOS DE LA PAZ-COTEL
          Avenida Mariscal Santa Cruz 980
          La Paz
          Bolivia
          Phone: 591 2373432
          Fax: 591 2310331
          Home Page: Homepage: http://www.cotel-bo.net/
          Contact: Jurgen Kurz
          
          DETECON
          Germaniastra? 18 - 20
          D-12099 Berlin
          Telephone : (+49-30) 7508-1100
          Fax : (+49-30) 7508-1444
          Home page: http://www.detecon.com/
          Contact:
          Karen Litters
          Phone: (0049) (0)6196-903-131
          Fax: (0049) (0)6196-903-465
          E-Mail: info@detecon.com

          WORLD BANK
          World Bank Headquarters
          1818 H Street, N.W.
          Washington, D.C. 20433
          United States
          Phone: (202) 473-1000
          Fax: (202) 477-6391
          Home Page: http://www.worldbank.org/
          Contact:
          Isabel Guerrero, Country Director -
                           Bolivia/Peru/Paraguay
          David de Ferranti, Vice President, Latin America



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

ACESITA: Gains Controllers Support On Planned Debenture Issue
-------------------------------------------------------------
Gilberto Audelino, investor relations director at Acesita,
announced that the controllers of the Brazilian stainless steel
maker decided to support the Company in its effort to issue
BRL800 million (US$222 million) in debentures, reports business
daily Gazeta Mercantil.

"In truth, the operation is part of a capital restructuring we
are carrying out at Acesita, which will allow us to work calmly
in the face of difficulties in the financial markets, mainly due
to credits related to imports and exports," Audelino said.

Acesita, which is controlled by Luxembourg-based steel group
Arcelor via Usinor with a 39% stake and local pension funds, has
BRL300 million in debentures maturing in December, as well as two
short-term credit lines secured by exports provided by foreign
controller Usinor of France, amounting to US$237 million.

Company executives have been negotiating with its controllers
after concluding it is better to pay dividends than high interest
rates on short-term financing.

"We are negotiating with our controllers, but it is certain that
we will at least have enough to roll over the debentures that are
expiring in December," Audelino said.

Acesita is yet to release financial results for the second-
quarter of this year, but according to the executive, a boom in
exports has helped to offset the rising cost of its dollar
denominated debt, given the weaker real.

CONTACT:  ACESITA
          Avenida Joao Pinheiro, 580
          30130-180 Belo Horizonte, Minas Gerais, Brazil
          Phone: +55-31-3235-4200
          Fax: +55-31-3235-4294
          URL: http://www.acesita.com.br
          Contacts:
          Luiz A. de Lima Fernandes, President
          Bernardo C. Marie Del Litto, Industrial Director
          Guilherme Amado, Financial Superintendent


EMBRATEL: Expects Expansion To Meet Growing Demands
--------------------------------------------------
WorldCom's Embratel Participacoes SA is planning to increase its
network capacity in Brazil's central-west region to meet demands
from medium and large corporations, says Business News Americas.
The Company has activated 3,924 circuits for voice, data and
video services in the region this year.

Brazil's largest long-distance telephone company has lately been
trying to cut costs, reduce debt and boost revenue from new
businesses such as its local service, after posting losses for
the past six quarters.

Problems were compounded when the local currency depreciated, as
the Company's debts were in dollars. At the end of June, the long
distance operator had BRL4.38 billion (US$1.19 billion) in debt.

In a bid to increase revenues, Embratel offered local services to
corporations. Now, the demands for virtual private networks,
high-speed Internet, a toll-free and complex central switchboard
service has grown, prompting the need for expansion.

Embratel, which primarily serves government clients in the
capital Brasilia, has just named Norbert Glatt as its new chief
executive officer.

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



TELEMAIS TELECOM: Announces Reverse Stock Split
-----------------------------------------------
Telemais Telecom Inc. (OTC:TMTU), a telecommunications company
with licenses to provide voice, data and Internet services in 69
municipalities in the wealthy southern region of Brazil, today
announced that its board of directors has authorized a one-for-
twenty reverse stock split.

Effective, October 11, 2002, the Company's common shares will
commence trading on a twenty-for-one reverse split basis. Under
the terms of the reverse split, 20 shares of common stock will be
exchanged for one share of new common stock. The Company's stock
will trade on a post- split basis under the new trading symbol of
"TLMT".

"After a difficult and disappointing first five months for
Telemais as a public company, The Board of Directors deems a
reverse split as an essential initiative for the long term health
of the Company and its shareholders," said Charles Frewen,
recently appointed President of Telemais Telecom. "Our goal is to
emerge from this market downturn and from our capital
restructuring efforts as a viable, healthy telecommunications
company."

About Telemais

Telemais is a telecommunication company poised to launch voice,
data and Internet services in Brazil using a unique network
configuration from a proven supplier that changes the market
dynamic for Local Loop service providers. With licenses in 69
municipalities in the southeast and southern region of Brazil,
Telemais can provide local, long distance and international call
termination as well as voice and data via wired or wireless
connections. Selection of these towns was based on high demand,
higher than average disposable income and lower than average
penetration of telephone service. The Telemais licenses are in
the four most southern and wealthiest states of Brazil. Telemais
currently trades over-the-counter under the symbol TMTU.

To visit Telemais on the web go to WWW.TELEMAIS.COM.BR


TUPY: WTO Urges EU To Correct Methodology In Imposing Tariffs
-------------------------------------------------------------
The European Union is now under attack by the World Trade
Organization for its methodology in calculating the anti-dumping
tariffs of 35% it slapped on steel alloy imports produced by
Brazilian foundry Tupy.

According to Business News Americas, the Geneva-based WTO
questioned the EU officials' use of 'zeroing' methodology and
urged that the EU correct its methodology in doing the
calculations. By not incorporating all of Tupy's exports - not
just those that were supposedly dumped on the European market -
the EU artificially inflated the dumping calculation, WTO said in
a report.

What is not clear, due to a lack of precedents, is how the EU
will change its calculation to conform to the WTO's Antidumping
Accord. Some countries believe that the anti-dumping tariff
should be removed, while others suggest that the duty be re-
calculated.

Last month, despite positive operating results, Florianopolis-
based foundry Tupy embarked on an administrative and financial
reorganization to address its problems with its cash flow
resulting from high levels of indebtedness.

As part of the reorganization, the Company fired its president
Mario Egerland.

Tupy posted a net loss of BRL34 million (currently US$11 million)
and net revenue of BRL375 million (US$121 million) for the first
half of this year.

The Company didn't reveal the details of its financial
restructuring, but in its latest report, Tupy said that its major
shareholders - pension fund Previ (30.5%), Telos (22.6%), Aerus
(18.5%) and the equity arm of state development bank BNDESPar
(17.6%) - promised to inject capital, lengthen the firm's debt
profile and substitute debt denominated in foreign currency with
local currency obligations.

Last June, the board of directors approved the issue of BRL150
million (US$50 million) in promissory notes.

CONTACT:  TUPY S.A. (Head Office)
          Rua Albano Schmidt, 3400
          Joinville - Sc - Brasil
          CEP: 89206-900
          TEL: + 55 (47) 441-8181
          FAX: + 55 (47) 441-8141
          EMAIL: marilda@tupy.com.br


* Soros Says Brazil May Have to Renegotiate Debt
------------------------------------------------
Billionaire financier George Soros said that Brazil would
probably have to renegotiate debt payments because the current
interest rates are too high, relates Bloomberg. He added that if
Brazil defaults on its debt, it will cut off other Latin American
countries from investments and financing. It would also put
additional strain on international lenders.

"There's a better than 50 percent chance that Brazil will have to
reorganize its debt," Soros said in a discussion at the London
School of Economics. "If a country like Brazil, which has
followed sound economic policies, can't be sustained then there's
a real risk that the global financial system will breakdown."

This year, the Brazilian currency has lost 36 percent of its
value against the dollar on concerns that the country will
default on US$300 million in debt. Inflation jumped, and the
central bank cannot cut rates.

Soros, who runs one of the world's largest hedge-fund companies,
has criticized the International Monetary Fund and banks for
failing to distribute money fairly to developing countries. He
had asked the world's central banks to help refinance Brazil's
debt in June.

Soros manages the US$7 billion Quantum Endowment Fund, which had
generated annual returns of more than 30 percent for more than 30
years. His network of foundations operates in 31 countries around
the world.



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

ENAMI: Bill Making State Guarantor To Reach Congress This Week
--------------------------------------------------------------
A bill aimed at resolving state minerals company Enami's
financial woes is due to be presented to congress this week, says
Business News Americas. But Chilean senator Ricardo Nunez,
chairman of the upper chamber's mining committee, indicated that
the legislation is likely to have a hard time passing through
congress.

The said legislation appoints the Chilean state as the explicit
guarantor of Enami's short-term debts, including US$240 million
of short-term debts and the same again in long-term obligations.
A proposal presented a few weeks back would make the state the
guarantor of a large chunk of Enami's long-term debt.

Nunez said in a statement issued by the senate that press reports
claiming state copper corporation Codelco would be involved in
the Enami plan were "not definite." Reports said the government
was considering reviving a plan it had previously appeared to
rule out, under which Enami's chief asset, its Ventanas copper-
smelter, would be transferred to Codelco.

Earlier, the government had considered offloading Ventanas to
Codelco as a way to pay off debts. This idea was dropped
following a lack of real interest on the part of Codelco and the
opposition of Enami workers.

Enami's debts ballooned in the nineties when it paid US$164
million to the state as "advanced profits" payment - earnings
Enami never actually posted. These payments were supplied with
loans from Lyonnaise and Dresdner banks.  

Another US$200 million of the debt was a result of heavy
investment in cleanup programs at Ventanas and its Paipote
smelter in northern Chile's Region III.

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


ENERSIS/ENDESA-CHILE: Fitch Puts Ratings on Watch Negative
----------------------------------------------------------
Fitch Ratings has placed the international local and foreign
currency ratings of Enersis S.A. (Enersis) of 'BBB+' on Rating
Watch Negative. The national scale rating of Enersis remains at
'AA-' with Rating Watch Negative. Endesa-Chile's international
local and foreign currency ratings of 'BBB+' and national scale
rating of 'AA' have also been placed on Rating Watch Negative.
Enersis owns 60% of Endesa-Chile.

The rating action on Enersis reflects the downgrade of Endesa-
Spain to 'A' with a Negative Rating Outlook coupled with reduced
expectations regarding the level of Endesa-Spain's support for
its Latin American investments. This change in expectations may
be partially offset by the measures recently announced by Enersis
and Endesa-Chile to improve its standalone credit profile,
including divesting assets, reducing debt, increasing the free
cash flow, and increasing equity, which will be analyzed to
resolve the Rating Watch status. Equity increases at Enersis will
be partially supported by Endesa-Spain, as previously
anticipated, via the conversion of up to US$1.4 billion in
subordinated debt from Endesa-Spain. Although Endesa-Spain's
contribution will not have a cash flow benefit, fresh money could
come from the other shareholders's subscription should they
choose to participate. The maintenance of the intercompany loan,
in its current form or as equity, plus potential asset purchases
up to $150 million represents the extent of the Spanish parent's
support to Enersis-a defined level of support which will be
incorporated into the standalone credit quality of Enersis and
Endesa-Chile following the review.

The rating pressure also reflects the weaker sovereign ratings of
Colombia, Peru, and Brazil. Given current conditions in
Argentina, Fitch has precluded any dividends out of Argentina in
the near term. Although on a consolidated basis, Enersis will
continue to include the financial results from Edesur and Endesa-
Chile's Argentine subsidiaries.

The company believes that the problems in Argentina can be
partially offset by improvements in Brazil, Colombia, and Peru,
which combined may represent two-thirds of foreign cash flow for
2002. Fitch remains concerned about investments in Brazil given
the material devaluation since the beginning of the year and
concerns over the evolving regulatory environment, which could
create liquidity problems for the Brazilian subsidiaries. With
respect to Colombia, a recent report by Fitch's sovereign group
analyzed risk of contagion from Argentina and Brazil, with
Colombia being the most exposed. In the Colombian electric
sector, sustained increased in demand and higher tariffs, may
offset some of the contagion. In Chile, the group's operations
should benefit from relatively stable prices and continued demand
growth.

Enersis is the largest private electricity distribution and
generation group in Latin America. The company has varying
ownership interests in electric distribution companies in
Argentina, Brazil, Chile, Colombia and Peru; electric generating
companies in Argentina, Brazil, Chile, Colombia and Peru; and
electric utility-related service companies. Enersis is 65%-owned
by Endesa-Spain.

Endesa-Chile is the largest electricity generation company in
Chile and owns and operates approximately 48% of the country's
total generating capacity. Endesa-Chile is also involved in
electric interconnection business between Argentina and Brazil.
Endesa-Spain is Spain's largest electrical utility, which holds
existing energy investments in South America. All three companies
have direct and indirect stakes in companies located in Chile,
Argentina, Colombia, Brazil, and Peru.

CONTACT:  Fitch Ratings
          Jason T. Todd, 312/368-3217
          Daniel R. Kastholm, CFA, 312/368-2070, Chicago
          Carlos Diez +011 562-206-7171, Santiago
                        or
          Media Relations: James Jockle, 212/908-0547, New York



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

AHMSA: Schedules Shareholders Meeting For November 7
----------------------------------------------------
Cash-starved Mexican steel maker Altos Hornos de Mexico SA
(AHMSA) will hold a long-overdue shareholders meeting November 7,
reports Dow Jones Newswires. On the agenda, among other things,
is the designation of new board members. AHMSA is currently under
attack by its creditors urging the Company to overhaul its
management and even asked a judge to declare AHMSA bankrupt
believing it is the only way to bring about a change in
management.

Creditors have been calling for the removal of Chairman Xavier
Autrey and Chief Executive Alonso Ancira, charging that the
management has not kept to the agreements it's made in the three
years since AHMSA defaulted on US$1.8 billion in debt.

Whether a change of management control will result from the Nov.
7 shareholders meeting could depend on whether creditors of
AHMSA's holding company, Grupo Acerero del Norte, or GAN, are
able to vote the AHMSA shares that were offered in guarantee on
past-due loans to GAN.

GAN holds around three quarters of AHMSA stock.

Monclova-based AHMSA, whose debts total some US$1.85 billion, has
been mired in problems after world steel prices tumbled following
the 1998 Asian crisis. With two plants in Monclova, in northern
Mexico's Coahuila state, the Company describes itself as the
country's largest steelworks.

CONTACT:  AHMSA
          Prolongacion B. Juarez s/n,
          Monclova , Coahuila 25770
          Mexico
          http://www.ahmsa.com
          Phone: +52 86 33 81 72
          Fax: +52 86 33 65 66
          Contacts:
          Alonso Ancira Elizondo, CEO, Vice Chairman, Pres./CEO
          Jorge Ancira Elizondo, Chief Financial Officer
          Manuel Ancira Elizondo, Chief Operating Officer


CORPORACION DURANGO: Georgia Mill Goes to Operadora Omega
---------------------------------------------------------
Mexican paper producer Corporacion Durango S.A. de C.V. sold its
interest in Georgia paper mill Durango Paper Co. to affiliate
Operadora Omega International S.A. de C.V. Corporacion Durango
didn't disclose the value of the transaction but said that it
would immediately add to earnings and would have a positive
effect on the Company's cash flow.

The sale is part of Corporacion Durango's consolidation strategy.

In September, Corporacion Durango announced it had considered
closing down the Georgia plant by Nov. 15 because it lost
millions of dollars each year since purchasing the 61-year-old
facility in 1999 from Gilman Paper Co. At that time, Miguel
Rincon, Corporacion Durango's board chairman, had said he was
willing to keep the facility open depending upon the findings of
a study conducted by Ernst & Young.

Corporacion Durango had hired Ernst & Young at its own expense to
conduct an audit of its Georgia subsidiary's finances.

CONTACTS:  CORPORACION DURANGO, S.A. DE C.V.
           Mayela R. Velasco
           +52 (1) 829 1008
           mrinconv@corpdgo.com.mx

           Arturo Diaz Medina
           +52 (1) 829 1015
           adiaz@corpdgo.com.mx


FERRONALES: Liquidation Process Remains Stalled
------------------------------------------------
Creditors of Mexico's state railroad company Ferrocarriles
Nacionales (Ferronales) are yet to recoup their money because up
to now, the defunct firm remains in legal limbo. Citing an El
Norte report, Business News Americas reports that the liquidation
of Ferronales' assets has been stalled after a senate decree
ordering its disbandment was published in June 2001.

So far not even an inventory of the Company's assets has been
taken, lawyer Fernando Garza Alanis, representing one of the
creditors, said.

The Mexican senate first passed the bill to disband Ferronales in
December 2000, with the aim of opening up the former state-
monopolized railroad sector to private competition.

And since the liquidation is still not in the works, creditors
have to wait awhile before getting their money back. Even if the
liquidation process started today, it would still take around 18
months before the creditors could start seeing their money.



=================
V E N E Z U E L A
=================

EDC: Fitch Affirms Foreign Currency, Lowers Local Currency
----------------------------------------------------------
Fitch Ratings has affirmed the 'B' senior unsecured foreign
currency rating of C.A. La Electricidad de Caracas (EDC) and
lowered the senior unsecured local currency rating to 'BB-' from
'BB+', with a Stable Rating Outlook. The foreign currency rating
of EDC, and to some extent the local currency rating, is
constrained by Venezuelan sovereign risks, including regulatory,
political and economic environments. Fitch currently maintains
'B-' local currency and 'B' foreign currency ratings of the
sovereign debt with a Negative Rating Outlook.

The rating action incorporates the many adverse economic and
political challenges that have pressured the credit quality of
the company and Venezuelan sovereign alike during the year. Since
the beginning of 2002 and primarily as a result of the 78%
devaluation of the Bolivar, EDC has become a more highly
leveraged company with lower cash flow to repay its mostly (77%
of total) US dollar denominated debt. EDC has been able to
somewhat withstand the impact of devaluation of the Bolivar
through June without a full offsetting tariff adjustment due to
its financial strength, cash and equivalents of more than US$200
million and ability to rollover debt maturities. However,
economic and foreign exchange pressures have affected the
company's credit quality and limited its ability to absorb
further stress, which is more accurately indicated by the new
rating.

The rating also reflects the potential for government
interference and/or reluctance to allow EDC to raise tariffs as
it should under the current laws. It should be noted that for
this year, EDC received its pre-arranged tariff increases based
on deviations from preset projected values of inflation and
foreign exchange rates, as well as monthly changes in fuel
prices. Tariffs were increased on average 26% through July.
However, future tariff adjustments are uncertain and may not
sufficiently offset the effect of devaluation pressuring the
company's ability to repay or refinance debt maturities. The next
tariff adjustment should come in January 2003.

Supporting EDC's credit quality is the company's position as the
largest private electric utility company in Venezuela. The
company is currently a low-cost, vertically integrated company,
with separate generation, transmission and distribution business
units, which places the company in a relatively strong
competitive position to operate in the evolving Venezuelan
electricity market. EDC's long history as a profitable, reliable
private entity helps provide comfort to the company's ability and
willingness to meet its financial obligations in the event of
material adverse events.

Financial performance has deteriorated recently primarily due to
the devaluation of the Bolivar since February 2002 and lower than
necessary tariff increases. EBITDA-to-interest has fallen to 2.8
times (x) through June 2002 versus 4.1x at year-end 2001. The
company has offset some of the financial impact of the currency
devaluation which reduced EBITDA in dollar terms by approximately
US$244 million. EDC's actions included aggressively negotiating
payment of government receivables, increasing sales to the
wholesale market, reducing costs and improving productivity,
which combined have recuperated approximately US$100 million.
These actions have been completed and should help sustain cash
flow during the second half of 2002. The company has also
benefited this year from cash received from the sale of CANTV
(US$91 million) and the use of hedging instruments. While these
steps are positive, the company's ability to offset further
devaluation is limited.

EDC has reduced total debt levels by 18% to US$891 million as of
June 2002 from US$1.07 billion at December 2001, partially due to
the effect of devaluation on Bolivar-denominated debt. Debt-to-
capital was approximately 41% as of June 2002, up from 33% as of
December 2001 illustrating the impact of the company's exposure
to foreign currency denominated debt on its capital structure.
EDC has somewhat offset its exposure via its US$150 million of
foreign exchange hedges, which resulted in Bs87 billion of income
through June 2002. Longer term, the tariff mechanism should
adjust for inflation and changes in exchange rates, allowing the
company to eventually recover some lost value. Debt levels in US
dollars are expected to continue to decline as the company holds
down capital expenditure levels and repays debt with free cash
flow and reflecting further devaluation of local currency debt.

The company's owner, AES, does not guarantee any portion of EDC's
financial obligations. However, the debt incurred to acquire EDC
is a direct obligation of AES, and was until recently secured by
AES shares. EDC paid US$60 million of dividends in April 2002.
Dividends for the remainder of the year may be limited by
dividend restriction covenants with multilateral lenders.
Additionally, AES' ability to extract value from EDC is
constrained by the company's by-laws and required approval of
independent directors for agreements between EDC and AES.

EDC provides electric generation, transmission and distribution
services in Venezuela. EDC serves 1.2 million customers in
metropolitan Caracas and Guarenas, situated in Venezuela's
strongest and most diverse economic region. AES Corp. (AES)
acquired 87% of EDC in June 2000 through a public tender offer.

CONTACT:  Fitch Ratings
          Jason T. Todd, 312/368-3217
          Alejandro Bertuol, 212/908-0393
          Franklin Santarelli, +011-58212 286-3232
          James Jockle, 212/908-0547 (Media Relations)



               ***********


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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