TCRLA_Public/021025.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 25, 2002, Vol. 3, Issue 212

                           Headlines


A R G E N T I N A

PEREZ COMPANC: Celarauco Bids On Forestry Assets
REPSOL YPF: Threatens to Halt Argentine Investments
ARGENTINE BONDS: Citibank Notifies Holders of Missed Payment
* IMF Insists on Argentine Tax and Tariff Hikes


B E R M U D A


TYCO INTERNATIONAL: Ex-CEO's Investment Raises More Questions


B R A Z I L

ALCOA ALUMINIO: Fitch Lowers Ratings, Outlook
ARACRUZ CELULOSE: Fitch Downgrades Foreign Currency Rating
AMBEV: Fitch Cuts Local Currency Rating; Outlook Negative
BRASIL TELECOM: Fitch Places Ratings On Rating Watch Negative
COMPANHIA PETROLIFERA: Fitch Lowers Local Currency Rating To `B'

CSN: Fitch Places Foreign Currency Rating On Watch Evolving
CST: Foreign Currency Rating Lowered To `B'
MRS LOGISTICA: Fitch Changes Rating Outlook To Negative
OPP QUIMICA: Foreign Currency Rating Downgraded To `B'
PETROBRAS: Fitch Cuts Foreign Currency Rating

RIPASA CELULOSE: Fitch Changes Rating Outlook To Negative
SADIA S.A.: Fitch Takes Various Rating Actions
SAMARCO: Fitch Downgrades Ratings
TELEMAR: Fitch Downgrades Ratings
BANCO ALFA: Fitch Takes Rating Actions on Numerous Issues

BANCO BRADESCO: Fitch Downgrades, Affirms Ratings
BANCO BRASCAN: Fitch Makes Multiple Rating Announcments
BANCO DO BRASIL: Fitch Adjusts, Affirms, Drops Various Ratings
BANCO FIBRA: Fitch Downgrades Currency Ratings
BANCO ITAU: Ratings Downgraded Following Sovereign Rating Cut

BANCO SAFRA: Fitch Lowers Reflects Sovereign Cut
BANCO SANTOS: Fitch Cuts Ratings On Heightened Risk
BANCO SUL AMERICA: Tightening Financial Environment Prompts Cut
BANCO VOTORANTIM: Fitch Cuts Foreign Currency Rating
BRADESCO SEGUROS: Fitch Lowers Financial Strength Rating

BBV ARGENTARIA BRASIL: Fitch Cuts, Affirms Currency Ratings
BCN: Mounting Risk In Operating Environment Pulls Down Ratings
UNIBANCO: Fitch Reduces Foreign Currency Ratings
ELETROPAULO METROPOLITANA: Ernst & Young Hired To Analyze Assets


C H I L E

ENERSIS: Declining Currencies Lead To Weaker 3Q02 Earnings


M E X I C O

ALFA: Releases 3Q02 Financial Results
ASARCO: Seeks to Move Tainted Smelter Soil to Ruston
DESC: Preliminary 3Q02 Numbers Show Decline
GRUPO COVARRA: Bankruptcy Imminent

GRUPO TMM: Shares Suspended On Failure To Divulge Information
HYLSAMEX: 3Q02 Financial Results Show Strong Improvement
VITRO: 3Q02 Results Show Modest Improvements


     - - - - - - - - - -

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

PEREZ COMPANC: Celarauco Bids On Forestry Assets
------------------------------------------------
Perez Companc received an offer from Celarauco (Celulosa Arauco y
Constitucion) for its forestry assets worth between US$65 million
- US$70 million, according to a report released by Estrategia.
The Argentinean group is looking to sell the assets, which
include 60,000 ha of forests in Misiones province, 96,700 ha at
Corrientes, and 4,000 at El Delta, as part of an effort to pull
out from the forestry business as it went out from oil & gas and
agribusiness. Several companies are clamoring for the property.
Perez Companc is expected to announce the winner in November.

Brazilian state-run oil giant Petrobras recently acquired a
58.62% controlling stake in Perez Companc in a deal reportedly
worth US$1.077 billion.

Petrobras, which produces 1.5 million barrels of oil per day in
Brazil, Argentina, Bolivia, Angola, Nigeria and the Gulf of
Mexico, is a publicly-traded firm in which the Brazilian
government holds a controlling stake.

Perez Companc, headquartered in Buenos Aires, is active in
Argentina, Brazil, Venezuela, Bolivia, Peru and Ecuador and is
Latin America's largest independent energy producer, with
production, transportation, refining, generation, transmission
and distribution facilities for oil and natural gas, electricity
and petrochemicals.

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


REPSOL YPF: Threatens to Halt Argentine Investments
----------------------------------------------------
Alfonso Cortina, president of Repsol YPF said that the company
will cut off its investments in Argentina if the country stops
them from booking 70 percent of their revenue from crude exports
outside the country. Earlier, Bloomberg reported that Argentina
may require Repsol and its rival companies to deposit as much as
50 percent of their oil export revenues in the country's central
bank.

AFX News quoted Cortina saying that Repsol hopes that the
legislation remains unchanged so that it can continue to invest
in Argentina. Repsol YPF shares were down by 6.78 percent Tuesday
to 11.00. Analysts say that concern on Argentina's requirement to
deposit export revenues has caused the slump.

CONTACT: Repsol YPF SA
         Head Office
         Paseo de la Castellana 278
         28046 Madrid
         Spain
         Tel  +34 91 348 81 00
         Fax  +34 91 348 28 21
         Telex  48162 RESOLE
         Web  http://www.repsol.com/
         Contacts:
         Alfonso Cortina de Alcocer, Chairman
         Jose Vilarasu Salat, Vice Chairman
         Antonio Hernandez, Vice Chairman


ARGENTINE BONDS: Citibank Notifies Holders of Missed Payment
------------------------------------------------------------
NOTICE TO HOLDERS OF THE REPUBLIC OF ARGENTINA
FLOATING RATE BONDS DUE 2005
October 1, 2002

Notice is given pursuant to Section 6(e) of the Floating Rate
Bond Fiscal Agency Agreement dated April 7, 1993, among the
Republic of Argentina, Citibank, N.A. and Citibank (Luxembourg)
S.A.

Citibank, N.A., as Fiscal Agency, hereby notifies the holders of
the Bonds that Argentina has failed to deposit with the Fiscal
Agent sufficient funds to pay the interest and principal
amortization due on the Bonds on September 30, 2002.

Inquiries from holders may be sent via facsimile to the Fiscal
Agent at (212) 657-4009. All inquiries must be accompanied by
proof of status as a holder.


* IMF Insists on Argentine Tax and Tariff Hikes
-----------------------------------------------
The International Monetary Fund is adamant that Argentina impose
a 20-30 percent increase on public service tariffs. IMF managing
director Horst Koehler had phoned Argentine Economy Ministry
Roberto Lavagna telling him of the IMF's demands, including a
demand on the government to raise tax rates. Both measures must
be implemented in order to obtain a new aid package from the
multilateral lender, reports AFX News.

However, Lavagna has expressed his opposition to the proposed
tariff and taxation hikes earlier. Argentine president Eduardo
Duhalde supports Lavagna's oppostion. A source close to Lavagna
revealed their belief that support from the U.S. government may
force to IMF to lend to Argentina without the country's
compliance of the IMF's demands, according to local daily Pagina
12.

An aide to Lavagna said that the government will continue working
to normalize the country's economy. He said that it would be
better if they received aid from the IMF, but if the IMF will
turn its back on the country, then Argentina will have to suspend
payments to lending institutions.



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


TYCO INTERNATIONAL: Ex-CEO's Investment Raises More Questions
-------------------------------------------------------------
A report from Wednesday's Wall Street Journal revealed that
former chief executive Dennis Kozlowski had invested US$5 million
in private stock fund managed by a Tyco outside director.
The fund in question, managed by Richard Bodman, a Tyco director
since 1992, is worth US$43 million.

Bodman, a member of two committees in Tyco: the audit committee
and the corporate governance and audit committee, denied that the
investment was involved in Tyco, saying that he and Kozlowski
never asked favors from one another.

According to the report, a source close Kozlowki said that Tyco's
former CEO was asked by Bodman to invest in the fund while they
were aboard a Tyco jet.

The source added that Kozlowski had disclosed the investment to
Tyco officials. A spokesman from Tyco said that the disclosure
was unnecessary, as the investment has nothing to do with the
company.

However, news of this investment has raised more doubts on the
independence of the embattled company's board. Tyco's board has
been under fire since disclosure of the alleged corporate
malfeasance committed by the company's former executives.

The company has filed charges against Kozlowki, and the company's
former finance chief Mark Belnick for allegedly stealing millions
of dollars from the company. Both have entered a plea of not
guilty.

In the course of investigation, the company's books are being
reviewed, and individual auditors from Tyco's auditor
PricewaterhouseCoopers, had been interrogated.



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

ALCOA ALUMINIO: Fitch Lowers Ratings, Outlook
---------------------------------------------
Fitch Ratings downgraded Alcoa Aluminio S.A.'s foreign currency
rating from `B+' to `B' and changed the outlook to negative.
Fitch also placed on Ratings Watch Negative Alcoa's `BBB-` local
currency rating. Moreover, the ratings agency placed on Watch
Negative Alcoa's `BBB-` Secured Export Notes. (See notes below
for explanations.)


ARACRUZ CELULOSE: Fitch Downgrades Foreign Currency Rating
----------------------------------------------------------
Fitch Ratings downgraded Aracruz Celulose S.A.'s foreign currency
rating from `B+' to `B' and changed the outlook to negative. The
ratings agency also placed Aracruz's `BBB' Senior Secured Local
Currency Rating and `BBB-' Senior Unsecured Local Currency Rating
to Ratings Watch Negative. (See notes below for explanations.)


AMBEV: Fitch Cuts Local Currency Rating; Outlook Negative
---------------------------------------------------------
Fitch Ratings cut the foreign currency rating of Companhia de
Bebidas das Americas S.A. (Ambev) from `B+' to `B' and changed
the outlook to negative. The ratings agency also placed Ambev's
`BBB-' local currency rating on Ratings Watch Negative. Ambev's
`BBB-' PRI Notes Rating was also placed on Watch Negative. (See
notes below for explanations.)


BRASIL TELECOM: Fitch Places Ratings On Rating Watch Negative
-------------------------------------------------------------
Fitch placed the local currency rating of south-central Brazilian
fixed line operator Brasil Telecom and its holding company Brasil
Telecom Participacoes, both rated Local Currency BBB-, on Rating
Watch Negative. (See notes below for explanations.)


COMPANHIA PETROLIFERA: Fitch Lowers Local Currency Rating To `B'
----------------------------------------------------------------
Fitch Ratings downgraded the foreign currency rating of Companhia
Petrolifera Marlim from `B+' to `B' and changed the outlook to
negative. (See notes below for explanations.)


CSN: Fitch Places Foreign Currency Rating On Watch Evolving
-----------------------------------------------------------
Fitch Ratings downgrades Companhia Siderurgica Nacional S.A.'s
(CSN) foreign currency rating from 'B+' to 'B' with a Rating
Watch Evolving. (See notes below for explanations.)


CST: Foreign Currency Rating Lowered To `B'
-------------------------------------------
Fitch Ratings lowered Companhia Siderurgica de Turbarao S.A.'s
(CST) foreign currency rating from 'B+' to 'B' and changed the
outlook to negative. (See notes below for explanations.)


MRS LOGISTICA: Fitch Changes Rating Outlook To Negative
-------------------------------------------------------
Credit rating agency Fitch downgraded the foreign currency rating
of Brazilian railroad concessionaire MRS Logistica to B from B+,
and placed the company on rating watch negative. (See notes below
for explanations.)

MRS operates the 1,700km southeast rail network (Malha Sudeste)
that spans the states of Minas Gerais, Rio de Janeiro and Sao
Paulo. MRS moved 68.8Mt of cargo last year.


OPP QUIMICA: Foreign Currency Rating Downgraded To `B'
------------------------------------------------------
Fitch Ratings downgraded OPP Quimica S.A.'s foreign currency
rating from 'B+' to 'B' and changed the outlook to negative. (See
notes below for explanations.)


PETROBRAS: Fitch Cuts Foreign Currency Rating
---------------------------------------------
Credit rating agency Fitch lowered the foreign currency rating of
Petroleo Brasileiro S.A. (Petrobras) to `B' from `B+' and changed
the outlook of Brazil's federal energy company to negative. (See
notes below for explanations.)


RIPASA CELULOSE: Fitch Changes Rating Outlook To Negative
---------------------------------------------------------
Credit rating agency Fitch downgraded the foreign currency rating
of Ripasa Celulose e Papel S.A. to `B' from `B+' and changed the
outlook of the company to negative. (See notes below for
explanations.)


SADIA S.A.: Fitch Takes Various Rating Actions
----------------------------------------------
Fitch downgraded the foreign currency rating of Brazilian food
company Sadia S.A. to `B' from `B+' and changed the outlook on
the rating to negative. At the same time, the agency also placed
Sadia's `BB+' local currency rating on Watch Negative. Moreover,
Fitch placed on Watch Negative Sadia's `BB+' IFC B Notes. (See
notes below for explanations.)


SAMARCO: Fitch Downgrades Ratings
---------------------------------
Credit rating agency Fitch cut the foreign currency rating of
Samarch Mineracao S.A. (Samarco) to `B' from `B+' and changed the
outlook on the rating to negative. Fitch also placed on Ratings
Watch Negative Samarco's `BBB-' local currency rating. (See notes
below for explanations.)


TELEMAR: Fitch Downgrades Ratings
---------------------------------
International rating agency Fitch Ratings downgraded the foreign
currency rating of north Brazilian fixed line operator Telemar
and its holding company Tele Norte Leste to `B' Outlook Negative
from B+ Rating Watch Negative. (See notes below for
explanations.)


FITCH NOTES:  The downgrades of the foreign currency ratings of
these Brazilian corporates to 'B' Outlook Negative from 'B+'
Rating Watch Negative mirror the recent downgrade of Brazil's
foreign and local currency ratings by Fitch. These rating actions
reflect the direct link between the ability of Brazilian
companies to pay their international creditors and the credit
quality of the Brazilian government, due to the sovereign's
ability to restrict foreign exchange during a financial crisis.

The change in the Rating Watch status of several local currency
ratings and structured transactions reflects an expectation that
operating and financial conditions will deteriorate within Brazil
due to a weaker outlook for domestic growth and a contraction in
external credit lines. The increased potential for sovereign
interference in structured transactions has also been noted by
the Rating Watch Negative designation.

Fitch will be reviewing all of its corporate local currency and
structured finance ratings in the near future and will continue
to closely monitor the events in Brazil as well as other factors
that may affect credit risks.

CONTACT:        Fitch Ratings
                Daniel R. Kastholm CFA, 312/368-2070, Chicago
                Joe Bormann, CFA, 312/368-3349, Chicago
                Greg Kabance, 312/368-2052, Chicago
                Rafael Guedes, +55-11-287-3177, Sao Paulo
                Media Relations: James Jockle, 212/908-0547,
                                 New York


BANCO ALFA: Fitch Takes Rating Actions on Numerous Issues
---------------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Alfa de Investimento with the following rating
actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--Long-term local currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating affirmed at 'B'

--National long-term rating downgraded to 'A-(bra)' from
'A+(bra)', and the Rating Outlook is now Negative

--National short-term rating downgraded to 'F2(bra)' from
'F1(bra)'

--Individual rating downgraded to 'C/D' from 'C'; and --Support
rating: affirmed at '4T'


BANCO BRADESCO: Fitch Downgrades, Affirms Ratings
-------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Bradesco with the following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--Long-term local currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating affirmed at 'B'

--National long-term rating downgraded to 'AA-(bra)' from
'AA+(bra)', and the Rating Outlook is now Negative

--National short-term rating affirmed at 'F1+(bra)'

--Individual rating downgraded to 'C' from 'B/C'

--Support rating affirmed at '4T'


BANCO BRASCAN: Fitch Makes Multiple Rating Announcments
-------------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Brascan with the following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--Long-term local currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating affirmed at 'B'

--National long-term rating downgraded to 'BBB(bra)' from 'A-
(bra)', and the Rating Outlook is now Negative

--National short-term rating downgraded to 'F3(bra)' from
'F2(bra)'

--Support rating affirmed at '4T'


BANCO DO BRASIL: Fitch Adjusts, Affirms, Drops Various Ratings
--------------------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco do Brasil with the following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--Long-term local currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating affirmed at 'B'

--National long-term rating downgraded to 'AA-(bra)' from
'AA+(bra)', and the Rating Outlook is now Negative

--National short-term rating affirmed at 'F1+(bra)'

--Individual rating affirmed at 'D/E'

--Support rating affirmed at '4T'


BANCO FIBRA: Fitch Downgrades Currency Ratings
----------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Fibra with the following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--Long-term local currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating affirmed at 'B'

--National long-term rating: downgraded to 'BBB-(bra)' from
'BBB+(bra)', and the Rating Outlook is now Negative

--National short-term rating downgraded to 'F3(bra)' from
'F2(bra)'

--Support rating affirmed at '4T'


BANCO ITAU: Ratings Downgraded Following Sovereign Rating Cut
-------------------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Itau with the following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--Long-term local currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating affirmed at 'B'

--National long-term rating downgraded to 'AA-(bra)' from
'AA+(bra)', and the Rating Outlook is now Negative

--National short-term rating affirmed at 'F1+(bra)'

--Individual rating downgraded to 'C' from 'B/C'

--Support rating affirmed at '4T'


BANCO SAFRA: Fitch Lowers Reflects Sovereign Cut
------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Safra with the following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--Long-term local currency rating: downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating affirmed at 'B'

--National long-term rating downgraded to 'A(bra)' from 'AA-
(bra)', and the Rating Outlook is now Negative

--National short-term rating downgraded to 'F1(bra)' from
'F1+(bra)'

--Individual rating downgraded to 'C' from 'B/C'

--Support rating affirmed at '4T'


BANCO SANTOS: Fitch Cuts Ratings On Heightened Risk
---------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Santos with the following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating: affirmed at 'B'

--Long-term local currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating affirmed at 'B'

--National long-term rating downgraded to 'BB+(bra)' from
'BBB(bra)', and the Rating Outlook is now Negative

--National short-term rating downgraded to 'B(bra)' from
'F3(bra)'

--Individual rating affirmed at 'D'

--Support rating affirmed at '5T'


BANCO SUL AMERICA: Tightening Financial Environment Prompts Cut
---------------------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Sul America with the following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--National long-term rating downgraded to 'BBB+(bra)' from
'A(bra)', and the Rating Outlook is now Negative

--National short-term rating downgraded to 'F2(bra)' from
'F1(bra)'

--Individual rating affirmed at 'D'

--Support rating affirmed at '3T'


BANCO VOTORANTIM: Fitch Cuts Foreign Currency Rating
----------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Votorantim with the following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Support rating affirmed at '3T'.


BRADESCO SEGUROS: Fitch Lowers Financial Strength Rating
--------------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Bradesco Seguros with the following rating actions:

--Financial Strength rating downgraded to 'B' from 'B+', removed
from Rating Watch Negative, and the Rating Outlook is now
Negative

--National Financial Strength rating downgraded to 'A+(bra)' from
'AA(bra)', and the Rating Outlook is Negative.


BBV ARGENTARIA BRASIL: Fitch Cuts, Affirms Currency Ratings
-----------------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco Bilbao Vizcaya Argentaria Brasil with the
following rating actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--National long-term rating downgraded to 'A(bra)' from 'AA-
(bra)', and the Rating Outlook is now Negative

--National short-term rating downgraded to 'F1(bra)' from
'F1+(bra)'

--Individual rating affirmed at 'C/D'

--Support rating affirmed at '3T'


BCN: Mounting Risk In Operating Environment Pulls Down Ratings
--------------------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Banco de Credit Nacional (BCN) with the following rating
actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--Long-term local currency rating: downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating affirmed at 'B'

--National long-term rating: downgraded to 'A+(bra)' from
'AA(bra)', and the Rating Outlook is now Negative

--National short-term rating downgraded to 'F1(bra)' from
'F1+(bra)'

--Individual rating downgraded to 'C' from 'B/C'

--Support rating affirmed at '4T'


UNIBANCO: Fitch Reduces Foreign Currency Ratings
------------------------------------------------
In a series of related announcements, Fitch Ratings agency
included Uniao de Bancos Brasileiros with the following rating
actions:

--Long-term foreign currency rating downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term foreign currency rating affirmed at 'B'

--Long-term local currency rating: downgraded to 'B' from 'B+',
removed from Rating Watch Negative, and the Rating Outlook is now
Negative

--Short-term local currency rating: affirmed at 'B'; --National
long-term rating downgraded to 'A+(bra)' from 'AA(bra)', and the
Rating Outlook is now Negative

--National short-term rating: downgraded to 'F1(bra)' from
'F1+(bra)'

--Individual rating affirmed at 'C'

--Support rating: affirmed at '4T'


FITCH NOTES: Fitch Ratings downgraded the long term foreign and
local currency debt ratings, individual ratings, and national
scale ratings of the banks listed above. This action follows the
downgrade of Brazil's sovereign ratings implemented Monday,
October 21, 2002.

The rating actions, and the Negative Outlook on the foreign and
local currency debt ratings, reflect the downgrade of the
sovereign ratings, with the actions taken on the national scale
rating driven by the downgrade of the local currency sovereign
rating. The downgrades of the banks' individual ratings reflect
the heightened risk in the operating environment as Brazil
addresses a crisis of confidence in financial markets at home and
abroad that has led to sharp devaluation of its currency and a
hike in already high local interest rates. Actions taken by the
Central Bank to stem the slide of the currency have also placed
an additional burden on the financial system, which has seen
reserve requirements on deposits and capital requirements on net
foreign exchange positions raised substantially, limiting the
options for the banks to diversify their assets and/or protect
their capital from the devaluation of the Real. While individual
banks' exposures vary, Fitch rated banks carry significant
exposure to the Brazilian government in the form of holdings of
securities issued by the government. These holdings are generally
the banks' single largest asset class and in excess, often
substantially so, of the banks' equity. This exposure is now (as
of June 30 2002) required to be classified by intention to hold
or to trade, and marked to market if not intended to be held to
maturity; the treatment of this classification varied widely
among the banks, but saw the more highly rated banks classify the
great majority of their portfolios in categories that required,
and should continue to require, that these holdings be marked to
market. In contrast, the generally smaller, lower rated banks
sheltered greater portions of securities portfolios from what
would have been substantial mark to market requirements; with
more concentrated, and therefore potentially more vulnerable,
funding bases.

As is implicit in Fitch's sovereign rating action, the
devaluation of the Real has put added pressure on the Brazilian
government's capacity to service a debt burden that has been
substantially affected by the devaluation and by the subsequent
increase in local interest rates. This deterioration of the
credit quality of banks' single largest borrower is exacerbated
by the fact that government debt forms much of the instruments
used by the banks to hedge their borrowings in foreign currency,
in the case where these funds have not been fully on-lent to
corporate borrowers. While most banks are, on the surface matched
or long in dollars, this position could come under pressure if
the terms of the dollar denominated or dollar linked government
debt were to be restructured. In addition, the devaluation and
the hike in interest rates will add to the pressures on the
banks' private sector borrowers. Private sector corporate
borrowers, shut out from the international markets that had
funded them in recent years, will look to the local banks to
replace at least some of the debt previously funded
internationally even as the banks' capacity to lend will be
squeezed by the higher reserve requirements, continued borrowing
needs of the government, and by restrictions on their own access
to foreign funding. In addition, these pressures come at a time
when capital ratios have been eroded by loan growth and
acquisition activities. In addition volatility in the capital
markets and the aforementioned higher capital requirements for
open foreign exchange (f/x) positions have also demanded greater
capital allocations for treasury activities.

As Fitch has stated in the past, robust individual ratings for
the leading Brazilian banks are supported by the experience the
banks have garnered from managing through previous crises and by
the proven capacity of the banks to adapt to the volatility of
the local economy. Fitch also highlights once again the history
of deposit stability in the banking system, which effectively
protects the banks from the need to forcibly liquidate their
assets to satisfy pressure on deposits; any reversal of this
historic stability would have a strong negative effect on the
banks' ratings. In spite of this, the current crisis has seen
volatility in excess of what Fitch had expected, and the
pressures on the operating environment outlined above, likely to
continue for some time, justify the downgrade of the individual
ratings outline below.

CONTACT: Peter Shaw 1-212-908-0553, New York, and Rafael Guedes
5511-287-3177, Sao Paulo.

Media Relations: James Jockle 1-212-908-0547, New York.


ELETROPAULO METROPOLITANA: Ernst & Young Hired To Analyze Assets
----------------------------------------------------------------
Eletropaulo Metropolitana SA, the Brazilian unit of U.S.-based
energy group AES Corp., contracted independent Ernst & Young to
assess the value of its assets in the state of Sao Paulo. Citing
a statement issued by the Company late Tuesday, Dow Jones reports
that the analysis aims at finding "strategic alternatives for the
divestment of its non-operational assets" in the said state.
Ernst & Young's retention came in the wake of Eletropaulo's
announcement that it is not negotiating to sell its assets.

CONTACT:  ELETROPAULO METROPOLITANA
          Avenida Alfredo Egidio de Souza Aranha 100-B,
          13 andar 04726-270 San Paulo
          Brazil
          Phone: +55-11-548-9461, +55 11 5696 3595
          Fax: +55-11-546-1933
          URL: http://www.eletropaulo.com.br
          Contacts:
          Luiz D. Travesso, Chairman and President
          Orestes Gonzalves Jr., VP Finance/Investor Relations



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

ENERSIS: Declining Currencies Lead To Weaker 3Q02 Earnings
----------------------------------------------------------
Enersis expects to report a US$120-million reduction in its
earnings before interest expenses, taxes, depreciation and
amortization in the first nine months of this year when it
releases its third-quarter financial results next week.

According to Bloomberg, the company, a unit of Endesa SA of
Spain, attributed the reduction to lower energy demand and
declining currencies. Enersis told Chile's securities regulators
most of the reduction was due to weaker currencies in Argentina,
Brazil and Colombia.

The value decrease makes it harder for Santiago-based Enersis to
make payments on US$9.3 billion of debt. The Company said earlier
this month that it will sell assets, including Chilean utility
companies, to help reduce its debt by as much as US$2.2 billion.

Meanwhile, Enersis' generating arm, Endesa Chile (Empresa
Nacional de Electricidad SA), told regulators in a separate
statement that lower energy prices in Argentina cost the company
US$25 million in the first nine months of the year.

CONTACT:  ENERSIS
          Investor Relations:
          Ricardo Alvial
          Chief Investments & Risks Officer of Enersis
          Email: ram@e.enersis.cl
          Phone: (562) 353-4682
          Contacts:
          Susana Rey, srm@e.enersis.cl
          Ximena Rivas, mxra@e.enersis.cl
          Pablo Lanyi-Grunfeldt, pll@e.enersis.cl



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

ALFA: Releases 3Q02 Financial Results
-------------------------------------
In an official company statement for 3Q02, Alfa announced it
continued to take advantage of the strong competitive position it
has built at its core companies to reach the highest EBITDA level
for a single quarter in company history and to improve its
financial condition. Despite market uncertainty about the near-
term performance of the Mexican and U.S. economies, Alfa remains
focused on improving operations at all business units to maintain
the positive trend in results.

3Q02 sales volume was 2% higher than 2Q02 and 18% above the
comparable figure in 3Q01. Higher sales of steel, raw materials
for polyester and food products contributed to the quarter's
growth in volumes. Average prices were 1% higher in dollars
during 3Q02 than in 2Q02, reflecting better industry conditions
in the steel business, mainly.

3Q02 revenues amounted to Ps. 13,867 million (US$ 1,394 million),
7% higher (3% higher, in dollars) than the Ps. 12,988 million
(US$ 1,348 million) reported in 2Q02.

Relative to 3Q01, ALFA reported a 17% increase in revenues in
pesos and a 15% revenue improvement in dollars. During the first
nine months of 2002, ALFA achieved revenues that were
cumulatively 7% and 10% higher in pesos and dollars respectively,
than in the same period of 2001.

3Q02 EBITDA amounted to US$ 233 million, the highest ever for a
single quarter plus 5% and 27% higher than the US$ 222 million
and the US$ 184 million reported in 2Q02 and 3Q01, respectively.
All business groups reported EBITDA increases relative to the
prior year due to higher sales volumes, better average prices and
savings in costs and expenses, in some cases. For the year so
far, ALFA has generated EBITDA of US$ 615 million, 24% higher
than the US$ 496 million generated in the first nine months of
2001.

Consolidated net debt decreased by US$ 71 million during 3Q02,
for a balance of US$ 2,365 million as of September 30, 2002. The
decrease was mainly the result of the restructuring agreement on
Hylsa's debt, which was reported in the 2Q02 release and
undertaken at the beginning of 3Q02. As of the end of 3Q02, ALFA
has reduced its net debt US$ 535 million, an 18% decrease from
its peak of US$ 2,900 million at the end of 1Q00. This reduction
was achieved through the combination of noncore business
divestitures and a reduction in both capital expenditures and net
working capital needs. Efforts to further reduce debt will
continue, particularly at the steel and petrochemicals
subsidiaries.

The reduction in net debt, coupled with the higher EBITDA
generation has resulted in an important improvement in ALFA's
financial ratios in recent quarters.

Majority net income of Ps. 1,275 or Ps. 2.17 per share was
reported during 3Q02. This is the result of the operating income
obtained in the quarter plus non-recurring gains produced by the
restructuring of Hylsa's debt and cancellation of reserves, which
more than offset a negative integral cost of financing plus
losses in non-consolidated companies.

Note: Non-Audited financial information. Figures in this release
are stated either in September 30, 2002 pesos (Ps.) or in US
dollars, as indicated. Where applicable, peso amounts were
translated into dollars using the average exchange rate of the
months during which operations were transacted. Comparisons in
pesos are in real terms, that is, adjusted for inflation.
Financial ratios are calculated in dollars.

To see financial statements: http://bankrupt.com/misc/Alfa.pdf

CONTACT:  ALFA, S.A. de C.V.
          Ave. Gomez Morin 1111 Sur, Col. Carrizalejo
          Garza Garcia, N. L. Mexico C.P. 66254
          Tel: 52 8748-1111
          Fax: 52 8748-2552


ASARCO: Seeks to Move Tainted Smelter Soil to Ruston
----------------------------------------------------
Asarco, a subsidiary of diversified mining company Grupo M‚xico,
seeks to save US$3 million by burying about 20,000-25,000 cubic
yards of arsenic-laden soil in Ruston reports Knight Ridder
Business News. Regulators had discovered dangerously high
concentrations of arsenic in the site of Asarco's Everett smelter
in northeast Everett.

A clean up order from the U.S. Ecology department requires Asarco
to start cleaning in April this year, and to finish by October
2004. U.S. Environmental Protection Agency (EPA) site manager
Kevin Rochlin said that a containment facility has already been
built in Ruston.

Rochlin added that EPA will not give the move its approval unless
Asarco puts up enough money to ensure the proper disposal of the
contaminated materials.

EPA is asking for a guarantee of between US$5 million to US$10
million, but has not received ay guarantee offers from Asarco
yet.

Ruston's mayor Kim Wheeler said he will support Asarco proposal
if it saves the company a substantial amount of money. However,
Mayor Bill Baarsma of Tacoma, where part of the site lies, does
not share Wheeler's willingness to support the move.

Baarsma said that they can negotiate if the move is required for
the company to complete its project in time, but he will never
allow the city to be selected as a regional dumpsite.

Ray Corpuz, city manager for Tacoma suggested that Asarco share
its savings from the move in cleaning up its Ruston site.

However, Asarco spokesman Clay Allen would not confirm if the
company actually would move the soil from Everett to Ruston,
saying that the company is considering other solutions.

Asarco has been trying to get EPA approval for a revised clean up
schedule of contaminated Asarco sites. According to the company,
a revision of clean up schedule is imperative as the company is
having trouble coping up with the clean up expenses while facing
record low copper prices, which has driven the company to the
verge of bankruptcy.

Over US$180 million has been spent on the Ruston smelter clean
up, which is just halfway through, and Asarco has broken its
promise to spend US$30 million on the clean up this year.
According to Rochlin, Asarco had spent only US$3 million for the
Ruston clean up this year.

Asarco faced more trouble as its most valuable asset, a copper
mine in Peru came under attack when the U.S. Justice Department
sued the company to prevent its parent, Grupo Mexico from
transferring ownership of the said mine.

CONTACT:  Asarco
          2575 E. Camelback Rd., Ste. 500
          Phoenix, AZ 85016
          Phoenix City
          Phone: 602-977-6500
          Fax: 602-977-6701
          Home Page: http://www.asarco.com
          Contacts:
          Germ n Larea Mota-Velasco, Chairman and CEO
          Genaro Larrea Mota-Velasco, President
          Daniel Tellechea Salido, VP and CFO
                     OR
          Grupo Mexico SA de CV
          Avenida Baja California 200,
          Colonia Roma Sur
          06760 M‚xico, D.F., Mexico
          Phone: +52-55-5264-7775
          Fax: +52-55-5264-7769
          Home Page: http://www.gmexico.com
          Contacts:
          Germ n Larrea Mota-Velasco, Chairman and CEO
          Xavier Garcˇa de Quevedo Topete, President and COO
          Alfredo Casar P‚rez, COO, Ferrocarril Mexicano
          Daniel Ch vez Carre˘n, COO, Industrial Minera M‚xico
          Daniel Tellechea Salido, VP Administration and Finance
                                   President


DESC: Preliminary 3Q02 Numbers Show Decline
-------------------------------------------
DESC, S.A. de C.V. announced its preliminary figures for the
third quarter of 2002. During this quarter, Desc's figures show
less favorable results compared to the same quarter of the
previous year, reflecting a series of events which are expected
to temporarily affect the operations of the Company.

The variables that affected the operations include:

a) Lower sales in the Autoparts Sector due to the closing of
Daimler Chrysler's Lago Alberto Plant in Mexico City, which was
announced in the Company's second quarter 2002 earnings release.

b) The economic volatility in Mexico and the U.S., which affected
the petrochemical sector due to the increase in raw material
prices and the continued weakness in the final product markets.

c) Low productivity of the pork business in the Bajio Region and
the drop in pork prices in the North American market.

AUTOPARTS SECTOR (UNIK)
During the third quarter of 2002, the expected sales from the
Autoparts Sector will be mainly affected by the closing of
Daimler Chrysler's Mexico City plant, as previously mentioned,
combined with the technical strikes undertaken by some assembly
plants in order to reduce inventories in certain platforms.

CHEMICAL SECTOR
During this quarter sales will remain stable when compared to
those reported during 3Q01. The Company continued implementing
its cost restriction policy and operating improvements. However,
the operating margin will decline due to the increase in certain
raw material prices that are not reflected in the final product
prices.

FOOD SECTOR
During the third quarter of 2002, the Food Sector will register
sales in-line with those achieved during the same quarter of
2001. This result is due to the revenues from the branded
products business, which continues to increase its market share
in its main products, and a significant improvement in costs.

However, the pork business continued showing poor results in its
Bajio operations while pork prices declined over 18% during 3Q02
compared to 3Q01. To lower the negative impact of this business,
Desc's management will propose a significant cutback in its Bajio
operations to the Board of Directors next week.

REAL ESTATE SECTOR
The expected revenues for the quarter will be slightly above
those reported during 3Q01, mainly due to the higher sales from
the Bosques de Santa Fe project as well as the Santa Fe Shopping
Center Land Reserves. This revenue mix will be composed of sales
with lower margins when compared to the same quarter of 2001.

Desc's financial structure continued to be healthy, presenting an
interest coverage ratio of close to 3.7x and a leverage level of
around 3.4x. At the close of 3Q02, the debt level will remain
similar to the levels at the close of 2Q02 due to the
optimization of working capital, which significantly decreased
yearover-year.

During the third quarter of 2002, Desc began to implement an
administrative restructure through which a significant SG&A will
take place.

On October 25, 2002, Desc will release its final Third Quarter
2002 Figures. On Monday, October 28, 2002 the Company will hold
its quarterly Conference Call.

CONTACTS:  Arturo D'Acosta
           Alejandro de la Barreda
           Tel: 5255-5261-8037
           abarredag@mail.desc.com.mx

           Blanca Hirani
           Melanie Carpenter
           Tel: 212-406-3693
           bhirani@i-advize.com


GRUPO COVARRA: Bankruptcy Imminent
----------------------------------
Mexican textile company Grupo Covarra, which has been in the
first stage of legal insolvency since March, is likely to declare
bankruptcy as early as November, El Financiero suggests. With
debts of US$200 million, the Company has been under pressure from
its creditor banks de Bancomext, Citibank, Inverlat, Dresdner
Bank, Quadrum y Gmac Comercial Credit to pay debts owed to them.

Even after embarking on a legal insolvency, Grupo Covarra has
continued to suffer from losses. The downturn in the textile
market, both domestically and internationally, and the increase
in the costs of raw materials have complicated its financial
condition.

CONTACT:  GRUPO COVARRA-RIVITEX, S.A. DE C.V.
          Carr. Federal Cuernavaca - Cuautlan Km 0.5
          Col. Flores Magon
          62370 Cuernavaca, MOR
          Phone: (73) 22 29 00 Fax: (73) 22 29 00
          http://www.adnet.com.mx/covarra


GRUPO TMM: Shares Suspended On Failure To Divulge Information
-------------------------------------------------------------
Grupo Transportacion Maritima Mexicana, a land and sea
transportation company, had its shares suspended on Mexico's
stock market, relates Reuters. Shares will remain suspended until
such time that the Company submits enough information regarding a
tax refund from the government.

On October 11, TMM announced that a Mexican tribunal ruled in
favor of its subsidiary Grupo Transportacion Ferroviaria Mexicana
(TFM) in a 1997 claim over value-added taxes (VAT) and
accumulated interest. TFM's original complaint was for US$260
million, but after charges and inflation, the refund has
increased to US$950 million.

However, according to the Mexican bourse, in a statement citing
reports by local media Tuesday, the government would not give
back the VAT refund in the short term and the resolution could be
appealed.

"This institution required TMM to give more information on
relevant events like whether it will ratify or deny the
information revealed by third parties yesterday [Tuesday]," the
stock exchange said in a statement on Wednesday.

"In order to avoid disorderly conditions in the market and while
we are waiting for more information, the stock exchange decided
to suspend the Series A shares of TMM," the statement continued.

TFM directors had been banking on the US$950 million to pay debt
and buy the 20% stake worth at least US$500 million that the
government holds in Ferrocarril Noreste. TFM, which as around
US$1 billion in debt, is owned by TMM and U.S. rail company
Kansas City Southern Ind. (KSU).

CONTACT:  Grupo TMM
          Jacinto Marina, 011-525-55-629-8790
          jacinto.marina@tmm.com.mx

          Investor Relations
          Brad Skinner, 011-525-55-629-8725
          brad.skinner@tmm.com.mx

          Media Relations
          Luis Calvillo, 011-525-55-629-8758
          luis.calvillo@tmm.com.mx


HYLSAMEX: 3Q02 Financial Results Show Strong Improvement
--------------------------------------------------------
HIGHLIGHTS

- Hylsamex sold a total of 745,200 tons during the third quarter
of 2002, showing increases of 6% from the previous quarter and
21% over the same quarter of last year.

- Shipments to the domestic market remained at similar levels to
the previous quarter, but increased 8% from the third quarter of
2001. Higher production versus 3Q01 in flat products explains the
positive variation.

- Export shipments amounted to 182,500 tons in 3Q02. Additional
demand for the Company's value-added products in this quarter
allowed an increase in export sales of 39%.

- Revenues in 3Q02 amounted to US$370 million, up 7% and 17% from
2Q02 and 3Q01, respectively. On a per ton basis, this figure grew
from the previous quarter, as average selling prices increased 3%
to US$456/ton. Against 3Q01, Hylsamex experienced relevant price
increases, but changes in mix and lower other steel revenue
prompted overall revenue per ton in 3Q02 to remain flat.

- Costs of goods sold continued improving, reaching 82.7% of
total revenue, compared to the 86.3% recorded last quarter. On a
per ton basis, Hylsamex posted a 3% quarter-on-quarter decrease,
reaching US$410 in 3Q02.

- Hylsamex recorded EBITDA of US$64 million, up 25% from the
US$52 million obtained during the previous quarter, and 18%
higher than in 3Q01. Improved demand for the Company's products,
complemented by an increase in selling prices, explains the
increase versus both comparable quarters.

- On July 22, 2002 Hylsa, Hylsamex's largest subsidiary,
successfully completed its restructuring process, in which the
majority of its debt was rescheduled.

- Sidor's EBITIDA for the period January to September 2002
amounted to US$99 million, increasing 37% from 9M01.

OVERVIEW

Hylsamex's financial performance continued improving during the
third quarter of 2002. Cash flow, measured as EBITDA, totaled
US$64 million, increasing 25% from the previous quarter and 18%
from the same period of last year. The increase over both
quarters was achieved through higher sales volumes, better steel
prices, and lower variable costs.

In this quarter, the increase in revenue was driven mainly by
additional shipments. Management decided to take advantage of the
higher demand for its steel products to increase the utilization
rate of Mill #1 at Hylsa's Flat Products Division. With this
additional volume, comprised of commodity-type hot rolled band,
Hylsamex has been able to increase its total sales volume to
serve both domestic and export markets, while at the same time
has redirected the output of its Continuous Casting Flat Products
Mill to focus on the production of value-added flat products. It
is worth noting that although exports increased this quarter,
Hylsamex's average export prices have also been on the rise (up
4% from 2Q02 and 9% from 1Q01). Likewise, domestic prices rose 3%
from 2Q02, especially in value-added products.

On July 19, 2002 Hylsamex announced the closing of the
refinancing agreement at its subsidiary Hylsa. After the
restructuring, Hylsamex's consolidated debt was reduced by 20%,
while Hylsa's standalone debt was reduced by 39%. In addition,
Galvak obtained new credit facilities totaling US$150 million;
which in part were used to refinance US$110 million of
preexisting debt with the remainder being used to fund a capacity
expansion program comprising all product lines that will be
carried out during the next 2 years. All-in-all, Hylsamex's
financial condition improved substantially: net debt to EBITDA -
quarterly figures, annualized- ratio improved from 6.3x in 2Q02
to 4.2x in 3Q02, and interest coverage ratio from 1.6x to 2.6x as
of September 2002. The interest coverage measured by EBITDA to
cash interest expense, net (without PIK debt) reached 3.1x. At
the same time, the weighted average life of debt improved from
2.8 years to 5.5 years.

STEEL MARKET

Hylsamex sold 745,200 tons during the third quarter of 2002, up
6% from the 702,900 tons recorded in the previous quarter and 21%
above the 615,600 tons sold in the same quarter a year ago. An 8%
increase in flat products (flat, tubular and coated), aided by a
2% rise in long products, prompted the overall 6% increase in
shipments versus 2Q02. The increase from 3Q01 was due to 19% more
sales of flat products and the sizable increase in long products
amounting to 26%.
Shipments to the domestic market continued at high levels,
totaling 562,600 tons in 3Q01 as compared to the 571,200 tons
sold in 2Q02, but 8% above 3Q01. Against the previous quarter,
the slight drop was evident in value-added products, as shipments
comprised of hot rolled band and long products increased 3% on
average. Likewise, additional demand for commodity products this
past quarter drove the increase in sales volume when compared to
the same period of 2001. The increase in the sale of commodity
flat products resulted from the higher utilization at Mill #1 of
the Flat Products Division, which ran at a rate of roughly
400,000 tons per year during 3Q02, as compared to 260,000 in the
previous quarter, and 6,000 in 3Q01.

Export shipments for the quarter amounted to 182,500 tons,
recording increases of 39% and 92% over the previous and the same
quarter of last year, respectively. The export ratio for the
quarter was 24.5%, compared to the 18.7% recorded in 2Q02 and
15.4% in 3Q01. Contrary to the trend exhibited in the domestic
market, approximately 60% of the increase in export shipments
over 2Q02 consisted of value-added products. The increase
resulted from the shift to higher commodity output from Mill#1
that allowed for a higher value product mix at its Continuous
Casting Mill (Mill #2). This permitted the company to serve the
added demand for value-added ultra-thin hot band from Hylsamex's
international customers. In the comparison to 3Q01, one half of
the variation in shipments consisted of value-added products.

Cumulatively, Hylsamex sold 2,071,400 tons in 2002, up 20% from
the 1,727,800 tons sold in the period January-September 2001.
According to preliminary data from CANACERO for the period
January-August 2002, domestic demand for finished products has
increased 10% with respect to the same period last year.
Hylsamex's shipments to the domestic market amounted to 1,668,200
tons, rising 13%, from 2001 due to increases experienced across
the board. On the other hand, additional demand for steel
products in international markets, especially for value-added
products, prompted an increase in the Company's export shipments.
Cumulatively, export sales totaled 403,200 tons in 2002,
representing an increase of 61% over the same period last year.

REVENUE

Hylsamex's revenue for the third quarter of 2002 amounted to
Ps.3,678 million (US$370 million), up 11% from the Ps.3,327
million (US$345 million) recorded in 2Q02 and 19% above the
Ps.3,079 million (US$316 million) obtained in the same quarter of
last year. The increase in revenue generation from the previous
quarter was accomplished through 6% additional shipments and a 4%
improvement in revenue per ton measured in pesos (Ps.4,733 in
2Q02 vs. 4,936 in 3Q02) due to better prices across the board.
Against the same quarter of 2001, the boost in revenues was
completely achieved through the 21% growth in sales volume, given
that revenue per ton in constant pesos was still 1% below
(Ps.5,002 in 3Q01, vs. Ps.4,936 in 3Q02) due to changes in mix
despite relevant increases in flat products.

Export revenue in 3Q02 amounted to US$89 million, up 41% from the
US$63 million obtained in the previous quarter and also 90% above
the US$47 million recorded in 3Q02. Value-added sales represented
74% of export revenues in this quarter, compared to the 75%
achieved in the previous quarter and the 87% posted in the same
period of the previous year. In dollars, revenue per ton was
constrained by the 2.1% depreciation of the peso over the
quarter. As a result, this figure increased only 1%, from
US$491/ton in 2Q02 to US$496/ton in 3Q02. In this comparison,
weighted average prices rose 3% or US$13/ton -from US$443/ton in
the previous quarter to US$456/ton in this quarter- with average
domestic and export prices increasing 3% and 4%, respectively,
while other steel-related revenue decreased 15% or US$7/ton.
Year-over-year, revenue per ton declined 8% as a result of a
US$17/ton decrease in steel-related revenue, given that average
prices remained similar although with relevant price improvements
in all flat products categories.

Cumulative sales revenue in 2002 amounted to Ps.9,728 million
(US$1,005 million), increasing 8% from the Ps.9,045 million
(US$907 million) recorded in the same period of 2001. The growth
in revenue resulting from the 20% increase in shipments was in
part offset by a 13% decrease in other-steel related revenue.
Notwithstanding, value-added products in the revenue mix improved
from 62% in the nine months ended September 2001 to 64% in the
same period of 2002. Dollar revenue per ton for the period
January-September 2002 reached US$485/ton, down 8% from the
US$525/ton recorded in 2001. Average prices receded 5%, with
decreases in domestic as well as in export prices. Part of this
decrease was due to a higher availability of commodity products
so far this year, although sold at higher prices.

Cost of goods sold in 3Q02 amounted to Ps.3,042 million (US$306
million), increasing 6% from the Ps.2,867 million (US$297
million) posted in the previous quarter and 19% above the
Ps.2,559 million (US$262 million) accounted for in the same
quarter of last year. The quarterly cost differential was mostly
attributed to the rise in sales volume. Recalling that in 3Q01
management decided to unwind a natural gas hedge generating
profit of Ps.193 million (US$20 million) and applying it as an
extraordinary cost reduction item, the year-over-year variation
in cost of goods sold amounts to 11%. On a per ton basis, cost in
dollars amounted to US$410, US$13/ton or 3% lower than the US$423
recorded in 2Q02. In this comparison, Hylsamex benefited from a
2% decrease in variable costs per ton due to higher cost
efficiency and a 6% reduction in fixed costs per ton due to a
better spread across the higher level of shipments. In same
quarter of 2001, COGS per ton amounted to US$426/ton including
the extraordinary cost reduction item equivalent to US$32/ton.
Without taking into account the latter item, COGS in 3Q01 would
have resulted in a per ton figure of US$458, implying that the
drop in costs in this quarter versus a year ago was US$48/ton,
comprised of a US$27/ton decrease in variable costs and a
US$21/ton drop in fixed costs per ton partly due to a higher
sales volume this quarter.

ENERGY

Natural gas prices in the south of Texas, used as a reference,
decreased 6% during 3Q02, and Hylsamex's average gas cost
declined 3% quarter-on-quarter. Approximately 56% of natural gas
consumption during the period was tied to the fixed contract with
Pemex (US$4.00/MMBTu, south of Texas), while the rest was bought
in the spot market. Aside from the Pemex contract, the Company
has hedged the remainder of its gas requirements for the period
September-December 2002 at US$3.06/MMBTu, Texas prices. With
respect to electricity, a 7% increase was observed during the
quarter mainly due to higher fossil fuel prices following an
increase in oil prices.

METALLIC CHARGE

The weighted average cost of the metallic charge in 3Q02
increased 2% from the previous quarter and 5% from 3Q01. The
viability of Direct Reduced Iron (DRI) relies not only on the
cost of natural gas, but also on the price of alternate metallic
inputs. As depicted in the graph above, steel scrap prices have
increased following international steel prices, and DRI has shown
a less volatile behavior, thus increasing the competitiveness of
in-house produced DRI. The metallic charge for the period
included 58% DRI and 1% of both HBI and pig iron, while the rest
consisted of steel scrap whether domestic, imported or internally
generated.

As of September 30, 2002, cost of goods sold amounted to Ps.8,390
million (US$868 million), up 5% from the Ps.7,956 million (US$797
million) obtained in the same period of last year. In dollars,
variable costs increased only 5% from 9M01 despite the 20% growth
in sales volume, mainly due to lower variable input costs on
average and to management's continuous cost-cutting strategies.
On the other hand, fixed costs increased throughout the period as
a result of the restart of Las Encinas mining complex and to the
higher activity levels at the Flat Products Division. COGS per
ton, in dollars, amounted to US$419, 9% less than the US$461
recorded in the first nine months of 2001. Out of the US$42/ton
decrease, US$39/ton was due to lower average production input
costs and to a higher cost efficiency and US$14 to a better
spreading of fixed costs. The extraordinary cost reduction item
amounted to US$11/ton.

OPERATING EXPENSES

Operating expenses for the third quarter of 2002 totaled Ps.295
million (US$30 million), 6% above the Ps.278 million (US$29
million) obtained in the previous quarter and also 3% higher than
the Ps.285 million (US$29 million) obtained in the same period of
2001. The operating expenses-to-sales ratio in 3Q02 was 8.0%,
lower than the 8.4% and the 9.3% registered in 2Q02 and in 3Q01,
respectively.

For the period ended September 30, 2002, SG&A amounted to Ps.840
million (US$87 million), up 5% from the Ps.803 million (US$81
million) recorded in the same period of 2001. As in the quarterly
comparison, the increase in SG&A was due to the 20% increase in
shipments and the associated freight and sales expenses.
Operating expenses-to-sales ratio in 9M02 was 8.6%, lower than
the 8.9% obtained last year.

OPERATING CASHFLOW

EBITDA in the quarter amounted to Ps.640 million (US$64 million),
increasing 28% from the Ps.500 million (US$52 million) accounted
for in the previous quarter, and also 20% above the Ps.533
million (US$55 million) recorded in 3Q01. The increase in volume
sold during 3Q02, complemented by lower costs per ton and higher
steel prices, led to the increase versus the previous quarter. On
the other hand, the increase versus the same quarter of last year
was due to an increase in shipments and a reduction in cost of
goods sold, as weighted average prices in 3Q02 are still below
3Q01 due to a change in mix.

EBITDA margin in 3Q02 was 17.4%, rising from the 15.0% obtained
in 2Q02, and from the 17.3% recorded in the same period of the
previous year (11.0% without the extraordinary cost reduction
item in 3Q01). It is worth noting that the EBITDA margin in this
quarter is the highest in the past eight quarters. Up to date,
operating cash flow amounts to Ps.1,419 million (US$146 million),
18% above the EBITDA of Ps.1,202 million (US$121 million, out of
which US$20 million were proceeds from the unwinding of the
natural gas hedge) recorded as of September 2001. The EBITDA
margin grew from 13.4% (11.2% without the aforementioned
extraordinary cost reduction), to 14.5% in 9M02.

COMPREHENSIVE FINANCIAL RESULT

The comprehensive financial result in the third quarter of 2002
was a net loss of Ps.272 million (US$28 million), compared to the
net loss of Ps.1,121 million (US$115 million) obtained during the
previous quarter and the loss of Ps.725 million (US$74 million)
registered in 3Q01. Financial losses in the quarter resulted from
the 2.1% depreciation of the Peso that generated foreign exchange
losses that, coupled with the financial expenses for the period,
led to a net financial cost.

In 9M02, Hylsamex registered a net financial cost of Ps.1,342
million, (US$138 million), compared to the financial cost of
Ps.650 million (US$66 million) obtained in the same period of
2001. The difference between both periods related mainly to the
peso valuation, which went from a 0.5% average appreciation in
9M01 to a depreciation of 11.2% in 9M02.

NET EARNINGS

Consolidated net results in the third quarter of 2002 amounted to
a loss of Ps.25 million (US$3 million) compared to the Ps.440
million (US$46 million) net loss recorded in the previous quarter
and the Ps.440 million (US$45 million) loss obtained in the same
quarter last year. The accumulated consolidated net result for
the nine months ended September 30, 2002 amounted to a loss of
Ps.738 million (US$78 million), compared to the net loss of
Ps.690 million (US$69 million) recorded in the comparable period
of 2001.

NET DEBT

Hylsamex recorded net debt of US$1,073 million as of September
30, 2002, US$219 million below the US$1,292 million posted as of
June 30 this year, before the completion of Hylsa and Hylsamex's
restructuring process. The table below depicts the change in
debt.

EFFECTS OF RESTRUCTURING:

The net effect on Hylsamex's balance sheet after the closing of
Hylsa's restructuring process amounted to a debt reduction
equivalent to US$279 million mainly due to:

- A US$92 million of capitalized loans with Alfa-including
interests- generated in 2001 and early 2002

- AUS$160 million of Hylsa's bank debt, purchased by Alfa at a
discount

- US$25 million liquidity facility provided by Alfa

-  Bank capitalization of US$7 million

WORKING CAPITAL

The increase in working capital this quarter was due to the
following.

- Increase in the level of inventories

Prior to the closing of the restructuring, inventories were kept
below optimal levels due to liquidity constraints. The Company
replenished its inventories through the increased production
activity. Likewise, a maintenance shutdown was scheduled at one
of the Direct Reduction Facilities in Monterrey (3M DRI plant) in
October that will last 21 days. Accordingly, the Company
increased the level of raw material inventories, particularly
scrap, in order to sustain production at its facilities.

- Effects of the restructuring agreement in NWC

According to the restructuring agreement, management fees will be
recognized as a Subordinated Debt. In quarters prior to the
restructuring, this item was recognized as an account payable;
however, during this quarter the shift from payables to
subordinated debt resulted in a net working capital requirement.
Also, minor debts were capitalized.

- Increase in accounts receivable

Higher accounts receivable balances follow the increase in volume
sales, but there was no change to DSO.

- Reduction in suppliers and accounts payable

Additional liquidity this quarter following the restructuring
agreement and the higher cash flow generation allowed the Company
to reduce this item.

INTEREST

Total interest payment this quarter of US$55 million included a
single payment of US$37 million paid by Hylsa upon closing of its
restructuring.

LIQUIDITY

Hylsamex ended the third quarter of 2002 with a cash balance of
US$73 million compared to the US$38 million recorded as of June
2002. The increase in cash on hand at Hylsamex is observed at its
subsidiary Galvak, whose cash position includes additional cash
from the US$150 million new credit facilities used to refinance
US$110 million of preexisting debt and to fund CAPEX
requirements. The US$25 million liquidity facility provided by
Alfa, as stated in Hylsa's restructuring contract, was fully
drawn as of July 26, 2002, when Hylsa paid the accrued and unpaid
interest on both bank debt and Bonds. As of September 30, 2000,
Hylsa, S.A. de C.V., Hylsamex's largest subsidiary, used US$26
million out of the US$40 million in its 30-month revolving
facility provided by the participating banks.

EQUITY INCOME FROM ASSOCIATED CO.

Information regarding Sidor or Amazonia contained in this report
is based upon preliminary figures. As detailed below, Sidor and
Amazonia's financial situation are subject to change as a result
of the ongoing restructuring process, which could result in
potentially unfavorable adjustments.

During 3Q02, Hylsamex recorded a loss of Ps.408 million (US$40
million).

The net loss for 3Q02 resulted mainly from the recognition of an
impairment allowance of US$107 million based on a study of the
fair value of its investment in Sidor on a discounted cash flow
basis. From the total amount, Hylsamex recognized US$39 million,
as per its share ownership in Amazonia.

After the allowance was made by Amazonia and recognized by
Hylsamex through the equity method, the US$43 million reserve
created by Hylsamex during 1Q02, which had the same purpose, was
no longer needed. Therefore, an extraordinary item of such amount
was credited to the income statement, reversing the charge made
during 1Q02.

Sales volume in this quarter amounted to 906,900 tons, up 7% from
the 851,500 tons sold during the previous quarter and 13% from
3Q01. Shipments to the Venezuelan market increased 13% quarter-
on-quarter, but decreased 6% when compared to a year ago. The
export ratio in this quarter was 71% as compared to the 73%
recorded in 2Q02 and the 65% obtained in 3Q01. Cumulative sales
volume totaled 2,575,700 tons, increasing 21% over the same
period of year 2001. In this comparison, shipments to the
domestic market decreased 21% while export shipments increased
53%. Export ratio in 9M02 amounted to 71% compared to the 56%
recorded in 9M01.

Sidor's revenue in the quarter amounted to US$268 million, 23%
above the US$217 million registered during the previous quarter,
and also 22% higher than the US$220 million recorded in the same
quarter of 2001. Weighted average price in 3Q02 amounted to
US$296/ton, up 15% from 2Q01, with a relevant 21% increase in
export prices. Cumulatively, Sidor's revenue increased 11%, from
US$612 million in 9M01 to US$683million in 9M02 as a result of
the increase in shipments, given that the weighted average price
decreased 8% in the period due to lower domestic prices, as
export prices rose 6%.

EBITDA for the nine months ended September 30, 2002 amounted to
US$99 million, 37% higher than the US$72 million as of September
2001.

To date, Hylsamex, S. A. de C.V. (the holding company) has
additional exposure with respect to Sidor in the amount of US$26
million in guarantees for the payment of Sidor's indebtedness to
the Fondo de Inversiones de Venezuela. In addition, it has an
additional exposure of US$26 million related to its share in a
performance bond for certain contractual obligations under the
Sidor acquisition agreement. HylsaLatin has additional exposure
for US$235 million in guarantees for the payment of Sidor's
indebtedness to Fondo de Inversiones de Venezuela. Hylsa, S.A. de
C.V., Hylsamex' steelmaking subsidiary, has no contingent
liabilities related to Sidor or Amazonia. Hylsamex's investment
in Amazonia, including convertible loans, amounts to US$51
million (Ps.517 million) at September 30, 2002

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

CONTACT:  HYLSAMEX
          Investor Relations
          Margarita Gutierrez
          E-Mail: mgutierrez@hylsamex.com.mx

          Ricardo Sada
          E-Mail: rsada@hylsamex.com.mx
          Phone: (52) 81 8865 1224
                 (52) 81 8865 1201
          Munich 101,
          San Nicolas de los Garza N.L., 66452
          Mexico


VITRO: 3Q02 Results Show Modest Improvements
--------------------------------------------
- EBITDA for the quarter increased YoY by 3.6 percent to US$105
million
- Consolidated outstanding debt declined QoQ by US$165 million to
US$1,370 million
- Net income for the quarter of US$38 million vs. a net loss of
US$59 million for the third quarter of 2001
- Glass Containers posted another solid quarter

Consolidated net sales for the quarter, decreased YoY by 1.4
percent to US$600 million. The loss of sales arising from the
divestiture of Ampolletas in April of this year accounted for
substantially all the YoY decline (89 percent). Stronger sales by
Glass Containers partially offset the declines at Flat Glass and
Glassware, which were mainly due to adverse market and economic
conditions in both Mexico and the United States.

Improved operating efficiencies, cost saving measures, better
capacity utilization and a YoY increase in sales at Glass
Containers, contributed to a 3.6 percent YoY increase in EBITDA
for the quarter. The positive performance of Glass Containers
partially offset the declines in profitability of Flat Glass and
Glassware. Flat Glass continued to be affected by a decrease in
demand from the non-residential construction and OEM auto
segment, pricing pressures and increased costs. In the case of
Glassware, profitability declined as a result of a change in the
sales mix towards exports, which is less profitable than the
retail segment.

Consolidated EBIT for the quarter improved YoY by 2.1 percent, to
US$53 million.

Consolidated net income for the quarter of US$38 million, from a
net loss of US$59 million for the third quarter of 2001.
Consolidated net incom e was benefited by a gain generated from
the positive difference in book value vs. the proceeds from the
divestiture of Vitromatic. On the other hand, it was negatively
affected by a non-cash foreign exchange loss of US$24 million,
due to the 2.74 percent depreciation of the peso against the U.S.
dollar during this quarter.

As of September 30, 2002, total outstanding debt was US$1,370
million, a reduction of US$165 million QoQ, which included net
decreases mostly arising from the proceeds of the divestiture of
Vitromatic (US$133 million) cash in hand and internally generated
funds (US$32 million). This reduction does not account for the
total debt of Vitromatic, which prior to closing the divestiture
amounted US$67.4 million of on-balance sheet debt and US$97.4 of
off-balance sheet debt.

Sales

Consolidated net sales for the third quarter of 2002 declined YoY
by 1.4 percent to US$600 million. The divestiture of Ampolletas
in April of this year accounted for 89 percent of the YoY
decrease. The Glass Containers business unit continued to show
the positive results of its strategy to enter into niche
specialty products markets within segments such as wine & liquor,
soft drinks and food. In addition, the beer segment continued to
perform better than the general economic trend. Excluding sales
at Ampolletas from the YoY comparison, Glass Containers would
have risen by 5.6 percent and consolidated sales would have
declined only by 0.3 percent. Ampolletas represented three
percent of Glass Containers' sales for last year's quarter and
one percent of sales at the consolidated level At Flat Glass,
sales were affected by the slower than expected economic recovery
in the U.S., especially in the non-residential construction
sector, and falling consumer confidence. In addition Flat Glass'
sales were affected by lower volume in the Mexican construction
and auto OEM markets. At the same time, these declines were
partially offset by the increase in the auto replacement market.
Sales for the quarter at Glassware were affected YoY by a slower
than expected recovery in the Mexican and U.S. economies and a
decline in consumer confidence.

EBIT and EBITDA

Consolidated EBIT and EBITDA for the quarter increased YoY by 2.1
percent and 3.6 percent respectively. At Glass Containers, EBIT
and EBITDA for the quarter continued their positive trend
increasing YoY by 76.3 percent and 28.6 percent respectively, as
a result of improved operating efficiencies, better capacity
utilization and an increase in sales. Flat Glass' EBIT and EBITDA
for the quarter decreased due to the continued slowdown of the
U.S. and Mexican economies, principally in the non-residential
construction sector and the auto OEM segment, pricing pressures
in the automotive and export markets and cost increases related
to some non-recurrent charges. Glassware's results for the
quarter were also affected by the slowdown of the Mexican and
U.S. economies, a less attractive sales mix, as YoY a larger
percentage of the business unit's sales came from exports, and
lower fixed cost absorption as a result of lower capacity
utilization.

Total Financing Cost

The Company's total financing cost for the quarter was reduced to
US$46 million, representing a 45.9 percent decline YoY. This was
mainly due to lower interest expense and foreign exchange losses.
Weighted average cost of debt for the quarter was 9.0 percent,
compared with 8.8 percent for the same period last year. During
the quarter currency swaps for the equivalent to US$200 million
were signed in order to better align the currencies profile in
which the Company's debt is denominated with its revenue and cost
structure. As mentioned in previous quarters, the Company has
entered into currency swap transactions that currently cover a
total of US$315 million of debt and derivative transactions that
currently cover interest rates for a total of US$711 million. For
the quarter, the Company recorded a US$24 million foreign
exchange loss in connection with the 2.74 percent depreciation of
the peso over the period. This loss had no impact on the
Company's cash position.

Taxes

Tax expenses for the quarter declined mainly due to the exchange
losses and a reduction in the deferred income tax, due to
amortizations of previous years' net operating losses, mainly in
Glass Containers.

Net Income

For the quarter, the Company posted a consolidated net income of
US$38 million compared with a loss of US$59 million for the same
period last year. Net income for the quarter reflected the YoY
decline in total financing cost and a non-recurring gain of US$39
million in connection with the divestiture of Vitromatic, which
was due to the positive difference in book value vs. the actual
proceeds received from such divestiture. The non-recurring gain
was partially offset by the write-off of US$8 million for certain
fixed assets.

Capital Expenditures

During the third quarter, the Company made capital expenditures
for a total of US$21 million. Mainly all CAPEX were used for
maintenance purposes, and the majority was allocated to Glass
Containers. The Company currently expects to invest approximately
a total of US$90 million for the full fiscal year, or US$23
million for the fourth quarter. The figure for CAPEX for the full
year is lower than what the Company originally expected to
invest.

Financial Position

Total outstanding debt on September 30, 2002, was US$1,370
million. This represented a net reduction over the previous
quarter of US$165 million, which was achieved by applying to pay
down debt most of the net proceeds from the Vitromatic's
divestiture, orUS$133 million, in addition to cash on hand and
internally generated funds for a total of US$32 million. This
reduction does not consider the total debt of Vitromatic, which
prior to the closing of the divestiture amounted to US$67.4
million of on-balance sheet debt and US$97.4 of off-balance sheet
debt. Continuing with the Company's strategy of strengthening its
financial structure, short-term debt decreased QoQ by US$120
million to US$492 million, from US$612 million, thus increasing
the average life of the Company's debt to 3.04 years, from 2.9
years for the second quarter of this year. Furthermore, in
October of this year the Company issued a medium-term note in
pesos, ("Certificados Burs tiles"), for Ps$360 million
(approximately US$35 million), which matures on October 2, 2008,
to refinance current maturities of long-term market debt. With
this operation the debt profile of the Company was further
improved, with long-term debt now representing 67 percent of
total debt, from 60 percent for the second quarter of this year.

Debt Profile as of September 30, 2002

- Average life of debt of 3.04 years.

- 62 percent of debt maturing in the period October 2002 -
September 2003, or approximately US$304 million, was related to
trade finance.

- The Company contracted a cap transaction of US$350 million,
which allows it to benefit from the current low interest rates,
to offset a potential increase in interest rates. Considering
such cap transaction the rate profile of the Company's debt is 78
percent fixed rate and 22 percent floating rate.

Cash Flow

Net free cash flow for the quarter was US$28 million,
representing a 49.7 percent YoY decline. During the quarter, an
US$18 million increase in working capital that affected free cash
flow was only partially offset by the US$5 million decline in
interest expense for the period. Working capital investments for
the quarter were mostly related to increases in inventory levels
at all businesses. These increases were due: in Glass Containers,
to the expected pick up in demand; in Glassware, to seasonality
of the business, and in Flat Glass, to the build up of
inventories because of the expected refurbishing of one of the
furnaces of the business unit to begin in early 2003. Dividends
paid for the period corresponded to minority interest from joint
venture partners in Flat glass and Glass Containers in Central
America.

Glass Containers (42 percent of Consolidated Sales)

Sales

Sales for the quarter increased YoY by 2.4 percent, to US$250
million. The increase was achieved despite the divestiture of
Ampolletas, which had net sales of US$7.3 million for the third
quarter of 2001. Excluding the effect of Ampolletas, sales would
have increased by 5.6 percent.

For the quarter, net sales of glass products accounted for
approximately 87 percent of the business unit's sales, increasing
YoY by 9 percent. Net sales of the non-glass segments (capital
goods, soda ash and aluminum cans) for the quarter were flat YoY.

Domestic sales for the quarter benefited by increased volumes in
the beer segment due to the business unit's capacity to supply
high growth demand on a short notice. For example, the business
unit is supporting a major Mexican-based beer producer in its
continuous strategy to expand into the U.S. and the Company
expects to maintain its participation in its fast growing market.
Also, the business unit continued to benefit from increased sales
in niche markets within its traditional customer base, taking
advantage of its flexibility to produce short runs and novelty
designs. A sample of such products is the 8-ounce Coca Cola
bottle, Jumex's sport -an energy drink-, Bacardˇ, A¤ejo &
Breezer, Tequila Herradura (antique design), Lala's (major dairy
Mexican producer) presentation of sour cream in glass bottles,
and the new colorful design of Florida blend by Jugos del Valle.

Given the regional market nature of glass containers and the
Company's strategic position within it, Glass Containers was able
to take advantage of this growing market, during last two
quarters. Currently, there is a 50-million bottle / month deficit
in the region that has allowed the business unit to focus on a
more attractive sales mix, and to use the excess capacity of its
Central American subsidiary.

EBIT and EBITDA

EBIT for the quarter increased YoY, by 76.3 percent to US$31
million. EBIT of glass products accounted for 86 percent of the
business unit's EBIT for the quarter, representing a YoY increase
of 71 percent. The EBIT improvement was mainly due to improved
operating efficiencies, better capacity utilization and
additional sales. For example, through the application of new
technologies, the net weight of certain bottles has been reduced
by approximately 20 percent.

EBIT at Alcali, the raw materials operations, was stable YoY
despite a slight decline in sales. Fama, the capital goods
company, returned to profitability, by targeting a more
diversified client base and closing non-profitable operations,
while Vancan, the aluminum can operations, reported lower EBIT as
a result of a decline in prices.

EBITDA for the quarter was US$55 million, reflecting a 28.6
percent YoY increase, mainly due to the factors outlined above.

Flat Glass (47.5 percent of Consolidated Sales)

Sales

During the quarter, sales declined YoY by 3.5 percent, mainly due
to a decline on non- residential construction and the OEM auto
segment in Mexico and the U.S. However, this was partially
compensated by increases in: the auto replacement market in both
Mexico and the U.S.; Vitro Cristalglass in Spain, where sales
increased YoY by 19.7 percent as the business increased its
participation in laminated and tempered glass; and, sales at the
fiberglass operations by 7.6 percent as the business was able to
meet demand through increased capacity.

Vitro America's sales in the U.S. were affected by excess
availability of office space in connection with the decline in
business activity, particularly on the West Coast. This sector
was also affected by the shortage of insurance availability for
corporate buildings due to the need to acquire coverage for
terrorist attacks. These resulted in a 17 percent YoY decline for
the year in non-residential construction permits. The Company
expects this trend to continue for at least another three
quarters.

The business unit has experienced YTD stable construction sales
in the domestic market, even though sales in that segment were
lower YoY for the quarter. This segment is recovering in line
with the 1.5 percent improvement in Mexican GDP currently
expected for 2002. It is also benefiting from low interest rates
and mortgage availability, which is reflected in the positive
outlook for both the residential and commercial sectors. In the
auto segment, the business unit was able to partially offset the
decline in auto sales to the OEMs in Mexico by focusing on the
aftermarket, and by branding products sold to OEMs.

EBIT and EBITDA

Consolidated EBIT for the quarter was US$24 million, representing
a YoY decline of 35.3 percent, due in part to lower sales, as
described above.

In addition, the cost structure was impacted by certain
extraordinary charges related to the write-off of inventories, as
well as increased costs of direct and indirect materials, natural
gas and freights, this last one due to a shift in sales to export
markets. Other factors affecting results were the non-recurrent
furnace shutdown caused by a failure in energy supply, that took
place in the second quarter, as already mentioned in that
quarter's earnings announcement, and that continued to force the
unit to buy flat glass from third parties in order to keep
serving its clients.

An additional factor contributing to the YoY decline in margins
was the change in sales mix towards the less profitable export
segment.

On the other side, in the auto segment, the business continued to
increase its presence in the more profitable auto replacement
market by enhancing the utilization on its own distribution
channels to maintain profitability even under the prevailing
pricing pressures in the OEM auto segment.

EBITDA for the quarter was US$41 million, a 21.7 percent YoY
decrease, resulting from the factors outlined above.

Glassware (10.5 percent of Consolidated Sales)

Sales

Sales for the quarter at Glassware declined YoY by 6.7 percent to
US$63 million. Domestic sales continued to be affected by
negative market conditions that have impacted the consumer's
confidence vs. last year. The wholesaler consumer segment was
down YTD by 10 percent. On the other hand, export sales have
increased YoY by 4.4 percent. To offset the decline in sales,
Glassware is working on strategies such as leveraging the on-
going service and high quality provided to the customers through
its traditional product lines for certain segments, while
focusing on product innovation and improved quality in the medium
and high end markets. YTD sales of new products represented 12
percent of the business unit's sales. Sales for the quarter at
the plastic segment decreased YoY by US$1.7 million (12.3
percent), mainly due to the slowdown of the Mexican economy,
which, as outlined above, has affected consumers' confidence, and
a decline in demand for promotional products within the
industrial segment.

EBIT and EBITDA

EBIT for the quarter decreased YoY by 52.3 percent to US$5
million. Profitability was affected by a change in the sales mix
towards the less profitable export market, where costs are higher
than the domestic market, mainly freights and packaging. Other
factors affecting margins were the YoY increases in raw materials
and maintenance costs, lower capacity utilization, as well as
pressure on prices, especially from Asian imports. EBITDA for the
quarter was US$12 million, a YoY decrease of 27.8 percent,
resulting from the factors outlined above.

RECENT DEVELOPMENTS

Debt Refinancing

The Company recently issued a medium-term note (Certificados
Burs tiles) in the Mexican market for Ps.360 million, maturing on
October 2, 2008. Proceeds were used to extend the average life of
Vitro's debt profile by replacing current maturities of long-term
market debt with long-term maturities. With this operation Vitro
continued to focus on its strategy to strengthen the Company's
financial position while maintaining a presence in the capital
markets. The program and the initial issue was granted a rating
of AA-(mex) by Fitch M‚xico, S.A. de C.V.

Cost Restructuring Efforts

Consistent with the Company's stated strategy of streamlining its
cost structure and improving efficiencies, the Company is
currently undergoing a downsizing program at the Corporate level.
Through this program the Company is reducing its headcount by
approximately 110 employees. In line with that, the Company has
implemented a new operating structure headed by Jose Domene,
Vitro's COO, from a business unit to a functional structure,
which is detailed as follows: Flat Glass Operational Vice
President, Fernando Flores; Glass Containers and Glassware
Operational Vice President, Roberto Rubio; Commercial and
Marketing Vice President, Alfonso G˘mez Palacio; and
International Vice President, Javier Bofarull. Gonzalo Escamez,
former Glassware President, decided to leave the Company.The rest
of the operational organization remains in place.

Agreement with AFG

The Mexican Competition Commission approved the 50 / 50 joint
venture for the production of float glass in Mexicali, B.C.,
Mexico between Vitro Plan, S.A. de C.V., a subsidiary of Vitro,
S.A. de C.V. and AFG Industries, Inc. a subsidiary of Asahi Glass
Co. Ltd.

Corporate Governance

The Board of Directors, pursuant to Mexican Law and the most
recent Sarbanes-Oxley Act, appointed new members, among the
Board, to its Finance, Audit, Compensation and Corporate
Governance Committees, and enhanced and increased the authority
of every such Committee, in line with the new applicable
regulations.

CONTACT:  VITRO, S.A. DE C.V.
          Investor Relations - Beatriz Martinez
          +52-81-8863-1258, bemartinez@vitro.com

          Media Relations - Albert Chico
          +52-81-8863-1335, achico@vitro.com

          Media - Eduardo Cruz
          +52-55-5089-6904, ecruz@vitro.com

          Web site:  http://www.vitro.com



               ***********


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

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

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

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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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