/raid1/www/Hosts/bankrupt/TCRLA_Public/021128.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, November 28, 2002, Vol. 3, Issue 236

                           Headlines


A R G E N T I N A

AHOLD: Corporate Strategy Questioned, Investors Demand Answers
ARGENTINE BANKS: Did Not Expect Banking Thaw
AT&T LATIN AMERICA: AlixPartners, LLC for Restructuring Input
MULTICANAL: Bear Stearns Shows 25% Subscriber Base Drop


B E R M U D A

TRENWICK GROUP: Seeks Creditors' Nod to Delay Payments


B R A Z I L

EMBRATEL: Regulatory Loopholes May Invite Takeover
USIMINAS: Sees Steel Products Shortage By Year-End
VARIG: New CEO Expected This Week
VARIG: S&P Lowers Ratings on Notes Issued by RG Receivables
VARIG: Looking To Sell 20% Stake


C H I L E

EDELNOR: Tractebel Strategy Yields Debt Reduction Benefits
TELEFONICA CTC: S&P Revises Outlook on Improved Performance


C O L O M B I A

PAZ DEL RIO: Workers To Take Over Mill In Turnaround Effort


M E X I C O

AHMSA: Creditor Banks Get New Restructuring Proposal
CFE: Bidding Rules Released For Several Power Projects
GRUPO MEXICO: Asarco Seeks Out-of-Court Settlement
SATMEX: Consent, Waiver Solicitation Yields Breathing Room


U R U G U A Y

URUGUAYAN BANKS: Government Wants To Merge Suspended Banks


     - - - - - - - - - -

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

AHOLD: Corporate Strategy Questioned, Investors Demand Answers
--------------------------------------------------------------
Investors are losing patience on Ahold's chief executive,
suggests Knight-Ridder Business News. Ceen van der Hoeven became
the Dutch-listed company's chief executive in 1993 and embarked
on an eight-year shopping spree that turned the Company into the
fifth-largest supermarket in the US. Investors supported him as
he set about a costly and high-risk expansion strategy throughout
Asia and Latin America in 1996.

But now, van der Hoeven is in danger of squandering the goodwill
he has accumulated since becoming chief executive.

In August, he promised investors that Ahold would deliver 5-8%
earnings per share growth. But subsequently, the executive
admitted it will see a 6-8% drop.

He also infuriated analysts by promising to sell off non-core
businesses and implement a new three-year strategy, while
refusing to define what "core" is. Furthermore, he explained away
the group's second profits warning of the year with an unhelpful
"when it rains, it pours".

Ahold's debts have swelled to EUR12.3 billion (7.8 billion) and
while the company loosened its control on its operations.

Sales in South America slumped by 49% mainly due to Argentina's
currency devaluation and the collapse of its former trading
partner, Velox Retail.

With regard to its Asian operations, the Company had to quit
China in 1999 after a costly joint venture with a Shanghai
partner fell through. Its 106 stores in Thailand, Malaysia and
Indonesia made an operating loss of US$16 million last year, and
contributed to just 1% of its US$60 billion revenues.

To rebuild Ahold's shattered share price, van der Hoeven must
focus its operations in Europe and in the US. Its US operations
account for two-thirds of Ahold's profits, but are under threat
from Wal-Mart and other discount stores.

However, its European operations, which make up around 33% of its
sales, are still the most efficient and well-respected.

CONTACT:  AHOLD NV
          Head Office
          3050
          Albert Heijnweg1
          1507 EH Zaandam
          Netherlands
          Tel  +31 75 6599111
          Fax  +31 75 6598350
          Telex  1 9010
          Web  http://www.ahold.com


ARGENTINE BANKS: Did Not Expect Banking Thaw
--------------------------------------------
Argentine banks were surprised when the country's economy
minister Roberto Lavagna announced the lifting of controls on all
demand deposits in the financial system. The demand deposits
would have been available starting Monday (Nov. 25), but an
article from Dow Jones Newswires said that Lavagna had postponed
the effective date to Dec. 2, giving the banks ample time to
adjust.

Analysts believe that the banks have enough liquidity to satisfy
an expected increase in the outflow of demand deposits, which
total about ARS2 billion (US$5.93 billion). The report also
indicated that analysts are confident that the public would be
returning their savings to the banks.

The latest easing of banking restrictions is part of the
government's effort to remove the unpopular bank freeze imposed
by then-president Fernando de la Rua last December.

However, Mr. Lavagna said that the freeze on time deposits
totaling some ARS9.3 billion remains.


AT&T LATIN AMERICA: AlixPartners, LLC for Restructuring Input
-------------------------------------------------------------
AT&T Latin America (Nasdaq: ATTL), a facilities-based provider of
integrated high-bandwidth business communications services in
five Latin American countries, announced Tuesday it has retained
AlixPartners, LLC as its financial advisor as it seeks to
restructure the company.

"We are delighted to bring AlixPartners on board to advise the
company as we work to address our liquidity needs and consider
alternatives for improving our capital structure," said Patricio
E. Northland, president, chairman and CEO of AT&T Latin
America.  "They have the expertise to guide us through this
difficult period."

"AlixPartners will assist the company with cash management, debt
restructuring and business planning to enhance AT&T Latin
America's ongoing efforts to improve its operating performance
and competitive position," said Jay Marshall, principal,
AlixPartners.

About AT&T Latin America

AT&T Latin America (Nasdaq: ATTL), headquartered in Washington,
D.C., is a facilities-based provider of integrated high-bandwidth
business communications services in five countries: Argentina,
Brazil, Chile, Colombia and Peru.  The company offers data,
Internet, voice, video-conferencing and e-business services.  For
more information, visit AT&T Latin America's website at
http://www.attla.com.

About AlixPartners, LLC

AlixPartners, LLC, a Delaware limited liability company, provides
a full range of results-oriented turnaround services including
performance improvement consulting, turnaround and restructuring,
financial advisory and information technology.  AlixPartners
delivers these services using small teams of experienced, senior
operating and consulting executives.  The firm has more than 180
professionals in its Detroit, New York, Chicago, Dallas and
London offices.  For more information, visit AlixPartners'
website at http://www.alixpartners.com.

CONTACT:  AT&T Latin America
          Media: Jim McGann, +1-202-689-6337
          Cell: +1-202-256-9972

          Lydia Rodriguez, +1-202-698-6323
          Cell: +1-202-549-5718

          Analysts: Catherine Castro, +1-202-689-6336
          Cell: +1-202-320-7936
          AT&T Latin America
          Web site:  http://www.attla.com


MULTICANAL: Bear Stearns Shows 25% Subscriber Base Drop
-------------------------------------------------------
Investment bank Bear Stearns disclosed in its research report
that cable TV operator Multicanal lost 25% of its customers this
year in relation to 2001. The report, according to Ambito
Financiero, also noted that the Company's tariffs increased by
49% in relation to 2001.

Multicanal, a unit of Grupo Clarin SA, closed the third quarter
of 2002 with US$26 million in cash, but it has an accumulated
unpaid debt in interests of US$62 million and a total debt of
US$586 million.

The cable group defaulted on interest payments in February and
April, garnering a "default" rating from Standard & Poor's.
Multicanal has hired J.P. Morgan Securities Inc. to draft a debt-
restructuring plan.

Argentina's four-year recession, an 18-month advertising and
corporate spending slump, including the peso devaluation in early
January, are being blamed for the company's financial
difficulties.  The peso devaluation was especially debilitating
because the company has substantial dollar-denominated debts.

CONTACT:  MULTICANAL S.A.
          Avalos 2057
          C1431DPM Buenos Aires, Argentina
          Tel: 54 11 4524-4700
          Fax: 54 11 4370-5162
          Contact: Fabian Melnitzky
          E-mail: fmelnitz@redarg.com.ar



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

TRENWICK GROUP: Seeks Creditors' Nod to Delay Payments
------------------------------------------------------
Trenwick Group, Inc. is still in talks with its creditors to
allow it to postpone payments on its US$226 million of debt by
one year, according to The Royal Gazette.

The Company and its creditors previously entered into a
forbearance agreement, which ended November 22. Trenwick tried to
have the forbearance agreement extended until December 6, but
final terms over the retention of the credit facility are yet to
be agreed upon.

News on Trenwick's negotiations with its creditors has lifted its
shares to US$1.04 as of Monday, after plunging to a 52-week low
of 43 cents last week.

However, credit ratings agency Standard & Poor's is questioning
the Company's status as a "going concern" in the event that it
fails to obtain a new agreement with its creditors next week.

According to S&P, without the letter of credit facility in place,
the Company would face "substantial doubt" as to its ability to
continue underwriting at Lloyds or to continue as an ongoing
concern.

The S&P downgraded the Company's credit rating earlier this month
from B to CCC+ and put the rating on credit watch negative which
indicated the Company's financial strength could be lowered
further.

The credit issue is key for the Company, which earlier this month
posted a nearly $140 million net loss for the third quarter.

CONTACT:  TRENWICK GROUP LTD.
          LOM Building
          27 Reid Street
          Hamilton HM 11 Bermuda
          Phone: +1441 441-292-4985  
          Fax: +1441 441 292-4878
          Email: info@trenwick.com
          Website: http://www.trenwick.com/
          Contacts:
          James F. Billet Jr., Chairman, President and CEO
          Alan L. Hunte , Executive Vice President and
                              Chief Financial Officer
          Paul Feldsher, Executive Vice President and Chief
                              Underwriting Officer
          Robert A. Giambo, Executive Vice President and
                              Chief Actuary



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

EMBRATEL: Regulatory Loopholes May Invite Takeover
--------------------------------------------------
Embratel is still vulnerable to a takeover despite its own
protests to the contrary, Dow Jones suggests. Reports have
surfaced that Brazil's three local service giants -  Telefonica
SA's (TEF) Telesp (TSP) unit, Brasil Telecom Participacoes SA
(BRP) and Tele Norte Leste Participacoes SA (TNE)- are planning
to form one group to acquire the ailing long-distance carrier.

Embratel has responded to the reports saying the plan will never
materialize because local antimonopoly regulations prevent fixed
line incumbents from buying the Company. However, according to
Dow Jones, loopholes exist for rules on mergers in the sector,
which is set to further deregulate in June 2003.

Minister of Communications Juarez Quadros on Tuesday said any one
of the local service companies could acquire a 19.9% voting stake
in Embratel, but that current rules "would have to be
interpreted" if each of the three bought a minority position for
a combined 59.7% controlling stake as planned.

"There are short-term obstacles to this transaction, such as
existing rules against changes in control, potential antitrust
questions and how to equitably split up Embratel's assets among
the three fixed-line operators," said Jeffrey Noble, analyst at
BBVA in Sao Paulo. "But it's ultimately possible."

Adding more fuel to the reports is the fact that bankrupt parent
company WorldCom Inc. has hired Goldman Sachs to look at the
possible sale of Embratel.

Embratel is in a bind that limits visibility on the stock and
makes a takeover likely. This competitive environment, combined
with falling long-distance prices and Worldcom's bankruptcy, have
left Embratel's American Depositary Receipts in a virtual
freefall for much of the last two years. Tuesday, they were
trading at about 75 cents.

If sold, analysts say Embratel might be valued at just above its
debt load. The money-losing company ended the third quarter with
BRL2.36 billion ($1=BRL3.60) in short-term debt and BRL2.82
billion in long-term debt.

While the deal might raise antitrust concerns, the government's
rulings on the matter would likely take into account Embratel's
difficult strategic position. And Cade, Brazil's top antitrust
body, has been soft on some mergers in the past.

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


USIMINAS: Sees Steel Products Shortage By Year-End
-----------------------------------------------------
Rinaldo Campos Soares, president of flat steelmaker Usiminas, is
forecasting scarcity of certain steel products on the Brazilian
market by the end of the year, Business News Americas reports,
citing AE Seterial news service.

"I believe it to be more a problem for building up inventory than
for production," he reportedly said.

According to Rentao Vallerini, the commercial director of
Usiminas' subsidiary Sao Paulo-based flat steelmaker Cosipa, the
mill has, in general, guaranteed normal supplies to its
customers.

"What has been difficult for us is supplying larger quantities
than companies' average annual purchases," he said.

Certain steel consumers have also claimed that there is a real
threat of scarcity that could affect production.

Joao Claudio Pante, president of metallurgical industry
association of Rio Grande do Sul, Simecs, said several companies
in the state could stop production by the end of the year due to
a shortage of steel.

Market analysts blame local steelmakers for not anticipating a
possible recovery on the domestic market. Many steel companies
focused their output on exports when the economy dipped a few
months ago and cannot satisfy the current higher-than-expected
domestic demand without breaking contractual obligations.

"You can't simply cancel export obligations because the domestic
market picks up again," Cosipa's Vallerini said.

Recently, Usiminas' chief financial officer Paulo Penido Pinto
Marques announced that the Brazilian flat steelmaker will abandon
exports in order to satisfy the domestic market. Marques said
that the Company has already decided to divert 80,000t of steel
slated for export to South Korea to the domestic market.

Company executives anticipate that the steelmaker will sell 76%
of this year's production on the domestic market and export the
rest. In recent years, the ratio has been 80:20.

CONTACT:  Usinas Siderurgicas de Minas Gerais Usiminas PN A
          Rua Prof. Jose Vieira de
          Mendonca, 3011
          Engenheiro Nogueira
          31310-260 Belo Horizonte - MG
          Brazil
          Tel  +55 31 3499-8000
          Fax  +55 31 3499-8475
          Web  http://www.usiminas.com.br
          Contact:
          Jose Augusto Muller de Oliveira Gomes, Chairman


VARIG: New CEO Expected This Week
----------------------------------
Brazil's biggest airline Viacao Area Rio- Grandense SA plans to
appoint a chief executive this week after its president resigned
over a debt disagreement with Fundacao Ruben Berta, the employee
fund that controls 87% of the voting shares, says Bloomberg.

Arnim Lore resigned as Varig's chief executive earlier this week
after FRB rejected an agreement with creditors to postpone US$118
million in debt payments until Nov. 30.

Exactly when the six board members of Varig - including Luiz
Carlos Vaini, Gesner Oliveira, Andre Bier, Joaquim Fernandes dos
Santos, Harro Fouquet and Waldir Santana - will meet to approve
the Company's new chief executive officer is still unknown. The
selection will be by way of an appointment from FRB.

The agreement with creditors was part of a plan to reduce Varig's
US$900 million in debt and raise capital to keep it in business
during a slump in air travel.

Varig, which has been hurt by a currency depreciation that
increased its costs for servicing dollar-linked debt and the
decline in air travel following the Sept. 11 terrorist attacks,
has asked the government for financial support.

The government said it will notify Varig by November 30 as to
whether it will provide financial support. Meanwhile, Antonio
Palocci, an aide to Brazilian President-elect Luiz Inacio Lula da
Silva, has expressed opposition to a plan that would see a
bailout of Varig by the state-owned development bank BNDES.

Financing the unprofitable carrier through the state-owned bank
"would be a waste of public money with little result," said
Palocci, who leads the transition team for Lula, who takes office
Jan. 1. "It's not a matter of lending to one company; we should
think of a longer solution."

The support of the development bank will depend on whether
management of Varig is able to prove it can be profitable, said a
spokeswoman for Brazil's Trade and Development Minister Sergio
Amaral.

CONTACT:  VARIG (Viacao Aerea Rio-Grandense, S.A.)
            Rua 18 de Novembro No. 800, Sao Joao
            90240-040 Porto Alegre,
            Rio Grande do Sul, Brazil
            Phone: (51) 358-7039/7040
                   (51) 358-7010/7042
            Fax: +55-51-358-7001
            Home Page: www.varig.com.br/english/
            Contacts:
            Dorival Ramos Schultz, EVP Finance and CFO
            E-mail: dorival.schultz@varig.com.br
  
            Investor Relations:
            Av. Almirante Silvio de Noronha,
            n  365-Bloco "B" - s/458 / Centro
            Rio de Janeiro, Brazil
  
            KPMG Brazil
            Belo Horizonte
            Rua Paraba, 1122
            13th Floor
            30130-918 Belo Horizonte MG
            Telephone 55 (31) 3261 5444
            Telefax 55 (31) 3261 5151
                     or
            Brasilia
            SBS Quadra 2 BL A N 1
            Edificio Casa de Sao Paulo SL 502
            70078-900 Braslia - DF
            Telephone 55 (61) 223 2024
            Telefax 55 (61) 224 0473
  
            BAIN & CO
            Primary Contact: Wendy Miller
            Two Copley Place, Boston, MA 02116
            USA
            Phone: +1-617-572-2000
            Fax: +1-617-572-2461
            Email: miles.cook@bain.com
            URL: http://www.bain.com


VARIG: S&P Lowers Ratings on Notes Issued by RG Receivables
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered Tuesday its rating on
the notes issued by RG Receivables Co. Ltd., a special-purpose
entity associated with Varig S.A., to 'CCC+' from 'B-'. The
rating remains on CreditWatch, where it was placed Nov. 29, 2001.

The downgrade stems from significantly increased uncertainty and
risk surrounding the negotiations between Varig's management, the
company's owners, and its creditors over a restructuring of the
airline's onerous debt burden. On Monday, Nov. 25, 2002, the
board of directors and the CEO of Varig announced their
resignations after the controlling shareholder of Varig, Fundacao
Ruben Berta, rejected a plan negotiated with the airline's
creditor group that would have postponed the payment of certain
near-term obligations and given Varig time to conclude a
comprehensive debt restructuring. The breakdown of negotiations
comes amid a continuing deterioration in the airline's financial
condition and reports that relations between Varig and its
creditors, and among the creditors themselves, are becoming
increasingly strained.

Of particular concern to Standard & Poor's is the possibility
that certain creditors may elect to demand immediate repayment of
amounts owed by Varig and/or refuse continued provision of
critical supplies, such as jet fuel, if payment is not
immediately forthcoming. Absent Varig's ability to make these
payments, which appears to be in doubt, such actions could lead
the airline to reduce or suspend operations for a period of time
and/or force the company into a voluntary or involuntary
bankruptcy proceeding.  

Although RG Receivables investors could emerge unscathed from a
bankruptcy proceeding, Varig's other creditors could seek to
force the inclusion of the RG Receivables notes in any general
restructuring by refusing to agree to a solution to the airline's
financial challenges absent concessions from the transaction
investors. This refusal, coupled with a threat to force a
suspension of the airline's operations, could conceivably leave
the noteholders with little choice but to negotiate a
restructuring of the RG Receivables obligations along with the
company's other debt. While acknowledging this risk, Standard &
Poor's also notes that several creditors also have significant
incentives to keep the airline in operation. These incentives
include the essentiality of the airline's service to the
Brazilian economy, the uncertainty surrounding the outcome of any
bankruptcy proceeding, and the stated willingness of the
Brazilian development bank, Banco Nacional de Desenvolvimento
Economico e Social (BNDES), to contribute financially to a viable
and constructive resolution of the company's financial problems.   

The CreditWatch placement indicates that the potential for
additional downward movement in the transaction rating is
significant over the next several days or weeks. In Standard &
Poor's view, significant downside risks associated with the
airline's restructuring negotiations, competition on transaction-
critical routes, and near-term performance of the Brazilian
economy currently outweigh certain positive credit elements such
as the robust receivables performance, the importance of Varig to
Brazil's economy, and the prospect that a successful financial
restructuring could place Varig's finances on a more viable long-
term footing. Any developments that appear to threaten further
the airline's ability to continue operating or could negatively
impact the generation of receivables on the transaction-critical
routes would likely lead to additional downward pressure on the
transaction rating. Conversely, if Varig's new management is able
to conclude a viable long-term financial restructuring of the
company and traffic continues to hold up on the critical routes
amid Brazil's challenging economic environment (or if that
environment should improve), a positive review of the current
rating and CreditWatch placement would become possible.

Standard & Poor's will continue to monitor carefully the
Brazilian economy and all developments involving Varig,
particularly its ongoing financial restructuring efforts.

ANALYSTS:  Kevin Kime, New York (1) 212-438-6223
           Reginaldo Takara, Sao Paulo (55) 11-5501-8932


VARIG: Looking To Sell 20% Stake
--------------------------------
In an effort to raise much-needed capital, Varig will sell up to
20% of the business to foreign carriers, reports Knight Ridder
Business News. Varig executive vice-president of strategic
planning, Alberto Fajerman, said that talks regarding the matter
are underway.

Lufthansa is among one of the European airlines most interested
in a stake. Fajerman declined to comment on the precise identity
of the suitors, but said: "Our Star Alliance partners are very
important to us." Lufthansa is a Star partner.

The sale of Varig's 20% stake will immediately follow a US$400
million rights issue on the Brazilian Stock Exchange in Sao Paulo
shortly after 30 November.

The airline has been working with BNDES, the Brazilian
development bank to restructure debts totaling US$900 million. It
is shedding 1,800 jobs.

The airline is asking the bank to approve a new business plan.
The rights issue will precede whatever the bank decides but its
final decision will effect how much can be raised.

"We are optimistic the bank will approve the plan. The solution
for us is capitalisation but we have to be alive when we go to
the market -- capitalisation would be no good after we've been
shot," Fajerman said.



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

EDELNOR: Tractebel Strategy Yields Debt Reduction Benefits
----------------------------------------------------------
Troubled Chilean energy distributor Empresa Electrica del Norte
Grande S.A. (ELDENOR S.A.) benefited from the strategy mapped out
by Tractebel. A report from El Mercurio revealed that Edelnor has
reduced its debt by US$170 million, and its creditors are
accepting a lower payment.

According to the report, the Company's financial expenses would
be reduced to US$8 million from US$28, as initially planned. Such
an arrangement would be extremely beneficial for the Company,
whose cash flow is about US$15 million.

Earlier, Tractebel had outlined an indirect strategy implying its
intention to acquire Edelnor and slash debts by US$340 million.
Tractebel, through investor Fernando del Sol had raised US$4.5
million from Banco del Chile for the completion of its plans.

Edelnor, which produces, distributes and supplies energy to
northern Chile's first and second regions, has debts concentrated
in UBS and Bank of America.

CONTACT:  Empresa Electrica Del Norte Grande SA
          Avenida Grecia 750
          Antofagasta, Chile  
          Phone: +56 55 248500
          +56 55 248094
          Contact: Fernando del Sol, Chairman

          Tractebel Energia SA
          Registered Office
          Rua Antonio Dib Mussi, no 366
          Centro
          88015 - 110 Florianopolis - SC
          Brazil
          Tel  +55 48 221-7016
          Fax  +55 48 221-7015
          Web  http://www.gerasul.com.br
          Contacts:
          Mauricio Stolle Bahr, Chairman   
          Eric L.J. de Muynck, Vice Chairman


TELEFONICA CTC: S&P Revises Outlook on Improved Performance
-----------------------------------------------------------
Standard & Poor's Ratings Services said Tuesday that it revised
the outlook on Chilean telecom provider Compania de
Telecomunicaciones de Chile S.A.'s (CTC) to positive from stable,
based mainly on the company's improved financial performance.

Standard & Poor's also affirmed its 'BBB' corporate credit rating
on CTC.

With a network of 2.7 million lines in service and 1.8 million
mobile subscribers, CTC is Chile's largest telecommunications
provider, operating nationwide. As of September 2002, the company
had US$1.6 billion in debt.

"We expect CTC's financial performance to continue improving
through further debt and cost reductions, and economic and
business conditions in Chile to remain relatively stable and
favorable," said credit analyst Ivana Recalde.

"However, the ratings are not likely to be raised until the next
regulatory setting process is finalized in 2004, in a way that is
favorable for the company's performance and business position.
Since many of the important structural changes have already been
implemented, the next tariff setting, scheduled for May 2004,
should involve milder changes compared to 1999's decree," she
added.

During 2000 and 2001, CTC felt the negative impact from lower-
than-expected tariffs after the last quinquennial rate
rebalancing in 1999, which changed the competitive environment in
Chile, increasing the pressures on CTC's market standing, and
decreasing the revenue generation potential of CTC's traditional
core business lines.

Nevertheless, cost cutting measures and increased efficiencies
have somewhat offset those effects allowing margins to recover to
46% during the nine months ended September 2002 (from 36% in 2000
and 43.7% in the nine months ended September 2001), in spite of a
4% drop in peso sales.

Additionally, lower capital expenditures and dividends have
allowed for a significant debt reduction of about 30% between
December 2000 and September 2002 to 49% of capitalization. Helped
by the average debt reduction, a drop of the average LIBOR, and
successful renegotiation of spreads, EBITDA interest coverage for
the period improved to 4.9 times (x) from 4.2x in 2001 (and 2.9x
in 2000).

ANALYSTS:  Ivana Recalde, Buenos Aires (54) 114-891-2127
           Marta Castelli, Buenos Aires (54) 114-891-2128



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

PAZ DEL RIO: Workers To Take Over Mill In Turnaround Effort
-----------------------------------------------------------
Workers and management at troubled steelmaker Acerias Paz de Rio,
which is now restructuring under the final stage of a bankruptcy
protection plan, agreed that active and retired workers will
takeover the operations of the mill in order to save the ailing
Colombian steelmaker.

According to Business News Americas, the agreement was brokered
by Colombian President Alvaro Uribe. Mr. Uribe stepped in,
offering to provide government backing for loan applications, if
the plant were handed over to an alternative operator and local
politicians desist from interfering in the affairs of the mill.
The local government of Boyaca department, in central Colombia,
owns Paz del Rio.

Under the agreement, workers will assume command of operations at
the plant from next January aided by a team of technical advisers
made up of past and present employees, company president Edgar
Plazas revealed.

"This doesn't mean workers' control of management, rather it's a
technical compromise; they will be running the plant but
answerable to the general management of the company," he said.

The Company's management has also promised to obtain US$13
million in financing to modernize the plant.

"With the agreement [with workers], the new funds and a proposed
accord with employees on the pension fund, we have a firm that is
not only viable but potentially profitable," according to Plazas.

Retired workers would also be involved in running the plant
because of their stake in the Company's endangered pension fund.
The agreement would involve setting up a fund that over three
years and at a cost of about US$11 million would aim to resolve
the pension issue.

Meanwhile, Gilberto Gomez, the trustee who was restructuring Paz
del Rio, has resigned, claiming that disputes and possible legal
issues prevented him continuing in the post. Under Law 550,
Colombia's bankruptcy protection legislation, the government is
obliged to find a replacement for Gomez.

CONTACT:  ACERIAS PAZ DEL RIO S.A.
          Carrera 8 # 13-31, Pisos 7 al 11
          Bogota, D.C.
          Phone: (091) 282-8111
          Fax: (091) 282-6268 282-3480
          E-mail: apdr@multi.net.co



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

AHMSA: Creditor Banks Get New Restructuring Proposal
----------------------------------------------------
Mexican iron and steel group AHMSA submitted late Monday its
restructuring proposal to creditor banks BBVA-Bancomer, Banamex-
Citi and Banorte, Business News Americas reports, citing El Norte
newspaper.

The recently submitted plan is considered an update of a previous
proposal, which the AHMSA board never ratified. Lack of action on
the board's part prompted the banks to break off negotiations
with the board in April this year. The banks accused the AHMSA
board of not being serious about restructuring the Company's
US$1.85-billion debt.

The original plan involved converting US$540 million of debt to
equity and selling off non-core assets worth US$120 million. This
would have left AHMSA with debts of US$1.14 billion, which would
be rescheduled with a final installment payable September 2009.
Under the restructuring plan, the GAN industrial group would have
maintained control of the Company with 50.1%, the banks would
have 40% and minority shareholders the rest.

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


CFE: Bidding Rules Released For Several Power Projects
------------------------------------------------------
The bidding rules for a number of transmission projects owned by
Mexico's state power company CFE are now available.

According to Business News Americas, CFE has made available
through February 1, 2003 the bidding rules for a contract to
build fives lines of 115kV for 205km in the states of Jalisco,
Coahuila, Veracruz, Michoacan and Guerrero and part of the east-
north system.

Bid rules for a contract to build five 115kV lines stretching
146km in the states of Aguascalientes, Guanajuato, Jalisco and
Nayarit, as well as 10 substations, are made available through
February 18, 2003.

Bid rules are available through March 18, 2003 for a contract to
build 832km of lines of 400kV, 230kV and 115kV voltages in
Chihuahua, Sonora, Sinaloa and Durango states as part of the
north-northeast grid system. The contract includes the
construction of eight 115-230kV substations.

Bid rules are available through March 12, 2003 for a project in
the northwest-west transmission system for the construction of
58km of seven 400kV, 230kV and 115kV voltage lines, as well as
work on five substations. The work is in Queretaro, Guanajuato
and Sinaloa states.

A previous TCR-LA report revealed that the CFE posted a net loss
of MXN4.92 billion in the third-quarter of this year, against a
profit of MXN3.07 billion in the same period a year ago, due to
exchange rate fluctuations.

However, for this year's January to September period, the CFE
obtained operating profits of MXN5.80 billion (US$568 million),
while in the same period of 2001, it reported a loss of MXN1.17
billion (US$115 million). The Company attributed the improvements
to lower costs of energy products and the reduction in subsidies
for domestic services.

But CFE director, Alfredo Elias Ayub, recognized that this year
only MXN4 billion (US$392 million) of the MXN5 billion (US$490
million) expected would be collected as a result of the reduction
in subsidies.

CONTACT:  COMISION FEDERAL DE ELECTRICIDAD
          Rio Rodano 14, Col. Cuauhtemoc
          06598 Mexico, D.F., Mexico
          Phone: +52-55-5229-4400
          Fax: +52-55-5310-4614
          http://www.cfe.gob.mx
          Contacts:
          Alfredo Elias Ayub, General Director
          Arturo Hernandez Alvarez, Director of Operations
          Francisco J. Santoyo Vargas, Director of Finance


GRUPO MEXICO: Asarco Seeks Out-of-Court Settlement
--------------------------------------------------
U.S. copper producer Asarco Inc., a subsidiary of Grupo Mexico,
admitted that it has an obligation with Glencore Ltd. but wants
to settle the matter out of court, relates Reuters.

Glencore filed a US$29.4-million lawsuit this month against
Asarco for breaching a business contract with the Swiss-based
metals company for copper purchase and sale agreements.

"These agreements involved the outright sale of blister copper by
Glencore to Asarco, or the refining and return of refined copper
delivered by Glencore to Asarco," Glencore said in its written
complaint.

In court documents, both parties confirmed that Asarco owed
Glencore US$29,426,718.66, excluding the additional cost of
interest incurred since January 2002.

The companies were unable to agree on a payment plan and the
miner's debt to Glencore remains unpaid, as Asarco is also trying
to fend off other huge cash liabilities.

In August, the Justice Department won a restraining order on
Asarco's plans to sell its 52.4% stake in Southern Peru Copper
Corp. to parent Grupo Mexico.

The U.S. government feared that Asarco had undervalued its share
in SPCC and so would struggle to meet all of its debt
obligations.

Asarco planned to use the proceeds of the sale to pay off US$550
million in debt -- $450 million on a revolving credit with banks,
which is currently in default, and a US$100 million bond issue.
The banks have delayed full repayment on the credit facility
until the end of January 2003, while the bond is to be repaid in
February.

The Company also planned to use SPCC sale proceeds to pay down
hundreds of millions of dollars in environmental clean-up costs
at old plants across the country.

CONTACT:    GRUPO MEXICO S.A. DE C.V.
            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 Garca 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 and Administration and
                                     Finance  President
  
            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


SATMEX: Consent, Waiver Solicitation Yields Breathing Room
----------------------------------------------------------
Satelites Mexicanos, S.A. de C.V. ("Satmex") announced Tuesday
that it has successfully completed its consent and waiver
solicitations launched on November 4, 2002, both of which expired
at 5:00 p.m., New York City time, on November 25, 2002, and has
accepted each consent and waiver delivered. Satmex sought
consents from the holders of a majority in principal amount of
its fixed rate notes to amend the insurance covenant contained in
the indenture governing the fixed rate notes to conform the
insurance requirements under that indenture to insurance coverage
currently available on commercially reasonable terms in the space
insurance market.

Concurrently with the consent solicitation, Satmex solicited
waivers from the holders of a majority in principal amount of its
floating rate notes of the covenant in the indenture governing
the floating rate notes that restricted Satmex's ability to amend
the insurance covenant in the fixed rate note indenture. Holders
of approximately 76% of the fixed rate notes consented to the
proposed amendment and holders of approximately 70% of the
floating rate notes delivered a waiver. Satmex has also obtained
a similar waiver from the majority of the lenders under its
revolving credit facility.

"We at Satmex are very pleased with the rapid resolution of this
consent solicitation and are especially grateful to the
overwhelming majority of the investors who supported us," said
Lauro Gonzalez, CEO of Satmex. "The collaborative spirit
generated during this process will be especially important going
forward as we move ahead with our recapitalization plan."

UBS Warburg LLC acted as solicitation agent for both the consent
solicitation and the waiver solicitation.

Satmex, a leading satellite operator in the Americas, owns and
operates a satellite system through which it offers broadcast,
telephone and telecommunications services to 39 countries in the
region. The Satmex fleet also helps develop rural areas by
offering distance learning and rural telephony services. And,
through its business partners in the NAFTA region and Latin
America, Satmex provides high-speed connectivity to ISPs and
Digital Broadcast Services (DBS), thus contributing to the
integration of Latin America with the rest of the Continent.
Satmex is ISO 9001 certified.

Included in this press release are certain forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such forward-looking statements
are based on the beliefs of Satmex's management as well as on
assumptions made. Actual results could differ materially from
those included in such forward-looking statements. Readers are
cautioned that all forward-looking statements involve risks and
uncertainty. The following factors could cause actual results to
differ materially from such forward- looking statements: Mexican,
U.S. and global economic and social conditions; partial or total
failure of Satmex's in-orbit satellites; reliance on certain
customers; ability to compete in its industry; ability to extend
the near-term maturities of its debt; ability to generate
sufficient cash flow to meet its obligations; adverse changes in
the satellite insurance market; and potential changes to Mexican
laws and regulations. These risk factors and additional
information are included in Satmex's reports on Form 6-K and 20-F
on file with the Securities and Exchange Commission.

CONTACT:  Satelites Mexicanos, S.A. de C.V.
          Kristi King Etchberger
          Tel: +5255-5201-0804
          URL: http://www.satmex.com


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

URUGUAYAN BANKS: Government Wants To Merge Suspended Banks
----------------------------------------------------------
The government of Uruguay may submit a bill to Congress, seeking
the approval of the merger of three Uruguayan banks, according to
a report from Business News Americas.

Banco Comercial, Banco Montevideo, Banco Caja Obrera were
suspended by the country's central bank earlier this year, due to
capital and liquidity problems. A fourth bank, Banco de Credito
was also suspended.

The government is yet to finalize an agreement with minority
shareholder St. George, an investment company of South Korea's
Moon Group.

The central bank is yet to call for bids for a contract to sell
the three banks' assets and recover loans exluded from the
merger.

CONTACT:  BANCO COMERCIAL
          Cerrito No. 400,
          11100 Montevideo
          Phone: 960-394/97
          Fax: 963-569
          Home Page: www.bancocomercial.com.uy/

          BANCO MONTEVIDEO
          Misiones
          1399 - Montevideo
          Fax: 9162880
          E-mail: info@bm.com.uy  
          Home Page: http://www.bancomontevideo.com.uy
          Contact: Sr. Marcelo Pestarino, President



               ***********


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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
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Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is $575 per half-year,
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