TCRLA_Public/021205.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, December 5, 2002, Vol. 3, Issue 241

                           Headlines


A R G E N T I N A

CAMUZZI GAS: Shelves $300M Bond Issue
CLISA: Fitch Analyst Warns Of Further Rating Downgrade

* Argentine Default May Trigger IADB Fee Increase


B E R M U D A

FLAG TELECOM: Completes New Virtual PoP in Pakistan
TRENWICK GROUP: Fitch Lowers Ratings to 'CC'
TRENWICK GROUP: S&P Revises Preferred Stock Ratings to 'D'
TYCO INTERNATIONAL: Names Courson Deputy General Counsel
TYCO INTERNATIONAL: Over-All Loss Obscures Electronics Profits


B O L I V I A

COTEL: Cuts Interconnection Agreement With AES


B R A Z I L

AES SUL: Averts Default After Renegotiating $53.5M In Debentures
BANCO FIAT: Itau Agrees To Acquire 99.99% Stake For BRL897M
BCP SA/BSE SA: Parent In Sale Talks With Various Groups
CEMIG: Issues Notice To Shareholders
CSN: Wishes To Restart Talks With Corus

CSN: Debt Elimination Believed Possible in Two Years
NET SERVICOS: S&P Lowers Rating To 'D'
NET SERVICOS: Shares Tumble On Word Debt Default Possible
TELESP CELULAR: Offering BREW Technology Next Year
USIMINAS: Seen Selling Auto Parts Unit To Boost Cash Reserves

* J. P. Morgan Lowers Recommendation on Brazilian Stocks


C O L O M B I A

METRO: Government Lends Helping Hand


M E X I C O

CFE: Plans New Plant, Restores Services to Pacific Coast
DESC: Moody's Cuts Ratings Following Assumption of Unit's Debt

     -  -  -  -  -  -  -  -

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

CAMUZZI GAS: Shelves $300M Bond Issue
-------------------------------------
Argentine natural gas distributors Camuzzi Gas Pampeana and
Camuzzi Gas del Sur informed the Buenos Aires bourse that they
canceled a joint issue of US$300 million in non-negotiable bonds,
relates Business News Americas.

"The Camuzzi distribution group will not make any further bond
issues before year-end, and since there are no issues outstanding
we have decided to cancel the remaining amount in the series," a
Camuzzi Argentina source said. "The company has no need to issue
more bonds at this time," the source added.

In 1996, the group, which supplies some 45% of Argentina's total
gas demand, notified the stock market of a bond issue up to
US$200 million, which was subsequently increased to US$300
million. According to the source, the first issue of US$130
million in 2001, which was the only issue from the series, was
repaid.

Camuzzi Gas del Sur and Pampeana are controlled by Sodigas Sur,
which in turn is 56.9% controlled by Camuzzi Argentina and 43.1%
by US-based Sempra Energy.


CLISA: Fitch Analyst Warns Of Further Rating Downgrade
------------------------------------------------------
An analyst at Fitch Ratings warned that it could lower CLISA'S
(Compania Latinoamericana de Infraestructura Servicios) current
rating of C (imminent default) issued earlier this year to D
(default), reports Business News Americas.

CLISA is currently on Watch Negative.

The warning came after the Argentine infrastructure and services
company missed its December 1, 2002 interest payment deadline on
its US$100 million guaranteed senior notes due 2004.

In a statement, CLISA said it would exercise its 30-day grace
period to decide on its next course of action, and plans to host
informal meetings for noteholders December 10 in New York City
and December 17 in Buenos Aires to discuss its corporate
operations and current financial position, as well as a
preliminary restructuring plan and restructuring timetable.

In addition, CLISA said it expects it will be able to positively
resolve its current situation. The Company plans to continue
operating its four business regions in Argentina, as well as in
other countries, company spokesperson Juan Ordonez said.

CLISA is a holding company mainly devoted to construction, mass
transportation and toll roads, and also participates in waste
management.

As of September 2002, the Company's total debt amounted to US$147
million, including the US$100 million notes that mature in June
2004. About 18% of total debt matures until September 2003.


* Argentine Default May Trigger IADB Fee Increase
-------------------------------------------------
The Inter-American Development Bank may consider raising its fees
after Argentina defaulted on an US$805 million payment due to the
World Bank last month, according the IADB's deputy manager for
risk management, Ira Kaylin.

Gersan Zurita, an analyst for Fitch ratings company said the bank
would also have to make changes in its pricing and lending
priorities by curtailing lending to companies and the more
prosperous among its client countries throughout Latin America
and the Caribbean.

A report from Bloomberg News shows that the development bank
currently has a 50-basis-point spread, a credit commission of 75
basis points on all outstanding loans to a borrower, and a 1
percent up-front fee. A basis point is one one-hundredth of a
percent.

According to Larry Hays of Standard & Poor's, all other countries
that borrow from the IADB would suffer if the lender decides to
raise its fees.

Latin American countries had already received a 64 percent
decrease in private investment this year.

Argentina has a US$160 million interest payment due to the IADB.
Though the country defaulted on US$95 billion in bonds last
December, it has remained current with the IADB, according to
Kaylin.

The report revealed that the IADB's staff is considering urging
the board to end this year's policy of waiving all fees on new
loans except for a 10-basis-point spread on the lender's average
cost of borrowing.

A default by Argentina would not jeopardize the bank's finances
even if the country holds 18 percent of the banks loans
outstanding. Rating agencies agree, saying that the banks
reserves are 21 percent of loans outstanding.

However, the bank may be compelled to deny Argentina loan
disbursements worth millions of dollars if it fails to make a
payment 39 days after the December 15 deadline. Kaylin said that
the planned lending is roughly equal to what the country owes the
bank.

Argentina had received approval of the US$2.5 billion loan in
1998 in a bid to cushion the country from the financial crisis in
East Asia and a debt default by Russia.

According to the report, the five-year loan features a three-year
grace period and a variable interest rate of 400 basis points
over the London interbank offered rate, or the interest rate
banks charge one another on short-term money. In July Argentina
made an on-time payment on the loan of $670 million.



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

FLAG TELECOM: Completes New Virtual PoP in Pakistan
---------------------------------------------------
FLAG Telecom Group Limited (OTC: FTGLF), ("FLAG Telecom"),
announced Tuesday that it has completed the installation of a new
virtual point of presence (VPoP) in Karachi, Pakistan. The VPoP
is now fully operational and will be managed and operated locally
by leading telecom operator Pakistan Telecommunication Company
Limited ("PTCL").

This collaboration between FLAG Telecom and PTCL is the first to
offer a seamless one stop shop for international managed
bandwidth between Pakistan and key international business centers
on the FLAG Telecom global network in Europe, the United States
and Asia. Customers are also now able to purchase high quality IP
transit bandwidth from the Karachi VPoP and take advantage of
FLAG's low latency Internet backbone, which incorporates both
eastwards and westwards routing and peering at major Internet
exchanges around the globe.

"We are excited to have completed this VPoP in an emerging and
growing market like Pakistan, and that we were able to fully meet
the needs and high quality standards of PTCL," said Walid
Irshaid, FLAG Telecom's regional vice president for the Middle
East. "The Karachi VPoP will enable PTCL and FLAG Telecom to
provide customers with a high level of global connectivity,
designed to offer resilience, reliability and superior quality of
service at a competitive price."

"This node will provide valuable services to our company and our
customers, and give us a wider range of choice for international
connectivity to world-wide destinations," said Akhter Jamil,
General Manager Information Technology Infrastructure Karachi of
PTCL. "We have tested FLAG Telecom's Internet bandwidth and we
have been extremely impressed with the quality and performance of
the network. We look forward to continuing to work jointly with
FLAG Telecom as we ensure the success of this partnership
venture."

PTCL owns and operates the public telephone network in Pakistan
and also provides various other telecommunication services. It is
currently the sole provider of all core infrastructure services
including international Data and Voice services out of Pakistan.
All necessary information about PTCL is available on the website
http://www.ptcl.com.pk

About FLAG Telecom

FLAG Telecom, along with its group companies, is a leading global
network services provider and independent carriers' carrier
providing an innovative range of products and services to the
international carrier community, ASPs and ISPs across an
international network platform designed to support the next
generation of IP over optical data networks. Recent news releases
and further information are on FLAG Telecom's website at:
www.flagtelecom.com.

CONTACT: FLAG Telecom
         Willem Baralt
         Tel +44 20 7317 0837
         Email: Wbaralt@flagtelecom.com
               or
         Sloane & Company
         Dan O'Connor
         Tel +1 212 446 1865
         Email: DOconnor@sloanepr.com
               or
         Pakistan Telecommunications Company Ltd
         Sultan Ahmad Hasan
         Tel +92 51 2251926
         Email: Gmpr@isb.paknet.com.pk


TRENWICK GROUP: Fitch Lowers Ratings to 'CC'
--------------------------------------------
Fitch Ratings lowered its long-term and senior debt ratings on
Trenwick Group, Ltd. and its subsidiaries, (collectively
Trenwick) to 'CC' from 'CCC'. In addition, Fitch lowered its
ratings on Trenwick's preferred capital securities to 'C' from
'CC' and its preferred stock to 'C' from 'CC'. The ratings remain
on Rating Watch Evolving.

Fitch's rating action follows Trenwick's November 29, 2002
announcement that it was suspending dividends or distributions on
its preferred stock and trust preferred capital securities. This
included a preferred dividend payable on December 2, 2002 to
holders of record on October 31, 2002.

Trenwick had agreed to refrain from making such payments or
distributions under a forbearance agreement it entered into with
its letter of credit providers on November 13, 2002.

Entity/Type/Issue          Action     Rating/Rating Watch

Trenwick Group, Ltd.

--Long-term                Downgrade  'CC'/Evolving.

Trenwick America Corp.

--Long-term                Downgrade  'CC'/Evolving;
--Senior debt              Downgrade  'CC'/Evolving.

LaSalle Re Holdings, Ltd.

--Long-term                Downgrade  'CC'/Evolving;
--Preferred stock          Downgrade  'C'/Evolving.

Trenwick Capital Trust I

--Preferred capital sec    Downgrade  'C'/Evolving.

CONTACT:  FITCH RATINGS
          Mark E. Rouck CPA, CFA, 312/368-2085, Chicago;
          Michael J. Barry, 212/908-0621, New York.
          Media Relations:
          James Jockle, 212/908-0547, New York.


TRENWICK GROUP: S&P Revises Preferred Stock Ratings to 'D'
----------------------------------------------------------
Standard & Poor's Ratings Services said Tuesday that it revised
its preferred stock ratings on Trenwick Group Ltd., Trenwick
America Corp, LaSalle Re Holdings Ltd., and Trenwick Capital
Trust I to 'D' from 'CC' following the announced non-payment of
the preferred dividend on Lasalle Re Holdings Ltd.'s Series A
preferred stock, which had a declared dividend due Tuesday.

Trenwick has also suspended dividends and distributions payable
on all other outstanding preferred securities, including Trenwick
Group Ltd.'s Series B cumulative convertible perpetual preferred
shares and Trenwick Capital Trust I's 8.82% exchange subordinated
capital income securities.

"The remaining ratings on Trenwick Group Ltd. and its
subsidiaries remain on CreditWatch with negative implications, as
management is in the process of restructuring its obligations to
maintain itself as an ongoing concern," noted Standard & Poor's
credit analyst Karole Dill Barkley. "Standard & Poor's expects
management, the banks, and Lloyd's to resolve the pending
renegotiation discussions within the next two to three weeks."

CONTACT:  STANDARD & POOR'S
          Karole Dill Barkley, New York, 212/438-7167
          Robert G Partridge, New York, 212/438-7231


TYCO INTERNATIONAL: Names Courson Deputy General Counsel
--------------------------------------------------------
Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI) announced
Tuesday that Gardner G. Courson has been appointed VP, Deputy
General Counsel, Litigation. Mr. Courson will be responsible for
corporate legal issues regarding litigation.  He will report to
Tyco General Counsel William B. Lytton.

Mr. Courson has practiced as a trial lawyer for 28 years, and is
admitted to six of the United States Courts of Appeals and the
U.S. Supreme Court.  He is the former managing partner of the
Atlanta office of McGuireWoods and was a member of the Firm's
Board of Partners before leaving the firm to join Tyco. Mr.
Courson has successfully handled hundreds of lawsuits across the
U.S., focusing on complex employment, labor relations and related
business tort issues.  He has acted as employers' legal advisor
in numerous individual and class actions and is widely viewed as
an authority on litigation management, alternative fees and the
use of legal technology.

Mr. Lytton said, "We're building a strong, professional legal
team at Tyco.  Gardner Courson has extensive experience in the
courtroom dealing with and managing difficult and multifaceted
corporate litigation.  He will make a valuable contribution to
Tyco and we are very excited that he is joining the Company at
this important transition period."

Mr. Courson said, "Tyco is working hard to demonstrate clear
leadership for American business in all facets of the legal area
and I am enthusiastic about being a part of that effort.  This is
a Company with enormous potential and I look forward to working
with Ed Breen, Bill Lytton and the talented group of people they
are assembling to lead Tyco into its promising future."

Mr. Courson graduated from the University of Virginia and earned
his law degree from Emory University School of Law in Atlanta,
Georgia.  He is a Fellow of The College of Labor and Employment
Lawyers; recipient of the General Counsel's Award for Achievement
in Diversity from the DuPont Legal Department and a member of the
Advisory Board of the University of Virginia's McIntire School of
Commerce.

ABOUT TYCO INTERNATIONAL LTD.

Tyco International Ltd. is a diversified manufacturing and
service company.  Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services and the world's largest
manufacturer of specialty valves.  Tyco also holds strong
leadership positions in medical device products, and plastics and
adhesives.  Tyco operates in more than 100 countries and had
fiscal 2002 revenues from continuing operations of approximately
$36 billion.

CONTACT:  Gary Holmes (Media)
          Tel +1-212-424-1314
                 or
          Kathy Manning (Investors)
          Tel +1-603-778-9700


TYCO INTERNATIONAL: Over-All Loss Obscures Electronics Profits
--------------------------------------------------------------
Bermuda-based conglomerate Tyco International, Ltd. reported a
net loss of US$9.1 billion on sales of US$35.7 billion for the
fiscal year ending September 30 this year.

However, not all of Tyco's divisions contributed to the loss.
Tyco Electronics had profits of US$1.5 billion on sales of
US$10.5 billion despite turbulence in the electronics industry.

Tyco Electronics has 54 divisions, subsidiaries and brands
including M/A-Com, a unit in Lowell, Mass., which makes land
mobile radio equipment and systems.

According to a report from Mobile Radio Technology, Tyco
International had not reported a breakdown of figures for M/A-
Com, which has an estimated US$60 million in annual sales,
according to the report.

Sales from land mobile radio equipment and systems account for
about 1 percent of Tyco International's business.

Meanwhile, the conglomerate is undergoing a forensic
investigation on transactions engineered by its former chief
executive Dennis L. Kozlowski.

Kozlowski, along with former finance chief Mark Belnick, face
larceny and enterprise corruption charges for allegedly looting
company coffers. Both are currently out on bail.

CONTACT: TYCO INTERNATIONAL LTD.
         Corporate Office
         The Zurich Centre, Second Floor
         90 Pitts Bay Road
         Pembroke HM 08, Bermuda
         Phone: 441-292-8674
         Home Page: http://www.tyco.com



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

COTEL: Cuts Interconnection Agreement With AES
----------------------------------------------
Bolivia's largest fixed-line operator Cotel is planning to offer
long distance and data transmission service on its own. The
announcement follows the dissolution of its partnership with AES
Communications Bolivia following a year-long negotiation on the
terms.

AES agreed to pay within a year, retroactive interconnection
costs worth about US$400,000 plus interest, according to a report
from Business News Americas.

According to AES Chairman Jon Elorriaga, his company will
maintain a commercial relationship with Cotel.

Although the agreement had been closed, Cotel might seek another
partnership with AES for international connectivity once it
obtains a long distance license. Cotel may also seek out a
similar deal with other long distance providers.

Last year, Cotel had agreed to take a 15 percent stake in AES
worth US$21 million, to be paid through the charges AES would
have to pay for local loop access.

Cotel's new management believes the AES deal was preventing the
Company from offering long distance and data services.

Cotel was taken into government control in August 2000 due to
administrative irregularities, labor unrest and debt problems.
The government had also given German telecoms consultant,
Detecon, in an attempt to help Cotel recover, and make it
competitive by November 2001. But the move failed due to a power
struggle between Detecon executives and the local board.

CONTACT:  COOPERATIVA DE TELEFONOS DE LA PAZ-COTEL
          Avenida Mariscal Santa Cruz 980
          La Paz
          Bolivia
          Phone: 591 2373432
          Fax: 591 2310331
          Home Page: Homepage: http://www.cotel-bo.net/
          Contact: Jurgen Kurz

          DETECON
          Germaniastra? 18 - 20
          D-12099 Berlin
          Telephone : (+49-30) 7508-1100
          Fax : (+49-30) 7508-1444
          Home page: http://www.detecon.com/
          Contact:
          Karen Litters
          Phone: (0049) (0)6196-903-131
          Fax: (0049) (0)6196-903-465
          E-Mail: info@detecon.com

          AES CORP
          Investor Relations
          Kenneth R. Woodcock, 703/522-1315
          www.investing@aes.com



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

AES SUL: Averts Default After Renegotiating $53.5M In Debentures
----------------------------------------------------------------
AES Sul, a subsidiary of US-based AES Corp., narrowly escaped
default after it successfully renegotiated US$53.5 million in
debentures, reports Business News Americas.

The Company, which operates in Rio Grande do Sul state, informed
the Sao Paulo stock exchange that a majority of debenture
holders, believed to be led by US-based BankBoston, agreed to the
new terms offered by AES Sul. They delayed principal repayment by
one year in exchange for a slightly better interest rate and a
1.25% one-off bonus.  AES Sul will honor all interest payments on
the debentures.

Altogether, there are US$53.5 million in debentures outstanding
in three tranches, which will now be paid back in 12 monthly
installments starting December 2003. The Company was scheduled to
pay 25% of the principal on December 1.

Despite the recent completion of the negotiations, credit rating
agency Standard & Poor's, which recently lowered AES Sul's rating
to brCC, expressed concern that AES Sul might not be able to meet
payments in 2003, including a US$64 million syndicated loan due
in the first half of the year. S&P noted that the Company's cash
flow for the year will be about US$68 million.


BANCO FIAT: Itau Agrees To Acquire 99.99% Stake For BRL897M
------------------------------------------------------------
Banco Itau S.A. (Itau), Fiat Auto S.p.A. and Fiat Automoveis S.A.
(Fiat) announced they have signed an agreement Tuesday for the
acquisition of 99.99% of Banco FIAT S.A.'s total capital by
Itau.

Following its acquisition by Itau, Banco Fiat S.A.'s Brazilian
operations will focus on vehicle financing and leasing
operations, financial services and the management of the
consortium under the FIAT brand name. Traditional operations
involving inventory financing (Floor Plan) and investments in the
dealer network and the car manufacturer's suppliers will remain
under the control and management of Fiat through Banco Fidis de
Investimento S.A. Corporate reorganization necessary to the
structure above is being submitted to the approval by the Central
Bank of Brazil.

The acquisition price will correspond to the payment of
approximately BRL897 million, thus implying goodwill of BRL462
million (1.06 times Stockholders' Equity).

Among finance companies and banks associated to car
manufacturers, Banco Fiat S.A. is the market leader in Brazil,
accounting for the financing of approximately 40% of the total
sales volume of new vehicles with the Fiat brand.

Under Itau's control, Banco Fiat S.A., through the signed
agreement, will hold in Brazil, for 10 (ten) years:

- Exclusivity in new vehicle financing and leasing related to
  all promotions organized by the manufacturer Fiat with respect
  to its sales to the consumer market;
- Sales of quotas in the consortium with the Fiat brand to end
  consumers;
- Supply of financial services to Banco Fiat S.A's actual and
  future customers;
- Fiat's recommendation of Banco Fiat S.A. to its dealer network
  for the purposes of channeling vehicle finance business
  through the Bank's intermediary;
- Use of the Fiat brand name in operations linked to the above-
  mentioned activities.

The transaction also provides for Fiat to indicate a member to
Banco Fiat's Board of Directors, during the term of the
exclusivity agreement, as a means of maximizing the commercial
linkage existing through the close partnership between Ita£ and
Fiat. In this way, the parties involved will be able to
coordinate their actions, maintaining the focus on their specific
areas of activity.

For Ita£, this acquisition means:

- The enhancement of its position in the car finance market;
- Development of new relationships with the Fiat brand customers;
- The possibility of selling products and services to the Fiat
  brand customers;
- Enhanced relationship with a large network of Fiat dealers and
  retailers;
- A major boost to consortium activity, begun in September 2002
  through Itaucons¢rcio;
- Provision of recognized expertise in technology and quality of
  additional services to the dealers and to the Fiat brand
  customers.

It is expected that this operation will already be able to make a
positive contribution to Itau's consolidated results in 2003. The
impact of this acquisition on the Basel capital adequacy ratio
will correspond to a reduction of about 0.7 percentage points,
thus placing the ratio in an extremely satisfactory level
estimated in 17.7%.

Founded in 1976 in Brazil, Fiat is the market leader for the
second consecutive year with a broad-based product range and a
dynamic network of more than 300 dealers. Fiat will continue
investing in its Brazilian operation, in the development of know-
how and new products for the domestic and export markets in order
to consolidate and increase its market share.

The finalization of this operation is conditional on approval by
the Central Bank of Brazil.

With this operation, Itau underscores its strategy of focusing
only on operations in its specialty areas of business and on
acquisitions which create additional value to the shareholders.


BCP SA/BSE SA: Parent In Sale Talks With Various Groups
-------------------------------------------------------
BellSouth Corp. is now engaging in talks with companies
interested in buying its stakes in two Brazilian units, BCP SA
and BSE SA, according to an executive.

Citing Paulino Barros, BellSouth's vice president for Latin
America, Bloomberg reports that the Company is in "several
negotiations" with an investment fund and phone operators in
Brazil over the possible sale of the two units.

BCP defaulted on US$430 million of debt and BSE is having trouble
making payments on US$76 million, after a 37% decline in the real
this year drove up financing costs for Brazilian companies.

Last month, BellSouth said it might sell its stake in both units.
The Atlanta-based Company and Brazilian partner, Safra Group,
each own about 45% of the wireless carriers.

BellSouth generates about 15% of its sales from Latin America.
However, due to the rising financing costs, as well as the
increasing competition in Brazil, the Company is considering of
pulling out of the country where it ranks as the fifth-largest
wireless operator.

"We have 11 properties in Latin America and Brazil is one of
these 11," Barros said in an interview. "The other 10 are very
healthy, financially speaking. Brazil was important but we could
do without it."

Minority owners of BSE and BCP are Grupo Oesp, the newspaper
holding company, with 6%, telephone equipment maker Splice do
Brasil with 2.8%, and BSB Participacoes, an investment holding
company, with 2.2%.

CONTACT:  BCP S.A.
          Rua Fl=rida, 1970 4o andar
          Spo Paulo - SP
          Tel: 55 11 5509-6428
          Fax: 55 11 5509-6257
          Home Page: http://www.bcp.com.br

          BELLSOUTH CORPORATION
          1155 Peachtree St. NE
          Atlanta, GA 30309-3610
          Phone: 404-249-2000
          Fax: 404-249-5599
          Home Page: http://www.bellsouth.com/
          Contacts:
          Investor Relations
          Phone (US):    800.241.3419
          Fax: 404.249.2060
          E-mail: investor@bellsouth.com

          BANCO SAFRA
          Av. Paulista, 2100 - Spo Paulo
          Brazil - 01310-930
          Phone: (11) 3175-7575
          Home Page: http://www.safra.com.br/ingles/index.asp
          Contact: Carlos Alberto Vieira, President


CEMIG: Issues Notice To Shareholders
------------------------------------
CEMIG's shareholders are hereby notified that beginning on
January 22, 2002, Banco Itau S.A. will act as the registrar for,
and will perform all shareholder services relating to, CEMIG's
outstanding common and preferred shares, and such services will
no longer be performed by CEMIG.

In order to accommodate this change, all shareholder services,
including updating of shareholder information, share transfers,
official notations in the share registry and share conversions,
will be temporarily suspended from January 7, 2002 to January 21,
2002. No action with respect to the appointment by CEMIG of Banco
Itau S.A. is required on the part of holders of American
Depositary Receipts representing CEMIG's preferred shares.

Beginning on January 22, 2002, CEMIG's shareholders should
contact Banco Itau S.A. for assistance with shareholder services.
Any changes to shareholder addresses or bank account numbers
should be provided to Banco Itau S.A. so that dividends and
interest on capital declared by CEMIG may be properly credited.
Shareholders may provide such information through any branch
office of Banco Itau S.A. in Brazil or by mail to Banco Itau
S.A., Assessoria de Acoes e Debentures, Rua Boa Vista, n§ 176 -
4§ andar, Sao Paulo, SP, CEP 01092-900, Brazil. In addition, any
shareholders holding bearer shares may convert them into
registered shares by presenting their identification, taxpayer
registration number and share certificates with all coupons to
any Banco Itau S.A. branch office, including the branches
specializing in shareholder services listed below, during branch
operating hours.

Banco Itau S.A. Branch Addresses in Brazil for Shareholder
Services

Belo Horizonte (MG) Av. Joao Pinheiro, 195 - mezanino

Sao Paulo (SP) Rua XV de Novembro, 318 - t‚rreo

Rio de Janeiro (RJ) Rua Sete de Setembro, 99 - subsolo

Porto Alegre (RS) Rua Sete de Setembro, 746 - sobre loja

Curitiba (PR) Rua Joao Negrao, 65

Brasilia (DF) SCS Quadra 3, Ed. Dona Angela - terreo

Salvador (BA) Rua Estados Unidos, 50 - 2§ andar Ed.
Sesquicentenario

For further information, CEMIG's shareholders may contact Banco
Itau S.A.'s "Departamento de Investifone" by telephone at (55 31)
3188-5909.

Belo Horizonte, Brazil
January 2, 2002
Stalin Amorim Duarte
Acting Investor Relations Officer


CSN: Wishes To Restart Talks With Corus
---------------------------------------
An executive at Brazilian flat steel maker CSN is seeking to
restart negotiations with Anglo-Dutch steel group Corus after the
latter scrapped a proposed US$3.5 billion takeover last month.

Business News Americas relates that CSN chairman Benjamin
Steinbruch said he would like to begin talks again in March with
Europe's second largest steel producer and reaffirmed that the
merged entity would boost profits and reduce costs. Steinbruch
said his company has much to teach Corus in restructuring its
inefficient mills.

"The path for Corus to grow is to restructure its assets and not
sell them," he was quoted as saying.

However, the European group, which broke off the merger due to
lower-than-expected steel prices and difficulties in raising
capital to carry out the merger, thinks differently about CSN's
plans.

"We made it clear that the proposed merger was off and we have no
present plans to re-open discussions with CSN," said Mike
Hitchcock, a spokesman for Corus.

Corus, which hasn't reported an annual profit since 1998, has
seen its shares fall by more than half since the merger was
announced in July.

CONTACT:  Luciana Paulo Ferreira, CSN - Investor Relations
          Tel. 021 2586 1442
          luferreira@csn.com.br
          www.csn.com.br


CSN: Debt Elimination Believed Possible in Two Years
----------------------------------------------------
CSN chairman Benjamin Steinbruch is confident that the Brazilian
flat steel maker can eliminate its debt in two years time,
relates Business News Americas.

CSN carries a debt of US$2.1 billion but given an Ebitda margin
of 40% this debt could be reduced to zero in just two years.

At the end of September, the Company was able to reduce debt by
US$700 million to US$1.4 billion even with a consolidated net
loss of BRL574 million during the period.


NET SERVICOS: S&P Lowers Rating To 'D'
--------------------------------------
NEW YORK (Standard & Poor's) Dec. 3, 2002--Standard & Poor's
Ratings Services said Tuesday that it lowered its corporate
credit rating on Brazilian pay-TV provider Net Servi‡os de
Comunica‡ao S.A. (Net) to 'D' from 'CC'.

The total debt outstanding is $354 million, as of September 2002.

The downgrade follows Net's announcement that it would be "re-
evaluating its cash flow obligations while the company pursues an
adequate capital structure," said Standard & Poor's credit
analyst Milena Zaniboni.

Net already missed payments on the interest of the convertible
and non-convertible debenture issues due on Dec. 1, 2002 (BrR4.5
million and BrR19 million, respectively), and Standard & Poor's
expects that the company will suspend payment of other immediate
maturities. Other public debt maturities include interest on the
$185 million senior guaranteed notes ($6 million due on Dec. 13,
2002), and on the $80 million Net Sul floating-rate notes
(approximately $3 million due on January 2003).

Although a legal default on the debentures will only be
characterized after 30 days of the non-payment, Standard & Poor's
considers the company to be in default as it does not intend to
remedy such missed payment in that time frame.

Net engaged The Blackstone Group as its financial advisor, and
expects to start discussions with creditors by the end of January
2003. The company seeks to restructure its debt profile to make
it compatible with its cash generation capacity. The ratings on
Net will be raised once this solution is reached.

ANALYSTS:  Milena Zaniboni, Sao Paulo (55) 11-5501-8945
           Jean-Pierre Cote Gil, Sao Paulo (55) 11-5501-8946


NET SERVICOS: Shares Tumble On Word Debt Default Possible
----------------------------------------------------------
Net Servicos de Comunicacao SA, Brazil's largest cable television
operator, indicated it might default on some debt maturing in the
coming months.

In a statement to the Sao Paulo stock exchange, the troubled unit
of media giant Globopar SA said it "is not able to refinance its
financial obligations" because of adverse market conditions.
Continued weakness in Brazil's real has driven up dollar-
denominated debt servicing costs at a time when access to
financing is scarce.

Following the disclosure, the Company's shares lost 2 centavos (1
U.S. cent), or 5.3%, to 36 centavos on the Sao Paulo stock
exchange.

"Net Servicos is again showing its fragility," said Jacqueline
Lison, an analyst with Fator Doria Atherino brokerage. "The
Company had investments to be able to attend 6 million
subscribers and it has only 1.3 million so far. The Company is
too far from a break-even point."

The stock has plunged 96% this year as the Company has been
unable to expand its subscribers amid weak economic growth and a
tumbling currency, which has lost 37% of its value this year.
The Company already won in July an extension on US$200 million in
debt from creditors.

Bloomberg reveals Net Servicos has hired the Blackstone Group and
Bank of America Corp. as financial advisers to help renegotiate
the debt. Earlier this year, the Company raised more than BRL1
billion (US$272.4 million) in capital markets to reduce its
BRL1.4 billion debt, about 73 % of which is denominated in
dollars.

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

CONTACTS: Marcio Minoru Miyakava
          (5511) 5186-2811
          minoru@netservicos.com.br

          Lu Yuan Fang
          (5511) 5186-2637
          lfang@netservicos.com.br


TELESP CELULAR: Offering BREW Technology Next Year
--------------------------------------------------
Brazilian mobile operator Telesp Celular will be launching
Qualcomm's BREW wireless applications platform in early next
year, reports Business News Americas, citing Qualcomm Brasil
senior markerting manager Jacqueline Lee.

According to Lee, Telesp will be the first Latin American
operator to commercialize BREW, after having successful tests
with 250 subscribers in Sao Paulo last June and July.

BREW, short for Binary Runtime Environment for Wireless, which
enables operators to select downloadable wireless applications
for their subscribers.

According to Qualcomm, it provides the "kick-start" needed to
fuel mass-market adoption of wireless data applications and
services.

The cost for launching BREW is not higher for GSM than CDMA
subscribers, since it is an open platform said Peggy Johnson,
president of Qualcomm Internet services.

But the report also mentioned that costs may limit mass-market
penetration of data applications among Latin American
subscribers, who spend little on data services, except for SMS
messaging.

BREW is available for handsets with grayscale screens, though
most BREW-capable handsets are being developed for color screens,
according to the report. Color screen handsets are relatively
more expensive than most, selling for about BRL1,800 (US$492) in
Brazil said Lee, though he expects prices would be coming down.

Qualcomm Mexico's business development VP Flavio Mansi said that
operators would probably be focusing on high-end markets, though
they may subsidize handsets to some extent.

But Qualcomm's strategic marketing senior director Clint
McClellan said that the actual cost of downloading applications
can be quite low.

He added that BREW may even be advantageous for prepaid
subscribers, though the operators would be the ones to determine
its economic viability.

Telesp, which is controlled by Portugal Telecom, had already had
some success with Wireless Application Protocol (WAP)- based
mobile data services, which it markets under the brand Waap.

CONTACT:  Qualcomm Inc
          5775 Morehouse Dr.
          San Diego, CA 92121-1714
          Phone: 858-587-1121
          Fax: 858-658-2100
          Web: http://www.qualcomm.com
          Contact:
          Dr. Irwin M. Jacobs, Chairman & Chief Executive

          Telesp Celular Participacoes, Sao Paulo
          Investor Relations:
          Edson Alves Menini, (55 11) 3059-7531
          Email: mailto:emenini@telespcelular.com.br


USIMINAS: Seen Selling Auto Parts Unit To Boost Cash Reserves
-------------------------------------------------------------
Brazilian flat steel maker Usiminas is yet to confirm a report
that it could divest its auto parts and components unit in order
to raise cash and reduce consolidated debt, which at the end of
September amounted to BRL10.6 billion.

Business daily Valor Economico suggested that Usiminas could
divest Usiparts, whose factory is located in Pouso Alegre, in the
southeast state of Minas Gerais.

Usiminas has been suffering from the effects of the depreciation
of the real currency on its dollar-denominated debt. For the
third quarter of this year, the Company widened its consolidated
net loss to BRL684 million (currently US$185mn) from the BRL23
million loss posted in the same-period 2001.

The Company's accounting procedures also contributed to its loss
since BRL969 million is a result of future export guarantee
contracts from the steelmaker's subsidiary, Sao Paulo-based flat
steelmaker Cosipa.

CONTACT:  USIMINAS
          Rua Prof. Jos, Vieira de MendonOa 3011
          Engenheiro Nogueira
          31310-260 Belo Horizonte
          Minas Gerais, Brazil
          Phone: +55-31-3499-8000
          Fax: +55-31-3499-8899
          Web http://www.usiminas.com.br


* J. P. Morgan Lowers Recommendation on Brazilian Stocks
--------------------------------------------------------
J. P. Morgan Chase & Co. has cut Brazilian bonds' recommendation
to underweight on concerns that the tax policies and cabinet
appointments would not be able to sustain a recent rally by the
country's debt.

According to Graham Stock, head of J.P. Morgan Chase's Latin
American sovereign strategy, the move is to demonstrate that
Brazil faces "tremendous challenges" ahead.

Bloomberg reports that Brazilian bonds have grown by more than 25
percent since mid-October, after concerns of a victory by now
president-elect Inacio Lula da Silva. Investors' fears that Lula
would trigger a default on the country's BRL1.13 trillion of debt
were allayed after Lula promised to pay the country's obligations
and cut back on spending and inflation.

Cabinet members may be named as early as Wednesday, when Lula
returns from Chile. The report said the new president would
possibly be appointing people from within the Workers' Party.
This may disappoint some investors hoping he would be naming more
people from outside of his party.

According to the report, the benchmark 8 percent bond maturing in
2014 fell 1.75 cents on the dollar to 62, raising the yield to
19.53 percent at 5:14 p.m. New York time. The bond rose 2.63
cents on the dollar yesterday to 63.75, its highest close since
July 18.

The real, which has lost 37 percent of its value this year, fell
another 1.4 percent to BRL3.6570 to the dollar. Inflation may
rise to 11 percent this year, according to analysts.



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

METRO: Government Lends Helping Hand
------------------------------------
The Colombian finance ministry was forced to bailout Medellin's
metro in Antioquia department due to the Company's severe debt
problems brought about by construction cost overruns.

Metro, which celebrated its seventh year of operation over the
weekend, was struggling with construction costs, which have
tripled its original estimated amount of US$650 million. In
addition, the Company had to deal with a debt expected to reach
US$2.9 billion.

Last month's meeting between Colombia's finance minister with
Antioquia metro officials failed to yield a solution to the
financial problem. However, department authorities have expressed
commitment to help pay the debt without asking Colombia to
increase payments.



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

CFE: Plans New Plant, Restores Services to Pacific Coast
--------------------------------------------------------
Mexico's Federal Electricity Commission (CFE) will be investing
US$350 million in building a combined cycle thermo-electrical
plant in Laguna II in Gomez Palacio, Durango, said the Company's
director Juan Jose Ramirez Ortiz.

According to a Notimex report, CFE expects the work to begin in
the first week of January next year. Construction is projected to
take about 30 months, employing almost 900 people. The work is
set to include a contract with the Decentralized Water and Sewage
System (Sideapa) to build a water treatment plant.  The plant has
an estimated capacity of 450MW, to support Laguna's industrial
sector.

Meanwhile, CFE resumed normal operations in Nayarit and Jalisco
states in the Pacific Coast after suffering damages from
hurricane Kenna in late October.

According to Business News Americas, Kenna had damaged 58 power
poles supporting 400kV transmission lines, 5,650 sections of
distribution lines, 2,950 electricity meters, 348 transformers,
and uprooted or dislodged 5,983 transmission posts. This had
affected about 107,000 people in 443 communities.

CFE ,which deployed 1,500 workers to restore service, suffered a
US$10 loss due to Kenna. Earlier, CFE had to shoulder a US$30
million damage caused by hurricane Isidore in late September.

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


DESC: Moody's Cuts Ratings Following Assumption of Unit's Debt
--------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Mexico's Desc
SA on US$73 million of debt belonging to a subsidiary but is now
assumed by Desc following the structural changes associated with
a merger that took effect May 15 this year.

According to Bloomberg, Moody's cut its rating on the debt by two
levels to B2, or five steps below investment grade, from Ba3. The
rating company also gave a Ba3 senior implied rating and a B2
senior unsecured issuer rating to Desc's other debt, Moody's said
in a statement.

Desc assumed the debt originally sold by Dine SA after the merger
in May, making the Company a direct holder of the US$73 million
instead of just guaranteeing it, Moody's said.

Moody's also said Desc's auto parts business is struggling
because it hasn't been able to replace production from a
DaimlerChrylser plant in Mexico City that closed.

Desc's auto parts sales will fall by US$130 million a year
because of the plant shutdown, Moody's said.

Desc, headquartered in Mexico City, is a diversified industrial
conglomerate with operations in the autoparts, chemical, food and
real estate sectors. The Company reported annual revenues
equivalent to about US$2.2 billion for fiscal year 2001.

New York
Russell Solomon
Senior Vice President
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Lisa B. Matalon
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653




               ***********


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
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Information contained herein is obtained from sources believed to
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