TCRLA_Public/030103.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, January 3, 2003, Vol. 4, Issue 2



AEROLINEAS ARGENTINAS: Creditors Approve Bankruptcy Exit Plan
BANCO DE GALICIA: Net Loss Nearly Triples In 3Q02 Earnings
ECOGAS: Expected To Pay $38M Bank Loan On December 31
PECOM ENERGIA: To Meet $9.4M Interest Payment January 6


GLOBAL CROSSING: Winnick Resigns; Board To Tap Lambert, Ullman
GLOBAL CROSSING: Founder Resigns as Chairman of the Board
TYCO INTERNATIONAL: Takes $382B Charge Based on Audit Findings
TYCO INTERNATIONAL: Admits To Maneuvering Accounts


CERJ: Aneel Authorizes 28.6% Rate Hike
CSN: Not Buying BHP's 2.1% Stake In CVRD
EMBRATEL: Reaches Restructuring Agreement With Creditor Banks
TELESP CELULAR: Issues Announcement On Transfer of Investments
SAESA: Shareholders OK Capital Increase for Saesa, Frontel


SEVEN SEAS: Five of Six Directors Abandon Ship


VITRO: Issues Local Debt Certificates Worth MXN1 Bln


CHIQUITA BRANDS: To Halt Financial Subsidy Of Panamanian Unit

T R I N I D A D   &   T O B A G O

CARONI LTD: Early Retirement Offer to Reduce Work Force


URUGUAYAN BANKS: Central Bank Extends Suspension To Jan 17
* Finance Minister Says Uruguay Will Pay Obligations This Year


* Venezuela's Oil Exports Halted By Tankers' Refusal To Dock

     - - - - - - - - - -


AEROLINEAS ARGENTINAS: Creditors Approve Bankruptcy Exit Plan
Argentinean flagship carrier Aerolineas Argentinas struck an
agreement with 553 creditors, paving a way out of a preventive
bankruptcy the Company applied for 18 months ago. Under the
agreement, the unit of Spanish travel group Marsans would settle
40% or ARS1 billion of its ARS2.47-billion debt in three
installments: 10% (AR100 million) within 90 days, 35% (ARS350
million) within 360 days and 55% (ARS550 million) within 720
days. Marsans acquired Aerolineas from Spanish state-owned
holding company SEPI for ARS2.5 billion (US$700 million) in
October 2001.

          Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA
          Phone: (54-11) 4310-3000
          Fax: (54-11) 4310-3585
          Home Page:
          Patricio Zabalia Lagos, President

BANCO DE GALICIA: Net Loss Nearly Triples In 3Q02 Earnings
Banco de Galicia y Buenos Aires S.A. (the "Bank", Buenos Aires
Stock Exchange: GALI) today announced its financial results for
the third quarter of FY 2002, ended September 30, 2002.

- The quarter ended September 30 , 2002, showed a Ps.339.3
million loss, mainly as a consequence of the Ps.335.6 million
monetary-adjusted loss recorded in net financial income. This
result was due to the differential variation of price indices,
interest rates and the exchange rate during the period.

- As of September 30, 2002, the Bank's shareholders' equity
amounted to Ps.1,939 million.

- The Bank's market share of Argentina's total deposits increased
from 4.85% as of June 30, 2002, to 5.04% at the close of the
current quarter.

- The Bank's liquidity, using a strict definition (cash and due
from banks exclusively), was 38.8% of the Bank's transactional
deposits and 22.5% of total non-restructured deposits as of
September 30, 2002.

- The allowance for loan losses as a percentage of the non-
accrual loan portfolio was 99.02% as of September 30, 2002,
remaining at the same level of the previous quarter. Coverage was
also maintained with the reserves established in order to cover
the negative shareholders' equity of the Bank's foreign
subsidiaries, future restructuring expenses and contingencies
related to its interests in non-financial businesses.


The quarter showed a loss of Ps.339.3 million, as compared to a
Ps.118.9 million loss in the previous quarter (restated in pesos
of September 30, 2002). Net income for the quarter before the
loss absorption mechanism established by Argentine Central Bank
in its Communiqu‚ "A" 3800 was a Ps.380.1 million loss. The
Ps.40.8 million difference represents an adjustment to the amount
of the gain related to the revaluation of the Bank's net asset
foreign currency position as of December 31, 2001. As explained
in previous press releases, the Argentine Central Bank
established such revaluation gain was to be reflected directly in
a specific shareholders' equity account ("Unrealized Valuation
Difference Resulting from Compensation of the Net Foreign
Currency Position"), without being recorded in the income


As a consequence of the significant and continuous changes in the
regulatory framework, the filing dates prescribed by the
information regime to which financial institutions are subject
experienced successive postponements. Argentine Central Bank's
Communiqu‚ "A" 3802 established that financial statements for the
quarters ended September 30, 2002 and December 31, 2002, were to
be submitted no later than January 6, 2003 and February 20, 2003,
respectively. Later on, Communiqu‚ "A" 3841 postponed the
September 30, 2002, financial statements filing date to January
9, 2003.

Beginning March 31, 2002, the line-by-line consolidation of the
consolidated balance sheet of Banco Galicia Uruguay S.A.
("Galicia Uruguay") has been discontinued.

Beginning the quarter ended March 31, 2002, the Bank's
consolidated financial statements, shown in pages 14 and 15,
include not only its foreign branches and Tarjetas Regionales
S.A., but also the following companies: Galicia Valores S.A.
Sociedad de Bolsa, Galicia Capital Markets S.A., Galicia
Factoring y Leasing S.A., Agro Galicia S.A., Galicia y Buenos
Aires Securities (UK) Ltd. and Tarjetas Regionales S.A.'s

Beginning with the quarter ended March 31, 2002, the Bank's
financial statements have been restated for inflation by using
the Wholesale Price Index (IPIM) published by the National Bureau
of Statistics and Census (INDEC), in accordance with Argentine
Central Bank's Communiqu‚ "A" 3702, Resolution No.240/02 of the
Argentine Federation of Professional Councils in Economic
Sciences and Resolution No.415/02 from the National Securities

3rd QUARTER OF FY 2002 RESULTS The 3rd quarters' loss was mainly
a consequence of the Ps.335.6 million loss showed by net
financial income after the monetary adjustment. Administrative
expenses, net of certain provisions as mentioned in the following
section, amounted to Ps.134.3 million, while provisions for loan
losses amounted to Ps.214.2 million. Net income from services and
net miscellaneous income amounted to Ps.55.5 million and Ps.140.2
million, respectively. The monetary gain associated to
miscellaneous transactions recorded a Ps.187 million profit.


Net financial income, net of the monetary loss from million loss.

Net financial income for the quarter comprises a Ps.65.6 million
profit from FX quotation differences and premiums. This amount
includes the above mentioned Ps.40.8 million gain corresponding
to the adjustment of the gain associated to the revaluation of
the Bank's net foreign currency position as of December 31, 2001.
The Ps.24.8 million remaining profit was mainly a consequence of
the reversal for Ps.110 million of part of the reserve
established to cover the negative shareholders' equity of the
Bank's foreign subsidiaries, the Ps.87 million gain related to
the capital forgiveness obtained in the restructuring of the New
York Branch debt and the Ps.14 million income from brokerage in
the FX market. These gains more than offset the loss associated
to the revaluation of the net asset foreign currency position of
the Bank during the quarter, due to a decrease in the exchange
rate during the period.

Consequently, the loss from financial intermediation reflects the
differential variation of price indices, the CER coefficient and
interest rates. In fact, while the IPIM index (which reflects the
cost of the exposure to inflation of a bank's liquid
shareholders' equity) increased at an annualized rate of 52.32%
and the cost of the financial assistance from the Argentine
Central Bank was 49.9% per annum during the quarter, the
annualized average yields on peso- denominated assets that accrue
interest only and peso-denominated assets whose principal is also
adjusted by CER were 14.0% and 41.5%, respectively, during the
same period.

Provisions for loan losses amounted to Ps.214.2 million during
the quarter and the allowance for loan losses as a percentage of
the private-sector loan portfolio reached 39.91%. Net income from
services amounted to Ps.55.5 million. In the previous quarter the
Bank recorded non-recurring expenses for services in the amount
of Ps.43 million, which were due to payments in connection with
structured-note transactions paid off prior to maturity. The
decrease in income from services during the quarter can be
attributed to the continuous in the fall of service prices in
real terms. These conditions affected mainly those services
related to credit cards, deposit accounts and insurance products.
Credit related fees include Ps.4.0 million corresponding to
previous periods adjustments. Net of this effect, the
aforementioned fees amounted to 6.0 million as of September 30,
2002. Fees related to foreign trade services growth in the volume
of this type of transactions during the quarter.

Administrative expenses, net of the monetary effect related to
such expenses, were Ps.178.9 million. Personnel expenses amounted
to Ps.107 million, including Ps.44.6 million of reorganization
expenses. During the previous quarter, by means of a charge to
the miscellaneous expenses account, the Bank established a
reserve for its total estimated reorganization expenses. As a
consequence, the recording of this quarter's reorganization
expenses have meant a reversal of that reserve in the same amount
of the expenses incurred. Not including such expenses, personnel
expenses for the quarter amounted to Ps.62.4 million. Excluding
depreciation and amortization charges, the remaining
administrative expenses also decreased in real terms.

Income from equity investments for the quarter showed a Ps.7.7
million profit, mainly as a consequence of the Ps.15.8 million
profit recorded by the four regional credit-card companies, which
was partially offset by the losses experienced, mainly, by
Galicia Capital Markets S.A., Galicia Valores S.A. and Galicia
Factoring y Leasing S.A.

Net other income recorded a Ps.140.2 million profit, mainly as a
result of the reversal of reserves for future restructuring
expenses, as mentioned above, and the reversal of other

The monetary gain associated to miscellaneous transactions
recorded a Ps.187 million profit, due to the effect of inflation
on the reserves established in order to cover the negative
shareholders' equity of the Bank's foreign subsidiaries, goodwill
amortization, future restructuring expenses and contingencies
related to its interests in non-financial businesses.


As of September 30, 2002, total assets amounted to Ps.23,947
million while total loans amounted to Ps.9,866 million.

As a result of the Argentine Central Bank having credited in the
Caja de Valores S.A. part of the Compensatory and Hedge Bonds to
which Bank is entitled, Ps.2,530 million in such bonds have been
recorded under the "Government Securities" account, while the
remaining Ps.5,982 million continue to be registered under the
"Other Receivables Resulting from Financial Brokerage" account.

As of September 30, 2002, the Bank's total deposits amounted to
Ps.5,664 million. Deposits in the Argentine market only
represented an estimated 5.04% market share. This amount includes
Ps.1,136 million of restructured deposits and Ps.693 million of
restructured deposits whose holders have exercised the exchange
option established by Decree N§905/02.

As of September 30, 2002, total financial assistance from the
Argentine Central Bank for transitory liquidity support amounted
to Ps.5,336 million. The Bank's debt, originated in the "Galicia
Capitalization and Liquidity Plan", with the Deposit Insurance
Fund and the Fiduciary Fund for the Assistance to Financial
Institutions and Insurance Companies, amounted to Ps.244 million
and Ps.156 million, respectively. Both amounts are recorded under
"Other Liabilities-Other". This caption also includes the
advances from the Argentine Central Bank for the subscription of
the Hedge Bond, as well as its adjustments accrued, for a total
amount of Ps.2,366 million.

Total gross loans amounted to Ps.11,178 million as of September
30, 2002, of which Ps.7,890 million were loans to the public
sector and the remaining Ps.3,288 million were loans to the
private sector. The Bank's estimated market share of all loans in
the Argentine financial system was 10.28% as of the same date.

When consolidating the loan portfolio of the regional credit card
companies, total gross loans as of September 30, 2002, amount to
Ps.11,300 million.

As of September 30, 2002, the Bank's holdings of government and
corporate securities totaled Ps.4,252 million. The increase over
the previous quarter's level is attributable to the recording,
under the government and corporate securities account, of that
part of the Compensatory and Hedge Bonds that was credited by the
Argentine Central Bank to the Bank, as mentioned above.

Equity investments amounted to Ps.119.4 million.

As of September 30, 2002, the Bank had 1.05 million deposit
accounts, 41% lower than in the same quarter of the prior FY.
This decrease was due to the closing of the accounts denominated
in foreign currency in accordance with the regulatory changes
introduced by the government to the operation of the financial


As of September 30, 2002, the Bank's non-accrual to total loans
ratio was 11.85%. Considering only the private-sector loan
portfolio, this ratio amounted to 40.3%. The high level of non-
accrual loans reflects both the effects of Argentina's prolonged
recession on repayment ability of debtors, and the impact of the
various government measures aimed at restructuring private-sector

The allowance for loan losses as a percentage of total loans
increased to 11.74% as of September 30, 2002, from 3.94% as of
September 30, 2001. The coverage of the non-accrual loan
portfolio with allowances for loan losses was 99.02% and the
coverage with guarantees was 53.36%. combined coverage of non-
accrual loans with allowances and guarantees represented 152.38%.

During the quarter, Ps.34.0 million were charged off against the
allowance for loan losses and a Ps.4.0 million direct charge to
the income statement was recorded for loans deemed uncollectible.

When consolidating the regional credit-card companies, non-
accrual loans as of September 30, 2002, amounted to Ps.1,416
million, representing 12.53% of total loans. . The coverage of
the non-accrual loan portfolio with allowances for loan losses
was 95.41% and the combined coverage with allowances and
guarantees was 145.34%.


Through its Communiqu‚s "A" 3599 and "A" 3604, the Argentine
Central Bank suspended the presentation by financial institutions
of the information related to the minimum capital requirements,
as a result of the changes that have occurred in the financial
system's situation and activities, which have significantly
affected the variables for the determination of minimum capital

As of September 30, 2002, the Bank's liquidity (defined as "Cash
and Due from Banks") represented 35.95% of its transactional
deposits and 13.82% of its total non-restructured deposits.
Considering the Bank's operations in Argentina, these ratios were
38.82% and 22.46%, respectively, as of September 30, 2002, and
35.41% and 23.54%, respectively, as of June 30, 2002.


Information on the regional credit-card companies is included on
page 13 of this press release.

Income from the four regional credit-card companies in which the
Bank holds majority interests recorded a Ps.15.8 million profit
in the quarter, mainly due to the profit generated by the
revaluation of the foreign currency position, given that the
exchange rate decreased during the quarter.

As of September 30, 2002, total assets of the four regional
credit-card companies amounted to Ps.527.7 million.

Total loans amounted to Ps.357.3 million, total allowances for
loan losses to Ps.39.4 million and the non-accrual loan portfolio
to Ps.91.3 million. As a consequence, the ratio of non-accrual
loans to total loans was 25.55%, with a coverage of non-accrual
loans with allowances of 43.15%.

RECENT DEVELOPMENTS I - The Economy and the Financial System

During the quarter ended September 30, 2002, the economy showed
signs of stabilization with respect to the developments observed
during the first half of the year, while the financial system
showed signs of improvement. These relate to favorable level of
activity indicators and lower price increases, as well as to a
constant increase in tax collection since May and a favorable
behavior of monetary variables.

During the 3rd quarter, wholesale prices increased at a 52.3%
annualized nominal rate while consumer prices increased a 28.1%
annualized nominal rate, compared to 184.8% and 75.9%,
respectively in the previous quarter. The nominal exchange rate
decreased to Ps.3.73 per US dollar from Ps.3.8 at the close of
the previous quarter, while interest rates decreased
significantly from the previous quarter's levels. Nominal 30-day
time-deposit interest rates decreased to 38.05% per annum from
58.01% in the previous quarter. In addition, GDP grew on a
quarter- over-quarter basis for the second time in the year,
increasing by 0.2%. During the 2nd quarter, GDP had increased
0.8%. Tax collection showed a nominal increase of 14.1% over the
previous quarter and of 23.1% over the same quarter of the
previous year. Likewise the industrial activity indicator
prepared by INDEC showed an increase of 1.6% over the previous
quarter on a seasonally adjusted basis.

With respect to the financial system, the first swap of deposits
for government bonds (Canje I), which closed at mid July 2002,
amounted to Ps.8 billion, of which Ps.1 billion corresponded to
transactional accounts (current and savings accounts) and Ps.7
billion to restructured deposits (25% of the financial system's
total restructured deposits at the swap's closing date), in
accordance with information provided by the Ministry of Economy.
Beginning on mid July 2002, transactional deposits remained
basically stable, amounting to Ps.23.4 billion as of June 30,
2002, Ps.22.2 billion as of September 30, 2002 and Ps.23.5
billion at mid December 2002. Time deposits of less than 180 days
increased by more than Ps.5.5 billion during the quarter and by
approximately Ps.5.7 billion between October 1 and mid December
2002, having increased even after the lifting of the "corralito."
Restructured deposits continued to decrease as a result of court
orders issued in connection with judicial actions from depositors
("amparos"). Therefore, total deposits of the private sector
increased approximately by Ps.1.8 billion between July 1 and
September 30, 2002, and Ps.1.1 billion between October 1 and mid
December 2002. This was due to the significant increase of time
deposits of less than 180 days and to the fact that financial
institutions were able to raise part of the funds that were freed
by means of "amparos", the payment by banks of restructured
deposits up to Ps.7 thousand or Ps.10 thousand, and the lifting
of the "corralito." (See "Main Regulatory Issues and the Impact
on the Bank").

By means of controls on the FX market, the sale of FX by
exporters to the Argentine Central Bank, the sterilization of
excess monetary supply and the intervention in the FX market, the
Argentine Central Bank succeeded in stabilizing the level of
international reserves while the nominal exchange rate decreased.
This resulted in a relative stability in domestic prices and
interest rates, which added to the stability in transactional
deposits encouraged the government to lift, beginning December 2,
2002, the restrictions imposed to transactional deposits. Funds
freed from the "corralito" did not have an impact on the value of
the nominal exchange rate. The lifting of the "corralito" was
accompanied by an increase of the average time-deposit legal cash
reserve requirements, up to 14% of time-deposits set up in cash.
Likewise, the financial system's liquidity, measured by cash in
bank vaults and balances kept with the Argentine Central Bank as
a percentage of total deposits, improved during the quarter,
reaching 17.1% at the end of September 2002, compared with a
12.3% ratio at the end of June 2002. As of December 16, 2002,
this ratio was 21.2%.

During the 4th quarter the economy continues to show signs of
improvement. In November 2002, wholesale prices decreased 1.7%,
consumer prices increased 0.5% and industrial activity increased
0.8% over the same month of the previous year. This was the first
time in the year and in 27 months that industrial activity
increased on an annual basis. In addition, November's industrial
activity level was the highest in the year. Also, at mid
December, international reserves had increased above US$10
billion. Likewise, November's total tax collection and the value
added tax (VAT) collection increased 7.4% and 3.4%, respectively
in real terms, the increase in the latter being an indicator of
an increase in domestic aggregate demand. In the 4th quarter, GDP
is expected to show another increase over the previous quarter.

During the month of December, Mr. Ado Pignanelli, president of
the Argentine Central Bank resigned and was replaced by Mr.
Alfonso Pratt Gay.

II- Main Regulatory Issues and the Impact on the Bank

Deposits and Obligations with the Public and Private Sectors

Through Decree No.1836/02 dated September 16, 2002, regulated by
Argentine Central Bank Communiqu‚ "A" 3740, the government
established a new swap of restructured deposits (CEDROs) for
government bonds ("Canje II") and the repayment of all
restructured deposits up to Ps.7,000 (excluding the CER
adjustment) as of May 31, 2002. Banks were allowed to voluntarily
repay all holders of restructured deposits of up to Ps.10,000
(excluding the CER adjustment).

Banco Galicia offered its customers the latter alternative. The
period initially established for the repayment of deposits up to
said amounts was October 31, 2002, inclusively. This period was
postponed until November 21, 2002, inclusively. The amount of the
Bank's deposits freed in connection with this government measure
represented a low percentage (of approximately 30%) of eligible
deposits and did not alter the behavior of the Bank's deposits or
its liquidity.

The new swap, still in progress as of the date of this press
release, contemplates different options for holders of CEDROs or
depositors that might have participated in the previous swap of
deposits for government bonds implemented by the government.
Holders of CEDROs are able to voluntarily exchange their
certificates for dollar-denominated bonds maturing in 2013 (Boden
2013), that will be secured by the financial institution in which
the deposit was made, and/or peso-denominated "Letras de Plazo
Fijo" ("Time Deposit Bills") to be issued by financial
institutions and that include an option granted by the government
to convert into US dollars, at each amortization and coupon due
dates, the amounts payable at those dates. The Time Deposit Bills
have the same maturity as the Boden 2013 and their principal will
be adjusted by CER. The period to participate in the swap was
initially set to expire on October 30, 2002. The expiration date
was postponed up to and including December 12, 2002, and
subsequently up to and including March 12, 2002. While the first
swap represented for the Bank approximately Ps.693 million
(without interest and the CER adjustment), as of the date of this
press release, the second swap did not reach material amounts. As
of the date of the Bank's September 30, 2002 financial
statements, restructured deposits exchanged for government bonds
in the two swaps amounted to Ps.759 million and the amount of
restructured deposits (CEDROs) to Ps.760 million. Both amounts
exclude interest and the CER adjustment.

In accordance with the provisions of Decree No.905/02,
restructured deposits can be applied for certain uses, among
which the repayment of loans in the same financial institution
where the deposit was made.

Decree No.1836/02 allowed financial institutions to offer dollar-
denominated government bonds maturing in 2006 to depositors
having initiated judicial actions pending resolution, to recover
their deposits. Acceptance of these bonds is voluntary.

On November 22, 2002, through its Resolution No.668/02 and
effective December 2, 2002, the Ministry of Economy eliminated
the restrictions still in force imposed on amounts that could be
withdrawn in cash from transactional deposit accounts (current
and savings accounts). These accounts were incorporated to the
free account system established by article 26 of Decree
No.905/02. As was the case with the repayment of deposits up to
Ps.10,000, this measure that meant the lifting of the
"corralito", did not have a material impact on the Bank's
deposits or liquidity.

Legal Actions Related to the Payment of Deposits

As a result of the measures adopted by the government, a
significant number of complaints have been filed against the
national government and/or financial institutions by individuals
and legal entities, claiming that those measures are in breach of
constitutional and other rights.

As of the date of the September 30, 2002, the final result of
these complaints remains unknown. As of November 30, 2002, court
orders received by the Bank mandating the reimbursement of
deposits in their original currency of denomination or at the
free exchange rate amounted to Ps.12.4 million and US$404.3
million. At that date, in compliance with such court orders, the
Bank had paid the amounts of Ps.534.7 million and US$68.3
million. As of September 30, 2002, the difference between the
amount paid and the amount resulting from the conversion into
pesos of the dollar balance of the deposits returned at the
Ps.1.40 per US dollar exchange rate was recorded in the "Other
Receivables Resulting from Financial Brokerage" account and
amounted to Ps.362.4 million. As of the date of this press
release, the Argentine Supreme Court is expected to rule on
certain cases that will set up its final position regarding the
constitutionality of the conversion of dollar- denominated
deposits into pesos and access restrictions imposed by the

Financial institutions have requested to the government that they
be compensated for the losses arising from the payment of
deposits pursuant to judicial actions, as explained above, at the
free market exchange rate, at values higher than the Ps.1.4 per
US dollar established by government regulations for the
conversion of bank assets and liabilities into pesos. As of the
date of this press release, the government has not addressed this

The Bank has made several presentations to the authorities
requesting that attention be provided to this situation.

Compensation to Financial Institutions

For the "Asymmetric Pesification" and its Consequences As
mentioned in previous press releases, Decree No.905/02 provided
that the compensation to which a financial institution was
entitled to would be calculated by taking into account the
imbalances generated by the government's pesification measures in
the balance sheet of such financial institution's headquarters
and branches located in Argentina as of December 31, 2001,
limiting the provision of compensation on account of imbalances
generated in the balance sheets of such institution's foreign
branches and subsidiaries, exclusively to the effects of the
conversion into pesos of such foreign branches' and subsidiaries'
investments in Secured Loans to the Government. Therefore, the
negative impact of the pesification of the other assets of the
Bank's foreign branches and subsidiaries and local subsidiaries
with complementary activities, subject to Argentine Law, remained
excluded from the compensation scope. This generated evident
damage to the Bank's financial condition.

For the Bank, the amount of compensation determined in accordance
with the provisions of Decree No.905/02 amounted to US$788
million (Compensatory Bond) and US$618 million (Hedge Bond).
These balances were included in the Bank's balance sheet as of
March 31, 2002.

On October 28, 2002, the government issued Decree No.2167/02
which modified Article 29 of Decree No.905/02 by incorporating
into the calculation of the compensation amounts the assets and
liabilities recorded in foreign branches and subsidiaries which
were subject to the provisions of Decree No.214/02 and
complementary ones. Decree No.2167 did not contemplate any
changes with respect to the assets of subsidiaries with
complementary activity. The changes in the above mentioned
amounts, resulting from the provisions of Decree No.2167/02 were
recognized in the June 30, 2002 financial statements. The
estimated effect of the incorporation of the previously excluded
assets of foreign branches and subsidiaries was an increase over
the amounts of compensation mentioned in the previous paragraph
of US$230 million (Compensatory Bond) and US$661 million (Hedge

Through its Communiqu‚s "A" 3805 and "A" 3825, the Argentine
Central Bank regulated the changes introduced by Decree
No.2167/02, and established that no later than December 23, 2002,
financial institutions must submit the new compensation amounts.
The variations in the above mentioned amounts resulting from
Decree No.2167/02 and Argentine Central Bank's Communiqu‚s "A"
3805 and "A" 3825 were recognized in the September 30, 2002
financial statements. The Compensatory Bond amounted to U$S1,022
million and the Hedge Bond to U$S1,232 million. These amounts
could be subject to regulatory changes or presentations by
clients under the terms of Argentine Central Bank's Communiqu‚
"A" 3561 and complementary ones. As of September 30, 2002, this
amount was recorded as follows:

- Ps.2,530 million of received compensation were recorded under
the account "Government Securities - in Foreign Currency -
Investment Account."

- Ps.5,982 million for compensation still to be received were
recorded under the "Other Receivables Resulting from Financial
Brokerage - In Foreign Currency - Compensation to be Received
from the National Government" account.

The advance from the Argentine Central Bank for the subscription
of the Hedge Bond was recorded under the "Other Liabilities
Resulting from Financial Brokerage - In Pesos - Advances for the
Subscription of National Government Bonds in Dollars Libor 2012"
account for Ps.2,366 million, including the capital adjustments

For the "Asymmetric Indexation" and Legal Actions Related to the
Payment of Deposits

In addition, financial institutions have requested to the
government that they be compensated for the losses generated to
them by: 1) the payment of deposits pursuant to judicial orders
at the free market exchange rate, which was greater than that
established by the government for conversion into pesos of
included financial institutions' assets and liabilities, and 2)
the adjustment for inflation of included assets and liabilities
by using different coefficients (CER vs. CVS) ("asymmetric
indexation"). As of the date of this press release, the
authorities have not taken any measures to compensate these
issues. As previously mentioned, the Bank has presented several
letters before the Ministry of Finance and the Argentine Central
Bank addressing the need to deal with this situation.

III - Situation of the Bank

During 2001, the financial system faced several episodes of
systemic deposit runs as a consequence of the Argentine critical
economic and political situation. At the end of 2001, in the case
of the Bank, the deepening of the economic and political crisis
led to a drop in deposits which caused a lack of liquidity, that
made it necessary for the Bank to request financial assistance
from the Argentine Central Bank. In order to face this situation,
the Bank submitted to the Argentine Central Bank the plan
described below.

Galicia Liquidity and Capitalization Plan

On March 21, 2002, the Bank submitted to the Argentine Central
Bank the "Galicia Capitalization and Liquidity Plan (the "Plan").
The pillars of the Plan were the immediate restoration of the
Bank's liquidity through the provision of cash in an amount
sufficient to allow the Bank to reimburse a significant portion
of its demand deposits without having to request financial
assistance from the Argentine Central Bank; and a subsequent
significant increase in its capitalization. The Plan also
contemplated the undertaking of negotiations with foreign
creditors in order to restructure the Bank`s debt with such
creditors, the orderly winding down of the Bank's operating units
abroad, and the streamlining of the Bank's organization and
administrative expenses in order to adapt its operations to a
level of activity that is lower than that experienced in the
recent past. The Plan included the temporary exemption from
compliance with certain technical ratios and the reduction of the
charges or fines arising from any non-compliance incurred or to
be incurred, before implementing the Plan, pursuant to the
provisions of Law 21,526 (Financial Institutions Law). The Plan
was approved, by the Board of Directors of the Argentine Central
Bank, on May 3, 2002, through its Resolution No.281.


As explained in previous press releases, initially the
improvement in the Bank's liquidity was a result of:

- The securitization (and/or sale) of the Bank's mortgage and
commercial loan portfolio for a total amount of Ps.400 million,
through the transfer of loans to, or the creation of trusts
subscribed by, domestic financial institutions during April 2002.

- A loan from the Deposit Insurance Fund ("Fondo de Garant¡a de
los Dep¢sitos") for the US dollar amount equivalent to Ps.200
million at the exchange rate prevailing on the day prior to that
of the disbursement (US$ 64.5 million), with a five-year term and
an interest rate equal to the 180-day LIBOR rate plus 300 basis

- A loan from the Fiduciary Fund for the Assistance to Financial
Institutions and Insurance Companies ("Fondo Fiduciario de
Asistencia a Entidades Financieras y de

Seguros") for the US dollar amount equivalent to Ps.100 million
at the exchange rate prevailing on the day prior to that of the
disbursement (US$32.3 million), with a three-year term and an
interest rate equivalent to the 180-day LIBOR plus 400 basis
points, with a floor of 8.07%. In addition, a Ps.574 million loan
from the Bank Liquidity Fund ("Fondo de Liquidez Bancaria") was
restructured by extending its maturity to three years. This loan
was canceled after the implementation of the Plan, by means of an
advance from the Argentine Central Bank. After the above
mentioned initial infusion of cash, and in the context of the
renegotiation of its external debt, between the implementation of
the Plan and the date of this press release, the Bank has rebuilt
and stabilized its liquidity position without requiring any
financial assistance from the Argentine Central Bank.

New York Branch and Units Abroad

The redefinition of the Bank's operating units abroad included
the "New York Branch Restructuring Plan", which was submitted to
the US Treasury's Office of the Comptroller of the Currency
("OCC") on March 22, 2002. This plan contemplated the voluntary
and orderly winding down of the New York Branch affairs and its
ultimate closing, after 1) the payment of the New York Branch's
small deposits; 2) the restructuring of its third party
liabilities; and 3) the transfer to the Head Office in Argentina
of the restructured debt. As of March 31, 200ý, the New York
Branch had third party liabilities totaling approximately US$331
million. Between that date and mid 2002 the restructuring of most
of the New York Branch's debt had taken place. As of the date of
the September 30, 2002 financial statements the restructuring of
all of the New York Branch's debt with third parties has
concluded and the Branch is close to finalizing the process of
winding down its operations. The restructuring of the New York
Branch debt consisted of a short-term reprogramming of commercial
debt for US$51 million, through a 20% cash payment and the
transfer of the remaining 80% to the Bank's Head Office in
Argentina. As of the date of this press release, all of such debt
has been repaid. From the approximately US$237 million of
financial debt (of which US$200 million was instrumented as two
bonds of US$100 million each), US$125.5 million were reprogrammed
as Head Office debt, with a 5-year maturity and 2-year grace
period, US$68.9 million were paid in cash, and a US$42.6 million
debt forgiveness was obtained. From the US$30 million in
deposits, the Branch paid US$12.5 million small deposits in cash,
reprogramming US$17 million as Head Office debt. The remaining
liabilities, trade-related contingencies, were transferred to the
Bank's Head Office. In accordance with the provisions of the
Plan, the Bank's representative offices in Sao Paulo (Brazil) and
London (UK), as well as the Bank's security house established in
the UK, Galicia y Buenos Aires Securities (UK) Ltd., have been


The increase in the Bank's capitalization is an integral part of
the global restructuring of the Bank's debt with foreign
creditors. The Plan contemplates, as an integral part of the
renegotiation of this debt, the addition of basic and/or
complementary capital through the subscription by such creditors
of ordinary shares or subordinated debt, whether or not
convertible into ordinary shares, at the option of the

Restructuring of the Head Office and the Cayman Branch Debt

On June 12, 2002, the Bank announced the restructuring of all of
the debt with foreign creditors of the Bank's Head Office in
Argentina, under the framework of the Plan. Within this
framework, the repayment of the Bank's debt with foreign
creditors has been postponed until such debt is renegotiated. At
the same time, the Bank announced that it had hired an
international investment bank as advisor in the process.

With respect to the restructuring of the Head Office's and the
Cayman Branch's foreign debt, the Bank has formally began
negotiations with a steering committee that was recently
established by the Bank's largest creditors. The Bank is
currently progressing in the restructuring process and the
definition of a repayment proposal.

The restructuring of the Bank's external debt is a complex
process due to the amount, number of creditors and variety of
debt instruments involved. In addition, the process is
complicated by the uncertainty prevailing in Argentina in the
political, economic and regulatory fields. This uncertainty has
been especially detrimental for the financial system, that was
particularly affected by the economic policy in 2002, while a
complete solution to its problems is still pending. (See "Main
Regulatory Issues and the Impact on the Bank - Compensation to
Financial Institutions")

Banco Galicia Uruguay S.A. and Banco de Galicia (Cayman) Ltd.

Galicia Uruguay

The developments in Argentina, and most importantly the
establishment of access restrictions to deposits in December
2001, resulted in the deterioration of the public's confidence in
Argentine banks and impacted negatively on depositors' confidence
in Galicia Uruguay, prompting a massive run on Galicia Uruguay's
deposits beginning in mid-December.

On February 6, 2002, Galicia Uruguay submitted a letter to the
Central Bank of Uruguay in order to i) communicate its situation
of temporary lack of liquidity, which prevented it from
continuing to face the withdrawal of deposits; ii) request
financial assistance in order to preserve its ability to
reimburse all of its deposits in an orderly manner and face the
withdrawals, substantially caused by the developments that had
occurred in Argentina; or iii) request from that entity the
authorization to temporarily suspend its activities.

On February 13, 2002, the Central Bank of Uruguay resolved to
appoint an intervenor to oversee Galicia Uruguay's management and
authorized the total suspension of its activities for a 90-day
period, which was extended subsequently for an additional 60-day
period. On June 10, 2002, Galicia Uruguay submitted to the
Central Bank of Uruguay a proposal to restructure its
liabilities. The proposal consisted of an initial cash payment in
dollars equivalent to 3% of the credit balance of each creditor
and, for the remaining balances and, at the creditors election, a
time deposit or negotiable obligations issued by Galicia Uruguay,
both maturing on September 2011, with principal amortization in
nine annual installments (the first two for the 15% of the
remaining balance and the following ones for 10% of such balance)
and a 2% annual interest rate. On June 18, 2002, the Central Bank
of Uruguay informed the Bank that it would not oppose any
restructuring solution that the Bank would agree with Galicia
Uruguay's depositors, subject to the proposal being accepted by
at least 75% of the depositors. This percentage coincides with
the minimum required by the Uruguayan Law to validate an
extrajudicial agreement. On June 20, 2002, the Bank informed the
Central Bank of Uruguay that it was offering a pledge of Galicia
Uruguay's commercial loan portfolio as guarantee of the
restructuring proposal presented on June 10, 2002.

On July 22, 2002, Standard & Poor's ("S&P") rated as "D" (and
"uyD" in the Uruguayan local scale) to Galicia Uruguay's
counterparty credit quality and deposits. Likewise, S&P announced
that the senior and subordinated medium-term notes to be issued
as part of Galicia Uruguay's restructuring plan would be rated
"CC" and "C", respectively.

The proposal was accepted by 7,067 account holders representing
more than US$930 million in deposits over a total of US$1,176
million held in 12,271 accounts. Measured in terms of balances,
this represents a percentage of acceptance of more than 79%.

On August 26, 2002, the Judge in charge of the Court of
Montevideo that oversees the case, accepted the steps taken by
Galicia Uruguay in reaching an extrajudicial agreement and
granted it a provisional moratorium that will extend until the
end of the process. In addition, the Central Bank of Uruguay was
designated by the above mentioned Court to verify that the legal
majority has been obtained in the agreement. Such verification
was satisfactorily concluded. On December 23, 2002, the Judge in
charge of the Court approved Galicia Uruguay's proposal to refund
100% of its US dollar-denominated deposits.

Banco Galicia (Cayman) Ltd.

Galicia Uruguay's situation has affected its subsidiary Banco
Galicia (Cayman) Ltd. As a consequence, on July 19, 2002, at the
request of said subsidiary, the Cayman Islands authorities have
designated a provisional liquidator in order to allow a voluntary
debt restructuring agreement to be reached between this
subsidiary and its creditors. The restructuring of the
liabilities of Banco Galicia (Cayman) Ltd., is currently in
progress. This subsidiary will present, in due time, to the
relevant authorities the proposal to be made to creditors. This
proposal can only be made once the agreement with the creditors
of Galicia Uruguay is closed.

Impact of Decree No.214/02 and Complementary Ones

The devaluation in Argentina and the mandatory "asymmetric
pesification" of a portion of Galicia Uruguay's loans that were
denominated in US dollars but subject to Argentine Law, have
materially and adversely affected Galicia Uruguay's financial
condition. As already mentioned, this impairment was caused by
the fact that Decree No.905/02 excluded from the calculation of
the amounts of Compensatory and Hedge Bonds to which the Bank was
entitled the pesified private-sector assets held by the Bank's
controlled companies with complementary activities and its
foreign branches and subsidiaries. Subsequently, Decree
No.2176/02 and Argentine Central Bank's Communiqu‚ "A" 3805
complemented the compensation calculation, by including in such
calculation the assets held by foreign subsidiaries subject to
pesification in accordance with Decree No.214/02. (See "Main
regulatory Issues and the Impact on the Bank - Compensation to
Financial Institutions")

In this context, the Bank has entered into an agreement with
Galicia Uruguay whereby the Bank has agreed to take such
necessary action in order to, in certain circumstances and with
the prior consent of the Argentine Central Bank, make
contributions to Galicia Uruguay that may be required to permit
Galicia Uruguay to repay all of its restructured deposits. Such
agreement was subsequently amended by both parties to clarify
that the direct and indirect legal effects resulting from the
representations and obligations set forth in such agreement and
the enforceability of the rights assumed thereunder are subject
to the prior restoration of the economic condition of the Bank
and the repayment in full of any financial assistance provided by
the Argentine Central Bank to the Bank. These foregoing
circumstances are mentioned in Article 52 of Resolution No.281 of
the Argentine Central Bank. In addition, as a result of the
intervention by the Uruguayan Central Bank of Galicia Uruguay,
audited financial statements prepared in accordance with
Argentine accounting rules are not available for Galicia Uruguay.

For the foregoing reasons and in complying with the Plan, the
Bank decided to fully provision its investment in Galicia Uruguay
and its subsidiary Banco Galicia (Cayman) Ltd. for the amounts
recorded in its books as of December 31, 2001. Likewise, and for
as long as the above mentioned circumstances remain, the Bank
deemed it appropriate to discontinue the valuation of these
subsidiaries in accordance with the equity method and
consolidation of both subsidiaries' financial statements with
those of the Bank. In addition, and in accordance with unaudited
information, the Bank has established a reserve, under the
liability account "Provisions - Other Contingencies", for
Ps.931.1 million, equivalent to the estimated negative
consolidated shareholders' equity of the two subsidiaries as of
September 30, 2002.

Within the context described, it is the Bank's intention to
continue the operations of its Uruguayan subsidiary.

Business Developments

Beginning in the middle of the second quarter and with more
emphasis in the third quarter of 2002, the Bank made significant
progress in the implementation of the Plan, and succeeded in
improving and stabilizing its liquidity position after the
initial increase tied to the Plan, significantly progressing in
the orderly winding down of its operating units abroad,
especially in the case of its New York branch, and the
restructuring of Galicia Uruguay's liabilities. The Bank has also
initiated the process of restructuring the Head Office's debt.

In this context, the improvement in the Bank's liquid position
was achieved by means of a strong emphasis on credit recovery
initiatives, a sustained cash flow associated to the credit
portfolio with periodic payment and a progressive increase in
deposits beginning in the third quarter of 2002. As a result of
the latter, the Bank offered its depositors, in the context of
the provisions of Decree No.1836/02, as previously explained, the
repayment of their CEDROs and Boden for amounts up to Ps.10,000,
higher than the mandatory amount of Ps.7,000 established by said
Decree. (See "Main Regulatory Issues and the Impact on the Bank -
Deposits and Obligations with the Public and Private Sectors") In
addition, within the Plan's measures, the Bank has made
significant progress in the reworking and streamlining of its
organizational structure and reduction of its administrative
expenses in order to adapt to a context that has radically
changed. For this, as of the date of this press release, the Bank
has reduced its branch network by more than 15 branches, through
mergers, from the number at September 30, 2002, and the Galicia
Ahora service centers network have been fully absorbed by the
Bank's branch network.

In addition, all rental contracts, and contracts with suppliers
of systems and communication services have been renegotiated. The
reduction in the Bank's staff, through voluntary mechanisms, has
accelerated during October and November 2002, with the current
number of employees being 998 lower than that reported for
September 30, 2002.

Even though in the present environment cost reduction is an
essential component of the Bank's strategy, concurrently the Bank
is proactively facing the challenge of successfully adapting to
the new environment for the financial business. The developments
that took place in Argentina since December 2001 have
significantly impaired the financial system's ability to act
directly as an intermediary between the public's savings and the
supply of credit. This situation is not expected to change in the
short term. For this reason, the Bank is concentrating its
efforts in the provision of transactional financial services such
as the management of means of payment (with emphasis in
electronic means of payment, debit cards and its transactional
"on-line" capacity), the supply of banking accounts and deposit
raising associated with customers' transactional needs, credit
card activities, the provision of foreign trade services and the
buying and selling of foreign currency and local governments'
bonds domestically used as currency. Even if the above mentioned
developments have had negative consequences on the financial
system, they have also fostered the use by the population of
traditional banking services and alternative channels. In
addition, the increase in the Bank's liquidity has allowed it to
resume, within the current applicable regulations, certain credit
activities, which are focused exclusively in the corporate

The Bank has put in place several initiatives aimed at increasing
its income from services and its deposit base at the same time.
In this effort, the Bank relies on one of the most extended and
diversified distribution platforms of the Argentine financial
system (given that, despite the reduction in its branch network,
the Bank has kept a significant nation-wide presence) and
appropriate information technology investments that allow it,
among others, to operate one of the best electronic banking
services of the country, benefit from a high capacity for
processing transactions, and efficiently use the information in
its data bases. The Bank also relies on a wide product offering,
that is being adapted to the new context and includes new
technology-based services, and modern working methods.

In the present context, one of the main objectives of the Bank is
to increase the coverage of its cash operating expenses with fee
income. Fee income as a percentage of operating expenses plus
expenses for services (1) increased from approximately 63% in
December 2001 to approximately 74% in September 2002.

It is also worthwhile highlighting the Bank's significant effort
to protect asset quality, through the establishment of loan loss
reserves for Ps.844.5 million in the 2nd quarter and Ps.214.2
million in the 3rd quarter, which allowed the coverage of non-
accrual loans with loan loss reserves to increase to 99.02% as of
September 30, 2002, from 63.41% as of March 31, 2002. Likewise,
provisions have been established for contingencies related to the
Bank's interests in non-financial businesses, amortization of
certain goodwill, future estimated restructuring charges and the
negative net worth of foreign branches and subsidiaries.

          Phone (54-11) 6329-6430
          Fax (54-11) 6329-6494

ECOGAS: Expected To Pay $38M Bank Loan On December 31
Argentine gas distributor Ecogas was scheduled to complete a debt
swap deal by December 31 to pay a US$38-million loan with
BankBoston and the New York branch of Spanish banking group BBVA,
Business News Americas reports, citing a company executive.

According to Ecogas administration manager Hector Diaz, the
Company will pay the loan with another US$35 million loan from
Italy's Sanpaolo-Imi bank and US$3 million in cash.

The loan extended by Sanpaolo is for two years at Libor plus
0.4%, which Diaz described as "very good" terms for Ecogas.

Ecogas originally had until September 27 to pay the loan, but
defaulted on it because of the devaluation of the Argentine

Ecogas (Distribudora de Gas del Centro) operates in Argentina's
Catamarca, Cordoba and La Rioja provinces.

PECOM ENERGIA: To Meet $9.4M Interest Payment January 6
Argentine energy company Pecom Energia informed the Buenos Aires
bourse that it would pay US$9.4 million in interest on January 6
for four series of debentures worth a total of US$599 million,
relates Business News Americas.

The debentures are a J class series of US$75.7 million (one year,
Libor plus 3.75%), L class of US$55.6 million (one year, Libor
plus 4%), K class of US$286.3 million (five years, Libor plus
4%), and M class of US$181.8 million (five years, Libor plus
4.75%). The bonds were issued as part of Pecom's US$2-billion
debt renegotiation in October 2002.

The refinancing was a key condition for Brazil's state oil
company Petrobras to buy 58.6% of Pecom Energia's holding company
Perez Companc for US$1.13 billion.

Pecom Energia S.A., controlled by Perez Companc S.A., is a
significant presence in an important Argentine and Latin American
industry sector, including oil and gas production and
transportation, refining and petrochemicals and power generation,
transmission and distribution.

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


GLOBAL CROSSING: Winnick Resigns; Board To Tap Lambert, Ullman
The Board of Directors of Global Crossing announced Tuesday that
it has accepted the resignation of Gary Winnick as Chairman of
the Board and a member of the Board of Directors, effective

In a statement, the directors said, "We wish to acknowledge Gary
Winnick's role as founder of a company that today provides
advanced telecommunications services to thousands of customers
worldwide. The company's Plan of Reorganization having now been
approved, we respect his desire to make this decision."

It is anticipated that independent directors Jeremiah D. Lambert
and Myron E. Ullman, III will be elected as Co-Chairmen of the
Board of Directors, also effective Tuesday.

Other continuing members of the Board include: Alice T. Kane,
Global Crossing Chief Executive John Legere, and Lodwrick Cook,
who will step down as Co-Chairman of the Board.

Messrs. Lambert and Ullman have served since April 2002 as
independent directors of Global Crossing and as members of the
Audit Committee, Compensation Committee and Special Committee on
Accounting Matters.

Mr. Lambert is a nationally known lawyer whose practice has
focused on corporate clients in regulated industries, including
those in the electricity, natural gas and telecom sectors. He
previously served as a senior partner in Shook, Hardy & Bacon
L.L.P., and was the co-founder and chair of Peabody, Lambert and
Meyers. Mr. Lambert, who began his legal practice at Cravath,
Swaine & Moore, is a frequent lecturer and widely published

Mr. Ullman, who has retired from full-time corporate activity,
has extensive experience, both domestically and internationally,
in corporations, government and academia. Over the past 15 years,
he has led major businesses in Asia (Wharf Holdings Ltd.), the
United States (R.H. Macy & Co., Inc. and DFS Group Ltd.) and,
most recently, in Europe (LVMH Mo‰t Hennessy Louis Vuitton and De
Beers LV). Mr. Ullman has also served on numerous business,
community and not-for-profit boards.

Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the globe.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services. Global Crossing operates throughout the Americas and
Europe, and provides services in Asia through its subsidiary,
Asia Global Crossing.

On January 28, 2002, Global Crossing Ltd. and certain of its
subsidiaries (excluding Asia Global Crossing and its
subsidiaries) commenced Chapter 11 cases in the United States
Bankruptcy Court for the Southern District of New York
(Bankruptcy Court) and coordinated proceedings in the Supreme
Court of Bermuda (Bermuda Court). On the same date, the Bermuda
Court granted an order appointing joint provisional liquidators
with the power to oversee the continuation and reorganization of
the Bermuda-incorporated companies' businesses under the control
of their boards of directors and under the supervision of the
Bankruptcy Court and the Bermuda Court. Additional Global
Crossing subsidiaries commenced Chapter 11 cases on April 23,
August 4 and August 30, 2002, with the Bermuda incorporated
subsidiaries filing coordinated insolvency proceedings in the
Bermuda Court. The administration of all the cases filed
subsequent to Global Crossing's initial filing on January 28,
2002 has been consolidated with that of the cases commenced on
January 28, 2002. Global Crossing's Plan of Reorganization, which
it filed with the Bankruptcy Court on September 16, 2002, does
not include a capital structure in which existing common or
preferred equity would retain any value.

On November 18, 2002, Asia Global Crossing Ltd. and its
subsidiary, Asia Global Crossing Development Co., commenced
Chapter 11 cases in the United States Bankruptcy Court for the
Southern District of New York and coordinated proceedings in the
Supreme Court of Bermuda. Asia Global Crossing's bankruptcy
proceedings are being administered separately and are not being
consolidated with Global Crossing's proceedings. Asia Global
Crossing Ltd. is a majority-owned subsidiary of Global Crossing.
However, Asia Global Crossing has announced that no recovery is
expected for Asia Global Crossing's shareholders

          Press Contacts
          Becky Yeamans
          Tel: + 1 973-410-5857
          Tisha Kresler
          Tel: +1 973-410-8666

          Analysts/Investors Contact
          Ken Simril
          Tel: +1 310-385-3838

GLOBAL CROSSING: Founder Resigns as Chairman of the Board
The founder and Chairman of bankrupt telecommunications company
Global Crossing Ltd. tendered his resignation after the Justice
Department decided not to file criminal charges against the
Company's executives. In his letter to the board, Mr. Winnick
said he is stepping down after he had helped develop a
reorganization plan for the Company and reimbursing US$25million
to employees who owned company stock in their retirement plans,
as he had promised.

Mr. Winnick added that the Company is in good hands under the
leadership of chief executive officer John Legere. The Associated
Press reported that Mr. Winnick had deposited US$25 million into
an escrow account for the affected employees; however, the report
did not indicate how it would be distributed.

Global Crossing, which filed for bankruptcy protection in January
of 2002, is facing a number of lawsuits filed by disgruntled
investors. The Company is also under investigation by Securities
and Exchange Commission after senior executives allegedly sold
their stock options, worth hundreds of millions of dollars just
before the bankruptcy filing.

Winnick himself sold US$734 million worth of stock, including
US$123 million in the weeks before the telecommunications company
began to collapse, according to the Associated Press.

TYCO INTERNATIONAL: Takes $382B Charge Based on Audit Findings
-- Unqualified Audit Opinion From PricewaterhouseCoopers LLP --

Tyco International Ltd. (NYSE - TYC, BSX - TYC, LSE - TYI) said
on Monday that it filed its annual report on Form 10-K reporting
on its financial results for the fiscal year 2002, which ended on
September 30. The report includes an unqualified audit opinion
from PricewaterhouseCoopers LLP, the Company's independent
auditors. The Company also filed a Form 8-K report with the
Securities and Exchange Commission regarding the previously
announced review and analysis of the Company's accounting and
governance practices and procedures.

In addition, Tyco said that it has recorded pre-tax charges of
$382 million in its fiscal 2002 results. This reflects audit
adjustments for the 2002 fiscal year as well as corrections of
errors in prior years. Of these charges, $186 million is
attributable to the recent modification the Company made to the
connection fee recognized for the ADT dealer program at the time
a customer's system is installed. This amount covers the impact
during the fiscal years 1999-2001. As a result of the pre-tax
charges, the Company's net loss after taxes for fiscal 2002
increased to $9.4 billion from the $9.1 billion reported on
October 24th.

Summary of Findings of Accounting and Governance Review

The purpose of the accounting and corporate governance review was
to review Tyco's 1999-2002 reported revenues, profits, cash flow,
internal auditing and control procedures, accounting for major
acquisitions and reserves, the use of non-recurring charges, the
personal use of corporate assets, the use of corporate funds to
pay personal expenses, employee loan and loan forgiveness
programs, and corporate governance issues. The review included an
examination of 15 mergers and acquisitions with an aggregate
purchase price of $30.1 billion excluding debt assumed in
connection with purchase accounting transactions.

In summary, it was concluded that:

1) There was no significant or systemic fraud affecting the
Company's prior financial statements;

2) There were a number of accounting entries and treatments that
were incorrect and were required to be corrected;

3) The incorrect accounting entries and treatments are not
individually or in the aggregate material to the overall
financial statements of the

4) The Company's prior management engaged in a pattern of
aggressive accounting which, even when in accordance with
Generally Accepted
Accounting Principles, was intended to increase reported earnings
above what they would have been if more conservative accounting
had been employed; and

5) Reversal or restatement of prior accounting entries and
treatments resulting from prior management's aggressive
accounting would not adversely affect the Company's reported cash
flow for 2003 and thereafter or materially adversely affect the
Company's reported revenue and earnings for 2003 and thereafter.

The Company's 8-K filing includes details on the findings of the
accounting and governance review.

The Company has been represented in connection with its
accounting and corporate governance review by the law firm Boies,
Schiller & Flexner LLP, and the Boies Firm was in turn assisted
by forensic accountants from Ernst & Young, KPMG, and Urbach,
Kahn & Werlin. Approximately 25 lawyers and 100 accountants
worked on the review from August into December 2002. In total,
more than 15,000 lawyer hours and 50,000 accountant hours were
dedicated to this review and analysis. The review team examined
documents and interviewed Tyco personnel at more than 45
operating units in 15 states in the United States and in 12
foreign countries.

The Boies Firm received the full cooperation of Tyco's auditors,
PricewaterhouseCoopers, as well as Tyco's current management. As
requested by the Company's Chief Executive Officer, Ed Breen, and
the Board of Directors, the review work began in August 2002
while the first phase of the Boies Firm's review and analysis was
still in progress. The stated goal of Mr. Breen and the Board is
to make Tyco's corporate governance and accounting practices not
just acceptable but consistent with best practices under
applicable rules and regulations.

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:  Walter Montgomery (Media)
          Tel: 212-424-1314

          Kathy Manning (Investors)
          Tel: 603-778-9700

TYCO INTERNATIONAL: Admits To Maneuvering Accounts
Tyco International Ltd. admitted on Monday that it had previously
used aggressive accounting and financial engineering to dress up
its financial results as it went on an acquisition binge. A
report from the Associated Press quoted the Company's filing with
the Securities and Exchange Commission saying, "Aggressive
accounting is not necessarily improper accounting."

The Company's shares went up 11.3 percent, closing at US$17.08 a
share on the New York Stock Exchange, after the results of the
investigation came out.

According to UBS Warburg analyst David Bleustein, Tyco is on its
way to recovery after a year of scandals. "Most of the big
hurdles have been cleared," he said.

But Morningstar stock analyst Jonathan Schrader said that Tyco
remains a risky stock because of the accounting issues, liquidity
concerns and declining margins.

The investigation, conducted by law firm Boies, Schiller &
Flexner revealed that in the recent years, Tyco's books are
marred with quite a number of improper entries, fraudulent
statements, and outright mistakes. But despite these, amounts
concerned would not have much impact on the Company's financial
results, if the mistakes were corrected.

Boies' report also said that the improper accounting does not
have an ongoing impact on the Company.

Mr. Boies's law firm was hired in April to conduct an internal
review of the Company. The first part of the investigation
produced a 300-page report in September, revealing how former CEO
Kozlowski and ex-CFO Swartz allegedly looted millions of dollars
in company funds.

A group of 25 lawyers and 100 accountants were hired to review
company documents in 60 different locations, including 12 foreign
countries. A 34-page report summarized the results of the later
part of the investigation, aimed at reviewing the Company's

The report cited Tyco's acquisition of Raychem Amp, Inc. in
August 1999. "Internal Tyco documents raise issues whether
actions taken by Raychem, even if consistent with generally
accepted accounting principles, artificially reduced revenue or
increased expenses in the quarter immediately prior to the
consummation of the acquisitions and artificially inflated
earnings and cash flow in subsequent quarters," said the report.
Tyco bought the Company for US$3 billion in cash.

According to the report, Raychem managers held back shipments and
paid bills -- even those not yet due -- just before the deal
closed. While Raychem had reported quarterly earnings before
interest and taxes averaging US$50 million in the four quarters
preceding the deal, the Company posted a loss of US$86 million in
the quarter in which the deal actually closed. "These documents
fit the pattern ... of the Company's aggressive use of numerous
accounting opportunities where available to enhance earnings in
the first few quarters after companies were acquired, compared to
the period just before acquisition."

Knight Ridder Business News reports that the investigation had
produced a number of documents outlining Tyco's ways of using
"financial engineering" to enhance its financial make up from its
mergers. The article also noted that the controller for Tyco's
fire and security division gave a presentation to managers in
1999, specifically looking at ways to manipulate the balance
sheets for maximum gain during acquisitions.

In 1999, David Tice, manager of the Prudent Bear Fund, a hedge
fund in Dallas wrote a report criticizing Tyco's accounting
practices. According to him, Tyco exaggerated charges related to
acquisitions, such as the cost of terminations, but the charges
will be reversed later, giving the financial results an
artificial boost.

The Company had vigorously denied the report when it came out.

In its financial report, filed on Monday, Tyco said it would take
on a US$382 million charge to correct the errors, all the way
back to 1999. This would bring the Company's 12-month net loss to
US$9.4 billion, from US$9.1 billion for the period ending in Sept
30 last year.

The SEC, which has also completed its own investigation on the
company, is yet to publish its results.


CERJ: Aneel Authorizes 28.6% Rate Hike
Brazilian distributor CERJ (Companhia de Eletricidade do Estado
do Rio de Janeiro) obtained authority from the country's power
regulator Aneel to increase regulated electric power rates by
28.6% from December 31. The Company had originally requested a
33.2% price hike.

According to Business News Americas, the increase, which is part
of CERJ's annual price adjustment, was allowed to account, among
other items, for higher power purchase costs.

Aneel allowed the increase in order for CERJ to compensate the
higher cost of power from the Itaipu hydroelectric power plant,
which is paid for in US dollars. The Brazilian real fell about
30% against the US dollar in 2002, although it has recovered
slightly in recent weeks.

CERJ's Spanish-based parent, Endesa Internacional, met with Rio
de Janeiro state governor-elect Rosinha Garotinho in November to
discuss Endesa's plan for the Rio de Janeiro-based unit. Endesa
was planning to invest about US$100 million in its Brazilian unit
this year to capitalize CERJ's debts.

Endesa Spain and its Chilean holding Enersis own a combined 79.9%
of CERJ and Portugal's EDP owns 19.5%. Endesa Spain reportedly
asked other shareholders to put up cash equivalent to their
stakes in the Company to match Endesa's investment.

CSN: Not Buying BHP's 2.1% Stake In CVRD
Brazilian steelmaker CSN declined to purchase Anglo-Australian
resource giant BHP Billiton's 2.1% stake in Rio de Janeiro-based
mining and logistics company CVRD, relates Business News
Americas. A CSN spokesperson made announcement after BHP said in
a statement that it intends to exercise an option to sell its
CVRD stake worth US$343 million to CSN.

BHP's stake is held via holding company Sweet River Investments.
The London and Melbourne-headquartered company owns 67% of Sweet
River, which plans to sell its entire 11.6% stake in Valepar -
the controlling shareholder of CVRD with 27% of the conglomerate.

BHP's statement revealed that Sweet River would sell its stake in
CVRD by exercising a put option on its Valepar shares to CSN that
is exercisable until May 2004. Consideration from CSN is due
within 69 days from exercise of the option, the statement added.

However, according to the CSN spokesperson, the steelmaker would
not purchase BHP Billiton's share in CVRD.

"CSN had preference rights to acquire the mining company's stake,
but with the undoing of shareholder cross-ownership between CSN
and CVRD, this right was passed to Litel [a holding company of
pension funds led by Previ]," said the official, Elio Marques.

Billiton paid Bank of America US$327.3 million for the 2.1% stake
in CVRD in July 2000.

EMBRATEL: Reaches Restructuring Agreement With Creditor Banks
Brazilian long distance operator Embratel successfully
restructured debt owed to banks Banco Itau, BBA, Spain's SCH,
Canada's Export Development Corporation and Bank of America,
Business News Americas reports, citing local daily Jornal do

The details of the agreement were not disclosed but, according to
a report included in the TCR-LA in December, the Company was in
talks to renegotiate US$750 million in debt held by 20-25 local
and international banks, and development agencies. The debt-
restructuring negotiations were mediated by Bank of America with
the assistance of Maria Silvia Marques, former head of steel
company Companhia Siderurgica Nacional.

When Embratel released its third quarter financial results, the
Company said it had debts totaling US$1.3 billion. At that time,
the Company said its immediate goal was to reduce financing costs
and convert part of its dollar denominated debt into reais.

            Investor Relations
            Silvia Pereira
            Tel. (55 21) 2519-9662
            Fax: (55 21) 2519-6388
            Press Relations:
            Helena Duncan/Mariana Palmeira
            Tel: (55 21) 2519-3653/3654
            Fax: (55 21) 2519-8010

TELESP CELULAR: Issues Announcement On Transfer of Investments
Telesp Celular Participacoes S.A. ("TCP") announced that PT
Moveis - Servicos de Telecomunicacoes SGPS, S.A. (PT Moveis) and
Telefonica Moviles, S.A implemented the transfer of their direct
and indirect equity investments in TCP and other interests in the
Brazilian mobile telephone services to BRASILCEL, N.V.,
previously denominated BRASILCEL B.V. on December 27th. BRASILCEL
N.V. is the Joint Venture established by both Groups, according
to the Relevant Notices announced on October 19th, 2002, and on
December 7th, 2002 in the "Diario do Estado de Sao Paulo", and on
October 21st, 2002 and December 9th 2002 in the "Gazeta
Mercantil" newspapers.

TCP also communicates that due to operating procedures of
depositary banks, the actual transfer to BRASILCEL, N.V of its
American Depositary Receipts (ADRs) owned by PT M¢veis will be
taken place at this present date.

Sao Paulo, December 30th, 2002.
Maria Paula de Almeida Martins Canais
Director of Investor Relations

SAESA: Shareholders OK Capital Increase for Saesa, Frontel
Chilean distribution holding Saesa Group announced that the
shareholders of distributors Saesa and Frontel have approved
capital increases of US$33.7 million and US$12.6 million
respectively, relates Business News Americas. In a statement,
Saesa Group said that it would issue new shares or convert debt
to shares within a period of six months.

"All of the capital increase will be used to pay debts," a Saesa
spokesperson said.

The recent capital increase, as well as the one approved by
shareholders on December 3, are separate from a planned bond
issue designed to pay a US$150-million loan due April 4, 2003,
the spokesperson said.

On December 3 shareholders approved a capital increase of US$36.9
million for distributor Saesa and US$3 million for Frontel, of
which some US$27.3 million went to debts with Saesa Group's US-
based parent company PSEG and the remainder to boost cash flow.

The terms of the US$150-million loan establishes that Saesa owes
the banks US$115 million and Frontel owes US$35 million. The loan
was originally due October 18 but the deadline was extended to
November 8, and then extended again after Saesa Group scrapped a
US$175-million bond issue at the last minute due to investor

The group still plans to issue the bonds before April 4, but for
a reduced amount and under different terms to make the issue more
attractive to potential investors.

          Gerencia y Administracion Zonal de Osorno
          Bulnes 441, Osorno
          Telefono: (64) 206400
          Fax: (64) 206209 - Casilla: 21 -0


SEVEN SEAS: Five of Six Directors Abandon Ship
Seven Seas Petroleum Inc. (Pink Sheets: "SVSSF") announced that
R. Randolph Devening, Brian F. Egolf, Gary F. Fuller, Robert A.
Hefner, III and Dr. James R. Schlesinger resigned from the
Company's Board of Directors, effective December 31, 2002. Larry
A. Ray, President and Chief Operating Officer of Seven Seas will
remain as the sole director of the Company. The resignations were
in response to:

* An involuntary petition in bankruptcy filed against the Company
in the United States Bankruptcy Court for the Southern District
of Texas, Houston Division, on December 20, 2002

* Chesapeake Energy Corporation, as collateral agent for the
Company's $45 Million Senior Secured Notes, exercising control
over Seven Seas' U.S. bank accounts, and

* The inability of the Company to obtain adequate directors' and
officers' insurance for corporate activities after December 30,

Mr. Ray indicated that there were no present plans to fill the
vacancies caused by the resignations and that the Company would
continue to work toward closing the previously announced sale of
its Guaduas Oil Field, financing a production test of the Escuela
2 well and monetizing the Company's Colombian tax credits for the
benefit of the Company's stakeholders.

Seven Seas Petroleum Inc. is an independent oil and gas
exploration and production company operating in Colombia, South


VITRO: Issues Local Debt Certificates Worth MXN1 Bln
In a bid to bolster its debt profile, Mexican glassmaker Vitro SA
announced Tuesday it placed around MXN1 billion ($1=MXN10.39) in
local debt certificates, which mature in six years.

Citing a company press release, Dow Jones reports that the local
certificates, expiring December 22, 2008, will pay net annual
interest of 3.25 percentage points above six-month Treasury
bills, or Cetes. Six-month Cetes rates stood at 7.8% at the
central bank's auction on Dec. 23, the most recent primary issue
of that maturity.

Monterrey-based Vitro is the leading producer of flat glass,
glass containers and glassware in Mexico. The Company is an
exporter of glass products to more than 70 countries for the
construction, automotive, beverage, retail and service
industries. In 2001, Vitro had sales of US$3.0 billion, EBITDA of
US$513 million, exports of US$801 million and foreign sales by
subsidiaries of US$619 million.

          Investor Relations - Beatriz Martinez

          Media Relations - Albert Chico

          Media - Eduardo Cruz

          Web site:


CHIQUITA BRANDS: To Halt Financial Subsidy Of Panamanian Unit
Chiquita Brands International, Inc. announced Tuesday that it
will cease subsidizing the operations of the company's Puerto
Armuelles Fruit Co. (PAFCO) in Panama, on Jan. 1, 2003.
Previously, Chiquita declared that the company could not sustain
continuing losses in this division, and that it would stop
funding the Armuelles division if a solution to its uncompetitive
cost position was not reached by year-end. PAFCO can continue to
operate for a brief period without financial subsidy. If an
agreement is not reached soon, the operations will shut down for
lack of funds. The Armuelles division has lost approximately
US$90 million over the past six years.

Earlier this month, the company presented a proposal to the
government of the Republic of Panama and the SITRACHILCO
(Sindicato Industrial de Trabajadores de la Chiriqui Land Company
y Empresas Afines) union to sell its farms to a worker-owned
cooperative. The Panamanian government supports the proposal, as
confirmed recently in a December 30th letter to the Company from
the Panamanian Trade Minister. The union, however, has rejected

"We regret that the union leadership has turned down our
proposal, and we urge them to reconsider. We believe strongly
that our proposal to sell assets to a worker-owned cooperative
and continue to purchase fruit under competitive long-term
contracts represents a fair, responsible and long-term solution
to a very difficult situation," said Cyrus Freidheim, Chiquita's
chairman and chief executive officer. "Workers would retain their
jobs and the economic engine of the local community would be
preserved. Our shareholders would benefit from competitive-cost
fruit and our customers would continue to receive the high
quality bananas they expect from Chiquita.

"We are concerned that the union's rejection of our proposal,
should it become final, would do enormous harm to current workers
and to the future economic well-being of an entire region of the
country," Freidheim said. "But we are yet hopeful that the
Panamanian government will identify appropriate mechanisms to
resolve the current crisis in the best interests of all the

Chiquita is the biggest exporter of bananas from Panama,
operating out of two separate divisions. It represents
approximately 89 percent of the country's total banana exports.
The PAFCO division currently employs 3,200 workers on
approximately 3,000 hectares of land on the Pacific coast. In
2001, this division exported approximately 6.5 million 40-pound
boxes of bananas for the international market, or approximately 6
percent of Chiquita's Latin American supply.

Chiquita Brands International is a leading international
marketer, producer and distributor of high-quality fresh and
processed foods. The company's Chiquita Fresh division is one of
the largest banana producers in the world and a major supplier of
bananas in North America and Europe. Sold primarily under the
premium Chiquita(R) brand, the company also distributes and
markets a variety of other fresh fruits and vegetables. In
addition, Chiquita Processed Foods is the largest processor of
private-label canned vegetables in the United States.

CONTACT:  Chiquita Brands International, Inc.
          News Media: Michael Mitchell

          Investors: Bill Sandstrom


T R I N I D A D   &   T O B A G O

CARONI LTD: Early Retirement Offer to Reduce Work Force
William Washington, the chief executive officer of Caroni (1975)
Ltd, expects that 1,000 workers will initially accept the
voluntary separation of employment plan, which will be offered to
them early in the new year, reports The Trinidad Express. John
Rahael, Minister of Agriculture, expects 2,000 workers were ready
to accept the VSEP, which is expected to go into effect in

At present, the state-owned sugar company employs 8,000 daily
paid workers and 1,400 monthly paid.

The VSEP, to which to the government intends to spend US$759
million in funding, is part of the cash-strapped sugar company's
restructuring program.

Meanwhile, in response to Washington's statement, union president
Rudy Indarsingh said: "In the final analysis it is management's
responsibility to engage the employees representative, that is
the union, in any meaningful talks to discuss the matter."

Indarsingh said the management, the Board, and the union had been
alienated from the decision making process.

CONTACT:  Caroni Limited
          Old Southern Main Road, Caroni,
          Trinidad & Tobago
          Phone: (868) 663-1781 or 662-0879
          Fax: (868) 663-1404

          All Trinidad Sugar and General Workers' Trade Union
          Rienzi Complex
          Exchange Village
          Southern Main Road, Couva.
          President: Mr. Boysie Moore-Jones
          General Secretary: Mr. Rudranath Indarsingh
          Tel. 868-636-2354
          Fax. 868-636-3372


URUGUAYAN BANKS: Central Bank Extends Suspension To Jan 17
The suspension and intervention of four intervened banks - Banco
Comercial, Banco Montevideo, Banco Caja Obrera and Banco de
Credito - has once again been extended to allow for more time to
seek a solution to re-open the banks.

According to Business News Americas, the suspension and
intervention, which was initiated in July and August due to
liquidity and capital problems, sparked by Uruguay's financial
crisis, was supposed to end December 27 but the Uruguayan central
bank extended it to January 17.

However, in a statement, the central bank indicated that it is
close to re-opening the banks, after congress approved a plan to
merge Comercial with Montevideo and Caja Obrera to form a
stronger bank to be called El Nuevo Banco Comercial.

Sources recently said on local radio that the central bank plans
to open the new bank in February.

The approval by the congress to merge three of the four banks is
partly aimed at regaining the trust of the International Monetary
Fund after the lender had delayed two disbursements on an
emergency loan to Uruguay. According to the IMF, the country had
not satisfied its requirements for dealing with fallen banks.

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

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

* Finance Minister Says Uruguay Will Pay Obligations This Year
Uruguay's Economy and Finance Minister Alejandro Atchugarry said
that the country would strictly comply with its foreign debt
obligations this year, according to EFE. The country faces a
US$1.6 billion in payments. Uruguay has a total debt of US$11.4
billion. This figure was increased after the International
Monetary Fund granted it a US$1.5 billion standby loan to help it
overcome its worst financial crisis.

Mr. Atchugarry also said that President Jorge Batlle would work
on programs to satisfy the demands of major industrial, trade,
export and service associations to reduce the size of the

Uruguay also approved the merger of three large suspended banks;
in an effort to regain the IMF's favor and receive the
disbursements the lender had put on hold, citing the government's
failure to address the problems of the banking sector.

The three banks were suspended in August last year after panicked
depositors withdrew millions of dollars from the banking system.


* Venezuela's Oil Exports Halted By Tankers' Refusal To Dock
Venezuela Energy and Mines Minister Rafael Ramirez said that
foreign tankers have created a "blockade" preventing the country
from exporting oil, reports Bloomberg News. At least 40 tankers
are lying off ports and are refusing to dock, just as the country
starts to resume oil production.

"The tanker issue is our gravest problem," Mr. Ramirez was quoted
by the report. "We can't move our products abroad." He added that
the country has no space for the oil, as its storage tanks are
full. Venezuela is the fifth-largest oil producer in the world.

Tankers refusing to dock cited safety concerns, but Mr. Ramirez
said, "Our ports are safe," adding that, "All the ports are under
our control."

A report from local paper El Nacional cited an incident in the
Maracaibo shipping channel, where a cargo ship ran aground
because the pilot was tired. However, a port official said that
the ship, which was carrying 25 metric tons of coal, is not
blocking traffic and is in the process of being re-floated.

Mr. Ramirez also said the government is trying to persuade
companies to send in their tankers. Among the international oil
companies that have refused to send their tankers to Venezuela
are Royal Dutch/Shell Group, Exxon Mobil Corp., and
ConocoPhillips, according to Governor Ramon Martinez, of Sucre

Shell said it had no tankers in Venezuela, while Exxon Mobil
declined comment on the company's shipping arrangements.
ConocoPhillips declined comment, said the report.

Ali Rodriguez, president of state oil company Petroleos de
Venezuela SA revealed that only 6.2 million barrels of oil were
exported during the first 24 days of December, compared with the
normal figure of 57.6 million barrels. The work stoppage had
caused PdVSA to lose US$2 billion.

About 90 percent of the country's oil exports were cut off by a
national strike that started in Dec. 2. Under normal
circumstances, Venezuela moves 2.4 million barrels a day. Oil
exports correspond to half of the government's revenues and about
one-third of the country's gross domestic product. The country's
economy is losing US$60 million a day due to this strike.

Normally, about 12 to 14 tankers depart for foreign destinations
daily, but that number was reduced to 10 tankers for the first 24
days of December.

Despite setbacks, the government remains optimistic that the oil
output would double to about 40 percent of pre-strike levels, or
about 1.2 million barrels a day, by next week. But analysts say
the government's estimates are overly optimistic, adding that the
strike may cause a 12 percent contraction of this year's fourth
quarter GDP.

The strike had also forced the central bank to delay the
publishing its annual report. Workers staged the national strike
asking for the resignation of President Hugo Chavez, or have him
call early elections. But Mr. Chavez has refused, saying that the
constitution allows a referendum on his presidency in August at
the earliest.

President Chavez' chances of maintaining his presidency may rely
on his ability to restart oil exports, according to Bloomberg.

Bloomberg reports that Venezuela's 9 1/4 percent bond due 2027
fell 0.5 cent on the dollar to 67.50 cents, raising the yield to
13.95 percent at 1:38 p.m. in New York, according to J.P. Morgan
Chase & Co. The bond has dropped more than 5 percent since the
strike began. The report also indicated that the local currency,
the bolivar strengthened 0.1 percent to 1,388.80 at 1:38 p.m. New
York time.

CONTACT:  Petroleos de Venezuela SA
          Head Office
          Apdo 169
          Avenida Libertador La
          Tel  +58 212 708 4111
          Fax  +58 212 708 4661
          Ali Rodriguez Araque, Chairman
          Jorge Kamkoff, Joint Vice Chairman
          Jose Rafael Paz, Joint Vice Chairman


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 2003.  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
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
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or balance thereof are $25 each.  For subscription information,
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