TCRLA_Public/030213.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, February 13, 2003, Vol. 4, Issue 31

                           Headlines


A R G E N T I N A

ACINDAR: Anticipates Debt Agreement Success With Creditors Soon
AOL LATIN AMERICA: Reports Reduced Losses for 4Q02
TELECOM ARGENTINA: Announces Reverse Dutch Auction Tender Offer
* Lavagna Warns IMF Terms May Deepen Recession


B R A Z I L

BCP: On The Verge Of Reaching Deal With Creditors
BSE: Sale To Telecom Americas Likely To Close This Week
CEMAR: Aneel Struggles To Fight Off Injunctions Blocking Sale
CEMAR: Will Require US$89 Million Over Next Three Years

CEMIG: Appoints New Board of Executive Officers
CESP: To Sell $98.4M in Bonds To Pay Contractors, Suppliers
TELEMAR: Stock Price Up on Regulator Rate Hikes Approval
VARIG/TAM: Cade To Scrutinize Merger Impact


M E X I C O

AHMSA: Rebar, Wire Rod Production to Resume In March
CNI CANAL: SCT Will Rule On Ownership This Week
MEXLUB: Ends Ten-Year Monopoly In Oil, Lubricants Market
SANLUIS CORPORACION: Responds, Comments On Newspaper Report
SAVIA: Seminis 1QFY03 Results Mildly Better than Break Even
TV AZTECA: $500M Preferred Dividend Expected Lure Debtholders


U R U G U A Y

ANCAP: S&P Cuts Ratings to 'CCC' Following Uruguay Downgrade
URUGUAYAN BANKS: Downgraded After Sovereign Rating Action
* Uruguay Long-Term Ratings Lowered to 'CCC'; Outlook Negative
* Uruguay Makes $151.7M Bond Payment Despite Current Troubles


V E N E Z U E L A

CITGO: Forecasts Normal Crude Volumes Despite Ongoing Strike
SINCOR: To Resume Synthetic Crude Shipments Next Week
* S&P's Francis Predicts Prolonged Struggle for Venezuela


     - - - - - - - - - -

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

ACINDAR: Anticipates Debt Agreement Success With Creditors Soon
---------------------------------------------------------------
Acindar, Argentina's largest long steelmaker, is looking to reach
a debt-restructuring agreement with creditors in the short term,
Sao Paulo business daily Valor Economico reports, citing company
president Arturo Acevedo.

"We are actively negotiating and we hope that an accord can be
announced in a relatively short time," he said.

Acindar suspended payments in December 2001 on its debt of US$340
million held with a consortium of banks and financial
institutions led by the International Finance Corp, the private
lending arm of the World Bank.

Acevedo did not provide any specifics but said the Company is
hoping to restructure its debts completely.

At the end of September last year, Acindar's debts stood at
US$1.16 billion, excluding a US$60-million convertible debenture
issue. Of the total, US$108 million had been converted into pesos
and the rest was dollar-denominated.

The current debt negotiations have held up Brazilian long
steelmaker Belgo-Mineira's option to buy the shares of the
Acevedo family in Acindar. At the end of last year, Belgo-Mineira
and the Acevedo family signed an option agreement whereby Belgo
could acquire Acindar's shares via its holding company Belgo
Mineira Uruguay (BMU).

By exercising its option in 2005, BMU could increase its stake in
Acindar from 20.4% to 41%, excluding US$46 million in financial
instruments that are convertible into shares.

BMU paid US$85 million at the end of 2000 to acquire the 20.4%
stake.

CONTACTS:  ACINDAR SA
           Jose I. Giraudo, Investor Relations Manager
           Phone: (5411) 4719 8674

           Andrea Dala, Investor Relations Officer
           Phone: (5411) 4719 8672


AOL LATIN AMERICA: Reports Reduced Losses for 4Q02
--------------------------------------------------
America Online Latin America, Inc. (Nasdaq:AOLA) reported Tuesday
narrowed per-share losses for the fourth quarter ended December
31, 2002, contributing to a narrowed full year loss for 2002. The
results mark AOL Latin America's tenth straight quarter of
narrowed per-share losses. Operational efficiencies implemented
during 2002, marketing strategies focused on higher-value
members, as well as regional currency devaluations contributed to
the Company's reduced losses. As a result of these improvements,
AOL Latin America now expects its cash on hand to finance
operations into the first quarter of 2004. Another key highlight
from the quarter was the revised marketing agreement with Banco
Itau which is designed to provide a stronger member acquisition
channel for the co-branded AOL Brazil/Itau service.

The Company's fourth quarter net loss applicable to common
stockholders narrowed by more than 45% to $38.6 million, or $0.58
per class A common share, basic and diluted, compared with a loss
of $70.5 million, or $1.05 per share, for the quarter ended
December 31, 2001, and approximately 3% from a loss of $39.9
million, or $0.59 per share, in the third quarter ended September
30, 2002. The Company's fourth quarter net loss before dividends
on preferred stock was $33.8 million, or $0.09 per share, on a
pro forma fully diluted basis, improving from a loss of $65.8
million, or $0.20 per share, on the same basis a year ago, and a
loss of $35.2 million, or $0.10 per share last quarter. Pro forma
fully diluted calculations were impacted by a significant
increase in potentially dilutive securities during the fourth
quarter resulting from the issuance of convertible notes to AOL
Time Warner Inc. and the payment of interest on such notes
through the issuance of preferred stock.

AOL Latin America reported total revenues of $17.8 million in the
fourth quarter, compared to $18.7 million in the quarter ended
December 31, 2001, and $17.6 million in the third quarter of
2002. Total revenues during 2002 were negatively impacted by
currency devaluations in Argentina, Brazil and Mexico. Excluding
currency devaluations, total revenues rose approximately 18% over
the prior year quarter and approximately 9% over the third
quarter 2002. Although currency devaluations in the region had a
negative effect on revenues, they also contributed to a decline
in operating expenses during the quarter and the year which more
than offset the negative currency effect on revenue versus the
prior periods, helping the Company conserve its cash on hand.

Subscription revenue totaled $15.3 million, unchanged from $15.3
million in the December 31, 2001 quarter. Subscription revenue
dropped slightly as compared with $15.8 million in the third
quarter of 2002 primarily due to currency devaluation.

Advertising and other revenue totaled $2.5 million, compared with
$3.4 million in the quarter ended December 31, 2001, and $1.8
million in the third quarter of 2002. Softness in the online
advertising markets in the region continued to impact the
Company's advertising and other revenues.

For full-year 2002, total revenue was $72.1 million, up from
$66.4 million in 2001. Subscription revenue totaled $63.0 million
for 2002, compared with $49.9 million for full-year 2001.
Advertising and other revenue fell to $9.1 million for 2002,
compared with $16.5 million for full-year 2001. AOL Latin
America's net loss before dividends on preferred stock for full-
year 2002 narrowed by approximately 44% to $161.9 million, or
$0.47 per share, on a pro-forma fully-diluted basis, compared
with a loss of $290.3 million for 2001. The reported full-year
2002 net loss per class A common share, basic and diluted, was
$2.69 per share on $180.6 million of net loss, compared with
$4.66 per share on $307.3 million of net loss for full-year 2001.

As a result of the Company's ongoing efforts to reduce the number
of members not paying on a timely basis and to target higher
value members, AOL Latin America's membership base declined
slightly during the quarter. AOL Latin America reported ending
the quarter with approximately 1.18 million members, down 2%, or
approximately 26,000 members compared to the third quarter of
2002. As with the Company's previous member reports, the 1.18
million members includes those participating in the services'
free trial promotional periods, as well as members of the co-
branded AOL Brazil service with Banco Itau, whose time online is
subsidized by the bank. In line with previous announcements, AOL
Latin America's overall efforts to improve the revenue
contribution of its membership base, as well as to reduce the
number of inactive members of the co-branded service under the
revised marketing agreement with Banco Itau, are expected to
result in further declines in membership in the near term.

Underscoring these initiatives, in December 2002, AOL Latin
America announced a revised agreement to promote the co-branded
AOL Brazil/Itau service to Banco Itau's more than 9 million
customers. The Company believes this agreement will provide a
stronger member acquisition channel for the co-branded service
with point-of-sale displays and interactive kiosks, staffed by
AOL Brazil promoters, in hundreds of Banco Itau's banking
branches throughout Brazil. As part of the agreement, AOL Latin
America will now oversee marketing activities, which will be
funded by Banco Itau. The revised agreement also restructures
subscriber and revenue targets, which are now based solely on the
implementation of Itau's marketing commitments and minimum
revenue contribution levels.

Over the past year, AOL Latin America has focused on targeting
higher value members through more efficient member acquisition
channels in an effort to improve the revenue contribution of its
member base. These channels have included point of sale displays
in key retail partners including Office Depot, Carrefour and Wal-
Mart. The Company also implemented member acquisition initiatives
that included bundled PC agreements with top manufacturers
including Hewlett-Packard in Mexico and Metron, Brazil's largest
PC manufacturer.

AOL Latin America announced that as of January 24, 2003, the
Company's class A common stock has regained compliance with the
required $35 million minimum market capitalization of listed
securities. NASDAQ also confirmed that the Company's class A
common stock is no longer in a conditional listing period. NASDAQ
has also recently granted a 180-day extension to comply with the
$1 minimum bid price requirement for continued listing. The
Company must now have a closing bid price of $1 or higher for at
least ten consecutive trading days commencing no later than June
30, 2003.

Charles Herington, President and CEO of AOL Latin America, said:
"Our ongoing initiatives to streamline operations and target
higher value members contributed to our tenth consecutive quarter
of narrowed losses. We also expect these ongoing initiatives will
help us finance operations into the first quarter of 2004. These
efforts will be augmented by our revised marketing agreement with
Banco Itau, which continues to be an important partner. With
these initiatives in place, and having recently remedied our
position on the NASDAQ SmallCap Market, AOL Latin America is
going in the right direction by building our business for the
future."

Other Highlights

Over the past several months, AOL Latin America continued to make
progress on several fronts, including:

-- New Content: AOL Latin America continued to enhance its robust
content offerings with several new partners, including a special
promotion with McDonald's in Brazil called "Dancing with Ronald
McDonald," an online music promotion with Sony in Mexico, and
content from Poder and Loft magazines from Zoom Media. Other
offerings have included AOL First Listens, exclusive worldwide
premieres of today's hottest music artists, and great online
content and promotions for Harry Potter and the Chamber of
Secrets and The Lord of the Rings: The Two Towers.

-- AOL 8.0: AOL Latin America also plans to begin launching
localized versions of the AOL 8.0 software in the first half of
2003. AOL 8.0 has been a great success in the U.S. with record
adoption levels since its launch in October, 2002. AOL 8.0 is
currently available to members in Puerto Rico.

-- Financing: AOL Latin America noted that, as of December 31,
2002, funds from the $160 million March 2002 financing agreement
with AOL Time Warner Inc. were completely drawn as per the
agreement. The Company now expects its cash on hand to be
sufficient to finance operations into the first quarter of 2004.
About AOL Latin America

America Online Latin America, Inc. (Nasdaq:AOLA) is the exclusive
provider of AOL-branded services in Latin America and has become
one of the leading Internet and interactive services providers in
the region. AOL Latin America launched its first service, America
Online Brazil, in November 1999, and began as a joint venture of
America Online, Inc., a wholly owned subsidiary of AOL Time
Warner Inc. (NYSE:AOL), and the Cisneros Group of Companies.
Banco Itau, a leading Brazilian bank, is also a minority
stockholder of AOL Latin America. The Company combines the
technology, brand name, infrastructure and relationships of
America Online, the world's leader in branded interactive
services, with the relationships, regional experience and
extensive media assets of the Cisneros Group of Companies, one of
the leading media groups in the Americas. The Company currently
operates services in Brazil, Mexico and Argentina and serves
members of the AOL-branded service in Puerto Rico. It also
operates a regional portal accessible at http://www.aola.com.
America Online's 35 million members worldwide can access content
and offerings from AOL Latin America through the International
Channels on their local AOL services.

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

CONTACT:  AOL Latin America, Fort Lauderdale
          Financial Community:
          Monique Skruzny, 954/689-3256
          aolairr@aol.com

                  or

          News Media:
          Fernando Figueredo, 954/689-3200
          LatAmPressMail@aol.com


TELECOM ARGENTINA: Announces Reverse Dutch Auction Tender Offer
--------------------------------------------------------------
Argentina STET- France Telecom S.A . (BASE: TECO2, NYSE: TEO)
"Telecom Argentina") and its subsidiary Telecom Personal S.A.
("Telecom Personal" and together with Telecom Argentina, the
"Companies"), announced Wednesday their intent to launch cash
tender offers for a portion of their financial debt obligations
and to make partial interest payments on their financial
debt obligations. In addition to the satisfaction of other
applicable conditions, the Companies intend to proceed with the
proposed transactions only after obtaining the necessary
regulatory approvals for both the tender offers and the partial
interest payments.

The tender offers will be open to the holders of all financial
debt obligations of Telecom Argentina and Telecom Personal,
including banks and bondholders. Subject to obtaining
all necessary regulatory approvals, the tender offers are
expected to be launched in March 2003.

Telecom Argentina and Telecom Personal intend to launch modified
reverse Dutch auction tender offers for a portion of their
financial debt obligations. Under the modified reverse Dutch
auction process, the respective purchase prices will be
determined by Telecom Argentina and Telecom Personal, as the case
may be, based on offers submitted by holders of the debt
obligations within a specified price range. The price range for
such modified reverse Dutch auctions is expected to be 43.5% to
50% of the principal amount of the Companies' debt obligations as
of June 24, 2002, without giving effect to any accrued but unpaid
interest, but will not be finally determined until the launch of
the tender offers.

The purchase price will be the lowest price specified by the
holders within the price range that will enable Telecom Argentina
and Telecom Personal to use cash of up to the equivalent of
US$260 million and US$45 million, respectively, to purchase
portions of their financial debt obligations. The purchase price
will be paid in the respective currency of such debt obligations.
All holders whose offers are accepted will receive the same
purchase price.

Contacts:
Telecom Argentina
Pedro Insussarry
Pablo Caride
Phone: (54-11) 4968-3627/3626

Golin/Harris International
Kevin Kirkeby
      Phone: 212-697-9191



* Lavagna Warns IMF Terms May Deepen Recession
----------------------------------------------
The implementation of the fiscal and monetary goals tied to the
US$7 billion debt accord reached recently by Argentina with the
International Monetary Fund will have to wait until after the
elections in April.

Argentinean President Eduardo Duhalde recently said that Congress
can't take up the major items in the IMF agreement before the
elections slated on April 27.  The reasoning for the inaction is
unknown.

Meanwhile, economy minister Roberto Lavagna hinted last week the
government's reluctance to implement the IMF demands, claiming
that it could worsen the country's four-year recession.
According to Bloomberg, these demands include hiking utility
rates, raising the budget surplus before interest payments to
2.5%, and restricting the amount of money in circulation.

Another reason for the hesitation to meet the IMF demands,
according to the New York Times, is the fact that implementing
them does not guarantee a lasting accord that would allow the
country to regain access to credit lines.

Following its default on public debts early last year -- the
largest-ever sovereign default in history -- the country pursued
but never came close to forging a new IMF package in 2002.  In
desperation, the country threatened last month to default on all
foreign debts and even dared to default on a US$1 billion loan
owed to the Fund.  The IMF eventually relented and approved in
late January a new loan package -- a rollover of obligations due
the Fund through August 2003.



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

BCP: On The Verge Of Reaching Deal With Creditors
-------------------------------------------------
BCP, BellSouth Corp.'s debt-ridden unit operating in the
metropolis of Sao Paulo, is reportedly nearing a deal with
creditors following months of negotiations. The agreement would
essentially leave creditor banks in control of the Company, as
they would accept a debt-for-equity swap. Last year, BCP
defaulted on more than US$400 million in loans. The Company has
some $2 billion in debt.

CONTACT:  BCP S.A.
          Rua Fl>rida, 1970 4o andar
          Sao 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


BSE: Sale To Telecom Americas Likely To Close This Week
-------------------------------------------------------
Telecom Americas, America Movil's Brazilian unit, is expected to
complete its purchase of northeastern Brazilian mobile operator
BSE for US$190 million by the end of this week, United Press
International reports, citing local daily Valor Economico.

The price could be considered reasonable," Roger Oey, a telecom
analyst with BBV in Sao Paulo, told United Press International.
"But there's been no mention of debt. If America Movil has to
take on some debt, then it would be an expensive acquisition."

BSE, also known as BCP Nordeste, has more than US$500 million in
debt, but it also has a client base of 1 million and a presence
in six northeastern Brazilian states, which would be savvy buy
for America Movil.

Buying BCP Nordeste would boost Telecom America's client base in
Brazil by 20%. Currently, Telecom Americas provides service to
more than 5 million clients in 14 Brazilian states, mainly in the
industrialized southeast.

BSE is owned by U.S. telephone company BellSouth Corp. and
Brazil's influential Safra family.


CEMAR: Aneel Struggles To Fight Off Injunctions Blocking Sale
-------------------------------------------------------------
The intervention of Brazil's power regulator Aneel in Maranhao
state power company Cemar is nearing its deadline, but so far, it
is still unclear whether the regulator can achieve its goals for
the embattled Cemar.

Business News Americas recalls that Aneel intervened in Cemar in
August, after the controlling shareholder, US-based PPL Global,
failed to reach an agreement with creditors to sell the Company.
Cemar filed for bankruptcy and Aneel intervened to take the
Company over and sell it off.

The intervention period officially expires on Monday, February
17. However, Aneel cannot sell the Company because of legal
injunctions filed by Stiu-MA - the local utility workers' union -
and the federal public ministry, which oppose the sale.

A Cemar spokesperson said the Company has not been informed of
any new decisions and that, as far as it is aware, Aneel is
working to overturn the injunctions and continue with the sale.

Meanwhile, Stiu-MA President Fernando Pereira said that the
federal government does not appear to have made up its mind about
Cemar.

Union members met with Luiz Pinguelli, president of federal power
company Eletrobras, in the first week of February, Pereira said.
Pinguelli agreed to conduct a feasibility study of Cemar and
would pass it on to the mines & energy ministry, which would
ultimately decide the Company's future.

The union hopes to meet with the MME minister Dilma Rousseff
before the end of this week, Mr. Pereira said.

The union is advocating a federal takeover of Cemar, Pereira
said. It does not want to risk the "lottery" of a private partner
again, as it has already failed once, he said. Furthermore, the
state governor Jose Reinaldo has ruled out taking over the
Company because the state government hasn't got the money, Mr.
Pereira explained.

CONTACT:  COMPANHIA ENERGETICA DO MARANHAO
          Av. Colares Moreira, 477
          65075-441 - Sao Luiz- MA
          PHONE: (98) 217-2119
          FAX: (98) 235-3024
          WEBSITE: http://www.cemar.com.br/

CREDITORS:  CENTRAIS ELETRICAS BRASILEIRAS S.A. - ELETROBRAS
            Avenida Presidente Vargas 409, 13 Andar
            20071-003 Rio de Janeiro Brazil
            Phone: (21) 2514-5151
            Fax: +55-21-2242-2697
            Home Page: http://www.eletrobras.gov.br
            Contacts:
            Cladio da Silva avila, President
            Jose Alexandre Nogueira de Resende, Director of
                                  Financial and Market Relations

            Investor Relations Division
            Phone: (0XX21) 2514-6207 / 2514-6333
            Av. Presidente Vargas, 409 - 9  andar
            20071-003 - Rio de Janeiro - RJ
            Email: arlindo@eletrobras.gov.br

            CENTRAIS ELETRICAS DO NORTH DO BRAZIL - ELETRONORTE
            Av. Presidente Vargas, 489 -13  andar.
            20071-003- Rio do Janeiro RJ
            Phone: + (55+61) 429 5139
            Fax: +(55+61) 328 1373
            E-mail: elnweb@eln.gov.br
            Home Page: http://www.eln.gov.br/
            Contact:
            Mr. Arlindo Soares Castanheira, Investor Relations
            Phone: 55 21 2514.6331
                   55 21 2514.6333
            Fax: 55 21 2242.2694
            E-mail: arlindo@eletrobras.gov.br

            FLEETBOSTON FINANCIAL CORP.
            100 Federal Street
            Boston, MA 02110
            Phone: (617) 434-2200
            Fax: (617) 434-6943
            URL: http://www.fleet.com/home.asp


CEMAR: Will Require US$89 Million Over Next Three Years
-------------------------------------------------------
A report prepared by Brazil's power regulator Aneel indicated
that Cemar needs investment of BRL400 million (US$89mn) over the
next three years, reveals Business News Americas. According to
Fernando Pereira, president of the local utility workers' union
Stiu-MA, the figure will be earmarked for the improvement of the
distribution network and payment of obligations to creditors,
including banks and outsourced companies.

A decision is needed urgently, as parts of Cemar's distribution
network are already failing, with some areas going without power
for periods of up to one week, Mr. Pereira said. These problems
will snowball, affecting ever-larger parts of the grid, if the
investments are not forthcoming, he said.

However, the federal government would not have to put all the
cash up front, as the Aneel study shows that monthly payments of
about BRL12 million would be enough to meet investment needs and
financial commitments. Any deal would also need to extend the
maturity of the BRL800 million owed by Cemar, added Mr. Pereira.


CEMIG: Appoints New Board of Executive Officers
-----------------------------------------------
Companhia Energetica de Minas Gerais - CEMIG - (NYSE: CIG; BOV:
CMIG4, CMIG3 and LATIBEX: XCMIG), one of Brazil's largest energy
companies, announced today that its Board of Directors has
appointed CEMIG's new Board of Executive Officers, as follows:

Chief Executive Officer - Mr. Djalma Bastos de Morais

Chief Planning, Projects and Construction Officer and
concurrently Executive Vice President - Mr. Celso Ferreira

Chief Financial Officer and concurrently Chief Investor Relations
Officer - Mr. Flavio Decat de Moura

Chief Energy Generation and Transmission Officer - Mr. Elmar de
Oliveira Santana

Chief Energy Distribution and Commercialization Officer-
Mr. Jose Maria de Macedo

Chief Corporate Management Officer - Ms. Heleni de Mello Fonseca

CONTACTS:  CEMIG
           Luiz Fernando, Investor Relations Officer
           Tel. +55-31-3299-3930
           Fax +55-31-3299-3933
           lrolla@cemig.com.br

           THE ANNE MCBRIDE COMPANY
           Rolla Vicky Osorio
           Tel. 212-983-1702
           Fax 212-983-1736
           vicky@annemcbride.com


CESP: To Sell $98.4M in Bonds To Pay Contractors, Suppliers
-----------------------------------------------------------
Cia. Energetica de Sao Paulo (CESP), Brazil's third-largest power
generator, will seek shareholders' approval at a general
shareholders meeting on Feb. 26 for a planned bond sale.

Citing a company statement sent to the Sao Paulo Stock Exchange,
Bloomberg reports that CESP plans to sell BRL350 million ($98.4
million) of bonds maturing in 54 months in the local market to
pay contractors and suppliers.

"The bonds can be used to pay suppliers and contractors and
eventually to refinance debt," said Valmir Gomes, manager of the
company's bond sale department.

Cesp's bonds will pay the interbank benchmark lending rate plus
2% annually, the Company said. The benchmark interbank rate is
about 25.34% a year. The bonds will probably be sold in April or
May, Mr. Gomes said.

CESP has about BRL12 billion of debt and about 80% of it is
denominated in dollars.

CONTACT:    Companhia Energetica De Sao Paulo (CESP)
            Rua da ConsolaO o, 1.875
            CEP 01301 -100 S o Paulo, Brazil
            Phone: +55-11-234-6322
            Fax: +55-11-287-0871
            Home Page: http://www.cesp.com.br/
            Contact:
            Mauro G. Jardim Arce, Chairman
            Ruy M. Altenfelder Silva, Vice Chairman
            Vicente Kazuhiro Okazaki, Finance Director


CPFL: Seeking Shareholder Approval on Planned Bond Sale
-------------------------------------------------------
Brazilian energy provider Cia. Paulista de Forca e Luz (CPFL)
will submit plans for a bond sale to shareholders for a vote at a
general meeting on February 25. According to Bloomberg, CPFL
plans to issue BRL1.8 billion ($500 million) in bonds locally to
pay maturing debt and fund investments.

"The main use for the funds will be to pay down maturing debt,"
said Sergio Tamashiro, a utility analyst at Uniao de Bancos
Brasileiros SA in Sao Paulo.

CPFL's debt at the end of September stood at BRL2.84 billion, 65%
of which is linked to foreign currency.

CPFL serves about 2.9 million customers in more than 230
municipalities in the state of Sao Paulo and distributes one-
fifth of electricity consumed in the state. Holding company VBC
Energia owns about 36% of CPFL.

CONTACT:  Rodovia Campinas Mogi-Mírim, Km 2.5, Jardim Santana
          CEP 13088-900 Campinas, Sao Paulo, Brazil
          Phone: +55-19-3756-8198
          Fax: +55-19-3756-8392
          Officers: Carlos Ermirio de Moraes, Chairman
                    Wilson Pinto Ferreira Jr., President and CEO
                    Otavio Carneiro de Rezende, Director Finance
                                             and Administration


TELEMAR: Stock Price Up on Regulator Rate Hikes Approval
--------------------------------------------------------
Shares of Tele Norte Leste Participacoes SA, Brazil's largest
telephone company, rose 1% to 10,479.61 on Monday, reports
Bloomberg. The boost in the stock came after the Brazilian
Telecommunications Regulatory Agency - Anatel - announced that it
would allow phone companies to increase rates on calls to mobile
phones by as much as 28%, in line with inflation over the past 14
months.

Analysts viewed the announcement as a signal that the government
won't try to slow inflation by freezing fixed-line rates, which
is Telemar's core business.

"The fact that the government allowed a full pass through of
inflation implies that in June when Telemar is due for a review
for its main business there's little risk the government might
unfairly control inflation by controlling rates," said Stephen
Graham, director of technology stock research at UBS Warburg LLC
in Rio de Janeiro. "There was fear the government would be
tempted to not allow full pass through but last week's move is
sending a signal otherwise."

CONTACT:  TNE - INVESTOR RELATIONS
          Roberto Terziani
          Email: terziani@telemar.com.br
          Tel: 55 21 3131 1208
          Fax: 55 21 3131 1155

          Carlos Lacerda
          Email: carlosl@telemar.com.br
          Tel: 55 21 3131 1314
          Fax: 55 21 3131 1155

          GLOBAL CONSULTING GROUP
          Rick Huber
          richard.huber@tfn.com
          Tel: 1 212 807 5026
          Fax: 1 212 807 5025

          Mariana Crespo
          Email: mariana.crespo@tfn.com
          Tel: 1 212 807 5026
          Fax: 1 212 807 5025


VARIG/TAM: Cade To Scrutinize Merger Impact
-------------------------------------------
Brazil's antitrust authority, Cade, will carefully study the
impact of a merger between the country's top two airlines Viacao
Aerea Rio-Grandense (Varig) and TAM Linhas Aereas, Business News
Americas reports, citing A-E Setorial. The presidents of both
airlines recently announced that they have signed a letter of
intent to combine the two airlines.

With a joint fleet of 218 aircraft and 29 million passengers a
year, the joint venture to be listed in the stock exchange would
be larger than some European airlines. The deal was widely seen
by both analysts and the government as the best hope for
resuscitating the ailing industry.

"We need to make the civil aviation sector sustainable, with a
competitive model and efficient management," said Brazil's
defense minister, José Viegas, who was appointed by President
Luiz In cio Lula da Silva to oversee the talks between the
airlines.

With US$900 million in debts, Varig has been losing money since
1997 and is barely bringing in enough cash to stay in operation.
Last week, a Varig jet was impounded in Paris because a lease
payment on it was overdue. The airline, founded in 1927, has been
wrangling for months with its creditors and its pilots over a
financial rescue plan. Mr. Guedes is its third president in three
months.

TAM, a much younger company, has stronger finances and little
debt, but it has suffered as much as rivals have from the global
slump in travel and the sharp fall in the value of the Brazilian
real. It is spending US$500 million a month on aircraft leases
and its fuel costs have soared. Analysts said the airlines could
cut costs significantly in a merger.

The deal, to be detailed by June 30, may face certain regulatory
limitations since the two companies dominate 70% of the Brazilian
domestic air market.

CONTACT:      VARIG (Viacao Aerea Rio-Grandense, S.A.)
              Rua 18 de Novembro No. 800, Sao Joao
              90240-040 Porto Alegre,
              Rio Grande do Sul, Brazil
              Phone: (51) 358-7039/7040
                     (51) 358-7010/7042
              Fax: +55-51-358-7001
              Home Page: www.varig.com.br/english/
              Contacts:
              Dorival Ramos Schultz, EVP Finance and CFO
              E-mail: dorival.schultz@varig.com.br

              Investor Relations:
              Av. Almirante Silvio de Noronha,
              n  365-Bloco "B" - s/458 / Centro
              Rio de Janeiro, Brazil

              KPMG Brazil
              Belo Horizonte
              Rua Paraba, 1122
              13th Floor
              30130-918 Belo Horizonte MG
              Telephone 55 (31) 3261 5444
              Telefax 55 (31) 3261 5151
                       or
              Brasilia
              SBS Quadra 2 BL A N 1
              Edificio Casa de Sao Paulo SL 502
              70078-900 Braslia - DF
              Telephone 55 (61) 223 2024
              Telefax 55 (61) 224 0473

              BAIN & CO
              Primary Contact: Wendy Miller
              Two Copley Place, Boston, MA 02116
              USA
              Phone: +1-617-572-2000
              Fax: +1-617-572-2461
              Email: miles.cook@bain.com
              URL: http://www.bain.com

              TAM
              Daniel Mandelli Martin, President
              Buenos Aires
              Tel. (54) (11) 4816-0001
              URL: www.tam.com.br



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

AHMSA: Rebar, Wire Rod Production to Resume In March
----------------------------------------------------
Integrated steel-maker, Alto Hornos de Mexico S.A (Ahmsa), said
it will restart production of rebar and wire rod in March,
Business News Americas reports, citing La Reforma newspaper.

After six-years of down time, the decision was made in response
to an increase in export demand and higher prices. According to
the newspaper, international prices of the two products rose 25%
in the last quarter of 2002, to over US$300/t.

Ahmsa, which is controlled by the GAN industrial conglomerate, is
scheduled to meet with creditor banks this month to discuss yet
another restructuring plan, after the banks rejected a proposal
in December giving them 40% stake in the Company in exchange for
writing off US$1.3 billion of debts.

According to a previous issue of TCR-Latin America, the banks are
demanding for as much as 98% stake in the Company, citing a
previous proposal offering a 40% stake for converting only US$530
million of debts. This proposal never materialized, the
newsletter said.

Three years have passed since the Company and its lenders started
negotiating a debt plan. Early last year, creditors walked away
from talks, saying the company's management had no desire to
strike a deal.  The company, which has a total debt of about
US$1.8 billion, has been in a form of bankruptcy protection for
more than three years now.

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


CNI CANAL: SCT Will Rule On Ownership This Week
-----------------------------------------------
The ownership of the TV signal of CNI Canal 40 will be determined
this week when Mexico's Transport and Communications Secretariat
(SCT) issues its administrative resolution, according to an
article released by Internet Securities.

The article also states that the SCT will also issue this week
sanctions over the events observed in recent weeks when TV Azteca
took control of the Canal 40 facilities on Cerro del Chiquihuite
to the north of Mexico City. CNI Canal claimed earlier that TV
Azteca used force during the takeover, something which the latter
denied.

CNI Canal has offered to pay its MXN25-million debt with TV
Azteca and has sought to form a trust fund in which it would
deposit money to pay the debt it owes TV Azteca. The said fund
would have served to guarantee the payment of these liabilities,
said CNI Canal.

TV Azteca, however, rejected CNI Canal's offer saying that the TV
company owned by Javier Moreno Valle, did not have any money,
"even for the rental of its facilities."

The firm went on to demand that CNI Canal 40 respect its purchase
rights. Meanwhile, Canal 40 said that investors, the names of
which were not disclosed, are going to capitalize the Company.


MEXLUB: Ends Ten-Year Monopoly In Oil, Lubricants Market
--------------------------------------------------------
Mexicana de Lubricantes (Mexlub) will relenquish its ten-year
state monopoly on the sale of oil and lubricants in Mexico's more
than 5,000 gas stations. According to an article released by
South American Business Information, the Company and Pemex
(Petroleos Mexicanos) have decided to open up competition in the
sale of these products in the US$1-billion market, allowing
manufacturers to sell their products directly in the gas
stations.

Mexlub sold 120mil liters of lubricants in 2002, of which 27% was
in Pemex gas stations, and expects to lose around 40% of these
sales with the end of its monopoly. The Company has been
struggling financially, with accumulated losses of MXN524 million
over the last eight years.

CONTACT:  Octavio Sanchez Mejorada, Manager
          Av. 8 de Julio N  2270, Z.I.
          Guadalajara, Jal. 44940
          Phone: 31-34-05-00
          Fax: 31-34-05-00
          E-mail: export@mexlub.com.mx
          URL: http://www.mexlub.com.mx


SANLUIS CORPORACION: Responds, Comments On Newspaper Report
-----------------------------------------------------------
A note was published Monday in the Mexican newspaper "El
Economista" stating that "Corporación SanLuis is subject to
bankruptcy proceedings ("concurso mercantil") since the seventh
district court has admitted a suit by one of its creditors, Orix
Capital Markets, a Japanese investment bank" and, also, that
starting today [Monday] "an IFECOM (the Mexican federal agency of
experts in "concurso mercantil") representative would visit the
company in order to commence the analysis and process to verify
the company's payment capacity".

In view of the above, SANLUIS Corporación, S.A. de C.V. (SANLUIS)
wishes to stress the following in order to avoid any confusion
among the investment community:

1. SANLUIS has not been declared bankrupt or in "concurso
mercantil". Currently, the legal term to reply to a "concurso
mercantil" petition is running, regarding the petition made by a
supposed creditor for a total of US$2.5 million dollars, an
amount equivalent to less than 1% of SANLUIS' total direct debt
as restructured (US$291.3 million dollars) under the terms of the
debt exchange and cash tender offers, which were made by the
company at the end of September 2002 to all holders of its
Eurobond due 2008, its Eurocommercial Paper and of certain
additional debt with financial institutions.

2. As was timely and publicly informed, SANLUIS has, up to this
date, restructured 87% of its own direct debt and was also able
to restructure 100% of its Suspensions Group and Brakes Group
bank debt, for a total amount of subsidiary debt of US$268.2
million dollars. Both restructurings, with the creditors at the
SANLUIS level that decided to participate in its restructuring
and with the creditor banks to the subsidiary operating
companies, are firm and irreversible; accordingly, nearly93.2% of
SANLUIS' total debt with third parties at a consolidated level
has been restructured.

3. With a basis on the above mentioned restructurings, it is
SANLUIS' opinion that the requirements to formally declare a
company bankrupt, as established in the "Ley de Concursos
Mercantiles" (the Mexican bankruptcy law), have not been met;
therefore, the company is starting to proceed with legal and
procedural actions in relation with such petition. SANLUIS
confirms once more that, during its entire restructuring process,
the company has taken decisions in order to face such
restructuring process in a legal, orderly and transparent
fashion, and ensuring at all moments the continuity of its
operations.

CONTACT:  SANLUIS Corporacion, S.A. de C.V.
          Hector Amador
          Tel. +11-5255-5229-5838
          Fax. +11-5255-5202-6604
          Email: hamador@sanluiscorp.com.mex
          Web site:  www.sanluiscorp.com


SAVIA: Seminis 1QFY03 Results Mildly Better than Break Even
-----------------------------------------------------------
Seminis Inc., the world's largest developer, producer and
marketer of vegetable and fruit seeds, reported Tuesday results
for the three-month period ended December 27, 2002.

"We are very proud of our achievements to date and I am happy to
present the results of our first quarter of fiscal year 2003,"
said Seminis Chairman and Chief Executive Officer Mr. Alfonso
Romo. "The fundamental stability of our business model has been
clearly reflected in the financial results during the last eight
quarters. Moving forward, we expect to continue this trend of
increased profitability and cash generation."

The company reported that earnings before interest, income tax,
depreciation and amortisation (EBITDA) improved by US$0.9
million, reducing the loss to US$0.3 million in the first quarter
of fiscal year 2003 from a loss of US$1.2 million in the first
quarter last year. The first quarter of Seminis' fiscal year has
the lowest sales due to the seasonal nature of the agronomic
cycle.

To better reflect the results of the company's ongoing
operations, excluding non-recurring expenses incurred during the
previous year and gains or losses from sales of fixed assets,
adjusted EBITDA reached US$0.2 million versus a loss of US$0.5
million last fiscal year.

Mr. Eugenio Najera, President and COO of Seminis, commented: "We
have successfully moulded the company into a more efficient
entity with a greater potential. The fact that for the first time
we have been able to achieve a positive adjusted EBITDA during
our seasonally most difficult quarter is further proof of how
productive our efforts have been."

The company also reported that net sales for the first quarter
were US$80.6 million compared to US$80.1 million for the same
quarter last year. In constant dollars and excluding divested
non-core business sales of US$2.0 million from first quarter
2002, sales increased 2.1% to US$79.8 million from US$78.1
million during the same period last year.

Gross profit increased to US$50.4 million or 62.5% of sales
compared to US$49.8 million or 62.2% for the same quarter last
year. Gross profit from net seed sales was 63.4% versus 62.8% for
the previous year.

Operating expenses for the reported quarter were reduced by
US$1.9 million, or 3.2%, to US$58.1 million, from US$60.0 million
in the first quarter of fiscal year 2002. Excluding the expenses
of divested non-core businesses and other non-recurring items
from fiscal year 2002, expenses would have increased by
approximately US$3.0 million. Ongoing gains in operational
efficiency were offset by increased insurance costs, other costs
impacted by inflation and the currency impact on Euro and Korean
Won based operating expenses.

The company's operating loss in the first quarter was reduced by
US$1.1 million dollars to US$8.1 million from a loss of US$9.3
million for the same quarter last year.

Net loss for the first quarter of fiscal year 2003 was US$11.8
million compared to a loss of US$19.3 million during the same
quarter last year. After taking into account US$4.0 million of
contingent dividends payable if the Exchange Agreement (announced
August 1, 2002) reached with its majority shareholder Savia is
not consummated, the net loss per common share available to
common shareholders was US$0.25 per share. Assuming the exchange
transaction between Savia and Seminis had been completed, net
loss available for common shareholders would have been US$12.3
million or US$0.19 per share in the first quarter of fiscal year
2003. This compares to a net loss available to common
shareholders of US$23.9 million or US$0.40 per share in the first
quarter of fiscal year 2002.

- About Seminis

Seminis Inc. is the largest developer, producer and marketer of
vegetable seeds in the world. The company uses seeds as the
delivery vehicle for innovative agricultural technology. Its
products are designed to reduce the need for agricultural
chemicals, increase crop yield, reduce spoilage, offer longer
shelf life, create better tasting foods and foods with better
nutritional content. Seminis has established a worldwide presence
and global distribution network that spans 150 countries and
territories.

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

CONTACT:  Enrique Osorio
          +1 805-918-2233
          enrique.osorio@seminis.com

          Patrick Turner
          +1 805-918-2201
          patrick.turner@seminis.com
          Web site: http://www.seminis.com/


TV AZTECA: $500M Preferred Dividend Expected Lure Debtholders
-------------------------------------------------------------
An investment bank predicts TV Azteca S.A. to gain inroads in its
effort to cut debts with the announcement of a US$500 million
dividend plan spread over six years. According to Dow Jones
Newswires, BBVA Securities has changed its recommendation on the
Mexican broadcaster's shares to "buy" from "hold."  The bank
believes the dividend payout will attract bondholders and induce
them into exchanging their notes for the company's shares.

"We believe bondholders will be more willing to accept the
exchange of part of the bond after receiving a significant
payment and after the company made public a new cash flow
strategy that will limit capital expenditures and guarantees
higher dividends to be paid during the next six years," the
investment bank said in a research note.

Under the plan unveiled late last week, TV Azteca will cut 40% of
its US$647 million debt-load by generating US$125 million in free
cash annually and distributing US$500 million in dividends within
the next six years.

BBVA said TV Azteca has "decided to go for a market-friendly
approach to the $150 million Azteca Holdings bond due next July."
Azteca Holdings owns 55.5% of TV Azteca and has close to US$280
million in debt.  The company will use more than US$120 million
from its own cash to pay a regular dividend to shareholders,
without increasing debt, the investment bank said.

The bank says proceeds from the dividend will be enough to pay
down US$50 million of the bond's principal, plus US$8 million of
a pending coupon.  The remaining US$100 million will be exchanged
for a longer-term bond.

CONTACT:  Bruno Rangel (Investors)
          Tel: +5255-3099-9167
          Email: jrangelk@tvazteca.com.mx
             or
          Rolando Villarreal
          Tel: +5255-3099-0041
          Email: rvillarreal@tvazteca.com.mx

          Tristan Canales (Media)
          Tel: +5255-3099-5786
          Email: tcanales@tvazteca.com.mx

          Web site:  http://www.tvazteca.com.mx



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

ANCAP: S&P Cuts Ratings to 'CCC' Following Uruguay Downgrade
------------------------------------------------------------
Standard & Poor's Ratings Services said Tuesday that it lowered
its local and foreign currency corporate credit ratings on
Uruguay's 100% state-owned fuel, alcohol, and cement company,
Administración Nacional de Combustibles Alcohol y Portland
(ANCAP), to 'CCC' from 'B-'. The rating action is in line with
the recent downgrade on the sovereign.

The outlook is negative. As of December 31, 2002, ANCAP had
approximately US$105 million in debt (including a syndicated
loan) that represented less than 30% of capitalization.

The downgrade and negative outlook on the Republic of Uruguay
reflect increasing prospects for a comprehensive debt
restructuring in the near term. While a debt-restructuring scheme
has not been formally announced, the government seems likely to
attempt to engineer a voluntary debt exchange designed to extend
maturities at minimum additional cost. Uruguay's gross general
government debt burden stands at around 100% of GDP, with almost
half that amount owed to official creditors.

"ANCAP's credit quality is tightly linked to that of the Republic
of Uruguay, its 100% owner. Therefore, Uruguay's financial system
crisis, and unfavorable growth prospects will also affect ANCAP,"
said Standard & Poor's credit analyst Pablo Lutereau. "The
negative outlook indicates both the linkage of ANCAP's credit
quality to the sovereign's financial health and the fact that
further deterioration at the sovereign level might continue to
hinder ANCAP's access to credit in a deteriorated economic
environment," Mr. Lutereau added.

The ratings on ANCAP are conditioned by the risks inherent in
operating as a single-asset refiner, as well as by the company's
limited upstream production. In addition, a growing fiscal
deficit and a contracting economy could hurt the company's future
financial performance and capital expenditures. Nevertheless, the
ratings also incorporate Standard & Poor's expectations that
ANCAP will maintain its dominant market position, and adequate
financial measures for the rating over the medium term.

ANALYSTS:  Pablo Lutereau, Buenos Aires (54) 114-891-2125
           Marta Castelli, Buenos Aires (54) 114-891-2128


URUGUAYAN BANKS: Downgraded After Sovereign Rating Action
---------------------------------------------------------
Standard & Poor's Ratings Services said Tuesday that it lowered
its long-term counterparty credit ratings on Citibank N.A.
(Uruguay Branch), American Express Bank (Uruguay) S.A., Banco
Bilbao Vizcaya Argentaria Uruguay, and Discount Bank Latin
America S.A. to 'CCC' from 'B-' as a direct result of the
lowering of the local and foreign currency ratings on the
Oriental Republic of Uruguay. The outlooks are negative,
reflecting the negative outlook on the Uruguayan sovereign
ratings.

"The ratings on these financial institutions are not expected to
change over the medium term unless the sovereign's ratings
change," said credit analyst Carina Lopez.

ANALYST:  Gabriel Caracciolo, Buenos Aires (54) 114-891-2110
          Carina Lopez, Buenos Aires (54) 11-4891-2118


* Uruguay Long-Term Ratings Lowered to 'CCC'; Outlook Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services said Tuesday that it lowered
its long-term sovereign credit rating on the Oriental Republic of
Uruguay to 'CCC' from 'B-'. The outlook remains negative.

According to Standard & Poor's the downgrade and negative outlook
reflect increasing prospects for recourse to a comprehensive debt
restructuring in the near term. While a debt-restructuring scheme
has not been formally announced, the government seems likely to
attempt to engineer a voluntary debt exchange designed to extend
maturities at minimum additional cost. Uruguay's gross general
government debt burden stands at around 100% of GDP, with almost
half that amount owed to official creditors.

"Despite government efforts to the contrary, absent debt relief,
Standard & Poor's believes that an extension of the average tenor
of general government debt owed to private sector creditors and a
smoothing of its maturity profile will be insufficient to allow
Uruguay to overcome its current crisis and to establish the
macroeconomic conditions needed for improved growth prospects,"
said sovereign analyst Lisa Schineller. "The negative outlook
reflects the challenges facing the government to reverse the
upward debt trajectory amid weak medium-term growth prospects. In
addition, deposits in the banking sector remain vulnerable to
swings in local sentiment," she added.

According to Ms. Schineller, with yesterday's debt-service
payment of US$154 million on the government's Provisional I bond,
international reserves are likely to fall below US$600 million
from US$700 million at year-end 2002 and US$3.1 billion at year-
end December 2001.

"The ratings could be lowered if it appears that any debt
exchange provides bondholders with less advantageous terms than
contracted in the original terms of the debt issues," noted Ms.
Schineller. "Conversely, creditworthiness could improve if a
voluntary exchange meaningfully improves Uruguay's debt profile
and allows for greater fiscal stability going forward," she
concluded.

ANALYSTS:  Sebastian Briozzo, New York 212-438-7342
           Lisa M Schineller, New York (1) 212-438-7352
           John Chambers, CFA, New York (1) 212-438-7344


* Uruguay Makes $151.7M Bond Payment Despite Current Troubles
-------------------------------------------------------------
The Uruguayan government made a US$151.7-million required payment
to bondholders, in a move that is expected to send a positive
signal to the International Monetary Fund that the country was
doing everything possible to keep up with its obligations.

The government is negotiating with the IMF to secure US$380
million from a $2.8 billion loan accord to help lift the economy
from recession and stabilize the banking system, which was hurt
by Argentina's debt default.

Uruguay has suffered more than any other country from the US$95
billion debt default in neighboring Argentina. The Uruguayan peso
has fallen 4.36% this year and Uruguayan bonds have declined
8.8%, the worst performance of the 33 bonds that are issued by
emerging market countries and tracked by J.P. Morgan Chase & Co.

Reports by the local press have suggested that the government is
considering restructuring its public debt, by lengthening
maturities on debt coming due. But authorities have issued no
public statements on those reports.

An IMF mission has been in Uruguay since Saturday to discuss the
country's financial situation. In a statement released Monday in
Washington, the IMF said: "The discussions with the Uruguayan
authorities have entered into an intensive phase. We are building
on the progress that has already been made."

Sticking points for concluding an agreement surround the
government's economic forecast for the year. IMF experts consider
the country's fiscal and economic targets unattainable given the
economy could contract by as much as 3 percent in 2003.



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

CITGO: Forecasts Normal Crude Volumes Despite Ongoing Strike
------------------------------------------------------------
Despite a 10-week strike at Venezuela, Citgo, the U.S. refining
arm of state oil firm Petroleos de Venezuela (PDVSA), will get
its normal volume of crude feedstock this month from the OPEC
nation, Reuters reports, citing state news agency Venpres.

"Citgo, affiliate of PDVSA in United States, will receive this
month 15 crude cargoes ... which covers 100 percent of the supply
contracts," Venpres reported.

Liftings by Citgo Petroleum, which had been importing about
360,000 barrels per day (bpd) from Venezuela before the strike
started on Dec. 2, fell to just eight cargoes in December.

Lyondell-Citgo, a joint venture between Lyondell Chemical Co. and
Citgo, normally takes an additional 200,000 bpd of Venezuelan
oil.

The fallout from Venezuela's oil strike has prompted Fitch
Ratings to downgrade Citgo's credit rating from speculative to
highly speculative.

Fitch cut Citgo's senior unsecured debt rating from BB- to B+ and
assigned a B+ rating to the Company's proposed US$550-million
bond offering.

The agency said the downgrade reflects Citgo's tight liquidity as
well as the potential use of proceeds from the proposed bond
offering to help pay PDV America's maturing debt in August.

Citgo is owned by PDV America, a subsidiary of the PDVSA.

Fitch is concerned about the ability and willingness of Citgo's
parent to pay the maturity of the notes in the absence of a
return to normal oil operations.

The strike ended earlier this week in every industry but oil.


SINCOR: To Resume Synthetic Crude Shipments Next Week
-----------------------------------------------------
Sincrudos de Oriente Sincor, C.A. (Sincor), operator of one of
Venezuela's heavy crude oil projects, will resume synthetic crude
exports next week after being suspended for two months due to the
national strike.

While several oil workers are still staying off their jobs,
carrying on the strike into its 10th week, Bloomberg says the
company will not cancel an order for 2.6 million barrels of
synthetic crude, two million of which will be shipped to U.S.-
based Valero Energy Corp and the rest to an unidentified client.

"They will be our first liftings since the strike began," Sincor
General Manager Joris de Smet said during a telephone interview
with Bloomberg.

The news agency says Valero chartered the tanker for its
shipment, making it the first transaction to be undertaken by
tankers not belonging or contracted to state oil company,
Petroleos de Venezuela SA.  Since the strike began on December 2,
unions have succeeded in discouraging oil companies from loading
up their tankers, claiming that the ports were unsafe.

Aside from the export operations, Mr. de Smet also told Bloomberg
that the company may altogether resume its operations next week.
Sincor, a US$4.6 billion joint venture, pumps extra-heavy crude
from Venezuela's Orinoco belt and transports it by pipeline to
the Caribbean coast, where it is refined into lighter, more
valuable synthetic crude.

Once restarted, it is estimated that full production could take a
month's time to achieve.  Before the strike, the company's daily
average was 200,000 barrels day; this dropped to about 19,000
barrels at the height of the strike.  Meanwhile, the government
recently said oil production has now reached 1.9 million barrels
a day.  Prior to the strike, the country averaged 3 million
barrels.

France's Total Fina Elf SA, Europe's third-largest oil company
owns 47 percent of Sincor, Petroleos de Venezuela holds 38
percent and Norway's Statoil ASA has 15 percent.  It is estimated
that the company had lost close to US$1.4 million a day during
the duration of the strike.  The production interruption led
Moody's to downgrade the company last month to 'B1' from 'Ba2'
and Fitch Ratings to 'B' from 'BB+'.


* S&P's Francis Predicts Prolonged Struggle for Venezuela
---------------------------------------------------------
Venezuela will face difficulty attracting investors in the near-
to medium-term, even if the opposition succeeds in replacing
embattled President Hugo Chavez, says a Standard & Poor's
official. In an interview with Bloomberg, Richard Francis,
associate director of sovereign ratings at S&P, said the effects
of the recent two-month national strike and the threat of a
foreign debt default will linger for a while.

"The economy is in a tailspin.  Even if the opposition were
to come into power, the country's institutions and political
stability have been dealt a severe blow.  With the economy in
such dire straits, whatever government comes to power is going to
face a severe problem," he said.

Apart from gas and oil, Mr. Francis said the government can
expect little or no investment at all in any other industry:
"Investors are going to shy away because the institutions, the
judicial system, the judges, have all been thrown up in the air
and the opposition is as much responsible for that as [Mr.
Chavez]."

"It's hard to see any significant investment coming into the
country in the near or medium term.  The only sector where you
might see investment is oil and gas," he said.

S&P downgraded Venezuela to 'CCC+' in December, after the
national strike that began that month showed no sign of letting
up.  The opposition is calling for early election in August,
halfway into Mr. Chavez term.



               ***********


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
members of the same firm for the term of the initial subscription
or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.


* * * End of Transmission * * *